Fair Value Measurements (Tables)
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6 Months Ended |
Jun. 30, 2025 |
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| Fair Value Disclosures [Abstract] |
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| Fair Value Measurement Inputs and Valuation Techniques |
The following table presents the fair values of Northern Trust’s Level 3 liabilities as of June 30, 2025 and December 31, 2024, as well as the valuation techniques, significant unobservable inputs, and quantitative information used to develop significant unobservable inputs for such liabilities as of such dates. TABLE 33: LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS | | | | | | | | | | | | | | | | | | | | | | | | | | | | JUNE 30, 2025 | | | | FINANCIAL INSTRUMENT | FAIR VALUE | VALUATION TECHNIQUE | UNOBSERVABLE INPUTS | INPUT VALUES | WEIGHTED-AVERAGE INPUT VALUES(1) | | Swaps Related to Sale of Certain Visa Class B Common Shares | $22.8 million | Discounted Cash Flow | Conversion Rate | 1.53 | x | 1.53 | x | | Visa Class A Appreciation | 8.61% | 8.61% | | Expected Duration | 4 | - | 26.5 months | 17.5 months |
(1) Weighted average of expected duration based on scenario probability. | | | | | | | | | | | | | | | | | | | | | | | | | | | | DECEMBER 31, 2024 | | | | FINANCIAL INSTRUMENT | FAIR VALUE | VALUATION TECHNIQUE | UNOBSERVABLE INPUTS | INPUT VALUES | WEIGHTED-AVERAGE INPUT VALUES(1) | | Swaps Related to Sale of Certain Visa Class B Common Shares | $27.2 million | Discounted Cash Flow | Conversion Rate | 1.54 | | x | 1.54 | x | | Visa Class A Appreciation | 8.66% | 8.66% | | Expected Duration | 10 | - | 32.5 months | 23.5 months |
(1) Weighted average of expected duration based on scenario probability.TABLE 36: LEVEL 3 NONRECURRING BASIS SIGNIFICANT UNOBSERVABLE INPUTS | | | | | | | | | | | | | | | | | | | | | | | | | DECEMBER 31, 2024 | | | FINANCIAL INSTRUMENT | FAIR VALUE(1) | VALUATION TECHNIQUE | UNOBSERVABLE INPUTS | INPUT VALUES | WEIGHTED-AVERAGE INPUT VALUES | | Loans | 19.1 million | Market Approach | Discount factor applied to real estate collateral-dependent loans to reflect realizable value | 20.0% | 20.0% | | | | | | | | |
(1) Includes real estate collateral-dependent loans and other collateral-dependent loans.
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| Recurring Basis Hierarchy Leveling |
The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024, segregated by fair value hierarchy level. TABLE 34: RECURRING BASIS HIERARCHY LEVELING | | | | | | | | | | | | | | | | | | | JUNE 30, 2025 | | (In Millions) | LEVEL 1 | LEVEL 2 | LEVEL 3 | NETTING | ASSETS/LIABILITIES AT FAIR VALUE | | Debt Securities | | | | | | | Available for Sale | | | | | | | U.S. Government | $ | 8,286.0 | | $ | — | | $ | — | | $ | — | | $ | 8,286.0 | | | Obligations of States and Political Subdivisions | — | | 306.8 | | — | | — | | 306.8 | | | Government Sponsored Agency | — | | 15,838.9 | | — | | — | | 15,838.9 | | | Non-U.S. Government | — | | 313.2 | | — | | — | | 313.2 | | | Corporate Debt | — | | 93.4 | | — | | — | | 93.4 | | | Covered Bonds | — | | 235.5 | | — | | — | | 235.5 | | | Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | — | | 4,970.9 | | — | | — | | 4,970.9 | | | Other Asset-Backed | — | | 1,687.9 | | — | | — | | 1,687.9 | | | Commercial Mortgage-Backed | — | | 517.8 | | — | | — | | 517.8 | | | | | | | | | | | | | | | Total Available for Sale Debt Securities | 8,286.0 | | 23,964.4 | | — | | — | | 32,250.4 | | | Other Assets | | | | | | Equity Securities(1) | 85.0 | | 21.7 | | — | | — | | 106.7 | | | Derivative Assets | | | | | | | Foreign Exchange Contracts | — | | 3,697.1 | | — | | (3,074.7) | | 622.4 | | | Interest Rate Contracts | — | | 369.4 | | — | | (100.8) | | 268.6 | | | | | | | | | Total Derivative Assets | — | | 4,066.5 | | — | | (3,175.5) | | 891.0 | | | Other Liabilities | | | | | | | Derivative Liabilities | | | | | | | Foreign Exchange Contracts | — | | 4,112.3 | | — | | (2,353.8) | | 1,758.5 | | | Interest Rate Contracts | — | | 402.6 | | — | | (5.4) | | 397.2 | | Other Financial Derivatives(2) | — | | — | | 22.8 | | (21.5) | | 1.3 | | | Total Derivative Liabilities | $ | — | | $ | 4,514.9 | | $ | 22.8 | | $ | (2,380.7) | | $ | 2,157.0 | |
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 June 30, 2025, derivative assets and liabilities shown above also include reductions of $1.6 billion and $820.0 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties. (1) Equity securities consists of a money market investment and Visa Class C common shares with a fair value of $85.0 million and $21.7 million, respectively, as of June 30, 2025. (2) Other Financial Derivatives consists of swaps related to the sale of certain Visa Class B common shares. | | | | | | | | | | | | | | | | | | | DECEMBER 31, 2024 | | (In Millions) | LEVEL 1 | LEVEL 2 | LEVEL 3 | NETTING | ASSETS/LIABILITIES AT FAIR VALUE | | Debt Securities | | | | | | | Available for Sale | | | | | | | U.S. Government | $ | 7,367.5 | | $ | — | | $ | — | | $ | — | | $ | 7,367.5 | | | Obligations of States and Political Subdivisions | — | | 297.6 | | — | | — | | 297.6 | | | Government Sponsored Agency | — | | 13,288.9 | | — | | — | | 13,288.9 | | | Non-U.S. Government | — | | 296.8 | | — | | — | | 296.8 | | | Corporate Debt | — | | 163.8 | | — | | — | | 163.8 | | | Covered Bonds | — | | 230.9 | | — | | — | | 230.9 | | | Sub-Sovereign, Supranational and Non-U.S. Agency Bonds | — | | 4,583.1 | | — | | — | | 4,583.1 | | | Other Asset-Backed | — | | 2,182.7 | | — | | — | | 2,182.7 | | | Commercial Mortgage-Backed | — | | 590.2 | | — | | — | | 590.2 | | | | | | | | | | | | | | | Total Available for Sale Debt Securities | 7,367.5 | | 21,634.0 | | — | | — | | 29,001.5 | | | Other Assets | | | | | | Equity Securities(1) | 85.0 | 26.3 | | — | | — | | 111.3 | | Derivative Assets | | | | | | | Foreign Exchange Contracts | — | | 4,997.3 | | — | | (1,745.2) | | 3,252.1 | | | Interest Rate Contracts | — | | 361.2 | | — | | (165.2) | | 196.0 | | | | | | | | | Total Derivative Assets | — | | 5,358.5 | | — | | (1,910.4) | | 3,448.1 | | | Other Liabilities | | | | | | | Derivative Liabilities | | | | | | | Foreign Exchange Contracts | — | | 4,709.8 | | — | | (4,197.3) | | 512.5 | | | Interest Rate Contracts | — | | 421.4 | | — | | (2.3) | | 419.1 | | Other Financial Derivatives(2) | — | | — | | 27.2 | | — | | 27.2 | | | Total Derivative Liabilities | $ | — | | $ | 5,131.2 | | $ | 27.2 | | $ | (4,199.6) | | $ | 958.8 | |
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, 2024, derivative assets and liabilities shown above also include reductions of $368.2 million and $2.7 billion, respectively, as a result of cash collateral received from and deposited with derivative counterparties. (1) Equity securities consists of a money market investment and Visa Class C common shares with a fair value of $85.0 million and $26.3 million, respectively, as of December 31, 2024. (2) Other Financial Derivatives consists of swaps related to the sale of certain Visa Class B common shares.
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| Changes in Level 3 Liabilities |
The following table presents the changes in Level 3 liabilities for the three and six months ended June 30, 2025 and 2024. TABLE 35: CHANGES IN LEVEL 3 LIABILITIES | | | | | | | | | | (In Millions) | SWAPS RELATED TO SALE OF CERTAIN VISA CLASS B COMMON SHARES | | THREE MONTHS ENDED JUNE 30, | 2025 | 2024 | Fair Value at April 1 | $ | 29.5 | | $ | 21.1 | | | Total (Gains) Losses: | | | Included in Earnings(1) | (0.2) | | 15.4 | | | Purchases, Issues, Sales, and Settlements | | | | Settlements | (6.5) | | (5.9) | | Fair Value at June 30 | $ | 22.8 | | $ | 30.6 | |
(1) (Gains) losses are recorded in Other Operating Income on the consolidated statements of income. | | | | | | | | | | (In Millions) | SWAPS RELATED TO SALE OF CERTAIN VISA CLASS B COMMON SHARES | | SIX MONTHS ENDED JUNE 30, 2025 | 2025 | 2024 | | Fair Value at January 1 | $ | 27.2 | | $ | 25.4 | | | Total (Gains) Losses: | | | Included in Earnings(1) | 5.4 | | 16.6 | | | Purchases, Issues, Sales, and Settlements | | | | Settlements | (9.8) | | (11.4) | | Fair Value at June 30 | $ | 22.8 | | $ | 30.6 | |
(1) (Gains) losses are recorded in Other Operating Income on the consolidated statements of income. |
| Fair Value of Financial Instruments |
The following tables present the carrying value and estimated fair value, including the fair value hierarchy level, of Northern Trust’s financial instruments that are not measured at fair value on the consolidated balance sheets as of June 30, 2025 and December 31, 2024. The following tables exclude those items measured at fair value on a recurring basis. TABLE 37: FAIR VALUE OF FINANCIAL INSTRUMENTS | | | | | | | | | | | | | | | | | | | JUNE 30, 2025 | | | | ESTIMATED FAIR VALUE | | (In Millions) | BOOK VALUE | TOTAL ESTIMATED FAIR VALUE | LEVEL 1 | LEVEL 2 | LEVEL 3 | | FINANCIAL ASSETS | | | | | Cash and Due from Banks | $ | 6,423.4 | | $ | 6,423.4 | | $ | 6,423.4 | | $ | — | | $ | — | | | Federal Reserve and Other Central Bank Deposits | 52,266.0 | | 52,266.0 | | — | | 52,266.0 | | — | | | Interest-Bearing Deposits with Banks | 2,412.1 | | 2,412.1 | | — | | 2,412.1 | | — | | | | | | | | | Federal Funds Sold and Securities Purchased under Agreements to Resell | 921.9 | | 921.9 | | — | | 921.9 | | — | | | Debt Securities - Held to Maturity | 21,400.8 | | 20,141.0 | | — | | 20,141.0 | | — | | | Loans | | | | | | | Held for Investment | 43,139.8 | | 42,890.0 | | — | | — | | 42,890.0 | | | Held for Sale | 3.1 | | 3.1 | | — | | 3.1 | | — | | | Other Assets | 1,484.9 | | 1,477.5 | | 92.2 | | 1,385.3 | | — | | | FINANCIAL LIABILITIES | | | | | | | Deposits | 137,053.7 | | 135,592.6 | | — | | 135,592.6 | | — | | | Federal Funds Purchased | 2,388.5 | | 2,388.5 | | — | | 2,388.5 | | — | | | Securities Sold Under Agreements to Repurchase | 841.4 | | 841.4 | | — | | 841.4 | | — | | | Other Borrowings | 6,532.9 | | 6,556.0 | | — | | 6,556.0 | | — | | | Senior Notes | 2,835.2 | | 2,872.6 | | — | | 2,872.6 | | — | | | Long-Term Debt | 4,089.8 | | 4,183.0 | | — | | 4,183.0 | | — | | | Unfunded Commitments | 193.2 | | 193.2 | | — | | 193.2 | | — | | | Other Liabilities | 52.2 | | 52.2 | | — | | — | | 52.2 | |
| | | | | | | | | | | | | | | | | | | | DECEMBER 31, 2024 | | | | | ESTIMATED FAIR VALUE | | | (In Millions) | BOOK VALUE | TOTAL ESTIMATED FAIR VALUE | LEVEL 1 | LEVEL 2 | LEVEL 3 | | | FINANCIAL ASSETS | | | | | | | | Cash and Due from Banks | $ | 4,677.2 | | $ | 4,677.2 | | $ | 4,677.2 | | $ | — | | $ | — | | | | Federal Reserve and Other Central Bank Deposits | 38,775.4 | | 38,775.4 | | | 38,775.4 | | — | | | | Interest-Bearing Deposits with Banks | 1,944.7 | | 1,944.7 | | | 1,944.7 | | — | | | | | | | | | | | Federal Funds Sold and Securities Purchased under Agreements to Resell | 451.0 | | 451.0 | | | 451.0 | | — | | | | Debt Securities - Held to Maturity | 22,296.7 | | 20,654.5 | | | 20,654.5 | | — | | | | Loans | | | | | | | | Held for Investment | 43,222.5 | | 42,803.2 | | | — | | 42,803.2 | | | | Other Assets | 1,506.4 | | 1,499.2 | | 83.3 | | 1,415.9 | | — | | | | FINANCIAL LIABILITIES | | | | | | | | Deposits | 122,482.7 | | 122,536.5 | | — | | 122,536.5 | | — | | | | Federal Funds Purchased | 2,159.5 | | 2,159.5 | | — | | 2,159.5 | | — | | | | Securities Sold Under Agreements to Repurchase | 462.0 | | 462.0 | | — | | 462.0 | | — | | | | Other Borrowings | 6,521.0 | | 6,545.3 | | — | | 6,545.3 | | — | | | | Senior Notes | 2,769.7 | | 2,800.3 | | — | | 2,800.3 | | — | | | | Long-Term Debt | 4,081.3 | | 4,164.4 | | — | | 4,164.4 | | — | | | | Unfunded Commitments | 227.1 | | 227.1 | | — | | 227.1 | | — | | | | Other Liabilities | 50.6 | | 50.6 | | — | | — | | 50.6 | | |
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