x | ANNUAL 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 La Salle Street | |
Chicago, Illinois | 60603 |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Name of Each Exchange On Which Registered |
Common Stock, $1.66 2/3 Par Value | The NASDAQ Stock Market LLC |
Depositary Shares, each representing 1/1000th interest in a share of Series C | |
Non-Cumulative Perpetual Preferred Stock | The NASDAQ Stock Market LLC |
Large accelerated filer | x | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page | ||
Item 1 | ||
Item 1A | ||
Item 1B | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Supplemental Item | ||
Item 5 | ||
Item 6 | ||
Item 7 | ||
Item 7A | ||
Item 8 | ||
Supplemental Item | ||
Item 9 | ||
Item 9A | ||
Item 9B | ||
Item 10 | ||
Item 11 | ||
Item 12 | ||
Item 13 | ||
Item 14 | ||
Item 15 | ||
Item 16 | ||
i 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 1 |
2 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 3 |
4 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 5 |
6 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 7 |
8 2018 Annual Report | Northern Trust Corporation |
COMMON EQUITY TIER 1 CAPITAL | TIER 1 CAPITAL | TOTAL CAPITAL | TIER 1 LEVERAGE | SUPPLEMENTARY LEVERAGE | ||||||||||||||
ADVANCED APPROACH | STANDARDIZED APPROACH | ADVANCED APPROACH | STANDARDIZED APPROACH | ADVANCED APPROACH | STANDARDIZED APPROACH | ADVANCED APPROACH | STANDARDIZED APPROACH | ADVANCED APPROACH | ||||||||||
Northern Trust Corporation | 13.7 | % | 12.9 | % | 15.0 | % | 14.1 | % | 16.9 | % | 16.1 | % | 8.0 | % | 8.0 | % | 7.0 | % |
The Northern Trust Company | 14.1 | % | 13.1 | % | 14.1 | % | 13.1 | % | 15.8 | % | 14.8 | % | 7.3 | % | 7.3 | % | 6.4 | % |
Minimum required ratio | 4.5 | % | 4.5 | % | 6.0 | % | 6.0 | % | 8.0 | % | 8.0 | % | 4.0 | % | 4.0 | % | 3.0 | % |
“Well-capitalized” minimum ratios, as applicable | ||||||||||||||||||
Northern Trust Corporation | N/A | N/A | 6.0 | % | 6.0 | % | 10.0 | % | 10.0 | % | N/A | N/A | N/A | |||||
The Northern Trust Company | 6.5 | % | 6.5 | % | 8.0 | % | 8.0 | % | 10.0 | % | 10.0 | % | 5.0 | % | 5.0 | % | 3.0 | % |
2018 Annual Report | Northern Trust Corporation 9 |
10 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 11 |
12 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 13 |
14 2018 Annual Report | Northern Trust Corporation |
• | Average Consolidated Balance Sheets with Analysis of Net Interest Income for the years ended December 31, 2018, 2017 and 2016. |
• | Changes in Net Interest Income for the years ended December 31, 2018 and 2017. |
• | Remaining Maturity and Average Yield of Debt Securities Held to Maturity and Available for Sale as of December 31, 2018. |
• | Remaining Maturity of Selected Loans and Leases as of December 31, 2018. |
• | Distribution of Non-U.S. Loans by Type as of December 31, 2018, 2017, 2016, 2015 and 2014. |
• | Allowance for Credit Losses Relating to Non-U.S. Operations for the years ended December 31, 2018, 2017, 2016, 2015 and 2014. |
• | Analysis of Allowance for Credit Losses for the years ended December 31, 2018, 2017, 2016, 2015 and 2014. |
• | Average Deposits by Type as of December 31, 2018, 2017 and 2016. |
• | Distribution of Non-U.S. Deposits by Type as of December 31, 2018, 2017 and 2016. |
• | Remaining Maturity of Time Deposits $100,000 or More as of December 31, 2018. |
• | Average Rates Paid on Interest-Related Deposits by Type for the years ended December 31, 2018, 2017 and 2016. |
• | Selected Average Assets and Liabilities Attributable to Non-U.S. Operations for the years ended December 31, 2018, 2017, 2016, 2015 and 2014. |
• | Percent of Non-U.S.-Related Average Assets and Liabilities to Total Consolidated Average Assets for the years ended December 31, 2018, 2017, 2016, 2015 and 2014. |
• | Non-U.S. Outstandings as of December 31, 2018, 2017 and 2016. |
• | Purchased Funds as of December 31, 2018, 2017 and 2016. |
• | Item 6, “Selected Financial Data,” includes the Corporation’s consolidated return on average common equity, return on average assets, dividend payout ratio and ratio of average equity to average assets. |
• | The “Securities Portfolio” table (Item 7) provides the book values of investments in obligations of the U.S. government, states and political subdivisions, and other held to maturity and available for sale debt securities as of December 31, 2018, 2017 and 2016. |
• | The “Composition of Loan Portfolio” table (Item 7) provides loans and leases by type as of December 31, 2018, 2017, 2016, 2015 and 2014. |
• | The “Nonperforming Assets” table (Item 7) provides information about the Corporation’s nonaccrual, past due and restructured loans receivable as of December 31, 2018, 2017, 2016, 2015 and 2014. |
• | The “Commercial Real Estate Loans” table (Item 7) provides details of loan concentrations as of December 31, 2018 and 2017. |
• | The “Allocation of the Allowance for Credit Losses” table (Item 7) provides a breakdown of the allowance for credit losses by loan class and illustrates the proportion of each loan class to total loans. |
• | The “Allowance and Provision for Credit Losses” section (Item 7) provides a discussion of the factors which influenced management’s judgment in determining the provision for credit losses. |
• | Note 6, “Loans and Leases,” (Item 8) provides the Corporation’s forgone interest income on nonaccrual loans, as well as a description of the nature of non-U.S. loans as of December 31, 2018 and 2017. |
• | Note 1, “Summary of Significant Accounting Policies,” (Item 8) provides a discussion of Northern Trust’s policy for placing loans on non-accrual status. |
• | Further discussion of Northern Trust’s management of credit risk with respect to the provision and allowance for credit losses is provided in the following information that is incorporated herein by reference to the notes to the consolidated financial statements provided in Item 8, “Financial Statements and Supplementary Data.” |
2018 Annual Report | Northern Trust Corporation 15 |
16 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 17 |
18 2018 Annual Report | Northern Trust Corporation |
• | failures of technological systems or breaches of security measures, including, but not limited to, those resulting from cyber-attacks; |
• | human errors or omissions, including failures to comply with applicable laws or corporate policies and procedures; |
• | theft, fraud or misappropriation of assets, whether arising from the intentional actions of internal personnel or external third parties; |
• | defects or interruptions in computer or communications systems; |
• | breakdowns in processes, over-reliance on manual processes, which are inherently more prone to error than automated processes, breakdowns in internal controls or failures of the systems and facilities that support our operations; |
• | unsuccessful or difficult implementation of computer systems upgrades; |
• | defects in product design or delivery; |
• | difficulty in accurately pricing assets, which can be aggravated by market volatility and illiquidity and lack of reliable pricing from third-party vendors; |
2018 Annual Report | Northern Trust Corporation 19 |
• | negative developments in relationships with key counterparties, third-party vendors, employees or associates in our day-to-day operations; and |
• | external events that are wholly or partially beyond our control, such as natural disasters, pandemics, computer viruses, geopolitical events, political unrest or acts of terrorism. |
20 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 21 |
22 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 23 |
24 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 25 |
26 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 27 |
28 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 29 |
30 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 31 |
32 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 33 |
34 2018 Annual Report | Northern Trust Corporation |
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 | |||||
October 1 - 31, 2018 | 797,315 | $ | 97.04 | 797,315 | 22,085,658 | ||||
November 1 - 30, 2018 | 545,459 | 96.25 | 545,459 | 21,540,199 | |||||
December 1 - 31, 2018 | 1,139,328 | 88.53 | 1,139,328 | 20,400,871 | |||||
Total (Fourth Quarter) | 2,482,102 | $ | 92.96 | 2,482,102 | 20,400,871 |
2018 Annual Report | Northern Trust Corporation 35 |
DECEMBER 31, | ||||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||
Northern Trust | $ | 100 | $ | 111 | $ | 121 | $ | 153 | $ | 174 | $ | 149 | ||||||
S&P 500 | 100 | 114 | 115 | 129 | 157 | 150 | ||||||||||||
KBW Bank Index | 100 | 109 | 110 | 141 | 167 | 138 |
36 2018 Annual Report | Northern Trust Corporation |
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||
FOR THE YEAR ENDED DECEMBER 31, | |||||||||||||||
CONDENSED STATEMENTS OF INCOME (In Millions) | |||||||||||||||
Noninterest Income | $ | 4,337.5 | $ | 3,946.1 | $ | 3,726.9 | $ | 3,632.5 | $ | 3,325.7 | |||||
Net Interest Income | 1,622.7 | 1,429.2 | 1,234.9 | 1,070.1 | 1,005.5 | ||||||||||
Total Revenue | $ | 5,960.2 | $ | 5,375.3 | $ | 4,961.8 | $ | 4,702.6 | $ | 4,331.2 | |||||
Provision for Credit Losses | (14.5 | ) | (28.0 | ) | (26.0 | ) | (43.0 | ) | 6.0 | ||||||
Noninterest Expense | 4,016.9 | 3,769.4 | 3,470.7 | 3,280.6 | 3,135.0 | ||||||||||
Income before Income Taxes | $ | 1,957.8 | $ | 1,633.9 | $ | 1,517.1 | $ | 1,465.0 | $ | 1,190.2 | |||||
Provision for Income Taxes | 401.4 | 434.9 | 484.6 | 491.2 | 378.4 | ||||||||||
Net Income | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | $ | 973.8 | $ | 811.8 | |||||
Preferred Stock Dividends | 46.4 | 49.8 | 23.4 | 23.4 | 9.5 | ||||||||||
Net Income Applicable to Common Stock | $ | 1,510.0 | $ | 1,149.2 | $ | 1,009.1 | $ | 950.4 | $ | 802.3 | |||||
PER COMMON SHARE | |||||||||||||||
Net Income – Basic | $ | 6.68 | $ | 4.95 | $ | 4.35 | $ | 4.03 | $ | 3.34 | |||||
– Diluted | 6.64 | 4.92 | 4.32 | 3.99 | 3.32 | ||||||||||
Cash Dividends Declared Per Common Share | 1.94 | 1.60 | 1.48 | 1.41 | 1.30 | ||||||||||
Book Value – End of Period (EOP) | 43.95 | 41.28 | 38.88 | 36.27 | 34.54 | ||||||||||
Market Price – EOP | 83.59 | 99.89 | 89.05 | 72.09 | 67.40 | ||||||||||
SELECTED BALANCE SHEET DATA (In Millions) | |||||||||||||||
At Year End: | |||||||||||||||
Earning Assets | $ | 122,847.3 | $ | 129,656.6 | $ | 115,446.4 | $ | 106,848.9 | $ | 100,889.8 | |||||
Total Assets | 132,212.5 | 138,590.5 | 123,926.9 | 116,749.6 | 109,946.5 | ||||||||||
Deposits | 104,496.8 | 112,390.8 | 101,651.7 | 96,868.9 | 90,757.0 | ||||||||||
Senior Notes | 2,011.3 | 1,497.3 | 1,496.6 | 1,497.4 | 1,497.0 | ||||||||||
Long-Term Debt | 1,112.4 | 1,449.5 | 1,330.9 | 1,371.3 | 1,615.1 | ||||||||||
Stockholders’ Equity | 10,508.3 | 10,216.2 | 9,770.4 | 8,705.9 | 8,448.9 | ||||||||||
Average Balances: | |||||||||||||||
Earning Assets | $ | 113,731.0 | $ | 111,178.3 | $ | 107,037.6 | $ | 102,249.8 | $ | 95,947.5 | |||||
Total Assets | 122,946.6 | 119,607.4 | 115,570.3 | 110,715.1 | 104,083.5 | ||||||||||
Deposits | 95,103.1 | 96,504.8 | 93,613.9 | 90,768.0 | 84,656.6 | ||||||||||
Senior Notes | 1,704.0 | 1,496.9 | 1,496.6 | 1,497.2 | 1,661.2 | ||||||||||
Long-Term Debt | 1,296.8 | 1,519.4 | 1,392.4 | 1,426.4 | 1,654.9 | ||||||||||
Stockholders’ Equity | 10,228.9 | 9,980.6 | 9,085.3 | 8,624.5 | 8,166.5 | ||||||||||
CLIENT ASSETS (In Billions) | |||||||||||||||
Assets Under Custody/Administration | $ | 10,125.3 | $ | 10,722.6 | $ | 8,541.3 | $ | 7,797.0 | N/A | ||||||
Assets Under Custody | 7,593.9 | 8,084.6 | 6,720.5 | 6,072.1 | 5,968.8 | ||||||||||
Assets Under Management | 1,069.4 | 1,161.0 | 942.4 | 875.3 | 934.1 | ||||||||||
SELECTED RATIOS AND METRICS | |||||||||||||||
Financial Ratios and Metrics: | |||||||||||||||
Return on Average Common Equity | 16.2 | % | 12.6 | % | 11.9 | % | 11.5 | % | 10.0 | % | |||||
Return on Average Assets | 1.27 | 1.00 | 0.89 | 0.88 | 0.78 | ||||||||||
Dividend Payout Ratio | 29.2 | 32.5 | 34.3 | 35.3 | 39.2 | ||||||||||
Net Interest Margin (*) | 1.46 | 1.33 | 1.18 | 1.07 | 1.08 | ||||||||||
Average Stockholders’ Equity to Average Assets | 8.3 | 8.3 | 7.9 | 7.8 | 7.8 |
Capital Ratios: | DECEMBER 31, 2018 | DECEMBER 31, 2017 | DECEMBER 31, 2016 | DECEMBER 31, 2015 | DECEMBER 31, 2014 | |||||||||||||||
ADVANCED APPROACH | STANDARDIZED APPROACH(a) | ADVANCED APPROACH | STANDARDIZED APPROACH(a) | ADVANCED APPROACH | STANDARDIZED APPROACH(a) | ADVANCED APPROACH | STANDARDIZED APPROACH(a) | ADVANCED APPROACH | STANDARDIZED APPROACH(a) | |||||||||||
Common Equity Tier 1 | 13.7 | % | 12.9 | % | 13.5 | % | 12.6 | % | 12.4 | % | 11.8 | % | 11.9 | % | 10.8 | % | 12.4 | % | 12.5 | % |
Tier 1 | 15.0 | 14.1 | 14.8 | 13.8 | 13.7 | 12.9 | 12.5 | 11.4 | 13.2 | 13.3 | ||||||||||
Total | 16.9 | 16.1 | 16.7 | 15.8 | 15.1 | 14.5 | 14.2 | 13.2 | 15.0 | 15.5 | ||||||||||
Tier 1 Leverage | 8.0 | 8.0 | 7.8 | 7.8 | 8.0 | 8.0 | 7.5 | 7.5 | N/A | 7.8 | ||||||||||
Supplementary Leverage(b) | 7.0 | N/A | 6.8 | N/A | 6.8 | N/A | 6.2 | N/A | N/A | N/A |
2018 Annual Report | Northern Trust Corporation 37 |
38 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 39 |
n | 63% Trust, Investment and Other Servicing Fees | |
n | 27% Net Interest Income | |
n | 5% Foreign Exchange Trading Income | |
n | 5% Other Noninterest Income | |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Trust, Investment and Other Servicing Fees | $ | 3,753.7 | $ | 3,434.3 | $ | 3,108.1 | 9 | % | 10 | % | |||
Foreign Exchange Trading Income | 307.2 | 209.9 | 236.6 | 46 | (11 | ) | |||||||
Treasury Management Fees | 51.8 | 56.4 | 62.8 | (8 | ) | (10 | ) | ||||||
Security Commissions and Trading Income | 98.3 | 89.6 | 81.4 | 10 | 10 | ||||||||
Other Operating Income | 127.5 | 157.5 | 241.2 | (19 | ) | (35 | ) | ||||||
Investment Security Losses, net | (1.0 | ) | (1.6 | ) | (3.2 | ) | (33 | ) | (50 | ) | |||
Total Noninterest Income | $ | 4,337.5 | $ | 3,946.1 | $ | 3,726.9 | 10 | % | 6 | % |
DAILY AVERAGES | YEAR-END | |||||||||||
2018 | 2017 | CHANGE | 2018 | 2017 | CHANGE | |||||||
S&P 500 | 2,746 | 2,448 | 12 | % | 2,507 | 2,674 | (6 | )% | ||||
MSCI EAFE (U.S. dollars) | 1,966 | 1,886 | 4 | 1,720 | 2,051 | (16 | ) | |||||
MSCI EAFE (local currency) | 1,125 | 1,105 | 2 | 1,008 | 1,164 | (13 | ) | |||||
40 2018 Annual Report | Northern Trust Corporation |
AS OF DECEMBER 31, | ||||||
2018 | 2017 | CHANGE | ||||
Barclays Capital U.S. Aggregate Bond Index | 2,047 | 2,046 | — | % | ||
Barclays Capital Global Aggregate Bond Index | 479 | 485 | (1 | ) | ||
DECEMBER 31, | CHANGE | |||||||||||||||
($ In Billions) | 2018 | 2017 | 2016 | 2015 | 2018 /2017 | 2017 /2016 | ||||||||||
Corporate & Institutional | $ | 9,490.5 | $ | 10,066.8 | $ | 7,987.0 | $ | 7,279.7 | (6 | )% | 26 | % | ||||
Wealth Management | 634.8 | 655.8 | 554.3 | 517.3 | (3 | ) | 18 | |||||||||
Total Assets Under Custody/Administration | $ | 10,125.3 | $ | 10,722.6 | $ | 8,541.3 | $ | 7,797.0 | (6 | )% | 26 | % |
DECEMBER 31, | CHANGE | FIVE-YEAR COMPOUND GROWTH RATE | |||||||||||||||||||
($ In Billions) | 2018 | 2017 | 2016 | 2015 | 2014 | 2018 /2017 | 2017 / 2016 | ||||||||||||||
Corporate & Institutional | $ | 6,971.0 | $ | 7,439.1 | $ | 6,176.9 | $ | 5,565.8 | $ | 5,453.1 | (6 | )% | 20 | % | 7 | % | |||||
Wealth Management | 622.9 | 645.5 | 543.6 | 506.3 | 515.7 | (4 | ) | 19 | 5 | ||||||||||||
Total Assets Under Custody | $ | 7,593.9 | $ | 8,084.6 | $ | 6,720.5 | $ | 6,072.1 | $ | 5,968.8 | (6 | )% | 20 | % | 6 | % |
DECEMBER 31, | ||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Equities | 45 | % | 47 | % | 46 | % | 44 | % | 45 | % |
Fixed Income Securities | 37 | 35 | 36 | 37 | 36 | |||||
Cash and Other Assets | 16 | 16 | 17 | 17 | 17 | |||||
Securities Lending Collateral | 2 | 2 | 1 | 2 | 2 |
2018 Annual Report | Northern Trust Corporation 41 |
DECEMBER 31, | CHANGE | FIVE-YEAR COMPOUND GROWTH RATE | |||||||||||||||||||
($ In Billions) | 2018 | 2017 | 2016 | 2015 | 2014 | 2018 / 2017 | 2017 / 2016 | ||||||||||||||
Corporate & Institutional | $ | 790.8 | $ | 871.2 | $ | 694.0 | $ | 648.0 | $ | 709.6 | (9 | )% | 26 | % | 4 | % | |||||
Wealth Management | 278.6 | 289.8 | 248.4 | 227.3 | 224.5 | (4 | ) | 17 | 5 | ||||||||||||
Total Assets Under Management | $ | 1,069.4 | $ | 1,161.0 | $ | 942.4 | $ | 875.3 | $ | 934.1 | (8 | )% | 23 | % | 4 | % |
DECEMBER 31, | ||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Equities | 50 | % | 51 | % | 51 | % | 51 | % | 52 | % |
Fixed Income Securities | 17 | 16 | 17 | 17 | 17 | |||||
Cash and Other Assets | 19 | 19 | 20 | 20 | 18 | |||||
Securities Lending Collateral | 14 | 14 | 12 | 12 | 13 |
DECEMBER 31, | ||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Index | 49 | % | 46 | % | 47 | % | 47 | % | 49 | % |
Active | 38 | 41 | 40 | 40 | 39 | |||||
Multi-Manager | 5 | 5 | 5 | 4 | 6 | |||||
Other | 8 | 8 | 8 | 9 | 6 |
42 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Loan Service Fees | $ | 48.9 | $ | 50.7 | $ | 56.6 | (4 | )% | (10 | )% | |||
Banking Service Fees | 46.4 | 48.6 | 50.6 | (5 | ) | (4 | ) | ||||||
Other Income | 32.2 | 58.2 | 134.0 | (44 | ) | (57 | ) | ||||||
Total Other Operating Income | $ | 127.5 | $ | 157.5 | $ | 241.2 | (19 | )% | (35 | )% |
2018 Annual Report | Northern Trust Corporation 43 |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Interest Income – GAAP | $ | 2,321.4 | $ | 1,769.4 | $ | 1,416.9 | 31 | % | 25 | % | |||
FTE Adjustment | 41.2 | 45.8 | 25.1 | (10 | ) | 82 | |||||||
Interest Income – FTE | 2,362.6 | 1,815.2 | 1,442.0 | 30 | 26 | ||||||||
Interest Expense | 698.7 | 340.2 | 182.0 | 105 | 87 | ||||||||
Net Interest Income – FTE Adjusted | 1,663.9 | 1,475.0 | 1,260.0 | 13 | 17 | ||||||||
Net Interest Income – GAAP | 1,622.7 | 1,429.2 | 1,234.9 | 14 | 16 | ||||||||
AVERAGE BALANCE | |||||||||||||
Earning Assets | $ | 113,731.0 | $ | 111,178.3 | $ | 107,037.6 | 2 | % | 4 | % | |||
Interest-Related Funds | 88,638.4 | 83,422.0 | 76,886.0 | 6 | 9 | ||||||||
Net Noninterest-Related Funds | 25,092.6 | 27,756.3 | 30,151.6 | (10 | ) | (8 | ) | ||||||
CHANGE IN PERCENTAGE | |||||||||||||
AVERAGE RATE | |||||||||||||
Earning Assets | 2.08 | % | 1.63 | % | 1.35 | % | 0.45 | 0.28 | |||||
Interest-Related Funds | 0.79 | 0.41 | 0.24 | 0.38 | 0.17 | ||||||||
Interest Rate Spread | 1.29 | 1.22 | 1.11 | 0.07 | 0.11 | ||||||||
Total Source of Funds | 0.62 | 0.31 | 0.17 | 0.31 | 0.14 | ||||||||
Net Interest Margin – GAAP | 1.43 | % | 1.29 | % | 1.15 | % | 0.14 | 0.14 | |||||
Net Interest Margin – FTE | 1.46 | % | 1.33 | % | 1.18 | % | 0.13 | 0.15 |
44 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Compensation | $ | 1,806.9 | $ | 1,733.7 | $ | 1,541.1 | 4 | % | 13 | % | |||
Employee Benefits | 356.7 | 319.9 | 293.3 | 12 | 9 | ||||||||
Outside Services | 739.4 | 668.4 | 627.1 | 11 | 7 | ||||||||
Equipment and Software | 582.2 | 524.0 | 467.4 | 11 | 12 | ||||||||
Occupancy | 201.1 | 191.8 | 177.4 | 5 | 8 | ||||||||
Other Operating Expense | 330.6 | 331.6 | 364.4 | — | (9 | ) | |||||||
Total Noninterest Expense | $ | 4,016.9 | $ | 3,769.4 | $ | 3,470.7 | 7 | % | 9 | % |
2018 Annual Report | Northern Trust Corporation 45 |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Business Promotion | $ | 98.3 | $ | 95.4 | $ | 83.6 | 3 | % | 14 | % | |||
FDIC Insurance Premiums | 27.4 | 34.7 | 31.7 | (21 | ) | 9 | |||||||
Staff Related | 33.6 | 42.8 | 43.0 | (22 | ) | (1 | ) | ||||||
Other Intangibles Amortization | 17.4 | 11.4 | 8.8 | 52 | 30 | ||||||||
Other Expenses | 153.9 | 147.3 | 197.3 | 4 | (25 | ) | |||||||
Total Other Operating Expense | $ | 330.6 | $ | 331.6 | $ | 364.4 | — | % | (9 | )% |
46 2018 Annual Report | Northern Trust Corporation |
(In Millions) | 2018 | 2017 | ||||
Federal Taxes on Mandatory Deemed Repatriation | $ | (16.8 | ) | $ | 150.0 | |
Impact Related to Federal Deferred Taxes | 12.7 | (210.0 | ) | |||
Other Adjustments | (0.7 | ) | 6.9 | |||
Provision (Benefit) for Income Taxes | $ | (4.8 | ) | $ | (53.1 | ) |
2018 Annual Report | Northern Trust Corporation 47 |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Noninterest Income | |||||||||||||
Trust, Investment and Other Servicing Fees | $ | 3,753.7 | $ | 3,434.3 | $ | 3,108.1 | 9 | % | 10 | % | |||
Foreign Exchange Trading Income | 307.2 | 209.9 | 236.6 | 46 | (11 | ) | |||||||
Other Noninterest Income | 276.6 | 301.9 | 382.2 | (8 | ) | (21 | ) | ||||||
Net Interest Income (Note) | 1,663.9 | 1,475.0 | 1,260.0 | 13 | 17 | ||||||||
Revenue (Note) | 6,001.4 | 5,421.1 | 4,986.9 | 11 | 9 | ||||||||
Provision for Credit Losses | (14.5 | ) | (28.0 | ) | (26.0 | ) | (48 | ) | 8 | ||||
Noninterest Expense | 4,016.9 | 3,769.4 | 3,470.7 | 7 | 9 | ||||||||
Income before Income Taxes (Note) | 1,999.0 | 1,679.7 | 1,542.2 | 19 | 9 | ||||||||
Provision for Income Taxes (Note) | 442.6 | 480.7 | 509.7 | (8 | ) | (6 | ) | ||||||
Net Income | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | 30 | % | 16 | % | |||
Average Assets | $ | 122,946.6 | $ | 119,607.4 | $ | 115,570.3 | 3 | % | 3 | % |
48 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Noninterest Income | |||||||||||||
Trust, Investment and Other Servicing Fees | $ | 2,173.1 | $ | 1,984.6 | $ | 1,787.8 | 9 | % | 11 | % | |||
Foreign Exchange Trading Income | 233.4 | 197.9 | 224.4 | 18 | (12 | ) | |||||||
Other Noninterest Income | 183.0 | 176.1 | 147.0 | 4 | 20 | ||||||||
Net Interest Income (Note) | 992.2 | 733.8 | 565.0 | 35 | 30 | ||||||||
Revenue (Note) | 3,581.7 | 3,092.4 | 2,724.2 | 16 | 14 | ||||||||
Provision for Credit Losses | 1.9 | 3.4 | 1.9 | (44 | ) | 79 | |||||||
Noninterest Expense | 2,421.4 | 2,194.5 | 2,012.2 | 10 | 9 | ||||||||
Income before Income Taxes (Note) | 1,158.4 | 894.5 | 710.1 | 30 | 26 | ||||||||
Provision for Income Taxes (Note) | 255.3 | 279.5 | 212.9 | (9 | ) | 31 | |||||||
Net Income | $ | 903.1 | $ | 615.0 | $ | 497.2 | 47 | % | 24 | % | |||
Percentage of Consolidated Net Income | 58 | % | 51 | % | 48 | % | |||||||
Average Assets | $ | 82,996.5 | $ | 80,105.6 | $ | 76,194.7 | 4 | % | 5 | % |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Custody and Fund Administration | $ | 1,501.1 | $ | 1,342.1 | $ | 1,182.2 | 12 | % | 14 | % | |||
Investment Management | 436.8 | 403.5 | 371.8 | 8 | 9 | ||||||||
Securities Lending | 102.0 | 96.4 | 97.7 | 6 | (1 | ) | |||||||
Other | 133.2 | 142.6 | 136.1 | (7 | ) | 5 | |||||||
Total Trust, Investment and Other Servicing Fees | $ | 2,173.1 | $ | 1,984.6 | $ | 1,787.8 | 10 | % | 11 | % |
2018 Annual Report | Northern Trust Corporation 49 |
n | 69% Custody and Fund Administration | |
n | 20% Investment Management | |
n | 5% Securities Lending | |
n | 6% Other Services | |
DECEMBER 31, | CHANGE | ||||||||||||
($ In Billions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
North America | $ | 3,693.4 | $ | 3,972.1 | $ | 3,334.5 | (7 | )% | 19 | % | |||
Europe, Middle East, and Africa | 2,538.6 | 2,602.4 | 2,152.2 | (2 | ) | 21 | |||||||
Asia Pacific | 589.2 | 697.1 | 578.4 | (15 | ) | 21 | |||||||
Securities Lending | 149.8 | 167.5 | 111.8 | (11 | ) | 50 | |||||||
Total Assets Under Custody | $ | 6,971.0 | $ | 7,439.1 | $ | 6,176.9 | (6 | )% | 20 | % |
n | 53% North America | |
n | 36% Europe, Middle East, and Africa | |
n | 9% Asia Pacific | |
n | 2% Securities Lending | |
50 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | CHANGE | ||||||||||||
($ In Billions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
North America | $ | 493.1 | $ | 533.5 | $ | 450.2 | (8 | )% | 19 | % | |||
Europe, Middle East, and Africa | 113.3 | 127.3 | 98.8 | (11 | ) | 29 | |||||||
Asia Pacific | 34.6 | 42.9 | 33.2 | (19 | ) | 29 | |||||||
Securities Lending | 149.8 | 167.5 | 111.8 | (11 | ) | 50 | |||||||
Total Assets Under Management | $ | 790.8 | $ | 871.2 | $ | 694.0 | (9 | )% | 26 | % |
n | 62% North America | |
n | 14% Europe, Middle East, and Africa | |
n | 5% Asia Pacific | |
n | 19% Securities Lending | |
n | 51% Equities | |
n | 19% Securities Lending | |
n | 17% Cash and Other Assets | |
n | 13% Fixed Income Securities | |
2018 Annual Report | Northern Trust Corporation 51 |
52 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Noninterest Income | |||||||||||||
Trust, Investment and Other Servicing Fees | $ | 1,580.6 | $ | 1,449.7 | $ | 1,320.3 | 9 | % | 10 | % | |||
Foreign Exchange Trading Income | 4.2 | 3.1 | 8.6 | 35 | (64 | ) | |||||||
Other Noninterest Income | 102.7 | 103.9 | 105.7 | (1 | ) | (2 | ) | ||||||
Net Interest Income (Note) | 816.5 | 736.2 | 651.4 | 11 | 13 | ||||||||
Revenue (Note) | 2,504.0 | 2,292.9 | 2,086.0 | 9 | 10 | ||||||||
Provision for Credit Losses | (16.4 | ) | (31.4 | ) | (27.9 | ) | (48 | ) | 13 | ||||
Noninterest Expense | 1,460.0 | 1,405.3 | 1,315.3 | 4 | 7 | ||||||||
Income before Income Taxes (Note) | 1,060.4 | 919.0 | 798.6 | 15 | 15 | ||||||||
Provision for Income Taxes (Note) | 262.1 | 347.2 | 301.1 | (25 | ) | 15 | |||||||
Net Income | $ | 798.3 | $ | 571.8 | $ | 497.5 | 40 | % | 15 | % | |||
Percentage of Consolidated Net Income | 51 | % | 48 | % | 48 | % | |||||||
Average Assets | $ | 26,163.7 | $ | 26,599.9 | $ | 26,525.0 | (2 | )% | — | % |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Central | $ | 607.8 | $ | 575.5 | $ | 523.8 | 6 | % | 10 | % | |||
East | 401.7 | 356.2 | 334.4 | 13 | 7 | ||||||||
West | 320.0 | 291.7 | 268.9 | 10 | 8 | ||||||||
Global Family Office | 251.1 | 226.3 | 193.2 | 11 | 17 | ||||||||
Total Trust, Investment and Other Servicing Fees | $ | 1,580.6 | $ | 1,449.7 | $ | 1,320.3 | 9 | % | 10 | % |
n | 39% Central | |
n | 25% East | |
n | 20% West | |
n | 16% Global Family Office | |
2018 Annual Report | Northern Trust Corporation 53 |
DECEMBER 31, | CHANGE | ||||||||||||
($ In Billions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Global Family Office | $ | 405.5 | $ | 422.9 | $ | 347.7 | (4 | )% | 22 | % | |||
Central | 88.2 | 94.8 | 83.8 | (7 | ) | 13 | |||||||
East | 72.7 | 70.5 | 61.7 | 3 | 14 | ||||||||
West | 56.5 | 57.3 | 50.4 | (1 | ) | 14 | |||||||
Total Assets Under Custody | $ | 622.9 | $ | 645.5 | $ | 543.6 | (4 | )% | 19 | % |
n | 65% Global Family Office | |
n | 14% Central | |
n | 12% East | |
n | 9% West | |
DECEMBER 31, | CHANGE | ||||||||||||
($ In Billions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Central | $ | 96.2 | $ | 102.1 | $ | 89.7 | (6 | )% | 14 | % | |||
Global Family Office | 83.5 | 87.1 | 69.3 | (4 | ) | 26 | |||||||
East | 57.0 | 57.0 | 50.9 | — | 12 | ||||||||
West | 41.9 | 43.6 | 38.5 | (4 | ) | 13 | |||||||
Total Assets Under Management | $ | 278.6 | $ | 289.8 | $ | 248.4 | (4 | )% | 17 | % |
n | 35% Central | |
n | 30% Global Family Office | |
n | 20% East | |
n | 15% West | |
54 2018 Annual Report | Northern Trust Corporation |
n | 47% Equities | |
n | 27% Cash and Other Assets | |
n | 26% Fixed Income Securities | |
2018 Annual Report | Northern Trust Corporation 55 |
FOR THE YEAR ENDED DECEMBER 31, | CHANGE | ||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Noninterest Income | $ | 60.5 | $ | 30.8 | $ | 133.1 | 96 | % | (77 | )% | |||
Net Interest Income (Note) | (144.8 | ) | 5.0 | 43.6 | N/M | (89 | ) | ||||||
Revenue (Note) | (84.3 | ) | 35.8 | 176.7 | N/M | (80 | ) | ||||||
Noninterest Expense | 135.5 | 169.6 | 143.2 | (20 | ) | 18 | |||||||
Income (Loss) before Income Taxes (Note) | (219.8 | ) | (133.8 | ) | 33.5 | 64 | N/M | ||||||
Provision (Benefit) for Income Taxes (Note) | (74.8 | ) | (146.0 | ) | (4.3 | ) | (49 | ) | N/M | ||||
Net Income | $ | (145.0 | ) | $ | 12.2 | $ | 37.8 | N/M | (68 | )% | |||
Percentage of Consolidated Net Income | (9 | )% | 1 | % | 4 | % | |||||||
Average Assets | $ | 13,786.4 | $ | 12,901.9 | $ | 12,850.6 | 7 | % | — | % |
56 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | CHANGE | ||||||||||||
($ In Billions) | 2018 | 2017 | 2016 | 2018 / 2017 | 2017 / 2016 | ||||||||
Equities | $ | 534.2 | $ | 592.3 | $ | 480.6 | (10 | )% | 23 | % | |||
Fixed Income Securities | 178.3 | 183.5 | 160.5 | (3 | ) | 14 | |||||||
Cash and Other Assets | 207.0 | 217.5 | 189.3 | (5 | ) | 15 | |||||||
Securities Lending Collateral | 149.9 | 167.7 | 112.0 | (11 | ) | 50 | |||||||
Total Assets Under Management | $ | 1,069.4 | $ | 1,161.0 | $ | 942.4 | (8 | )% | 23 | % |
($ In Billions) | 2018 | 2017 | 2016 | |||||||
Balance as of January 1, | $ | 1,161.0 | $ | 942.4 | $ | 875.3 | ||||
Inflows by Investment Type | ||||||||||
Equities | 174.7 | 192.1 | 136.0 | |||||||
Fixed Income Securities | 63.7 | 68.1 | 59.3 | |||||||
Cash and Other Assets | 484.3 | 407.9 | 383.4 | |||||||
Securities Lending Collateral | 165.6 | 132.4 | 93.8 | |||||||
Total Inflows | 888.3 | 800.5 | 672.5 | |||||||
Outflows by Investment Type | ||||||||||
Equities | (179.2 | ) | (185.7 | ) | (136.1 | ) | ||||
Fixed Income Securities | (72.5 | ) | (57.2 | ) | (48.0 | ) | ||||
Cash and Other Assets | (487.4 | ) | (384.0 | ) | (363.6 | ) | ||||
Securities Lending Collateral | (183.3 | ) | (76.7 | ) | (85.7 | ) | ||||
Total Outflows | (922.4 | ) | (703.6 | ) | (633.4 | ) | ||||
Net (Outflows) / Inflows | (34.1 | ) | 96.9 | 39.1 | ||||||
Market Performance, Currency and Other | ||||||||||
Market Performance and Other | (49.3 | ) | 111.6 | 32.0 | ||||||
Currency | (8.2 | ) | 10.1 | (4.0 | ) | |||||
Total Market Performance, Currency and Other | (57.5 | ) | 121.7 | 28.0 | ||||||
Balance as of December 31, | $ | 1,069.4 | $ | 1,161.0 | $ | 942.4 |
2018 Annual Report | Northern Trust Corporation 57 |
DECEMBER 31, | |||||||||
($ In Millions) | 2018 | 2017 | 2016 | ||||||
Debt Securities Held to Maturity | |||||||||
U.S. Government | $ | 101.6 | $ | 35.0 | $ | 15.0 | |||
Obligations of States and Political Subdivisions | 18.9 | 34.6 | 63.6 | ||||||
Government Sponsored Agency | 4.5 | 5.8 | 7.4 | ||||||
Other | 14,229.0 | 12,973.6 | 8,835.1 | ||||||
Total Debt Securities Held to Maturity | $ | 14,354.0 | $ | 13,049.0 | $ | 8,921.1 | |||
Debt Securities Available for Sale | |||||||||
U.S. Government | $ | 5,185.3 | $ | 5,700.3 | $ | 7,522.6 | |||
Obligations of States and Political Subdivisions | 655.9 | 746.4 | 885.2 | ||||||
Government Sponsored Agency | 22,424.6 | 18,676.6 | 17,892.8 | ||||||
Asset-Backed | 3,244.9 | 2,726.4 | 2,556.7 | ||||||
Auction Rate | — | 4.3 | 4.7 | ||||||
Other | 5,378.1 | 5,888.1 | 6,717.8 | ||||||
Total Debt Securities Available for Sale | $ | 36,888.8 | $ | 33,742.1 | $ | 35,579.8 | |||
Trading Account | $ | 0.3 | $ | 0.5 | $ | 0.3 | |||
Total Debt Securities at Year-End | $ | 51,243.1 | $ | 46,791.6 | $ | 44,501.2 | |||
Average Total Securities | $ | 50,281.5 | $ | 44,715.7 | $ | 42,041.3 |
58 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | |||||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
Commercial | |||||||||||||||
Commercial and Institutional | $ | 8,728.1 | $ | 9,042.2 | $ | 9,287.4 | $ | 9,307.5 | $ | 8,343.7 | |||||
Commercial Real Estate | 3,228.8 | 3,482.7 | 4,002.5 | 3,848.8 | 3,333.3 | ||||||||||
Non-U.S. | 2,701.6 | 1,538.5 | 1,877.8 | 1,137.7 | 1,530.6 | ||||||||||
Lease Financing, net | 90.7 | 229.2 | 293.9 | 544.4 | 916.3 | ||||||||||
Other | 426.0 | 265.4 | 205.1 | 194.1 | 191.5 | ||||||||||
Total Commercial | $ | 15,175.2 | $ | 14,558.0 | $ | 15,666.7 | $ | 15,032.5 | $ | 14,315.4 | |||||
Personal | |||||||||||||||
Private Client | $ | 10,733.3 | $ | 10,753.1 | $ | 10,052.0 | $ | 9,136.4 | $ | 7,466.9 | |||||
Residential Real Estate | 6,514.0 | 7,247.6 | 8,077.5 | 8,974.7 | 9,820.8 | ||||||||||
Other | 67.5 | 33.5 | 25.9 | 37.3 | 37.1 | ||||||||||
Total Personal | $ | 17,314.8 | $ | 18,034.2 | $ | 18,155.4 | $ | 18,148.4 | $ | 17,324.8 | |||||
Total Loans and Leases | $ | 32,490.0 | $ | 32,592.2 | $ | 33,822.1 | $ | 33,180.9 | $ | 31,640.2 |
2018 Annual Report | Northern Trust Corporation 59 |
DECEMBER 31, | ||||||
($ In Millions) | 2018 | 2017 | ||||
Commercial Mortgages: | ||||||
Office | $ | 811.2 | $ | 825.2 | ||
Apartment/Multi-family | 490.7 | 623.3 | ||||
Retail | 529.7 | 631.1 | ||||
Industrial / Warehouse | 254.9 | 311.1 | ||||
Other | 426.6 | 445.6 | ||||
Total Commercial Mortgages | 2,513.1 | 2,836.3 | ||||
Construction, Acquisition and Development Loans | 420.6 | 350.8 | ||||
Single Family Investment | 127.0 | 164.8 | ||||
Other Commercial Real Estate Related | 168.1 | 130.8 | ||||
Total Commercial Real Estate Loans | $ | 3,228.8 | $ | 3,482.7 |
60 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | |||||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
Nonperforming Loans and Leases | |||||||||||||||
Commercial | |||||||||||||||
Commercial and Institutional | $ | 6.8 | $ | 26.0 | $ | 9.2 | $ | 18.1 | $ | 15.0 | |||||
Commercial Real Estate | 6.9 | 8.3 | 11.6 | 16.7 | 37.1 | ||||||||||
Non-U.S. | 0.4 | — | — | — | — | ||||||||||
Total Commercial | 14.1 | 34.3 | 20.8 | 34.8 | 52.1 | ||||||||||
Personal | |||||||||||||||
Residential Real Estate | $ | 95.0 | $ | 116.4 | $ | 139.1 | $ | 144.9 | $ | 162.4 | |||||
Private Client | 0.2 | — | 0.3 | 0.4 | 1.2 | ||||||||||
Total Personal | 95.2 | 116.4 | 139.4 | 145.3 | 163.6 | ||||||||||
Total Nonperforming Loans and Leases | 109.3 | 150.7 | 160.2 | 180.1 | 215.7 | ||||||||||
Other Real Estate Owned | 8.4 | 4.6 | 5.2 | 8.2 | 16.6 | ||||||||||
Total Nonperforming Assets | $ | 117.7 | $ | 155.3 | $ | 165.4 | $ | 188.3 | $ | 232.3 | |||||
90 Day Past Due Loans Still Accruing | $ | 16.4 | $ | 8.0 | $ | 31.0 | $ | 7.1 | $ | 22.7 | |||||
Nonperforming Loans and Leases to Total Loans and Leases | 0.34 | % | 0.46 | % | 0.47 | % | 0.54 | % | 0.68 | % | |||||
Allowance for Credit Losses Assigned to Loans and Leases to Nonperforming Loans and Leases | 1.0 | x | 0.9 | x | 1.0 | x | 1.1 | x | 1.2 | x |
($ In Millions) | 2018 | 2017 | 2016 | ||||||
Balance at January 1 | $ | 153.8 | $ | 192.0 | $ | 233.3 | |||
Charge-Offs | (10.1 | ) | (21.5 | ) | (27.3 | ) | |||
Recoveries | 9.0 | 11.3 | 12.1 | ||||||
Net Charge-Offs | (1.1 | ) | (10.2 | ) | (15.2 | ) | |||
Provision for Credit Losses | (14.5 | ) | (28.0 | ) | (26.0 | ) | |||
Effects of Foreign Exchange Rates | — | — | (0.1 | ) | |||||
Balance at December 31 | $ | 138.2 | $ | 153.8 | $ | 192.0 |
2018 Annual Report | Northern Trust Corporation 61 |
DECEMBER 31, | |||||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||
($ 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 | ALLOWANCE AMOUNT | PERCENT OF LOANS TO TOTAL LOANS | ALLOWANCE AMOUNT | PERCENT OF LOANS TO TOTAL LOANS | |||||||||||||||
Specific Allowance | $ | 10.0 | — | % | $ | 5.4 | — | % | $ | 2.1 | — | % | $ | 3.1 | — | % | $ | 21.1 | — | % | |||||
Allocated Inherent Allowance | |||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||
Commercial and Institutional | 33.5 | 27 | 34.7 | 27 | 34.7 | 27 | 40.4 | 28 | 73.0 | 26 | |||||||||||||||
Commercial Real Estate | 35.5 | 10 | 43.3 | 11 | 69.2 | 12 | 69.5 | 12 | 69.4 | 10 | |||||||||||||||
Lease Financing, net | 0.1 | — | 0.2 | 1 | 0.4 | 1 | 1.9 | 2 | 3.6 | 3 | |||||||||||||||
Non-U.S. | — | 8 | — | 5 | — | 5 | — | 3 | 3.3 | 5 | |||||||||||||||
Other | 2.7 | 2 | 1.5 | 1 | 0.6 | 1 | — | 1 | — | 1 | |||||||||||||||
Total Commercial | 71.8 | 47 | 79.7 | 45 | 104.9 | 46 | 111.8 | 46 | 149.3 | 45 | |||||||||||||||
Personal | |||||||||||||||||||||||||
Residential Real Estate | 45.8 | 20 | 57.3 | 22 | 69.0 | 24 | 96.2 | 27 | 107.7 | 31 | |||||||||||||||
Private Client | 9.2 | 33 | 9.5 | 33 | 13.8 | 30 | 19.7 | 27 | 17.8 | 24 | |||||||||||||||
Other | 1.4 | — | 1.9 | — | 2.2 | — | 2.5 | — | — | — | |||||||||||||||
Total Personal | 56.4 | 53 | 68.7 | 55 | 85.0 | 54 | 118.4 | 54 | 125.5 | 55 | |||||||||||||||
Total Allocated Inherent Allowance | $ | 128.2 | 100 | % | $ | 148.4 | 100 | % | $ | 189.9 | 100 | % | $ | 230.2 | 100 | % | $ | 274.8 | 100 | % | |||||
Total Allowance for Credit Losses | $ | 138.2 | 100 | % | $ | 153.8 | 100 | % | $ | 192.0 | 100 | % | $ | 233.3 | 100 | % | $ | 295.9 | 100 | % | |||||
Allowance Assigned to: | |||||||||||||||||||||||||
Loans and Leases | $ | 112.6 | $ | 131.2 | $ | 161.0 | $ | 193.8 | $ | 267.0 | |||||||||||||||
Undrawn Commitments and Standby Letters of Credit | 25.6 | 22.6 | 31.0 | 39.5 | 28.9 | ||||||||||||||||||||
Total Allowance for Credit Losses | $ | 138.2 | $ | 153.8 | $ | 192.0 | $ | 233.3 | $ | 295.9 | |||||||||||||||
Allowance Assigned to Loans and Leases to Total Loans and Leases | 0.35 | % | 0.40 | % | 0.48 | % | 0.58 | % | 0.84 | % |
62 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 63 |
64 2018 Annual Report | Northern Trust Corporation |
• | Discount Rate: Northern Trust estimates the discount rate for its U.S. pension plans by applying the projected cash flows for future benefit payments to the Aon AA Above Median yield curve as of the measurement date. This yield curve is composed of individual zero-coupon interest rates for 198 different time periods over a 99-year time horizon. Zero-coupon rates utilized by the yield curve are mathematically derived from observable market yields for AA-rated corporate bonds. This yield curve model referenced by Northern Trust in establishing the discount rate resulted in a rate of 4.47% at December 31, 2018 for the Qualified and Nonqualified plans, an increase from 3.79% at December 31, 2017. |
• | Compensation Level: Based on a review of actual and anticipated salary experience, the compensation scale assumption continues to be based on a graded schedule from 9.00% to 2.50% that averages 4.39%. |
• | Rate of Return on Plan Assets: The expected return on plan assets is based on an estimate of the long-term (30 years) rate of return on plan assets, which is determined using a building block approach that considers the current asset mix and estimates of return by asset class based on historical experience, giving proper consideration to diversification and rebalancing. Current market factors such as inflation and interest rates are also evaluated before long-term capital market assumptions are determined. Peer data and historical returns are reviewed to check for reasonability and appropriateness. As a result of these analyses, Northern Trust’s rate of return assumption for the Qualified Plan remains at 6.00% for 2019. |
• | Mortality Table: Northern Trust uses the aggregate RP-2014 mortality table with adjustment from 2014 to 2006. Northern Trust’s pension obligations reflect proposed future improvement under scale MP-2018, released by the Society of Actuaries in October 2018. This assumption was updated at December 31, 2018 from improvement scale MP-2017. The updated improvement scale applies to annuity payments only and results in generally lower projected mortality improvements than estimated by the MP-2017 improvement scale. Mortality assumptions on lump sum payments remain static and continue to be in line with the IRS prescribed table for minimum lump sums in 2019. |
($ In Millions) | 25 BASIS POINT INCREASE | 25 BASIS POINT DECREASE | ||||
Increase (Decrease) in 2019 Pension Expense | ||||||
Discount Rate Change | $ | (3.8 | ) | $ | 3.9 | |
Compensation Level Change | 1.8 | (1.6 | ) | |||
Rate of Return on Plan Assets Change | (3.6 | ) | 3.6 | |||
Increase (Decrease) in 2018 Projected Benefit Obligation | ||||||
Discount Rate Change | (42.0 | ) | 44.3 | |||
Compensation Level Change | 6.7 | (6.5 | ) |
2018 Annual Report | Northern Trust Corporation 65 |
66 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 67 |
DECEMBER 31, | ||||||
($ In Millions) | 2018 | 2017 | ||||
Undrawn Commitments to Extend Credit | ||||||
One Year and Less | $ | 7,629.9 | $ | 8,617.3 | ||
Over One Year | 17,393.1 | 18,205.3 | ||||
Total | $ | 25,023.0 | $ | 26,822.6 | ||
Standby Letters of Credit | $ | 2,486.2 | $ | 2,970.0 | ||
Commercial Letters of Credit | 32.3 | 37.7 | ||||
Custody Securities Lent with Indemnification | 128,904.8 | 143,568.2 |
68 2018 Annual Report | Northern Trust Corporation |
AS OF DECEMBER 31, 2018 | COMMITMENT EXPIRATION | |||||||||||
($ In Millions) | TOTAL COMMITMENTS | ONE YEAR AND LESS | OVER ONE YEAR | OUTSTANDING LOANS | ||||||||
Commercial | ||||||||||||
Commercial and Institutional | ||||||||||||
Finance and Insurance | $ | 3,877.6 | $ | 1,745.1 | $ | 2,132.5 | $ | 1,644.2 | ||||
Holding Companies | — | — | — | 20.3 | ||||||||
Manufacturing | 6,637.8 | 614.1 | 6,023.7 | 1,604.4 | ||||||||
Mining | 723.1 | 184.9 | 538.2 | 21.1 | ||||||||
Public Administration | 106.0 | 106.0 | — | 58.7 | ||||||||
Retail Trade | 772.3 | 170.0 | 602.3 | 134.3 | ||||||||
Services | 5,629.0 | 2,338.2 | 3,290.8 | 4,274.7 | ||||||||
Transportation and Warehousing | 308.2 | 1.3 | 306.9 | 235.4 | ||||||||
Utilities | 1,265.6 | — | 1,265.6 | 4.5 | ||||||||
Wholesale Trade | 634.7 | 36.8 | 597.9 | 387.8 | ||||||||
Other Commercial | 199.4 | 152.2 | 47.2 | 342.7 | ||||||||
Commercial and Institutional (Note) | 20,153.7 | 5,348.6 | 14,805.1 | 8,728.1 | ||||||||
Commercial Real Estate | 331.4 | 63.9 | 267.5 | 3,228.8 | ||||||||
Lease Financing, net | — | — | — | 90.7 | ||||||||
Non-U.S. | 1,167.0 | 608.6 | 558.4 | 2,701.6 | ||||||||
Other | 130.8 | 130.8 | — | 426.0 | ||||||||
Total Commercial | 21,782.9 | 6,151.9 | 15,631.0 | 15,175.2 | ||||||||
Personal | ||||||||||||
Residential Real Estate | 824.0 | 194.0 | 630.0 | 6,514.0 | ||||||||
Private Client | 2,395.4 | 1,263.3 | 1,132.1 | 10,733.3 | ||||||||
Other | 20.7 | 20.7 | — | 67.5 | ||||||||
Total Personal | 3,240.1 | 1,478.0 | 1,762.1 | 17,314.8 | ||||||||
Total | $ | 25,023.0 | $ | 7,629.9 | $ | 17,393.1 | $ | 32,490.0 |
2018 Annual Report | Northern Trust Corporation 69 |
70 2018 Annual Report | Northern Trust Corporation |
CREDIT RATING | |||
STANDARD & POOR’S | MOODY’S | FITCHRATINGS | |
Northern Trust Corporation: | |||
Senior Debt | A+ | A2 | AA- |
Subordinated Debt | A | A2 | A+ |
Preferred Stock | BBB+ | Baa1 | BBB |
Trust Preferred Capital Securities | BBB+ | A3 | BBB+ |
Outlook | Stable | Stable | Stable |
The Northern Trust Company: | |||
Short-Term Deposit | A-1+ | P-1 | F1+ |
Long-Term Deposit | AA- | Aa2 | AA |
Subordinated Debt | A+ | A2 | A+ |
Outlook | Stable | Stable | Stable |
2018 Annual Report | Northern Trust Corporation 71 |
PAYMENT DUE BY PERIOD | |||||||||||||||
($ In Millions) | TOTAL | ONE YEAR AND LESS | 1-3 YEARS | 3-5 YEARS | OVER 5 YEARS | ||||||||||
Senior Notes(1) | $ | 2,011.3 | $ | — | $ | 998.8 | $ | 499.2 | $ | 513.3 | |||||
Subordinated Debt(1) | 1,112.4 | — | — | — | 1,112.4 | ||||||||||
Floating Rate Capital Debt(1) | 277.6 | — | — | — | 277.6 | ||||||||||
Operating Leases(2) | 763.1 | 98.8 | 183.7 | 144.9 | 335.7 | ||||||||||
Purchase Obligations(3) | 715.2 | 260.9 | 301.8 | 140.9 | 11.6 | ||||||||||
Total Contractual Obligations | $ | 4,879.6 | $ | 359.7 | $ | 1,484.3 | $ | 785.0 | $ | 2,250.6 |
72 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 73 |
($ In Millions) | December 31, 2018 | December 31, 2017 | ||||||||||
Advanced Approach | Standardized Approach | Advanced Approach | Standardized Approach | |||||||||
Common Equity Tier 1 Capital | ||||||||||||
Common Stockholders’ Equity | $ | 9,626.3 | $ | 9,626.3 | $ | 9,334.2 | $ | 9,334.2 | ||||
Net Unrealized (Gains) Losses on Debt Securities Available for Sale | — | — | 15.0 | 15.0 | ||||||||
Net Unrealized (Gains) Losses on Cash Flow Hedges | — | — | (0.9 | ) | (0.9 | ) | ||||||
Goodwill and Other Intangible Assets, net of Deferred Tax Liability | (767.6 | ) | (767.6 | ) | (697.4 | ) | (697.4 | ) | ||||
Pension and Other Postretirement Benefit Adjustments | — | — | 68.4 | 68.4 | ||||||||
Other | (128.9 | ) | (128.9 | ) | (93.0 | ) | (93.0 | ) | ||||
Total Common Equity Tier 1 | 8,729.8 | 8,729.8 | 8,626.3 | 8,626.3 | ||||||||
Additional Tier 1 Capital | ||||||||||||
Preferred Stock | 882.0 | 882.0 | 882.0 | 882.0 | ||||||||
Other | (15.1 | ) | (15.1 | ) | (34.9 | ) | (34.9 | ) | ||||
Total Additional Tier 1 Capital | 866.9 | 866.9 | 847.1 | 847.1 | ||||||||
Total Tier 1 Capital | 9,596.7 | 9,596.7 | 9,473.4 | 9,473.4 | ||||||||
Tier 2 Capital | ||||||||||||
Qualifying Allowance for Credit Losses | — | 138.2 | — | 153.8 | ||||||||
Qualifying Subordinated Debt | 1,099.4 | 1,099.4 | 1,099.4 | 1,099.4 | ||||||||
Floating Rate Capital | 107.7 | 107.7 | 134.6 | 134.6 | ||||||||
Total Tier 2 Capital | 1,207.1 | 1,345.3 | 1,234.0 | 1,387.8 | ||||||||
Total Risk-Based Capital | $ | 10,803.8 | $ | 10,942.0 | $ | 10,707.4 | $ | 10,861.2 | ||||
Risk-Weighted Assets(1) | $ | 63,914.8 | $ | 67,837.1 | $ | 64,018.7 | $ | 68,616.4 | ||||
Total Assets – End of Period (EOP) | 132,212.5 | 132,212.5 | 138,590.5 | 138,590.5 | ||||||||
Adjusted Average Fourth Quarter Assets(2) | 120,402.6 | 120,402.6 | 121,517.1 | 121,517.1 | ||||||||
Total Loans and Leases – EOP | 32,490.0 | 32,490.0 | 32,592.2 | 32,592.2 | ||||||||
Common Stockholders’ Equity to: | ||||||||||||
Total Loans and Leases – EOP | 29.63 | % | 29.63 | % | 28.64 | % | 28.64 | % | ||||
Total Assets – EOP | 7.28 | 7.28 | 6.74 | 6.74 | ||||||||
Risk-Based Capital Ratios | ||||||||||||
Common Equity Tier 1 | 13.7 | % | 12.9 | % | 13.5 | % | 12.6 | % | ||||
Tier 1 | 15.0 | 14.1 | 14.8 | 13.8 | ||||||||
Total (Tier 1 and Tier 2) | 16.9 | 16.1 | 16.7 | 15.8 | ||||||||
Leverage | 8.0 | 8.0 | 7.8 | 7.8 | ||||||||
Supplementary Leverage(3) | 7.0 | N/A | 6.8 | N/A |
74 2018 Annual Report | Northern Trust Corporation |
Northern Trust Corporation Board of Directors | |||
Audit Committee | Business Risk Committee | Capital Governance Committee | Compensation and Benefits Committee |
Global Enterprise Risk Committee (GERC) | |||||
Credit Risk Committee | Operational Risk Committee | Fiduciary Risk Committee | Compliance & Ethics Oversight Committee | Market & Liquidity Risk Committee | Model Risk Oversight Committee |
2018 Annual Report | Northern Trust Corporation 75 |
76 2018 Annual Report | Northern Trust Corporation |
• | not an originator of loan products to be sold into a secondary market or to be bundled into asset securitizations; |
• | not an agent bank or syndicator of loans, where risk management is achieved post-close through the sale of participations; and |
• | not a participant in leveraged financial transactions, such as project finance, private-equity-originated acquisition financing or hedge fund leveraging. |
2018 Annual Report | Northern Trust Corporation 77 |
78 2018 Annual Report | Northern Trust Corporation |
• | Loss Event Data Program - a program that collects internal and external loss data for use in monitoring operational risk exposure, various business analyses and a Basel Advanced Measurement Approach (AMA) capital quantification. |
• | Risk and Control Self-Assessment - a structured risk management process used by Northern Trust’s businesses to analyze the risks that are present in their respective business environments, processes and activities and to assess the adequacy of associated internal controls. |
• | Operational Risk Scenario Analysis - a systematic process of obtaining expert opinions from business managers and risk management experts to derive reasoned assessments of the likelihood of occurrence and the potential loss impact of plausible high-severity operational losses. |
• | Product and Process Risk Management Program - a program used for evaluating and managing risks associated with the introduction of new and modified noncredit products and services, significant changes to operating processes, and related significant loss events. |
• | Outsourcing Risk Management Program - a program that provides processes for appropriate risk assessment, measurement, monitoring and management of outsourced technology and business process outsourcing. |
• | Information Security and Technology Risk Management - a program that communicates and implements compliance and risk management processes and controls to address information security, including cyber threats and technology risks to the organization. |
• | Business Continuity and Disaster Recovery Management Program - a program designed to minimize business impact and support the resumption of mission critical functions for clients following an incident. |
• | Physical Security - a program that provides for the safety of Northern Trust partners, clients, and visitors worldwide. |
• | Insurance Management Program - a program designed to reduce the monetary impact of certain operational loss events. |
2018 Annual Report | Northern Trust Corporation 79 |
80 2018 Annual Report | Northern Trust Corporation |
• | Regulatory Risk - risk arising from failure to comply with prudential and conduct of business or other regulatory requirements. |
• | Financial Crime Risk - risk arising from financial crime (e.g., money laundering, sanctions violations, fraud, insider dealing, theft, etc.) in relation to the products, services, or accounts of the institution, its clients, or others associated with the same. |
2018 Annual Report | Northern Trust Corporation 81 |
82 2018 Annual Report | Northern Trust Corporation |
• | repricing, which arises from differences in the maturity and repricing terms of assets and liabilities; |
• | yield curve, which arises from changes in the shape of the yield curve; |
• | basis, which arises from imperfect correlation in the adjustment of the rates earned and paid on different financial instruments with otherwise similar repricing characteristics; and |
• | behavioral characteristics embedded optionality, which arises from client or counterparty behavior in response to interest rate changes. |
• | purchase of securities; |
• | sale of debt securities that are classified as available for sale; |
• | issuance of senior notes and subordinated notes; |
• | collateralized borrowings from the Federal Home Loan Bank; |
• | placing and taking Eurodollar time deposits; and |
• | hedges with various types of derivative financial instruments. |
• | the balance sheet size and mix 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 nonmaturity deposits that are considered short-term in nature and therefore receive a more conservative interest-bearing treatment; |
• | 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; |
• | nonmaturity deposit pricing is 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. |
2018 Annual Report | Northern Trust Corporation 83 |
($ 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 | $ | 71 | |
200 Basis Points | 109 | ||
DECREASE IN INTEREST RATES BELOW MARKET IMPLIED FORWARD RATES | |||
100 Basis Points | (86 | ) |
• | the present value of nonmaturity deposits are estimated using dynamic decay methodologies or estimated 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 longer 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 | $ | 412 | |
200 Basis Points | 383 | ||
DECREASE IN INTEREST RATES BELOW MARKET IMPLIED FORWARD RATES | |||
100 Basis Points | (606 | ) |
84 2018 Annual Report | Northern Trust Corporation |
($ In Millions) | TOTAL VaR (SPOT AND FORWARD) | FOREIGN EXCHANGE SPOT VaR | FOREIGN EXCHANGE FORWARD VaR | |||||||||||||||
FOR THE YEAR ENDED DECEMBER 31, | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
High | $ | 0.3 | $ | 1.6 | $ | 0.2 | $ | 1.6 | $ | 0.3 | $ | 1.2 | ||||||
Low | 0.1 | 0.1 | — | — | — | 0.1 | ||||||||||||
Average | 0.1 | 0.6 | 0.1 | 0.1 | 0.1 | 0.5 | ||||||||||||
As of December 31, | 0.1 | 0.3 | 0.1 | — | 0.1 | 0.3 |
2018 Annual Report | Northern Trust Corporation 85 |
• | Macroeconomic and geopolitical risk, which centers on events or themes that would have a significant, detrimental impact on financial markets, and by extension, financial services firms. Episodes of this kind would tend to have general, as opposed to idiosyncratic, consequences. |
• | Business risk, which arises from change in the following areas: |
• | Internal: situations within Northern Trust that threaten business continuity, profitability, or the achievement of strategic objectives |
• | Secular: behavioral or technological change that affects clients and renders a Northern Trust process or service obsolete |
• | Competitive: new products or shifts in the industry landscape that challenge Northern Trust’s performance |
• | Regulatory: changes to prudential or fiscal policy that have an adverse impact on Northern Trust or its clients |
• | Reputation risk is a residual risk which arises from negative perception on the part of clients, counterparties, stockholders, investors, debt holders, market analysts, regulators, staff, or other relevant parties that adversely affects Northern Trust’s ability to conduct its business. Reputation risk can arise from a range of risk events and is not limited to strategic risk. |
86 2018 Annual Report | Northern Trust Corporation |
• | financial market disruptions or economic recession in the United States or other countries across the globe resulting from any of a number of factors, including, for example, actual or potential changes to international trade policy; |
• | 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 those related to cyber-security, data security, 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; |
• | changes in the method pursuant to which the London Interbank Offered Rate (LIBOR) or other interest rate benchmarks are determined; |
• | 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 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 address in the Corporation's resolution plan submitted in December 2017 the “shortcomings” jointly identified by the Federal Reserve Board and the FDIC in the resolution plan submitted by the Corporation in December 2015; |
• | 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 including with respect to the adoption of the Tax Cuts and Jobs Act; |
• | 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 pending departure of the United Kingdom from the European Union, commonly referred to as “Brexit,” and any negative 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; |
2018 Annual Report | Northern Trust Corporation 87 |
• | Northern Trust’s success in implementing its expense management initiatives, including its “Value for Spend” initiative; |
• | 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 continuing to enhance its 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 this Annual Report on Form 10-K, 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. |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | |||||||||||||||||||||||||
($ In Millions) | REPORTED | FTE ADJ. | FTE | REPORTED | FTE ADJ. | FTE | REPORTED | FTE ADJ. | FTE | ||||||||||||||||||
Interest Income | $ | 2,321.4 | $ | 41.2 | $ | 2,362.6 | $ | 1,769.4 | $ | 45.8 | $ | 1,815.2 | $ | 1,416.9 | $ | 25.1 | $ | 1,442.0 | |||||||||
Interest Expense | 698.7 | — | 698.7 | 340.2 | — | 340.2 | 182.0 | — | 182.0 | ||||||||||||||||||
Net Interest Income | $ | 1,622.7 | $ | 41.2 | $ | 1,663.9 | $ | 1,429.2 | $ | 45.8 | $ | 1,475.0 | $ | 1,234.9 | $ | 25.1 | $ | 1,260.0 | |||||||||
Net Interest Margin | 1.43 | % | 1.46 | % | 1.29 | % | 1.33 | % | 1.15 | % | 1.18 | % | |||||||||||||||
Total Revenue | $ | 5,960.2 | $ | 41.2 | $ | 6,001.4 | $ | 5,375.3 | $ | 45.8 | $ | 5,421.1 | $ | 4,961.8 | $ | 25.1 | $ | 4,986.9 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
($ In Millions) | REPORTED | FTE ADJ. | FTE | REPORTED | FTE ADJ. | FTE | |||||||||||||||
Interest Income | $ | 1,224.0 | $ | 25.3 | $ | 1,249.3 | $ | 1,186.9 | $ | 29.4 | $ | 1,216.3 | |||||||||
Interest Expense | 153.9 | — | 153.9 | 181.4 | — | 181.4 | |||||||||||||||
Net Interest Income | $ | 1,070.1 | $ | 25.3 | $ | 1,095.4 | $ | 1,005.5 | $ | 29.4 | $ | 1,034.9 | |||||||||
Net Interest Margin | 1.05 | % | 1.07 | % | 1.05 | % | 1.08 | % | |||||||||||||
Total Revenue | $ | 4,702.6 | $ | 25.3 | $ | 4,727.9 | $ | 4,331.2 | $ | 29.4 | $ | 4,360.6 |
88 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 89 |
90 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | ||||||
(In Millions Except Share Information) | 2018 | 2017 | ||||
ASSETS | ||||||
Cash and Due from Banks | $ | 4,581.6 | $ | 4,518.1 | ||
Federal Reserve and Other Central Bank Deposits | 30,080.2 | 40,479.1 | ||||
Interest-Bearing Deposits with Banks | 4,264.2 | 5,611.9 | ||||
Federal Funds Sold and Securities Purchased under Agreements to Resell | 1,165.2 | 1,324.3 | ||||
Debt Securities | ||||||
Available for Sale | 36,888.8 | 33,742.1 | ||||
Held to Maturity (Fair value of $14,267.0 and $13,010.9) | 14,354.0 | 13,049.0 | ||||
Trading Account | 0.3 | 0.5 | ||||
Total Debt Securities | 51,243.1 | 46,791.6 | ||||
Loans and Leases | ||||||
Commercial | 15,175.2 | 14,558.0 | ||||
Personal | 17,314.8 | 18,034.2 | ||||
Total Loans and Leases (Net of unearned income of $13.2 and $35.5) | 32,490.0 | 32,592.2 | ||||
Allowance for Credit Losses Assigned to Loans and Leases | (112.6 | ) | (131.2 | ) | ||
Buildings and Equipment | 428.2 | 464.6 | ||||
Client Security Settlement Receivables | 1,646.1 | 1,647.0 | ||||
Goodwill | 669.3 | 605.6 | ||||
Other Assets | 5,757.2 | 4,687.3 | ||||
Total Assets | $ | 132,212.5 | $ | 138,590.5 | ||
LIABILITIES | ||||||
Deposits | ||||||
Demand and Other Noninterest-Bearing | $ | 14,508.0 | $ | 18,712.2 | ||
Savings, Money Market and Other Interest-Bearing | 14,612.0 | 16,975.3 | ||||
Savings Certificates and Other Time | 688.7 | 1,152.3 | ||||
Non U.S. Offices – Noninterest-Bearing | 8,220.1 | 9,878.8 | ||||
– Interest-Bearing | 66,468.0 | 65,672.2 | ||||
Total Deposits | 104,496.8 | 112,390.8 | ||||
Federal Funds Purchased | 2,594.2 | 2,286.1 | ||||
Securities Sold Under Agreements to Repurchase | 168.3 | 834.0 | ||||
Other Borrowings | 7,901.7 | 6,051.1 | ||||
Senior Notes | 2,011.3 | 1,497.3 | ||||
Long-Term Debt | 1,112.4 | 1,449.5 | ||||
Floating Rate Capital Debt | 277.6 | 277.5 | ||||
Other Liabilities | 3,141.9 | 3,588.0 | ||||
Total Liabilities | 121,704.2 | 128,374.3 | ||||
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 219,012,050 and 226,126,674 | 408.6 | 408.6 | ||||
Additional Paid-In Capital | 1,068.5 | 1,047.2 | ||||
Retained Earnings | 10,776.8 | 9,685.1 | ||||
Accumulated Other Comprehensive Loss | (453.7 | ) | (414.3 | ) | ||
Treasury Stock (26,159,474 and 19,044,850 shares, at cost) | (2,173.9 | ) | (1,392.4 | ) | ||
Total Stockholders' Equity | 10,508.3 | 10,216.2 | ||||
Total Liabilities and Stockholders' Equity | $ | 132,212.5 | $ | 138,590.5 |
2018 Annual Report | Northern Trust Corporation 91 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions Except Share Information) | 2018 | 2017 | 2016 | ||||||
Noninterest Income | |||||||||
Trust, Investment and Other Servicing Fees | $ | 3,753.7 | $ | 3,434.3 | $ | 3,108.1 | |||
Foreign Exchange Trading Income | 307.2 | 209.9 | 236.6 | ||||||
Treasury Management Fees | 51.8 | 56.4 | 62.8 | ||||||
Security Commissions and Trading Income | 98.3 | 89.6 | 81.4 | ||||||
Other Operating Income | 127.5 | 157.5 | 241.2 | ||||||
Investment Security Losses, net (Note) | (1.0 | ) | (1.6 | ) | (3.2 | ) | |||
Total Noninterest Income | 4,337.5 | 3,946.1 | 3,726.9 | ||||||
Net Interest Income | |||||||||
Interest Income | 2,321.4 | 1,769.4 | 1,416.9 | ||||||
Interest Expense | 698.7 | 340.2 | 182.0 | ||||||
Net Interest Income | 1,622.7 | 1,429.2 | 1,234.9 | ||||||
Provision for Credit Losses | (14.5 | ) | (28.0 | ) | (26.0 | ) | |||
Net Interest Income after Provision for Credit Losses | 1,637.2 | 1,457.2 | 1,260.9 | ||||||
Noninterest Expense | |||||||||
Compensation | 1,806.9 | 1,733.7 | 1,541.1 | ||||||
Employee Benefits | 356.7 | 319.9 | 293.3 | ||||||
Outside Services | 739.4 | 668.4 | 627.1 | ||||||
Equipment and Software | 582.2 | 524.0 | 467.4 | ||||||
Occupancy | 201.1 | 191.8 | 177.4 | ||||||
Other Operating Expense | 330.6 | 331.6 | 364.4 | ||||||
Total Noninterest Expense | 4,016.9 | 3,769.4 | 3,470.7 | ||||||
Income before Income Taxes | 1,957.8 | 1,633.9 | 1,517.1 | ||||||
Provision for Income Taxes | 401.4 | 434.9 | 484.6 | ||||||
NET INCOME | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | |||
Preferred Stock Dividends | 46.4 | 49.8 | 23.4 | ||||||
Net Income Applicable to Common Stock | $ | 1,510.0 | $ | 1,149.2 | $ | 1,009.1 | |||
PER COMMON SHARE | |||||||||
Net Income – Basic | $ | 6.68 | $ | 4.95 | $ | 4.35 | |||
– Diluted | 6.64 | 4.92 | 4.32 | ||||||
Average Number of Common Shares Outstanding – Basic | 223,148,335 | 228,257,664 | 227,580,584 | ||||||
– Diluted | 224,488,326 | 229,654,401 | 229,151,406 | ||||||
Note: Changes in Other-Than-Temporary-Impairment (OTTI) Losses | $ | (0.5 | ) | $ | (0.2 | ) | $ | (3.7 | ) |
Other Security Gains/(Losses), net | (0.5 | ) | (1.4 | ) | 0.5 | ||||
Investment Security Losses, net | $ | (1.0 | ) | $ | (1.6 | ) | $ | (3.2 | ) |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Net Income | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | |||
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications) | |||||||||
Net Unrealized (Losses) Gains on Debt Securities Available for Sale | (22.3 | ) | (42.4 | ) | (1.4 | ) | |||
Net Unrealized Gains (Losses) on Cash Flow Hedges | (1.4 | ) | (1.6 | ) | 9.1 | ||||
Foreign Currency Translation Adjustments | 22.2 | 16.7 | (0.9 | ) | |||||
Pension and Other Postretirement Benefit Adjustments | (12.6 | ) | (17.0 | ) | (4.1 | ) | |||
Other Comprehensive Income (Loss) | (14.1 | ) | (44.3 | ) | 2.7 | ||||
Comprehensive Income | $ | 1,542.3 | $ | 1,154.7 | $ | 1,035.2 |
92 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
PREFERRED STOCK | |||||||||
Balance at January 1 | $ | 882.0 | $ | 882.0 | $ | 388.5 | |||
Issuance of Preferred Stock, Series D | — | — | 493.5 | ||||||
Balance at December 31 | 882.0 | 882.0 | 882.0 | ||||||
COMMON STOCK | |||||||||
Balance at January 1 and December 31 | 408.6 | 408.6 | 408.6 | ||||||
ADDITIONAL PAID-IN CAPITAL | |||||||||
Balance at January 1 | 1,047.2 | 1,035.8 | 1,072.3 | ||||||
Treasury Stock Transactions – Stock Options and Awards | (110.2 | ) | (117.1 | ) | (116.6 | ) | |||
Stock Options and Awards – Amortization | 131.5 | 128.5 | 87.7 | ||||||
Stock Options and Awards – Tax Benefits | — | — | (7.6 | ) | |||||
Balance at December 31 | 1,068.5 | 1,047.2 | 1,035.8 | ||||||
RETAINED EARNINGS | |||||||||
Balance at January 1 | 9,685.1 | 8,908.4 | 8,242.8 | ||||||
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | 25.3 | — | — | ||||||
Change in Accounting Principle | (4.5 | ) | — | — | |||||
Net Income | 1,556.4 | 1,199.0 | 1,032.5 | ||||||
Dividends Declared – Common Stock | (439.1 | ) | (372.5 | ) | (343.5 | ) | |||
Dividends Declared – Preferred Stock | (46.4 | ) | (49.8 | ) | (23.4 | ) | |||
Balance at December 31 | 10,776.8 | 9,685.1 | 8,908.4 | ||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||
Balance at January 1 | (414.3 | ) | (370.0 | ) | (372.7 | ) | |||
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | (25.3 | ) | — | — | |||||
Net Unrealized (Losses) Gains on Debt Securities Available for Sale | (22.3 | ) | (42.4 | ) | (1.4 | ) | |||
Net Unrealized Gains (Losses) on Cash Flow Hedges | (1.4 | ) | (1.6 | ) | 9.1 | ||||
Foreign Currency Translation Adjustments | 22.2 | 16.7 | (0.9 | ) | |||||
Pension and Other Postretirement Benefit Adjustments | (12.6 | ) | (17.0 | ) | (4.1 | ) | |||
Balance at December 31 | (453.7 | ) | (414.3 | ) | (370.0 | ) | |||
TREASURY STOCK | |||||||||
Balance at January 1 | (1,392.4 | ) | (1,094.4 | ) | (1,033.6 | ) | |||
Stock Options and Awards | 142.8 | 225.1 | 350.3 | ||||||
Stock Purchased | (924.3 | ) | (523.1 | ) | (411.1 | ) | |||
Balance at December 31 | (2,173.9 | ) | (1,392.4 | ) | (1,094.4 | ) | |||
Total Stockholders’ Equity at December 31 | $ | 10,508.3 | $ | 10,216.2 | $ | 9,770.4 |
2018 Annual Report | Northern Trust Corporation 93 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
Net Income | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | |||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities | |||||||||
Investment Security Losses, net | 1.0 | 1.6 | 3.2 | ||||||
Amortization and Accretion of Securities and Unearned Income, net | 95.9 | 105.0 | 100.9 | ||||||
Provision for Credit Losses | (14.5 | ) | (28.0 | ) | (26.0 | ) | |||
Depreciation on Buildings and Equipment | 108.6 | 101.2 | 89.2 | ||||||
Amortization of Computer Software | 334.9 | 309.1 | 275.3 | ||||||
Amortization of Intangibles | 17.4 | 11.4 | 8.8 | ||||||
Change in Accrued Income Taxes | (130.0 | ) | 36.2 | (129.0 | ) | ||||
Pension Plan Contributions | (74.5 | ) | (14.5 | ) | (12.8 | ) | |||
Deferred Income Tax Provision | 10.5 | (76.1 | ) | (175.8 | ) | ||||
Change in Receivables | (197.0 | ) | (119.3 | ) | (129.2 | ) | |||
Change in Interest Payable | 28.5 | 10.7 | (0.1 | ) | |||||
Change in Collateral With Derivative Counterparties, net | (699.6 | ) | 486.2 | (180.4 | ) | ||||
Other Operating Activities, net | 729.9 | (302.1 | ) | 653.4 | |||||
Net Cash Provided by Operating Activities | 1,767.5 | 1,720.4 | 1,510.0 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
Net Change in Federal Funds Sold and Securities Purchased under Agreements to Resell | 105.7 | 678.9 | (372.9 | ) | |||||
Change in Interest-Bearing Deposits with Banks | 1,073.8 | (467.7 | ) | 1,906.1 | |||||
Net Change in Federal Reserve and Other Central Bank Deposits | 9,679.6 | (12,748.7 | ) | (4,124.2 | ) | ||||
Purchases of Debt Securities – Held to Maturity | (21,463.1 | ) | (11,955.2 | ) | (8,573.2 | ) | |||
Proceeds from Maturity and Redemption of Debt Securities – Held to Maturity | 20,036.7 | 9,924.8 | 4,026.5 | ||||||
Purchases of Debt Securities – Available for Sale | (12,596.9 | ) | (9,780.0 | ) | (14,741.9 | ) | |||
Proceeds from Sale, Maturity and Redemption of Debt Securities – Available for Sale | 8,958.7 | 10,103.4 | 11,317.3 | ||||||
Change in Loans and Leases | 66.1 | 1,451.0 | (471.0 | ) | |||||
Purchases of Buildings and Equipment | (97.6 | ) | (91.6 | ) | (111.3 | ) | |||
Purchases and Development of Computer Software | (408.4 | ) | (381.2 | ) | (362.1 | ) | |||
Change in Client Security Settlement Receivables | (49.7 | ) | (592.6 | ) | 1,105.0 | ||||
Acquisition of a Business, Net of Cash Received | (104.2 | ) | (188.5 | ) | (16.9 | ) | |||
Other Investing Activities, net | (873.6 | ) | 25.8 | 226.5 | |||||
Net Cash Provided by (Used in) Investing Activities | 4,327.1 | (14,021.6 | ) | (10,192.1 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
Change in Deposits | (6,163.2 | ) | 8,523.6 | 6,737.4 | |||||
Change in Federal Funds Purchased | 308.1 | 2,081.2 | (146.7 | ) | |||||
Change in Securities Sold under Agreements to Repurchase | (665.2 | ) | 360.5 | (72.9 | ) | ||||
Change in Short-Term Other Borrowings | 1,860.9 | 967.7 | 1,073.5 | ||||||
Proceeds from Senior Notes and Long-Term Debt | 497.9 | 350.0 | — | ||||||
Repayments of Senior Notes and Long-Term Debt | (314.3 | ) | (208.7 | ) | (6.7 | ) | |||
Proceeds from Issuance of Preferred Stock - Series D | — | — | 493.5 | ||||||
Treasury Stock Purchased | (924.3 | ) | (523.1 | ) | (411.1 | ) | |||
Net Proceeds from Stock Options | 32.6 | 108.0 | 233.8 | ||||||
Cash Dividends Paid on Common Stock | (405.4 | ) | (356.8 | ) | (333.0 | ) | |||
Cash Dividends Paid on Preferred Stock | (46.4 | ) | (49.8 | ) | (23.4 | ) | |||
Other Financing Activities, net | 1.1 | 0.1 | (7.5 | ) | |||||
Net Cash (Used In) Provided by Financing Activities | (5,818.2 | ) | 11,252.7 | 7,536.9 | |||||
Effect of Foreign Currency Exchange Rates on Cash | (212.9 | ) | 234.6 | 58.7 | |||||
Change in Cash and Due from Banks | 63.5 | (813.9 | ) | (1,086.5 | ) | ||||
Cash and Due from Banks at Beginning of Year | 4,518.1 | 5,332.0 | 6,418.5 | ||||||
Cash and Due from Banks at End of Year | $ | 4,581.6 | $ | 4,518.1 | $ | 5,332.0 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||||
Interest Paid | $ | 670.2 | $ | 328.8 | $ | 181.6 | |||
Income Taxes Paid | 493.5 | 441.2 | 754.2 | ||||||
Transfers from Loans to OREO | 11.4 | 8.2 | 14.2 |
94 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 95 |
96 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 97 |
98 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 99 |
100 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 101 |
102 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 103 |
DECEMBER 31, 2018 | |||||||||
FINANCIAL INSTRUMENT | FAIR VALUE | VALUATION TECHNIQUE | UNOBSERVABLE INPUT | RANGE OF INPUTS | |||||
Swaps Related to Sale of Certain Visa Class B Common Shares | $ | 32.8 | million | Discounted Cash Flow | Visa Class A Appreciation | 7.0 | % | – | 11.0% |
Conversion Rate | 1.62 | x | – | 1.64x | |||||
Expected Duration | 1.5 | – | 4.0 years |
DECEMBER 31, 2017 | |||||||||
FINANCIAL INSTRUMENT | FAIR VALUE | VALUATION TECHNIQUE | UNOBSERVABLE INPUT | RANGE OF INPUTS | |||||
Auction Rate Securities | $ | 4.3 | million | Comparables | Price | $92 | – | $100 | |
Swap 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 |
104 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, 2018 | ||||||||||||||||
(In Millions) | LEVEL 1 | LEVEL 2 | LEVEL 3 | NETTING | ASSETS/ LIABILITIES AT FAIR VALUE | |||||||||||
Debt Securities | ||||||||||||||||
Available for Sale | ||||||||||||||||
U.S. Government | $ | 5,185.3 | $ | — | $ | — | $ | — | $ | 5,185.3 | ||||||
Obligations of States and Political Subdivisions | — | 655.9 | — | — | 655.9 | |||||||||||
Government Sponsored Agency | — | 22,424.6 | — | — | 22,424.6 | |||||||||||
Non-U.S. Government | — | 142.2 | — | — | 142.2 | |||||||||||
Corporate Debt | — | 2,294.7 | — | — | 2,294.7 | |||||||||||
Covered Bonds | — | 829.3 | — | — | 829.3 | |||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | — | 2,096.2 | — | — | 2,096.2 | |||||||||||
Other Asset-Backed | — | 2,657.7 | — | — | 2,657.7 | |||||||||||
Commercial Mortgage-Backed | — | 587.2 | — | — | 587.2 | |||||||||||
Other | — | 15.7 | — | — | 15.7 | |||||||||||
Total Available for Sale | 5,185.3 | 31,703.5 | — | — | 36,888.8 | |||||||||||
Trading Account | — | 0.3 | — | — | 0.3 | |||||||||||
Total Available for Sale and Trading Debt Securities | 5,185.3 | 31,703.8 | — | — | 36,889.1 | |||||||||||
Other Assets | ||||||||||||||||
Derivative Assets | ||||||||||||||||
Foreign Exchange Contracts | — | 2,466.1 | — | — | 2,466.1 | |||||||||||
Interest Rate Contracts | — | 96.1 | — | — | 96.1 | |||||||||||
Other Financial Derivatives (1) | — | 1.3 | — | — | 1.3 | |||||||||||
Total Derivative Assets | — | 2,563.5 | — | (1,357.1 | ) | 1,206.4 | ||||||||||
Other Liabilities | ||||||||||||||||
Derivative Liabilities | ||||||||||||||||
Foreign Exchange Contracts | — | 2,262.5 | — | — | 2,262.5 | |||||||||||
Interest Rate Contracts | — | 93.1 | — | — | 93.1 | |||||||||||
Other Financial Derivatives (2) | — | — | 32.8 | — | 32.8 | |||||||||||
Total Derivative Liabilities | $ | — | $ | 2,355.6 | $ | 32.8 | $ | (1,796.3 | ) | $ | 592.1 |
2018 Annual Report | Northern Trust Corporation 105 |
DECEMBER 31, 2017 | ||||||||||||||||
(In Millions) | LEVEL 1 | LEVEL 2 | LEVEL 3 | NETTING | ASSETS/ LIABILITIES AT FAIR VALUE | |||||||||||
Debt 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 Debt 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 | |||||||||||
Other Financial Derivative | — | — | — | — | — | |||||||||||
Total Derivatives 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 Derivative (1) | — | 0.7 | 29.7 | — | 30.4 | |||||||||||
Total Derivative Liabilities | $ | — | $ | 2,799.3 | $ | 29.7 | $ | (1,621.4 | ) | $ | 1,207.6 |
106 2018 Annual Report | Northern Trust Corporation |
LEVEL 3 ASSETS | AUCTION RATE SECURITIES | |||||
(In Millions) | 2018 | 2017 | ||||
Fair Value at January 1 | $ | 4.3 | $ | 4.7 | ||
Total Gains (Losses): | ||||||
Included in Other Comprehensive Income (1) | 0.1 | 0.2 | ||||
Purchases, Issues, Sales, and Settlements | ||||||
Settlements | (4.4 | ) | (0.6 | ) | ||
Fair Value at December 31 | $ | — | $ | 4.3 |
LEVEL 3 LIABILITIES | SWAPS RELATED TO SALE OF CERTAIN VISA CLASS B COMMON SHARES | |||||
(In Millions) | 2018 | 2017 | ||||
Fair Value at January 1 | $ | 29.7 | $ | 25.2 | ||
Total (Gains) Losses: | ||||||
Included in Earnings (1) | 19.8 | 12.7 | ||||
Purchases, Issues, Sales, and Settlements | ||||||
Settlements | (16.7 | ) | (8.2 | ) | ||
Fair Value at December 31 | $ | 32.8 | $ | 29.7 | ||
Unrealized (Gains) Losses Included in Earnings Related to Financial Instruments Held at December 31 (1) | $ | 13.3 | $ | 11.4 |
2018 Annual Report | Northern Trust Corporation 107 |
DECEMBER 31, 2018 | ||||||
FINANCIAL INSTRUMENT | FAIR VALUE | VALUATION TECHNIQUE | UNOBSERVABLE INPUT | RANGE OF DISCOUNTS APPLIED | ||
Loans | $24.9 million | Market Approach | Discount to reflect realizable value | 15.0% | – | 30.0% |
OREO | $0.4 million | Market Approach | Discount to reflect realizable value | 15.0% | – | 30.0% |
DECEMBER 31, 2017 | ||||||
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% |
108 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, 2018 | |||||||||||||||
FAIR VALUE | |||||||||||||||
(In Millions) | BOOK VALUE | TOTAL FAIR VALUE | LEVEL 1 | LEVEL 2 | LEVEL 3 | ||||||||||
ASSETS | |||||||||||||||
Cash and Due from Banks | $ | 4,581.6 | $ | 4,581.6 | $ | 4,581.6 | $ | — | $ | — | |||||
Federal Reserve and Other Central Bank Deposits | 30,080.2 | 30,080.2 | — | 30,080.2 | — | ||||||||||
Interest-Bearing Deposits with Banks | 4,264.2 | 4,264.2 | — | 4,264.2 | — | ||||||||||
Federal Funds Sold and Securities Purchased under Agreements to Resell | 1,165.2 | 1,165.2 | — | 1,165.2 | — | ||||||||||
Debt Securities | |||||||||||||||
Available for Sale (Note) | 36,888.8 | 36,888.8 | 5,185.3 | 31,703.5 | — | ||||||||||
Held to Maturity | 14,354.0 | 14,267.0 | 101.6 | 14,165.4 | — | ||||||||||
Trading Account | 0.3 | 0.3 | — | 0.3 | — | ||||||||||
Loans (excluding Leases) | |||||||||||||||
Held for Investment | 32,287.0 | 32,339.2 | — | — | 32,339.2 | ||||||||||
Held for Sale | — | — | — | — | — | ||||||||||
Client Security Settlement Receivables | 1,646.1 | 1,646.1 | — | 1,646.1 | — | ||||||||||
Other Assets | |||||||||||||||
Federal Reserve and Federal Home Loan Bank Stock | 300.3 | 300.3 | — | 300.3 | — | ||||||||||
Community Development Investments | 606.6 | 606.6 | — | 606.6 | — | ||||||||||
Employee Benefit and Deferred Compensation | 202.3 | 194.5 | 125.0 | 69.5 | — | ||||||||||
LIABILITIES | |||||||||||||||
Deposits | |||||||||||||||
Demand, Noninterest-Bearing, Savings and Money Market | $ | 37,340.1 | $ | 37,340.1 | $ | 37,340.1 | $ | — | $ | — | |||||
Savings Certificates and Other Time | 688.7 | 691.8 | — | 691.8 | — | ||||||||||
Non U.S. Offices Interest-Bearing | 66,468.0 | 66,468.0 | — | 66,468.0 | — | ||||||||||
Federal Funds Purchased | 2,594.2 | 2,594.2 | — | 2,594.2 | — | ||||||||||
Securities Sold Under Agreements to Repurchase | 168.3 | 168.3 | — | 168.3 | — | ||||||||||
Other Borrowings | 7,901.7 | 7,904.1 | — | 7,904.1 | — | ||||||||||
Senior Notes | 2,011.3 | 1,994.4 | — | 1,994.4 | — | ||||||||||
Long-Term Debt | |||||||||||||||
Subordinated Debt | 1,112.4 | 1,089.7 | — | 1,089.7 | — | ||||||||||
Floating Rate Capital Debt | 277.6 | 253.5 | — | 253.5 | — | ||||||||||
Other Liabilities | |||||||||||||||
Standby Letters of Credit | 28.0 | 28.0 | — | — | 28.0 | ||||||||||
Loan Commitments | 139.9 | 139.9 | — | — | 139.9 | ||||||||||
DERIVATIVE INSTRUMENTS | |||||||||||||||
Asset/Liability Management | |||||||||||||||
Foreign Exchange Contracts | |||||||||||||||
Assets | $ | 306.7 | $ | 306.7 | $ | — | $ | 306.7 | $ | — | |||||
Liabilities | 72.5 | 72.5 | — | 72.5 | — | ||||||||||
Interest Rate Contracts | |||||||||||||||
Assets | 30.0 | 30.0 | — | 30.0 | — | ||||||||||
Liabilities | 24.5 | 24.5 | — | 24.5 | — | ||||||||||
Other Financial Derivatives | |||||||||||||||
Assets (1) | 1.3 | 1.3 | — | 1.3 | — | ||||||||||
Liabilities (2) | 32.8 | 32.8 | — | — | 32.8 | ||||||||||
Client-Related and Trading | |||||||||||||||
Foreign Exchange Contracts | |||||||||||||||
Assets | 2,159.4 | 2,159.4 | — | 2,159.4 | — | ||||||||||
Liabilities | 2,190.0 | 2,190.0 | — | 2,190.0 | — | ||||||||||
Interest Rate Contracts | |||||||||||||||
Assets | 66.1 | 66.1 | — | 66.1 | — | ||||||||||
Liabilities | 68.6 | 68.6 | — | 68.6 | — |
2018 Annual Report | Northern Trust Corporation 109 |
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 Securities Purchased under Agreements to Resell | 1,324.3 | 1,324.3 | — | 1,324.3 | — | ||||||||||
Debt 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 | — | ||||||||||
Floating Rate Capital Debt | 277.5 | 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 | — |
110 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, 2018 | ||||||||||||
(In Millions) | AMORTIZED COST | GROSS UNREALIZED GAINS | GROSS UNREALIZED LOSSES | FAIR VALUE | ||||||||
U.S. Government | $ | 5,203.1 | $ | 21.8 | $ | 39.6 | $ | 5,185.3 | ||||
Obligations of States and Political Subdivisions | 657.6 | 2.0 | 3.7 | 655.9 | ||||||||
Government Sponsored Agency | 22,522.7 | 52.4 | 150.5 | 22,424.6 | ||||||||
Non-U.S. Government | 143.3 | — | 1.1 | 142.2 | ||||||||
Corporate Debt | 2,312.6 | 3.2 | 21.1 | 2,294.7 | ||||||||
Covered Bonds | 832.7 | 1.4 | 4.8 | 829.3 | ||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 2,087.8 | 11.9 | 3.5 | 2,096.2 | ||||||||
Other Asset-Backed | 2,678.9 | 1.7 | 22.9 | 2,657.7 | ||||||||
Commercial Mortgage-Backed | 587.4 | 4.0 | 4.2 | 587.2 | ||||||||
Other | 15.7 | — | — | 15.7 | ||||||||
Total | $ | 37,041.8 | $ | 98.4 | $ | 251.4 | $ | 36,888.8 |
DECEMBER 31, 2017 | ||||||||||||
(In Millions) | AMORTIZED COST | GROSS UNREALIZED GAINS | GROSS UNREALIZED LOSSES | FAIR VALUE | ||||||||
U.S. Government | $ | 5,714.4 | $ | 18.0 | $ | 32.1 | $ | 5,700.3 | ||||
Obligations of States and Political Subdivisions | 749.9 | — | 3.5 | 746.4 | ||||||||
Government Sponsored Agency | 18,745.3 | 39.9 | 108.6 | 18,676.6 | ||||||||
Non-U.S. Government | 179.1 | — | 1.9 | 177.2 | ||||||||
Corporate Debt | 3,013.7 | 2.2 | 22.9 | 2,993.0 | ||||||||
Covered Bonds | 879.0 | 1.0 | 4.4 | 875.6 | ||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 1,819.8 | 4.0 | 3.8 | 1,820.0 | ||||||||
Other Asset-Backed | 2,297.7 | 1.5 | 7.9 | 2,291.3 | ||||||||
Auction Rate | 4.4 | — | 0.1 | 4.3 | ||||||||
Commercial Mortgage-Backed | 439.2 | — | 4.1 | 435.1 | ||||||||
Other | 22.3 | — | — | 22.3 | ||||||||
Total | $ | 33,864.8 | $ | 66.6 | $ | 189.3 | $ | 33,742.1 |
DECEMBER 31, 2018 | DECEMBER 31, 2017 | |||||||||||||
(In Millions) | AMORTIZED COST | FAIR VALUE | AMORTIZED COST | FAIR VALUE | ||||||||||
Due in One Year or Less | $ | 9,206.2 | $ | 9,162.8 | $ | 6,249.5 | $ | 6,227.0 | ||||||
Due After One Year Through Five Years | 21,012.7 | 20,943.9 | 20,017.2 | 19,937.8 | ||||||||||
Due After Five Years Through Ten Years | 5,774.1 | 5,740.8 | 6,545.3 | 6,535.1 | ||||||||||
Due After Ten Years | 1,048.8 | 1,041.3 | 1,052.8 | 1,042.2 | ||||||||||
Total | $ | 37,041.8 | $ | 36,888.8 | $ | 33,864.8 | $ | 33,742.1 |
2018 Annual Report | Northern Trust Corporation 111 |
DECEMBER 31, 2018 | ||||||||||||
(In Millions) | AMORTIZED COST | GROSS UNREALIZED GAINS | GROSS UNREALIZED LOSSES | FAIR VALUE | ||||||||
U.S. Government | $ | 101.6 | $ | — | $ | — | $ | 101.6 | ||||
Obligations of States and Political Subdivisions | 18.9 | 0.6 | — | 19.5 | ||||||||
Government Sponsored Agency | 4.5 | 0.2 | — | 4.7 | ||||||||
Corporate Debt | 472.9 | 0.4 | 1.8 | 471.5 | ||||||||
Covered Bonds | 2,877.6 | 9.6 | 9.3 | 2,877.9 | ||||||||
Non-U.S. Government | 6,488.2 | 2.1 | 8.7 | 6,481.6 | ||||||||
Certificates of Deposit | 45.1 | — | — | 45.1 | ||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 2,966.8 | 5.8 | 12.3 | 2,960.3 | ||||||||
Other Asset-Backed | 1,146.4 | — | 4.0 | 1,142.4 | ||||||||
Other | 232.0 | — | 69.6 | 162.4 | ||||||||
Total | $ | 14,354.0 | $ | 18.7 | $ | 105.7 | $ | 14,267.0 |
DECEMBER 31, 2017 | ||||||||||||
(In Millions) | AMORTIZED COST | GROSS UNREALIZED GAINS | GROSS UNREALIZED LOSSES | FAIR VALUE | ||||||||
U.S. Government | $ | 35.0 | $ | — | $ | — | $ | 35.0 | ||||
Obligations of States and Political Subdivisions | 34.6 | 1.4 | 0.1 | 35.9 | ||||||||
Government Sponsored Agency | 5.8 | 0.4 | — | 6.2 | ||||||||
Corporate Debt | 431.5 | 1.0 | 0.4 | 432.1 | ||||||||
Covered Bonds | 2,821.5 | 11.9 | 3.7 | 2,829.7 | ||||||||
Non-U.S. Government | 5,536.2 | 1.3 | 6.0 | 5,531.5 | ||||||||
Certificates of Deposit | 43.8 | — | 0.1 | 43.7 | ||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 2,788.9 | 5.4 | 4.1 | 2,790.2 | ||||||||
Other Asset-Backed | 1,175.8 | 0.6 | 0.5 | 1,175.9 | ||||||||
Other | 175.9 | — | 45.2 | 130.7 | ||||||||
Total | $ | 13,049.0 | $ | 22.0 | $ | 60.1 | $ | 13,010.9 |
DECEMBER 31, 2018 | DECEMBER 31, 2017 | |||||||||||||
(In Millions) | AMORTIZED COST | FAIR VALUE | AMORTIZED COST | FAIR VALUE | ||||||||||
Due in One Year or Less | $ | 6,638.2 | $ | 6,635.5 | $ | 5,691.9 | $ | 5,695.8 | ||||||
Due After One Year Through Five Years | 7,066.0 | 7,040.0 | 6,667.8 | 6,663.9 | ||||||||||
Due After Five Years Through Ten Years | 567.9 | 553.0 | 612.2 | 606.3 | ||||||||||
Due After Ten Years | 81.9 | 38.5 | 77.1 | 44.9 | ||||||||||
Total | $ | 14,354.0 | $ | 14,267.0 | $ | 13,049.0 | $ | 13,010.9 |
112 2018 Annual Report | Northern Trust Corporation |
AS OF DECEMBER 31, 2018 | 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 | $ | — | $ | — | $ | 2,862.0 | $ | 39.6 | $ | 2,862.0 | $ | 39.6 | ||||||
Obligations of States and Political Subdivisions | 169.6 | 2.4 | 279.6 | 1.3 | 449.2 | 3.7 | ||||||||||||
Government Sponsored Agency | 8,368.8 | 33.5 | 6,822.4 | 117.0 | 15,191.2 | 150.5 | ||||||||||||
Non-U.S. Government | 5,065.2 | 0.8 | 1,274.0 | 9.0 | 6,339.2 | 9.8 | ||||||||||||
Corporate Debt | 712.7 | 4.1 | 1,097.4 | 18.8 | 1,810.1 | 22.9 | ||||||||||||
Covered Bonds | 646.4 | 3.7 | 696.9 | 10.4 | 1,343.3 | 14.1 | ||||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 1,105.0 | 4.6 | 1,189.2 | 11.2 | 2,294.2 | 15.8 | ||||||||||||
Other Asset-Backed | 2,507.8 | 15.9 | 954.9 | 11.0 | 3,462.7 | 26.9 | ||||||||||||
Commercial Mortgage-Backed | 22.8 | 0.1 | 274.4 | 4.1 | 297.2 | 4.2 | ||||||||||||
Other | 50.5 | 18.8 | 112.6 | 50.8 | 163.1 | 69.6 | ||||||||||||
Total | $ | 18,648.8 | $ | 83.9 | $ | 15,563.4 | $ | 273.2 | $ | 34,212.2 | $ | 357.1 |
AS OF DECEMBER 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 | $ | 3,595.0 | $ | 32.1 | $ | — | $ | — | $ | 3,595.0 | $ | 32.1 | ||||||
Obligations of States and Political Subdivisions | 687.8 | 3.3 | 52.0 | 0.3 | 739.8 | 3.6 | ||||||||||||
Government Sponsored Agency | 6,495.6 | 81.3 | 2,998.9 | 27.3 | 9,494.5 | 108.6 | ||||||||||||
Non-U.S. Government | 5,181.8 | 7.9 | — | — | 5,181.8 | 7.9 | ||||||||||||
Corporate Debt | 1,547.3 | 9.3 | 922.3 | 14.0 | 2,469.6 | 23.3 | ||||||||||||
Covered Bonds | 967.5 | 7.2 | 89.1 | 0.9 | 1,056.6 | 8.1 | ||||||||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | 1,692.4 | 7.5 | 235.8 | 0.4 | 1,928.2 | 7.9 | ||||||||||||
Other Asset-Backed | 2,453.7 | 8.3 | 29.9 | 0.1 | 2,483.6 | 8.4 | ||||||||||||
Certificates of Deposit | 43.7 | 0.1 | — | — | 43.7 | 0.1 | ||||||||||||
Auction Rate | — | — | 3.1 | 0.1 | 3.1 | 0.1 | ||||||||||||
Commercial Mortgage-Backed | 233.5 | 2.6 | 201.6 | 1.5 | 435.1 | 4.1 | ||||||||||||
Other | 82.9 | 27.3 | 48.1 | 17.9 | 131.0 | 45.2 | ||||||||||||
Total | $ | 22,981.2 | $ | 186.9 | $ | 4,580.8 | $ | 62.5 | $ | 27,562.0 | $ | 249.4 |
2018 Annual Report | Northern Trust Corporation 113 |
DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Changes in Other-Than-Temporary Impairment Losses(1) | $ | (0.5 | ) | $ | (0.2 | ) | $ | (3.7 | ) |
Noncredit-related Losses Recorded in / (Reclassified from) OCI(2) | — | — | — | ||||||
Net Impairment Losses Recognized in Earnings | $ | (0.5 | ) | $ | (0.2 | ) | $ | (3.7 | ) |
114 2018 Annual Report | Northern Trust Corporation |
YEAR ENDED DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Cumulative Credit-Related Losses on Debt Securities Held – Beginning of Year | $ | 3.6 | $ | 3.4 | ||
Plus: Losses on Newly Identified Impairments | 0.4 | 0.1 | ||||
Additional Losses on Previously Identified Impairments | 0.1 | 0.1 | ||||
Less: Current and Prior Period Losses on Debt Securities Sold or Matured During the Year | — | — | ||||
Cumulative Credit-Related Losses on Debt Securities Held – End of Year | $ | 4.1 | $ | 3.6 |
($ In Millions) | 2018 | 2017 | ||||
Balance at December 31 | $ | 1,031.2 | $ | 1,303.3 | ||
Average Balance During the Year | 1,478.3 | 1,832.0 | ||||
Average Interest Rate Earned During the Year | 2.22 | % | 1.48 | % | ||
Maximum Month-End Balance During the Year | 1,942.0 | 2,064.1 |
($ In Millions) | 2018 | 2017 | ||||
Balance at December 31 | $ | 168.3 | $ | 834.0 | ||
Average Balance During the Year | 525.2 | 738.9 | ||||
Average Interest Rate Paid During the Year | 1.48 | % | 0.81 | % | ||
Maximum Month-End Balance During the Year | 981.3 | 834.0 |
December 31, 2018 | |||
(In Millions) | Remaining Contractual Maturity of the Agreements | ||
Repurchase Agreements | Overnight and Continuous | ||
U.S. Treasury and Agency Securities | $ | 168.3 | |
Total Borrowings | 168.3 | ||
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 27 | 168.3 | ||
Amounts related to agreements not included in Note 27 | — |
2018 Annual Report | Northern Trust Corporation 115 |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Commercial | ||||||
Commercial and Institutional | $ | 8,728.1 | $ | 9,042.2 | ||
Commercial Real Estate | 3,228.8 | 3,482.7 | ||||
Non-U.S. | 2,701.6 | 1,538.5 | ||||
Lease Financing, net | 90.7 | 229.2 | ||||
Other | 426.0 | 265.4 | ||||
Total Commercial | 15,175.2 | 14,558.0 | ||||
Personal | ||||||
Private Client | 10,733.3 | 10,753.1 | ||||
Residential Real Estate | 6,514.0 | 7,247.6 | ||||
Other | 67.5 | 33.5 | ||||
Total Personal | 17,314.8 | 18,034.2 | ||||
Total Loans and Leases | $ | 32,490.0 | $ | 32,592.2 | ||
Allowance for Credit Losses Assigned to Loans and Leases | (112.6 | ) | (131.2 | ) | ||
Net Loans and Leases | $ | 32,377.4 | $ | 32,461.0 |
116 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Direct Finance Leases | ||||||
Lease Receivable | $ | 9.8 | $ | 26.6 | ||
Residual Value | 23.8 | 72.4 | ||||
Initial Direct Costs | 0.3 | 0.7 | ||||
Unearned Income | — | (1.5 | ) | |||
Investment in Direct Finance Leases | 33.9 | 98.2 | ||||
Leveraged Leases | ||||||
Net Rental Receivable | 33.9 | 76.1 | ||||
Residual Value | 33.3 | 85.6 | ||||
Unearned Income | (10.4 | ) | (30.7 | ) | ||
Investment in Leveraged Leases | 56.8 | 131.0 | ||||
Lease Financing, net | $ | 90.7 | $ | 229.2 |
(In Millions) | FUTURE MINIMUM LEASE PAYMENTS | ||
2019 | $ | 3.7 | |
2020 | 3.7 | ||
2021 | 2.1 | ||
2022 | — | ||
2023 | — |
• | 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. |
2018 Annual Report | Northern Trust Corporation 117 |
DECEMBER 31, 2018 | DECEMBER 31, 2017 | |||||||||||||||||||||||
(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 | $ | 5,477.4 | $ | 3,159.8 | $ | 90.9 | $ | 8,728.1 | $ | 5,832.9 | $ | 3,133.4 | $ | 75.9 | $ | 9,042.2 | ||||||||
Commercial Real Estate | 1,209.6 | 1,992.2 | 27.0 | 3,228.8 | 1,280.7 | 2,187.5 | 14.5 | 3,482.7 | ||||||||||||||||
Non-U.S. | 1,625.3 | 1,075.3 | 1.0 | 2,701.6 | 606.6 | 930.5 | 1.4 | 1,538.5 | ||||||||||||||||
Lease Financing, net | 78.3 | 12.4 | — | 90.7 | 191.4 | 37.8 | — | 229.2 | ||||||||||||||||
Other | 203.3 | 222.7 | — | 426.0 | 155.5 | 109.9 | — | 265.4 | ||||||||||||||||
Total Commercial | 8,593.9 | 6,462.4 | 118.9 | 15,175.2 | 8,067.1 | 6,399.1 | 91.8 | 14,558.0 | ||||||||||||||||
Personal | ||||||||||||||||||||||||
Private Client | 6,321.1 | 4,403.2 | 9.0 | 10,733.3 | 6,716.0 | 4,027.8 | 9.3 | 10,753.1 | ||||||||||||||||
Residential Real Estate | 2,745.0 | 3,502.3 | 266.7 | 6,514.0 | 2,960.5 | 3,978.8 | 308.3 | 7,247.6 | ||||||||||||||||
Other | 32.2 | 35.3 | — | 67.5 | 19.6 | 13.9 | — | 33.5 | ||||||||||||||||
Total Personal | 9,098.3 | 7,940.8 | 275.7 | 17,314.8 | 9,696.1 | 8,020.5 | 317.6 | 18,034.2 | ||||||||||||||||
Total Loans and Leases | $ | 17,692.2 | $ | 14,403.2 | $ | 394.6 | $ | 32,490.0 | $ | 17,763.2 | $ | 14,419.6 | $ | 409.4 | $ | 32,592.2 |
118 2018 Annual Report | Northern Trust Corporation |
(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 | ||||||||||||||
December 31, 2018 | |||||||||||||||||||||
Commercial | |||||||||||||||||||||
Commercial and Institutional | $ | 8,678.2 | $ | 37.4 | $ | 4.5 | $ | 1.2 | $ | 8,721.3 | $ | 6.8 | $ | 8,728.1 | |||||||
Commercial Real Estate | 3,191.5 | 8.4 | 15.6 | 6.4 | 3,221.9 | 6.9 | 3,228.8 | ||||||||||||||
Non-U.S. | 2,701.2 | — | — | — | 2,701.2 | 0.4 | 2,701.6 | ||||||||||||||
Lease Financing, net | 90.7 | — | — | — | 90.7 | — | 90.7 | ||||||||||||||
Other | 426.0 | — | — | — | 426.0 | — | 426.0 | ||||||||||||||
Total Commercial | 15,087.6 | 45.8 | 20.1 | 7.6 | 15,161.1 | 14.1 | 15,175.2 | ||||||||||||||
Personal | |||||||||||||||||||||
Private Client | 10,681.1 | 39.5 | 12.5 | — | 10,733.1 | 0.2 | 10,733.3 | ||||||||||||||
Residential Real Estate | 6,376.8 | 27.2 | 6.2 | 8.8 | 6,419.0 | 95.0 | 6,514.0 | ||||||||||||||
Other | 67.5 | — | — | — | 67.5 | — | 67.5 | ||||||||||||||
Total Personal | 17,125.4 | 66.7 | 18.7 | 8.8 | 17,219.6 | 95.2 | 17,314.8 | ||||||||||||||
Total Loans and Leases | $ | 32,213.0 | $ | 112.5 | $ | 38.8 | $ | 16.4 | $ | 32,380.7 | $ | 109.3 | $ | 32,490.0 | |||||||
Other Real Estate Owned | $ | 8.4 | |||||||||||||||||||
Total Nonperforming Assets | $ | 117.7 |
(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 | ||||||||||||||
December 31, 2017 | |||||||||||||||||||||
Commercial | |||||||||||||||||||||
Commercial and Institutional | $ | 8,999.4 | $ | 13.3 | $ | 3.1 | $ | 0.4 | $ | 9,016.2 | $ | 26.0 | $ | 9,042.2 | |||||||
Commercial Real Estate | 3,455.3 | 14.1 | 4.1 | 0.9 | 3,474.4 | 8.3 | 3,482.7 | ||||||||||||||
Non-U.S. | 1,538.3 | 0.2 | — | — | 1,538.5 | — | 1,538.5 | ||||||||||||||
Lease Financing, net | 229.2 | — | — | — | 229.2 | — | 229.2 | ||||||||||||||
Other | 265.4 | — | — | — | 265.4 | — | 265.4 | ||||||||||||||
Total Commercial | 14,487.6 | 27.6 | 7.2 | 1.3 | 14,523.7 | 34.3 | 14,558.0 | ||||||||||||||
Personal | |||||||||||||||||||||
Private Client | 10,687.5 | 55.3 | 9.7 | 0.6 | 10,753.1 | — | 10,753.1 | ||||||||||||||
Residential Real Estate | 7,059.4 | 53.8 | 11.9 | 6.1 | 7,131.2 | 116.4 | 7,247.6 | ||||||||||||||
Other | 33.5 | — | — | — | 33.5 | — | 33.5 | ||||||||||||||
Total Personal | 17,780.4 | 109.1 | 21.6 | 6.7 | 17,917.8 | 116.4 | 18,034.2 | ||||||||||||||
Total Loans and Leases | $ | 32,268.0 | $ | 136.7 | $ | 28.8 | $ | 8.0 | $ | 32,441.5 | $ | 150.7 | $ | 32,592.2 | |||||||
Other Real Estate Owned | $ | 4.6 | |||||||||||||||||||
Total Nonperforming Assets | $ | 155.3 |
2018 Annual Report | Northern Trust Corporation 119 |
AS OF DECEMBER 31, 2018 | AS OF DECEMBER 31, 2017 | |||||||||||||||||
(In Millions) | RECORDED INVESTMENT | UNPAID PRINCIPAL BALANCE | SPECIFIC ALLOWANCE | RECORDED INVESTMENT | UNPAID PRINCIPAL BALANCE | SPECIFIC ALLOWANCE | ||||||||||||
With no related specific allowance | ||||||||||||||||||
Commercial and Institutional | $ | 0.2 | $ | 0.4 | $ | — | $ | 24.9 | $ | 30.3 | $ | — | ||||||
Commercial Real Estate | 5.8 | 7.6 | — | 5.7 | 7.6 | — | ||||||||||||
Residential Real Estate | 76.7 | 104.7 | — | 90.9 | 124.9 | — | ||||||||||||
Private Client | 1.7 | 1.7 | — | 0.7 | 0.7 | — | ||||||||||||
With a related specific allowance | ||||||||||||||||||
Commercial and Institutional | 6.4 | 7.3 | 3.0 | 0.5 | 5.4 | 0.5 | ||||||||||||
Commercial Real Estate | 2.6 | 2.8 | 1.1 | 2.8 | 2.8 | 0.6 | ||||||||||||
Residential Real Estate | 22.8 | 26.1 | 3.1 | 14.3 | 14.9 | 4.3 | ||||||||||||
Total | ||||||||||||||||||
Commercial | 15.0 | 18.1 | 4.1 | 33.9 | 46.1 | 1.1 | ||||||||||||
Personal | 101.2 | 132.5 | 3.1 | 105.9 | 140.5 | 4.3 | ||||||||||||
Total | $ | 116.2 | $ | 150.6 | $ | 7.2 | $ | 139.8 | $ | 186.6 | $ | 5.4 |
YEAR ENDED DECEMBER 31, 2018 | YEAR ENDED DECEMBER 31, 2017 | |||||||||||
(In Millions) | AVERAGE RECORDED INVESTMENT | INTEREST INCOME RECOGNIZED | AVERAGE RECORDED INVESTMENT | INTEREST INCOME RECOGNIZED | ||||||||
With no related specific allowance | ||||||||||||
Commercial and Institutional | $ | 6.8 | $ | — | $ | 8.7 | $ | — | ||||
Commercial Real Estate | 6.4 | 0.2 | 9.2 | 0.1 | ||||||||
Residential Real Estate | 94.9 | 1.9 | 105.0 | 1.5 | ||||||||
Private Client | 0.6 | 0.1 | 0.2 | — | ||||||||
With a related specific allowance | ||||||||||||
Commercial and Institutional | 4.6 | — | 6.5 | — | ||||||||
Commercial Real Estate | 2.1 | — | 2.6 | — | ||||||||
Residential Real Estate | 9.2 | — | 17.0 | — | ||||||||
Total | ||||||||||||
Commercial | 19.9 | 0.2 | 27.0 | 0.1 | ||||||||
Personal | 104.7 | 2.0 | 122.2 | 1.5 | ||||||||
Total | $ | 124.6 | $ | 2.2 | $ | 149.2 | $ | 1.6 |
120 2018 Annual Report | Northern Trust Corporation |
($ In Millions) | NUMBER OF LOANS AND LEASES | RECORDED INVESTMENT | UNPAID PRINCIPAL BALANCE | |||||
December 31, 2018 | ||||||||
Commercial | ||||||||
Commercial and Institutional | 1 | $ | 0.3 | $ | 0.5 | |||
Commercial Real Estate | 2 | 2.8 | 2.8 | |||||
Total Commercial | 3 | 3.1 | 3.3 | |||||
Personal | ||||||||
Residential Real Estate | 48 | 27.7 | 30.8 | |||||
Private Client | 1 | — | 0.1 | |||||
Total Personal | 49 | 27.7 | 30.9 | |||||
Total Loans and Leases | 52 | $ | 30.8 | $ | 34.2 |
($ In Millions) | NUMBER OF LOANS AND LEASES | RECORDED INVESTMENT | UNPAID PRINCIPAL BALANCE | |||||
December 31, 2017 | ||||||||
Commercial | ||||||||
Commercial and Institutional | 3 | $ | 0.4 | $ | 1.4 | |||
Commercial Real Estate | 2 | 1.8 | 1.8 | |||||
Total Commercial | 5 | 2.2 | 3.2 | |||||
Personal | ||||||||
Residential Real Estate | 66 | 22.1 | 22.8 | |||||
Private Client | 3 | 0.2 | 0.5 | |||||
Total Personal | 69 | 22.3 | 23.3 | |||||
Total Loans and Leases | 74 | $ | 24.5 | $ | 26.5 |
2018 Annual Report | Northern Trust Corporation 121 |
2018 | 2017 | 2016 | |||||||||||||||||||||||||
(In Millions) | COMMERCIAL | PERSONAL | TOTAL | COMMERCIAL | PERSONAL | TOTAL | COMMERCIAL | PERSONAL | TOTAL | ||||||||||||||||||
Balance at Beginning of Year | $ | 80.8 | $ | 73.0 | $ | 153.8 | $ | 104.9 | $ | 87.1 | $ | 192.0 | $ | 114.8 | $ | 118.5 | $ | 233.3 | |||||||||
Charge-Offs | (0.9 | ) | (9.2 | ) | (10.1 | ) | (11.4 | ) | (10.1 | ) | (21.5 | ) | (16.6 | ) | (10.7 | ) | (27.3 | ) | |||||||||
Recoveries | 1.7 | 7.3 | 9.0 | 5.5 | 5.8 | 11.3 | 4.8 | 7.3 | 12.1 | ||||||||||||||||||
Net (Charge-Offs) Recoveries | 0.8 | (1.9 | ) | (1.1 | ) | (5.9 | ) | (4.3 | ) | (10.2 | ) | (11.8 | ) | (3.4 | ) | (15.2 | ) | ||||||||||
Provision for Credit Losses | (2.9 | ) | (11.6 | ) | (14.5 | ) | (18.2 | ) | (9.8 | ) | (28.0 | ) | 2.0 | (28.0 | ) | (26.0 | ) | ||||||||||
Effects of Foreign Exchange Rates | — | — | — | — | — | — | (0.1 | ) | — | (0.1 | ) | ||||||||||||||||
Balance at End of Year | $ | 78.7 | $ | 59.5 | $ | 138.2 | $ | 80.8 | $ | 73.0 | $ | 153.8 | $ | 104.9 | $ | 87.1 | $ | 192.0 | |||||||||
Allowance for Credit Losses Assigned to: | |||||||||||||||||||||||||||
Loans and Leases | $ | 57.6 | $ | 55.0 | $ | 112.6 | $ | 63.5 | $ | 67.7 | $ | 131.2 | $ | 83.7 | $ | 77.3 | $ | 161.0 | |||||||||
Undrawn Commitments and Standby Letters of Credit | 21.1 | 4.5 | 25.6 | 17.3 | 5.3 | 22.6 | 21.2 | 9.8 | 31.0 | ||||||||||||||||||
Total Allowance for Credit Losses | $ | 78.7 | $ | 59.5 | $ | 138.2 | $ | 80.8 | $ | 73.0 | $ | 153.8 | $ | 104.9 | $ | 87.1 | $ | 192.0 |
122 2018 Annual Report | Northern Trust Corporation |
(In Millions) | COMMERCIAL | PERSONAL | TOTAL | ||||||
December 31, 2018 | |||||||||
Loans and Leases | |||||||||
Specifically Evaluated for Impairment | $ | 15.0 | $ | 101.2 | $ | 116.2 | |||
Evaluated for Inherent Impairment | 15,160.2 | 17,213.6 | 32,373.8 | ||||||
Total Loans and Leases | 15,175.2 | 17,314.8 | 32,490.0 | ||||||
Allowance for Credit Losses on Credit Exposures | |||||||||
Specifically Evaluated for Impairment | 4.1 | 3.1 | 7.2 | ||||||
Evaluated for Inherent Impairment | 53.5 | 51.9 | 105.4 | ||||||
Allowance Assigned to Loans and Leases | 57.6 | 55.0 | 112.6 | ||||||
Allowance for Undrawn Exposures | |||||||||
Commitments and Standby Letters of Credit | 21.1 | 4.5 | 25.6 | ||||||
Total Allowance for Credit Losses | $ | 78.7 | $ | 59.5 | $ | 138.2 |
(In Millions) | COMMERCIAL | PERSONAL | TOTAL | ||||||
December 31, 2017 | |||||||||
Loans and Leases | |||||||||
Specifically Evaluated for Impairment | $ | 33.9 | $ | 105.9 | $ | 139.8 | |||
Evaluated for Inherent Impairment | 14,524.1 | 17,928.3 | 32,452.4 | ||||||
Total Loans and Leases | 14,558.0 | 18,034.2 | 32,592.2 | ||||||
Allowance for Credit Losses on Credit Exposures | |||||||||
Specifically Evaluated for Impairment | 1.1 | 4.3 | 5.4 | ||||||
Evaluated for Inherent Impairment | 62.4 | 63.4 | 125.8 | ||||||
Allowance Assigned to Loans and Leases | 63.5 | 67.7 | 131.2 | ||||||
Allowance for Undrawn Exposures | |||||||||
Commitments and Standby Letters of Credit | 17.3 | 5.3 | 22.6 | ||||||
Total Allowance for Credit Losses | $ | 80.8 | $ | 73.0 | $ | 153.8 |
2018 Annual Report | Northern Trust Corporation 123 |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Commercial Mortgages | ||||||
Office | $ | 811.2 | $ | 825.2 | ||
Apartment/ Multi-family | 490.7 | 623.3 | ||||
Retail | 529.7 | 631.1 | ||||
Industrial/ Warehouse | 254.9 | 311.1 | ||||
Other | 426.6 | 445.6 | ||||
Total Commercial Mortgages | 2,513.1 | 2,836.3 | ||||
Construction, Acquisition and Development Loans | 420.6 | 350.8 | ||||
Single Family Investment | 127.0 | 164.8 | ||||
Other Commercial Real Estate Related | 168.1 | 130.8 | ||||
Total Commercial Real Estate Loans | $ | 3,228.8 | $ | 3,482.7 |
DECEMBER 31, 2018 | |||||||||
(In Millions) | ORIGINAL COST | ACCUMULATED DEPRECIATION | NET BOOK VALUE | ||||||
Land and Improvements | $ | 15.4 | $ | 1.1 | $ | 14.3 | |||
Buildings | 245.7 | 148.2 | 97.5 | ||||||
Equipment | 649.9 | 457.6 | 192.3 | ||||||
Leasehold Improvements | 406.0 | 281.9 | 124.1 | ||||||
Total Buildings and Equipment | $ | 1,317.0 | $ | 888.8 | $ | 428.2 |
124 2018 Annual Report | Northern Trust Corporation |
(In Millions) | FUTURE MINIMUM LEASE PAYMENTS | ||
2019 | $ | 98.8 | |
2020 | 97.8 | ||
2021 | 85.9 | ||
2022 | 77.2 | ||
2023 | 67.7 | ||
Later Years | 335.7 | ||
Total Minimum Lease Payments | 763.1 | ||
Less: Sublease Rentals | (23.4 | ) | |
Net Minimum Lease Payments | $ | 739.7 |
(In Millions) | CORPORATE & INSTITUTIONAL SERVICES | WEALTH MANAGEMENT | TOTAL | ||||||
Balance at December 31, 2016 | $ | 448.4 | $ | 71.0 | $ | 519.4 | |||
Goodwill Acquired | 78.3 | — | 78.3 | ||||||
Measurement Period Adjustments | (1.3 | ) | — | (1.3 | ) | ||||
Foreign Exchange Rates | 9.1 | 0.1 | 9.2 | ||||||
Balance at December 31, 2017 | $ | 534.5 | $ | 71.1 | $ | 605.6 | |||
Goodwill Acquired | 71.4 | — | 71.4 | ||||||
Foreign Exchange Rates | (7.7 | ) | — | (7.7 | ) | ||||
Balance at December 31, 2018 | $ | 598.2 | $ | 71.1 | $ | 669.3 |
2018 Annual Report | Northern Trust Corporation 125 |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Gross Carrying Amount | $ | 211.1 | $ | 222.7 | ||
Less: Accumulated Amortization | 72.5 | 61.3 | ||||
Net Book Value | $ | 138.6 | $ | 161.4 |
126 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | ||||||||
($ In Millions) | RATE | 2018 | 2017 | |||||
Corporation-Senior Notes(1)(4) | ||||||||
Fixed Rate Due Nov. 2020(5) | 3.45 | % | $ | 499.7 | $ | 499.6 | ||
Fixed Rate Due Aug. 2021(6) | 3.38 | 499.1 | 498.8 | |||||
Fixed Rate Due Aug. 2022(7) | 2.38 | 499.2 | 498.9 | |||||
Fixed Rate Due Aug. 2028(8)(11) | 3.65 | 513.3 | — | |||||
Total Senior Notes | $ | 2,011.3 | $ | 1,497.3 |
DECEMBER 31, | ||||||
($ In Millions) | 2018 | 2017 | ||||
Bank-Subordinated Debt(1)(3)(4)(11) | ||||||
6.50% Notes due Aug. 2018(9) | $ | — | $ | 305.5 | ||
Corporation-Subordinated Debt(4) | ||||||
3.95% Notes due Oct. 2025(1)(10)(11) | 763.1 | 780.4 | ||||
3.375% Fixed-to-Floating Rate Notes due May 2032(2) | 349.3 | 349.2 | ||||
Total Corporation Subordinated Debt | 1,112.4 | 1,129.6 | ||||
Capital Lease Obligations | — | 14.4 | ||||
Total Long-Term Debt | $ | 1,112.4 | $ | 1,449.5 | ||
Long-Term Debt Qualifying as Risk-Based Capital | $ | 1,099.5 | $ | 1,099.4 |
2018 Annual Report | Northern Trust Corporation 127 |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
NTC Capital I Subordinated Debentures due January 15, 2027 | $ | 154.2 | $ | 154.2 | ||
NTC Capital II Subordinated Debentures due April 15, 2027 | 123.4 | 123.3 | ||||
Total Subordinated Debentures | $ | 277.6 | $ | 277.5 |
128 2018 Annual Report | Northern Trust Corporation |
2018 | 2017 | 2016 | ||||
Balance at January 1 | 226,126,674 | 228,605,485 | 229,293,783 | |||
Incentive Plan and Awards | 1,310,778 | 1,320,129 | 1,209,124 | |||
Stock Options Exercised | 575,662 | 1,997,362 | 4,156,728 | |||
Treasury Stock Purchased | (9,001,064 | ) | (5,796,302 | ) | (6,054,150 | ) |
Balance at December 31 | 219,012,050 | 226,126,674 | 228,605,485 |
(In Millions) | BALANCE AT DECEMBER 31, 2018 | NET CHANGE | RECLASSIFICATION OF CERTAIN TAX EFFECTS FROM AOCI | BALANCE AT DECEMBER 31, 2017 | NET CHANGE | BALANCE AT DECEMBER 31, 2016 | NET CHANGE | BALANCE AT DECEMBER 31, 2015 | ||||||||||||||||
Net Unrealized (Losses) Gains on Debt Securities Available for Sale* | $ | (114.9 | ) | $ | (22.3 | ) | $ | (17.8 | ) | $ | (74.8 | ) | $ | (42.4 | ) | $ | (32.4 | ) | $ | (1.4 | ) | $ | (31.0 | ) |
Net Unrealized Gains (Losses) on Cash Flow Hedges | 4.0 | (1.4 | ) | 0.9 | 4.5 | (1.6 | ) | 6.1 | 9.1 | (3.0 | ) | |||||||||||||
Net Foreign Currency Adjustments | 67.9 | 22.2 | 47.5 | (1.8 | ) | 16.7 | (18.5 | ) | (0.9 | ) | (17.6 | ) | ||||||||||||
Net Pension and Other Postretirement Benefit Adjustments | (410.7 | ) | (12.6 | ) | (55.9 | ) | (342.2 | ) | (17.0 | ) | (325.2 | ) | (4.1 | ) | (321.1 | ) | ||||||||
Total | $ | (453.7 | ) | $ | (14.1 | ) | $ | (25.3 | ) | $ | (414.3 | ) | $ | (44.3 | ) | $ | (370.0 | ) | $ | 2.7 | $ | (372.7 | ) |
2018 Annual Report | Northern Trust Corporation 129 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||||||||||||||||||||
2018 | 2017 | 2016 | |||||||||||||||||||||||||
(In Millions) | BEFORE TAX | TAX EFFECT | AFTER TAX | BEFORE TAX | TAX EFFECT | AFTER TAX | BEFORE TAX | TAX EFFECT | AFTER TAX | ||||||||||||||||||
Unrealized Gains (Losses) on Debt Securities Available for Sale | |||||||||||||||||||||||||||
Unrealized (Losses) Gains on Debt Securities Available for Sale | $ | (31.9 | ) | $ | 9.2 | $ | (22.7 | ) | $ | (70.2 | ) | $ | 26.9 | $ | (43.3 | ) | $ | (1.8 | ) | $ | 0.7 | $ | (1.1 | ) | |||
Reclassification Adjustment for (Gains) Losses Included in Net Income | 0.5 | (0.1 | ) | 0.4 | 1.4 | (0.5 | ) | 0.9 | (0.5 | ) | 0.2 | (0.3 | ) | ||||||||||||||
Net Change | $ | (31.4 | ) | $ | 9.1 | $ | (22.3 | ) | $ | (68.8 | ) | $ | 26.4 | $ | (42.4 | ) | $ | (2.3 | ) | $ | 0.9 | $ | (1.4 | ) | |||
Unrealized (Losses) Gains on Cash Flow Hedges | |||||||||||||||||||||||||||
Foreign Exchange Contracts | $ | 70.5 | $ | (17.6 | ) | $ | 52.9 | $ | 32.5 | $ | (19.5 | ) | $ | 13.0 | $ | 3.1 | $ | 4.2 | $ | 7.3 | |||||||
Interest Rate Contracts | (1.2 | ) | 0.3 | (0.9 | ) | 1.3 | (0.8 | ) | 0.5 | 1.3 | 1.7 | 3.0 | |||||||||||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income | (71.1 | ) | 17.7 | (53.4 | ) | (24.5 | ) | 9.4 | (15.1 | ) | (1.9 | ) | 0.7 | (1.2 | ) | ||||||||||||
Net Change | $ | (1.8 | ) | $ | 0.4 | $ | (1.4 | ) | $ | 9.3 | $ | (10.9 | ) | $ | (1.6 | ) | $ | 2.5 | $ | 6.6 | $ | 9.1 | |||||
Foreign Currency Adjustments | |||||||||||||||||||||||||||
Foreign Currency Translation Adjustments | $ | (107.8 | ) | $ | 1.5 | $ | (106.3 | ) | $ | 156.5 | $ | (3.1 | ) | $ | 153.4 | $ | (126.5 | ) | $ | (3.1 | ) | $ | (129.6 | ) | |||
Long-Term Intra-Entity Foreign Currency Transaction Losses | (1.8 | ) | 0.5 | (1.3 | ) | 2.0 | (0.7 | ) | 1.3 | (5.3 | ) | 2.0 | (3.3 | ) | |||||||||||||
Net Investment Hedge Gains (Losses) | 173.0 | (43.2 | ) | 129.8 | (223.2 | ) | 85.2 | (138.0 | ) | 212.4 | (80.4 | ) | 132.0 | ||||||||||||||
Net Change | $ | 63.4 | $ | (41.2 | ) | $ | 22.2 | $ | (64.7 | ) | $ | 81.4 | $ | 16.7 | $ | 80.6 | $ | (81.5 | ) | $ | (0.9 | ) | |||||
Pension and Other Postretirement Benefit Adjustments | |||||||||||||||||||||||||||
Net Actuarial Gains (Losses) | $ | (54.9 | ) | $ | 9.6 | $ | (45.3 | ) | $ | (58.4 | ) | $ | 25.4 | $ | (33.0 | ) | $ | (31.1 | ) | $ | 11.2 | $ | (19.9 | ) | |||
Reclassification Adjustment for Losses Included in Net Income | 36.3 | (3.6 | ) | 32.7 | 25.9 | (9.9 | ) | 16.0 | 25.4 | (9.6 | ) | 15.8 | |||||||||||||||
Net Change | $ | (18.6 | ) | $ | 6.0 | $ | (12.6 | ) | $ | (32.5 | ) | $ | 15.5 | $ | (17.0 | ) | $ | (5.7 | ) | $ | 1.6 | $ | (4.1 | ) |
130 2018 Annual Report | Northern Trust Corporation |
(In Millions) | LOCATION OF RECLASSIFICATION ADJUSTMENTS RECOGNIZED IN INCOME | AMOUNT OF RECLASSIFICATION ADJUSTMENTS RECOGNIZED IN INCOME YEAR ENDED DECEMBER 31, | ||||||||
2018 | 2017 | 2016 | ||||||||
Debt Securities Available for Sale | ||||||||||
Realized Losses (Gains) on Debt Securities Available for Sale | Investment Security Losses, net | $ | 0.5 | $ | 1.4 | $ | (0.5 | ) | ||
Realized (Gains) Losses on Cash Flow Hedges | ||||||||||
Foreign Exchange Contracts | Other Operating Income | (3.9 | ) | (5.0 | ) | 6.4 | ||||
Interest Income | (67.4 | ) | (19.3 | ) | (6.4 | ) | ||||
Other Operating Expense | — | 0.1 | 0.9 | |||||||
Interest Rate Contracts | Interest Income | 0.2 | (0.3 | ) | (2.8 | ) | ||||
Total Realized (Gains) on Cash Flow Hedges | (71.1 | ) | (24.5 | ) | (1.9 | ) | ||||
Pension and Other Postretirement Benefit Adjustments | ||||||||||
Amortization of Net Actuarial Losses | Employee Benefits | 36.6 | 26.0 | 25.6 | ||||||
Amortization of Prior Service Cost | Employee Benefits | (0.3 | ) | (0.1 | ) | (0.2 | ) | |||
Gross Reclassification Adjustment | $ | 36.3 | $ | 25.9 | $ | 25.4 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
($ In Millions Except Per Common Share Information) | 2018 | 2017 | 2016 | ||||||
BASIC NET INCOME PER COMMON SHARE | |||||||||
Average Number of Common Shares Outstanding | 223,148,335 | 228,257,664 | 227,580,584 | ||||||
Net Income | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | |||
Less: Dividends on Preferred Stock | 46.4 | 49.8 | 23.4 | ||||||
Net Income Applicable to Common Stock | $ | 1,510.0 | $ | 1,149.2 | $ | 1,009.1 | |||
Less: Earnings Allocated to Participating Securities | 20.1 | 18.8 | 18.7 | ||||||
Earnings Allocated to Common Shares Outstanding | 1,489.9 | 1,130.4 | 990.4 | ||||||
Basic Net Income Per Common Share | 6.68 | 4.95 | 4.35 | ||||||
DILUTED NET INCOME PER COMMON SHARE | |||||||||
Average Number of Common Shares Outstanding | 223,148,335 | 228,257,664 | 227,580,584 | ||||||
Plus Dilutive Effect of Share-based Compensation | 1,339,991 | 1,396,737 | 1,570,822 | ||||||
Average Common and Potential Common Shares | 224,488,326 | 229,654,401 | 229,151,406 | ||||||
Earnings Allocated to Common and Potential Common Shares | $ | 1,490.0 | $ | 1,130.5 | $ | 990.4 | |||
Diluted Net Income Per Common Share | 6.64 | 4.92 | 4.32 |
2018 Annual Report | Northern Trust Corporation 131 |
132 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | |||
(In Millions) | 2018 | ||
Noninterest Income | |||
Trust, Investment and Other Servicing Fees | |||
Custody and Fund Administration | $ | 1,589.1 | |
Investment Management and Advisory | 1,862.6 | ||
Securities Lending | 102.8 | ||
Other | 199.2 | ||
Total Trust, Investment and Other Servicing Fees | $ | 3,753.7 | |
Other Noninterest Income | |||
Foreign Exchange Income | $ | 307.2 | |
Treasury Management | 51.8 | ||
Securities Commissions and Trading Income | 98.3 | ||
Other Operating Income | 127.5 | ||
Investment Security Losses, net | (1.0 | ) | |
Total Other Noninterest Income | $ | 583.8 | |
Total Noninterest Income | $ | 4,337.5 |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Trust Fees Receivable, net (1) | $ | 742.5 | $ | 629.7 | ||
Other | 90.1 | 79.0 | ||||
Total Client Receivables | $ | 832.6 | $ | 708.7 |
2018 Annual Report | Northern Trust Corporation 133 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Interest Income | |||||||||
Loans and Leases | $ | 1,098.8 | $ | 919.1 | $ | 806.5 | |||
Securities – Taxable | 905.2 | 594.1 | 428.8 | ||||||
– Non-Taxable | 7.0 | 9.8 | 7.5 | ||||||
Interest-Bearing Due from and Deposits with Banks (1) | 70.0 | 63.8 | 64.3 | ||||||
Federal Reserve and Other Central Bank Deposits and Other | 240.4 | 182.6 | 109.8 | ||||||
Total Interest Income | $ | 2,321.4 | $ | 1,769.4 | $ | 1,416.9 | |||
Interest Expense | |||||||||
Deposits | $ | 384.6 | $ | 182.1 | $ | 83.5 | |||
Federal Funds Purchased | 50.3 | 10.4 | 1.5 | ||||||
Securities Sold under Agreements to Repurchase | 7.8 | 6.0 | 2.3 | ||||||
Other Borrowings | 150.1 | 50.7 | 18.0 | ||||||
Senior Notes | 53.4 | 46.9 | 46.8 | ||||||
Long-Term Debt | 45.0 | 39.2 | 26.4 | ||||||
Floating Rate Capital Debt | 7.5 | 4.9 | 3.5 | ||||||
Total Interest Expense | $ | 698.7 | $ | 340.2 | $ | 182.0 | |||
Net Interest Income | $ | 1,622.7 | $ | 1,429.2 | $ | 1,234.9 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Loan Service Fees | $ | 48.9 | $ | 50.7 | $ | 56.6 | |||
Banking Service Fees | 46.4 | 48.6 | 50.6 | ||||||
Other Income | 32.2 | 58.2 | 134.0 | ||||||
Total Other Operating Income | $ | 127.5 | $ | 157.5 | $ | 241.2 |
134 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Business Promotion | $ | 98.3 | $ | 95.4 | $ | 83.6 | |||
FDIC Insurance Premiums | 27.4 | 34.7 | 31.7 | ||||||
Staff Related | 33.6 | 42.8 | 43.0 | ||||||
Other Intangibles Amortization | 17.4 | 11.4 | 8.8 | ||||||
Other Expenses | 153.9 | 147.3 | 197.3 | ||||||
Total Other Operating Expense | $ | 330.6 | $ | 331.6 | $ | 364.4 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Federal Rate | 21.0 | % | 35.0 | % | 35.0 | % | |||
Tax at Statutory Rate | $ | 411.1 | $ | 571.9 | $ | 531.0 | |||
Tax Exempt Income | (6.9 | ) | (9.6 | ) | (7.2 | ) | |||
Foreign Tax Rate Differential | (7.3 | ) | (50.0 | ) | (50.9 | ) | |||
Excess Tax Benefit Related to Share-Based Compensation | (16.8 | ) | (31.6 | ) | (12.3 | ) | |||
State Taxes, net | 65.5 | 41.0 | 31.1 | ||||||
Impact of Tax Cuts and Jobs Act | (4.8 | ) | (53.1 | ) | — | ||||
Change in Accounting Method | (24.4 | ) | — | — | |||||
Other | (15.0 | ) | (33.7 | ) | (7.1 | ) | |||
Provision for Income Taxes | $ | 401.4 | $ | 434.9 | $ | 484.6 |
2018 Annual Report | Northern Trust Corporation 135 |
(In Millions) | 2018 | 2017 | ||||
Federal Taxes on Mandatory Deemed Repatriation | $ | (16.8 | ) | $ | 150.0 | |
Impact Related to Federal Deferred Taxes | 12.7 | (210.0 | ) | |||
Other Adjustments | (0.7 | ) | 6.9 | |||
Provision (Benefit) for Income Taxes | $ | (4.8 | ) | $ | (53.1 | ) |
(In Millions) | 2018 | 2017 | ||||
Balance at January 1 | $ | 27.7 | $ | 17.2 | ||
Additions for Tax Positions Taken in the Current Year | 0.5 | 9.9 | ||||
Additions for Tax Positions Taken in Prior Years | 1.7 | 6.2 | ||||
Reductions for Tax Positions Taken in Prior Years | (7.8 | ) | (5.4 | ) | ||
Reductions Resulting from Expiration of Statutes | (0.2 | ) | (0.2 | ) | ||
Balance at December 31 | $ | 21.9 | $ | 27.7 |
136 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Current Tax Provision: | |||||||||
Federal | $ | 132.8 | $ | 347.3 | $ | 495.8 | |||
State | 95.4 | 38.3 | 65.3 | ||||||
Non-U.S. | 162.7 | 125.4 | 99.3 | ||||||
Total | 390.9 | 511.0 | 660.4 | ||||||
Deferred Tax Provision: | |||||||||
Federal | $ | 33.8 | $ | (96.4 | ) | $ | (159.0 | ) | |
State | (13.8 | ) | 24.6 | (18.9 | ) | ||||
Non-U.S. | (9.5 | ) | (4.3 | ) | 2.1 | ||||
Total | 10.5 | (76.1 | ) | (175.8 | ) | ||||
Provision for Income Taxes | $ | 401.4 | $ | 434.9 | $ | 484.6 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Current Tax Benefit (Charge) for Employee Stock Options and Other Stock-Based Plans | $ | — | $ | — | $ | (7.6 | ) | ||
Tax Effect of Other Comprehensive Income | 25.7 | (112.4 | ) | 72.4 |
2018 Annual Report | Northern Trust Corporation 137 |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Deferred Tax Liabilities: | ||||||
Lease Financing | $ | 43.3 | $ | 85.8 | ||
Software Development | 193.2 | 187.8 | ||||
Accumulated Depreciation | 129.5 | 41.0 | ||||
Compensation and Benefits | 10.9 | — | ||||
State Taxes, net | 58.9 | 59.4 | ||||
Other Liabilities | 114.5 | 145.7 | ||||
Gross Deferred Tax Liabilities | 550.3 | 519.7 | ||||
Deferred Tax Assets: | ||||||
Allowance for Credit Losses | 29.0 | 32.3 | ||||
Compensation and Benefits | — | 35.5 | ||||
Other Assets | 120.6 | 88.3 | ||||
Gross Deferred Tax Assets | 149.6 | 156.1 | ||||
Valuation Reserve | (0.3 | ) | (1.1 | ) | ||
Deferred Tax Assets, net of Valuation Reserve | 149.3 | 155.0 | ||||
Net Deferred Tax Liabilities | $ | 401.0 | $ | 364.7 |
138 2018 Annual Report | Northern Trust Corporation |
U.S. PLAN | NON-U.S. PLANS | SUPPLEMENTAL PLAN | ||||||||||||||||
($ In Millions) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Accumulated Benefit Obligation | $ | 980.6 | $ | 1,088.4 | $ | 178.4 | $ | 192.2 | $ | 120.9 | $ | 129.0 | ||||||
Projected Benefit Obligation | 1,092.0 | 1,209.9 | 183.5 | 198.3 | 135.6 | 144.5 | ||||||||||||
Plan Assets at Fair Value | 1,380.1 | 1,506.4 | 166.7 | 178.7 | — | — | ||||||||||||
Funded Status at December 31 | $ | 288.1 | $ | 296.5 | $ | (16.8 | ) | $ | (19.6 | ) | $ | (135.6 | ) | $ | (144.5 | ) | ||
Weighted-Average Assumptions: | ||||||||||||||||||
Discount Rates | 4.47 | % | 3.79 | % | 2.16 | % | 2.08 | % | 4.47 | % | 3.79 | % | ||||||
Rate of Increase in Compensation Level | 4.39 | 4.39 | 1.75 | % | 1.75 | 4.39 | 4.39 | |||||||||||
Expected Long-Term Rate of Return on Assets | 6.00 | 6.00 | 2.39 | 2.61 | N/A | N/A |
U.S. PLAN | NON-U.S. PLANS | SUPPLEMENTAL PLAN | ||||||||||||||||
(In Millions) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Actuarial Loss | $ | 435.4 | $ | 399.0 | $ | 41.2 | $ | 44.2 | $ | 65.8 | $ | 83.2 | ||||||
Prior Service Cost | (1.4 | ) | (1.8 | ) | 3.6 | 2.5 | 0.4 | 0.6 | ||||||||||
Gross Amount in Accumulated Other Comprehensive Income | 434.0 | 397.2 | 44.8 | 46.7 | 66.2 | 83.8 | ||||||||||||
Income Tax Effect | 108.5 | 151.6 | 6.0 | 5.3 | 16.4 | 31.9 | ||||||||||||
Net Amount in Accumulated Other Comprehensive Income | $ | 325.5 | $ | 245.6 | $ | 38.8 | $ | 41.4 | $ | 49.8 | $ | 51.9 |
U.S. PLAN | NON-U.S. PLANS | SUPPLEMENTAL PLAN | |||||||||||||||||||||||||
($ In Millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||
Service Cost | $ | 41.4 | $ | 38.3 | $ | 37.4 | $ | 1.7 | $ | 0.4 | $ | — | $ | 4.3 | $ | 3.7 | $ | 3.5 | |||||||||
Interest Cost | 44.3 | 45.9 | 45.8 | 4.0 | 4.0 | 4.7 | 5.3 | 5.2 | 5.1 | ||||||||||||||||||
Expected Return on Plan Assets | (88.2 | ) | (93.8 | ) | (94.4 | ) | (4.4 | ) | (4.5 | ) | (4.6 | ) | N/A | N/A | N/A | ||||||||||||
Settlement Expense | — | — | — | 0.5 | 1.1 | 3.7 | — | — | — | ||||||||||||||||||
Amortization: | |||||||||||||||||||||||||||
Net Loss | 28.2 | 19.0 | 18.8 | 0.9 | 1.3 | 1.0 | 7.4 | 5.7 | 5.8 | ||||||||||||||||||
Prior Service Cost | (0.4 | ) | (0.4 | ) | (0.4 | ) | 0.2 | 0.1 | — | 0.2 | 0.2 | 0.2 | |||||||||||||||
Net Periodic Pension Expense | $ | 25.3 | $ | 9.0 | $ | 7.2 | $ | 2.9 | $ | 2.4 | $ | 4.8 | $ | 17.2 | $ | 14.8 | $ | 14.6 | |||||||||
Weighted-Average Assumptions: | |||||||||||||||||||||||||||
Discount Rates | 3.79 | % | 4.46 | % | 4.71 | % | 2.08 | % | 2.33 | % | 3.39 | % | 3.79 | % | 4.46 | % | 4.71 | % | |||||||||
Rate of Increase in Compensation Level | 4.39 | 4.39 | 4.25 | 1.75 | 1.75 | N/A | 4.39 | 4.39 | 4.25 | ||||||||||||||||||
Expected Long-Term Rate of Return on Assets | 6.00 | 6.75 | 7.00 | 2.61 | 3.13 | 3.73 | N/A | N/A | N/A |
2018 Annual Report | Northern Trust Corporation 139 |
U.S. PLAN | NON-U.S. PLANS | SUPPLEMENTAL PLAN | ||||||||||||||||
(In Millions) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Beginning Balance | $ | 1,209.9 | $ | 1,062.7 | $ | 198.3 | $ | 155.9 | $ | 144.5 | $ | 121.1 | ||||||
Service Cost | 41.4 | 38.3 | 1.7 | 0.4 | 4.3 | 3.7 | ||||||||||||
Interest Cost | 44.3 | 45.9 | 4.0 | 4.0 | 5.3 | 5.2 | ||||||||||||
Employee Contributions | — | — | 0.4 | 0.1 | — | — | ||||||||||||
Plan Amendment | — | — | 1.3 | 2.5 | — | — | ||||||||||||
Actuarial (Gain) Loss | (112.4 | ) | 142.6 | (9.3 | ) | 0.4 | (9.7 | ) | 21.5 | |||||||||
Settlement | — | — | (2.7 | ) | (6.8 | ) | — | — | ||||||||||
Acquisitions/Divestitures | — | — | — | 27.0 | — | — | ||||||||||||
Benefits Paid | (91.2 | ) | (79.6 | ) | (1.1 | ) | (3.0 | ) | (8.8 | ) | (7.0 | ) | ||||||
Foreign Exchange Rate Changes | — | — | (9.1 | ) | 17.8 | — | — | |||||||||||
Ending Balance | $ | 1,092.0 | $ | 1,209.9 | $ | 183.5 | $ | 198.3 | $ | 135.6 | $ | 144.5 |
(In Millions) | U.S. PLAN | NON-U.S. PLANS | SUPPLEMENTAL PLAN | ||||||
2019 | $ | 74.0 | $ | 3.4 | $ | 12.0 | |||
2020 | 76.8 | 3.8 | 11.5 | ||||||
2021 | 75.1 | 4.1 | 14.4 | ||||||
2022 | 73.4 | 3.9 | 16.2 | ||||||
2023 | 77.1 | 4.3 | 14.9 | ||||||
2024-2028 | 368.9 | 26.4 | 63.6 |
U.S. PLAN | NON-U.S. PLANS | |||||||||||
(In Millions) | 2018 | 2017 | 2018 | 2017 | ||||||||
Fair Value of Assets at Beginning of Period | $ | 1,506.4 | $ | 1,393.5 | $ | 178.7 | $ | 139.3 | ||||
Actual Return on Assets | (85.1 | ) | 192.5 | (2.3 | ) | 12.4 | ||||||
Employer Contributions | 50.0 | — | 2.6 | 3.0 | ||||||||
Employee Contributions | — | — | 0.4 | 0.1 | ||||||||
Settlement | — | — | (2.7 | ) | (6.8 | ) | ||||||
Acquisitions/Divestitures | — | — | — | 18.5 | ||||||||
Benefits Paid | (91.2 | ) | (79.6 | ) | (1.1 | ) | (3.0 | ) | ||||
Foreign Exchange Rate Changes | — | — | (8.9 | ) | 15.2 | |||||||
Fair Value of Assets at End of Period | $ | 1,380.1 | $ | 1,506.4 | $ | 166.7 | $ | 178.7 |
140 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 141 |
December 31, 2018 | ||||||||||||
(In Millions) | LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||
Domestic Common Stock | $ | 36.3 | $ | — | $ | — | $ | 36.3 | ||||
Foreign Common Stock | — | — | — | — | ||||||||
U.S. Government Obligations | — | 1,010.2 | — | 1,010.2 | ||||||||
Northern Trust Mutual Fund | 39.9 | — | — | 39.9 | ||||||||
Exchange Traded Fund | 0.1 | — | — | 0.1 | ||||||||
Northern Trust Collective Trust Funds | — | 226.5 | — | 226.5 | ||||||||
Northern Trust Private Equity Funds | — | — | 25.5 | 25.5 | ||||||||
Northern Trust Hedge Funds | — | — | 29.2 | 29.2 | ||||||||
Cash and Other | 12.4 | — | — | 12.4 | ||||||||
Total Assets at Fair Value | $ | 88.7 | $ | 1,236.7 | $ | 54.7 | $ | 1,380.1 |
December 31, 2017 | ||||||||||||
(In Millions) | LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | ||||||||
Domestic Common Stock | $ | 38.6 | $ | — | $ | — | $ | 38.6 | ||||
Foreign Common Stock | — | — | — | — | ||||||||
U.S. Government Obligations | — | 1,072.0 | — | 1,072.0 | ||||||||
Northern Trust Mutual Fund | 44.5 | — | — | 44.5 | ||||||||
Exchange Traded Fund | 0.1 | — | — | 0.1 | ||||||||
Northern Trust Collective Trust Funds | — | 268.6 | — | 268.6 | ||||||||
Northern Trust Private Equity Funds | — | — | 29.3 | 29.3 | ||||||||
Northern Trust Hedge Funds | — | — | 44.6 | 44.6 | ||||||||
Cash and Other | 8.7 | — | — | 8.7 | ||||||||
Total Assets at Fair Value | $ | 91.9 | $ | 1,340.6 | $ | 73.9 | $ | 1,506.4 |
PRIVATE EQUITY FUNDS | HEDGE FUNDS | |||||||||||
(In Millions) | 2018 | 2017 | 2018 | 2017 | ||||||||
Fair Value at January 1 | $ | 29.3 | $ | 35.7 | $ | 44.6 | $ | 64.8 | ||||
Actual Return on Plan Assets | (1.5 | ) | (5.4 | ) | (2.7 | ) | (3.1 | ) | ||||
Realized Gain | — | — | 2.4 | 5.0 | ||||||||
Purchases | 0.3 | 0.8 | — | — | ||||||||
Sales | (2.6 | ) | (1.8 | ) | (15.1 | ) | (22.1 | ) | ||||
Fair Value at December 31 | $ | 25.5 | $ | 29.3 | $ | 29.2 | $ | 44.6 |
142 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Accumulated Postretirement Benefit Obligation at Measurement Date: | ||||||
Retirees and Dependents | $ | 23.5 | $ | 27.7 | ||
Actives Eligible for Benefits | 4.6 | 6.7 | ||||
Net Postretirement Benefit Obligation | $ | 28.1 | $ | 34.4 |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Net Actuarial Loss / (Gain) | $ | (6.5 | ) | $ | 3.9 | |
Prior Service Cost | — | — | ||||
Gross Amount in Accumulated Other Comprehensive Income | (6.5 | ) | 3.9 | |||
Income Tax Effect | (2.2 | ) | 1.5 | |||
Net Amount in Accumulated Other Comprehensive Income | $ | (4.3 | ) | $ | 2.4 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Service Cost | $ | — | $ | 0.1 | $ | 0.1 | |||
Interest Cost | 1.3 | 1.4 | 1.5 | ||||||
Expected Return on Plan Assets | — | — | — | ||||||
Amortization | |||||||||
Net Gain | — | — | — | ||||||
Prior Service Benefit | — | — | — | ||||||
Net Periodic Postretirement Expense | $ | 1.3 | $ | 1.5 | $ | 1.6 |
2018 Annual Report | Northern Trust Corporation 143 |
FOR THE YEAR ENDED DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Beginning Balance | $ | 34.4 | $ | 34.1 | ||
Service Cost | — | 0.1 | ||||
Interest Cost | 1.3 | 1.4 | ||||
Actuarial Loss / (Gain) | (6.7 | ) | (0.2 | ) | ||
Net Claims Paid | (6.3 | ) | (1.0 | ) | ||
Medicare Subsidy | 5.4 | — | ||||
Ending Balance | $ | 28.1 | $ | 34.4 |
(In Millions) | TOTAL POSTRETIREMENT MEDICAL BENEFITS | ||
2019 | $ | 2.5 | |
2020 | 2.5 | ||
2021 | 2.4 | ||
2022 | 2.3 | ||
2023 | 2.2 | ||
2024-2028 | 10.1 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Restricted Stock Unit Awards | $ | 96.3 | $ | 87.3 | $ | 60.2 | |||
Stock Options | 2.6 | 9.0 | 9.0 | ||||||
Performance Stock Units | 32.0 | 31.7 | 17.6 | ||||||
Total Share-Based Compensation Expense | $ | 130.9 | $ | 128.0 | $ | 86.8 | |||
Tax Benefits Recognized | $ | 32.5 | $ | 48.7 | $ | 32.8 |
144 2018 Annual Report | Northern Trust Corporation |
2017 | 2016 | |||
Expected Term (in Years) | 6.9 | 7.0 | ||
Dividend Yield | 1.81 | % | 2.57 | % |
Expected Volatility | 23.2 | 32.3 | ||
Risk-Free Interest Rate | 2.11 | 1.45 |
2018 Annual Report | Northern Trust Corporation 145 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions, Except Per Share Information) | 2018 | 2017 | 2016 | ||||||
Weighted Average Grant-Date Per Share Fair Value of Stock Options Granted | $ | — | $ | 19.18 | $ | 14.84 | |||
Grant-Date Fair Value of Stock Options Vested | 8.1 | 7.3 | 9.6 | ||||||
Stock Options Exercised | |||||||||
Intrinsic Value as of Exercise Date | 28.5 | 74.7 | 83.9 | ||||||
Cash Received | 32.6 | 108.0 | 233.8 | ||||||
Tax Deduction Benefits Realized | 27.7 | 73.1 | 80.0 |
NONVESTED OPTIONS | SHARES | WEIGHTED- AVERAGE GRANT- DATE FAIR VALUE PER SHARE | |||
Nonvested at December 31, 2017 | 1,246,505 | $ | 17.25 | ||
Granted | — | — | |||
Vested | (483,605 | ) | 17.07 | ||
Forfeited or Cancelled | (5,162 | ) | 19.18 | ||
Nonvested at December 31, 2018 | 757,738 | $ | 17.36 |
($ In Millions Except Per Share Information) | SHARES | WEIGHTED AVERAGE EXERCISE PRICE PER SHARE | WEIGHTED AVERAGE REMAINING CONTRACTUAL TERM (YEARS) | AGGREGATE INTRINSIC VALUE | |||||
Options Outstanding, December 31, 2017 | 3,073,098 | $ | 60.99 | ||||||
Granted | — | — | |||||||
Exercised | (575,662 | ) | 56.55 | ||||||
Forfeited, Expired or Cancelled | (16,375 | ) | 79.78 | ||||||
Options Outstanding, December 31, 2018 | 2,481,061 | $ | 61.90 | 5.1 | $ | 55.8 | |||
Options Exercisable, December 31, 2018 | 1,723,323 | $ | 56.82 | 4.2 | $ | 46.6 |
146 2018 Annual Report | Northern Trust Corporation |
($ In Millions) | NUMBER | AGGREGATE INTRINSIC VALUE | |||
Restricted Stock Unit Awards Outstanding, December 31, 2017 | 3,399,438 | $ | 339.6 | ||
Granted | 815,314 | ||||
Distributed | (1,016,846 | ) | |||
Forfeited | (76,064 | ) | |||
Restricted Stock Unit Awards Outstanding, December 31, 2018 | 3,121,842 | $ | 261.0 | ||
Units Convertible, December 31, 2018 | 144,722 | $ | 12.1 |
NONVESTED RESTRICTED STOCK UNITS | NUMBER | WEIGHTED AVERAGE GRANT- DATE FAIR VALUE PER UNIT | WEIGHTED AVERAGE REMAINING VESTING TERM (YEARS) | |||
Nonvested at December 31, 2017 | 3,231,327 | $ | 69.67 | 1.9 | ||
Granted | 815,314 | 103.74 | ||||
Vested | (993,457 | ) | 66.82 | |||
Forfeited | (76,064 | ) | 73.18 | |||
Nonvested at December 31, 2018 | 2,977,120 | $ | 79.92 | 1.9 |
2018 Annual Report | Northern Trust Corporation 147 |
148 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 149 |
DECEMBER 31, 2018 | DECEMBER 31, 2017 | |||||||||||||||||
FAIR VALUE | FAIR VALUE | |||||||||||||||||
(In Millions) | NOTIONAL VALUE | ASSET 1 | LIABILITY 2 | NOTIONAL VALUE | ASSET 1 | LIABILITY 2 | ||||||||||||
Derivatives Designated as Hedging under GAAP | ||||||||||||||||||
Interest Rate Contracts | ||||||||||||||||||
Fair Value Hedges | $ | 4,590.4 | $ | 29.8 | $ | 23.3 | $ | 4,473.1 | $ | 31.7 | $ | 18.2 | ||||||
Cash Flow Hedges | 600.0 | 0.2 | 1.2 | 925.0 | 0.2 | 1.2 | ||||||||||||
Foreign Exchange Contracts | ||||||||||||||||||
Cash Flow Hedges | 2,648.2 | 13.8 | 57.8 | 3,289.0 | 28.4 | 13.0 | ||||||||||||
Net Investment Hedges | 3,475.1 | 292.4 | 14.5 | 3,011.3 | 0.6 | 179.5 | ||||||||||||
Total Derivatives Designated as Hedging under GAAP | $ | 11,313.7 | $ | 336.2 | $ | 96.8 | $ | 11,698.4 | $ | 60.9 | $ | 211.9 | ||||||
Derivatives Not Designated as Hedging under GAAP | ||||||||||||||||||
Non-Designated Risk Management Derivatives | ||||||||||||||||||
Foreign Exchange Contracts | $ | 122.2 | $ | 0.5 | $ | 0.2 | $ | 214.1 | $ | 1.1 | $ | 0.1 | ||||||
Other Financial Derivatives 3 | 483.4 | 1.3 | 32.8 | 404.7 | — | 30.4 | ||||||||||||
Total Non-Designated Risk Management Derivatives | $ | 605.6 | $ | 1.8 | $ | 33.0 | $ | 618.8 | $ | 1.1 | $ | 30.5 | ||||||
Client-Related and Trading Derivatives | ||||||||||||||||||
Foreign Exchange Contracts | $ | 281,864.4 | $ | 2,159.4 | $ | 2,190.0 | $ | 317,882.5 | $ | 2,527.0 | $ | 2,522.5 | ||||||
Interest Rate Contracts | 7,711.2 | 66.1 | 68.6 | 7,418.0 | 65.1 | 64.1 | ||||||||||||
Total Client-Related and Trading Derivatives | $ | 289,575.6 | $ | 2,225.5 | $ | 2,258.6 | $ | 325,300.5 | $ | 2,592.1 | $ | 2,586.6 | ||||||
Total Derivatives Not Designated as Hedging under GAAP | $ | 290,181.2 | $ | 2,227.3 | $ | 2,291.6 | $ | 325,919.3 | $ | 2,593.2 | $ | 2,617.1 | ||||||
Total Gross Derivatives | $ | 301,494.9 | $ | 2,563.5 | $ | 2,388.4 | $ | 337,617.7 | $ | 2,654.1 | $ | 2,829.0 | ||||||
Less: Netting 4 | 1,357.1 | 1,796.3 | 1,860.0 | 1,621.4 | ||||||||||||||
Total Derivative Financial Instruments | $ | 1,206.4 | $ | 592.1 | $ | 794.1 | $ | 1,207.6 |
150 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 151 |
Location and Amount of Derivative Gain/(Loss) Recognized in Income | ||||||||||||||||||||||||||||||||||||||||
(in Millions) | Interest Income | Interest Expense | Other Operating Income | Other Operating Expense | ||||||||||||||||||||||||||||||||||||
For the Year Ended December 31, | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||
Total amounts on the consolidated statements of income | $ | 2,321.4 | $ | 1,769.4 | $ | 1,416.9 | $ | 698.7 | $ | 340.2 | $ | 182.0 | $ | 127.5 | $ | 157.5 | $ | 241.2 | $ | 330.6 | $ | 331.6 | $ | 364.4 | ||||||||||||||||
Gains/(Losses) on fair value hedges recognized on | ||||||||||||||||||||||||||||||||||||||||
Interest Rate Contracts | ||||||||||||||||||||||||||||||||||||||||
Recognized on derivatives | 13.9 | 8.8 | 80.6 | (9.5 | ) | (24.3 | ) | (33.9 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||
Recognized on hedged items | (13.9 | ) | (8.8 | ) | (80.6 | ) | 9.5 | 24.3 | 33.9 | — | — | — | — | — | — | |||||||||||||||||||||||||
Amounts related to interest settlements on derivatives | 17.8 | (9.6 | ) | (16.9 | ) | 7.9 | 27.7 | 38.9 | — | — | — | — | — | — | ||||||||||||||||||||||||||
Total gain/(loss) recognized on fair value hedges | $ | 17.8 | $ | (9.6 | ) | $ | (16.9 | ) | $ | 7.9 | $ | 27.7 | $ | 38.9 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Gains/(Losses) on cash flow hedges recognized on | ||||||||||||||||||||||||||||||||||||||||
Foreign Exchange Contracts | ||||||||||||||||||||||||||||||||||||||||
Net gain/(loss) reclassified from AOCI to net income | 67.4 | 19.3 | 6.4 | — | — | — | 3.9 | 5.0 | (6.4 | ) | — | (0.1 | ) | (0.9 | ) | |||||||||||||||||||||||||
Interest Rate Contracts | ||||||||||||||||||||||||||||||||||||||||
Net gain/(loss) reclassified from AOCI to net income | (0.2 | ) | 0.3 | 2.8 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total gain/(loss) reclassified from AOCI to net income on cash flow hedges | $ | 67.2 | $ | 19.6 | $ | 9.2 | $ | — | $ | — | $ | — | $ | 3.9 | $ | 5.0 | $ | (6.4 | ) | $ | — | $ | (0.1 | ) | $ | (0.9 | ) |
152 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, 2018 | |||||||
(In Millions) | CARRYING VALUE OF THE HEDGED ITEMS | CUMULATIVE HEDGE ACCOUNTING BASIS ADJUSTMENT 1 | |||||
Available for Sale Debt Securities 2 | $ | 3,831.6 | $ | 99.4 | |||
Senior Notes and Long-Term Subordinated Debt | 1,248.8 | 29.3 | |||||
Total | $ | 5,080.4 | $ | 128.7 |
(In Millions) | LOCATION OF DERIVATIVE GAIN / (LOSS) RECOGNIZED IN INCOME | AMOUNT OF DERIVATIVE GAIN / (LOSS) RECOGNIZED IN INCOME | ||||||||
2018 | 2017 | 2016 | ||||||||
Non-designated risk management derivatives | ||||||||||
Foreign Exchange Contracts | Other Operating Income | $ | (4.1 | ) | $ | 8.2 | $ | (6.7 | ) | |
Other Financial Derivatives (1) | Other Operating Income | (19.2 | ) | (13.3 | ) | (6.1 | ) | |||
Gains/(Losses) from non-designated risk management derivatives | $ | (23.3 | ) | $ | (5.1 | ) | $ | (12.8 | ) | |
Client-related and trading derivatives | ||||||||||
Foreign Exchange Contracts | Foreign Exchange Trading Income | 307.2 | 209.9 | 236.6 | ||||||
Interest Rate Contracts | Security Commissions and Trading Income | 7.7 | 10.7 | 11.4 | ||||||
Gains/(Losses) from client-related and trading derivatives | $ | 314.9 | $ | 220.6 | $ | 248.0 | ||||
Total gains/(losses) from derivatives not designated as hedging under GAAP | $ | 291.6 | $ | 215.5 | $ | 235.2 |
2018 Annual Report | Northern Trust Corporation 153 |
December 31, 2018 | |||||||||||||||
(In Millions) | GROSS RECOGNIZED ASSETS | GROSS AMOUNTS OFFSET IN THE BALANCE SHEET | NET AMOUNTS PRESENTED IN THE BALANCE SHEET | GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET | NET AMOUNT(3) | ||||||||||
Derivative Assets(1) | |||||||||||||||
Foreign Exchange Contracts Over the Counter (OTC) | $ | 1,902.3 | $ | 1,175.3 | $ | 727.0 | $ | 12.7 | $ | 714.3 | |||||
Interest Rate Swaps OTC | 71.6 | 19.0 | 52.6 | — | 52.6 | ||||||||||
Interest Rate Swaps Exchange Cleared | 24.5 | 24.4 | 0.1 | — | 0.1 | ||||||||||
Other Financial Derivative | 1.3 | — | 1.3 | — | 1.3 | ||||||||||
Cross Product Netting Adjustment | — | 3.9 | — | — | — | ||||||||||
Cross Product Collateral Adjustment | — | 134.5 | — | — | — | ||||||||||
Total Derivatives Subject to a Master Netting Arrangement | 1,999.7 | 1,357.1 | 642.6 | 12.7 | 629.9 | ||||||||||
Total Derivatives Not Subject to a Master Netting Arrangement | 563.8 | — | 563.8 | 2.7 | 561.1 | ||||||||||
Total Derivatives | 2,563.5 | 1,357.1 | 1,206.4 | 15.4 | 1,191.0 | ||||||||||
Securities Purchased under Agreements to Resell(2) | $ | 1,031.2 | $ | — | $ | 1,031.2 | $ | 1,031.2 | $ | — |
December 31, 2017 | |||||||||||||||
(In Millions) | GROSS RECOGNIZED ASSETS | GROSS AMOUNTS OFFSET IN THE BALANCE SHEET | NET AMOUNTS PRESENTED IN THE BALANCE SHEET | GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET | NET AMOUNT(3) | ||||||||||
Derivative Assets(1) | |||||||||||||||
Foreign Exchange Contracts Over the Counter (OTC) | $ | 2,106.3 | $ | 1,397.7 | $ | 708.6 | $ | 2.1 | $ | 706.5 | |||||
Interest Rate Swaps OTC | 86.9 | 14.2 | 72.7 | — | 72.7 | ||||||||||
Interest Rate Swaps Exchange Cleared | 10.1 | 10.1 | — | — | — | ||||||||||
Cross Product Netting Adjustment | — | 10.4 | — | — | — | ||||||||||
Cross Product Collateral Adjustment | — | 427.6 | — | — | — | ||||||||||
Total Derivatives Subject to a Master Netting Arrangement | 2,203.3 | 1,860.0 | 343.3 | 2.1 | 341.2 | ||||||||||
Total Derivatives Not Subject to a Master Netting Arrangement | 450.8 | — | 450.8 | 2.5 | 448.3 | ||||||||||
Total Derivatives | 2,654.1 | 1,860.0 | 794.1 | 4.6 | 789.5 | ||||||||||
Securities Purchased under Agreements to Resell(2) | $ | 1,303.3 | $ | — | $ | 1,303.3 | $ | 1,303.3 | $ | — |
154 2018 Annual Report | Northern Trust Corporation |
December 31, 2018 | |||||||||||||||
(In Millions) | GROSS RECOGNIZED LIABILITIES | GROSS AMOUNTS OFFSET IN THE BALANCE SHEET | NET AMOUNTS PRESENTED IN THE BALANCE SHEET | GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET | NET AMOUNT(2) | ||||||||||
Derivative Liabilities(1) | |||||||||||||||
Foreign Exchange Contracts OTC | $ | 1,821.0 | $ | 1,175.3 | $ | 645.7 | $ | — | $ | 645.7 | |||||
Interest Rate Swaps OTC | 68.8 | 19.0 | 49.8 | — | 49.8 | ||||||||||
Interest Rate Swaps Exchange Cleared | 24.4 | 24.4 | — | — | — | ||||||||||
Other Financial Derivatives | 32.8 | — | 32.8 | — | 32.8 | ||||||||||
Cross Product Netting Adjustment | — | 3.9 | — | — | — | ||||||||||
Cross Product Collateral Adjustment | — | 573.7 | — | — | — | ||||||||||
Total Derivatives Subject to a Master Netting Arrangement | 1,947.0 | 1,796.3 | 150.7 | — | 150.7 | ||||||||||
Total Derivatives Not Subject to a Master Netting Arrangement | 441.4 | — | 441.4 | — | 441.4 | ||||||||||
Total Derivatives | 2,388.4 | 1,796.3 | 592.1 | — | 592.1 | ||||||||||
Securities Sold under Agreements to Repurchase | $ | 168.3 | $ | — | $ | 168.3 | $ | 168.3 | $ | — |
December 31, 2017 | |||||||||||||||
(In Millions) | GROSS RECOGNIZED LIABILITIES | GROSS AMOUNTS OFFSET IN THE BALANCE SHEET | NET AMOUNTS PRESENTED IN THE BALANCE SHEET | GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET | NET AMOUNT(2) | ||||||||||
Derivative Liabilities(1) | |||||||||||||||
Foreign Exchange Contracts OTC | $ | 1,889.2 | $ | 1,397.7 | $ | 491.5 | $ | — | $ | 491.5 | |||||
Interest Rate Swaps OTC | 69.2 | 14.2 | 55.0 | — | 55.0 | ||||||||||
Interest Rate Swaps Exchange Cleared | 14.3 | 10.1 | 4.2 | — | 4.2 | ||||||||||
Other Financial Derivatives | 30.4 | — | 30.4 | — | 30.4 | ||||||||||
Cross Product Netting Adjustment | — | 10.4 | — | — | — | ||||||||||
Cross Product Collateral Adjustment | — | 189.0 | — | — | — | ||||||||||
Total Derivatives Subject to a Master Netting Arrangement | 2,003.1 | 1,621.4 | 381.7 | — | 381.7 | ||||||||||
Total Derivatives Not Subject to a Master Netting Arrangement | 825.9 | — | 825.9 | — | 825.9 | ||||||||||
Total Derivatives | 2,829.0 | 1,621.4 | 1,207.6 | — | 1,207.6 | ||||||||||
Securities Sold under Agreements to Repurchase | $ | 834.0 | $ | — | $ | 834.0 | $ | 834.0 | $ | — |
2018 Annual Report | Northern Trust Corporation 155 |
156 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
Legally Binding Commitments to Extend Credit(1) | $ | 25,023.0 | $ | 26,822.6 | ||
Standby Letters of Credit(2) | 2,486.2 | 2,970.0 | ||||
Commercial Letters of Credit | 32.3 | 37.7 |
2018 Annual Report | Northern Trust Corporation 157 |
158 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 159 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Noninterest Income | |||||||||
Trust, Investment and Other Servicing Fees | $ | 2,173.1 | $ | 1,984.6 | $ | 1,787.8 | |||
Foreign Exchange Trading Income | 233.4 | 197.9 | 224.4 | ||||||
Other Noninterest Income | 183.0 | 176.1 | 147.0 | ||||||
Net Interest Income (Note) | 992.2 | 733.8 | 565.0 | ||||||
Revenue (Note) | 3,581.7 | 3,092.4 | 2,724.2 | ||||||
Provision for Credit Losses | 1.9 | 3.4 | 1.9 | ||||||
Noninterest Expense | 2,421.4 | 2,194.5 | 2,012.2 | ||||||
Income before Income Taxes (Note) | 1,158.4 | 894.5 | 710.1 | ||||||
Provision for Income Taxes (Note) | 255.3 | 279.5 | 212.9 | ||||||
Net Income | $ | 903.1 | $ | 615.0 | $ | 497.2 | |||
Percentage of Consolidated Net Income | 58 | % | 51 | % | 48 | % | |||
Average Assets | $ | 82,996.5 | $ | 80,105.6 | $ | 76,194.7 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Noninterest Income | |||||||||
Trust, Investment and Other Servicing Fees | $ | 1,580.6 | $ | 1,449.7 | $ | 1,320.3 | |||
Foreign Exchange Trading Income | 4.2 | 3.1 | 8.6 | ||||||
Other Noninterest Income | 102.7 | 103.9 | 105.7 | ||||||
Net Interest Income (Note) | 816.5 | 736.2 | 651.4 | ||||||
Revenue (Note) | 2,504.0 | 2,292.9 | 2,086.0 | ||||||
Provision for Credit Losses | (16.4 | ) | (31.4 | ) | (27.9 | ) | |||
Noninterest Expense | 1,460.0 | 1,405.3 | 1,315.3 | ||||||
Income before Income Taxes (Note) | 1,060.4 | 919.0 | 798.6 | ||||||
Provision for Income Taxes (Note) | 262.1 | 347.2 | 301.1 | ||||||
Net Income | $ | 798.3 | $ | 571.8 | $ | 497.5 | |||
Percentage of Consolidated Net Income | 51 | % | 48 | % | 48 | % | |||
Average Assets | $ | 26,163.7 | $ | 26,599.9 | $ | 26,525.0 |
160 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Noninterest Income | $ | 60.5 | $ | 30.8 | $ | 133.1 | |||
Net Interest Income (Note) | (144.8 | ) | 5.0 | 43.6 | |||||
Revenue (Note) | (84.3 | ) | 35.8 | 176.7 | |||||
Noninterest Expense | 135.5 | 169.6 | 143.2 | ||||||
Income before Income Taxes (Note) | (219.8 | ) | (133.8 | ) | 33.5 | ||||
Provision for Income Taxes (Note) | (74.8 | ) | (146.0 | ) | (4.3 | ) | |||
Net Income | $ | (145.0 | ) | $ | 12.2 | $ | 37.8 | ||
Percentage of Consolidated Net Income | (9 | )% | 1 | % | 4 | % | |||
Average Assets | $ | 13,786.4 | $ | 12,901.9 | $ | 12,850.6 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Noninterest Income | |||||||||
Trust, Investment and Other Servicing Fees | $ | 3,753.7 | $ | 3,434.3 | $ | 3,108.1 | |||
Foreign Exchange Trading Income | 307.2 | 209.9 | 236.6 | ||||||
Other Noninterest Income | 276.6 | 301.9 | 382.2 | ||||||
Net Interest Income (Note) | 1,663.9 | 1,475.0 | 1,260.0 | ||||||
Revenue (Note) | 6,001.4 | 5,421.1 | 4,986.9 | ||||||
Provision for Credit Losses | (14.5 | ) | (28.0 | ) | (26.0 | ) | |||
Noninterest Expense | 4,016.9 | 3,769.4 | 3,470.7 | ||||||
Income before Income Taxes (Note) | 1,999.0 | 1,679.7 | 1,542.2 | ||||||
Provision for Income Taxes (Note) | 442.6 | 480.7 | 509.7 | ||||||
Net Income | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | |||
Average Assets | $ | 122,946.6 | $ | 119,607.4 | $ | 115,570.3 |
2018 Annual Report | Northern Trust Corporation 161 |
(In Millions) | TOTAL ASSETS | TOTAL REVENUE | INCOME BEFORE INCOME TAXES | NET INCOME | ||||||||
2018 | ||||||||||||
Non-U.S. | $ | 32,712.9 | $ | 2,018.1 | $ | 786.4 | $ | 625.7 | ||||
U.S. | 99,499.6 | 3,942.1 | 1,171.4 | 930.7 | ||||||||
Total | $ | 132,212.5 | $ | 5,960.2 | $ | 1,957.8 | $ | 1,556.4 | ||||
2017 | ||||||||||||
Non-U.S. | $ | 30,325.3 | $ | 1,709.7 | $ | 613.5 | $ | 430.0 | ||||
U.S. | 108,265.2 | 3,665.6 | 1,020.4 | 769.0 | ||||||||
Total | $ | 138,590.5 | $ | 5,375.3 | $ | 1,633.9 | $ | 1,199.0 | ||||
2016 | ||||||||||||
Non-U.S. | $ | 24,944.0 | $ | 1,221.2 | $ | 284.3 | $ | 225.1 | ||||
U.S. | 98,982.9 | 3,740.6 | 1,232.8 | 807.4 | ||||||||
Total | $ | 123,926.9 | $ | 4,961.8 | $ | 1,517.1 | $ | 1,032.5 |
162 2018 Annual Report | Northern Trust Corporation |
December 31, 2018 | December 31, 2017 | |||||||||||||||||||
($ In Millions) | ADVANCED APPROACH | STANDARDIZED APPROACH | ADVANCED APPROACH | STANDARDIZED APPROACH | ||||||||||||||||
BALANCE | RATIO | BALANCE | RATIO | BALANCE | RATIO | BALANCE | RATIO | |||||||||||||
Common Equity Tier 1 | ||||||||||||||||||||
Northern Trust Corporation | $ | 8,729.8 | 13.7 | % | $ | 8,729.8 | 12.9 | % | $ | 8,626.3 | 13.5 | % | $ | 8,626.3 | 12.6 | % | ||||
The Northern Trust Company | 8,722.5 | 14.1 | 8,722.5 | 13.1 | 8,517.8 | 13.7 | 8,517.8 | 12.6 | ||||||||||||
Minimum to qualify as well-capitalized: | ||||||||||||||||||||
Northern Trust Corporation | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||
The Northern Trust Company | 4,007.4 | 6.5 | 4,335.9 | 6.5 | 4,032.7 | 6.5 | 4,406.8 | 6.5 | ||||||||||||
Tier 1 | ||||||||||||||||||||
Northern Trust Corporation | 9,596.7 | 15.0 | 9,596.7 | 14.1 | 9,473.4 | 14.8 | 9,473.4 | 13.8 | ||||||||||||
The Northern Trust Company | 8,722.5 | 14.1 | 8,722.5 | 13.1 | 8,517.8 | 13.7 | 8,517.8 | 12.6 | ||||||||||||
Minimum to qualify as well-capitalized: | ||||||||||||||||||||
Northern Trust Corporation | 3,834.9 | 6.0 | 4,070.0 | 6.0 | 3,841.1 | 6.0 | 4,117.0 | 6.0 | ||||||||||||
The Northern Trust Company | 4,932.2 | 8.0 | 5,336.4 | 8.0 | 4,963.3 | 8.0 | 5,423.8 | 8.0 | ||||||||||||
Total | ||||||||||||||||||||
Northern Trust Corporation | 10,803.8 | 16.9 | 10,942.0 | 16.1 | 10,707.4 | 16.7 | 10,861.2 | 15.8 | ||||||||||||
The Northern Trust Company | 9,732.5 | 15.8 | 9,870.7 | 14.8 | 9,527.8 | 15.4 | 9,681.6 | 14.3 | ||||||||||||
Minimum to qualify as well-capitalized: | ||||||||||||||||||||
Northern Trust Corporation | 6,391.5 | 10.0 | 6,783.7 | 10.0 | 6,401.9 | 10.0 | 6,861.6 | 10.0 | ||||||||||||
The Northern Trust Company | 6,165.3 | 10.0 | 6,670.6 | 10.0 | 6,204.2 | 10.0 | 6,779.7 | 10.0 | ||||||||||||
Tier 1 Leverage | ||||||||||||||||||||
Northern Trust Corporation | 9,596.7 | 8.0 | 9,596.7 | 8.0 | 9,473.4 | 7.8 | 9,473.4 | 7.8 | ||||||||||||
The Northern Trust Company | 8,722.5 | 7.3 | 8,722.5 | 7.3 | 8,517.8 | 7.0 | 8,517.8 | 7.0 | ||||||||||||
Minimum to qualify as well-capitalized: | ||||||||||||||||||||
Northern Trust Corporation | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||
The Northern Trust Company | 5,998.6 | 5.0 | 5,998.6 | 5.0 | 6,057.9 | 5.0 | 6,057.9 | 5.0 | ||||||||||||
Supplementary Leverage (1) | ||||||||||||||||||||
Northern Trust Corporation | 9,596.7 | 7.0 | N/A | N/A | 9,473.4 | 6.8 | N/A | N/A | ||||||||||||
The Northern Trust Company | 8,722.5 | 6.4 | N/A | N/A | 8,517.8 | 6.1 | N/A | N/A | ||||||||||||
Minimum to qualify as well-capitalized: | ||||||||||||||||||||
Northern Trust Corporation | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||
The Northern Trust Company | 4,077.2 | 3.0 | N/A | N/A | N/A | N/A | N/A | N/A |
2018 Annual Report | Northern Trust Corporation 163 |
DECEMBER 31, | ||||||
(In Millions) | 2018 | 2017 | ||||
ASSETS | ||||||
Cash on Deposit with Subsidiary Bank | $ | 866.8 | $ | 1,002.5 | ||
Debt Securities | — | 0.9 | ||||
Advances to Wholly-Owned Subsidiaries – Banks | 2,910.0 | 2,460.0 | ||||
– Nonbank | — | 13.5 | ||||
Investments in Wholly-Owned Subsidiaries – Banks | 9,585.2 | 9,223.9 | ||||
– Nonbank | 182.9 | 212.9 | ||||
Other Assets | 803.1 | 706.4 | ||||
Total Assets | $ | 14,348.0 | $ | 13,620.1 | ||
LIABILITIES | ||||||
Senior Notes | $ | 2,011.3 | $ | 1,497.3 | ||
Long Term Debt | 1,112.4 | 1,129.6 | ||||
Floating Rate Capital Debt | 277.6 | 277.5 | ||||
Other Liabilities | 438.5 | 499.5 | ||||
Total Liabilities | 3,839.8 | 3,403.9 | ||||
STOCKHOLDERS’ EQUITY | ||||||
Preferred Stock | 882.0 | 882.0 | ||||
Common Stock | 408.6 | 408.6 | ||||
Additional Paid-in Capital | 1,068.4 | 1,047.2 | ||||
Retained Earnings | 10,776.8 | 9,685.1 | ||||
Accumulated Other Comprehensive Income (Loss) | (453.7 | ) | (414.3 | ) | ||
Treasury Stock | (2,173.9 | ) | (1,392.4 | ) | ||
Total Stockholders’ Equity | 10,508.2 | 10,216.2 | ||||
Total Liabilities and Stockholders’ Equity | $ | 14,348.0 | $ | 13,620.1 |
164 2018 Annual Report | Northern Trust Corporation |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
OPERATING INCOME | |||||||||
Dividends – Bank Subsidiaries | $ | 1,200.9 | $ | 525.0 | $ | 300.0 | |||
– Nonbank Subsidiaries | — | — | 3.4 | ||||||
Intercompany Interest and Other Charges | 91.9 | 58.2 | 39.8 | ||||||
Interest and Other Income | (8.7 | ) | 18.1 | 7.5 | |||||
Total Operating Income | 1,284.1 | 601.3 | 350.7 | ||||||
OPERATING EXPENSES | |||||||||
Interest Expense | 97.3 | 76.5 | 63.5 | ||||||
Other Operating Expenses | 17.0 | 25.9 | 19.9 | ||||||
Total Operating Expenses | 114.3 | 102.4 | 83.4 | ||||||
Income before Income Taxes and Equity in Undistributed Net Income of Subsidiaries | 1,169.8 | 498.9 | 267.3 | ||||||
Benefit for Income Taxes | 24.6 | 43.7 | 28.3 | ||||||
Income before Equity in Undistributed Net Income of Subsidiaries | 1,194.4 | 542.6 | 295.6 | ||||||
Equity in Undistributed Net Income of Subsidiaries – Banks | 336.7 | 632.6 | 708.3 | ||||||
– Nonbank | 25.3 | 23.8 | 28.6 | ||||||
Net Income | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | |||
Preferred Stock Dividends | 46.4 | 49.8 | 23.4 | ||||||
Net Income Applicable to Common Stock | $ | 1,510.0 | $ | 1,149.2 | $ | 1,009.1 |
2018 Annual Report | Northern Trust Corporation 165 |
FOR THE YEAR ENDED DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
OPERATING ACTIVITIES: | |||||||||
Net Income | $ | 1,556.4 | $ | 1,199.0 | $ | 1,032.5 | |||
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities: | |||||||||
Equity in Undistributed Net Income of Subsidiaries | (362.0 | ) | (656.4 | ) | (736.9 | ) | |||
Change in Prepaid Expenses | (0.6 | ) | (0.3 | ) | 3.0 | ||||
Change in Accrued Income Taxes | (141.8 | ) | 17.2 | (17.9 | ) | ||||
Other, net | 125.6 | 55.7 | 55.7 | ||||||
Net Cash Provided by Operating Activities | 1,177.6 | 615.2 | 336.4 | ||||||
INVESTING ACTIVITIES: | |||||||||
Proceeds from Sale, Maturity and Redemption of Debt Securities – Available for Sale | 1.0 | — | 0.2 | ||||||
Change in Capital Investments in Subsidiaries | — | — | (3.0 | ) | |||||
Advances to Wholly-Owned Subsidiaries | (436.5 | ) | 100.0 | (295.0 | ) | ||||
Acquisition of a Subsidiary, net of cash acquired | (31.2 | ) | — | — | |||||
Other, net | (3.1 | ) | 1.9 | 1.2 | |||||
Net Cash Used in Investing Activities | (469.8 | ) | 101.9 | (296.6 | ) | ||||
FINANCING ACTIVITIES: | |||||||||
Proceeds from Senior Notes and Long-Term Debt | 497.9 | 350.0 | — | ||||||
Proceeds from Issuance of Preferred Stock – Series D | — | — | 493.5 | ||||||
Treasury Stock Purchased | (924.3 | ) | (523.1 | ) | (411.1 | ) | |||
Net Proceeds from Stock Options | 32.6 | 108.0 | 233.8 | ||||||
Cash Dividends Paid on Common Stock | (405.4 | ) | (356.8 | ) | (333.0 | ) | |||
Cash Dividends Paid on Preferred Stock | (46.4 | ) | (49.8 | ) | (23.4 | ) | |||
Other, net | 2.1 | 0.1 | (0.1 | ) | |||||
Net Cash Used in Financing Activities | (843.5 | ) | (471.6 | ) | (40.3 | ) | |||
Net Change in Cash on Deposit with Subsidiary Bank | (135.7 | ) | 245.5 | (0.5 | ) | ||||
Cash on Deposit with Subsidiary Bank at Beginning of Year | 1,002.5 | 757.0 | 757.5 | ||||||
Cash on Deposit with Subsidiary Bank at End of Year | $ | 866.8 | $ | 1,002.5 | $ | 757.0 |
166 2018 Annual Report | Northern Trust Corporation |
STATEMENTS OF INCOME | 2018 | 2017 | ||||||||||||||||||||||
($ In Millions Except Per Share Information) | FOURTH QUARTER | THIRD QUARTER | SECOND QUARTER | FIRST QUARTER | FOURTH QUARTER | THIRD QUARTER | SECOND QUARTER | FIRST QUARTER | ||||||||||||||||
Trust, Investment and Other Servicing Fees | $ | 933.9 | $ | 939.2 | $ | 942.9 | $ | 937.7 | $ | 910.0 | $ | 867.9 | $ | 848.2 | $ | 808.2 | ||||||||
Other Noninterest Income | 152.7 | 126.9 | 149.9 | 154.3 | 134.5 | 123.1 | 131.5 | 122.7 | ||||||||||||||||
Net Interest Income | ||||||||||||||||||||||||
Interest Income | 648.6 | 599.2 | 567.7 | 505.9 | 488.1 | 453.8 | 417.2 | 410.3 | ||||||||||||||||
Interest Expense | 231.4 | 191.0 | 154.4 | 121.9 | 108.1 | 99.6 | 75.7 | 56.8 | ||||||||||||||||
Net Interest Income | 417.2 | 408.2 | 413.3 | 384.0 | 380.0 | 354.2 | 341.5 | 353.5 | ||||||||||||||||
Provision for Credit Losses | (4.0 | ) | (9.0 | ) | 1.5 | (3.0 | ) | (13.0 | ) | (7.0 | ) | (7.0 | ) | (1.0 | ) | |||||||||
Noninterest Expense | 1,021.9 | 1,002.3 | 997.4 | 995.3 | 1,001.9 | 935.6 | 937.4 | 894.5 | ||||||||||||||||
Provision for Income Taxes | 76.0 | 106.5 | 116.8 | 102.1 | 79.0 | 118.2 | 122.9 | 114.8 | ||||||||||||||||
Net Income | $ | 409.9 | $ | 374.5 | $ | 390.4 | $ | 381.6 | $ | 356.6 | $ | 298.4 | $ | 267.9 | $ | 276.1 | ||||||||
Preferred Stock Dividends | 5.9 | 17.3 | 5.9 | 17.3 | 5.9 | 17.3 | 5.9 | 20.7 | ||||||||||||||||
Net Income Applicable to Common Stock | $ | 404.0 | $ | 357.2 | $ | 384.5 | $ | 364.3 | $ | 350.7 | $ | 281.1 | $ | 262.0 | $ | 255.4 | ||||||||
PER COMMON SHARE | ||||||||||||||||||||||||
Net Income – Basic | $ | 1.81 | $ | 1.59 | $ | 1.69 | $ | 1.59 | $ | 1.52 | $ | 1.21 | $ | 1.12 | $ | 1.10 | ||||||||
– Diluted | 1.80 | 1.58 | 1.68 | 1.58 | 1.51 | 1.20 | 1.12 | 1.09 | ||||||||||||||||
AVERAGE BALANCE SHEET ASSETS | ||||||||||||||||||||||||
Cash and Due from Banks | $ | 2,400.9 | $ | 2,702.9 | $ | 2,440.5 | $ | 2,593.2 | $ | 2,838.8 | $ | 2,666.8 | $ | 2,701.1 | $ | 2,116.6 | ||||||||
Federal Reserve and Other Central Bank Deposits | 21,762.6 | 22,889.6 | 24,512.8 | 26,495.1 | 25,995.8 | 25,182.9 | 22,570.0 | 21,806.9 | ||||||||||||||||
Interest-Bearing Due from and Deposits with Banks(1) | 5,228.9 | 5,410.3 | 6,556.9 | 6,920.4 | 7,084.7 | 7,145.8 | 7,653.9 | 6,684.3 | ||||||||||||||||
Federal Funds Sold and Securities Purchased under Agreements to Resell | 1,334.3 | 1,775.2 | 1,417.1 | 1,467.1 | 1,389.8 | 1,945.8 | 2,059.4 | 2,011.7 | ||||||||||||||||
Securities(2) | 52,228.6 | 50,820.8 | 49,692.4 | 48,335.7 | 45,601.9 | 44,742.3 | 43,731.8 | 44,777.7 | ||||||||||||||||
Loans and Leases | 31,623.8 | 31,798.9 | 32,235.4 | 32,468.0 | 33,235.6 | 33,468.2 | 33,891.4 | 33,671.2 | ||||||||||||||||
Allowance for Credit Losses Assigned to Loans and Leases | (120.3 | ) | (127.6 | ) | (126.4 | ) | (131.0 | ) | (149.1 | ) | (155.1 | ) | (162.3 | ) | (160.8 | ) | ||||||||
Other Assets | 6,855.4 | 6,885.5 | 7,138.0 | 6,344.8 | 6,314.5 | 6,162.7 | 5,955.4 | 5,568.8 | ||||||||||||||||
Total Assets | $ | 121,314.2 | $ | 122,155.6 | $ | 123,866.7 | $ | 124,493.3 | $ | 122,312.0 | $ | 121,159.4 | $ | 118,400.7 | $ | 116,476.4 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Demand and Other Noninterest-Bearing | $ | 19,211.2 | $ | 19,430.5 | $ | 21,484.7 | $ | 22,022.9 | $ | 21,385.5 | $ | 21,736.4 | $ | 23,518.1 | $ | 25,712.5 | ||||||||
Savings, Money Market, and Other | 14,349.1 | 14,787.6 | 15,565.0 | 15,916.4 | 15,996.1 | 15,617.1 | 15,236.1 | 15,446.7 | ||||||||||||||||
Savings Certificates and Other Time | 721.1 | 810.5 | 896.6 | 1,058.5 | 1,189.2 | 1,255.1 | 1,312.7 | 1,338.5 | ||||||||||||||||
Non-U.S. Offices – Interest-Bearing | 58,873.9 | 58,473.2 | 57,684.5 | 59,199.7 | 58,632.0 | 58,503.4 | 56,672.3 | 52,435.9 | ||||||||||||||||
Total Deposits | 93,155.3 | 93,501.8 | 95,630.8 | 98,197.5 | 97,202.8 | 97,112.0 | 96,739.2 | 94,933.6 | ||||||||||||||||
Short-Term Borrowings | 10,987.9 | 11,380.7 | 11,336.2 | 9,405.3 | 8,411.9 | 7,264.5 | 5,412.0 | 5,659.1 | ||||||||||||||||
Senior Notes | 1,996.5 | 1,818.0 | 1,497.6 | 1,497.4 | 1,497.2 | 1,497.0 | 1,496.9 | 1,496.7 | ||||||||||||||||
Long-Term Debt | 1,099.6 | 1,254.4 | 1,410.8 | 1,426.5 | 1,540.1 | 1,672.5 | 1,536.1 | 1,324.9 | ||||||||||||||||
Floating Rate Capital Debt | 277.6 | 277.6 | 277.5 | 277.5 | 277.5 | 277.5 | 277.4 | 277.4 | ||||||||||||||||
Other Liabilities | 3,498.5 | 3,648.5 | 3,511.7 | 3,551.4 | 3,271.7 | 3,295.7 | 2,963.1 | 2,993.3 | ||||||||||||||||
Stockholders’ Equity | 10,298.8 | 10,274.6 | 10,202.1 | 10,137.7 | 10,110.8 | 10,040.2 | 9,976.0 | 9,791.4 | ||||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 121,314.2 | $ | 122,155.6 | $ | 123,866.7 | $ | 124,493.3 | $ | 122,312.0 | $ | 121,159.4 | $ | 118,400.7 | $ | 116,476.4 | ||||||||
ANALYSIS OF NET INTEREST INCOME | ||||||||||||||||||||||||
Earning Assets | $ | 112,178.2 | $ | 112,694.8 | $ | 114,414.6 | $ | 115,686.3 | $ | 113,307.8 | $ | 112,485.0 | $ | 109,906.5 | $ | 108,951.8 | ||||||||
Interest-Related Funds | 88,305.7 | 88,802.0 | 88,668.2 | 88,781.4 | 87,544.0 | 86,087.1 | 81,943.5 | 77,979.2 | ||||||||||||||||
Noninterest-Related Funds | $ | 23,872.5 | $ | 23,892.8 | $ | 25,746.4 | $ | 26,904.9 | $ | 25,763.8 | $ | 26,397.9 | $ | 27,963.0 | $ | 30,972.6 | ||||||||
Net Interest Income (Fully Taxable Equivalent) | 430.1 | 418.5 | 422.6 | 392.7 | 396.0 | 366.2 | 350.4 | 362.4 | ||||||||||||||||
Net Interest Margin (Fully Taxable Equivalent) | 1.52 | % | 1.47 | % | 1.48 | % | 1.38 | % | 1.39 | % | 1.29 | % | 1.28 | % | 1.35 | % |
2018 Annual Report | Northern Trust Corporation 167 |
2018 | 2017 | 2016 | ||||||||||||||||||||||
($ In Millions) | INTEREST | AVERAGE BALANCE | RATE(4) | INTEREST | AVERAGE BALANCE | RATE(4) | INTEREST | AVERAGE BALANCE | RATE(4) | |||||||||||||||
AVERAGE EARNING ASSETS | ||||||||||||||||||||||||
Federal Reserve and Other Central Bank Deposits | $ | 207.1 | $ | 23,899.3 | 0.87 | % | $ | 155.1 | $ | 23,903.9 | 0.65 | % | $ | 91.4 | $ | 20,434.4 | 0.45 | % | ||||||
Interest-Bearing Due from and Deposits with Banks(1) | 70.0 | 6,022.8 | 1.16 | 63.8 | 7,143.3 | 0.89 | 64.3 | 8,742.7 | 0.73 | |||||||||||||||
Federal Funds Sold and Securities Purchased under Agreements to Resell | 33.3 | 1,498.8 | 2.22 | 27.5 | 1,850.2 | 1.48 | 18.4 | 1,775.7 | 1.04 | |||||||||||||||
Securities | ||||||||||||||||||||||||
U.S. Government | 108.3 | 5,737.1 | 1.89 | 89.4 | 6,342.5 | 1.41 | 78.1 | 7,073.1 | 1.10 | |||||||||||||||
Obligations of States and Political Subdivisions | 13.9 | 725.2 | 1.91 | 13.1 | 887.3 | 1.48 | 11.3 | 585.8 | 1.94 | |||||||||||||||
Government Sponsored Agency | 456.0 | 20,682.7 | 2.20 | 283.2 | 17,987.0 | 1.57 | 177.2 | 17,421.0 | 1.02 | |||||||||||||||
Other(2) | 367.5 | 23,136.5 | 1.59 | 253.3 | 19,498.9 | 1.30 | 189.9 | 16,961.4 | 1.12 | |||||||||||||||
Total Securities | 945.7 | 50,281.5 | 1.88 | 639.0 | 44,715.7 | 1.43 | 456.5 | 42,041.3 | 1.09 | |||||||||||||||
Loans and Leases(3) | 1,106.5 | 32,028.6 | 3.45 | 929.8 | 33,565.2 | 2.77 | 811.4 | 34,043.5 | 2.38 | |||||||||||||||
Total Earning Assets | 2,362.6 | 113,731.0 | 2.08 | 1,815.2 | 111,178.3 | 1.63 | 1,442.0 | 107,037.6 | 1.35 | |||||||||||||||
Allowance for Credit Losses Assigned to Loans and Leases | — | (126.3 | ) | — | — | (156.8 | ) | — | — | (192.9 | ) | — | ||||||||||||
Cash and Due from Banks | — | 2,534.3 | — | — | 2,583.1 | — | — | 2,035.3 | — | |||||||||||||||
Buildings and Equipment | — | 438.5 | — | — | 466.0 | — | — | 445.5 | — | |||||||||||||||
Client Security Settlement Receivables | — | 1,002.0 | — | — | 891.6 | — | — | 1,136.6 | — | |||||||||||||||
Goodwill | — | 642.5 | — | — | 544.0 | — | 524.9 | — | ||||||||||||||||
Other Assets | — | 4,724.6 | — | — | 4,101.2 | — | — | 4,583.3 | — | |||||||||||||||
Total Assets | $ | — | $ | 122,946.6 | — | % | $ | — | $ | 119,607.4 | — | % | $ | — | $ | 115,570.3 | — | % | ||||||
AVERAGE SOURCE OF FUNDS | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Savings, Money Market, and Other | $ | 82.0 | $ | 15,149.3 | 0.54 | % | $ | 24.3 | $ | 15,575.6 | 0.16 | % | $ | 11.9 | $ | 15,142.4 | 0.08 | % | ||||||
Savings Certificates and Other Time | 7.8 | 870.6 | 0.90 | 9.4 | 1,273.4 | 0.74 | 8.3 | 1,432.0 | 0.58 | |||||||||||||||
Non-U.S. Offices – Interest-Bearing | 294.8 | 58,556.6 | 0.50 | 148.4 | 56,583.2 | 0.26 | 63.3 | 50,808.2 | 0.12 | |||||||||||||||
Total Interest-Bearing Deposits | 384.6 | 74,576.5 | 0.52 | 182.1 | 73,432.2 | 0.25 | 83.5 | 67,382.6 | 0.12 | |||||||||||||||
Short-Term Borrowings | 208.2 | 10,783.5 | 1.93 | 67.1 | 6,696.0 | 1.00 | 21.8 | 6,337.0 | 0.34 | |||||||||||||||
Senior Notes | 53.4 | 1,704.0 | 3.13 | 46.9 | 1,496.9 | 3.13 | 46.8 | 1,496.6 | 3.13 | |||||||||||||||
Long-Term Debt | 45.0 | 1,296.8 | 3.47 | 39.2 | 1,519.4 | 2.58 | 26.4 | 1,392.4 | 1.90 | |||||||||||||||
Floating Rate Capital Debt | 7.5 | 277.6 | 2.72 | 4.9 | 277.5 | 1.75 | 3.5 | 277.4 | 1.25 | |||||||||||||||
Total Interest-Related Funds | 698.7 | 88,638.4 | 0.79 | 340.2 | 83,422.0 | 0.41 | 182.0 | 76,886.0 | 0.24 | |||||||||||||||
Interest Rate Spread | — | — | 1.29 | — | — | 1.22 | — | — | 1.11 | |||||||||||||||
Demand and Other Noninterest-Bearing Deposits | — | 20,526.6 | — | — | 23,072.6 | — | — | 26,231.3 | — | |||||||||||||||
Other Liabilities | — | 3,552.7 | — | — | 3,132.2 | — | — | 3,367.7 | — | |||||||||||||||
Stockholders’ Equity | — | 10,228.9 | — | — | 9,980.6 | — | — | 9,085.3 | — | |||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | — | $ | 122,946.6 | — | % | $ | — | $ | 119,607.4 | — | % | $ | — | $ | 115,570.3 | — | % | ||||||
Net Interest Income/Margin (FTE Adjusted) | $ | 1,663.9 | $ | — | 1.46 | % | $ | 1,475.0 | $ | — | 1.33 | % | $ | 1,260.0 | $ | — | 1.18 | % | ||||||
Net Interest Income/Margin (Unadjusted) | $ | 1,622.7 | $ | — | 1.43 | % | $ | 1,429.2 | $ | — | 1.29 | % | $ | 1,234.9 | $ | — | 1.15 | % | ||||||
Net Interest Income/Margin Components (FTE Adjusted) | ||||||||||||||||||||||||
U.S. | $ | 1,079.9 | $ | 88,717.0 | 1.22 | % | $ | 1,076.4 | $ | 90,090.3 | 1.19 | % | $ | 959.5 | $ | 88,514.4 | 1.08 | % | ||||||
Non-U.S. | 584.0 | 25,014.0 | 2.33 | 398.6 | 21,088.0 | 1.89 | % | 300.5 | 18,523.2 | 1.62 | % | |||||||||||||
Consolidated | $ | 1,663.9 | $ | 113,731.0 | 1.46 | % | $ | 1,475.0 | $ | 111,178.3 | 1.33 | % | $ | 1,260.0 | $ | 107,037.6 | 1.18 | % |
Notes: | Net Interest Income (FTE Adjusted) 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 24.9%. Total taxable equivalent interest adjustments amounted to $41.2 million in 2018, $45.8 million in 2017 and 25.1 million in 2016. Interest revenue on cash collateral positions is reported above within interest-bearing due from and deposits with banks and within loans and leases. Interest expense on cash collateral positions is reported above within non-U.S. offices interest-bearing deposits. Related cash collateral received from and deposited with derivative counterparties is recorded net of the associated derivative contract within other assets and other liabilities, respectively. |
168 2018 Annual Report | Northern Trust Corporation |
(INTEREST AND RATE ON A FULLY TAXABLE EQUIVALENT BASIS) | 2018/2017 CHANGE DUE TO | 2017/2016 CHANGE DUE TO | ||||||||||||||||
(In Millions) | AVERAGE BALANCE | RATE | TOTAL | AVERAGE BALANCE | RATE | TOTAL | ||||||||||||
Increase (Decrease) in Interest Income | ||||||||||||||||||
Money Market Assets | ||||||||||||||||||
Federal Reserve and Other Central Bank Deposits | $ | — | $ | 52.0 | $ | 52.0 | $ | 17.6 | $ | 46.1 | $ | 63.7 | ||||||
Interest-Bearing Due from and Deposits with Banks | (6.7 | ) | 12.9 | 6.2 | 2.5 | (3.0 | ) | (0.5 | ) | |||||||||
Federal Funds Sold and Securities Purchased under Agreements to Resell | (3.5 | ) | 9.3 | 5.8 | 0.8 | 8.3 | 9.1 | |||||||||||
Securities | ||||||||||||||||||
U.S. Government | (7.3 | ) | 26.2 | 18.9 | (6.5 | ) | 17.8 | 11.3 | ||||||||||
Obligations of States and Political Subdivisions | (1.4 | ) | 2.2 | 0.8 | 3.4 | (1.6 | ) | 1.8 | ||||||||||
Government Sponsored Agency | 47.0 | 125.8 | 172.8 | 6.1 | 99.9 | 106.0 | ||||||||||||
Other | 52.0 | 62.2 | 114.2 | 30.6 | 32.8 | 63.4 | ||||||||||||
Loans and Leases | (20.5 | ) | 197.2 | 176.7 | 20.5 | 97.9 | 118.4 | |||||||||||
Total | $ | 59.6 | $ | 487.8 | $ | 547.4 | $ | 75.0 | $ | 298.2 | $ | 373.2 | ||||||
Savings and Money Market | $ | (0.7 | ) | $ | 58.4 | $ | 57.7 | $ | 0.3 | $ | 12.1 | $ | 12.4 | |||||
Savings Certificates and Other Time | (4.8 | ) | 3.2 | (1.6 | ) | (0.7 | ) | 1.8 | 1.1 | |||||||||
Non-U.S. Offices Time | 5.3 | 141.1 | 146.4 | 7.5 | 77.6 | 85.1 | ||||||||||||
Short-Term Borrowings | 55.9 | 85.2 | 141.1 | 1.3 | 44.0 | 45.3 | ||||||||||||
Senior Notes | 6.5 | — | 6.5 | — | 0.1 | 0.1 | ||||||||||||
Subordinated Notes | ||||||||||||||||||
Long-Term Debt | (5.8 | ) | 11.6 | 5.8 | 10.3 | 2.5 | 12.8 | |||||||||||
Floating Rate Capital Debt | — | 2.6 | 2.6 | — | 1.4 | 1.4 | ||||||||||||
Total | $ | 56.4 | $ | 302.1 | $ | 358.5 | $ | 18.7 | $ | 139.5 | $ | 158.2 | ||||||
Increase in Net Interest Income | $ | 3.2 | $ | 185.7 | $ | 188.9 | $ | 56.3 | $ | 158.7 | $ | 215.0 |
2018 Annual Report | Northern Trust Corporation 169 |
December 31, 2018 | |||||||||||||||||||||
ONE YEAR OR LESS | ONE TO FIVE YEARS | FIVE TO TEN YEARS | OVER TEN YEARS | AVERAGE MATURITY | |||||||||||||||||
($ in Millions) | BOOK | YIELD | BOOK | YIELD | BOOK | YIELD | BOOK | YIELD | |||||||||||||
Debt Securities Held to Maturity | |||||||||||||||||||||
U.S. Government | $ | 101.6 | 2.37 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | 2 mo. | ||||
Obligations of States and Political Subdivisions | 9.3 | 5.11 | 9.6 | 4.85 | — | — | — | — | 14 mos. | ||||||||||||
Government Sponsored Agency | 0.9 | 4.66 | 2.1 | 4.81 | 1.1 | 4.74 | 0.4 | 4.68 | 52 mos. | ||||||||||||
Other – Fixed | 6,276.5 | 1.05 | 5,517.4 | 0.82 | 194.7 | 0.64 | 81.5 | 2.25 | 19 mos. | ||||||||||||
– Floating | 249.9 | 1.85 | 1,536.9 | 1.84 | 372.1 | 0.34 | — | — | 48 mos. | ||||||||||||
Total Debt Securities Held to Maturity | $ | 6,638.2 | 1.11 | % | $ | 7,066.0 | 1.05 | % | $ | 567.9 | 0.45 | % | $ | 81.9 | 2.27 | % | 23 mos. | ||||
Debt Securities Available for Sale | |||||||||||||||||||||
U.S. Government | $ | 1,287.1 | 1.46 | % | $ | 3,898.2 | 1.63 | % | $ | — | — | % | $ | — | — | % | 29 mos. | ||||
Obligations of States and Political Subdivisions | 208.0 | 1.13 | 140.4 | 1.88 | 307.5 | 3.37 | — | — | 53 mos. | ||||||||||||
Government Sponsored Agency | 5,725.4 | 2.54 | 10,727.3 | 2.59 | 4,963.2 | 2.59 | 1,008.7 | 2.67 | 43 mos. | ||||||||||||
Asset-Backed – Fixed | 547.7 | 1.53 | 966.6 | 2.29 | 234.2 | 3.68 | 6.6 | 3.88 | 25 mos. | ||||||||||||
Asset-Backed – Floating | 319.2 | 3.10 | 1,097.1 | 3.32 | 49.4 | 1.70 | 24.1 | 1.78 | 45 mos. | ||||||||||||
Other – Fixed | 812.6 | 1.50 | 2,754.2 | 2.42 | 94.9 | 1.82 | — | — | 31 mos. | ||||||||||||
– Floating | 262.8 | 2.67 | 1,360.1 | 2.91 | 91.6 | 2.74 | 1.9 | 2.94 | 30 mos. | ||||||||||||
Total Debt Securities Available for Sale | $ | 9,162.8 | 2.23 | % | $ | 20,943.9 | 2.43 | % | $ | 5,740.8 | 2.66 | % | $ | 1,041.3 | 2.66 | % | 39 mos. |
170 2018 Annual Report | Northern Trust Corporation |
December 31, 2018 | ||||||||||||
(In Millions) | TOTAL | ONE YEAR OR LESS | ONE TO FIVE YEARS | OVER FIVE YEARS | ||||||||
U.S. (Excluding Residential Real Estate and Private Client Loans): | ||||||||||||
Commercial and Institutional | $ | 8,728.1 | $ | 5,229.7 | $ | 2,111.4 | $ | 1,387.0 | ||||
Commercial Real Estate | 3,228.8 | 635.2 | 2,101.9 | 491.7 | ||||||||
Lease Financing, net | 90.7 | 4.3 | 33.0 | 53.4 | ||||||||
Other-Commercial | 426.0 | 255.2 | 103.1 | 67.7 | ||||||||
Other-Personal | 67.5 | 2.6 | 4.1 | 60.8 | ||||||||
Total U.S. | $ | 12,541.1 | $ | 6,127.0 | $ | 4,353.5 | $ | 2,060.6 | ||||
Non-U.S. | $ | 2,701.6 | $ | 2,616.0 | $ | 47.7 | $ | 37.9 | ||||
Total Selected Loans and Leases | $ | 15,242.7 | $ | 8,743.0 | $ | 4,401.2 | $ | 2,098.5 | ||||
Interest Rate Sensitivity of Loans and Leases: | ||||||||||||
Fixed Rate | $ | 8,909.2 | $ | 6,505.2 | $ | 1,344.1 | $ | 1,059.9 | ||||
Variable Rate | 6,333.5 | 2,340.9 | 3,023.9 | 968.7 | ||||||||
Total | $ | 15,242.7 | $ | 8,846.1 | $ | 4,368.0 | $ | 2,028.6 |
DECEMBER 31, | |||||||||||||||
(In Millions) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
Commercial | $ | 117.4 | $ | 289.5 | $ | 318.0 | $ | 335.2 | $ | 154.0 | |||||
Non-U.S. Governments and Official Institutions | — | — | — | — | — | ||||||||||
Banks | — | — | 26.2 | 8.5 | — | ||||||||||
Other | 2,584.2 | 1,249.0 | 1,533.6 | 794.0 | 1,376.6 | ||||||||||
Total | $ | 2,701.6 | $ | 1,538.5 | $ | 1,877.8 | $ | 1,137.7 | $ | 1,530.6 |
(In Millions) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
Balance at Beginning of Year | $ | — | $ | — | $ | — | $ | 3.3 | $ | 2.1 | |||||
Charge-Offs | — | — | — | — | — | ||||||||||
Recoveries | — | — | — | — | — | ||||||||||
Provision for Credit Losses | — | — | — | (3.3 | ) | 1.2 | |||||||||
Balance at End of Year | $ | — | $ | — | $ | — | $ | — | $ | 3.3 |
2018 Annual Report | Northern Trust Corporation 171 |
($ in Millions) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
Balance at Beginning of Year | $ | 153.8 | $ | 192.0 | $ | 233.3 | $ | 295.9 | $ | 307.9 | |||||
Charge-Offs | |||||||||||||||
Commercial | |||||||||||||||
Commercial and Institutional | 0.1 | 10.3 | 15.8 | 9.2 | 5.4 | ||||||||||
Commercial Real Estate | 0.8 | 1.1 | 0.8 | 3.9 | 7.5 | ||||||||||
Total Commercial | 0.9 | 11.4 | 16.6 | 13.1 | 12.9 | ||||||||||
Personal | |||||||||||||||
Residential Real Estate | 7.3 | 8.0 | 10.4 | 16.7 | 21.2 | ||||||||||
Private Client | 1.9 | 2.1 | 0.3 | 0.9 | 2.0 | ||||||||||
Total Personal | 9.2 | 10.1 | 10.7 | 17.6 | 23.2 | ||||||||||
Total Charge-Offs | 10.1 | 21.5 | 27.3 | 30.7 | 36.1 | ||||||||||
Recoveries | |||||||||||||||
Commercial | |||||||||||||||
Commercial and Institutional | 1.5 | 3.7 | 3.3 | 1.7 | 1.3 | ||||||||||
Commercial Real Estate | 0.2 | 1.8 | 1.5 | 3.8 | 9.8 | ||||||||||
Total Commercial | 1.7 | 5.5 | 4.8 | 5.5 | 11.1 | ||||||||||
Personal | |||||||||||||||
Residential Real Estate | 6.7 | 5.4 | 6.6 | 4.5 | 5.6 | ||||||||||
Private Client | 0.6 | 0.4 | 0.7 | 1.2 | 1.4 | ||||||||||
Total Personal | 7.3 | 5.8 | 7.3 | 5.7 | 7.0 | ||||||||||
Total Recoveries | 9.0 | 11.3 | 12.1 | 11.2 | 18.1 | ||||||||||
Net Charge-Offs | 1.1 | 10.2 | 15.2 | 19.5 | 18.0 | ||||||||||
Provision for Credit Losses | (14.5 | ) | (28.0 | ) | (26.0 | ) | (43.0 | ) | 6.0 | ||||||
Effect of Foreign Exchange Rates | — | — | (0.1 | ) | (0.1 | ) | — | ||||||||
Net Change in Allowance | (15.6 | ) | (38.2 | ) | (41.3 | ) | (62.6 | ) | (12.0 | ) | |||||
Balance at End of Year | 138.2 | 153.8 | 192.0 | 233.3 | 295.9 | ||||||||||
Allowance Assigned To: | |||||||||||||||
Loans and Leases | $ | 112.6 | $ | 131.2 | $ | 161.0 | $ | 193.8 | $ | 267.0 | |||||
Undrawn Commitments and Standby Letters of Credit | 25.6 | 22.6 | 31.0 | 39.5 | 28.9 | ||||||||||
Total Allowance for Credit Losses | $ | 138.2 | $ | 153.8 | $ | 192.0 | $ | 233.3 | $ | 295.9 | |||||
Loans and Leases at Year-End | $ | 32,490.0 | $ | 32,592.2 | $ | 33,822.1 | $ | 33,180.9 | $ | 31,640.2 | |||||
Average Total Loans and Leases | $ | 32,028.6 | $ | 33,565.2 | $ | 34,043.5 | $ | 33,016.1 | $ | 30,215.6 | |||||
As a Percent of Year-End Loans and Leases | |||||||||||||||
Net Loan Charge-Offs | — | % | 0.03 | % | 0.04 | % | 0.06 | % | 0.06 | % | |||||
Provision for Credit Losses | (0.04 | ) | (0.09 | ) | (0.08 | ) | (0.13 | ) | 0.02 | ||||||
Allowance at Year-End Assigned to Loans and Leases | 0.35 | 0.40 | 0.48 | 0.58 | 0.84 | ||||||||||
As a Percent of Average Loans and Leases | |||||||||||||||
Net Loan Charge-Offs | — | % | 0.03 | % | 0.04 | % | 0.06 | % | 0.06 | % | |||||
Allowance at Year-End Assigned to Loans and Leases | 0.35 | 0.39 | 0.47 | 0.59 | 0.88 |
172 2018 Annual Report | Northern Trust Corporation |
DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
U.S. Offices | |||||||||
Demand and Noninterest-Bearing | |||||||||
Individuals, Partnerships, Corporations, and Other | $ | 14,303.4 | $ | 16,412.0 | $ | 20,841.1 | |||
Correspondent Banks | 58.2 | 60.3 | 58.0 | ||||||
Total Demand and Noninterest-Bearing | 14,361.6 | 16,472.3 | 20,899.1 | ||||||
Interest-Bearing | |||||||||
Savings, Money Market, and Other | 15,149.3 | 15,575.6 | 15,142.4 | ||||||
Savings Certificates less than $100,000 | 109.3 | 130.1 | 150.9 | ||||||
Savings Certificates $100,000 and more | 434.2 | 717.3 | 672.0 | ||||||
Other | 327.1 | 426.0 | 609.1 | ||||||
Total Interest-Bearing | 16,019.9 | 16,849.0 | 16,574.4 | ||||||
Total U.S. Offices | 30,381.5 | 33,321.3 | 37,473.5 | ||||||
Non-U.S. Offices | |||||||||
Noninterest-Bearing | 6,165.0 | 6,600.3 | 5,332.2 | ||||||
Interest-Bearing | 58,556.6 | 56,583.2 | 50,808.2 | ||||||
Total Non-U.S. Offices | 64,721.6 | 63,183.5 | 56,140.4 | ||||||
Total Deposits | $ | 95,103.1 | $ | 96,504.8 | $ | 93,613.9 |
DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Commercial | $ | 69,899.2 | $ | 70,987.1 | $ | 57,354.0 | |||
Non-U.S. Governments and Official Institutions | 4,612.7 | 4,246.0 | 3,971.8 | ||||||
Banks | 161.9 | 305.5 | 276.6 | ||||||
Other Time | — | 6.3 | 9.4 | ||||||
Other Demand | 14.3 | 6.1 | 8.8 | ||||||
Total | $ | 74,688.1 | $ | 75,551.0 | $ | 61,620.6 |
DECEMBER 31, 2018 | |||||||||
U.S. OFFICES | NON-U.S. OFFICES | ||||||||
(In Millions) | CERTIFICATES OF DEPOSIT | OTHER TIME | |||||||
3 Months or Less | $ | 214.1 | $ | — | $ | 16,786.3 | |||
Over 3 through 6 Months | 92.9 | — | 10.5 | ||||||
Over 6 through 12 Months | 153.2 | — | 8.5 | ||||||
Over 12 Months | 120.7 | — | — | ||||||
Total | $ | 580.9 | $ | — | $ | 16,805.3 |
2018 Annual Report | Northern Trust Corporation 173 |
DECEMBER 31, | ||||||
Interest-Related Deposits – U.S. Offices | 2018 | 2017 | 2016 | |||
Savings, Money Market, and Other | 0.54 | % | 0.16 | % | 0.08 | % |
Savings Certificates less than $100,000 | 0.17 | 0.15 | 0.15 | |||
Savings Certificates $100,000 and more | 0.76 | 0.46 | 0.35 | |||
Other Time | 1.80 | 1.38 | 0.94 | |||
Total U.S. Offices Interest-Related Deposits | 0.56 | 0.20 | 0.12 | |||
Total Non-U.S. Offices Interest-Related Deposits | 0.50 | 0.26 | 0.12 | |||
Total Interest-Related Deposits | 0.52 | 0.25 | 0.12 |
(In Millions) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
Total Assets | $ | 30,781.3 | $ | 26,510.1 | $ | 24,031.0 | $ | 29,411.2 | $ | 28,072.8 | |||||
Time Deposits with Banks | 3,943.2 | 5,013.4 | 6,331.3 | 13,712.9 | 16,106.9 | ||||||||||
Loans | 2,054.6 | 2,014.8 | 1,894.3 | 1,759.4 | 1,490.2 | ||||||||||
Non-U.S. Investments | 19,016.1 | 14,047.8 | 10,255.7 | 8,590.8 | 6,446.5 | ||||||||||
Total Liabilities | 66,008.5 | 64,267.3 | 57,270.0 | 54,521.0 | 52,123.3 | ||||||||||
Deposits | 64,721.6 | 63,183.5 | 56,139.8 | 52,981.2 | 49,854.7 |
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Assets | 25 | % | 22 | % | 21 | % | 27 | % | 27 | % |
Liabilities | 54 | % | 54 | % | 50 | % | 49 | % | 50 | % |
174 2018 Annual Report | Northern Trust Corporation |
(In Millions) | BANKS | COMMERCIAL AND OTHER | TOTAL | ||||||
AT DECEMBER 31, 2018 | |||||||||
Japan | $ | 391 | $ | 4,858 | $ | 5,249 | |||
Canada | 1,328 | 359 | 1,687 | ||||||
France | 1,470 | 468 | 1,938 | ||||||
AT DECEMBER 31, 2017 | |||||||||
Japan | $ | 510 | $ | 3,375 | $ | 3,885 | |||
Canada | 1,437 | 196 | 1,633 | ||||||
AT DECEMBER 31, 2016 | |||||||||
Japan | $ | 900 | $ | 1,608 | $ | 2,508 | |||
Canada | 2,114 | 309 | 2,423 | ||||||
France | 1,311 | 233 | 1,544 | ||||||
Sweden | 1,112 | 217 | 1,329 | ||||||
DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Balance on December 31 | $ | 2,594.2 | $ | 2,286.1 | $ | 204.8 | |||
Highest Month-End Balance | 4,395.8 | 2,286.1 | 378.5 | ||||||
Year – Average Balance | 2,762.8 | 1,102.6 | 617.7 | ||||||
– Average Rate | 1.82 | % | 0.95 | % | 0.25 | % | |||
Average Rate at Year-End | 2.25 | % | 1.17 | % | 0.07 | % |
DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Balance on December 31 | $ | 168.3 | $ | 834.0 | $ | 473.7 | |||
Highest Month-End Balance | 981.3 | 834.0 | 565.5 | ||||||
Year – Average Balance | 525.2 | 738.9 | 847.1 | ||||||
– Average Rate | 1.48 | % | 0.81 | % | 0.27 | % | |||
Average Rate at Year-End | 2.32 | % | 1.29 | % | 0.64 | % |
DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Balance on December 31 | $ | 7,901.7 | $ | 6,051.1 | $ | 5,109.5 | |||
Highest Month-End Balance | 7,901.7 | 7,040.4 | 6,037.6 | ||||||
Year – Average Balance | 7,495.5 | 4,854.5 | 4,872.1 | ||||||
– Average Rate | 2.00 | % | 1.04 | % | 0.37 | % | |||
Average Rate at Year-End | 2.38 | % | 1.38 | % | 0.57 | % |
2018 Annual Report | Northern Trust Corporation 175 |
DECEMBER 31, | |||||||||
(In Millions) | 2018 | 2017 | 2016 | ||||||
Balance on December 31 | $ | 10,664.2 | $ | 9,171.2 | $ | 5,788.0 | |||
Year – Average Balance | 10,783.5 | 6,696.0 | 6,337.0 | ||||||
– Average Rate | 1.93 | % | 1.00 | % | 0.34 | % |
176 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 177 |
178 2018 Annual Report | Northern Trust Corporation |
2018 Annual Report | Northern Trust Corporation 179 |
For Northern Trust Corporation and Subsidiaries: |
Consolidated Balance Sheets - December 31, 2018 and 2017 |
Consolidated Statements of Income - Years Ended December 31, 2018, 2017, and 2016 |
Consolidated Statements of Comprehensive Income - Years Ended December 31, 2018, 2017, and 2016 |
Consolidated Statements of Changes in Stockholders' Equity - Years Ended December 31, 2018, 2017, and 2016 |
Consolidated Statements of Cash Flows - Years Ended December 31, 2018, 2017, and 2016 |
Notes to Consolidated Financial Statements |
Report of Independent Registered Public Accounting Firm |
180 2018 Annual Report | Northern Trust Corporation |
Northern Trust Corporation | |
(Registrant) | |
By: | /s/ Michael G. O’Grady |
Michael G. O’Grady | |
Chairman, President, and Chief Executive Officer |
Signature | Capacity | |
/s/ Michael G. O'Grady | Chairman, President, and Chief Executive Officer (Principal Executive Officer) | |
Michael G. O’Grady | ||
/s/ S. Biff Bowman | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
S. Biff Bowman | ||
/s/ Aileen B. Blake | Executive Vice President and Controller (Principal Accounting Officer) | |
Aileen B. Blake | ||
/s/ Linda Walker Bynoe | Director | |
Linda Walker Bynoe | ||
/s/ Susan Crown | Director | |
Susan Crown | ||
/s/ Dean M. Harrison | Director | |
Dean M. Harrison | ||
/s/ Jay L. Henderson | Director | |
Jay L. Henderson | ||
/s/ Marcy S. Klevorn | Director | |
Marcy S. Klevorn | ||
/s/ Siddharth N. (Bobby) Mehta | Director | |
Siddharth N. (Bobby) Mehta |
2018 Annual Report | Northern Trust Corporation 181 |
/s/ Jose Luis Prado | Director | |
Jose Luis Prado | ||
/s/ Thomas E. Richards | Director | |
Thomas E. Richards | ||
/s/ John W. Rowe | Director | |
John W. Rowe | ||
/s/ Martin P. Slark | Director | |
Martin P. Slark | ||
/s/ David H.B. Smith, Jr. | Director | |
David H.B. Smith, Jr. | ||
/s/ Donald Thompson | Director | |
Donald Thompson | ||
/s/ Charles A. Tribbett, III | Director | |
Charles A. Tribbett, III |
182 2018 Annual Report | Northern Trust Corporation |
Exhibit Number | Description |
4.3 | Certain instruments defining the rights of the holders of long-term debt of the Corporation and certain of its subsidiaries, none of which authorize a total amount of indebtedness in excess of 10% of the total assets of the Corporation and its subsidiaries on a consolidated basis, have not been filed as exhibits. The Corporation hereby agrees to furnish a copy of any of these agreements to the SEC upon request. |
2018 Annual Report | Northern Trust Corporation 183 |
Exhibit Number | Description |
184 2018 Annual Report | Northern Trust Corporation |
Exhibit Number | Description |
2018 Annual Report | Northern Trust Corporation 185 |
Exhibit Number | Description |
186 2018 Annual Report | Northern Trust Corporation |
Exhibit Number | Description |
101 | Includes the following financial and related information from the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets as of December 31, 2018 and 2017, (ii) the Consolidated Statements of Income for the twelve months ended December 31, 2018, 2017 and 2016, (iii) the Consolidated Statements of Comprehensive Income for the twelve months ended December 31, 2018, 2017 and 2016, (iv) the Consolidated Statements of Changes in Stockholders’ Equity for the twelve months ended December 31, 2018, 2017 and 2016, (v) the Consolidated Statements of Cash Flows for the twelve months ended December 31, 2018, 2017 and 2016, and (vi) Notes to Consolidated Financial Statements. |
2018 Annual Report | Northern Trust Corporation 187 |
• | an administrative assistant who can assist you during normal working hours; |
• | basic office supplies such as stationary, printer paper, and printer toner; and |
• | basic office equipment such as personal computers, printers, telephones for you and the administrative assistant, with the Corporation to reimburse you for related telephone and internet expense. |
Percent Owned | Jurisdiction of Incorporation | |
The Northern Trust Company | 100% | Illinois |
MFC Company, Inc. | 100% | Delaware |
Norlease, Inc. | 100% | Delaware |
Clenston Ltd.* | 100% | Bermuda |
NL-Camillus NMTC Fund, LLC | 100% | Delaware |
Northern CDE Corporation | 100% | Illinois |
Northern Trust Company of California | 100% | California |
Northern Trust Guernsey Holdings Limited | 100% | Guernsey |
Northern Trust (Guernsey) Limited | 100% | Guernsey |
Northern Trust Hedge Fund Services LLC | 100% | Delaware |
Northern Trust Holdings Limited | 100% | England |
Northern Trust Luxembourg Management Company S.A. | 100% | Luxembourg |
Northern Trust Global Services SE | 100% | England |
Northern Trust Switzerland AG | 100% | Switzerland |
NT Property Nominees 1A Limited | 100% | England |
NT Property Nominees 1B Limited | 100% | England |
Northern Trust Investments, Inc. | 100% | Illinois |
Nortrust Nominees Limited | 100% | England |
NTC-Dormae NMTC Fund, LLC | 100% | Delaware |
The Northern Trust Company of Delaware | 100% | Delaware |
The Northern Trust Company of Nevada | 100% | Nevada |
The Northern Trust Company UK Pension Plan Limited | 100% | England |
The Northern Trust Company, Canada | 100% | Ontario, Canada |
The Northern Trust International Banking Corporation | 100% | Edge Act |
Northern Operating Services Private Limited | 100% | India |
Northern Trust Cayman International, Ltd. | 100% | Cayman Islands, BWI |
Northern Trust Equities Limited | 100% | England |
Northern Trust Fund Managers (Ireland) Limited | 100% | Ireland |
Northern Trust Global Fund Services Cayman Limited | 100% | Cayman Islands, BWI |
Northern Trust Management Services Asia Pte. Ltd. | 100% | Singapore |
Northern Operating Services Asia Inc. | 99.99% | Philippines |
The Northern Trust Company of Hong Kong Limited | 100% | Hong Kong |
NT Securities Asia Limited | 100% | Hong Kong |
Northern Trust Management Services Limited | 100% | England |
Northern Trust Global Investments Limited | 100% | England |
Northern Trust Partners Scotland Limited | 100% | Scotland |
Northern Trust Securities LLP | 100% | England |
NT Global Advisors, Inc. | 100% | Ontario, Canada |
The Northern Trust Scottish Limited Partnership | 100% | Scotland |
Northern Trust (Ireland) Limited | 100% | Ireland |
Northern Trust Fiduciary Services (Ireland) Limited | 100% | Ireland |
Northern Trust Fund Services (Ireland) Limited | 100% | Ireland |
Northern Trust International Fund Administration Services (Ireland) Limited | 100% | Ireland |
Northern Trust Management Services (Ireland) Limited | 100% | Ireland |
Northern Trust Nominees (Ireland) Limited | 100% | Ireland |
Northern Trust Pension Trustees (Ireland) Limited | 100% | Ireland |
Percent Owned | Jurisdiction of Incorporation | |
NTRS Nominees Limited | 100% | Ireland |
Northern Trust GFS Holdings Limited | 100% | Guernsey |
Northern Trust Fiduciary Services (Guernsey) Limited | 100% | Guernsey |
Arnold Limited | 100% | Guernsey |
Doyle Administration Limited | 100% | Guernsey |
Barfield Nominees Limited | 100% | Guernsey |
Truchot Limited | 100% | Guernsey |
Vivian Limited | 100% | Guernsey |
Northern Trust International Fund Administration Services (Guernsey) Limited | 100% | Guernsey |
Admiral Nominees Limited | 100% | Guernsey |
Nelson Representatives Limited | 100% | Guernsey |
Northern Trust Luxembourg Capital S.A.R.L. | 100% | Luxembourg |
Northern Trust Management Services (Deutschland) GmbH | 100% | Germany |
NT EBT Limited | 100% | England |
The Northern Trust Company of Saudi Arabia (a closed joint stock company) | 100% | Kingdom of Saudi Arabia |
TNT-BH NMTC Fund, LLC | 100% | Illinois |
Northern CDE 10, LLC | 100% | Illinois |
TNT-CASFV NMTC Fund, LLC | 100% | Illinois |
Northern CDE 7, LLC | 100% | Illinois |
TNT-DHA NMTC Fund, LLC | 100% | Illinois |
Northern CDE 2, LLC | 100% | Illinois |
TNT-Eastside NMTC Fund, LLC | 100% | Illinois |
Northern CDE 1, LLC | 100% | Illinois |
TNT-HCCH NMTC Fund, LLC | 100% | Illinois |
TNT-HHO NMTC Fund, LLC | 100% | Illinois |
Northern CDE 5, LLC | 100% | Illinois |
TNT-HopeWorks NMTC Fund, LLC | 100% | Illinois |
Northern CDE 6, LLC | 100% | Illinois |
TNT-HW 1 NMTC Fund, LLC | 100% | Illinois |
TNT-Jewel NMTC Fund, LLC | 100% | Illinois |
TNT-PBSA NMTC Fund, LLC | 100% | Illinois |
Northern CDE 3, LLC | 100% | Illinois |
TNT-Student U NMTC Fund, LLC | 100% | Illinois |
Northern CDE 4, LLC | 100% | Illinois |
TNT-RWA NMTC Fund, LLC | 100% | Illinois |
Northern CDE 9, LLC | 100% | Illinois |
50 South Capital Advisors, LLC | 100% | Delaware |
BEx LLC | 100% | Illinois |
Equilend Holdings LLC | 10% | Delaware |
Northern Trust European Holdings Limited | 100% | England |
Northern Trust Global Investments Japan, K.K. | 100% | Japan |
Northern Trust Holdings L.L.C. | 100% | Delaware |
Northern Trust Securities, Inc. | 100% | Delaware |
Northern Trust Services, Inc. | 100% | Illinois |
Nortrust Realty Management, Inc. | 100% | Illinois |
NTC Capital I | 100% | Delaware |
NTC Capital II | 100% | Delaware |
Parilux Investment Technology, LLC | 33% | New Jersey |
1. | I have reviewed this report on Form 10-K for the year ended December 31, 2018 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. |
Date: | February 26, 2019 | /s/ Michael G. O’Grady |
Michael G. O’Grady | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
1. | I have reviewed this report on Form 10-K for the year ended December 31, 2018 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. |
Date: | February 26, 2019 | /s/ S. Biff Bowman |
S. Biff Bowman | ||
Chief Financial Officer | ||
(Principal Financial Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
/s/ Michael G. O’Grady |
Michael G. O’Grady |
Chief Executive Officer |
(Principal Executive Officer) |
February 26, 2019 |
/s/ S. Biff Bowman |
S. Biff Bowman |
Chief Financial Officer |
(Principal Financial Officer) |
February 26, 2019 |
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end
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
YT5R^@>-_!WBL$^&?%7AWQ 54.ZZ-K.G:E)&I ;,D5I<2RIP1G>B
MD9 .#Q744 %%%% !1110 4444 %%%% !1110 4444 %>$^/_ (P0Z-)<:-X9
M$-YJ<>^*ZU)R);/3Y<%3% @^2]NXCR^6-K Z[)//D#PI2^+?Q(EL&F\*Z!<&
M.\*!=8OX6P]HDJ!A86S@?+=2Q.&NIE(>UB98HR)Y&>#YB & , < #H!Z4 ?
M4WP_\2-X]\/7>@:Q<^=XATK-Q;7R2&V2[\>?$_P 2O$7Q
M%UI/B?#/INM:3<2VEIX>621M(T/3Y"KV\6AE@(KNQO(DBN#K,89]9;_2)I!L
M2VMO&: "BBB@ HHHH **** "BBM+1](U37]4L-%T6PN=4U;5+J*RT_3[.-I;
MF[N9F"I'&@X &2\LKE8;>%7GGDCAC=U .B^'W@37?B5XNT?P=X>B#7^JSD27
M$F!;Z;I\&U]1U6[8D 6VGVQ,S(,O<3&"TA5I[F)6_=WP9X2T?P+X7T/PEH$!
MM]*T*PAL;57P9I?+!::[N7 427E[<-+=WDN 9;F:5SC< /$_V
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
Document and Entity Information - USD ($) $ in Billions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Jan. 31, 2019 |
Jun. 29, 2018 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | NTRS | ||
Entity Registrant Name | NORTHERN TRUST CORP | ||
Entity Central Index Key | 0000073124 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding (in shares) | 218,411,773 | ||
Entity Public Float | $ 22.8 |
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Held to Maturity, Fair value | $ 14,267.0 | $ 13,010.9 |
Total Loans and Leases, unearned income | $ 13.2 | $ 35.5 |
Preferred stock, par value (in dollars per share) | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 1.6667 | $ 1.6667 |
Common stock, shares authorized (in shares) | 560,000,000 | 560,000,000 |
Common stock, shares outstanding (in shares) | 219,012,050 | 226,126,674 |
Treasury stock, shares (in shares) | 26,159,474 | 19,044,850 |
Series C Preferred Stock | ||
Preferred stock, shares outstanding (in shares) | 16,000 | 16,000 |
Series D Preferred Stock | ||
Preferred stock, shares outstanding (in shares) | 5,000 | 5,000 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 1,556.4 | $ 1,199.0 | $ 1,032.5 |
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications) | |||
Net Unrealized (Losses) Gains on Debt Securities Available for Sale | (22.3) | (42.4) | (1.4) |
Net Unrealized Gains (Losses) on Cash Flow Hedges | (1.4) | (1.6) | 9.1 |
Foreign Currency Translation Adjustments | 22.2 | 16.7 | (0.9) |
Pension and Other Postretirement Benefit Adjustments | (12.6) | (17.0) | (4.1) |
Other Comprehensive Income (Loss) | (14.1) | (44.3) | 2.7 |
Comprehensive Income | $ 1,542.3 | $ 1,154.7 | $ 1,035.2 |
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) and reporting practices prescribed for the banking industry. A description of the more significant accounting policies follows. A. Basis of Presentation. The consolidated financial statements include the accounts of Northern Trust Corporation (Corporation) and its wholly-owned subsidiary, The Northern Trust Company (Bank), and various other wholly-owned subsidiaries of the Corporation and Bank. Throughout the notes to the consolidated financial statements, the term “Northern Trust” refers to the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated statements of income include results of acquired subsidiaries from the dates of acquisition. Certain prior-year balances have been reclassified consistent with the current year’s presentation. B. Nature of Operations. The Corporation is a bank holding company that has elected to be a financial holding company under the Bank Holding Company Act of 1956, as amended. The Bank is an Illinois banking corporation headquartered in Chicago and the Corporation’s principal subsidiary. The Corporation conducts business in the United States (U.S.) and internationally through various U.S. and non-U.S. subsidiaries, including the Bank. Northern Trust generates the majority of its revenue from its two client-focused reporting segments: Corporate & Institutional Services (C&IS) and Wealth Management. Asset management and related services are provided to C&IS and Wealth Management clients primarily by the Asset Management business. C&IS is a leading global provider of asset servicing and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds, and other institutional investors around the globe. Asset servicing and related services encompass a full range of capabilities including but not limited to: global custody; fund administration; investment operations outsourcing; investment management; investment risk and analytical services; employee benefit services; securities lending; foreign exchange; treasury management; brokerage services; transition management services; banking and cash management. Client relationships are managed through the Bank and the Bank’s and the Corporation’s other subsidiaries, including support from locations in North America, Europe, the Middle East, and the Asia-Pacific region. Wealth Management focuses on high-net-worth individuals and families, business owners, executives, professionals, retirees, and established privately-held businesses in its target markets. The business also includes the Global Family Office, which provides customized services to meet the complex financial needs of individuals and family offices in the U.S. and throughout the world with assets typically exceeding $200 million. In supporting these targeted segments, Wealth Management provides trust, investment management, custody, and philanthropic services; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services; and private and business banking. Wealth Management services are delivered by multidisciplinary teams through a network of offices in 18 U.S. states and Washington, D.C., as well as offices in London, Guernsey, and Abu Dhabi. C. Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. D. Foreign Currency Remeasurement and Translation. Asset and liability accounts denominated in nonfunctional currencies are remeasured into functional currencies at period-end rates of exchange, except for certain balance sheet items including buildings and equipment, goodwill and other intangible assets, which are remeasured at historical exchange rates. Results from remeasurement of asset and liability accounts are reported in other operating income as currency translation gains (losses), net. Income and expense accounts are remeasured at period-average rates of exchange. Asset and liability accounts of entities with functional currencies that are not the U.S. dollar are translated at period-end rates of exchange. Income and expense accounts are translated at period-average rates of exchange. Translation adjustments, net of applicable taxes, are reported directly to accumulated other comprehensive income (AOCI), a component of stockholders’ equity. E. Securities. Securities Available for Sale are reported at fair value, with unrealized gains and losses credited or charged, net of the tax effect, to AOCI. Realized gains and losses on securities available for sale are determined on a specific identification basis and are reported within other security gains (losses), net, in the consolidated statements of income. Interest income is recorded on the accrual basis, adjusted for the amortization of premium and accretion of discount. Securities Held to Maturity consist of debt securities that management intends to, and Northern Trust has the ability to, hold until maturity. Such securities are reported at cost, adjusted for amortization of premium and accretion of discount. Interest income is recorded on the accrual basis adjusted for the amortization of premium and accretion of discount. Securities Held for Trading are stated at fair value. Realized and unrealized gains and losses on securities held for trading are reported in the consolidated statements of income within security commissions and trading income. Nonmarketable Securities primarily consist of Federal Reserve Bank of Chicago and Federal Home Loan Bank stock and community development investments, each of which are recorded in other assets on the consolidated balance sheets. Federal Reserve and Federal Home Loan Bank stock are reported at cost, which represents redemption value. Community development investments are typically reported at amortized cost. Those community development investments that are designed to generate a return primarily through realization of tax credits and other tax benefits, which are discussed in further detail in Note 29, “Variable Interest Entities,” are reported at amortized cost using the effective yield method or proportional amortization method and amortized over the lives of the related tax credits and other tax benefits. Other-Than-Temporary Impairment (OTTI). A security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference being defined as the credit loss) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or more-likely-than-not will be required, to sell the security before recovery of the security’s amortized cost basis. If OTTI exists, the charge to earnings is limited to the amount of credit loss if the investor does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis. Any remaining difference between fair value and amortized cost is recognized in AOCI, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. F. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase. Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession, either directly or via third-party custodians, of securities purchased under agreements to resell. Securities sold under agreements to repurchase are held by the counterparty until the repurchase. G. Derivative Financial Instruments. Northern Trust is a party to various derivative 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 generally include foreign exchange contracts, interest rate contracts, total return swap contracts and credit default swap contracts. Derivative financial instruments are recorded on the consolidated balance sheets at fair value within other assets and other liabilities. Derivative asset and liability positions with the same counterparty are reflected on a net basis on the consolidated balance sheets in cases where legally enforceable master netting arrangements or similar agreements exist. These derivative assets and liabilities are further reduced by cash collateral received from, and deposited with, derivative counterparties. The accounting for changes in the fair value of a derivative in the consolidated statements of income depends on whether or not the contract has been designated as a hedge and qualifies for hedge accounting under GAAP. Derivative financial instruments are recorded on the consolidated statements of cash flows within the line item, “other operating activities, net,” except for net investment hedges which are recorded within “other investing activities, net”. Changes in the fair value of client-related and trading derivative instruments, which are not designated hedges under GAAP, are recognized currently in either foreign exchange trading income or security commissions and trading income. Changes in the fair value of derivative instruments entered into for risk management purposes but not designated as hedges are recognized currently in other operating income. Certain derivative instruments used by Northern Trust to manage risk are formally designated and qualify for hedge accounting as fair value, cash flow, or net investment hedges. Derivatives designated as fair value hedges are used to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. 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 recognized currently in interest income or interest expense. For substantially all fair value hedges, Northern Trust applies the “shortcut” method of accounting, available under GAAP. As a result, changes recorded in the fair value of the hedged item are assumed to equal the offsetting gain or loss on the derivative. For fair value hedges that do not qualify for the “shortcut” method of accounting, Northern Trust utilizes regression analysis, a “long-haul” method of accounting, in assessing whether these hedging relationships are highly effective at inception and quarterly thereafter. Derivatives designated as cash flow hedges are used to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. Changes in the fair value of such derivatives are recognized in AOCI, a component of stockholders’ equity, and there is no change to the accounting for the hedged item. Balances in AOCI are reclassified to earnings when the hedged forecasted transaction impacts earnings, and are reflected in the same line item. Northern Trust applies the “shortcut” method of accounting for cash flow hedges of certain available for sale investment securities. For cash flow hedges of certain other available for sale investment securities, foreign currency denominated investment securities, and forecasted foreign currency denominated revenue and expenditure transactions, Northern Trust closely matches all terms of the hedged item and hedging derivative at inception and on an ongoing basis. For cash flow hedges of available for sale investment securities, to the extent all terms are not perfectly matched, effectiveness is assessed using regression analysis. For cash flow hedges of forecasted foreign currency denominated revenue and expenditure transactions and investment securities, to the extent all terms are not perfectly matched, effectiveness is assessed using the dollar-offset method. Foreign exchange contracts and qualifying non-derivative instruments designated as net investment hedges are used to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. Changes in the fair value of the hedging instrument are recognized in AOCI consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis. Amounts recorded in AOCI are reclassified to earnings only upon the sale or liquidation of an investment in a non-U.S. branch or subsidiary. Fair value, cash flow, and net investment hedges are designated and formally documented as such contemporaneous with the transaction. The formal documentation describes the hedge relationship and identifies the hedging instruments and hedged items. Included in the documentation is a discussion of the risk management objectives and strategies for undertaking such hedges, the nature of the risk being hedged, and a description of the method for assessing hedge effectiveness at inception and on an ongoing basis. For hedges that do not qualify for the “shortcut” or the critical terms match methods of accounting, a formal assessment is performed on a calendar quarter basis to verify that derivatives used in hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. Hedge accounting is discontinued if a derivative ceases to be highly effective, matures, is terminated or sold, if a hedged forecasted transaction is no longer expected to occur, or if Northern Trust removes the derivative’s hedge designation. Subsequent gains and losses on these derivatives are included in foreign exchange trading income or security commissions and trading income. For discontinued cash flow hedges, the accumulated gain or loss on the derivative remains in AOCI and is reclassified to earnings in the period in which the previously hedged forecasted transaction impacts earnings or is no longer probable of occurring. For discontinued fair value hedges, the previously hedged asset or liability ceases to be adjusted for changes in its fair value. Previous adjustments to the hedged item are amortized over the remaining life of the hedged item. H. Loans and Leases. Loans and leases are recognized assets that represent a contractual right to receive money either on demand or on fixed or determinable dates. Loans and leases are disaggregated for disclosure purposes by portfolio segment (segment) and by class. Northern Trust has defined its segments as commercial and personal. A class of loans and leases is a subset of a segment, the components of which has similar risk characteristics, measurement attributes, or risk monitoring methods. The classes within the commercial segment have been defined as commercial and institutional, commercial real estate, lease financing, net, non-U.S. and other. The classes within the personal segment have been defined as residential real estate, private client and other. Loan Classification. Loans that are held for investment are reported at the principal amount outstanding, net of unearned income. Loans classified as held for sale are reported at the lower of aggregate cost or fair value. Undrawn commitments relating to loans that are not held for sale are recorded in other liabilities and are carried at the amount of unamortized fees with an allowance for credit loss liability recognized for any estimated probable losses. 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. 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. 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 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. A loan is 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 payment periods) 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 payment periods) under the revised terms. 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, lease financing, net, non-U.S., 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 $1,000,000) 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. Premium, Discounts, Origination Costs and Fees. Premiums and discounts on loans are recognized as an adjustment of yield using the interest method based on the contractual terms of the loan. Certain direct origination costs and fees are netted, deferred and amortized over the life of the related loan as an adjustment to the loan’s yield. Direct Financing and Leveraged Leases. Unearned lease income from direct financing and leveraged leases is recognized using the interest method. This method provides a constant rate of return on the unrecovered investment over the life of the lease. The rate of return and the allocation of income over the lease term are recalculated from the inception of the lease if during the lease term assumptions regarding the amount or timing of estimated cash flows change. Lease residual values are established at the inception of the lease based on in-house valuations and market analyses provided by outside parties. Lease residual values are reviewed at least annually for OTTI. A decline in the estimated residual value of a leased asset determined to be other-than-temporary would be recorded in the period in which the decline is identified as a reduction of interest income. I. Allowance for Credit Losses. The allowance for credit losses represents management’s estimate of probable losses which have occurred as of the date of the consolidated financial statements. The loan and lease portfolio and other lending-related credit exposures are regularly reviewed to evaluate the level of the allowance for credit losses. In determining an appropriate allowance level, Northern Trust evaluates the allowance necessary for impaired loans and lending-related commitments and also estimates losses inherent in other lending-related credit exposures. The allowance for credit losses consists of the following components: Specific Allowance. The specific allowance is determined through an individual evaluation of loans and lending-related commitments considered impaired that is based on expected future cash flows, the value of collateral, and other factors that may impact the borrower’s ability to pay. For impaired loans where the amount of specific allowance, if any, is determined based on the value of the underlying real estate collateral, third-party appraisals are typically obtained and utilized by management. These appraisals are generally less than twelve months old and are subject to adjustments to reflect management’s judgment as to the realizable value of the collateral. Inherent Allowance. The inherent allowance estimation methodology is based on internally developed loss data specific to the Northern Trust loan and lease portfolio. The estimation methodology and the related qualitative adjustment framework segregate the loan and lease portfolio into homogeneous segments. For each segment, the probability of default and the loss given default are applied to the total exposure at default to determine a quantitative inherent allowance. The quantitative inherent allowance is then reviewed within the qualitative adjustment framework, where management applies judgment by assessing internal risk factors, potential limitations in the quantitative methodology and environmental factors that are not fully contemplated in the quantitative methodology to compute an adjustment to the quantitative inherent allowance for each segment of the loan portfolio. The results of the inherent allowance estimation methodology are reviewed quarterly by Northern Trust’s Loan Loss Reserve Committee, which includes representatives from Credit Risk Management, reporting segment management, and Corporate Finance. 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. Northern Trust’s policies relative to the charging-off of uncollectible loans and leases are consistent across both loan and lease segments. Determinations as to whether loan balances for which the collectability is in question are charged-off or a specific reserve is established are based on management’s assessment as to the level of certainty regarding the amount of loss. The provision for credit losses, which is charged to income, is the amount necessary to adjust the allowance for credit losses to the level determined to be appropriate through the above processes. Actual losses may vary from current estimates and the amount of the provision for credit losses may be either greater or less than actual net charge-offs. Northern Trust analyzes its exposure to credit losses from both on-balance-sheet and off-balance-sheet activity using a consistent methodology. For purposes of estimating the allowance for credit losses for undrawn loan commitments and standby letters of credit, the exposure at default includes an estimated drawdown of unused credit based on a credit conversion factor. The proportionate amount of the quantitative methodology calculation after any required adjustment in the qualitative framework results in the required allowance for undrawn loan commitments and standby letters of credit as of the reporting date. The portion of the allowance assigned to loans and leases is reported as a contra asset, directly following loans and leases in the consolidated balance sheets. The portion of the allowance assigned to undrawn loan commitments and standby letters of credit is reported in other liabilities in the consolidated balance sheets. J. Standby Letters of Credit. Fees on standby letters of credit are recognized in other operating income using the straight-line method over the lives of the underlying agreements. Northern Trust’s recorded other liability for standby letters of credit, reflecting the obligation it has undertaken, is measured as the amount of unamortized fees on these instruments. K. Buildings and Equipment. Buildings and equipment owned are carried at original cost less accumulated depreciation. The charge for depreciation is computed using the straight-line method based on the following range of lives: buildings – up to 30 years; equipment – 3 to 10 years; and leasehold improvements–the shorter of the lease term or 15 years. Leased properties meeting certain criteria are capitalized and amortized using the straight-line method over the lease period. L. Other Real Estate Owned (OREO). OREO is comprised of commercial and residential real estate properties acquired in partial or total satisfaction of loans. OREO assets are carried at the lower of cost or fair value less estimated costs to sell and are recorded in other assets on the consolidated balance sheets. Fair value is typically based on third-party appraisals. Appraisals of OREO properties are updated on an annual basis and are subject to adjustments to reflect management’s judgment as to the realizable value of the properties. Losses identified during the 90-day period after the acquisition of such properties are charged against the allowance for credit losses assigned to loans and leases. Subsequent write-downs that may be required to the carrying value of these assets and gains or losses realized from asset sales are recorded within other operating expense. M. Goodwill and Other Intangible Assets. Goodwill is not subject to amortization. Separately identifiable acquired intangible assets with finite lives are amortized over their estimated useful lives, primarily on a straight-line basis. Purchased software, software licenses, and allowable internal costs, including compensation relating to software developed for internal use, are capitalized. Software is amortized using the straight-line method over the estimated useful lives of the assets, generally ranging from 3 to 10 years. Fees paid for the use of software licenses that are not hosted by Northern Trust are expensed as incurred. Goodwill and other intangible assets are reviewed for impairment on an annual basis or more frequently if events or changes in circumstances indicate the carrying amounts may not be recoverable. N. Trust, Investment and Other Servicing Fees. Trust, investment and other servicing fees are recorded on an accrual basis, over the period in which the service is provided. Fees are primarily a function of the market value of assets custodied, managed and serviced, transaction volumes, and securities lending volume and spreads, as set forth in the underlying client agreement. This revenue recognition involves the use of estimates and assumptions, including components that are calculated based on estimated asset valuations and transaction volumes. O. Client Security Settlement Receivables. These receivables result from custody client withdrawals from short-term investment funds that settle on the following business day as well as custody client security sales executed under contractual settlement date accounting that have not yet settled. Northern Trust advances cash to the client on the date of either client withdrawal or trade execution and awaits collection from either the short-term investment funds or via the settled trade. P. Income Taxes. Northern Trust follows an asset and liability approach to account for income taxes. The objective is to recognize the amount of taxes payable or refundable for the current year, and to recognize deferred tax assets and liabilities resulting from temporary differences between the amounts reported in the financial statements and the tax bases of assets and liabilities. The measurement of tax assets and liabilities is based on enacted tax laws and applicable tax rates. Tax positions taken or expected to be taken on a tax return are evaluated based on their likelihood of being sustained upon examination by tax authorities. Only tax positions that are considered more-likely-than-not to be sustained are recorded in the consolidated financial statements. Northern Trust recognizes any interest and penalties related to unrecognized tax benefits in the provision for income taxes. Q. Cash Flow Statements. Cash and cash equivalents have been defined as “Cash and Due from Banks”. R. Pension and Other Postretirement Benefits. Northern Trust records the funded status of its defined benefit pension and other postretirement plans on the consolidated balance sheets. Funded pension and postretirement benefits are reported in other assets and unfunded pension and postretirement benefits are reported in other liabilities. Plan assets and benefit obligations are measured annually at December 31. Plan assets are determined based on fair value generally representing observable market prices. The projected benefit obligations are determined based on the present value of projected benefit distributions at an assumed discount rate. Pension costs are recognized ratably over the estimated working lifetime of eligible participants. S. Share-Based Compensation Plans. Northern Trust recognizes as compensation expense the grant-date fair value of stock and stock unit awards and other share-based compensation granted to employees within the consolidated statements of income. The fair values of stock and stock unit awards, including performance stock unit awards and director awards, are based on the closing price of the Corporation’s stock on the date of grant adjusted for certain awards that do not accrue dividends while vesting. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The model utilizes weighted-average assumptions regarding the period of time that options granted are expected to be outstanding (expected term) based primarily on the historical exercise behavior attributable to previous option grants, the estimated yield from dividends paid on the Corporation’s stock over the expected term of the options, the historical volatility of Northern Trust’s stock price and the implied volatility of traded options on Northern Trust stock, and a risk free interest rate based on the U.S. Treasury yield curve at the time of grant for a period equal to the expected term of the options granted. Compensation expense for share-based award grants with terms that provide for a graded vesting schedule, whereby portions of the award vest in increments over the requisite service period, are recognized on a straight-line basis over the requisite service period for the entire award. Compensation expense for performance stock unit awards are recognized on a straight-line basis over the requisite service period of the award based on expected achievement of the performance condition. Adjustments are made for employees that meet certain eligibility criteria at the grant date or during the requisite service period. Northern Trust does not include an estimate of future forfeitures in its recognition of share-based compensation expense. Share-based compensation expense is adjusted based on forfeitures as they occur. Dividend equivalents are paid on a current basis for restricted stock units granted prior to February 21, 2017 that are not yet vested. Dividend equivalents are accrued for performance stock unit awards, most restricted stock units granted on or after February 21, 2017 and director awards not yet vested, and are paid upon vesting. Certain restricted stock units granted on or after February 20, 2018 are not entitled to dividend equivalents during the vesting period. Cash flows resulting from the realization of excess tax benefits are classified as operating cash flows. T. Net Income Per Common Share. Basic net income per common share is computed by dividing net income/loss applicable to common stock by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income applicable to common stock and potential common shares by the aggregate of the weighted average number of common shares outstanding during the period and common share equivalents calculated for stock options outstanding using the treasury stock method. In a period of a net loss, diluted net income per common share is calculated in the same manner as basic net income per common share. Northern Trust has issued certain restricted stock unit awards, which are unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents. These units are considered participating securities. Accordingly, Northern Trust calculates net income applicable to common stock using the two-class method, whereby net income is allocated between common stock and participating securities. |
Recent Accounting Pronouncements |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On January 1, 2018, Northern Trust adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09). The primary objective of ASU 2014-09 is revenue recognition that represents the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Northern Trust adopted ASU 2014-09 using the modified retrospective method applied to contracts not yet completed as of the date of adoption. Results for reporting periods beginning January 1, 2018 are presented under ASU 2014-09, including certain changes to gross versus net presentation, whereas prior period amounts are not adjusted. The impact of adopting ASU 2014-09 resulted in a $4.0 million reduction in retained earnings. Please refer to Note 17 - “Revenue from Contracts with Clients” for further information. On January 1, 2018, Northern Trust adopted ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01). ASU 2016-01 requires equity investments (except those accounted for under the equity method or those that result in consolidation) to be measured at fair value with changes in fair value recognized in net income unless a policy election is made for investments without readily determinable fair values. Additionally, ASU 2016-01 requires public entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost on the balance sheet. Furthermore, it requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The impact of adopting ASU 2016-01 resulted in a $0.5 million reduction in retained earnings. On January 1, 2018, Northern Trust adopted ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (ASU 2016-15). ASU 2016-15 provides guidance on eight specific cash flow issues, thereby reducing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Upon adoption of ASU 2016-15, there was no significant impact to Northern Trust’s consolidated statement of cash flows. On January 1, 2018, Northern Trust adopted ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (ASU 2016-16). ASU 2016-16 requires an entity to recognize the income tax consequences of intra-entity transfers of assets (excluding inventory) in the period in which the transfer occurs. Upon adoption of ASU 2016-16, there was no significant impact to Northern Trust’s consolidated financial condition or results of operations. On January 1, 2018, Northern Trust adopted ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)” (ASU 2016-18). ASU 2016-18 requires an entity to include amounts generally described as restricted cash and cash equivalents with cash and cash equivalents when reconciling beginning and end of period total cash balances in the statement of cash flows and as a result, transfers between cash and cash equivalents, and restricted cash and cash equivalents, will not be presented in the statement of cash flows as cash flow activities. Additionally, if the balance sheet includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash and cash equivalents, an entity is required to disclose a reconciliation between the balance sheet and the statement of cash flows. Furthermore, if restricted cash and cash equivalents are material, an entity must disclose information about the nature of restrictions. Upon adoption of ASU 2016-18, there was no significant impact to Northern Trust’s consolidated statement of cash flows. On January 1, 2018, Northern Trust adopted ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist companies with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in ASU 2017-01 provide a more robust framework to use in determining when a set of assets and activities is a business. Upon adoption of ASU 2017-01, there was no significant impact to Northern Trust’s consolidated financial condition or results of operations. On January 1, 2018, Northern Trust adopted ASU No. 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” (ASU 2017-05). ASU 2017-05 clarifies that an in substance nonfinancial asset is an asset or group of assets for which substantially all of the fair value consists of nonfinancial assets and the group or subsidiary is not a business. Transfers of nonfinancial assets to another entity in exchange for a noncontrolling ownership interest in that entity will be accounted for under Accounting Standards Codification 610-20 - Gains and Losses from the Derecognition of Nonfinancial Assets. ASU 2017-05 also impacts the accounting for partial sales of nonfinancial assets, and provides that when an entity transfers its controlling financial interest in a nonfinancial asset, but retains a noncontrolling ownership interest, the entity will measure the retained interest at fair value. This will result in full gain or loss recognition upon the sale of a controlling interest in a nonfinancial asset. Upon adoption of ASU 2017-05, there was no significant impact to Northern Trust’s consolidated financial condition or results of operations. On January 1, 2018, Northern Trust adopted ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (ASU 2017-07). Under previous GAAP, net benefit cost on pension and postretirement benefit plans included multiple components, including current-period employee service cost, interest cost on the obligation, expected return on plan assets, and amortization of various amounts deferred from previous periods. ASU 2017-07 requires the bifurcation of the net benefit cost by presenting separately the service cost component from the other components of net benefit cost. Northern Trust provides a detailed breakdown of its net periodic pension costs components including a reference to the respective income statement line in the footnotes and therefore there were no changes to the presentation of net periodic pension costs in the results of operations upon adoption of ASU 2017-07. On January 1, 2018, Northern Trust adopted ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (ASU 2017-09). ASU 2017-09 clarifies which types of changes to share-based payment awards are in scope of modification accounting. ASU 2017-09 also provides clarification related to the fair value assessment with respect to determining whether a fair value calculation is required and the appropriate unit of account to apply. Upon adoption of ASU 2017-09, there was no impact to Northern Trust’s consolidated financial condition or results of operations. On January 1, 2018, Northern Trust adopted ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (ASU 2018-02). The amendments in ASU 2018-02 allow an entity to elect to reclassify from accumulated other comprehensive income to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-02 is effective for interim and annual reporting periods beginning after December 15, 2018, however early adoption is permitted. The amendments in ASU 2018-02 may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Upon adoption of ASU 2018-02, Northern Trust elected to reclassify $25.3 million of income tax effects from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. In the normal course, it is Northern Trust’s policy to release income tax effects from accumulated other comprehensive income on an aggregate portfolio basis. Please refer to Note 15 - “Accumulated Other Comprehensive Income (Loss)” for further information. On April 1, 2018, Northern Trust adopted ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (ASU 2017-12). The main provisions of ASU 2017-12 are intended to align better an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships. ASU 2017-12 eliminates the requirement to measure and report hedge ineffectiveness separately and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Further, ASU 2017-12 eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. Northern Trust currently applies the “shortcut” method of accounting available under US GAAP for substantially all fair value hedges and other aspects of Northern Trust’s current hedge accounting program and therefore upon adoption of ASU 2017-12, there was no significant impact to Northern Trust’s consolidated financial condition or results of operations. On December 31, 2018, Northern Trust adopted ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans” (ASU 2018-14). ASU 2018-14 improves the effectiveness of disclosures in the notes to financial statements by removing, modifying and adding certain disclosures related to defined benefit pension, and other postretirement plans. Upon adoption of ASU 2018-14, there was no impact to Northern Trust’s consolidated financial condition or results of operations. Please refer to Note 22 - “Employee Benefits” for further information. |
Fair Value Measurements |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value under GAAP is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. 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 years ended December 31, 2018, or 2017. 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 debt 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 December 31, 2018, Northern Trust’s available for sale debt securities portfolio included 1,479 Level 2 securities with an aggregate market value of $31.7 billion. All 1,479 debt securities were valued by external pricing vendors. As of December 31, 2017, Northern Trust’s available for sale debt securities portfolio included 1,436 Level 2 debt securities with an aggregate market value of $28.0 billion. All 1,436 debt securities were valued by external pricing vendors. Trading account debt securities, which totaled $0.3 million and $0.5 million as of December 31, 2018, and December 31, 2017, respectively, were all valued using external pricing vendors. Northern Trust has established processes and procedures to assess the suitability of valuation methodologies used by external pricing vendors, including reviews of valuation techniques and assumptions used for selected securities. On a daily basis, periodic quality control reviews of prices received from vendors are conducted which include comparisons to prices on similar security types received from multiple pricing vendors and to the previous day’s reported prices for each security. Predetermined tolerance level exceptions are researched and may result in additional validation through available market information or the use of an alternate pricing vendor. Quarterly, Northern Trust reviews documentation from third-party pricing vendors regarding the valuation processes and assumptions used in their valuations and assesses whether the fair value levels assigned by Northern Trust to each security classification are appropriate. Annually, valuation inputs used within third-party pricing vendor valuations are reviewed for propriety on a sample basis through a comparison of inputs used to comparable market data, including security classifications that are less actively traded and security classifications comprising significant portions of the portfolio. 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; credit spreads, default probabilities, and recovery rates for credit default swap 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 consisted 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 swap also requires 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 swap 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 25 — “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. Management of various businesses and departments of Northern Trust (including Corporate Market Risk, Credit Risk Management, Corporate Finance, C&IS and Wealth Management) reviews valuation methods and models for Level 3 assets and liabilities. Fair value measurements are performed upon acquisitions of an asset or liability. Management of the appropriate business or department reviews assumed inputs, especially when unobservable in the marketplace, in order to substantiate their use in each fair value measurement. When appropriate, management reviews forecasts used in the valuation process in light of other relevant financial projections to understand any variances between current and previous fair value measurements. In certain circumstances, third party information is used to support the fair value measurements. If certain third party information seems inconsistent with consensus views, a review of the information is performed by management of the respective business or department to determine the appropriate fair value of the asset or liability. The following table presents the fair values of Northern Trust’s Level 3 assets and liabilities as of December 31, 2018 and 2017, as well as the valuation techniques, significant unobservable inputs, and quantitative information used to develop significant unobservable inputs for such assets and liabilities as of such dates. TABLE 46: LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS
The following presents assets and liabilities measured at fair value on a recurring basis as of December 31, 2018 and 2017, segregated by fair value hierarchy level. TABLE 47: 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 December 31, 2018, derivative assets and liabilities shown above also include reductions of $134.5 million and $573.7 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties. (1) This line consists of a total return swap contract. (2) This line consists of swaps related to the sale of certain Visa Class B common shares.
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 a total return swap contract. The following tables present the changes in Level 3 assets and liabilities for the years ended December 31, 2018 and 2017. TABLE 48: CHANGES IN LEVEL 3 ASSETS AND LIABILITIES
(1) Unrealized gains (losses) are included in net unrealized gains (losses) on debt securities available for sale, within the consolidated statements of comprehensive income.
(1) Gains (losses) are recorded in other operating income (expense) within the consolidated statements of income. For the years ended December 31, 2018 and 2017 there were no assets or liabilities transferred into or out of Level 3. 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 separately disclose these subsequent fair value measurements and to classify them under the fair value hierarchy. Assets measured at fair value on a nonrecurring basis at December 31, 2018 and 2017, 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 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. Collateral-based impaired loans and OREO assets that have been adjusted to fair value totaled $24.9 million and $0.4 million, respectively, at December 31, 2018, and $12.2 million and $0.3 million, respectively, at December 31, 2017. Assets measured at fair value on a nonrecurring basis reflect management’s judgment as to realizable value. The following table presents the fair values of Northern Trust’s Level 3 assets that were measured at fair value on a nonrecurring basis as of December 31, 2018 and 2017, as well as the valuation technique, significant unobservable inputs, and quantitative information used to develop the significant unobservable inputs for such assets as of such dates. TABLE 49: LEVEL 3 NONRECURRING BASIS SIGNIFICANT UNOBSERVABLE INPUTS
The following tables summarize the fair values of all financial instruments. TABLE 50: FAIR VALUE OF FINANCIAL INSTRUMENTS
Note: Refer to the table located on page 105 for the disaggregation of available for sale debt securities. (1) This line consists of a total return swap contract. (2) This line consists of swaps related to the sale of certain Visa Class B common shares.
Note: Refer to the table located on page 106 for the disaggregation of available for sale debt securities. (1) This line consists of swaps related to the sale of certain Visa Class B common shares and a total return swap contract. |
Securities |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities Debt Securities Available for Sale. The following tables provide the amortized cost, fair values, and remaining maturities of debt securities available for sale. TABLE 51: RECONCILIATION OF AMORTIZED COST TO FAIR VALUE OF DEBT SECURITIES AVAILABLE FOR SALE
TABLE 52: REMAINING MATURITY OF DEBT SECURITIES AVAILABLE FOR SALE
Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments. Debt Securities Held to Maturity. The following tables provide the amortized cost, fair values and remaining maturities of debt securities held to maturity. TABLE 53: RECONCILIATION OF AMORTIZED COST TO FAIR VALUES OF DEBT SECURITIES HELD TO MATURITY
TABLE 54: REMAINING MATURITY OF DEBT SECURITIES HELD TO MATURITY
Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments. Debt securities held to maturity consist of securities that management intends to, and Northern Trust has the ability to, hold until maturity. During the twelve months ended December 31, 2018, approximately $287.9 million of securities reflected in Other Asset-Backed, Covered Bonds, Sub-Sovereign, Supranational and Non-U.S. Agency Bonds, and Corporate Debt were transferred from available for sale to held to maturity. Investment Security Gains and Losses. Net investment security losses of $1.0 million were recognized in 2018, and include $0.5 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 losses of $1.6 million, and $3.2 million were recognized in 2017, and 2016, respectively. There were $0.2 million OTTI losses in 2017 and $3.7 million OTTI losses in 2016. Proceeds of $307.3 million from the sale of securities in 2018 resulted in gross realized gains and losses of $1.5 million and $2.0 million, respectively. Proceeds of $2.2 billion from the sale of securities in 2017 resulted in gross realized gains and losses of $0.2 million and $1.6 million, respectively. Proceeds of $828.9 million from the sale of securities in 2016 resulted in gross realized gains and losses of $0.7 million and $0.2 million, respectively. Debt Securities with Unrealized Losses. The following tables provide information regarding debt securities that had been in a continuous unrealized loss position for less than 12 months and for 12 months or longer as of December 31, 2018 and 2017. TABLE 55: DEBT SECURITIES WITH UNREALIZED LOSSES
As of December 31, 2018, 1,357 debt securities with a combined fair value of $34.2 billion were in an unrealized loss position, with their unrealized losses totaling $357.1 million. Unrealized losses of $150.5 million and $39.6 million related to government sponsored agency and U.S. government securities, respectively, are primarily attributable to changes in market rates since their purchase. Unrealized losses of $22.9 million within corporate debt securities primarily reflect widened credit spreads and higher market rates since purchase; 37% of the corporate debt portfolio is backed by guarantees provided by U.S. and non-U.S. governmental entities. The majority of the $69.6 million of unrealized losses in debt securities classified as “other” at December 31, 2018, relate to securities primarily purchased at a premium or par by Northern Trust to fulfill its obligations under the CRA. Unrealized losses on these CRA-related securities are attributable to yields that are below market rates for the purpose of supporting institutions and programs that benefit low- to moderate-income communities within Northern Trust’s market area. The remaining unrealized losses on Northern Trust’s securities portfolio as of December 31, 2018, are attributable to changes in overall market interest rates, increased credit spreads, or reduced market liquidity. As of December 31, 2018, Northern Trust does not intend to sell any investment in an unrealized loss position and it is not more likely than not that Northern Trust will 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, a security type for which Northern Trust has recognized OTTI in 2018 and 2017, incorporates an expected loss approach using discounted cash flows on the underlying collateral pools. To evaluate whether an unrealized loss on CRA 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 pool or similar 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 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 mortgage-backed securities vary by vintage of loan origination and collateral quality. There were $0.5 million and $0.2 million of OTTI losses recognized in 2018 and 2017, respectively. There were $3.7 million OTTI losses recognized during the year ended December 31, 2016. Credit Losses on Debt Securities. The table below provides information regarding total other-than-temporarily impaired debt securities, including noncredit-related amounts recognized in other comprehensive income and net impairment losses recognized in earnings, for the years ended December 31, 2018, 2017, and 2016. TABLE 56: NET IMPAIRMENT LOSSES RECOGNIZED IN EARNINGS
(1) For initial other-than-temporary impairments in the respective period, the balance includes the excess of the amortized cost over the fair value of the impaired securities. For subsequent impairments of the same security, the balance includes any additional changes in fair value of the security subsequent to its most recently recorded OTTI. (2) For initial other-than-temporary impairments in the respective period, the balance includes the portion of the excess of amortized cost over the fair value of the impaired securities that was recorded in OCI. For subsequent impairments of the same security, the balance includes additional changes in OCI for that security subsequent to its most recently recorded OTTI. Provided in the table below are the cumulative credit-related losses recognized in earnings on debt securities other-than-temporarily impaired. TABLE 57: CUMULATIVE CREDIT-RELATED LOSSES ON DEBT SECURITIES HELD
|
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession, either directly or via third-party custodians, of securities purchased under agreements to resell. Securities sold under agreements to repurchase are held by the counterparty until the repurchase. The following tables summarize information related to securities purchased under agreements to resell and securities sold under agreements to repurchase. TABLE 58: SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL
TABLE 59: SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
TABLE 60: REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS
|
Loans and Leases |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases | Loans and Leases Amounts outstanding for loans and leases, by segment and class, are shown below. TABLE 61: 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 ratio 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 December 31, 2018 and 2017, equity credit lines totaled $655.5 million and $908.6 million, respectively, and equity credit lines for which first liens were held by Northern Trust represented 95% and 93%, respectively, of the total equity credit lines as of those dates. 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 $2.2 billion and $906.4 million at December 31, 2018 and 2017, respectively. Demand deposit overdrafts reclassified as loan balances totaled $152.5 million and $127.6 million at December 31, 2018 and 2017, respectively. There were no loans or leases classified as held for sale as of December 31, 2018, compared to $20.9 million of loans and $33.1 million of leases classified as held for sale at December 31, 2017 related to the decision to exit a non-strategic loan and lease portfolio. The components of the net investment in direct finance and leveraged leases are as follows: TABLE 62: DIRECT FINANCE AND LEVERAGED LEASES
The following schedule reflects the future minimum lease payments to be received over the next five years under direct finance leases. TABLE 63: FUTURE MINIMUM LEASE PAYMENTS
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 and management reporting. 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, 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 generally validated at least annually. Loan and lease segment and class balances at December 31, 2018 and 2017 are provided below, segregated by borrower ratings into “1 to 3”, “4 to 5”, and “6 to 9” (watch list), categories. TABLE 64: 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 fewer financial resources to manage through economic downturns. 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 to probable likelihood of loss. The following table provides balances and delinquency status of performing and nonperforming loans and leases by segment and class, as well as the other real estate owned and total nonperforming asset balances, as of December 31, 2018 and 2017. TABLE 65: DELINQUENCY STATUS
The following table provides information related to impaired loans by segment and class. TABLE 66: IMPAIRED LOANS
Note: Average recorded investments in impaired loans are calculated as the average of the month-end impaired loan balances for the period. Interest income that would have been recorded on nonperforming loans in accordance with their original terms totaled approximately $8.0 million in 2018, $9.1 million in 2017, and $8.5 million in 2016. There were $12.6 million and $9.4 million of aggregate undrawn loan commitments and standby letters of credit at December 31, 2018 and 2017, respectively, issued to borrowers whose loans were classified as nonperforming or impaired. Troubled Debt Restructurings (TDRs). Included within impaired loans were $64.6 million and $72.5 million of nonperforming TDRs and $35.2 million and $25.9 million of performing TDRs as of December 31, 2018 and 2017, respectively. The following tables provide, by segment and class, the number of loans and leases modified in TDRs during the years ended December 31, 2018, and 2017, and the recorded investments and unpaid principal balances as of December 31, 2018 and 2017. TABLE 67: TROUBLED DEBT RESTRUCTURINGS
Note: Period-end balances reflect all paydowns and charge-offs during the year.
Note: Period-end balances reflect all paydowns and charge-offs during the year. TDR modifications primarily involve extensions of term, deferrals of principal, interest rate concessions, and other modifications. Other modifications typically reflect other nonstandard terms which Northern Trust would not offer in non-troubled situations. During the year ended December 31, 2018, the TDR modifications of loans within residential real estate were primarily extensions of term, deferrals of principal, other modifications, and interest rate concessions. During the year ended December 31, 2018, TDR modifications of loans within commercial and institutional, commercial real estate, and private client classes were extensions of term, deferrals of principal, and other modifications. During the year ended December 31, 2017, the TDR modifications of loans within residential real estate loans were primarily extensions of term, deferrals of principal, interest rate concessions and other modifications; modification within commercial and institutional, commercial real estate, and private client classes were primarily extensions of term or deferrals of principal. There were four loans or leases modified in TDRs during the previous twelve-month periods which subsequently became nonperforming during the year ended December 31, 2018. There were two loans or leases modified in TDRs during the previous twelve-month periods which subsequently became nonperforming during the year ended December 31, 2017. All loans and leases modified in troubled debt restructurings are evaluated for impairment. The nature and extent of impairment of TDRs, including those which 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 real estate via foreclosure. As of December 31, 2018 and 2017, Northern Trust held foreclosed real estate properties with a carrying value of $8.4 million and $4.6 million, respectively, as a result of obtaining physical possession. In addition, as of December 31, 2018 and 2017, Northern Trust had loans with a carrying value of $10.9 million and $14.1 million, respectively, for which formal foreclosure proceedings were in process. |
Allowance for Credit Losses |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Changes in the allowance for credit losses by segment were as follows: TABLE 68: 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 December 31, 2018 and 2017. TABLE 69: RECORDED INVESTMENTS IN LOANS AND LEASES
|
Concentrations of Credit Risk |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentrations of Credit Risk | Concentrations of Credit Risk Concentrations of credit risk exist if a number of borrowers or other counterparties are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The fact that a credit exposure falls into one of these groups does not necessarily indicate that the credit has a higher than normal degree of credit risk. These groups are: banks and bank holding companies, residential real estate, and commercial real estate. Banks and Bank Holding Companies. At December 31, 2018, on-balance-sheet credit risk to banks and bank holding companies, both U.S. and non-U.S., consisted primarily of interest-bearing deposits with banks of $4.3 billion, federal funds sold and securities purchased under agreements to resell of $1.2 billion, and demand balances maintained at correspondent banks of $4.5 billion. At December 31, 2017, on-balance-sheet credit risk to banks and bank holding companies, both U.S. and non-U.S., consisted primarily of interest-bearing deposits with banks of $5.6 billion, federal funds sold and securities purchased under agreements to resell of $1.3 billion, and demand balances maintained at correspondent banks of $4.3 billion. Credit risk associated with U.S. and non-U.S. banks and bank holding companies deemed to be counterparties by Credit Risk Management is managed by the Capital Markets Credit Committee. Credit limits are established through a review process that includes an internally-prepared financial analysis, use of an internal risk rating system and consideration of external ratings from rating agencies. Northern Trust places deposits with banks that have strong internal and external credit ratings and the average life to maturity of deposits with banks is maintained on a short-term basis in order to respond quickly to changing credit conditions. Residential Real Estate. At December 31, 2018, residential real estate loans totaled $6.5 billion, or 22% of total U.S. loans and leases at December 31, 2018, compared with $7.2 billion, or 23% of total U.S. loans and leases at December 31, 2017. Residential real estate loans consist of traditional first lien mortgages and equity credit lines, which generally require a loan-to-collateral value ratio of no more than 65% to 80% at inception. Revaluations of supporting collateral are obtained upon refinancing or default or when otherwise considered warranted. Collateral revaluations for mortgages are performed by independent third parties. Of the total $6.5 billion in residential real estate loans, $1.7 billion were in Florida, $1.3 billion were in California, and $1.2 billion were in the greater Chicago area, with the remainder distributed throughout the other geographic regions within the U.S. served by Northern Trust. Legally binding undrawn commitments to extend residential real estate credit, which are primarily equity credit lines, totaled $824.0 million and $1.0 billion at December 31, 2018 and 2017, respectively. Commercial Real Estate. The commercial real estate portfolio consists of commercial mortgages and construction, acquisition and development loans extended to experienced investors well known to Northern Trust. Underwriting standards generally reflect conservative loan-to-value ratios and debt service coverage requirements. Recourse to borrowers through guarantees is also commonly required. Commercial mortgage financing is provided for the acquisition or refinancing of income-producing properties. Cash flows from the properties generally are sufficient to amortize the loan. These loans are primarily located in the California, Illinois, Florida, Texas, and Arizona markets. Construction, acquisition and development loans provide financing for commercial real estate prior to rental income stabilization. The intent is generally that the borrower will sell the project or refinance the loan through a commercial mortgage with Northern Trust or another financial institution upon completion. The table below provides additional detail regarding commercial real estate loan types. TABLE 70: COMMERCIAL REAL ESTATE LOANS
|
Buildings and Equipment |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Buildings and Equipment | Buildings and Equipment A summary of buildings and equipment is presented below. TABLE 71: BUILDINGS AND EQUIPMENT
The charge for depreciation, which includes depreciation of assets that were recorded under capital leases and is included within occupancy expense in the consolidated statements of income, amounted to $108.6 million in 2018, $101.2 million in 2017, and $89.2 million in 2016. |
Lease Commitments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Commitments | Lease Commitments At December 31, 2018, Northern Trust was obligated under a number of non-cancelable operating leases for buildings and equipment. Certain leases contain rent escalation clauses based on market indices or increases in real estate taxes and other operating expenses and renewal option clauses calling for increased rentals. There are no restrictions imposed by any lease agreement regarding the payment of dividends, debt financing or Northern Trust entering into further lease agreements. Minimum annual lease commitments as of December 31, 2018, for all non-cancelable operating leases with a term of one year or more are as follows: TABLE 72: MINIMUM LEASE PAYMENTS
Operating lease rental expense, net of rental income, is recorded in occupancy expense and amounted to $79.0 million in 2018, $76.7 million in 2017, and $76.1 million in 2016. |
Goodwill and Other Intangibles |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangibles | Goodwill and Other Intangibles Goodwill. Changes by reporting segment in the carrying amount of goodwill for the years ended December 31, 2018 and 2017, including the effect of foreign exchange rates on non-U.S.-dollar-denominated balances, were as follows: TABLE 73: GOODWILL
Other Intangible Assets Subject to Amortization. The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of December 31, 2018 and 2017 were as follows: TABLE 74: 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 was $17.4 million, $11.4 million, and $8.8 million for the years ended December 31, 2018, 2017, and 2016, respectively. Amortization for the years 2019, 2020, 2021, 2022, and 2023 is estimated to be $16.8 million, $16.8 million, $14.4 million, $9.8 million, and $9.5 million respectively. In November 2018, Northern Trust completed its acquisition of BEx LLC, a provider of foreign exchange software solutions, for a total purchase price of $37.6 million, inclusive of cash consideration of $31.2 million paid in the fourth quarter of 2018. The related purchase accounting is expected to be completed in the first quarter of 2019. Since its acquisition of Omnium LLC in 2011, Northern Trust has made various investments in Citadel Technology LLC’s Omnium technology platform. In June 2018, Northern Trust completed its acquisition of such platform, along with associated development resources, for a total purchase price of $73.0 million. Goodwill and incremental software intangible assets associated with the acquisition in 2018 totaled $71.4 million and $1.6 million, respectively. On October 1, 2017, Northern Trust completed its acquisition of UBS Asset Management’s fund administration servicing business in Luxembourg and Switzerland. The purchase price recorded in connection with the closing of the acquisition, which was subject to adjustment through May 2018, totaled $191.3 million. Goodwill and other intangible assets associated with the acquisition totaled $78.3 million and $126.0 million, respectively. |
Senior Notes and Long-Term Debt |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes and Long-Term Debt | Senior Notes and Long-Term Debt Senior Notes. A summary of senior notes outstanding at December 31, 2018 and 2017 is presented below. TABLE 75: SENIOR NOTES
Long-Term Debt. A summary of long-term debt outstanding at December 31, 2018 and 2017 is presented below. TABLE 76: LONG-TERM DEBT
(1) Not redeemable prior to maturity, except for senior notes due Aug. 2028, which are redeemable within three months of maturity. (2) The subordinated notes will bear interest from the date they were issued to, but excluding, May 8, 2027, at an annual rate of 3.375%, payable semi-annually in arrears. From, and including, May 8, 2027, the subordinated notes will bear interest at an annual rate equal to three-month LIBOR plus 1.131%, payable quarterly in arrears. The subordinated notes are unsecured and may be redeemed, in whole but not in part, on, and only on, May 8, 2027, at a redemption price equal to 100% of the principal amount of the subordinated notes to be redeemed, plus accrued and unpaid interest, if any, up to but excluding the redemption date. (3) Under the terms of its current Offering Circular dated November 6, 2013, the Bank has the ability to offer from time to time its senior bank notes in an aggregate principal amount of up to $4.5 billion at any one time outstanding and up to an additional $1.0 billion of subordinated notes. Each senior note will mature from 30 days to 15 years, and each subordinated note will mature from 5 years to 15 years, following its date of original issuance. Each note will mature on such date as selected by the initial purchaser and agreed to by the Bank. (4) As of December 31, 2018, debt issue costs of $1.6 million and $1.4 million are included as a direct deduction from the carrying amount of Senior Notes and Long-Term Debt, respectively. Debt issue costs are amortized on a straight-line basis over the life of the Note. (5) Notes issued at a discount of 0.117% (6) Notes issued at a discount of 0.437% (7) Notes issued at a discount of 0.283% (8) Notes issued at a discount of 0.125% (9) Notes issued at a discount of 0.02% (10) Notes issued at a discount of 0.114% (11) Interest rate swap contracts were entered into to modify the interest expense on these senior and subordinated notes from fixed rates to floating rates. The swaps are recorded as fair value hedges and at December 31, 2018, increases in the carrying values of the senior and subordinated notes outstanding of $29.3 million were recorded. As of December 31, 2017, net adjustments in the carrying values of subordinated notes outstanding of $37.4 million were recorded. |
Floating Rate Capital Debt |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brokers and Dealers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Floating Rate Capital Debt | Floating Rate Capital Debt In January 1997, the Corporation issued $150 million of Floating Rate Capital Securities, Series A, through a statutory business trust wholly owned by the Corporation (NTC Capital I). In April 1997, the Corporation also issued, through a separate wholly owned statutory business trust (NTC Capital II), $120 million of Floating Rate Capital Securities, Series B. The sole assets of the trusts are subordinated debentures of Northern Trust Corporation that have the same interest rates and maturity dates as the corresponding distribution rates and redemption dates of the Floating Rate Capital Securities. The Series A Securities were issued at a discount to yield 60.5 basis points above the three-month London Interbank Offered Rate (LIBOR) and are due January 15, 2027. The Series B Securities were issued at a discount to yield 67.9 basis points above the three-month LIBOR and are due April 15, 2027. Under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the regulatory capital treatment of these securities is required to be phased out over a period that began on January 1, 2013. In 2018, 40% of these securities are eligible for Tier 2 capital treatment, declining at an incremental 10% a year until they are fully phased out in 2022. The Corporation has fully, irrevocably and unconditionally guaranteed all payments due on the Series A and B securities. The holders of the Series A and B securities are entitled to receive preferential cumulative cash distributions quarterly in arrears (based on the liquidation amount of $1,000 per security) at an interest rate equal to the rate on the corresponding subordinated debentures. The interest rate on the Series A and Series B securities is equal to three-month LIBOR plus 0.52% and 0.59%, respectively. Subject to certain exceptions, the Corporation has the right to defer payment of interest on the subordinated debentures at any time or from time to time for a period not exceeding 20 consecutive quarterly periods provided that no extension period may extend beyond the stated maturity date. If interest is deferred on the subordinated debentures, distributions on the Series A and B securities will also be deferred and the Corporation will not be permitted, subject to certain exceptions, to pay or declare any cash distributions with respect to the Corporation’s capital stock or debt securities that rank the same as or junior to the subordinated debentures, until all past due distributions are paid. The subordinated debentures are unsecured and subordinated to substantially all of the Corporation’s existing indebtedness. The Corporation has the right to redeem the Series A and Series B subordinated debentures, in whole or in part, at a price equal to the principal amount plus accrued and unpaid interest. The following table summarizes the book values of the outstanding subordinated debentures as of December 31, 2018 and 2017. TABLE 77: SUBORDINATED DEBENTURES
|
Stockholders' Equity |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. As of December 31, 2018, the Corporation had issued and outstanding 500,000 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”) issued in August 2016. Equity related to Series D Preferred Stock as of December 31, 2018 and 2017 was $493.5 million. 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). Dividends on the Series D Preferred Stock, which are not mandatory, accrue and are 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 are payable in arrears on the 1st day of April and October of each year, through 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. As of December 31, 2018, 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 December 31, 2018 and 2017 totaled $388.5 million. Series C Preferred Stock has no par value and has a liquidation preference of $25,000 (equivalent to $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%. Common Stock. Stock repurchases through July 17, 2018 were made pursuant to the repurchase program announced by the Corporation on July 18, 2017, under which the Corporation’s Board of Directors authorized the Corporation to repurchase up to 9.5 million shares of the Corporation’s common stock. This program was terminated and replaced with a new repurchase program, announced on July 17, 2018, under which the Corporation’s Board of Directors authorized the Corporation to repurchase up to 25.0 million shares of the Corporation’s common stock. Repurchases after July 17, 2018 were made pursuant to the new repurchase program. Shares are repurchased by the Corporation to, among other things, manage the Corporation's capital levels. Repurchased shares are used for general purposes, including the issuance of shares under stock option and other incentive plans. The new repurchase authorization approved by the Board of Directors has no expiration date. Under the Corporation’s 2018 Capital Plan, which was reviewed without objection by the Federal Reserve, the Corporation may repurchase up to $529.5 million of common stock after December 31, 2018 through June 30, 2019. The average price paid per share for common stock repurchased in 2018, 2017, and 2016 was $102.69, $90.25, and $67.91, respectively. An analysis of changes in the number of shares of common stock outstanding follows: TABLE 78: SHARES OF COMMON STOCK
|
Accumulated Other Comprehensive Income (Loss) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 December 31, 2018, 2017, and 2016, and changes during the years then ended. TABLE 79: SUMMARY OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
* Includes net unrealized gains on debt securities transferred from available for sale to held to maturity during the years ended December 31, 2018 and 2017. TABLE 80: 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 years ended December 31, 2018, 2017 and 2016. TABLE 81: RECLASSIFICATION ADJUSTMENT OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME
|
Net Income per Common Share |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Common Share | Net Income per Common Share The computations of net income per common share are presented below. TABLE 82: NET INCOME PER COMMON SHARE
Note: For the year ended December 31, 2018, there were no common stock equivalents excluded in the computation of diluted net income per share. Common stock equivalents of 115,491, and 1,108,067 for the years ended December 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. |
Revenue from Contracts with Clients |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Clients | Revenue from Contracts with Clients Trust, Investment, and Other Servicing Fees. Custody and fund administration income is comprised of revenues received from our core asset servicing business for providing custody, fund administration, and middle-office-related services, primarily to C&IS clients. Investment management and advisory income contains revenue received from providing asset management and related services to Wealth Management and C&IS clients and to Northern Trust sponsored funds. Securities lending income represents revenues generated from securities lending arrangements that Northern Trust enters into as agent, mainly with C&IS clients. Other income largely consists of revenues received from providing employee benefit, investment risk and analytic and other services to C&IS and Wealth Management clients. Other Noninterest Income. Treasury management income represents revenues received from providing cash and liquidity management services to C&IS and Wealth Management clients. The portion of securities commissions and trading income that relates to revenue from contracts with clients is primarily comprised of commissions earned from providing securities brokerage services to Wealth Management and C&IS clients. The portion of other operating income that relates to revenue from contracts with clients is mainly comprised of service fees for banking-related services provided to Wealth Management and C&IS clients. Performance Obligations. Clients are typically charged monthly or quarterly in arrears based on the fee arrangement agreed to with each client; payment terms will vary depending on the client and services offered. Substantially all revenues generated from contracts with clients for asset servicing, asset management, securities lending, treasury management and banking-related services are recognized on an accrual basis, over the period in which services are provided. The nature of Northern Trust’s performance obligations is to provide a series of distinct services in which the customer simultaneously receives and consumes the benefits of the promised services as they are performed. Fee arrangements are mainly comprised of variable amounts based on market value of client assets managed and serviced, transaction volumes, number of accounts, and securities lending volume and spreads. Revenue is recognized using the output method in an amount that reflects the consideration to which Northern Trust expects to be entitled in exchange for providing each month or quarter of service. For contracts with multiple performance obligations, revenue is allocated to each performance obligation based on the price agreed to with the client, representing its relative standalone selling price. Security brokerage revenue is primarily represented by securities commissions received in exchange of providing trade execution related services. Control is transferred at a point in time, on the trade date of the transaction, and fees are typically variable based on transaction volumes and security types. Northern Trust’s contracts with its clients are typically open ended arrangements and are therefore considered to have an original duration of less than one year. Northern Trust has elected the practical expedient to not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less. The following table presents revenues disaggregated by major revenue source. TABLE 83: REVENUE DISAGGREGATION
Trust, investment and other servicing fees and treasury management fees represent revenue from contracts with clients. Revenue from contracts with clients also includes $86.7 million of the $98.3 million total securities commissions and trading income and $44.0 million of the $127.5 million total other operating income in 2018. Receivables Balances. The table below represents receivables balances from contracts with clients, which are included in other assets in the consolidated balance sheets, at December 31, 2018 and December 31, 2017. TABLE 84: CLIENT RECEIVABLES
(1) The net trust fees receivable balance at December 31, 2017 does not reflect the reduction for the estate settlement revenue transition adjustment of $2.7 million, which was recorded with an effective date of January 1, 2018. |
Net Interest Income |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift, Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Interest Income | Net Interest Income The components of net interest income were as follows: TABLE 85: NET INTEREST INCOME
(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. |
Other Operating Income |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Operating Income | Other Operating Income The components of other operating income were as follows: TABLE 86: OTHER OPERATING INCOME
Other income totaled $32.2 million in 2018, down from $58.2 million in 2017, primarily due to the impairment of a community development equity investment previously held at cost, expenses related to existing swap agreements related to Visa Inc. Class B common shares, and the net impact of various other operating income categories. Other income in 2016 included a $123.1 million net gain on the sale of 1.1 million Visa Class B common shares. Other Operating Expense The components of other operating expense were as follows: TABLE 87: OTHER OPERATING EXPENSE
Other expenses in 2016 included a charge in connection with an agreement to settle certain securities lending litigation of $50.0 million and charges related to contractual modifications associated with existing C&IS clients of $18.6 million. |
Other Operating Expense |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Operating Expense | Other Operating Income The components of other operating income were as follows: TABLE 86: OTHER OPERATING INCOME
Other income totaled $32.2 million in 2018, down from $58.2 million in 2017, primarily due to the impairment of a community development equity investment previously held at cost, expenses related to existing swap agreements related to Visa Inc. Class B common shares, and the net impact of various other operating income categories. Other income in 2016 included a $123.1 million net gain on the sale of 1.1 million Visa Class B common shares. Other Operating Expense The components of other operating expense were as follows: TABLE 87: OTHER OPERATING EXPENSE
Other expenses in 2016 included a charge in connection with an agreement to settle certain securities lending litigation of $50.0 million and charges related to contractual modifications associated with existing C&IS clients of $18.6 million. |
Income Taxes |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The following table reconciles the total provision for income taxes recorded in the consolidated statements of income with the amounts computed at the statutory federal tax rate for the periods presented below. TABLE 88: INCOME TAXES
The current year includes tax benefits primarily attributable to the reduction in the U.S. corporate income tax rate from 35% to 21% as a result of the Tax Cuts and Jobs Act (TCJA) enacted in the fourth quarter of 2017, a tax benefit recognized in 2018 resulting from a change in accounting method regarding the timing of tax deductions for software-related expenses, and adjustments recorded in the current year associated with the implementation of the TCJA as outlined below. These decreases to the provision for income taxes in the current year were partially offset by the impact of an increase in income before income taxes, tax accounting changes in 2018 brought about by the TCJA including the tax accounting associated with additional non-deductible expenses, and a reduction in the income tax benefit derived from the vesting of restricted stock units and stock option exercises. Additionally, the 2017 provision for income taxes included a net benefit attributable to the implementation of the TCJA of $53.1 million and Federal and State research tax credits of $17.6 million related to the Corporation’s technology spend between 2013 and 2016, each resulting in a reduction of the effective tax rate. The TCJA was enacted on December 22, 2017, and reduced the U.S. federal corporate tax rate from 35% to 21%. It also required companies to pay a mandatory deemed repatriation tax on earnings of foreign subsidiaries that were previously tax deferred. At December 31, 2017, Northern Trust made a reasonable estimate as to the impact of the TCJA. During 2018, Northern Trust completed the related calculations and additional analyses associated with the implementation of the TCJA, resulting in a number of adjustments to the 2018 tax provision as follows: TABLE 89: IMPACT OF TAX CUTS AND JOBS ACT
Adjustments in the above table include a tax benefit of $16.8 million resulting from an adjustment to the Corporation’s 2017 income tax provision for mandatory deemed repatriation with respect to the pre-2018 earnings of its non-US subsidiaries, offset by a $12.7 million net provision associated with the repricing of deferred taxes. For tax years beginning after December 31, 2017, the TCJA introduces new provisions for U.S. taxation of certain global intangible low-taxed income (GILTI). Northern Trust has made the policy election to record any current year tax expense associated with GILTI in the period in which it is incurred. The Corporation files income tax returns in the U.S. federal, various state, and foreign jurisdictions. The Corporation is no longer subject to income tax examinations by U.S. federal authorities before 2013, U.S. state or local tax authorities for years before 2011, or non-U.S. tax authorities for years before 2010. Included in other liabilities within the consolidated balance sheets at December 31, 2018 and 2017 were $21.9 million and $27.7 million of unrecognized tax benefits, respectively. If recognized, 2018 and 2017 net income would have increased by $19.8 million and $21.7 million, respectively, resulting in a decrease of those years’ effective income tax rates. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: TABLE 90: UNRECOGNIZED TAX BENEFITS
Unrecognized tax benefits had net decreases of $5.8 million, resulting in a remaining balance of $21.9 million at December 31, 2018, compared to net increases of $10.5 million resulting in a remaining balance of $27.7 million at December 31, 2017. It is possible that changes in the amount of unrecognized tax benefits could occur in the next 12 months due to changes in judgment related to recognition or measurement, settlements with taxing authorities, or expiration of statute of limitations. Management does not believe that future changes, if any, would have a material effect on the consolidated financial position or liquidity of Northern Trust, although they could have a material effect on operating results for a particular period. A provision for interest and penalties of $0.3 million, net of tax, was included in the provision for income taxes for the year ended December 31, 2018. This compares to a provision for interest and penalties of $0.1 million, net of tax, for the year ended December 31, 2017. As of December 31, 2018 and 2017, the liability for the potential payment of interest and penalties totaled $9.2 million and $10.3 million, net of tax, respectively. The components of the consolidated provision for income taxes for each of the three years ended December 31 are as follows: TABLE 91: PROVISION FOR INCOME TAXES
In addition to the amounts shown above, tax charges and benefits have been recorded directly to stockholders’ equity for the following: TABLE 92: TAX CHARGES AND BENEFITS RECORDED DIRECTLY TO STOCKHOLDERS’ EQUITY
Deferred taxes result from temporary differences between the amounts reported in the consolidated financial statements and the tax bases of assets and liabilities. As a result of the TCJA being enacted on December 22, 2017, deferred tax assets and liabilities as of December 31, 2018 and 2017 were measured at 21%, compared to 35% as of December 31, 2016, based on the federal tax rate at which they are expected to reverse in the future. Deferred tax assets and liabilities have been computed as follows: TABLE 93: NET DEFERRED TAX LIABILITIES
Northern Trust had various state net operating loss carryforwards as of December 31, 2018 and 2017. The income tax benefits associated with these loss carryforwards were approximately $0.3 million as of December 31, 2018 and $1.1 million as of December 31, 2017. A valuation allowance of $0.3 million was recorded at December 31, 2018 and $1.1 million as of December 31, 2017, as management believes the net operating losses will not be fully realized. No valuation allowance related to the remaining deferred tax assets was recorded at December 31, 2018 and 2017, as management believes it is more likely than not that the deferred tax assets will be fully realized. |
Employee Benefits |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefits | Employee Benefits The Corporation and certain of its subsidiaries provide various benefit programs, including defined benefit pension, postretirement health care, and defined contribution plans. A description of each major plan and related disclosures are provided below. Pension. A noncontributory qualified defined benefit pension plan covers substantially all U.S. employees of Northern Trust. Employees of certain European subsidiaries retain benefits in local defined benefit plans, although those plans are closed to new participants and to future benefit accruals. Employees continue to accrue benefits under the Swiss pension plan, which is accounted for as a defined benefit plan under U.S. GAAP. Northern Trust also maintains a noncontributory supplemental pension plan for participants whose retirement benefit payments under the U.S. plan are expected to exceed the limits imposed by federal tax law. Northern Trust has a nonqualified trust, referred to as a “Rabbi” Trust, used to hold assets designated for the funding of benefits in excess of those permitted in certain of its qualified retirement plans. This arrangement offers participants a degree of assurance for payment of benefits in excess of those permitted in the related qualified plans. As the “Rabbi” Trust assets remain subject to the claims of creditors and are not the property of the employees, they are accounted for as corporate assets and are included in other assets in the consolidated balance sheets. Total assets in the “Rabbi” Trust related to the nonqualified pension plan at December 31, 2018 and 2017 amounted to $129.9 million and $116.7 million, respectively. Contributions of $21.9 million and $11.5 million were made to the “Rabbi” Trust in 2018 and 2017, respectively. The following tables set forth the status, amounts included in AOCI, and net periodic pension expense of the U.S. plan, non-U.S. plans, and supplemental plan for 2018, 2017, and 2016. Prior service costs are being amortized on a straight-line basis over 11 years for the U.S. plan and 9 years for the supplemental plan. TABLE 94: EMPLOYEE BENEFIT PLAN STATUS
TABLE 95: AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME
TABLE 96: NET PERIODIC PENSION EXPENSE
The components of net periodic pension expense are included in the line item “Employee Benefits” expense in the consolidated statements of income. TABLE 97: CHANGE IN PROJECTED BENEFIT OBLIGATION
Actuarial gains of $131.4 million in 2018 were primarily caused by increases in discount rates, while actuarial losses of $164.5 million in 2017 were mostly a result of decreases in discount rates and an update to the U.S. IRS lump sum mortality assumption to reflect longer life expectancies. TABLE 98: ESTIMATED FUTURE BENEFIT PAYMENTS
TABLE 99: CHANGE IN PLAN ASSETS
The minimum required and maximum remaining deductible contributions for the U.S. qualified plan in 2019 are estimated to be zero and $270.0 million, respectively. During 2017, the investment strategy employed for Northern Trust's U.S. pension plan was changed to utilize a dynamic glide path based on a set of pre-approved asset allocations to return-seeking and liability-hedging assets that vary in accordance with the plan's projected benefit obligation funded ratio. In general, as the plan’s projected benefit obligation funded ratio increases beyond an established threshold, the plan’s allocation to liability-hedging assets will increase while the allocation to return-seeking assets will decrease. Conversely, a decrease in the plan’s projected benefit obligation funded ratio beyond an established threshold will result in a decrease in the plan’s allocation to liability-hedging assets and increase in the allocation to return-seeking assets. Liability-hedging assets include U.S. long credit bonds, U.S. long government bonds, and a custom completion strategy used to hedge more closely the liability duration of projected plan benefits with bond duration across all durations. Return-seeking assets include: U.S. equity, international developed equity, emerging markets equity, real estate, high yield bonds, global listed infrastructure, emerging market debt, private equity and hedge funds. Northern Trust utilizes an asset/liability methodology to determine the investment policies that will best meet its short and long-term objectives. The process is performed by modeling current and alternative strategies for asset allocation, funding policy and actuarial methods and assumptions. The financial modeling uses projections of expected capital market returns and expected volatility of those returns to determine alternative asset mixes having the greatest probability of meeting the plan’s investment objectives. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The intent of this strategy is to minimize plan expenses by outperforming growth in plan liabilities over the long run. The target allocation of plan assets since May 2017 is 45% U.S. long credit bonds, 10% U.S. long government bonds, 10% custom completion, 8% U.S. equities, 5% international developed equity, 3% emerging markets equity, 3% real estate, 4% high yield bonds, 3% global listed infrastructure, 4% emerging market debt, 2% private equity, and 3% hedge funds. Equity investments include common stocks that are listed on an exchange and investments in commingled funds that invest primarily in publicly traded equities. Equity investments are diversified across U.S. and non-U.S. stocks and divided by investment style and market capitalization. Fixed income securities held include U.S. treasury securities and investments in commingled funds that invest in a diversified blend of longer duration fixed income securities; the custom completion strategy uses U.S. treasury securities and interest rate futures (or similar instruments) to align more closely with the target hedge ratio across maturities. Diversifying investments, including private equity, hedge funds, listed real estate, emerging market debt, high yield bonds, and global listed infrastructure, are used judiciously to enhance long-term returns while improving portfolio diversification. Private equity assets consist primarily of investments in limited partnerships that invest in individual companies in the form of non-public equity or non-public debt positions. Direct or co-investment in non-public stock by the plan is prohibited. The plan’s private equity investments are limited to 2% of the total limited partnership and the maximum allowable loss cannot exceed the commitment amount. The plan holds two investments in hedge funds of funds, which invest, either directly or indirectly, in diversified portfolios of funds or other pooled investment vehicles. Investment in listed real estate, high yield bonds, emerging market debt, and global listed infrastructure are designed to provide income and added diversification. Though not a primary strategy for meeting the plan’s objectives, derivatives may be used from time to time, depending on the nature of the asset class to which they relate, to gain market exposure in an efficient and timely manner, to hedge foreign currency exposure or interest rate risk, or to alter the duration of a portfolio. There were four derivatives held by the plan at December 31, 2018. There were four derivatives held by the plan at December 31, 2017. Investment risk is measured and monitored on an ongoing basis through monthly liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews. Standards used to evaluate the plan’s investment manager performance include, but are not limited to, the achievement of objectives, operation within guidelines and policy, and comparison against a relative benchmark. In addition, each manager of the investment funds held by the plan is ranked against a universe of peers and compared to a relative benchmark. Total plan performance analysis includes an analysis of the market environment, asset allocation impact on performance, risk and return relative to other ERISA plans, and manager impacts upon plan performance. The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by Northern Trust for the U.S. qualified plan assets measured at fair value. Level 1 – Quoted, active market prices for identical assets or liabilities. The Plan’s Level 1 investments are comprised of a mutual fund and domestic common stocks. The Plan’s Level 1 investments that are exchange traded are valued at the closing price reported by the respective exchanges on the day of valuation. 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. The Plan’s Level 2 assets are comprised of U.S. government obligations and collective trust funds. The investments in collective trust funds fair values are calculated on a scheduled basis using the closing market prices and accruals of securities in the funds (total value of the funds) divided by the number of fund shares currently issued and outstanding. Redemptions of the collective trust funds occur by contract at the respective fund’s redemption date NAV. Level 3 – Valuation techniques in which one or more significant inputs are unobservable in the marketplace. The Plan’s Level 3 assets are comprised of private equity and hedge funds which invest in underlying groups of investment funds or other pooled investment vehicles that are selected by the respective funds’ investment managers. The investment funds and the underlying investments held by these investment funds are valued at fair value. In determining the fair value of the underlying investments of each fund, the fund’s investment manager or general partner takes into account the estimated value reported by the underlying funds as well as any other considerations that may, in their judgment, increase or decrease such estimated value. While Northern Trust believes its valuation methods for plan assets are appropriate and consistent with other market participants, the use of different methodologies or assumptions, particularly as applied to Level 3 assets, could have a material effect on the computation of the estimated fair values. The following table presents the fair values of Northern Trust’s U.S. pension plan assets, by major asset category, and their level within the fair value hierarchy defined by GAAP as of December 31, 2018 and 2017. TABLE 100: FAIR VALUE OF U.S. PENSION PLAN ASSETS
The following table presents the changes in Level 3 assets for the years ended December 31, 2018 and 2017. TABLE 101: CHANGE IN LEVEL 3 ASSETS
Note: The return on plan assets represents the change in the unrealized gain (loss) on assets still held at December 31. A building block approach is employed for Northern Trust’s U.S. pension plan in determining the long-term rate of return for plan assets. Historical markets and long-term historical relationships between equities, fixed income and other asset classes are studied using the widely accepted capital market principle that assets with higher volatility generate a greater return over the long-run. Current market factors such as inflation expectations and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio rate of return is established with consideration given to diversification and rebalancing. The rate is reviewed against peer data and historical returns to verify the return is reasonable and appropriate. Based on this approach and the plan’s target asset allocation, the expected long-term rate of return on assets as of the plan’s December 31, 2018, measurement date was set at 6.00%. Postretirement Health Care. Northern Trust maintains an unfunded postretirement health care plan under which those employees who retire at age 55 or older under the provisions of the U.S. defined benefit plan and had attained 15 years of service as of December 31, 2011 may be eligible for subsidized postretirement health care coverage. The provisions of this plan may be changed further at the discretion of Northern Trust, which also reserves the right to terminate these benefits at any time. The following tables set forth the postretirement health care plan status and amounts included in AOCI at December 31, the net periodic postretirement benefit cost of the plan for 2018 and 2017, and the change in the accumulated postretirement benefit obligation during 2018 and 2017. TABLE 102: POSTRETIREMENT HEALTH CARE PLAN STATUS
TABLE 103: AMOUNTS INCLUDED IN ACCUMULATED OTHER COMPREHENSIVE INCOME
TABLE 104: NET PERIODIC POSTRETIREMENT (BENEFIT) EXPENSE
TABLE 105: CHANGE IN ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION
Northern Trust uses the aggregate RP-2014 mortality table with adjustment from 2014 to 2006. Northern Trust’s pension obligations reflect proposed future improvement under scale MP-2018, released by the Society of Actuaries in October 2018. This assumption was updated at December 31, 2018 from improvement scale MP-2017. TABLE 106: ESTIMATED FUTURE BENEFIT PAYMENTS
The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 4.47% at December 31, 2018, and 3.79% at December 31, 2017. For measurement purposes, a 6.5% annual increase in the cost of pre-age 65 medical benefits and post-age 65 medical benefits were assumed for 2018. For drug claims, an 8.50% annual increase in cost was assumed for 2018. These rates are both assumed to gradually decrease until they reach 4.5% in 2026 and 2027, respectively. The health care cost trend rate assumption has an effect on the amounts reported. Defined Contribution Plans. The Corporation and its subsidiaries maintain various defined contribution plans covering substantially all employees. The Corporation’s contribution to the U.S. plan and to certain European-based plans includes a matching component. The expense associated with defined contribution plans is charged to employee benefits and totaled $54.4 million in 2018, $53.4 million in 2017, and $50.0 million in 2016. |
Share-Based Compensation Plans |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Plans | Share-Based Compensation Plans Northern Trust recognizes expense for the grant-date fair value of share-based compensation granted to employees and non-employee directors. Total compensation expense for share-based payment arrangements to employees and the associated tax impacts were as follows for the periods presented. TABLE 107: TOTAL COMPENSATION EXPENSE FOR SHARE-BASED PAYMENT ARRANGEMENTS TO EMPLOYEES
As of December 31, 2018, there was $84.5 million of unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Corporation’s share-based compensation plans. That cost is expected to be recognized as expense over a weighted-average period of approximately two years. The Northern Trust Corporation 2017 Long-Term Incentive Plan (2017 Plan) is administered by the Compensation and Benefits Committee (Committee) of the Board of Directors. All employees of the Corporation and its subsidiaries and all directors of the Corporation are eligible to receive awards under the 2017 Plan. The 2017 Plan provides for the grant of nonqualified and incentive stock options; tandem and free-standing stock appreciation rights; stock awards in the form of restricted stock, restricted stock units and other stock awards; and performance awards. Beginning with grants made on February 21, 2017 under the Northern Trust Corporation 2012 Stock Plan (2012 Plan), 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 employee meets applicable age and service requirements upon separation from service. Grants are outstanding under the 2017 Plan, the 2012 Plan, and the Amended and Restated Northern Trust Corporation 2002 Stock Plan (2002 Plan). The 2017 Plan was approved by stockholders in April 2017. Upon approval of the 2017 Plan, no additional shares have been or will be granted under the 2012 Plan or 2002 Plan. The total number of shares of the Corporation’s common stock authorized for issuance under the 2017 Plan is 20,000,000 plus shares forfeited under the 2012 Plan and 2002 Plan. As of December 31, 2018, shares available for future grant under the 2017 Plan, including shares forfeited under the 2012 Plan and 2002 Plan, totaled 19,314,935. The following describes Northern Trust’s share-based payment arrangements and applies to awards under the 2017 Plan, 2012 Plan and the 2002 Plan, as applicable. Stock Options. Stock options consist of options to purchase common stock at prices not less than 100% of the fair value thereof on the date the options are granted. Options have a maximum 10 year life and generally vest and become exercisable in 1 year to 4 years after the date of grant. All options terminate at such time as determined by the Committee and as provided in the terms and conditions of the respective option grants. There were no options granted during the year ended December 31, 2018. The weighted-average assumptions used for options granted during the years ended December 31, 2017 and 2016 are as follows: TABLE 108: WEIGHTED-AVERAGE ASSUMPTIONS USED FOR OPTIONS GRANTED
The expected term of options represents the period of time options granted are expected to be outstanding based primarily on the historical exercise behavior attributable to previous option grants. Dividend yield represents the estimated yield from dividends paid on the Corporation’s common stock over the expected term of the options. Expected volatility is determined based on a combination of the historical volatility of Northern Trust’s stock price and the implied volatility of traded options on Northern Trust stock. The risk-free interest rate is based on the U.S. Treasury yield curve at the time of grant for a period equal to the expected term of the options granted. The following table provides information about stock options granted, vested, and exercised in the years ended December 31, 2018, 2017, and 2016. TABLE 109: STOCK OPTIONS GRANTED, VESTED, AND EXERCISED
The following is a summary of changes in nonvested stock options for the year ended December 31, 2018. TABLE 110: CHANGES IN NONVESTED STOCK OPTIONS
A summary of the status of stock options at December 31, 2018, and changes during the year then ended, are presented in the table below. TABLE 111: STATUS OF STOCK OPTIONS AND CHANGES
Restricted Stock Unit Awards. Restricted stock unit awards may be granted to participants which entitle them to receive a payment in the Corporation’s common stock or cash and such other terms and conditions as the Committee deems appropriate. Each restricted stock unit provides the recipient the opportunity to receive one share of stock for each stock unit that vests. The restricted stock units granted in 2018 predominately vest at a rate equal to 25% each year for four years on the anniversary of the grant. Restricted stock unit grants totaled 815,314, 863,308, and 1,301,693, with weighted average grant-date fair values of $103.74, $88.19, and $59.17 per share, for the years ended December 31, 2018, 2017, and 2016, respectively. The total fair value of restricted stock units vested during the years ended December 31, 2018, 2017, and 2016, was $66.4 million, $88.7 million, and $52.3 million, respectively. A summary of the status of outstanding restricted stock unit awards at December 31, 2018, and changes during the year then ended, is presented in the table below. TABLE 112: OUTSTANDING RESTRICTED STOCK UNIT AWARDS
The following is a summary of nonvested restricted stock unit awards at December 31, 2018, and changes during the year then ended. TABLE 113: NONVESTED RESTRICTED STOCK UNIT AWARDS
Performance Stock Units. Each performance stock unit provides the recipient the opportunity to receive one share of the Corporation’s common stock for each stock unit that vests over a three-year performance period, subject to satisfaction of specified performance targets that are a function of return on equity and continued employment until the end of the vesting period. For performance stock units outstanding as of December 31, 2018, and granted in 2016, the number of such units that may vest ranges from 0% to 125% of the original award granted based on the attainment of the applicable three-year average annual return on equity target. For performance stock units outstanding at December 31, 2018, and granted in 2017 or 2018, the number of such units that may vest ranges from 0% to 150% of the original award granted based on the attainment of the applicable three-year average annual return on equity target. Distribution of the shares is then made after vesting. Performance stock unit grants totaled 242,232, 231,269, and 354,606 for the years ended December 31, 2018, 2017, and 2016, respectively, with weighted average grant-date fair values of $104.72, $69.80, and $62.67. Performance stock units outstanding at target level performance totaled 797,531, 817,432, and 859,502 at December 31, 2018, 2017, and 2016, respectively. Performance stock units had aggregate intrinsic values of $66.7 million, $81.7 million, and $76.5 million, and weighted average remaining vesting terms of 1.0 year, 1.1 years, and 1.5 years, at December 31, 2018, 2017, and 2016, respectively. Non-employee Director Stock Awards. Stock units with total values of $1.2 million (11,363 units), $1.2 million (13,354 units), and $1.3 million (18,001 units) were granted to non-employee directors in 2018, 2017, and 2016, respectively, which vest or vested on the date of the annual meeting of the Corporation’s stockholders in the following years. Total expense recognized on these grants was $1.3 million, $1.3 million, and $1.3 million in 2018, 2017, and 2016, respectively. Stock units granted to non-employee directors do not have voting rights. Each stock unit entitles a director to one share of common stock at vesting, unless a director elects to defer receipt of the shares. Directors may elect to defer the payment of their annual stock unit grant and cash-based compensation until termination of services as director. Deferred cash compensation is converted into stock units representing shares of common stock of the Corporation. Distributions of deferred stock units are made in stock. For compensation deferred prior to January 1, 2018, distributions of the stock unit accounts that relate to cash-based compensation are made in cash based on the fair value of the stock units at the time of distribution. For compensation deferred on or after January 1, 2018, distributions of the stock unit accounts that relate to cash-based compensation are made in stock. |
Cash-Based Compensation Plans |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Compensation Related Costs [Abstract] | |
Cash-Based Compensation Plans | Cash-Based Compensation Plans Various incentive plans provide for cash incentives and bonuses to selected employees based upon accomplishment of corporate net income objectives, goals of the reporting segments and support functions, and individual performance. The provision for awards under these plans is charged to compensation expense and totaled $326.5 million in 2018, $289.8 million in 2017, and $250.7 million in 2016. |
Contingent Liabilities |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities Legal Proceedings. In the normal course of business, the Corporation and its subsidiaries are routinely defendants in or parties to pending and threatened legal actions, and are subject to regulatory examinations, information-gathering requests, investigations, and proceedings, both formal and informal. In certain legal actions, claims for substantial monetary damages are asserted. In regulatory matters, claims for disgorgement, restitution, penalties and/or other remedial actions or sanctions may be sought. Based on current knowledge, after consultation with legal counsel and after taking into account current accruals, management does not believe that losses, fines or penalties, if any, arising from pending litigation or threatened legal actions or regulatory matters either individually or in the aggregate, after giving effect to applicable reserves and insurance coverage 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.” The outcome of litigation and regulatory matters is inherently difficult to predict and/or the range of loss often cannot be reasonably estimated, particularly for 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 December 31, 2018, the Corporation has estimated the range of reasonably possible loss for these matters to be from zero to approximately $20 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 estimated range of reasonably possible loss discussed above. In 2015 Northern Trust Fiduciary Services (Guernsey) Limited (NTFS), an indirect subsidiary of the Corporation, was charged by a French investigating magistrate judge with complicity in estate tax fraud in connection with the administration of two trusts for which it serves as trustee. Charges also were brought against a number of other persons and entities related to this matter. In 2017 a 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 appealed the court decision and in June 2018 a French appellate court issued its opinion on the matter, acquitting all persons and entities charged, including NTFS. The Public Prosecutor’s Office of France has appealed the appellate court’s decision to the Cour de Cassation, the highest court in France. As trustee, NTFS provided no tax advice and had no involvement in the preparation or filing of the challenged estate tax filings. In the first quarter of 2018, Northern Trust received a document request from the U.S. Commodity Futures Trading Commission (CFTC), Division of Enforcement, seeking the production of documents related to the Bank’s activities as a swap dealer provisionally registered with the CFTC. Northern Trust has responded to the CFTC’s document request. In addition, the National Futures Association (NFA) provided the Bank with a letter dated April 30, 2018, summarizing certain findings related to the Bank’s swap dealer compliance program identified during a then-recently completed examination. Northern Trust is addressing the findings identified by the NFA in its examination and cooperating with both the NFA and the CFTC. 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. On June 28, 2018, Visa deposited an additional $600 million into the escrow account previously established with respect to the covered litigation. As a result, the rate at which Visa Class B common shares will convert into Visa Class A common shares was reduced. In September 2018, Visa announced that a proposed class settlement agreement covering damage claims but not injunctive relief claims regarding the covered litigation was reached, with Visa’s share of the proposed settlement amount to be satisfied through funds previously deposited with the court and the $600 million placed into escrow in June 2018. The agreement has been preliminarily approved by the district court, and, if final approval is granted, objecting parties may appeal. Further, individual merchants may opt out of the proposed settlement and pursue claims separately. For these and other reasons, the ultimate resolution of the covered litigation, the timing for removal of the selling restrictions on the Visa Class B common shares and the rate at which such shares will ultimately convert into Visa Class A 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 Visa Class B common shares, which are recorded at their original cost basis of zero as of both December 31, 2018 and 2017. Clearing and Settlement Organizations. The Bank is a participating member of various cash, securities, and foreign exchange clearing and settlement organizations. It participates in these organizations on behalf of its clients and on its own behalf as a result of its own activities. A wide variety of cash and securities transactions are settled through these organizations, including those involving obligations of states and political subdivisions, asset-backed securities, commercial paper, dollar placements, and securities issued by the Government National Mortgage Association. As a result of its participation in cash, securities, and foreign exchange clearing and settlement organizations, the Bank could be responsible for a pro rata share of certain credit-related losses arising out of the clearing activities. The method in which such losses would be shared by the clearing members is stipulated in each clearing organization’s membership agreement. Credit exposure related to these agreements varies from day to day, primarily as a result of fluctuations in the volume of transactions cleared through the organizations. At December 31, 2018 and 2017, we have not recorded any material liabilities under these arrangements. Controls related to these clearing transactions are closely monitored by management to protect the assets of Northern Trust and its clients. |
Derivative Financial Instruments |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 may 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. 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 and risk management purposes. 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 debt 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 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. The following table shows the notional and fair values of all derivative financial instruments as of December 31, 2018 and December 31, 2017. TABLE 114: NOTIONAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS
(1) Derivative assets are reported in other assets on the consolidated balance sheets. (2) Derivative liabilities are reported in other liabilities on the consolidated balance sheets. (3) This line includes swaps related to sales of certain Visa Class B common shares and total return swap contracts. (4) See further detail in Note 27 - Offsetting of Assets and Liabilities. 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, net of any collateral received, which is significantly less than the notional amount. Hedging Derivative Instruments Designated Under GAAP. 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 (see below section “Derivative Instruments Not Designated as Hedging under GAAP”). Fair Value Hedges. 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. Cash Flow Hedges. 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 were no material gains or losses reclassified into earnings during the years ended December 31, 2018, 2017, and 2016 as a result of the discontinuance of forecasted transactions that were no longer probable of occurring. It is estimated that net gains of $3.1 million and $1.4 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 debt securities, respectively. It is estimated that a net loss of $1.2 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 debt securities. As of December 31, 2018, 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. There was no ineffectiveness recognized in earnings for cash flow hedges during the years ended December 31, 2017 and 2016. The following table provides fair value and cash flow hedge derivative gains and losses recognized in income during the years ended December 31, 2018, 2017 and 2016. TABLE 115: LOCATION AND AMOUNT OF FAIR VALUE AND CASH FLOW HEDGE DERIVATIVE GAINS AND LOSSES RECORDED IN INCOME
The following table provides the impact of fair value hedge accounting on the carrying value of the designated hedged items as of December 31, 2018. TABLE 116: HEDGED ITEMS IN FAIR VALUE HEDGES
(1) There are no amounts related to discontinued hedging relationships. (2) Carrying value represents amortized cost. Net Investment Hedges. Certain foreign exchange contracts and qualifying non-derivative 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. For net investment hedges, there was no ineffectiveness recorded for these hedges during the years ended December 31, 2017 and 2016. Net investment hedge gains of $173.0 million and losses of $223.2 million were recognized in AOCI related to foreign exchange contracts for the years ended December 31, 2018 and December 31, 2017, respectively. Derivative Instruments Not Designated as Hedging under GAAP. Northern Trust’s derivative instruments that are not designated as hedging under GAAP include derivatives for purposes of client-related and trading activities, as well as other risk management purposes. 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. Non-designated risk management derivatives include foreign exchange contracts 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 the sale of certain Visa Class B common shares were entered into which retain the risks associated with the ultimate conversion of the Visa Class B common shares into shares of Visa Class A common shares. Credit default swaps were entered into to manage the 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 provides the location and amount of gains and losses recorded in the consolidated statements of income for the years ended December 31, 2018, 2017, and 2016 for derivative instruments not designated as hedges under GAAP. TABLE 117: LOCATION AND AMOUNT OF GAINS AND LOSSES RECORDED IN INCOME FOR DERIVATIVES NOT DESIGNATED AS HEDGING UNDER GAAP
(1) This line includes swaps related to the sale of certain Visa Class B common shares, credit default swap contracts, and total return swap contracts. |
Offsetting of Assets and Liabilities |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting of Assets and Liabilities | Offsetting of Assets and Liabilities The following table provides information regarding the offsetting of derivative assets and of securities purchased under agreements to resell within the consolidated balance sheets as of December 31, 2018 and 2017. TABLE 118: OFFSETTING OF DERIVATIVE ASSETS AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL
(1) Derivative assets are reported in other assets in the consolidated balance sheets. Other assets (excluding derivative assets) totaled $4.6 billion and $3.9 billion as of December 31, 2018 and 2017, 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. Federal funds sold totaled $134.0 million and $21.0 million as of December 31, 2018 and 2017, 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 December 31, 2018 and 2017. The following table provides information regarding the offsetting of derivative liabilities and of securities sold under agreements to repurchase within the consolidated balance sheets as of December 31, 2018 and 2017. TABLE 119: OFFSETTING OF DERIVATIVE LIABILITIES AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
(1) Derivative liabilities are reported in other liabilities in the consolidated balance sheets. Other liabilities (excluding derivative liabilities) totaled $2.5 billion and $2.4 billion as of December 31, 2018 and 2017, 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 December 31, 2018 and 2017. 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. However, Northern Trust’s repurchase agreements and reverse repurchase agreements do not meet the requirements to net. 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. 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 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 credit spreads 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. Additional cash collateral received from and deposited with derivative counterparties totaling $27.6 million and $91.5 million, respectively, as of December 31, 2018, and $67.0 million and $143.1 million, respectively, as of December 31, 2017, was not offset against derivative assets and liabilities on the consolidated balance sheets as the amounts exceeded the net derivative positions with those counterparties. 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 $324.1 million and $223.7 million at December 31, 2018 and 2017, respectively. Cash collateral amounts deposited with derivative counterparties on those dates included $316.5 million and $35.8 million, respectively, posted against these liabilities, resulting in a net maximum amount of termination payments that could have been required at December 31, 2018 and 2017 of $7.6 million and $187.9 million, respectively. Accelerated settlement of these liabilities would not have a material effect on the consolidated financial position or liquidity of Northern Trust. |
Off-Balance-Sheet Financial Instruments |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Off-Balance-Sheet Financial Instruments | Off-Balance-Sheet Financial Instruments Commitments and Letters of Credit. 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. The contractual amounts of these instruments represent the potential credit exposure should the instrument be fully drawn upon and the client default. To control the credit risk associated with entering into commitments and issuing letters of credit, Northern Trust subjects such activities to the same credit quality and monitoring controls as its lending activities. Commitments and letters of credit consist of the following: 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. 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. Commercial Letters of Credit are instruments issued by Northern Trust on behalf of its clients that authorize a third party (the beneficiary) to draw drafts up to a stipulated amount under the specified terms and conditions of the agreement and other similar instruments. Commercial letters of credit are issued primarily to facilitate international trade. The following table shows the contractual amounts of commitments and letters of credit. TABLE 120: COMMITMENTS AND LETTERS OF CREDIT
(1)These amounts exclude $242.3 million and $385.5 million of commitments participated to others at December 31, 2018 and 2017, respectively. (2)These amounts include $72.3 million and $92.5 million of standby letters of credit secured by cash deposits or participated to others as of December 31, 2018 and 2017, respectively. The weighted average maturity of standby letters of credit was 23 months at December 31, 2018 and 22 months at December 31, 2017. Other Off-Balance-Sheet Financial Instruments. 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 Capital Markets Credit 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 December 31, 2018 and 2017 subject to indemnification was $128.9 billion and $143.6 billion, respectively. Because of the credit quality of the borrowers and the requirement to fully collateralize securities borrowed, management believes that the exposure to credit loss from this activity is not significant and no liability was recorded related to these indemnifications. |
Variable Interest Entities |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Variable Interest Entities (VIEs) are defined within GAAP as entities which 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 and 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 the leveraged lease trust VIEs given it lacks the power to direct the activities that most significantly impact the economic performance of the leveraged lease trust VIEs. Northern Trust’s maximum exposure to loss as a result of its involvement with leveraged lease trust VIEs is limited to the carrying amounts of its leveraged lease investments. As of December 31, 2018 and 2017, the carrying amounts of these investments, which are included in loans and leases in the consolidated balance sheets, were $56.8 million and $131.0 million, respectively. Northern Trust’s funding requirements relative to the leveraged lease trust VIEs are limited to its invested capital. Northern Trust has no other liquidity arrangements or obligations to purchase assets of the leveraged lease trust 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 in which Northern Trust invests as a limited partner/investor member through equity contributions. The economic performance of the community development projects, some of 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 project VIEs 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 community development project VIEs. Northern Trust’s maximum exposure to loss as a result of its involvement with community development projects is limited to the carrying amounts of its investments, including any undrawn commitments. As of December 31, 2018 and 2017, the carrying amounts of these investments in community development projects that generate tax credits, included in other assets in the consolidated balance sheets, totaled $602.4 million and $415.3 million, respectively, of which $549.8 million and $386.1 million are VIEs as of December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017, liabilities related to unfunded commitments on investments in tax credit community development projects, included in other liabilities in the consolidated balance sheets, totaled $321.0 million and $241.1 million, respectively, of which $279.5 million and $215.2 million related to undrawn commitments on VIEs as of December 31, 2018 and 2017, 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. Tax credits and other tax benefits attributable to community development projects totaled $63.0 million and $57.9 million, respectively, as of December 31, 2018 and 2017. 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. For the year ended December 31, 2018, Northern Trust did not waive any money market mutual fund fees. For the year ended December 31, 2017, Northern Trust voluntarily waived $1.0 million of money market mutual fund fees. Northern Trust does not have any contractual obligations 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. Periodically, Northern Trust makes seed capital investments to certain funds. As of December 31, 2018, Northern Trust had $29.2 million of investments valued using net asset value per share and included in other assets and had no unfunded commitments related to seed capital investments. As of December 31, 2017, Northern Trust had $10.0 million of investments valued using net asset value per share and included in other assets and had no unfunded commitments related to seed capital investments. |
Pledged and Restricted Assets |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Financial Instruments Owned and Pledged as Collateral [Abstract] | |
Pledged and Restricted Assets | Pledged and Restricted 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, for potential Federal Reserve Bank discount window borrowings, and for derivative contracts. As of December 31, 2018, securities and loans totaling $39.6 billion ($30.9 billion of government-sponsored agency and other securities, $640.4 million of obligations of states and political subdivisions and $8.1 billion of loans) were pledged. This compares to $40.1 billion ($30.8 billion of government-sponsored agency and other securities, $684.3 million of obligations of states and political subdivisions and $8.6 billion of loans) at December 31, 2017. Collateral required for these purposes totaled $9.3 billion and $8.9 billion at December 31, 2018 and December 31, 2017, respectively. Included in the total pledged assets are available for sale debt securities with a total fair value of $151.5 million and $833.4 million, as of December 31, 2018 and December 31, 2017, respectively, which were pledged as collateral for agreements to repurchase securities sold transactions, and available for sale debt securities with a total fair value of $29.0 million and $39.9 million, as of December 31, 2018 and December 31, 2017, respectively, which were pledged as collateral for derivative contracts. The secured parties to these transactions have the right to repledge or sell the securities as it relates to $151.5 million and $833.4 million of the pledged collateral as of December 31, 2018 and December 31, 2017, respectively. Northern Trust is not permitted, by contract or custom, to repledge or sell securities accepted as collateral under certain repurchase agreements. The total fair value of securities accepted as collateral was $605.0 million as of December 31, 2018 and $1.2 billion as of December 31, 2017. Northern Trust has the right to repledge or sell securities accepted as collateral under certain repurchase agreements. The fair value of these securities accepted as collateral was $426.2 million as of December 31, 2018 and $78.3 million as of December 31, 2017. There was no repledged or sold collateral as of December 31, 2018 or December 31, 2017. Northern Trust has the right to repledge or sell securities accepted as collateral under derivative contracts. The total fair value of securities accepted as collateral was $15.3 million as of December 31, 2018. There were $4.6 million securities accepted as collateral under derivative contracts as of December 31, 2017. Deposits maintained to meet Federal Reserve Bank reserve requirements averaged $1.7 billion in 2018 as compared to $3.1 billion in 2017. |
Restrictions on Subsidiary Dividends and Loans or Advances |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Restrictions on Subsidiary Dividends and Loans or Advances | Restrictions on Subsidiary Dividends and Loans or Advances Various federal and state statutory provisions limit the amount of dividends the Bank can pay to the Corporation without regulatory approval. Approval of the Federal Reserve Board is required for payment of any dividend by a state-chartered bank that is a member of the Federal Reserve System if the total of all dividends declared by the bank in any calendar year would exceed the total of its retained net income (as defined by regulatory agencies) for that year combined with its retained net income for the preceding two years. In addition, a state member bank may not pay a dividend in an amount greater than its “undivided profits,” as defined, without regulatory and stockholder approval. Under Illinois law, an Illinois state bank, prior to paying a dividend, must carry over to surplus at least one-tenth of its net profits since the date of the declaration of the last preceding dividend, until the bank’s surplus is equal to its capital. In addition, an Illinois state bank may not pay any dividend in an amount greater than its net profits then on hand, after deduction of losses and bad debts (defined as debts due to a state bank on which interest is past due and unpaid for a period of six months or more, unless the same are well secured and in the process of collection). The Bank is also prohibited under federal law from paying any dividends if the Bank is undercapitalized or if the payment of the dividends would cause the Bank to become undercapitalized. In addition, the federal regulatory agencies are authorized to prohibit a bank or bank holding company from engaging in an unsafe or unsound banking practice. The payment of dividends could, depending on the financial condition of the Bank, be deemed to constitute an unsafe or unsound practice. The Dodd-Frank Wall Street Reform and Consumer Protection Act and Basel III impose additional restrictions on the ability of banking institutions to pay dividends (e.g., the Corporation must include proposed dividends in the capital plan that it submits to the Federal Reserve Board and such dividends may only be declared if the Federal Reserve Board does not object to the Corporation’s capital plan). Under federal law, financial transactions by the Bank, the Corporation’s insured banking subsidiary, with the Corporation and its affiliates that are in the form of loans or extensions of credit, investments, guarantees, derivative transactions, repurchase agreements, securities lending transactions or purchases of assets, are restricted. Transfers of this kind to the Corporation or a nonbanking subsidiary by the Bank are limited to 10% of the Bank’s capital and surplus with respect to any single affiliate, and to 20% of the Bank’s capital and surplus with all affiliates in the aggregate, and are also subject to certain collateral requirements (in the case of credit transactions) and other restrictions on covered transactions. These transactions, as well as other transactions between the Bank and the Corporation or its affiliates, also must be on terms substantially the same as, or at least as favorable as, those prevailing at the time for comparable transactions with non-affiliated companies or, in the absence of comparable transactions, on terms, or under circumstances, including credit standards, that would be offered to, or would apply to, non-affiliated companies. Other state and federal laws may limit the transfer of funds by the Corporation’s banking subsidiaries to the Corporation and certain of its affiliates. |
Reporting Segments and Related Information |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reporting Segments and Related Information | Reporting Segments and Related Information Segment Information. Northern Trust is organized around its two client-focused reporting segments: C&IS and Wealth Management. Asset management and related services are provided to C&IS and Wealth Management clients primarily by the Asset Management business. The revenue and expenses of Asset Management and certain other support functions are allocated fully to C&IS and Wealth Management. Income and expense associated with the Corporation’s and the Bank’s wholesale funding activities and investment portfolios, as well as certain corporate-based expense, executive level compensation and nonrecurring items are not allocated to C&IS and Wealth Management, and are reported in Northern Trust’s third reporting segment, Treasury and Other, in the tables below. C&IS and Wealth Management results are presented to promote a greater understanding of their financial performance. The information, presented on an internal management-reporting basis as opposed to GAAP which is used for consolidated financial reporting purposes, derives from internal accounting systems that support Northern Trust’s strategic objectives and management structure. The accounting policies used for management reporting are consistent with those described in Note 1, “Summary of Significant Accounting Policies.” The following tables show the earnings contribution of Northern Trust’s reporting segments for the years ended December 31, 2018, 2017, and 2016. TABLE 121: CORPORATE AND INSTITUTIONAL SERVICES RESULTS OF OPERATIONS
Note: Stated on an FTE basis. TABLE 122: WEALTH MANAGEMENT RESULTS OF OPERATIONS
Note: Stated on an FTE basis. TABLE 123: TREASURY AND OTHER RESULTS OF OPERATIONS
Note: Stated on an FTE basis. TABLE 124: CONSOLIDATED FINANCIAL INFORMATION
Note: Stated on an FTE basis. The consolidated figures include $41.2 million, $45.8 million, and $25.1 million, of FTE adjustments for 2018, 2017, and 2016, respectively. Further discussion of reporting segment results is provided within the “Reporting Segments and Related Information” section of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Geographic Area Information. Northern Trust’s non-U.S. activities are primarily related to its asset servicing, asset management, foreign exchange, cash management, and commercial banking businesses. The operations of Northern Trust are managed on a reporting segment basis and include components of both U.S and non-U.S. source income and assets. Non-U.S. source income and assets are not separately identified in Northern Trust’s internal management reporting system. However, Northern Trust is required to disclose non-U.S. activities based on the domicile of the customer. Due to the complex and integrated nature of Northern Trust’s activities, it is difficult to segregate with precision revenues, expenses and assets between U.S. and non-U.S.-domiciled customers. Therefore, certain subjective estimates and assumptions have been made to allocate revenues, expenses and assets between U.S. and non-U.S. operations. For purposes of this disclosure, all foreign exchange trading income has been allocated to non-U.S. operations. Interest expense is allocated to non-U.S. operations based on specifically matched or pooled funding. Allocations of indirect noninterest expenses, when made, are based on various methods such as time, space, and number of employees. The table below summarizes Northern Trust’s performance based on the allocation process described above without regard to guarantors or the location of collateral. TABLE 125: DISTRIBUTION OF TOTAL ASSETS AND OPERATING PERFORMANCE
Note: Total revenue is comprised of net interest income and noninterest income. |
Regulatory Capital Requirements |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital Requirements | Regulatory Capital Requirements Northern Trust and the Bank are subject to various regulatory capital requirements administered by the federal bank regulatory authorities. Under these requirements, banks must maintain specific risk-based and leverage ratios in order to be classified as “well-capitalized.” The regulatory capital requirements impose certain restrictions upon banks that meet minimum capital requirements but are not “well-capitalized” and obligate the federal bank regulatory authorities to take “prompt corrective action” with respect to banks that do not maintain such minimum ratios. Such prompt corrective action could have a direct material effect on a bank’s financial statements. As of December 31, 2018 and 2017, the Bank had capital ratios above the levels required for classification as a “well-capitalized” institution and had not received any regulatory notification of a lower classification. Additionally, Northern Trust’s subsidiary banks located outside the U.S. are subject to regulatory capital requirements in the jurisdictions in which they operate. As of December 31, 2018 and 2017, Northern Trust’s non-U.S. banking subsidiaries had capital ratios above their specified minimum requirements. There were no conditions or events since December 31, 2018, that management believes have adversely affected the capital categorization of any Northern Trust subsidiary bank. The table below provides capital ratios for the Corporation and the Bank determined by Basel III phased in requirements. TABLE 126: RISK-BASED AND LEVERAGE CAPITAL AMOUNTS AND RATIOS
(1) Effective January 1, 2018, a minimum supplementary leverage ratio of 3 percent became applicable. The risk-based capital guidelines that apply to the Corporation and the Bank, commonly referred to as Basel III, are based upon the 2011 capital accord of the Basel Committee. The Basel III rules are currently being phased in, and will come into full effect by January 1, 2022. Under the final Basel III rules, the Corporation and the Bank are required to calculate and publicly disclose risk-based capital ratios using two methodologies: an advanced approach and a standardized approach. Under the advanced approach, credit risk weighted assets (RWA) are based on internal credit models and parameters. Additionally, the advanced approach incorporates operational risk RWA. Under the standardized approach, RWA are based on supervisory prescribed risk weights that are primarily dependent on counterparty type and asset class. Pursuant to the Federal Reserve Board's implementation in the final Basel III rules of a provision of the Dodd-Frank Act, the capital adequacy of the Corporation and the Bank is assessed based on the lower of the advanced approach or standardized approach capital ratios. The U.S.’s implementation of Basel III has increased the minimum capital thresholds for banking organizations and tightened the standards for what qualifies as capital. The Corporation and the Bank believe their capital strength, balance sheets and business models leave them well positioned for the continued U.S. implementation of Basel III. |
Northern Trust Corporation (Corporation only) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northern Trust Corporation (Corporation only) | Northern Trust Corporation (Corporation only) Condensed financial information is presented below. Investments in wholly-owned subsidiaries are carried on the equity method of accounting. TABLE 127: CONDENSED BALANCE SHEETS
TABLE 128: CONDENSED STATEMENTS OF INCOME
TABLE 129: CONDENSED STATEMENTS OF CASH FLOWS
|
Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation. The consolidated financial statements include the accounts of Northern Trust Corporation (Corporation) and its wholly-owned subsidiary, The Northern Trust Company (Bank), and various other wholly-owned subsidiaries of the Corporation and Bank. Throughout the notes to the consolidated financial statements, the term “Northern Trust” refers to the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated statements of income include results of acquired subsidiaries from the dates of acquisition. Certain prior-year balances have been reclassified consistent with the current year’s presentation. |
Nature of Operations | Nature of Operations. The Corporation is a bank holding company that has elected to be a financial holding company under the Bank Holding Company Act of 1956, as amended. The Bank is an Illinois banking corporation headquartered in Chicago and the Corporation’s principal subsidiary. The Corporation conducts business in the United States (U.S.) and internationally through various U.S. and non-U.S. subsidiaries, including the Bank. Northern Trust generates the majority of its revenue from its two client-focused reporting segments: Corporate & Institutional Services (C&IS) and Wealth Management. Asset management and related services are provided to C&IS and Wealth Management clients primarily by the Asset Management business. C&IS is a leading global provider of asset servicing and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, sovereign wealth funds, and other institutional investors around the globe. Asset servicing and related services encompass a full range of capabilities including but not limited to: global custody; fund administration; investment operations outsourcing; investment management; investment risk and analytical services; employee benefit services; securities lending; foreign exchange; treasury management; brokerage services; transition management services; banking and cash management. Client relationships are managed through the Bank and the Bank’s and the Corporation’s other subsidiaries, including support from locations in North America, Europe, the Middle East, and the Asia-Pacific region. Wealth Management focuses on high-net-worth individuals and families, business owners, executives, professionals, retirees, and established privately-held businesses in its target markets. The business also includes the Global Family Office, which provides customized services to meet the complex financial needs of individuals and family offices in the U.S. and throughout the world with assets typically exceeding $200 million. In supporting these targeted segments, Wealth Management provides trust, investment management, custody, and philanthropic services; financial consulting; guardianship and estate administration; family business consulting; family financial education; brokerage services; and private and business banking. Wealth Management services are delivered by multidisciplinary teams through a network of offices in 18 U.S. states and Washington, D.C., as well as offices in London, Guernsey, and Abu Dhabi. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. |
Foreign Currency Remeasurement and Translation | Foreign Currency Remeasurement and Translation. Asset and liability accounts denominated in nonfunctional currencies are remeasured into functional currencies at period-end rates of exchange, except for certain balance sheet items including buildings and equipment, goodwill and other intangible assets, which are remeasured at historical exchange rates. Results from remeasurement of asset and liability accounts are reported in other operating income as currency translation gains (losses), net. Income and expense accounts are remeasured at period-average rates of exchange. Asset and liability accounts of entities with functional currencies that are not the U.S. dollar are translated at period-end rates of exchange. Income and expense accounts are translated at period-average rates of exchange. Translation adjustments, net of applicable taxes, are reported directly to accumulated other comprehensive income (AOCI), a component of stockholders’ equity. |
Securities | Securities. Securities Available for Sale are reported at fair value, with unrealized gains and losses credited or charged, net of the tax effect, to AOCI. Realized gains and losses on securities available for sale are determined on a specific identification basis and are reported within other security gains (losses), net, in the consolidated statements of income. Interest income is recorded on the accrual basis, adjusted for the amortization of premium and accretion of discount. Securities Held to Maturity consist of debt securities that management intends to, and Northern Trust has the ability to, hold until maturity. Such securities are reported at cost, adjusted for amortization of premium and accretion of discount. Interest income is recorded on the accrual basis adjusted for the amortization of premium and accretion of discount. Securities Held for Trading are stated at fair value. Realized and unrealized gains and losses on securities held for trading are reported in the consolidated statements of income within security commissions and trading income. Nonmarketable Securities primarily consist of Federal Reserve Bank of Chicago and Federal Home Loan Bank stock and community development investments, each of which are recorded in other assets on the consolidated balance sheets. Federal Reserve and Federal Home Loan Bank stock are reported at cost, which represents redemption value. Community development investments are typically reported at amortized cost. Those community development investments that are designed to generate a return primarily through realization of tax credits and other tax benefits, which are discussed in further detail in Note 29, “Variable Interest Entities,” are reported at amortized cost using the effective yield method or proportional amortization method and amortized over the lives of the related tax credits and other tax benefits. Other-Than-Temporary Impairment (OTTI). A security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference being defined as the credit loss) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or more-likely-than-not will be required, to sell the security before recovery of the security’s amortized cost basis. If OTTI exists, the charge to earnings is limited to the amount of credit loss if the investor does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis. Any remaining difference between fair value and amortized cost is recognized in AOCI, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase. Securities purchased under agreements to resell and securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were acquired or sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities purchased or sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. It is Northern Trust’s policy to take possession, either directly or via third-party custodians, of securities purchased under agreements to resell. Securities sold under agreements to repurchase are held by the counterparty until the repurchase. |
Derivative Financial Instruments | Derivative Financial Instruments. Northern Trust is a party to various derivative 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 generally include foreign exchange contracts, interest rate contracts, total return swap contracts and credit default swap contracts. Derivative financial instruments are recorded on the consolidated balance sheets at fair value within other assets and other liabilities. Derivative asset and liability positions with the same counterparty are reflected on a net basis on the consolidated balance sheets in cases where legally enforceable master netting arrangements or similar agreements exist. These derivative assets and liabilities are further reduced by cash collateral received from, and deposited with, derivative counterparties. The accounting for changes in the fair value of a derivative in the consolidated statements of income depends on whether or not the contract has been designated as a hedge and qualifies for hedge accounting under GAAP. Derivative financial instruments are recorded on the consolidated statements of cash flows within the line item, “other operating activities, net,” except for net investment hedges which are recorded within “other investing activities, net”. Changes in the fair value of client-related and trading derivative instruments, which are not designated hedges under GAAP, are recognized currently in either foreign exchange trading income or security commissions and trading income. Changes in the fair value of derivative instruments entered into for risk management purposes but not designated as hedges are recognized currently in other operating income. Certain derivative instruments used by Northern Trust to manage risk are formally designated and qualify for hedge accounting as fair value, cash flow, or net investment hedges. Derivatives designated as fair value hedges are used to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. 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 recognized currently in interest income or interest expense. For substantially all fair value hedges, Northern Trust applies the “shortcut” method of accounting, available under GAAP. As a result, changes recorded in the fair value of the hedged item are assumed to equal the offsetting gain or loss on the derivative. For fair value hedges that do not qualify for the “shortcut” method of accounting, Northern Trust utilizes regression analysis, a “long-haul” method of accounting, in assessing whether these hedging relationships are highly effective at inception and quarterly thereafter. Derivatives designated as cash flow hedges are used to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. Changes in the fair value of such derivatives are recognized in AOCI, a component of stockholders’ equity, and there is no change to the accounting for the hedged item. Balances in AOCI are reclassified to earnings when the hedged forecasted transaction impacts earnings, and are reflected in the same line item. Northern Trust applies the “shortcut” method of accounting for cash flow hedges of certain available for sale investment securities. For cash flow hedges of certain other available for sale investment securities, foreign currency denominated investment securities, and forecasted foreign currency denominated revenue and expenditure transactions, Northern Trust closely matches all terms of the hedged item and hedging derivative at inception and on an ongoing basis. For cash flow hedges of available for sale investment securities, to the extent all terms are not perfectly matched, effectiveness is assessed using regression analysis. For cash flow hedges of forecasted foreign currency denominated revenue and expenditure transactions and investment securities, to the extent all terms are not perfectly matched, effectiveness is assessed using the dollar-offset method. Foreign exchange contracts and qualifying non-derivative instruments designated as net investment hedges are used to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. Changes in the fair value of the hedging instrument are recognized in AOCI consistent with the related translation gains and losses of the hedged net investment. For net investment hedges, all critical terms of the hedged item and the hedging instrument are matched at inception and on an ongoing basis. Amounts recorded in AOCI are reclassified to earnings only upon the sale or liquidation of an investment in a non-U.S. branch or subsidiary. Fair value, cash flow, and net investment hedges are designated and formally documented as such contemporaneous with the transaction. The formal documentation describes the hedge relationship and identifies the hedging instruments and hedged items. Included in the documentation is a discussion of the risk management objectives and strategies for undertaking such hedges, the nature of the risk being hedged, and a description of the method for assessing hedge effectiveness at inception and on an ongoing basis. For hedges that do not qualify for the “shortcut” or the critical terms match methods of accounting, a formal assessment is performed on a calendar quarter basis to verify that derivatives used in hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. Hedge accounting is discontinued if a derivative ceases to be highly effective, matures, is terminated or sold, if a hedged forecasted transaction is no longer expected to occur, or if Northern Trust removes the derivative’s hedge designation. Subsequent gains and losses on these derivatives are included in foreign exchange trading income or security commissions and trading income. For discontinued cash flow hedges, the accumulated gain or loss on the derivative remains in AOCI and is reclassified to earnings in the period in which the previously hedged forecasted transaction impacts earnings or is no longer probable of occurring. For discontinued fair value hedges, the previously hedged asset or liability ceases to be adjusted for changes in its fair value. Previous adjustments to the hedged item are amortized over the remaining life of the hedged item. |
Loans and Leases | Loans and Leases. Loans and leases are recognized assets that represent a contractual right to receive money either on demand or on fixed or determinable dates. Loans and leases are disaggregated for disclosure purposes by portfolio segment (segment) and by class. Northern Trust has defined its segments as commercial and personal. A class of loans and leases is a subset of a segment, the components of which has similar risk characteristics, measurement attributes, or risk monitoring methods. The classes within the commercial segment have been defined as commercial and institutional, commercial real estate, lease financing, net, non-U.S. and other. The classes within the personal segment have been defined as residential real estate, private client and other. Loan Classification. Loans that are held for investment are reported at the principal amount outstanding, net of unearned income. Loans classified as held for sale are reported at the lower of aggregate cost or fair value. Undrawn commitments relating to loans that are not held for sale are recorded in other liabilities and are carried at the amount of unamortized fees with an allowance for credit loss liability recognized for any estimated probable losses. 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. 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. 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 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. A loan is 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 payment periods) 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 payment periods) under the revised terms. 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, lease financing, net, non-U.S., 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 $1,000,000) 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. Premium, Discounts, Origination Costs and Fees. Premiums and discounts on loans are recognized as an adjustment of yield using the interest method based on the contractual terms of the loan. Certain direct origination costs and fees are netted, deferred and amortized over the life of the related loan as an adjustment to the loan’s yield. Direct Financing and Leveraged Leases. Unearned lease income from direct financing and leveraged leases is recognized using the interest method. This method provides a constant rate of return on the unrecovered investment over the life of the lease. The rate of return and the allocation of income over the lease term are recalculated from the inception of the lease if during the lease term assumptions regarding the amount or timing of estimated cash flows change. Lease residual values are established at the inception of the lease based on in-house valuations and market analyses provided by outside parties. Lease residual values are reviewed at least annually for OTTI. A decline in the estimated residual value of a leased asset determined to be other-than-temporary would be recorded in the period in which the decline is identified as a reduction of interest income. |
Allowance for Credit Losses | Allowance for Credit Losses. The allowance for credit losses represents management’s estimate of probable losses which have occurred as of the date of the consolidated financial statements. The loan and lease portfolio and other lending-related credit exposures are regularly reviewed to evaluate the level of the allowance for credit losses. In determining an appropriate allowance level, Northern Trust evaluates the allowance necessary for impaired loans and lending-related commitments and also estimates losses inherent in other lending-related credit exposures. The allowance for credit losses consists of the following components: Specific Allowance. The specific allowance is determined through an individual evaluation of loans and lending-related commitments considered impaired that is based on expected future cash flows, the value of collateral, and other factors that may impact the borrower’s ability to pay. For impaired loans where the amount of specific allowance, if any, is determined based on the value of the underlying real estate collateral, third-party appraisals are typically obtained and utilized by management. These appraisals are generally less than twelve months old and are subject to adjustments to reflect management’s judgment as to the realizable value of the collateral. Inherent Allowance. The inherent allowance estimation methodology is based on internally developed loss data specific to the Northern Trust loan and lease portfolio. The estimation methodology and the related qualitative adjustment framework segregate the loan and lease portfolio into homogeneous segments. For each segment, the probability of default and the loss given default are applied to the total exposure at default to determine a quantitative inherent allowance. The quantitative inherent allowance is then reviewed within the qualitative adjustment framework, where management applies judgment by assessing internal risk factors, potential limitations in the quantitative methodology and environmental factors that are not fully contemplated in the quantitative methodology to compute an adjustment to the quantitative inherent allowance for each segment of the loan portfolio. The results of the inherent allowance estimation methodology are reviewed quarterly by Northern Trust’s Loan Loss Reserve Committee, which includes representatives from Credit Risk Management, reporting segment management, and Corporate Finance. 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. Northern Trust’s policies relative to the charging-off of uncollectible loans and leases are consistent across both loan and lease segments. Determinations as to whether loan balances for which the collectability is in question are charged-off or a specific reserve is established are based on management’s assessment as to the level of certainty regarding the amount of loss. The provision for credit losses, which is charged to income, is the amount necessary to adjust the allowance for credit losses to the level determined to be appropriate through the above processes. Actual losses may vary from current estimates and the amount of the provision for credit losses may be either greater or less than actual net charge-offs. Northern Trust analyzes its exposure to credit losses from both on-balance-sheet and off-balance-sheet activity using a consistent methodology. For purposes of estimating the allowance for credit losses for undrawn loan commitments and standby letters of credit, the exposure at default includes an estimated drawdown of unused credit based on a credit conversion factor. The proportionate amount of the quantitative methodology calculation after any required adjustment in the qualitative framework results in the required allowance for undrawn loan commitments and standby letters of credit as of the reporting date. The portion of the allowance assigned to loans and leases is reported as a contra asset, directly following loans and leases in the consolidated balance sheets. The portion of the allowance assigned to undrawn loan commitments and standby letters of credit is reported in other liabilities in the consolidated balance sheets. |
Standby Letters of Credit | Standby Letters of Credit. Fees on standby letters of credit are recognized in other operating income using the straight-line method over the lives of the underlying agreements. Northern Trust’s recorded other liability for standby letters of credit, reflecting the obligation it has undertaken, is measured as the amount of unamortized fees on these instruments. |
Buildings and Equipment | Buildings and Equipment. Buildings and equipment owned are carried at original cost less accumulated depreciation. The charge for depreciation is computed using the straight-line method based on the following range of lives: buildings – up to 30 years; equipment – 3 to 10 years; and leasehold improvements–the shorter of the lease term or 15 years. Leased properties meeting certain criteria are capitalized and amortized using the straight-line method over the lease period. |
Other Real Estate Owned (OREO) | Other Real Estate Owned (OREO). OREO is comprised of commercial and residential real estate properties acquired in partial or total satisfaction of loans. OREO assets are carried at the lower of cost or fair value less estimated costs to sell and are recorded in other assets on the consolidated balance sheets. Fair value is typically based on third-party appraisals. Appraisals of OREO properties are updated on an annual basis and are subject to adjustments to reflect management’s judgment as to the realizable value of the properties. Losses identified during the 90-day period after the acquisition of such properties are charged against the allowance for credit losses assigned to loans and leases. Subsequent write-downs that may be required to the carrying value of these assets and gains or losses realized from asset sales are recorded within other operating expense. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets. Goodwill is not subject to amortization. Separately identifiable acquired intangible assets with finite lives are amortized over their estimated useful lives, primarily on a straight-line basis. Purchased software, software licenses, and allowable internal costs, including compensation relating to software developed for internal use, are capitalized. Software is amortized using the straight-line method over the estimated useful lives of the assets, generally ranging from 3 to 10 years. Fees paid for the use of software licenses that are not hosted by Northern Trust are expensed as incurred. Goodwill and other intangible assets are reviewed for impairment on an annual basis or more frequently if events or changes in circumstances indicate the carrying amounts may not be recoverable. |
Trust, Investment and Other Servicing Fees | Trust, Investment and Other Servicing Fees. Trust, investment and other servicing fees are recorded on an accrual basis, over the period in which the service is provided. Fees are primarily a function of the market value of assets custodied, managed and serviced, transaction volumes, and securities lending volume and spreads, as set forth in the underlying client agreement. This revenue recognition involves the use of estimates and assumptions, including components that are calculated based on estimated asset valuations and transaction volumes. |
Client Security Settlement Receivables | Client Security Settlement Receivables. These receivables result from custody client withdrawals from short-term investment funds that settle on the following business day as well as custody client security sales executed under contractual settlement date accounting that have not yet settled. Northern Trust advances cash to the client on the date of either client withdrawal or trade execution and awaits collection from either the short-term investment funds or via the settled trade. |
Income Taxes | Income Taxes. Northern Trust follows an asset and liability approach to account for income taxes. The objective is to recognize the amount of taxes payable or refundable for the current year, and to recognize deferred tax assets and liabilities resulting from temporary differences between the amounts reported in the financial statements and the tax bases of assets and liabilities. The measurement of tax assets and liabilities is based on enacted tax laws and applicable tax rates. Tax positions taken or expected to be taken on a tax return are evaluated based on their likelihood of being sustained upon examination by tax authorities. Only tax positions that are considered more-likely-than-not to be sustained are recorded in the consolidated financial statements. Northern Trust recognizes any interest and penalties related to unrecognized tax benefits in the provision for income taxes. |
Cash Flow Statements | Cash Flow Statements. Cash and cash equivalents have been defined as “Cash and Due from Banks”. |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits. Northern Trust records the funded status of its defined benefit pension and other postretirement plans on the consolidated balance sheets. Funded pension and postretirement benefits are reported in other assets and unfunded pension and postretirement benefits are reported in other liabilities. Plan assets and benefit obligations are measured annually at December 31. Plan assets are determined based on fair value generally representing observable market prices. The projected benefit obligations are determined based on the present value of projected benefit distributions at an assumed discount rate. Pension costs are recognized ratably over the estimated working lifetime of eligible participants. |
Share-Based Compensation Plans | Share-Based Compensation Plans. Northern Trust recognizes as compensation expense the grant-date fair value of stock and stock unit awards and other share-based compensation granted to employees within the consolidated statements of income. The fair values of stock and stock unit awards, including performance stock unit awards and director awards, are based on the closing price of the Corporation’s stock on the date of grant adjusted for certain awards that do not accrue dividends while vesting. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The model utilizes weighted-average assumptions regarding the period of time that options granted are expected to be outstanding (expected term) based primarily on the historical exercise behavior attributable to previous option grants, the estimated yield from dividends paid on the Corporation’s stock over the expected term of the options, the historical volatility of Northern Trust’s stock price and the implied volatility of traded options on Northern Trust stock, and a risk free interest rate based on the U.S. Treasury yield curve at the time of grant for a period equal to the expected term of the options granted. Compensation expense for share-based award grants with terms that provide for a graded vesting schedule, whereby portions of the award vest in increments over the requisite service period, are recognized on a straight-line basis over the requisite service period for the entire award. Compensation expense for performance stock unit awards are recognized on a straight-line basis over the requisite service period of the award based on expected achievement of the performance condition. Adjustments are made for employees that meet certain eligibility criteria at the grant date or during the requisite service period. Northern Trust does not include an estimate of future forfeitures in its recognition of share-based compensation expense. Share-based compensation expense is adjusted based on forfeitures as they occur. Dividend equivalents are paid on a current basis for restricted stock units granted prior to February 21, 2017 that are not yet vested. Dividend equivalents are accrued for performance stock unit awards, most restricted stock units granted on or after February 21, 2017 and director awards not yet vested, and are paid upon vesting. Certain restricted stock units granted on or after February 20, 2018 are not entitled to dividend equivalents during the vesting period. Cash flows resulting from the realization of excess tax benefits are classified as operating cash flows. |
Net Income Per Common Share | Net Income Per Common Share. Basic net income per common share is computed by dividing net income/loss applicable to common stock by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income applicable to common stock and potential common shares by the aggregate of the weighted average number of common shares outstanding during the period and common share equivalents calculated for stock options outstanding using the treasury stock method. In a period of a net loss, diluted net income per common share is calculated in the same manner as basic net income per common share. Northern Trust has issued certain restricted stock unit awards, which are unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents. These units are considered participating securities. Accordingly, Northern Trust calculates net income applicable to common stock using the two-class method, whereby net income is allocated between common stock and participating securities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On January 1, 2018, Northern Trust adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09). The primary objective of ASU 2014-09 is revenue recognition that represents the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Northern Trust adopted ASU 2014-09 using the modified retrospective method applied to contracts not yet completed as of the date of adoption. Results for reporting periods beginning January 1, 2018 are presented under ASU 2014-09, including certain changes to gross versus net presentation, whereas prior period amounts are not adjusted. The impact of adopting ASU 2014-09 resulted in a $4.0 million reduction in retained earnings. Please refer to Note 17 - “Revenue from Contracts with Clients” for further information. On January 1, 2018, Northern Trust adopted ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01). ASU 2016-01 requires equity investments (except those accounted for under the equity method or those that result in consolidation) to be measured at fair value with changes in fair value recognized in net income unless a policy election is made for investments without readily determinable fair values. Additionally, ASU 2016-01 requires public entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes and eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost on the balance sheet. Furthermore, it requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. The impact of adopting ASU 2016-01 resulted in a $0.5 million reduction in retained earnings. On January 1, 2018, Northern Trust adopted ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (ASU 2016-15). ASU 2016-15 provides guidance on eight specific cash flow issues, thereby reducing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Upon adoption of ASU 2016-15, there was no significant impact to Northern Trust’s consolidated statement of cash flows. On January 1, 2018, Northern Trust adopted ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” (ASU 2016-16). ASU 2016-16 requires an entity to recognize the income tax consequences of intra-entity transfers of assets (excluding inventory) in the period in which the transfer occurs. Upon adoption of ASU 2016-16, there was no significant impact to Northern Trust’s consolidated financial condition or results of operations. On January 1, 2018, Northern Trust adopted ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)” (ASU 2016-18). ASU 2016-18 requires an entity to include amounts generally described as restricted cash and cash equivalents with cash and cash equivalents when reconciling beginning and end of period total cash balances in the statement of cash flows and as a result, transfers between cash and cash equivalents, and restricted cash and cash equivalents, will not be presented in the statement of cash flows as cash flow activities. Additionally, if the balance sheet includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash and cash equivalents, an entity is required to disclose a reconciliation between the balance sheet and the statement of cash flows. Furthermore, if restricted cash and cash equivalents are material, an entity must disclose information about the nature of restrictions. Upon adoption of ASU 2016-18, there was no significant impact to Northern Trust’s consolidated statement of cash flows. On January 1, 2018, Northern Trust adopted ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (ASU 2017-01). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist companies with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in ASU 2017-01 provide a more robust framework to use in determining when a set of assets and activities is a business. Upon adoption of ASU 2017-01, there was no significant impact to Northern Trust’s consolidated financial condition or results of operations. On January 1, 2018, Northern Trust adopted ASU No. 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” (ASU 2017-05). ASU 2017-05 clarifies that an in substance nonfinancial asset is an asset or group of assets for which substantially all of the fair value consists of nonfinancial assets and the group or subsidiary is not a business. Transfers of nonfinancial assets to another entity in exchange for a noncontrolling ownership interest in that entity will be accounted for under Accounting Standards Codification 610-20 - Gains and Losses from the Derecognition of Nonfinancial Assets. ASU 2017-05 also impacts the accounting for partial sales of nonfinancial assets, and provides that when an entity transfers its controlling financial interest in a nonfinancial asset, but retains a noncontrolling ownership interest, the entity will measure the retained interest at fair value. This will result in full gain or loss recognition upon the sale of a controlling interest in a nonfinancial asset. Upon adoption of ASU 2017-05, there was no significant impact to Northern Trust’s consolidated financial condition or results of operations. On January 1, 2018, Northern Trust adopted ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (ASU 2017-07). Under previous GAAP, net benefit cost on pension and postretirement benefit plans included multiple components, including current-period employee service cost, interest cost on the obligation, expected return on plan assets, and amortization of various amounts deferred from previous periods. ASU 2017-07 requires the bifurcation of the net benefit cost by presenting separately the service cost component from the other components of net benefit cost. Northern Trust provides a detailed breakdown of its net periodic pension costs components including a reference to the respective income statement line in the footnotes and therefore there were no changes to the presentation of net periodic pension costs in the results of operations upon adoption of ASU 2017-07. On January 1, 2018, Northern Trust adopted ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (ASU 2017-09). ASU 2017-09 clarifies which types of changes to share-based payment awards are in scope of modification accounting. ASU 2017-09 also provides clarification related to the fair value assessment with respect to determining whether a fair value calculation is required and the appropriate unit of account to apply. Upon adoption of ASU 2017-09, there was no impact to Northern Trust’s consolidated financial condition or results of operations. On January 1, 2018, Northern Trust adopted ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (ASU 2018-02). The amendments in ASU 2018-02 allow an entity to elect to reclassify from accumulated other comprehensive income to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-02 is effective for interim and annual reporting periods beginning after December 15, 2018, however early adoption is permitted. The amendments in ASU 2018-02 may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Upon adoption of ASU 2018-02, Northern Trust elected to reclassify $25.3 million of income tax effects from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. In the normal course, it is Northern Trust’s policy to release income tax effects from accumulated other comprehensive income on an aggregate portfolio basis. Please refer to Note 15 - “Accumulated Other Comprehensive Income (Loss)” for further information. On April 1, 2018, Northern Trust adopted ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (ASU 2017-12). The main provisions of ASU 2017-12 are intended to align better an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships. ASU 2017-12 eliminates the requirement to measure and report hedge ineffectiveness separately and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Further, ASU 2017-12 eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. Northern Trust currently applies the “shortcut” method of accounting available under US GAAP for substantially all fair value hedges and other aspects of Northern Trust’s current hedge accounting program and therefore upon adoption of ASU 2017-12, there was no significant impact to Northern Trust’s consolidated financial condition or results of operations. On December 31, 2018, Northern Trust adopted ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans” (ASU 2018-14). ASU 2018-14 improves the effectiveness of disclosures in the notes to financial statements by removing, modifying and adding certain disclosures related to defined benefit pension, and other postretirement plans. Upon adoption of ASU 2018-14, there was no impact to Northern Trust’s consolidated financial condition or results of operations. Please refer to Note 22 - “Employee Benefits” for further information. |
Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2018 and 2017, segregated by fair value hierarchy level. TABLE 47: 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 December 31, 2018, derivative assets and liabilities shown above also include reductions of $134.5 million and $573.7 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties. (1) This line consists of a total return swap contract. (2) This line consists of swaps related to the sale of certain Visa Class B common shares.
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 a total return swap contract. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Level 3 Assets | The following tables present the changes in Level 3 assets and liabilities for the years ended December 31, 2018 and 2017. TABLE 48: CHANGES IN LEVEL 3 ASSETS AND LIABILITIES
(1) Unrealized gains (losses) are included in net unrealized gains (losses) on debt securities available for sale, within the consolidated statements of comprehensive income. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Level 3 Liabilities |
(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
Note: Refer to the table located on page 105 for the disaggregation of available for sale debt securities. (1) This line consists of a total return swap contract. (2) This line consists of swaps related to the sale of certain Visa Class B common shares.
Note: Refer to the table located on page 106 for the disaggregation of available for sale debt securities. (1) This line consists of swaps related to the sale of certain Visa Class B common shares and a total return swap contract. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 table presents the fair values of Northern Trust’s Level 3 assets and liabilities as of December 31, 2018 and 2017, as well as the valuation techniques, significant unobservable inputs, and quantitative information used to develop significant unobservable inputs for such assets and liabilities as of such dates. TABLE 46: LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 presents the fair values of Northern Trust’s Level 3 assets that were measured at fair value on a nonrecurring basis as of December 31, 2018 and 2017, as well as the valuation technique, significant unobservable inputs, and quantitative information used to develop the significant unobservable inputs for such assets as of such dates. TABLE 49: LEVEL 3 NONRECURRING BASIS SIGNIFICANT UNOBSERVABLE INPUTS
|
Securities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Amortized Cost to Fair Value of Securities Available for Sale | The following tables provide the amortized cost, fair values, and remaining maturities of debt securities available for sale. TABLE 51: RECONCILIATION OF AMORTIZED COST TO FAIR VALUE OF DEBT SECURITIES AVAILABLE FOR SALE
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Continuous Unrealized Loss Position | The following tables provide information regarding debt securities that had been in a continuous unrealized loss position for less than 12 months and for 12 months or longer as of December 31, 2018 and 2017. TABLE 55: DEBT SECURITIES WITH UNREALIZED LOSSES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Amortized Cost to Fair Values of Securities Held to Maturity | The following tables provide the amortized cost, fair values and remaining maturities of debt securities held to maturity. TABLE 53: RECONCILIATION OF AMORTIZED COST TO FAIR VALUES OF DEBT SECURITIES HELD TO MATURITY
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Related Impairment Losses Recognized in Earnings on Other Than Temporarily Impaired Securities | The table below provides information regarding total other-than-temporarily impaired debt securities, including noncredit-related amounts recognized in other comprehensive income and net impairment losses recognized in earnings, for the years ended December 31, 2018, 2017, and 2016. TABLE 56: NET IMPAIRMENT LOSSES RECOGNIZED IN EARNINGS
(1) For initial other-than-temporary impairments in the respective period, the balance includes the excess of the amortized cost over the fair value of the impaired securities. For subsequent impairments of the same security, the balance includes any additional changes in fair value of the security subsequent to its most recently recorded OTTI. (2) For initial other-than-temporary impairments in the respective period, the balance includes the portion of the excess of amortized cost over the fair value of the impaired securities that was recorded in OCI. For subsequent impairments of the same security, the balance includes additional changes in OCI for that security subsequent to its most recently recorded OTTI. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Credit-Related Losses Recognized in Earnings on Debt Securities Other-Than-Temporarily Impaired | Provided in the table below are the cumulative credit-related losses recognized in earnings on debt securities other-than-temporarily impaired. TABLE 57: CUMULATIVE CREDIT-RELATED LOSSES ON DEBT SECURITIES HELD
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Available for Sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining Maturity of Securities |
Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Held-to-maturity Securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining Maturity of Securities |
Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments. |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Purchased under Agreements to Resell |
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Securities Sold under Agreements to Repurchase |
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Table Text Block] |
|
Loans and Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 61: LOANS AND LEASES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Investment in Direct Finance and Leveraged Leases | The components of the net investment in direct finance and leveraged leases are as follows: TABLE 62: DIRECT FINANCE AND LEVERAGED LEASES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Payments to be Received | The following schedule reflects the future minimum lease payments to be received over the next five years under direct finance leases. TABLE 63: FUTURE MINIMUM LEASE PAYMENTS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 at December 31, 2018 and 2017 are provided below, segregated by borrower ratings into “1 to 3”, “4 to 5”, and “6 to 9” (watch list), categories. TABLE 64: BORROWER RATINGS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances and Delinquency Status of Performing and Nonperforming Loans and Leases by Segment and Class as well as Total Other Real Estate Owned and Nonperforming Asset Balances | The following table provides balances and delinquency status of performing and nonperforming loans and leases by segment and class, as well as the other real estate owned and total nonperforming asset balances, as of December 31, 2018 and 2017. TABLE 65: DELINQUENCY STATUS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impaired Loans By Segment and Class | The following table provides information related to impaired loans by segment and class. TABLE 66: IMPAIRED LOANS
Note: Average recorded investments in impaired loans are calculated as the average of the month-end impaired loan balances for the period. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 years ended December 31, 2018, and 2017, and the recorded investments and unpaid principal balances as of December 31, 2018 and 2017. TABLE 67: TROUBLED DEBT RESTRUCTURINGS
Note: Period-end balances reflect all paydowns and charge-offs during the year.
Note: Period-end balances reflect all paydowns and charge-offs during the year. |
Allowance for Credit Losses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Allowance for Credit Losses by Segment | Changes in the allowance for credit losses by segment were as follows: TABLE 68: CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 December 31, 2018 and 2017. TABLE 69: RECORDED INVESTMENTS IN LOANS AND LEASES
|
Concentrations of Credit Risk (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial Real Estate Loan Types | The table below provides additional detail regarding commercial real estate loan types. TABLE 70: COMMERCIAL REAL ESTATE LOANS
|
Buildings and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Buildings and Equipment | A summary of buildings and equipment is presented below. TABLE 71: BUILDINGS AND EQUIPMENT
|
Lease Commitments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease payments for Non-cancelable Operating Leases | Minimum annual lease commitments as of December 31, 2018, for all non-cancelable operating leases with a term of one year or more are as follows: TABLE 72: MINIMUM LEASE PAYMENTS
|
Goodwill and Other Intangibles (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Changes by reporting segment in the carrying amount of goodwill for the years ended December 31, 2018 and 2017, including the effect of foreign exchange rates on non-U.S.-dollar-denominated balances, were as follows: TABLE 73: GOODWILL
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Intangible Assets Subject to Amortization | The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of December 31, 2018 and 2017 were as follows: TABLE 74: OTHER INTANGIBLE ASSETS
|
Senior Notes and Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Senior Notes Outstanding | A summary of senior notes outstanding at December 31, 2018 and 2017 is presented below. TABLE 75: SENIOR NOTES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-Term Debt Outstanding | A summary of long-term debt outstanding at December 31, 2018 and 2017 is presented below. TABLE 76: LONG-TERM DEBT
(1) Not redeemable prior to maturity, except for senior notes due Aug. 2028, which are redeemable within three months of maturity. (2) The subordinated notes will bear interest from the date they were issued to, but excluding, May 8, 2027, at an annual rate of 3.375%, payable semi-annually in arrears. From, and including, May 8, 2027, the subordinated notes will bear interest at an annual rate equal to three-month LIBOR plus 1.131%, payable quarterly in arrears. The subordinated notes are unsecured and may be redeemed, in whole but not in part, on, and only on, May 8, 2027, at a redemption price equal to 100% of the principal amount of the subordinated notes to be redeemed, plus accrued and unpaid interest, if any, up to but excluding the redemption date. (3) Under the terms of its current Offering Circular dated November 6, 2013, the Bank has the ability to offer from time to time its senior bank notes in an aggregate principal amount of up to $4.5 billion at any one time outstanding and up to an additional $1.0 billion of subordinated notes. Each senior note will mature from 30 days to 15 years, and each subordinated note will mature from 5 years to 15 years, following its date of original issuance. Each note will mature on such date as selected by the initial purchaser and agreed to by the Bank. (4) As of December 31, 2018, debt issue costs of $1.6 million and $1.4 million are included as a direct deduction from the carrying amount of Senior Notes and Long-Term Debt, respectively. Debt issue costs are amortized on a straight-line basis over the life of the Note. (5) Notes issued at a discount of 0.117% (6) Notes issued at a discount of 0.437% (7) Notes issued at a discount of 0.283% (8) Notes issued at a discount of 0.125% (9) Notes issued at a discount of 0.02% (10) Notes issued at a discount of 0.114% (11) Interest rate swap contracts were entered into to modify the interest expense on these senior and subordinated notes from fixed rates to floating rates. The swaps are recorded as fair value hedges and at December 31, 2018, increases in the carrying values of the senior and subordinated notes outstanding of $29.3 million were recorded. As of December 31, 2017, net adjustments in the carrying values of subordinated notes outstanding of $37.4 million were recorded. |
Floating Rate Capital Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brokers and Dealers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Book Values of Outstanding Subordinated Debentures | The following table summarizes the book values of the outstanding subordinated debentures as of December 31, 2018 and 2017. TABLE 77: SUBORDINATED DEBENTURES
|
Stockholders' Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Analysis of Changes in Number of Shares of Common Stock Outstanding | An analysis of changes in the number of shares of common stock outstanding follows: TABLE 78: SHARES OF COMMON STOCK
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Income (Loss) | The following tables summarize the components of accumulated other comprehensive income (loss) (AOCI) at December 31, 2018, 2017, and 2016, and changes during the years then ended. TABLE 79: SUMMARY OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
* Includes net unrealized gains on debt securities transferred from available for sale to held to maturity during the years ended December 31, 2018 and 2017. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Changes in Accumulated Other Comprehensive Income (Loss) |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 years ended December 31, 2018, 2017 and 2016. TABLE 81: RECLASSIFICATION ADJUSTMENT OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME
|
Net Income per Common Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computations of Net Income per Common Share | The computations of net income per common share are presented below. TABLE 82: NET INCOME PER COMMON SHARE
Note: For the year ended December 31, 2018, there were no common stock equivalents excluded in the computation of diluted net income per share. Common stock equivalents of 115,491, and 1,108,067 for the years ended December 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. |
Revenue from Contracts with Clients Revenue from Contrats with Clients (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Disaggregation | The following table presents revenues disaggregated by major revenue source. TABLE 83: REVENUE DISAGGREGATION
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Client Receivables | The table below represents receivables balances from contracts with clients, which are included in other assets in the consolidated balance sheets, at December 31, 2018 and December 31, 2017. TABLE 84: CLIENT RECEIVABLES
(1) The net trust fees receivable balance at December 31, 2017 does not reflect the reduction for the estate settlement revenue transition adjustment of $2.7 million, which was recorded with an effective date of January 1, 2018. |
Net Interest Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift, Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Interest Income | The components of net interest income were as follows: TABLE 85: NET INTEREST INCOME
(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. |
Other Operating Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Other Operating Income | The components of other operating income were as follows: TABLE 86: OTHER OPERATING INCOME
|
Other Operating Expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of other operating expenses | The components of other operating expense were as follows: TABLE 87: OTHER OPERATING EXPENSE
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Total Provision for Income Taxes with Amounts Computed at Federal Tax Rate of 35% | The following table reconciles the total provision for income taxes recorded in the consolidated statements of income with the amounts computed at the statutory federal tax rate for the periods presented below. TABLE 88: INCOME TAXES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Consolidated Provision for Income Taxes | The TCJA was enacted on December 22, 2017, and reduced the U.S. federal corporate tax rate from 35% to 21%. It also required companies to pay a mandatory deemed repatriation tax on earnings of foreign subsidiaries that were previously tax deferred. At December 31, 2017, Northern Trust made a reasonable estimate as to the impact of the TCJA. During 2018, Northern Trust completed the related calculations and additional analyses associated with the implementation of the TCJA, resulting in a number of adjustments to the 2018 tax provision as follows: TABLE 89: IMPACT OF TAX CUTS AND JOBS ACT
The components of the consolidated provision for income taxes for each of the three years ended December 31 are as follows: TABLE 91: PROVISION FOR INCOME TAXES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: TABLE 90: UNRECOGNIZED TAX BENEFITS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax Charges (Benefits) Recorded Directly to Stockholders' Equity | In addition to the amounts shown above, tax charges and benefits have been recorded directly to stockholders’ equity for the following: TABLE 92: TAX CHARGES AND BENEFITS RECORDED DIRECTLY TO STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Tax Liabilities and Assets | Deferred tax assets and liabilities have been computed as follows: TABLE 93: NET DEFERRED TAX LIABILITIES
|
Employee Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plan Status of U.S. Plan, Non-U.S. Plans and Supplemental Plan | The following tables set forth the postretirement health care plan status and amounts included in AOCI at December 31, the net periodic postretirement benefit cost of the plan for 2018 and 2017, and the change in the accumulated postretirement benefit obligation during 2018 and 2017. TABLE 102: POSTRETIREMENT HEALTH CARE PLAN STATUS
The following tables set forth the status, amounts included in AOCI, and net periodic pension expense of the U.S. plan, non-U.S. plans, and supplemental plan for 2018, 2017, and 2016. Prior service costs are being amortized on a straight-line basis over 11 years for the U.S. plan and 9 years for the supplemental plan. TABLE 94: EMPLOYEE BENEFIT PLAN STATUS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount Included in Accumulated Other Comprehensive Income |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Company's Net Periodic Benefit Cost |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Benefit Obligation, Postretirement Health Care, and in Accumulated Postretirement Benefit Obligation |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Benefit Payments |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Plan Assets |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of U.S. Pension Plan Assets by Major Asset Category, and their Level within Fair Value Hierarchy | The following table presents the fair values of Northern Trust’s U.S. pension plan assets, by major asset category, and their level within the fair value hierarchy defined by GAAP as of December 31, 2018 and 2017. TABLE 100: FAIR VALUE OF U.S. PENSION PLAN ASSETS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Level 3 U.S. Pension Plan Assets | The following table presents the changes in Level 3 assets for the years ended December 31, 2018 and 2017. TABLE 101: CHANGE IN LEVEL 3 ASSETS
Note: The return on plan assets represents the change in the unrealized gain (loss) on assets still held at December 31. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Health Care Cost Trend Rate Sensitivity Analysis |
Share-Based Compensation Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Expense for Share-Based Payment Arrangements and Associated Tax Impacts | Total compensation expense for share-based payment arrangements to employees and the associated tax impacts were as follows for the periods presented. TABLE 107: TOTAL COMPENSATION EXPENSE FOR SHARE-BASED PAYMENT ARRANGEMENTS TO EMPLOYEES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Assumptions Used for Options Granted | The weighted-average assumptions used for options granted during the years ended December 31, 2017 and 2016 are as follows: TABLE 108: WEIGHTED-AVERAGE ASSUMPTIONS USED FOR OPTIONS GRANTED
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information Pertaining to Stock Options Granted, Vested and Exercised | The following table provides information about stock options granted, vested, and exercised in the years ended December 31, 2018, 2017, and 2016. TABLE 109: STOCK OPTIONS GRANTED, VESTED, AND EXERCISED
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Status of Stock Options under 2012 Plan and 2002 Plan | A summary of the status of stock options at December 31, 2018, and changes during the year then ended, are presented in the table below. TABLE 111: STATUS OF STOCK OPTIONS AND CHANGES
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested Options | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Nonvested Stock | The following is a summary of changes in nonvested stock options for the year ended December 31, 2018. TABLE 110: CHANGES IN NONVESTED STOCK OPTIONS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Unit Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Status of Outstanding Restricted Stock Unit Awards 2012 Plan and the 2002 Plan | A summary of the status of outstanding restricted stock unit awards at December 31, 2018, and changes during the year then ended, is presented in the table below. TABLE 112: OUTSTANDING RESTRICTED STOCK UNIT AWARDS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Nonvested Restricted Stock Unit Awards | The following is a summary of nonvested restricted stock unit awards at December 31, 2018, and changes during the year then ended. TABLE 113: NONVESTED RESTRICTED STOCK UNIT AWARDS
|
Derivative Financial Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 all derivative financial instruments as of December 31, 2018 and December 31, 2017. TABLE 114: NOTIONAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS
(1) Derivative assets are reported in other assets on the consolidated balance sheets. (2) Derivative liabilities are reported in other liabilities on the consolidated balance sheets. (3) This line includes swaps related to sales of certain Visa Class B common shares and total return swap contracts. (4) See further detail in Note 27 - Offsetting of Assets and Liabilities. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gains/Losses of Derivative Financial Instruments | The following table provides fair value and cash flow hedge derivative gains and losses recognized in income during the years ended December 31, 2018, 2017 and 2016. TABLE 115: LOCATION AND AMOUNT OF FAIR VALUE AND CASH FLOW HEDGE DERIVATIVE GAINS AND LOSSES RECORDED IN INCOME
The following table provides the impact of fair value hedge accounting on the carrying value of the designated hedged items as of December 31, 2018. TABLE 116: HEDGED ITEMS IN FAIR VALUE HEDGES
(1) There are no amounts related to discontinued hedging relationships. (2) Carrying value represents amortized cost. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gains/Losses of Derivative Financial Instruments Not Designated as Hedging | The following table provides the location and amount of gains and losses recorded in the consolidated statements of income for the years ended December 31, 2018, 2017, and 2016 for derivative instruments not designated as hedges under GAAP. TABLE 117: LOCATION AND AMOUNT OF GAINS AND LOSSES RECORDED IN INCOME FOR DERIVATIVES NOT DESIGNATED AS HEDGING UNDER GAAP
(1) This line includes swaps related to the sale of certain Visa Class B common shares, credit default swap contracts, and total return swap contracts. |
Offsetting of Assets and Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Purchased Under Agreements to Resell and Derivative Assets in the Consolidated Balance Sheet | The following table provides information regarding the offsetting of derivative assets and of securities purchased under agreements to resell within the consolidated balance sheets as of December 31, 2018 and 2017. TABLE 118: OFFSETTING OF DERIVATIVE ASSETS AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL
(1) Derivative assets are reported in other assets in the consolidated balance sheets. Other assets (excluding derivative assets) totaled $4.6 billion and $3.9 billion as of December 31, 2018 and 2017, 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. Federal funds sold totaled $134.0 million and $21.0 million as of December 31, 2018 and 2017, 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 December 31, 2018 and 2017. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities Sold Under Agreements to Repurchase and Derivative Liabilities in the Consolidated Balance Sheet | The following table provides information regarding the offsetting of derivative liabilities and of securities sold under agreements to repurchase within the consolidated balance sheets as of December 31, 2018 and 2017. TABLE 119: OFFSETTING OF DERIVATIVE LIABILITIES AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
(1) Derivative liabilities are reported in other liabilities in the consolidated balance sheets. Other liabilities (excluding derivative liabilities) totaled $2.5 billion and $2.4 billion as of December 31, 2018 and 2017, 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 December 31, 2018 and 2017. |
Off-Balance-Sheet Financial Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Letters of Credit | The following table shows the contractual amounts of commitments and letters of credit. TABLE 120: COMMITMENTS AND LETTERS OF CREDIT
(1)These amounts exclude $242.3 million and $385.5 million of commitments participated to others at December 31, 2018 and 2017, respectively. (2)These amounts include $72.3 million and $92.5 million of standby letters of credit secured by cash deposits or participated to others as of December 31, 2018 and 2017, respectively. The weighted average maturity of standby letters of credit was 23 months at December 31, 2018 and 22 months at December 31, 2017. |
Reporting Segments and Related Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Contribution of Northern Trust's Reporting Segments | The following tables show the earnings contribution of Northern Trust’s reporting segments for the years ended December 31, 2018, 2017, and 2016. TABLE 121: CORPORATE AND INSTITUTIONAL SERVICES RESULTS OF OPERATIONS
Note: Stated on an FTE basis. TABLE 122: WEALTH MANAGEMENT RESULTS OF OPERATIONS
Note: Stated on an FTE basis. TABLE 123: TREASURY AND OTHER RESULTS OF OPERATIONS
Note: Stated on an FTE basis. TABLE 124: CONSOLIDATED FINANCIAL INFORMATION
Note: Stated on an FTE basis. The consolidated figures include $41.2 million, $45.8 million, and $25.1 million, of FTE adjustments for 2018, 2017, and 2016, respectively. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution of Total Assets and Operating Performance | The table below summarizes Northern Trust’s performance based on the allocation process described above without regard to guarantors or the location of collateral. TABLE 125: DISTRIBUTION OF TOTAL ASSETS AND OPERATING PERFORMANCE
Note: Total revenue is comprised of net interest income and noninterest income. |
Regulatory Capital Requirements (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk-Based Capital Amounts and Ratios for Northern Trust on Consolidated Basis and for Bank | The table below provides capital ratios for the Corporation and the Bank determined by Basel III phased in requirements. TABLE 126: RISK-BASED AND LEVERAGE CAPITAL AMOUNTS AND RATIOS
(1) Effective January 1, 2018, a minimum supplementary leverage ratio of 3 percent became applicable. |
Northern Trust Corporation (Corporation only) (Tables) - Parent Company |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheet |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Statement of Income |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Statement of Cash Flows |
|
Fair Value Measurements - Changes in Level 3 Assets (Detail) - Auction Rate - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 4.3 | $ 4.7 |
Total Gains (Losses): | ||
Included in Other Comprehensive Income | 0.1 | 0.2 |
Purchases, Issues, Sales, and Settlements | ||
Settlements | (4.4) | (0.6) |
Balance at end of period | $ 0.0 | $ 4.3 |
Fair Value Measurements - Changes in Level 3 Liabilities (Detail) - Visa Conversion Rate Swap - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 29.7 | $ 25.2 |
Total (Gains) Losses: | ||
Included in Earnings | 19.8 | 12.7 |
Purchases, Issues, Sales, and Settlements | ||
Settlements | (16.7) | (8.2) |
Balance at end of period | 32.8 | 29.7 |
Unrealized (Gains) Losses Included in Earnings Related to Financial Instruments Held at December 31 | $ 13.3 | $ 11.4 |
Fair Value Measurements - Valuation Techniques, Significant Unobservable Inputs, Quantitative Information Non-recurring Basis (Detail) - Fair Value, Measurements, Nonrecurring - LEVEL 3 $ in Millions |
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
---|---|---|
Discount to reflect realizable value | Lower Limit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans, Range of Discounts Applied | 0.150 | 0.150 |
OREO, Range of Discounts Applied | 0.150 | 0.150 |
Discount to reflect realizable value | Upper Limit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans, Range of Discounts Applied | 0.300 | 0.250 |
OREO, Range of Discounts Applied | 0.300 | 0.200 |
Loans | Discount to reflect realizable value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
FAIR VALUE | $ 24.9 | $ 12.2 |
OREO | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
FAIR VALUE | $ 0.4 | $ 0.3 |
Securities - Remaining Maturity of Securities Available for Sale (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Available for Sale - Amortized Cost | ||
Due in One Year or Less | $ 9,206.2 | $ 6,249.5 |
Due After One Year Through Five Years | 21,012.7 | 20,017.2 |
Due After Five Years Through Ten Years | 5,774.1 | 6,545.3 |
Due After Ten Years | 1,048.8 | 1,052.8 |
AMORTIZED COST | 37,041.8 | 33,864.8 |
Available for Sale - Fair Value | ||
Due in One Year or Less | 9,162.8 | 6,227.0 |
Due After One Year Through Five Years | 20,943.9 | 19,937.8 |
Due After Five Years Through Ten Years | 5,740.8 | 6,535.1 |
Due After Ten Years | 1,041.3 | 1,042.2 |
Total | $ 36,888.8 | $ 33,742.1 |
Securities - Remaining Maturity of Securities Held to Maturity (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Held to Maturity - Amortized Cost | ||
Due in One Year or Less | $ 6,638.2 | $ 5,691.9 |
Due After One Year Through Five Years | 7,066.0 | 6,667.8 |
Due After Five Years Through Ten Years | 567.9 | 612.2 |
Due After Ten Years | 81.9 | 77.1 |
AMORTIZED COST | 14,354.0 | 13,049.0 |
Held to Maturity - Fair Value | ||
Due in One Year or Less | 6,635.5 | 5,695.8 |
Due After One Year Through Five Years | 7,040.0 | 6,663.9 |
Due After Five Years Through Ten Years | 553.0 | 606.3 |
Due After Ten Years | 38.5 | 44.9 |
FAIR VALUE | $ 14,267.0 | $ 13,010.9 |
Securities - Narrative (Detail) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
Investment
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Debt and Equity Securities, FV-NI [Line Items] | |||
Transferred from available for sale to held to maturity | $ 287.9 | ||
Investment security losses, net | (1.0) | $ (1.6) | $ (3.2) |
Changes in other-than-temporary-impairment (OTTI) losses | 0.5 | 0.2 | 3.7 |
Gross proceeds from sale of securities | 307.3 | 2,200.0 | 828.9 |
Gross realized securities gains | 1.5 | 0.2 | 0.7 |
Gross realized securities losses | $ 2.0 | $ 1.6 | $ 0.2 |
Number of securities in an unrealized loss position | Investment | 1,357 | ||
Total fair value | $ 34,200.0 | ||
Total unrealized losses | 357.1 | ||
Government Sponsored Agency | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Total unrealized losses | 150.5 | ||
Other | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Total unrealized losses | 69.6 | ||
Corporate Debt | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Total unrealized losses | $ 22.9 | ||
Percent of corporate debt portfolio | 37.00% |
Securities - Net Impairment Losses Recognized In Earnings (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | |||
Changes in Other-Than-Temporary Impairment Losses | $ (0.5) | $ (0.2) | $ (3.7) |
Noncredit-related Losses Recorded in / (Reclassified from) OCI | 0.0 | 0.0 | 0.0 |
Net Impairment Losses Recognized in Earnings | $ (0.5) | $ (0.2) | $ (3.7) |
Securities - Cumulative Credit-Related Losses On Securities Held (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||
Cumulative Credit-Related Losses on Debt Securities Held – Beginning of Year | $ 3.6 | $ 3.4 |
Plus: Losses on Newly Identified Impairments | 0.4 | 0.1 |
Additional Losses on Previously Identified Impairments | 0.1 | 0.1 |
Less: Current and Prior Period Losses on Debt Securities Sold or Matured During the Year | 0.0 | 0.0 |
Cumulative Credit-Related Losses on Debt Securities Held – End of Year | $ 4.1 | $ 3.6 |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase - Securities Purchased under Agreements to Resell (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Balance at December 31 | $ 1,031.2 | $ 1,303.3 |
Average Balance During the Year | $ 1,478.3 | $ 1,832.0 |
Average Interest Rate Earned During the Year | 2.22% | 1.48% |
Maximum Month-End Balance During the Year | $ 1,942.0 | $ 2,064.1 |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase - Securities Sold under Agreements to Repurchase (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Balance at December 31 | $ 168.3 | $ 834.0 |
Average Balance During the Year | $ 525.2 | $ 738.9 |
Average Interest Rate Paid During the Year | 1.48% | 0.81% |
Maximum Month-End Balance During the Year | $ 981.3 | $ 834.0 |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase - Repurchase Agreements Accounted for as Secured Borrowings (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 27 | $ 150.7 | $ 381.7 |
Maturity overnight and continuous | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total borrowings, repurchase agreements | 168.3 | |
Gross Amount of Recognized Liabilities for Repurchase Agreements in Note 27 | 168.3 | |
Amounts related to agreements not included in Note 27 | 0.0 | |
Maturity overnight and continuous | U.S. Treasury and Agency Securities | ||
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items] | ||
Total borrowings, repurchase agreements | $ 168.3 |
Loans and Leases - Direct Finance and Leveraged Leases (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Direct Finance Leases | ||
Lease Receivable | $ 9.8 | $ 26.6 |
Residual Value | 23.8 | 72.4 |
Initial Direct Costs | 0.3 | 0.7 |
Unearned Income | 0.0 | (1.5) |
Investment in Direct Finance Leases | 33.9 | 98.2 |
Leveraged Leases | ||
Net Rental Receivable | 33.9 | 76.1 |
Residual Value | 33.3 | 85.6 |
Unearned Income | (10.4) | (30.7) |
Investment in Leveraged Leases | 56.8 | 131.0 |
Lease Financing, net | $ 90.7 | $ 229.2 |
Loans and Leases - Future Minimum Lease Payments (Detail) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Receivables [Abstract] | |
2019 | $ 3.7 |
2020 | 3.7 |
2021 | 2.1 |
2022 | 0.0 |
2023 | $ 0.0 |
Concentrations of Credit Risk - Narrative (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Concentration Risk [Line Items] | ||
Interest bearing balances held at banks | $ 4,300.0 | $ 5,600.0 |
Federal funds sold and securities purchased under agreements to resell | 1,165.2 | 1,324.3 |
Credit risk to banks | 4,500.0 | 4,300.0 |
Residential real estate | $ 6,500.0 | $ 7,200.0 |
Residential real estate loans as percentage of total U.S. loans | 22.00% | 23.00% |
Lower limit of generally required loan to collateral value for residential real estate loans | 65.00% | |
Upper limit of generally required loan to collateral value for residential real estate loans | 80.00% | |
Legally binding undrawn commitments to extend credit | $ 824.0 | $ 1,000.0 |
Florida | ||
Concentration Risk [Line Items] | ||
Residential real estate | 1,700.0 | |
Greater Chicago Area | ||
Concentration Risk [Line Items] | ||
Residential real estate | 1,200.0 | |
California | ||
Concentration Risk [Line Items] | ||
Residential real estate | $ 1,300.0 |
Concentrations of Credit Risk - Commercial Real Estate Loans (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Commercial Mortgages | ||
Office | $ 811.2 | $ 825.2 |
Apartment/ Multi-family | 490.7 | 623.3 |
Retail | 529.7 | 631.1 |
Industrial/ Warehouse | 254.9 | 311.1 |
Other | 426.6 | 445.6 |
Total Commercial Mortgages | 2,513.1 | 2,836.3 |
Construction, Acquisition and Development Loans | 420.6 | 350.8 |
Single Family Investment | 127.0 | 164.8 |
Other Commercial Real Estate Related | 168.1 | 130.8 |
Total Commercial Real Estate Loans | $ 3,228.8 | $ 3,482.7 |
- Buildings and Equipment (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
ORIGINAL COST | $ 1,317.0 | |
ACCUMULATED DEPRECIATION | 888.8 | |
NET BOOK VALUE | 428.2 | $ 464.6 |
Land and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
ORIGINAL COST | 15.4 | |
ACCUMULATED DEPRECIATION | 1.1 | |
NET BOOK VALUE | 14.3 | |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
ORIGINAL COST | 245.7 | |
ACCUMULATED DEPRECIATION | 148.2 | |
NET BOOK VALUE | 97.5 | |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
ORIGINAL COST | 649.9 | |
ACCUMULATED DEPRECIATION | 457.6 | |
NET BOOK VALUE | 192.3 | |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
ORIGINAL COST | 406.0 | |
ACCUMULATED DEPRECIATION | 281.9 | |
NET BOOK VALUE | $ 124.1 |
Buildings and Equipment - Narrative (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation of assets | $ 108.6 | $ 101.2 | $ 89.2 |
Lease Commitments - Minimum Lease Payments (Detail) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 98.8 |
2020 | 97.8 |
2021 | 85.9 |
2022 | 77.2 |
2023 | 67.7 |
Later Years | 335.7 |
Total Minimum Lease Payments | 763.1 |
Less: Sublease Rentals | (23.4) |
Net Minimum Lease Payments | $ 739.7 |
Lease Commitments - Narrative (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Leases [Abstract] | |||
Net rental expense | $ 79.0 | $ 76.7 | $ 76.1 |
Goodwill and Other Intangibles - Goodwill (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Goodwill [Roll Forward] | ||
Beginning Balance | $ 605.6 | $ 519.4 |
Goodwill Acquired | 71.4 | 78.3 |
Measurement Period Adjustments | (1.3) | |
Foreign Exchange Rates | (7.7) | 9.2 |
Ending Balance | 669.3 | 605.6 |
CORPORATE & INSTITUTIONAL SERVICES | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 534.5 | 448.4 |
Goodwill Acquired | 71.4 | 78.3 |
Measurement Period Adjustments | (1.3) | |
Foreign Exchange Rates | (7.7) | 9.1 |
Ending Balance | 598.2 | 534.5 |
WEALTH MANAGEMENT | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 71.1 | 71.0 |
Goodwill Acquired | 0.0 | 0.0 |
Measurement Period Adjustments | 0.0 | |
Foreign Exchange Rates | 0.0 | 0.1 |
Ending Balance | $ 71.1 | $ 71.1 |
Goodwill and Other Intangibles - Other Intangible Assets (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross Carrying Amount | $ 211.1 | $ 222.7 |
Less: Accumulated Amortization | 72.5 | 61.3 |
Net Book Value | $ 138.6 | $ 161.4 |
Senior Notes and Long-Term Debt - Senior Notes (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Senior Notes | $ 2,011.3 | $ 1,497.3 |
Fixed Rate Due Nov. 2020 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.45% | |
Senior Notes | $ 499.7 | 499.6 |
Fixed Rate Due Aug. 2021 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.38% | |
Senior Notes | $ 499.1 | 498.8 |
Fixed Rate Due Aug. 2022 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.38% | |
Senior Notes | $ 499.2 | 498.9 |
Fixed Rate Due Aug. 2028 | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.65% | |
Senior Notes | $ 513.3 | $ 0.0 |
Floating Rate Capital Debt - Subordinated Debentures (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Outstanding [Line Items] | ||
Floating Rate Capital Debt | $ 277.6 | $ 277.5 |
NTC Capital I Subordinated Debentures due January 15, 2027 | ||
Debt Outstanding [Line Items] | ||
Floating Rate Capital Debt | 154.2 | 154.2 |
NTC Capital II Subordinated Debentures due April 15, 2027 | ||
Debt Outstanding [Line Items] | ||
Floating Rate Capital Debt | $ 123.4 | $ 123.3 |
Stockholders' Equity - Shares of Common Stock (Detail) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Beginning balance (in shares) | 226,126,674 | 228,605,485 | 229,293,783 |
Incentive Plan and Awards (in shares) | 1,310,778 | 1,320,129 | 1,209,124 |
Stock Options Exercised (in shares) | 575,662 | 1,997,362 | 4,156,728 |
Treasury Stock Purchased (in shares) | (9,001,064) | (5,796,302) | (6,054,150) |
Ending balance (in shares) | 219,012,050 | 226,126,674 | 228,605,485 |
Revenue from Contracts with Clients (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disaggregation of Revenue [Line Items] | |||
Security commissions and trading income | $ 98.3 | $ 89.6 | $ 81.4 |
Other operating income | 127.5 | $ 157.5 | $ 241.2 |
Securities Commission and Trading | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | 86.7 | ||
Products and Services, Other Operating Income | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customer | $ 44.0 |
Revenue from Contracts with Clients (Client Receivables) (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Total Client Receivables | $ 832.6 | $ 708.7 |
Estate settlement revenue transition adjustment | 2.7 | |
Trust Fees Receivable, Net | ||
Disaggregation of Revenue [Line Items] | ||
Total Client Receivables | 742.5 | 629.7 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Client Receivables | $ 90.1 | $ 79.0 |
Net Interest Income - Net Interest Income (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Interest Income | |||
Loans and Leases | $ 1,098.8 | $ 919.1 | $ 806.5 |
Securities – Taxable | 905.2 | 594.1 | 428.8 |
Securities - Non-Taxable | 7.0 | 9.8 | 7.5 |
Interest-Bearing Due from and Deposits with Banks | 70.0 | 63.8 | 64.3 |
Federal Reserve and Other Central Bank Deposits and Other | 240.4 | 182.6 | 109.8 |
Total Interest Income | 2,321.4 | 1,769.4 | 1,416.9 |
Interest Expense | |||
Deposits | 384.6 | 182.1 | 83.5 |
Federal Funds Purchased | 50.3 | 10.4 | 1.5 |
Securities Sold under Agreements to Repurchase | 7.8 | 6.0 | 2.3 |
Other Borrowings | 150.1 | 50.7 | 18.0 |
Senior Notes | 53.4 | 46.9 | 46.8 |
Long-Term Debt | 45.0 | 39.2 | 26.4 |
Floating Rate Capital Debt | 7.5 | 4.9 | 3.5 |
Total Interest Expense | 698.7 | 340.2 | 182.0 |
Net Interest Income | $ 1,622.7 | $ 1,429.2 | $ 1,234.9 |
Other Operating Income - (Detail) - USD ($) shares in Millions, $ in Millions |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Components of Other Operating Income [Line Items] | |||||
Total Other Operating Income | $ 127.5 | $ 157.5 | $ 241.2 | ||
Visa Class B | |||||
Components of Other Operating Income [Line Items] | |||||
Net gain on sale of derivative | $ 123.1 | $ 99.9 | $ 123.1 | ||
Shares sold (in shares) | 1.1 | 1.0 | 1.1 | ||
Loan Service Fees | |||||
Components of Other Operating Income [Line Items] | |||||
Total Other Operating Income | 48.9 | 50.7 | $ 56.6 | ||
Banking Service Fees | |||||
Components of Other Operating Income [Line Items] | |||||
Total Other Operating Income | 46.4 | 48.6 | 50.6 | ||
Other Income | |||||
Components of Other Operating Income [Line Items] | |||||
Total Other Operating Income | $ 32.2 | $ 58.2 | $ 134.0 |
Other Operating Expense - (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Other Income and Expenses [Abstract] | |||
Business Promotion | $ 98.3 | $ 95.4 | $ 83.6 |
FDIC Insurance Premiums | 27.4 | 34.7 | 31.7 |
Staff Related | 33.6 | 42.8 | 43.0 |
Other Intangibles Amortization | 17.4 | 11.4 | 8.8 |
Other Expenses | 153.9 | 147.3 | 197.3 |
Total Other Operating Expense | $ 330.6 | $ 331.6 | 364.4 |
Agreement To Settle Securities | |||
Loss Contingencies [Line Items] | |||
Litigation settlement | 50.0 | ||
Contractual Modifications | |||
Loss Contingencies [Line Items] | |||
Litigation settlement | $ 18.6 |
Income Taxes - Income Taxes (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Tax at Statutory Rate | $ 411.1 | $ 571.9 | $ 531.0 |
Tax Exempt Income | (6.9) | (9.6) | (7.2) |
Foreign Tax Rate Differential | (7.3) | (50.0) | (50.9) |
Excess Tax Benefit Related to Share-Based Compensation | (16.8) | (31.6) | (12.3) |
State Taxes, net | 65.5 | 41.0 | 31.1 |
Impact of Tax Cuts and Jobs Act | (4.8) | (53.1) | 0.0 |
Change in Accounting Method | 24.4 | 0.0 | 0.0 |
Other | (15.0) | (33.7) | (7.1) |
Provision for Income Taxes | $ 401.4 | $ 434.9 | $ 484.6 |
Income Taxes - Impact of Tax Cuts and Jobs Act (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Federal Taxes on Mandatory Deemed Repatriation | $ (16.8) | $ 150.0 | |
Impact Related to Federal Deferred Taxes | 12.7 | (210.0) | |
Other Adjustments | (0.7) | 6.9 | |
Provision (Benefit) for Income Taxes | $ (4.8) | $ (53.1) | $ 0.0 |
Income Taxes - Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning Balance | $ 27.7 | $ 17.2 |
Additions for Tax Positions Taken in the Current Year | 0.5 | 9.9 |
Additions for Tax Positions Taken in Prior Years | 1.7 | 6.2 |
Reductions for Tax Positions Taken in Prior Years | (7.8) | (5.4) |
Reductions Resulting from Expiration of Statutes | (0.2) | (0.2) |
Ending Balance | $ 21.9 | $ 27.7 |
Income Taxes - Provision for Income Taxes (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Current Tax Provision: | |||
Federal | $ 132.8 | $ 347.3 | $ 495.8 |
State | 95.4 | 38.3 | 65.3 |
Non-U.S. | 162.7 | 125.4 | 99.3 |
Total | 390.9 | 511.0 | 660.4 |
Deferred Tax Provision: | |||
Federal | 33.8 | (96.4) | (159.0) |
State | (13.8) | 24.6 | (18.9) |
Non-U.S. | (9.5) | (4.3) | 2.1 |
Total | 10.5 | (76.1) | (175.8) |
Provision for Income Taxes | $ 401.4 | $ 434.9 | $ 484.6 |
Income Taxes - Tax Charges and Benefits Recorded Directly to Stockholders' Equity (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Current Tax Benefit (Charge) for Employee Stock Options and Other Stock-Based Plans | $ 0.0 | $ 0.0 | $ (7.6) |
Tax Effect of Other Comprehensive Income | $ 25.7 | $ (112.4) | $ 72.4 |
Income Taxes - Deferred Tax Liabilities (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred Tax Liabilities: | ||
Lease Financing | $ 43.3 | $ 85.8 |
Software Development | 193.2 | 187.8 |
Accumulated Depreciation | 129.5 | 41.0 |
Compensation and Benefits | 10.9 | 0.0 |
State Taxes, net | 58.9 | 59.4 |
Other Liabilities | 114.5 | 145.7 |
Gross Deferred Tax Liabilities | 550.3 | 519.7 |
Deferred Tax Assets: | ||
Allowance for Credit Losses | 29.0 | 32.3 |
Compensation and Benefits | 0.0 | 35.5 |
Other Assets | 120.6 | 88.3 |
Gross Deferred Tax Assets | 149.6 | 156.1 |
Valuation Reserve | (0.3) | (1.1) |
Deferred Tax Assets, net of Valuation Reserve | 149.3 | 155.0 |
Net Deferred Tax Liabilities | $ 401.0 | $ 364.7 |
Employee Benefits - Estimated Future Benefit Payments (Detail) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Supplemental Plan | |
Schedule of Pension Expected Future Benefit Payments [Line Items] | |
2019 | $ 12.0 |
2020 | 11.5 |
2021 | 14.4 |
2022 | 16.2 |
2023 | 14.9 |
2024-2028 | 63.6 |
U.S. Plan | Pension Plans, Defined Benefit | |
Schedule of Pension Expected Future Benefit Payments [Line Items] | |
2019 | 74.0 |
2020 | 76.8 |
2021 | 75.1 |
2022 | 73.4 |
2023 | 77.1 |
2024-2028 | 368.9 |
Non U.S. Plans | Pension Plans, Defined Benefit | |
Schedule of Pension Expected Future Benefit Payments [Line Items] | |
2019 | 3.4 |
2020 | 3.8 |
2021 | 4.1 |
2022 | 3.9 |
2023 | 4.3 |
2024-2028 | $ 26.4 |
Employee Benefits - Postretirement Health Care Plan Status (Detail) - Other Postretirement Plan - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Defined Benefit Plan Disclosure [Line Items] | |||
Net Postretirement Benefit Obligation | $ 28.1 | $ 34.4 | $ 34.1 |
Retirees and Dependents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net Postretirement Benefit Obligation | 23.5 | 27.7 | |
Actives Eligible for Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net Postretirement Benefit Obligation | $ 4.6 | $ 6.7 |
Employee Benefits - Postretirement Amounts Included in Accumulated Other Comprehensive Income (Detail) - Other Postretirement Plan - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net Actuarial Loss / (Gain) | $ (6.5) | $ 3.9 |
Prior Service Cost | 0.0 | 0.0 |
Gross Amount in Accumulated Other Comprehensive Income | (6.5) | 3.9 |
Income Tax Effect | (2.2) | 1.5 |
Net Amount in Accumulated Other Comprehensive Income | $ (4.3) | $ 2.4 |
Employee Benefits - Net Periodic Postretirement (Benefit) Expense (Detail) - Other Postretirement Plan - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service Cost | $ 0.0 | $ 0.1 | $ 0.1 |
Interest Cost | 1.3 | 1.4 | 1.5 |
Expected Return on Plan Assets | 0.0 | 0.0 | 0.0 |
Amortization | |||
Net Gain | 0.0 | 0.0 | 0.0 |
Prior Service Benefit | 0.0 | 0.0 | 0.0 |
Net Periodic Pension Expense | $ 1.3 | $ 1.5 | $ 1.6 |
Employee Benefits - Change in Accumulated Postreitrement Benefit Obligation (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Actuarial Loss / (Gain) | $ (131.4) | $ 164.5 | |
Other Postretirement Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Beginning Balance | 34.4 | 34.1 | |
Service Cost | 0.0 | 0.1 | $ 0.1 |
Interest Cost | 1.3 | 1.4 | 1.5 |
Actuarial Loss / (Gain) | (6.7) | (0.2) | |
Net Claims Paid | (6.3) | (1.0) | |
Medicare Subsidy | 5.4 | 0.0 | |
Ending Balance | $ 28.1 | $ 34.4 | $ 34.1 |
Employee Benefits - Postretirement Estimated Future Benefit Payments (Detail) - Other Postretirement Plan $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Schedule of Pension and Other Postretirement Benefits Expected Benefit Payments [Line Items] | |
2019 | $ 2.5 |
2020 | 2.5 |
2021 | 2.4 |
2022 | 2.3 |
2023 | 2.2 |
2024-2028 | $ 10.1 |
Share-Based Compensation Plans - Total Compensation Expense for Share-Based Payment Arrangements to Employees (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Share-Based Compensation Expense | $ 130.9 | $ 128.0 | $ 86.8 |
Tax Benefits Recognized | 32.5 | 48.7 | 32.8 |
Restricted Stock Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Share-Based Compensation Expense | 96.3 | 87.3 | 60.2 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Share-Based Compensation Expense | 2.6 | 9.0 | 9.0 |
Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Share-Based Compensation Expense | $ 32.0 | $ 31.7 | $ 17.6 |
Share-Based Compensation Plans - Weighted-Average Assumptions Used for Options Granted (Detail) - Equity Option |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Term (in Years) | 6 years 10 months 8 days | 7 years |
Dividend Yield | 1.81% | 2.57% |
Expected Volatility | 23.20% | 32.30% |
Risk-Free Interest Rate | 2.11% | 1.45% |
Share-Based Compensation Plans - Stock Options Granted, Vested, and Exercised (Detail) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Weighted Average Grant-Date Per Share Fair Value of Stock Options Granted (in dollars per share) | $ 0.00 | $ 19.18 | $ 14.84 |
Grant-Date Fair Value of Stock Options Vested | $ 8.1 | $ 7.3 | $ 9.6 |
Stock Options Exercised | |||
Intrinsic Value as of Exercise Date | 28.5 | 74.7 | 83.9 |
Cash Received | 32.6 | 108.0 | 233.8 |
Tax Deduction Benefits Realized | $ 27.7 | $ 73.1 | $ 80.0 |
Share-Based Compensation Plans - Changes in Nonvested Stock Options (Detail) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
SHARES | |||
Nonvested stock options outstanding, at beginning of the year (in shares) | 1,246,505 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | (483,605) | ||
Forfeited or Cancelled (in shares) | (5,162) | ||
Nonvested stock options outstanding, at end of the year (in shares) | 757,738 | 1,246,505 | |
WEIGHTED- AVERAGE GRANT- DATE FAIR VALUE PER SHARE | |||
Nonvested stock options weighted average grant date fair value at beginning of the year (in dollars per share) | $ 17.25 | ||
Granted (in dollars per share) | 0.00 | $ 19.18 | $ 14.84 |
Vested (in dollars per share) | 17.07 | ||
Forfeited or Cancelled (in dollars per share) | 19.18 | ||
Nonvested stock options weighted average grant date fair value at end of the year (in dollars per share) | $ 17.36 | $ 17.25 |
Share-Based Compensation Plans - Outstanding Restricted Stock Unit Awards (Detail) - Restricted Stock Unit Awards - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
NUMBER | ||
Balance at beginning of period (in shares) | 3,399,438 | |
Granted (in shares) | 815,314 | |
Distributed (in shares) | (1,016,846) | |
Forfeited (in shares) | (76,064) | |
Balance at end of period (in shares) | 3,121,842 | |
Units Convertible, at the end of year (in shares) | 144,722 | |
AGGREGATE INTRINSIC VALUE | ||
AGGREGATE INTRINSIC VALUE | $ 261.0 | $ 339.6 |
Units Convertible, at the end of year | $ 12.1 |
Share-Based Compensation Plans - Nonvested Restricted Stock Unit Awards (Detail) - Restricted Stock Unit Awards - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
NUMBER | ||
Beginning Balance (in shares) | 3,231,327 | |
Granted (in shares) | 815,314 | |
Vested (in shares) | (993,457) | |
Forfeited (in shares) | (76,064) | |
Ending Balance (in shares) | 2,977,120 | 3,231,327 |
WEIGHTED AVERAGE GRANT- DATE FAIR VALUE PER UNIT | ||
Nonvested at beginning of year (in dollars per share) | $ 69.67 | |
Granted (in dollars per share) | 103.74 | |
Vested (in dollars per share) | 66.82 | |
Forfeited (in dollars per share) | 73.18 | |
Nonvested at end of year (in dollars per share) | $ 79.92 | $ 69.67 |
WEIGHTED AVERAGE REMAINING VESTING TERM (YEARS) | ||
Nonvested | 1 year 10 months 8 days | 1 year 10 months 8 days |
Cash-Based Compensation Plans - Narrative (Detail) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Compensation Related Costs [Abstract] | |||
Cash based compensation expense | $ 326.5 | $ 289.8 | $ 250.7 |
Derivative Financial Instruments - Hedged Items in Fair Value (Detail) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Carrying Value, Available for Sale Debt Securities | $ 3,831.6 |
Carrying value, Senior Notes and Long-Term Subordinated Debt | 1,248.8 |
Carrying value, Total | 5,080.4 |
Cumulative Hedge Accounting Basis Adjustment, Available for Sale Debt Securities | 99.4 |
Cumulative Hedge Accounting Basis Adjustment, Senior Notes and Long-Term Subordinated Debt | 29.3 |
Cumulative Hedge Accounting Basis Adjustment, Total | $ 128.7 |
Offsetting of Assets and Liabilities - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Derivative [Line Items] | ||
GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET | $ 12.7 | $ 2.1 |
GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET | 0.0 | |
Aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position | 324.1 | 223.7 |
Collateral deposited with derivative counterparties for derivatives instruments with credit-risk-related contingent features that are in a liability position | 316.5 | 35.8 |
Assets needed for immediate settlement, aggregate fair value | 7.6 | 187.9 |
Net Investment Hedges | ||
Derivative [Line Items] | ||
GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET | 27.6 | |
GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET | $ 91.5 | |
Cash collateral received from derivative counterparties not offset against derivative assets | 67.0 | |
Cash collateral deposited with derivative counterparties not offset against derivative liabilities | $ 143.1 |
Off-Balance-Sheet Financial Instruments - Commitments and Letters of Credit (Detail) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Legally Binding Commitments to Extend Credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments and letters of credit | $ 25,023.0 | $ 26,822.6 |
Commitments, participated to others | 242.3 | 385.5 |
Standby Letters of Credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments and letters of credit | $ 2,486.2 | $ 2,970.0 |
Weighted average maturity, letters of credit | 23 months | 22 months |
Commercial Letters of Credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments and letters of credit | $ 32.3 | $ 37.7 |
Secured by Cash Deposits or Participated to Others | Standby Letters of Credit | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments and letters of credit | $ 72.3 | $ 92.5 |
Off-Balance-Sheet Financial Instruments - Narrative (Detail) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Minimum collateral maintained against fair value of client securities loaned plus accrued interest | 100.00% | |
Indemnification Agreement | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Securities loaned and subject to indemnification | $ 128,900,000,000 | $ 143,600,000,000 |
Credit loss liability | $ 0 |
Reporting Segments and Related Information - Narrative (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2018
Segment
| |
Segment Reporting [Abstract] | |
Number of client-focused reportable segment | 2 |
Reporting Segments and Related Information - Distribution of Total Assets and Operating Performance (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Segment Reporting Information [Line Items] | |||
TOTAL ASSETS | $ 132,212.5 | $ 138,590.5 | $ 123,926.9 |
TOTAL REVENUE | 5,960.2 | 5,375.3 | 4,961.8 |
INCOME BEFORE INCOME TAXES | 1,957.8 | 1,633.9 | 1,517.1 |
Net Income | 1,556.4 | 1,199.0 | 1,032.5 |
Non-U.S. | |||
Segment Reporting Information [Line Items] | |||
TOTAL ASSETS | 32,712.9 | 30,325.3 | 24,944.0 |
TOTAL REVENUE | 2,018.1 | 1,709.7 | 1,221.2 |
INCOME BEFORE INCOME TAXES | 786.4 | 613.5 | 284.3 |
Net Income | 625.7 | 430.0 | 225.1 |
U.S. | |||
Segment Reporting Information [Line Items] | |||
TOTAL ASSETS | 99,499.6 | 108,265.2 | 98,982.9 |
TOTAL REVENUE | 3,942.1 | 3,665.6 | 3,740.6 |
INCOME BEFORE INCOME TAXES | 1,171.4 | 1,020.4 | 1,232.8 |
Net Income | $ 930.7 | $ 769.0 | $ 807.4 |
Label | Element | Value |
---|---|---|
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (4,500,000) |
U0WDW+!]:(D\0/DL,@<13URK.62#(=
M5UIVXT0W#MU$YN8D"9/'6*6B6O&.19U3+A0Y/R3Z(?13,#^$SS'>@1V4D==Z
M5 GQOJS&460_N=+[
M]^/%8VZYU"N?K^SP=[,OX^&SIK%24.7FG?%O%A_OP6A6RQ(-:?K&RRU
M@OVUI-62[+ 3#./D8WN^BI.P 0<-N*,!=VF 94>=-.&HV9TTWH?&B7!/LG0I
MLSF+@($MP]1X[+.'/GL0-&,# 1H(.FAC1- GC;]T5,1[4L1+11-$N%K#3>7Y
M1.AJU*X&T?&+J&Z2?9/-Q8]T/>K@C!R:VFKII"9CYQ-T/H%^%K=9)'6;F76-
M4"V3 6=M9GR!EWM,6OH/]T9^TB\BB4C,!TC ED8:FP(_;PS'S
M^ !X8S":U1[Y3LY*O?O@2UW@C3<$'"KK%:A;+O $G'LA9^/7K(F7DIZXWE_5
M7T+OKI ^($+\F.V;Z 91[ FBMDH X,M*?)U%5X=WU)OV)5"5898_
MVJ-"AG4$\XO#7]MN_W0\6'>8W/>ONV$\0W5Q]?WPWF<:#X^)ZPO[J3T=P?O3
MS.E$X+]7^Z?U[C#YV@]#OST>('OL^Z$K3I82:CIY[E8/[U\VW>,P?HSE\_YT
M$N_T9>A?SJ<,Y^]''>_^#U!+ P04 " A5I.NQHT6[0! #2 P &
M 'AL+W=O
/*B5>LRVGC?'1AS10-:N"O308LWE;%:>#1MS5QG0901
MI!7C27+-M) MS=/H.]D\-;U7LH63):[76M@_1U!FR.B&OCH>9-WXX&!YVHD:
M?H+_U9TL6FQF*:6&UDG3$@M51F\WA^,NQ,> 1PF#6YQ)J.1LS',POI4938(@
M4%#XP"!PN\ =*!6(4,;OB9/.*0-P>7YEOX^U8RUGX>#.J"=9^B:C>TI*J$2O
M_(,9OL)4SR=*IN*_PP44A@)*
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MS]/^3=A6]HY)*BMYYHR853$6)MW%O==R'\8;O
M)MHZ@4\$/A/V,0X; \7,OPDO\M2:@=BQ]YT(3[P]<.Q-$9RQ%?$.DW?HO>3)
M3(?)._1>"WZ;9.P:A&;,:<+P%6:W(!BJ+R'X5H@3_X?.M^G[S0SW
MD;Y?T]/#MD"Z*9!&@?2_)6YA_BZ2K7JJP#9QFAPIS:#C)*^\R\#>\_@F'_!I
MVK\)VW3:D8OQ^+*Q_[4Q'C"5Y 9'J,4/MA@2:A^.G_!LIS&;#&_Z^0>QY1L7
M?P!02P,$% @ (5:3CBZ/ZBS 0 T@, !D !X;"]W;W)KE?2=BJIQI,$Z?)DA*'+D[RRKL,[#V/;_([?)KV)V$:
MV5ER1N=?-O:_1G3@I>QN_ BU_H,MAH+:A>-'?S;3F$V&PW[^06SYQL4O4$L#
M!!0 ( "%6D[X[E4+M0$ -(# 9 >&PO=V]R:W-H965T
MINP2=";(<83P!60S(Y@7GR/PM0A'_HG.U^G;U02WD;Y=TO?)NL!N56 7!7;_
MJ_ SA.__K9$M.JK!U'&6+"FP;^,<+[SSN-[Q^"(?\''6?PI3R]:2,SK_KK'[
M%:(#GTIRY0>H\=]K-A14+ARO_=F,0S8:#KOI_[#Y$^=_ 5!+ P04 "
MA5I.&AY=CK0! #2 P &0 'AL+W=O
:%EGT74R18>^DT' QQ/9*/[#!*'G&[IF^-)-*T+#E9D'6_@
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M_:\1'?A4-G=^A%K_P69#0NW"\>#/9ARST7#833^(S=^X^ -02P,$% @
M (5:3JH-I&+! 0 -P0 !D !X;"]W;W)K= M@T*O@O
*S.!(S-3[7H0GWA^Y[TT9G+$5\
T]"#L0! W!
M&0 'AL+W=OI22:_]%Y:B-%(N*346PMWGL>C].\\X^7FAA ET(="7<>1\R&_G,'YEA
M1:;DA-1\]@-S5QP?J#V;T@7]4?@]F[RVT4N11C0C%R>T8(XSAFXP\8H@5GVU
MH"&+(_U$IV%Z$LPP\?1D2_^2A 5V08&=%]C]5V)R56((LPN;I$&3-""07IF$
M,/LK$[*Y. &J\4]6HU*.O6^7373MBGOJ+_X??&ZI9Z::KM?H+(U]/OZ2:RD-
MV%2B&YM+:[MX77"HC9O>VKF:W_*\,')8VI2L_XKB+U!+ P04 " A5I.
M+BH+U;0! #2 P &0 'AL+W=O
R8@3 I;"0%C:2 $0P+9*! =OO6Y*!
M#CAPREQVF'Q0)@J<=CW=@%EUF'2(@:T6H-6BRQX:\$=Z-0'YD]M[A2(X_1'0
MK<2-?W1=9I)/W , 0L79B)V1PPC]/U<64PP#@_(H