Reporting Segments

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Reporting Segments

Reporting Segments

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.

Reporting segment financial information, presented on an internal management-reporting basis, is determined by accounting systems used to allocate revenue and expense to each segment, and incorporates processes for allocating assets, liabilities, equity and the applicable interest income and expense utilizing a funds transfer pricing (FTP) methodology. Under the methodology, assets and liabilities receive a funding charge or credit that considers interest rate risk, liquidity risk, and other product characteristics on an instrument level.

Revenues, expenses and average assets are allocated to C&IS and Wealth Management, with the exception of non-recurring activities such as certain costs associated with acquisitions, divestitures, litigation, restructuring, and tax adjustments not directly attributable to a specific reporting segment.

Reporting segment results are subject to reclassification when organizational changes are made. The results are also subject to refinements in revenue and expense allocation methodologies, which are typically reflected on a prospective basis.

The following table reflects the earnings contributions and average assets of Northern Trust’s reporting segments for the three- and six-month periods ended June 30, 2020 and 2019.

TABLE 62: RESULTS OF REPORTING SEGMENTS

THREE MONTHS ENDED JUNE 30,	CORPORATE & INSTITUTIONAL SERVICES						WEALTH MANAGEMENT						TREASURY AND OTHER						TOTAL CONSOLIDATED
($ In Millions)	2020			2019			2020			2019			2020			2019			2020			2019
Noninterest Income
Trust, Investment and Other Servicing Fees	$	566.2		$	549.4		$	395.3		$	406.1		$	—		$	—		$	961.5		$	955.5
Foreign Exchange Trading Income	68.3			57.3			3.0			3.2			—			—			71.3			60.5
Other Noninterest Income	69.0			44.8			40.8			31.5			(8.6)			(3.1)			101.2			73.2
Total Noninterest Income	703.5			651.5			439.1			440.8			(8.6)			(3.1)			1,134.0			1,089.2
Net Interest Income(1)	165.4			229.6			214.4			195.5			—			—			379.8			425.1
Revenue(1)	868.9			881.1			653.5			636.3			(8.6)			(3.1)			1,513.8			1,514.3
Provision for Credit Losses	28.8			(2.4)			37.2			(4.1)			—			—			66.0			(6.5)
Noninterest Expense	655.6			633.3			372.0			372.1			9.3			0.8			1,036.9			1,006.2
Income before Income Taxes(1)	184.5			250.2			244.3			268.3			(17.9)			(3.9)			410.9			514.6
Provision for Income Taxes(1)	41.3			58.3			60.8			67.9			(4.5)			(1.0)			97.6			125.2
Net Income	$	143.2		$	191.9		$	183.5		$	200.4		$	(13.4)		$	(2.9)		$	313.3		$	389.4
Percentage of Consolidated Net Income	45		%	49		%	59		%	52		%	(4)		%	(1)		%	100		%	100		%
Average Assets	$	107,051.3		$	86,696.3		$	31,719.3		$	29,662.6		$	—		$	—		$	138,770.6		$	116,358.9

⁽¹⁾ Non-GAAP financial measures stated on a fully taxable equivalent basis (FTE). Total consolidated includes FTE adjustments of $7.7 million for both 2020 and 2019.

SIX MONTHS ENDED JUNE 30,	CORPORATE & INSTITUTIONAL SERVICES						WEALTH MANAGEMENT						TREASURY AND OTHER						TOTAL CONSOLIDATED
($ In Millions)	2020			2019			2020			2019			2020			2019			2020			2019
Noninterest Income
Trust, Investment and Other Servicing Fees	$	1,140.6		$	1,084.6		$	824.5		$	799.8		$	—		$	—		$	1,965.1		$	1,884.4
Foreign Exchange Trading Income	153.4			117.0			6.8			9.7			—			—			160.2			126.7
Other Noninterest Income	110.8			88.2			83.2			57.0			(5.7)			(8.2)			188.3			137.0
Total Noninterest Income	1,404.8			1,289.8			914.5			866.5			(5.7)			(8.2)			2,313.6			2,148.1
Net Interest Income(1)	376.7			464.4			419.3			390.5			—			—			796.0			854.9
Revenue(1)	1,781.5			1,754.2			1,333.8			1,257.0			(5.7)			(8.2)			3,109.6			3,003.0
Provision for Credit Losses	54.5			(3.5)			72.5			(3.0)			—			—			127.0			(6.5)
Noninterest Expense	1,314.9			1,281.3			766.4			752.0			21.2			1.6			2,102.5			2,034.9
Income before Income Taxes(1)	412.1			476.4			494.9			508.0			(26.9)			(9.8)			880.1			974.6
Provision for Income Taxes(1)	91.2			111.9			121.7			128.7			(6.7)			(2.5)			206.2			238.1
Net Income	$	320.9		$	364.5		$	373.2		$	379.3		$	(20.2)		$	(7.3)		$	673.9		$	736.5
Percentage of Consolidated Net Income	48		%	49		%	55		%	52		%	(3)		%	(1)		%	100		%	100		%
Average Assets	$	99,910.1		$	88,512.4		$	31,560.5		$	29,367.0		$	—		$	—		$	131,470.6		$	117,879.4