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Loans and Leases
 6 Months Ended
Jun. 30, 2021
Receivables [Abstract]  
Loans and Leases Loans and Leases
Amounts outstanding for Loans and Leases, by segment and class, are shown in the following table.
TABLE 46: LOANS AND LEASES
(In Millions)JUNE 30, 2021DECEMBER 31, 2020
Commercial
Commercial and Institutional$9,833.8 $10,058.3 
Commercial Real Estate3,943.9 3,558.4 
Non-U.S.2,091.1 1,345.7 
Lease Financing, net11.0 11.4 
Other327.9 288.2 
Total Commercial16,207.7 15,262.0 
Personal
Private Client14,636.7 11,815.1 
Residential Real Estate6,100.6 6,035.7 
Non-U.S.385.5 597.9 
Other76.1 49.0 
Total Personal21,198.9 18,497.7 
Total Loans and Leases$37,406.6 $33,759.7 
Residential real estate loans consist of traditional first lien mortgages and equity credit lines that generally require a loan-to-collateral value 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 June 30, 2021 and December 31, 2020, equity credit lines totaled $281.5 million and $304.4 million, respectively, and equity credit lines for which first liens were held by Northern Trust represented 97% of the total equity credit lines as of both June 30, 2021 and December 31, 2020.
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, totaling $1.7 billion at June 30, 2021 and $1.1 billion at December 31, 2020, respectively. Demand deposit overdrafts reclassified as loan balances totaled $13.3 million and $26.4 million at June 30, 2021 and December 31, 2020, respectively. Loans classified as held for sale totaled $131.2 million at June 30, 2021 related to the decision to exit a non-strategic loan portfolio. There were no loans classified as held for sale at December 31, 2020. Loans classified as held for sale are recorded at the lower of cost or fair value.
As of June 30, 2021 and December 31, 2020, there were no leases classified as held for sale.
Paycheck Protection Program. In response to the COVID-19 pandemic, Northern Trust became a lender under the Paycheck Protection Program, as amended (PPP), which was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and is administered by the U.S. Small Business Administration (SBA). Loans issued under the PPP are funded by Northern Trust directly to participating borrowers. The PPP loans are guaranteed by the SBA and borrowers are eligible to apply for PPP loan forgiveness for up to the full principal amount and accrued interest of the PPP loan.
To the extent a borrower uses PPP loan proceeds to cover eligible costs and has met all other SBA loan forgiveness requirements, the SBA will determine loan forgiveness under the CARES Act and will pay to Northern Trust the eligible PPP loan forgiven amount, which will be credited to the borrower’s loan to repay or pay down the PPP loan. The SBA forgiveness portal opened on August 10, 2020 and Northern Trust’s vendor portal opened on September 11, 2020 to begin processing the PPP loan forgiveness applications. When Northern Trust submits forgiveness applications to the SBA, the SBA will have at least 90 days to respond as to the approval or denial of such application. 889 applications went through the PPP loan forgiveness process and resulted in $153.1 million of loan principal and interest being forgiven as of June 30, 2021.
As of June 30, 2021, Northern Trust had 666 outstanding loans totaling $145.4 million under the PPP in its commercial and institutional portfolio with an average loan balance of $0.2 million. For its origination efforts, Northern Trust received approximately $2.7 million in SBA fees, net of service charges as of June 30, 2021.
Northern Trust accounts for loans originated under the PPP as loan receivables in accordance with Accounting Standards Codification (ASC) 310 and recognizes such loans at the principal amount less the net amount of loan origination fees. PPP loans are reported in Total Loans and Leases on the consolidated balance sheets.
The SBA provides a 100% guarantee on PPP loans covering principal and interest. Northern Trust considers the risk mitigating effects of these guarantees, and accounts for them as a credit enhancement embedded in the contract. As a result, no allowance for credit losses is measured for Northern Trust’s exposure under the PPP.
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.
•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.
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 as of June 30, 2021 and December 31, 2020 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 47: CREDIT QUALITY INDICATOR AT AMORTIZED COST BASIS BY ORIGINATION YEAR
June 30, 2021TERM LOANS AND LEASESREVOLVING LOANSREVOLVING LOANS CONVERTED TO TERM LOANS
(In Millions)20212020201920182017PRIORTOTAL
Commercial
Commercial and Institutional
Risk Rating:
1 to 3 Category$524.2 $654.2 $323.0 $218.5 $101.5 $606.7 $3,701.9 $1.0 $6,131.0 
4 to 5 Category598.5 432.9 409.5 277.3 267.7 253.1 1,163.7 33.7 3,436.4 
6 to 9 Category29.6 27.8 71.7 31.5 25.0 22.9 57.9 — 266.4 
Total Commercial and Institutional1,152.3 1,114.9 804.2 527.3 394.2 882.7 4,923.5 34.7 9,833.8 
Commercial Real Estate
Risk Rating:
1 to 3 Category247.4 278.2 242.9 78.8 25.5 95.7 110.4 2.7 1,081.6 
4 to 5 Category375.1 772.8 658.1 243.2 104.9 504.5 66.8 10.9 2,736.3 
6 to 9 Category 19.7 6.3 55.3 13.3 20.3 11.1 — — 126.0 
Total Commercial Real Estate642.2 1,057.3 956.3 335.3 150.7 611.3 177.2 13.6 3,943.9 
Non-U.S.
Risk Rating:
1 to 3 Category910.6 87.1 17.0 — 11.1 — 318.0 — 1,343.8 
4 to 5 Category369.6 102.0 0.7 2.0 — 108.5 136.2 1.8 720.8 
6 to 9 Category0.1 — 23.1 — — — 3.3 — 26.5 
Total Non-U.S.1,280.3 189.1 40.8 2.0 11.1 108.5 457.5 1.8 2,091.1 
Lease Financing, net
Risk Rating:
4 to 5 Category— — — — — 11.0 — — 11.0 
Total Lease Financing, net— — — — — 11.0 — — 11.0 
Other
Risk Rating:
1 to 3 Category120.4 — — — — — — — 120.4 
4 to 5 Category207.5 — — — — — — — 207.5 
Total Other327.9 — — — — — — — 327.9 
Total Commercial3,402.7 2,361.3 1,801.3 864.6 556.0 1,613.5 5,558.2 50.1 16,207.7 
Personal
Private Client
Risk Rating:
1 to 3 Category198.4 336.7 101.1 38.4 70.0 155.1 7,958.9 51.0 8,909.6 
4 to 5 Category264.5 563.0 524.0 95.0 26.1 76.4 3,984.1 163.3 5,696.4 
6 to 9 Category 1.0 5.4 — 21.3 — — 3.0 — 30.7 
Total Private Client463.9 905.1 625.1 154.7 96.1 231.5 11,946.0 214.3 14,636.7 
Residential Real Estate
Risk Rating:
1 to 3 Category682.2 1,300.3 251.0 19.9 89.3 707.1 158.9 — 3,208.7 
4 to 5 Category252.5 919.2 296.6 105.0 116.7 856.3 229.9 1.9 2,778.1 
6 to 9 Category 0.3 13.1 8.0 0.6 0.5 75.3 16.0 — 113.8 
Total Residential Real Estate935.0 2,232.6 555.6 125.5 206.5 1,638.7 404.8 1.9 6,100.6 
Non-U.S.
Risk Rating:
1 to 3 Category12.0 3.7 31.7 — — 0.1 78.7 — 126.2 
4 to 5 Category37.0 3.8 7.6 10.7 — 7.2 179.2 13.6 259.1 
6 to 9 Category — — — — — 0.2 — — 0.2 
Total Non-U.S.49.0 7.5 39.3 10.7 — 7.5 257.9 13.6 385.5 
Other
Risk Rating:
1 to 3 Category54.4 — — — — — — — 54.4 
4 to 5 Category21.7 — — — — — — — 21.7 
Total Other76.1 — — — — — — — 76.1 
Total Personal1,524.0 3,145.2 1,220.0 290.9 302.6 1,877.7 12,608.7 229.8 21,198.9 
Total Loans and Leases$4,926.7 $5,506.5 $3,021.3 $1,155.5 $858.6 $3,491.2 $18,166.9 $279.9 $37,406.6 
December 31, 2020TERM LOANS AND LEASESREVOLVING LOANSREVOLVING LOANS CONVERTED TO TERM LOANS
(In Millions)20202019201820172016PRIORTOTAL
Commercial
Commercial and Institutional
Risk Rating:
1 to 3 Category$663.8 $546.0 $204.6 $96.0 $396.0 $448.8 $3,742.4 $5.5 $6,103.1 
4 to 5 Category793.4 505.1 354.1 405.4 134.6 167.3 1,238.7 32.3 3,630.9 
6 to 9 Category34.3 119.8 37.3 42.8 23.0 6.0 61.1 — 324.3 
Total Commercial and Institutional1,491.5 1,170.9 596.0 544.2 553.6 622.1 5,042.2 37.8 10,058.3 
Commercial Real Estate
Risk Rating:
1 to 3 Category406.3 109.2 27.6 36.5 11.8 99.4 124.3 8.7 823.8 
4 to 5 Category703.1 811.8 332.7 107.4 184.5 382.8 60.4 11.4 2,594.1 
6 to 9 Category 15.3 55.2 32.0 25.8 — 12.2 — — 140.5 
Total Commercial Real Estate1,124.7 976.2 392.3 169.7 196.3 494.4 184.7 20.1 3,558.4 
Non-U.S.
Risk Rating:
1 to 3 Category555.2 16.8 — 11.1 — — 78.5 — 661.6 
4 to 5 Category313.1 0.7 2.0 — — 157.9 39.2 1.8 514.7 
6 to 9 Category— 23.1 — — — — 146.3 — 169.4 
Total Non-U.S.868.3 40.6 2.0 11.1 — 157.9 264.0 1.8 1,345.7 
Lease Financing, net
Risk Rating:
4 to 5 Category— — — — — 11.4 — — 11.4 
Total Lease Financing, net— — — — — 11.4 — — 11.4 
Other
Risk Rating:
1 to 3 Category81.7 — — — — — — — 81.7 
4 to 5 Category206.5 — — — — — — — 206.5 
Total Other288.2 — — — — — — — 288.2 
Total Commercial3,772.7 2,187.7 990.3 725.0 749.9 1,285.8 5,490.9 59.7 15,262.0 
Personal
Private Client
Risk Rating:
1 to 3 Category668.6 273.7 51.7 60.4 10.2 136.1 5,392.8 47.9 6,641.4 
4 to 5 Category492.1 479.9 117.3 60.4 77.5 77.5 3,564.7 207.3 5,076.7 
6 to 9 Category 6.0 0.5 22.1 3.2 — — 63.7 1.5 97.0 
Total Private Client1,166.7 754.1 191.1 124.0 87.7 213.6 9,021.2 256.7 11,815.1 
Residential Real Estate
Risk Rating:
1 to 3 Category1,554.3 317.4 42.9 109.9 205.1 627.8 152.8 1.7 3,011.9 
4 to 5 Category854.6 359.5 115.8 163.2 209.7 896.5 273.1 7.4 2,879.8 
6 to 9 Category 15.3 8.3 0.7 0.5 1.9 94.8 22.5 — 144.0 
Total Residential Real Estate2,424.2 685.2 159.4 273.6 416.7 1,619.1 448.4 9.1 6,035.7 
Non-U.S.
Risk Rating:
1 to 3 Category23.3 14.9 — — — 1.8 275.6 — 315.6 
4 to 5 Category12.7 26.0 11.8 0.5 0.5 7.9 217.5 5.1 282.0 
6 to 9 Category — — — — — 0.3 — — 0.3 
Total Non-U.S.36.0 40.9 11.8 0.5 0.5 10.0 493.1 5.1 597.9 
Other
Risk Rating:
1 to 3 Category34.6 — — — — — — — 34.6 
4 to 5 Category14.4 — — — — — — — 14.4 
Total Other49.0 — — — — — — — 49.0 
Total Personal3,675.9 1,480.2 362.3 398.1 504.9 1,842.7 9,962.7 270.9 18,497.7 
Total Loans and Leases$7,448.6 $3,667.9 $1,352.6 $1,123.1 $1,254.8 $3,128.5 $15,453.6 $330.6 $33,759.7 

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 nonaccrual 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.
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 and leases 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 and leases by segment and class, as well as the other real estate owned and nonaccrual asset balances, as of June 30, 2021 and December 31, 2020.
TABLE 48: DELINQUENCY STATUS
ACCRUALNONACCRUAL WITH NO ALLOWANCE
(In Millions)CURRENT30 – 59 DAYS
PAST DUE		60 – 89 DAYS
PAST DUE		90 DAYS
OR MORE
PAST DUE		TOTAL ACCRUALNONACCRUALTOTAL LOANS
AND LEASES
June 30, 2021
Commercial
Commercial and Institutional$9,709.5 $8.6 $96.0 $— $9,814.1 $19.7 $9,833.8 $8.9 
Commercial Real Estate3,887.2 — 12.0 8.4 3,907.6 36.3 3,943.9 28.5 
Non-U.S.2,091.1 — — — 2,091.1 — 2,091.1 — 
Lease Financing, net11.0 — — — 11.0 — 11.0 — 
Other327.9 — — — 327.9 — 327.9 — 
Total Commercial16,026.7 8.6 108.0 8.4 16,151.7 56.0 16,207.7 37.4 
Personal
Private Client14,532.3 86.3 16.3 1.8 14,636.7 — 14,636.7 — 
Residential Real Estate6,048.1 0.2 1.5 0.3 6,050.1 50.5 6,100.6 50.1 
Non-U.S.385.2 — 0.3 — 385.5 — 385.5 — 
Other76.1 — — — 76.1 — 76.1 — 
Total Personal21,041.7 86.5 18.1 2.1 21,148.4 50.5 21,198.9 50.1 
Total Loans and Leases$37,068.4 $95.1 $126.1 $10.5 $37,300.1 $106.5 $37,406.6 $87.5 
Other Real Estate Owned$0.2 
Total Nonaccrual Assets$106.7 
ACCRUALNONACCRUAL WITH NO ALLOWANCE
(In Millions)CURRENT30 – 59 DAYS
PAST DUE		60 – 89 DAYS
PAST DUE		90 DAYS
OR MORE
PAST DUE		TOTAL ACCRUALNONACCRUALTOTAL LOANS
AND LEASES
December 31, 2020
Commercial
Commercial and Institutional$9,877.0 $153.7 $1.2 $— $10,031.9 $26.4 $10,058.3 $9.1 
Commercial Real Estate3,516.2 2.0 — — 3,518.2 40.2 3,558.4 32.3 
Non-U.S.1,345.7 — — — 1,345.7 — 1,345.7 — 
Lease Financing, net11.4 — — — 11.4 — 11.4 — 
Other288.2 — — — 288.2 — 288.2 — 
Total Commercial15,038.5 155.7 1.2 — 15,195.4 66.6 15,262.0 41.4 
Personal
Private Client11,765.4 29.1 9.9 7.8 11,812.2 2.9 11,815.1 2.9 
Residential Real Estate5,946.0 23.5 2.9 1.1 5,973.5 62.2 6,035.7 53.8 
Non-U.S596.7 1.2 — — 597.9 — 597.9 — 
Other49.0 — — — 49.0 — 49.0 — 
Total Personal18,357.1 53.8 12.8 8.9 18,432.6 65.1 18,497.7 56.7 
Total Loans and Leases$33,395.6 $209.5 $14.0 $8.9 $33,628.0 $131.7 $33,759.7 $98.1 
Other Real Estate Owned$0.7 
Total Nonaccrual Assets$132.4 
Interest income that would have been recorded for nonaccrual loans and leases in accordance with their original terms was $0.8 million and $1.7 million for the three and six months ended June 30, 2021, and $1.1 million and $2.4 million for the three and six months ended June 30, 2020, respectively.
Collateral Dependent Financial Assets. A financial asset is collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Most of Northern Trust’s collateral dependent credit exposure relates to its residential real estate portfolio for which the collateral is usually the underlying real estate property. For collateral dependent financial assets, it is Northern Trust’s policy to reserve or charge-off the difference between the amortized cost basis of the loan and the value of the collateral. The collateral dependent financial asset balance as of June 30, 2021 was immaterial to Northern Trust’s financial statements.
Recognition of Income. Interest income on loans and leases 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 nonaccrual and interest income is recorded on a cash basis. At the time a loan is determined to be nonaccrual, interest accrued but not collected is reversed against interest income in the current period. Interest collected on nonaccrual loans is applied to principal unless, in the opinion of management, collectability of principal is not in doubt. Management’s assessment of the 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. Nonaccrual loans are returned to accrual status when factors indicating doubtful collectability no longer exist. Factors considered in returning a loan to accrual status are consistent across all classes of loans and leases and, in accordance with regulatory guidance, relate primarily to expected payment performance. Loans are eligible to be returned to accrual 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 accrual 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.
Nonaccrual Loans and Troubled Debt Restructurings (TDRs). A loan that has been modified as a concession by Northern Trust or a bankruptcy court resulting from the debtor’s financial difficulties is referred to as a troubled debt restructuring
(TDR). All TDRs are reported starting in the calendar year of their restructuring. In subsequent years, a TDR may cease being reported 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 accrual status if it satisfies the six-payment-period performance requirement.
The expected credit loss is measured based upon the present value of expected future cash flows, discounted at the effective interest rate based on the original contractual rate. If a loan’s contractual interest rate varies based on subsequent changes in an independent factor, such as an index or rate, the loan’s effective interest rate is calculated based on the factor as it changes over the life of the loan. Northern Trust elected not to project changes in the factor for purposes of estimating expected future cash flows. Further, Northern Trust elected not to adjust the effective interest rate for prepayments. If the loan is collateral dependent, the expected loss is measured based on the fair value of the collateral at the reporting date.
If the loan valuation is less than the recorded value of the loan, either an allowance is established, or a charge-off is recorded, for the difference. Smaller balance (individually less than $1 million) homogeneous loans are collectively evaluated. Northern Trust’s accounting policies for material nonaccrual loans is consistent across all classes of loans and leases.
All loans and leases with TDR modifications are evaluated for additional expected credit losses. The nature and extent of further deterioration in credit quality, including a subsequent default, is considered in the determination of an appropriate level of allowance for credit losses.
Included within nonaccrual loans were $77.5 million and $38.9 million of nonaccrual TDRs, and $27.3 million and $29.3 million of accrual TDRs as of June 30, 2021 and December 31, 2020, respectively.
There were $9.9 million and $10.4 million of aggregate undrawn loan commitments and standby letters of credit at June 30, 2021 and December 31, 2020, respectively, issued to borrowers with TDR modifications of loans.
The following table provides, by segment and class, the number of TDR modifications of loans and leases during the three- and six- month periods ended June 30, 2021 and 2020, and the recorded investments and unpaid principal balances as of June 30, 2021 and 2020.
TABLE 49: TROUBLED DEBT RESTRUCTURINGS
THREE MONTHS ENDED JUNE 30, 2021SIX MONTHS ENDED JUNE 30, 2021
($ In Millions)NUMBER OF
LOANS AND
LEASES		RECORDED
INVESTMENT		UNPAID
PRINCIPAL
BALANCE		NUMBER OF
LOANS AND
LEASES		RECORDED
INVESTMENT		UNPAID
PRINCIPAL
BALANCE
Commercial
Commercial and Institutional— $— $— 6 $19.6 $19.6 
Commercial Real Estate1 6.9 11.2 2 28.3 34.5 
Total Commercial1 6.9 11.2 8 47.9 54.1 
Personal
Residential Real Estate5 0.6 0.7 7 0.8 1.0 
Total Personal5 0.6 0.7 7 0.8 1.0 
Total Loans and Leases6 $7.5 $11.9 15 $48.7 $55.1 
Note: Period-end balances reflect all paydowns and charge-offs during the period.
THREE MONTHS ENDED JUNE 30, 2020SIX MONTHS ENDED JUNE 30, 2020
($ In Millions)NUMBER OF
LOANS AND
LEASES		RECORDED
INVESTMENT		UNPAID
PRINCIPAL
BALANCE		NUMBER OF
LOANS AND
LEASES		RECORDED
INVESTMENT		UNPAID
PRINCIPAL
BALANCE
Commercial
Commercial and Institutional— $— $— 2 $24.3 $24.5 
Total Commercial— — — 2 24.3 24.5 
Personal
Residential Real Estate— — — 6 1.0 1.2 
Total Personal— — — 6 1.0 1.2 
Total Loans and Leases— $— $— 8 $25.3 $25.7 
Note: Period-end balances reflect all paydowns and charge-offs during the period.
TDR modifications 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 three and six months ended June 30, 2021, the TDR modification of loans within residential real estate were other modifications and deferred principal. During the six months ended June 30, 2021, the TDR modification of loans within
commercial and institutional were deferred principal. During the three and six months ended June 30, 2021, the TDR modification of loans within commercial real estate were deferred principal, interest rate concessions, and extension of term.
During the six months ended June 30, 2020, the TDR modifications of loans within residential real estate were extensions of term, other modifications, interest rate concessions, and deferred principal. During the six months ended June 30, 2020, the TDR modifications within commercial and institutional were other modifications.
There were no residential real estate loan TDR modification during the twelve months ended March 31, 2021, which subsequently had a payment default during the three and six months ended June 30, 2021.
There were no residential real estate loan TDR modifications during the twelve months ended March 31, 2020, which subsequently had a payment default during the three and six months ended June 30, 2020.
Northern Trust may obtain physical possession of real estate via foreclosure on an in-substance repossession. As of June 30, 2021, Northern Trust held foreclosed real estate properties with a carrying value of $0.2 million as a result of obtaining physical possession. In addition, as of June 30, 2021, Northern Trust had loans with a carrying value of $5.6 million for which formal foreclosure proceedings were in process.
TDR Relief — COVID-19. Due to the economic environment arising from the COVID-19 pandemic, there have been two forms of relief provided for classifying loans as TDRs: the Interagency Guidance (as defined below) and the CARES Act.
Various banking regulators, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau, issued guidance in the April 7, 2020 Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (revised) on loan modification treatment (Interagency Guidance) pursuant to which financial institutions can apply ASC 310-40 Receivables – Troubled Debt Restructurings by Creditors. In accordance with the Interagency Guidance, a loan modification is not considered a TDR if the modification is related to COVID-19; the borrower had been current (not more than 29 days past due) when the modification program was implemented; and the modification includes payment deferrals for not more than 6 months.
Under section 4013 of the CARES Act, relief provided to lenders exempting certain loan modifications which would otherwise be classified as TDRs from such classification applies for loans that were not more than 30 days past due as of December 31, 2019. The TDR relief under the CARES Act applies to COVID-19-related modifications that were made from March 1, 2020 until the earlier of (a) January 1, 2022 or (b) 60 days from the date the COVID-19 national emergency officially ends.
Financial institutions may account for eligible loan modifications under the Interagency Guidance and/or the CARES Act. Northern Trust elected to apply both the CARES Act and the Interagency Guidance, as applicable, in providing borrowers with loan modification relief in response to the COVID-19 pandemic. All other types of modifications which do not meet the CARES Act or Interagency Guidance requirements continue to be governed by existing regulations and accounting policies.
The following tables provide, by segment and class, the number of total COVID-19-related loan modifications including the loan volume and deferred principal and interest balances as of June 30, 2021, for which Northern Trust applied an exemption from TDR classification that are in active deferral (loans currently in the deferral period) or completed deferral (loans that returned to their regular payment schedule).
TABLE 50: COVID-19 LOAN MODIFICATIONS NOT CONSIDERED TDRS IN ACTIVE DEFERRAL STATUS
JUNE 30, 2021
($ In Millions)NUMBER OF COVID-19 RELATED MODIFICATIONSLOAN VOLUMEDEFERRED PRINCIPAL AMOUNTDEFERRED INTEREST AMOUNT
Personal
Residential Real Estate13 $4.7 $0.2 $0.1 
Total Personal13 $4.7 $0.2 $0.1 
Total Loans13 $4.7 $0.2 $0.1 
TABLE 51: COVID-19 LOAN MODIFICATIONS NOT CONSIDERED TDRS THAT HAVE COMPLETED DEFERRAL
JUNE 30, 2021
($ In Millions)NUMBER OF COVID-19 RELATED MODIFICATIONSLOAN VOLUMEDEFERRED PRINCIPAL AMOUNTDEFERRED INTEREST AMOUNT
Commercial
Commercial and Institutional84 $226.7 $— $1.8 
Commercial Real Estate88 443.7 — 2.6 
Total Commercial172 $670.4 $— $4.4 
Personal
Private Client31 $153.0 $— $1.0 
Residential Real Estate376 146.2 1.5 1.8 
Total Personal407 $299.2 $1.5 $2.8 
Total Loans579 $969.6 $1.5 $7.2 

Northern Trust continues to accrue and recognize interest income during the loan deferral period, and hence has not moved these loans to nonaccrual or reported them as past due. Further, these loan balances continue to be assessed on a collective basis for purposes of measuring an allowance for expected credit losses.
During the quarter ended June 30, 2021, 41 loans with an aggregate principal amount of $57.8 million that had been granted payment deferrals were paid off.