Loans

12 Months Ended

Dec. 31, 2024

Receivables [Abstract]

Loans

Loans

Amounts outstanding for Loans, by segment and class, are shown in the following table.

TABLE 57: LOANS

	DECEMBER 31,
(In Millions)	2024		2023
Commercial
Commercial and Institutional(1)	$	10,537.1	$	11,555.3
Commercial Real Estate	5,314.2		5,134.2
Non-U.S.(1)	2,113.9		2,778.5
Other	2,313.6		5,944.8
Total Commercial	20,278.8		25,412.8
Personal
Private Client	15,848.8		14,360.0
Residential Real Estate	6,109.9		6,327.1
Non-U.S.	674.7		428.8
Other	478.4		1,088.3
Total Personal	23,111.8		22,204.2
Total Loans	$	43,390.6	$	47,617.0

(1) Commercial and institutional and commercial-non-U.S. combined include $4.1 billion and $4.5 billion of private equity capital call finance loans at December 31, 2024 and 2023, respectively.

Residential real estate loans consist of traditional first lien mortgages and equity credit lines that generally require a loan-to-collateral value ratio of 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, 2024 and 2023, equity credit lines totaled $250.3 million and $228.7 million, respectively. Equity credit lines for which first liens were held by Northern Trust represented 97% and 96% of the total equity credit lines as of December 31, 2024 and 2023, respectively.

Included within the other commercial, non-U.S. commercial, and other personal classes are short duration advances, primarily related to the processing of custodied client investments, totaling $3.8 billion and $8.4 billion at December 31, 2024 and 2023, respectively. The $8.4 billion short duration advances at December 31, 2023 primarily reflected higher levels of year-end trading and settlement activity. Demand deposit overdrafts reclassified as loan balances, primarily in personal-other, totaled $47.6 million and $12.1 million at December 31, 2024 and 2023, respectively. There were no loans classified as held for sale on either December 31, 2024 or December 31, 2023. Loans classified as held for sale are recorded at the lower of cost or fair value. There were no loans sold during the year ended December 31, 2024. There was a $2.5 million commercial real estate loan sold during the year ended December 31, 2023.

Credit Quality Indicators. Credit quality indicators are statistics, measurements or other metrics that provide information regarding the relative credit risk of loans. Northern Trust uses a variety of credit quality indicators to assess the credit risk of loans 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 their probability of default. Each borrower is rated using one of a number of ratings models or subjective assessment tools, which consider both quantitative and qualitative factors. The ratings models vary among classes of loans 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 class:

•Commercial and Institutional: leverage, profit margin, liquidity, asset size and capital levels;

•Commercial Real Estate: debt service coverage, loan-to-collateral value ratio, leasing status and guarantor support;

•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-collateral 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.

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.

Loans 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 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 in the “6 to 9” category have elevated credit risk profiles that are monitored through internal watch lists. Borrowers associated with these risk profiles may have limited financial flexibility. Cash flows and capital levels range from acceptable to potentially insufficient to meet current requirements, particularly in adverse economic cycles. As a result of these characteristics, these credits, which include all nonaccrual credits, have elevated risk of default or are currently in default.

Loan segment and class balances as of December 31, 2024 are provided in the following table, segregated by borrower ratings into “1 to 3,” “4 to 5” and “6 to 9” (watch list and nonaccrual status) categories by year of origination at amortized cost basis. Loans that are held for investment are reported at the principal amount outstanding, net of unearned income.

TABLE 58: CREDIT QUALITY INDICATOR AT AMORTIZED COST BASIS BY ORIGINATION YEAR

DECEMBER 31, 2024	TERM LOANS												REVOLVING LOANS		REVOLVING LOANS CONVERTED TO TERM LOANS
(In Millions)	2024		2023		2022		2021		2020		PRIOR						TOTAL
Commercial
Commercial and Institutional (C&I)
Risk Rating:
1 to 3 Category	$	462.1	$	238.2	$	367.9	$	466.2	$	82.2	$	277.2	$	4,364.8	$	26.5	$	6,285.1
4 to 5 Category	708.3		506.4		392.5		428.3		82.3		144.2		1,585.1		59.7		3,906.8
6 to 9 Category	34.8		89.3		65.8		70.2		2.3		2.3		73.6		6.9		345.2
Total C&I	1,205.2		833.9		826.2		964.7		166.8		423.7		6,023.5		93.1		10,537.1
C&I Gross Charge-offs	—		(7.3)		(5.4)		—		—		—		—		—		(12.7)
Commercial Real Estate (CRE)
Risk Rating:
1 to 3 Category	123.2		256.3		224.4		203.7		13.8		43.7		52.6		—		917.7
4 to 5 Category	610.1		1,574.2		1,070.4		424.8		173.2		174.4		198.0		5.2		4,230.3
6 to 9 Category	14.0		15.8		125.7		6.0		4.3		0.4		—		—		166.2
Total CRE	747.3		1,846.3		1,420.5		634.5		191.3		218.5		250.6		5.2		5,314.2
CRE Gross Charge-offs	—		—		(2.4)		—		—		—		—		—		(2.4)
Non-U.S.
Risk Rating:
1 to 3 Category	707.1		—		—		—		70.6		28.8		614.9		—		1,421.4
4 to 5 Category	480.5		83.9		0.8		25.0		—		27.9		59.9		—		678.0
6 to 9 Category	0.9		—		13.6		—		—		—		—		—		14.5
Total Non-U.S.	1,188.5		83.9		14.4		25.0		70.6		56.7		674.8		—		2,113.9
Other
Risk Rating:
1 to 3 Category	1,142.4		—		—		—		—		—		—		—		1,142.4
4 to 5 Category	1,171.2		—		—		—		—		—		—		—		1,171.2
Total Other	2,313.6		—		—		—		—		—		—		—		2,313.6
Total Commercial	5,454.6		2,764.1		2,261.1		1,624.2		428.7		698.9		6,948.9		98.3		20,278.8
Commercial Gross Charge-offs	—		(7.3)		(7.8)		—		—		—		—		—		(15.1)
Personal
Private Client
Risk Rating:
1 to 3 Category	251.3		33.9		84.4		37.9		7.9		44.6		6,993.2		93.3		7,546.5
4 to 5 Category	249.0		660.2		384.0		390.5		123.5		181.3		5,734.8		535.3		8,258.6
6 to 9 Category	—		16.1		—		—		—		—		27.6		—		43.7
Total Private Client	500.3		710.2		468.4		428.4		131.4		225.9		12,755.6		628.6		15,848.8
Residential Real Estate (RRE)
Risk Rating:
1 to 3 Category	197.5		150.5		436.7		375.2		325.7		743.6		114.3		—		2,343.5
4 to 5 Category	212.7		263.6		647.2		706.0		652.1		938.1		270.2		2.1		3,692.0
6 to 9 Category	1.7		—		6.8		3.9		2.3		32.5		27.2		—		74.4
Total RRE	411.9		414.1		1,090.7		1,085.1		980.1		1,714.2		411.7		2.1		6,109.9
RRE Gross Charge-offs	—		—		—		—		—		(0.1)		—		—		(0.1)
Non-U.S.
Risk Rating:
1 to 3 Category	3.3		1.0		—		—		—		6.0		369.6		—		379.9
4 to 5 Category	19.5		16.0		15.2		39.1		—		19.6		170.3		7.2		286.9
6 to 9 Category	7.8		—		—		—		—		0.1		—		—		7.9
Total Non-U.S.	30.6		17.0		15.2		39.1		—		25.7		539.9		7.2		674.7
Other
Risk Rating:
1 to 3 Category	168.5		—		—		—		—		—		—		—		168.5
4 to 5 Category	309.9		—		—		—		—		—		—		—		309.9
Total Other	478.4		—		—		—		—		—		—		—		478.4
Other Gross Charge-offs	—		—		—		—		—		(0.3)		—		—		(0.3)
Total Personal	1,421.2		1,141.3		1,574.3		1,552.6		1,111.5		1,965.8		13,707.2		637.9		23,111.8
Personal Gross Charge-offs	—		—		—		—		—		(0.4)		—		—		(0.4)
Total Loans	$	6,875.8	$	3,905.4	$	3,835.4	$	3,176.8	$	1,540.2	$	2,664.7	$	20,656.1	$	736.2	$	43,390.6
Total Loans Gross Charge-offs	$	—	$	(7.3)	$	(7.8)	$	—	$	—	$	(0.4)	$	—	$	—	$	(15.5)

December 31, 2023	TERM LOANS												REVOLVING LOANS		REVOLVING LOANS CONVERTED TO TERM LOANS
(In Millions)	2023		2022		2021		2020		2019		PRIOR						TOTAL
Commercial
Commercial and Institutional (C&I)
Risk Rating:
1 to 3 Category	$	443.9	$	534.1	$	668.3	$	78.1	$	137.2	$	409.9	$	4,909.8	$	15.0	$	7,196.3
4 to 5 Category	801.4		790.9		729.5		138.7		120.5		178.7		1,332.4		72.0		4,164.1
6 to 9 Category	13.8		70.0		60.8		12.0		0.1		1.7		34.7		1.8		194.9
Total C&I	1,259.1		1,395.0		1,458.6		228.8		257.8		590.3		6,276.9		88.8		11,555.3
CRE
Risk Rating:
1 to 3 Category	403.6		389.9		159.1		23.9		37.8		44.8		51.0		—		1,110.1
4 to 5 Category	1,513.5		1,208.8		521.0		218.4		252.8		96.0		136.3		7.9		3,954.7
6 to 9 Category	16.1		—		30.5		—		8.2		14.6		—		—		69.4
Total CRE	1,933.2		1,598.7		710.6		242.3		298.8		155.4		187.3		7.9		5,134.2
CRE Gross Charge-offs	(0.7)		(4.4)		—		—		—		—		—		—		(5.1)
Non-U.S.
Risk Rating:
1 to 3 Category	487.9		—		43.2		65.2		34.2		3.3		760.0		—		1,393.8
4 to 5 Category	974.7		0.8		—		—		—		150.0		243.4		—		1,368.9
6 to 9 Category	1.5		14.3		—		—		—		—		—		—		15.8
Total Non-U.S.	1,464.1		15.1		43.2		65.2		34.2		153.3		1,003.4		—		2,778.5
Other
Risk Rating:
1 to 3 Category	4,313.2		—		—		—		—		—		—		—		4,313.2
4 to 5 Category	1,631.6		—		—		—		—		—		—		—		1,631.6
Total Other	5,944.8		—		—		—		—		—		—		—		5,944.8
Other Gross Charge-offs	(0.6)		—		—		—		—		—		—		—		(0.6)
Total Commercial	10,601.2		3,008.8		2,212.4		536.3		590.8		899.0		7,467.6		96.7		25,412.8
Commercial Gross Charge-offs	(1.3)		(4.4)		—		—		—		—		—		—		(5.7)
Personal
Private Client
Risk Rating:
1 to 3 Category	504.7		140.8		52.3		67.5		8.7		134.7		5,320.9		168.1		6,397.7
4 to 5 Category	290.1		488.2		655.1		100.9		158.8		44.7		5,721.5		447.8		7,907.1
6 to 9 Category	23.6		0.3		—		—		—		18.3		13.0		—		55.2
Total Private Client	818.4		629.3		707.4		168.4		167.5		197.7		11,055.4		615.9		14,360.0
RRE
Risk Rating:
1 to 3 Category	278.7		464.0		500.6		373.3		142.4		722.4		219.8		—		2,701.2
4 to 5 Category	191.6		694.9		717.4		686.7		290.0		805.3		170.3		—		3,556.2
6 to 9 Category	—		10.9		—		0.7		1.6		43.6		12.9		—		69.7
Total RRE	470.3		1,169.8		1,218.0		1,060.7		434.0		1,571.3		403.0		—		6,327.1
RRE Gross Charge-offs	(0.8)		—		—		—		—		(1.0)		—		—		(1.8)
Non-U.S.
Risk Rating:
1 to 3 Category	15.5		—		0.6		—		—		4.6		71.4		—		92.1
4 to 5 Category	12.7		16.0		39.2		—		16.4		8.9		236.1		7.4		336.7
Total Non-U.S.	28.2		16.0		39.8		—		16.4		13.5		307.5		7.4		428.8
Other
Risk Rating:
1 to 3 Category	461.7		—		—		—		—		—		—		—		461.7
4 to 5 Category	626.6		—		—		—		—		—		—		—		626.6
Total Other	1,088.3		—		—		—		—		—		—		—		1,088.3
Total Personal	2,405.2		1,815.1		1,965.2		1,229.1		617.9		1,782.5		11,765.9		623.3		22,204.2
Personal Gross Charge-offs	$	(0.8)	$	—	$	—	$	—	$	—	$	(1.0)	$	—	$	—	$	(1.8)
Total Loans	$	13,006.4	$	4,823.9	$	4,177.6	$	1,765.4	$	1,208.7	$	2,681.5	$	19,233.5	$	720.0	$	47,617.0
Total Loans Gross Charge-offs	$	(2.1)	$	(4.4)	$	—	$	—	$	—	$	(1.0)	$	—	$	—	$	(7.5)

Past Due Status. Past due status is based on the length of time from 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. The following table provides balances and delinquency status of accrual and nonaccrual loans by segment and class, as well as the other real estate owned and nonaccrual asset balances, as of December 31, 2024 and 2023.

TABLE 59: DELINQUENCY STATUS

	ACCRUAL														NONACCRUAL WITH NO ALLOWANCE
(In Millions)	CURRENT		30 – 59 DAYS PAST DUE		60 – 89 DAYS PAST DUE		90 DAYS OR MORE PAST DUE		TOTAL ACCRUAL		NONACCRUAL		TOTAL LOANS
December 31, 2024
Commercial
Commercial and Institutional	$	10,486.9	$	12.8	$	0.7	$	6.9	$	10,507.3	$	29.8	$	10,537.1	$	10.5
Commercial Real Estate	5,304.9		3.3		—		0.4		5,308.6		5.6		5,314.2		5.6
Non-U.S.	2,113.0		—		0.4		—		2,113.4		0.5		2,113.9		—
Other	2,313.6		—		—		—		2,313.6		—		2,313.6		—
Total Commercial	20,218.4		16.1		1.1		7.3		20,242.9		35.9		20,278.8		16.1
Personal
Private Client	15,677.6		87.7		15.2		66.0		15,846.5		2.3		15,848.8		0.7
Residential Real Estate	6,063.4		17.2		2.5		9.0		6,092.1		17.8		6,109.9		17.8
Non-U.S.	673.1		1.6		—		—		674.7		—		674.7		—
Other	478.4		—		—		—		478.4		—		478.4		—
Total Personal	22,892.5		106.5		17.7		75.0		23,091.7		20.1		23,111.8		18.5
Total Loans	$	43,110.9	$	122.6	$	18.8	$	82.3	$	43,334.6	$	56.0	$	43,390.6	$	34.6
					Other Real Estate Owned						$	—
					Total Nonaccrual Assets						$	56.0

	ACCRUAL														NONACCRUAL WITH NO ALLOWANCE
(In Millions)	CURRENT		30 – 59 DAYS PAST DUE		60 – 89 DAYS PAST DUE		90 DAYS OR MORE PAST DUE		TOTAL ACCRUAL		NONACCRUAL		TOTAL LOANS
December 31, 2023
Commercial
Commercial and Institutional	$	11,374.6	$	163.7	$	0.7	$	—	$	11,539.0	$	16.3	$	11,555.3	$	4.1
Commercial Real Estate	5,123.7		4.4		6.1		—		5,134.2		—		5,134.2		—
Non-U.S.	2,778.5		—		—		—		2,778.5		—		2,778.5		—
Other	5,944.8		—		—		—		5,944.8		—		5,944.8		—
Total Commercial	25,221.6		168.1		6.8		—		25,396.5		16.3		25,412.8		4.1
Personal
Private Client	14,240.0		63.9		24.8		11.0		14,339.7		20.3		14,360.0		18.3
Residential Real Estate	6,283.0		7.5		0.5		9.1		6,300.1		27.0		6,327.1		27.0
Non-U.S	428.2		—		0.6		—		428.8		—		428.8		—
Other	1,088.3		—		—		—		1,088.3		—		1,088.3		—
Total Personal	22,039.5		71.4		25.9		20.1		22,156.9		47.3		22,204.2		45.3
Total Loans	$	47,261.1	$	239.5	$	32.7	$	20.1	$	47,553.4	$	63.6	$	47,617.0	$	49.4
					Other Real Estate Owned						$	1.5
					Total Nonaccrual Assets						$	65.1

Interest income that would have been recorded for nonaccrual loans and leases in accordance with their original terms was $2.1 million in 2024, $3.4 million in 2023, and $4.1 million in 2022.

Northern Trust may obtain physical possession of real estate via foreclosure on an in-substance repossession. As of December 31, 2024 and 2023, Northern Trust held foreclosed real estate properties with an immaterial carrying value for both years as a result of obtaining physical possession. As of both December 31, 2024 and 2023, Northern Trust had loans with a carrying value of $3.5 million for which formal foreclosure proceedings were in process.

Loan Modifications to Borrowers Experiencing Financial Difficulty

Northern Trust may provide payment relief by modifying the terms of the original loans for borrowers experiencing financial difficulties. Loan modifications to borrowers experiencing financial difficulty involve primarily extension of term, deferrals of principal and interest, interest rate concessions, and other modifications or a combination thereof and totaled $7.2 million and $40.7 million for the years ended December 31, 2024 and 2023, respectively. Northern Trust considers payment deferrals of less than 90 days as insignificant, absent any material modifications to other loan terms.

The effectiveness of Northern Trust’s modification efforts is measured by the loans’ respective past-due status under the modified terms as of the end of the period. As of December 31, 2024, of loans that were modified in the previous 12 months, there were no loans 30-89 days past due and $1.3 million 90 days and greater past due in accordance with their modified terms. As of December 31, 2023, of the loans that were modified in the previous 12 months, there were $4.7 million 30-89 days past due and $16.2 million 90 days and greater past due in accordance with their modified terms. Northern Trust charged off $8.5 million and $2.0 million related to loan modifications to borrowers experiencing financial difficulty for the years ended December 31, 2024 and 2023, respectively.

There were no undrawn loan commitments or standby letters of credit issued to financially distressed borrowers for which Northern Trust had modified the payment terms of the loans as of December 31, 2024 and 2023, respectively.