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Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurement Inputs and Valuation Techniques
The following table presents the fair values of Northern Trust’s Level 3 liabilities as of September 30, 2020 and December 31, 2019, 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 36: LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS
SEPTEMBER 30, 2020
FINANCIAL INSTRUMENTFAIR VALUEVALUATION TECHNIQUEUNOBSERVABLE INPUTSINPUT VALUES
WEIGHTED-AVERAGE INPUT VALUES(1)
Swaps Related to Sale of Certain Visa Class B Common Shares$32.3 millionDiscounted Cash FlowConversion Rate1.62x1.62x
Visa Class A Appreciation8.70%8.70%
Expected Duration12-33 months20 months
(1) Weighted average of expected duration based on scenario probability.
DECEMBER 31, 2019
FINANCIAL INSTRUMENTFAIR VALUEVALUATION TECHNIQUEUNOBSERVABLE INPUTSINPUT VALUES
WEIGHTED-AVERAGE INPUT VALUES(1)
Swaps Related to Sale of Certain Visa Class B Common Shares$33.4 millionDiscounted Cash FlowConversion Rate1.62x1.62x
Visa Class A Appreciation8.54%8.54%
Expected Duration12-36 months22 months
(1) Weighted average of expected duration based on scenario probability.
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 September 30, 2020 and December 31, 2019, 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 39: LEVEL 3 NONRECURRING BASIS SIGNIFICANT UNOBSERVABLE INPUTS
SEPTEMBER 30, 2020
FINANCIAL INSTRUMENT
FAIR VALUE(1)
VALUATION TECHNIQUEUNOBSERVABLE INPUTSINPUT VALUESWEIGHTED-AVERAGE INPUT VALUES
Loans$21.2 millionMarket ApproachDiscount factor applied to real estate collateral-based loans to reflect realizable value15.0%-20.0%15.2%
(1) Includes real estate collateral-based loans and other collateral-based loans.
DECEMBER 31, 2019
FINANCIAL INSTRUMENT
FAIR VALUE(1)
VALUATION TECHNIQUEUNOBSERVABLE INPUTSINPUT VALUESWEIGHTED-AVERAGE INPUT VALUES
Loans$8.0 millionMarket ApproachDiscount factor applied to real estate collateral-based loans to reflect realizable value15.0 %-20.0%15.3%
(1) Includes real estate collateral-based loans and other collateral-based loans.
Recurring Basis Hierarchy Leveling
The following table presents assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, segregated by fair value hierarchy level.
TABLE 37: RECURRING BASIS HIERARCHY LEVELING
SEPTEMBER 30, 2020
(In Millions)LEVEL 1LEVEL 2LEVEL 3NETTINGASSETS/LIABILITIES AT FAIR VALUE
Debt Securities
Available for Sale
U.S. Government$4,165.2 $— $— $— $4,165.2 
Obligations of States and Political Subdivisions— 2,600.5 — — 2,600.5 
Government Sponsored Agency— 24,568.8 — — 24,568.8 
Non-U.S. Government— 937.6 — — 937.6 
Corporate Debt— 2,627.4 — — 2,627.4 
Covered Bonds— 516.8 — — 516.8 
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds— 2,552.8 — — 2,552.8 
Other Asset-Backed— 3,559.4 — — 3,559.4 
Commercial Mortgage-Backed— 1,015.2 — — 1,015.2 
Other— 7.3 — — 7.3 
Total Available for Sale4,165.2 38,385.8 — — 42,551.0 
Trading Account0.3 0.3 — — 0.6 
Total Available for Sale and Trading Debt Securities4,165.5 38,386.1 — — 42,551.6 
Other Assets
Derivative Assets
Foreign Exchange Contracts— 2,279.5 — (1,405.7)873.8 
Interest Rate Contracts— 333.7 — (2.6)331.1 
Total Derivative Assets— 2,613.2 — (1,408.3)1,204.9 
Other Liabilities
Derivative Liabilities
Foreign Exchange Contracts— 2,326.3 — (1,493.6)832.7 
Interest Rate Contracts— 142.2 — (109.7)32.5 
Other Financial Derivatives(1)
— — 32.3 — 32.3 
Total Derivative Liabilities$— $2,468.5 $32.3 $(1,603.3)$897.5 
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 September 30, 2020, derivative assets and liabilities shown above also include reductions of $212.7 million and $407.7 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.
DECEMBER 31, 2019
(In Millions)LEVEL 1LEVEL 2LEVEL 3NETTINGASSETS/LIABILITIES AT FAIR VALUE
Debt Securities
Available for Sale
U.S. Government$4,549.1 $— $— $— $4,549.1 
Obligations of States and Political Subdivisions— 1,615.3 — — 1,615.3 
Government Sponsored Agency— 23,271.2 — — 23,271.2 
Non-U.S. Government— 3.3 — — 3.3 
Corporate Debt— 2,402.7 — — 2,402.7 
Covered Bonds— 769.9 — — 769.9 
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds— 2,127.6 — — 2,127.6 
Other Asset-Backed— 3,330.5 — — 3,330.5 
Commercial Mortgage-Backed— 797.7 — — 797.7 
Other— 9.0 — — 9.0 
Total Available for Sale4,549.1 34,327.2 — — 38,876.3 
Trading Account— 0.3 — — 0.3 
Total Available for Sale and Trading Debt Securities4,549.1 34,327.5 — — 38,876.6 
Other Assets
Derivative Assets
Foreign Exchange Contracts— 3,234.8 — (2,334.1)900.7 
Interest Rate Contracts— 152.9 — (3.9)149.0 
Total Derivative Assets— 3,387.7 — (2,338.0)1,049.7 
Other Liabilities
Derivative Liabilities
Foreign Exchange Contracts— 3,182.2 — (1,548.6)1,633.6 
Interest Rate Contracts— 97.4 — (57.3)40.1 
Other Financial Derivatives(1)
— — 33.4 (12.5)20.9 
Total Derivative Liabilities$— $3,279.6 $33.4 $(1,618.4)$1,694.6 
Note: Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting arrangements or similar agreements exist between Northern Trust and the counterparty. As of December 31, 2019, derivative assets and liabilities shown above also include reductions of $1,136.8 million and $417.2 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.
Changes in Level 3 Liabilities
The following table presents the changes in Level 3 liabilities for the three and nine months ended September 30, 2020 and 2019.

TABLE 38: CHANGES IN LEVEL 3 LIABILITIES
(In Millions)SWAPS RELATED TO SALE OF CERTAIN VISA CLASS B COMMON SHARES
THREE MONTHS ENDED SEPTEMBER 30,20202019
Fair Value at July 1
$31.3 $34.7 
Total (Gains) Losses:
Included in Earnings(1)
5.3 6.7 
Purchases, Issues, Sales, and Settlements
Settlements(4.3)(3.7)
Fair Value at September 30
$32.3 $37.7 
(1) (Gains) losses are recorded in Other Operating Income on the consolidated statements of income.
NINE MONTHS ENDED SEPTEMBER 30,20202019
Fair Value at January 1$33.4 $32.8 
Total (Gains) Losses:
Included in Earnings(1)
11.0 14.9 
Purchases, Issues, Sales, and Settlements
Settlements(12.1)(10.0)
Fair Value at September 30
$32.3 $37.7 
(1) (Gains) losses are recorded in Other Operating Income on the consolidated statements of income.
Fair Value of Financial Instruments
The following table summarizes the fair values of all financial instruments.
TABLE 40: FAIR VALUE OF FINANCIAL INSTRUMENTS
SEPTEMBER 30, 2020
  FAIR VALUE
(In Millions)BOOK VALUETOTAL FAIR VALUELEVEL 1LEVEL 2LEVEL 3
ASSETS
Cash and Due from Banks$4,737.5 $4,737.5 $4,737.5 $— $— 
Federal Reserve and Other Central Bank Deposits39,244.6 39,244.6 — 39,244.6 — 
Interest-Bearing Deposits with Banks2,754.4 2,754.4 — 2,754.4 — 
Federal Funds Sold and Securities Purchased under Agreements to Resell1,533.4 1,533.4 — 1,533.4 — 
Debt Securities
Available for Sale(1)
42,551.0 42,551.0 4,165.2 38,385.8 — 
Held to Maturity16,754.0 16,746.5 99.0 16,647.5 — 
Trading Account0.6 0.6 0.3 0.3 — 
Loans (excluding Leases)
Held for Investment32,521.2 33,001.4 — — 33,001.4 
Client Security Settlement Receivables2,296.8 2,296.8 — 2,296.8 — 
Other Assets
Federal Reserve and Federal Home Loan Bank Stock239.7 239.7 — 239.7 — 
Community Development Investments761.3 761.3 — 761.3 — 
Employee Benefit and Deferred Compensation214.6 230.0 143.6 86.4 — 
LIABILITIES
Deposits
Demand, Noninterest-Bearing, Savings, Money Market and Other Interest-Bearing$59,756.8 $59,756.8 $59,756.8 $— $— 
Savings Certificates and Other Time1,486.7 1,496.5 — 1,496.5 — 
Non U.S. Offices Interest-Bearing61,345.6 61,345.6 — 61,345.6 — 
Federal Funds Purchased2,203.7 2,203.7 — 2,203.7 — 
Securities Sold Under Agreements to Repurchase269.8 269.8 — 269.8 — 
Other Borrowings5,771.7 5,772.9 — 5,772.9 — 
Senior Notes3,655.6 3,731.0 — 3,731.0 — 
Long-Term Debt
Subordinated Debt1,196.0 1,250.0 — 1,250.0 — 
Floating Rate Capital Debt277.7 255.6 — 255.6 — 
Other Liabilities
Standby Letters of Credit23.9 23.9 — — 23.9 
Loan Commitments55.7 55.7 — — 55.7 
Derivative Instruments
Asset/Liability Management
Foreign Exchange Contracts
Assets$36.8 $36.8 $— $36.8 $— 
Liabilities112.8 112.8 — 112.8 — 
Interest Rate Contracts
Assets10.5 10.5 — 10.5 — 
Liabilities18.9 18.9 — 18.9 — 
Other Financial Derivatives
Liabilities(2)
32.3 32.3 — — 32.3 
Client-Related and Trading
Foreign Exchange Contracts
Assets2,242.7 2,242.7 — 2,242.7 — 
Liabilities2,213.5 2,213.5 — 2,213.5 — 
Interest Rate Contracts
Assets323.2 323.2 — 323.2 — 
Liabilities123.3 123.3 — 123.3 — 
(1) Refer to the table located on page 46 for the disaggregation of available for sale debt securities.
(2) This line consists of swaps related to the sale of certain Visa Class B common shares.
DECEMBER 31, 2019
  FAIR VALUE
(In Millions)BOOK VALUETOTAL FAIR VALUELEVEL 1LEVEL 2LEVEL 3
ASSETS
Cash and Due from Banks$4,459.2 $4,459.2 $4,459.2 $— $— 
Federal Reserve and Other Central Bank Deposits33,886.0 33,886.0 — 33,886.0 — 
Interest-Bearing Deposits with Banks4,877.1 4,877.1 — 4,877.1 — 
Federal Funds Sold and Securities Purchased under Agreements to Resell712.8 712.8 — 712.8 — 
Debt Securities
Available for Sale(1)
38,876.3 38,876.3 4,549.1 34,327.2 — 
Held to Maturity12,284.5 12,249.3 138.8 12,110.5 — 
Trading Account0.3 0.3 — 0.3 — 
Loans (excluding Leases)
Held for Investment31,239.5 31,517.8 — — 31,517.8 
Client Security Settlement Receivables845.7 845.7 — 845.7 — 
Other Assets
Federal Reserve and Federal Home Loan Bank Stock301.2 301.2 — 301.2 — 
Community Development Investments749.3 749.3 — 749.3 — 
Employee Benefit and Deferred Compensation199.5 207.6 131.0 76.6 — 
LIABILITIES
Deposits
Demand, Noninterest-Bearing, Savings, Money Market and Other Interest-Bearing$47,733.6 $47,733.6 $47,733.6 $— $— 
Savings Certificates and Other Time986.7 994.2 — 994.2 — 
Non U.S. Offices Interest-Bearing60,400.3 60,400.3 — 60,400.3 — 
Federal Funds Purchased552.9 552.9 — 552.9 — 
Securities Sold Under Agreements to Repurchase489.7 489.7 — 489.7 — 
Other Borrowings6,744.8 6,745.9 — 6,745.9 — 
Senior Notes2,573.0 2,593.0 — 2,593.0 — 
Long-Term Debt
Subordinated Debt1,148.1 1,169.5 — 1,169.5 — 
Floating Rate Capital Debt277.7 262.1 — 262.1 — 
Other Liabilities
Standby Letters of Credit25.5 25.5 — — 25.5 
Loan Commitments32.3 32.3 — — 32.3 
Derivative Instruments
Asset/Liability Management
Foreign Exchange Contracts
Assets$83.1 $83.1 $— $83.1 $— 
Liabilities24.1 24.1 — 24.1 — 
Interest Rate Contracts
Assets20.5 20.5 — 20.5 — 
Liabilities21.1 21.1 — 21.1 — 
Other Financial Derivatives
Liabilities(2)
33.4 33.4 — — 33.4 
Client-Related and Trading
Foreign Exchange Contracts
Assets3,151.7 3,151.7 — 3,151.7 — 
Liabilities3,158.1 3,158.1 — 3,158.1 — 
Interest Rate Contracts
Assets132.4 132.4 — 132.4 — 
Liabilities76.3 76.3 — 76.3 — 
(1) Refer to the table located on page 47 for the disaggregation of available for sale debt securities.    
(2) This line consists of swaps related to the sale of certain Visa Class B common shares.