|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
36-2723087
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
50 South LaSalle Street
Chicago, Illinois
|
60603
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
x
|
Accelerated filer
|
¨
|
|
|
|
|
Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
|
|
|
|
|
|
Emerging growth company
|
¨
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|||||||||
CONDENSED INCOME STATEMENTS (In Millions)
|
2017
|
|
2016
|
|
% Change
(1)
|
|||||
Noninterest Income
|
$
|
930.9
|
|
|
$
|
882.2
|
|
|
6
|
%
|
Net Interest Income
|
353.5
|
|
|
307.8
|
|
|
15
|
|
||
Provision for Credit Losses
|
(1.0
|
)
|
|
2.0
|
|
|
N/M
|
|
||
Noninterest Expense
|
894.5
|
|
|
828.8
|
|
|
8
|
|
||
Income before Income Taxes
|
390.9
|
|
|
359.2
|
|
|
9
|
|
||
Provision for Income Taxes
|
114.8
|
|
|
113.8
|
|
|
1
|
|
||
Net Income
|
$
|
276.1
|
|
|
$
|
245.4
|
|
|
13
|
%
|
PER COMMON SHARE
|
|
|
|
|
|
|||||
Net Income — Basic
|
$
|
1.10
|
|
|
$
|
1.03
|
|
|
7
|
%
|
— Diluted
|
1.09
|
|
|
1.03
|
|
|
6
|
|
||
Cash Dividends Declared Per Common Share
|
0.38
|
|
|
0.36
|
|
|
6
|
|
||
Book Value — End of Period (EOP)
|
39.62
|
|
|
37.01
|
|
|
7
|
|
||
Market Price — EOP
|
86.58
|
|
|
65.17
|
|
|
33
|
|
SELECTED BALANCE SHEET DATA (In Millions)
|
|
|
|
|
|
|||||
|
March 31, 2017
|
|
December 31, 2016
|
|
% Change
(1)
|
|||||
End of Period:
|
|
|
|
|
|
|||||
Assets
|
$
|
121,488.7
|
|
|
$
|
123,926.9
|
|
|
(2
|
)%
|
Earning Assets
|
112,974.1
|
|
|
115,446.4
|
|
|
(2
|
)
|
||
Deposits
|
100,529.5
|
|
|
101,651.7
|
|
|
(1
|
)
|
||
Stockholders’ Equity
|
9,977.7
|
|
|
9,770.4
|
|
|
2
|
|
|
Three Months Ended March 31,
|
|||||||||
|
2017
|
|
2016
|
|
% Change
(1)
|
|||||
Average Balances:
|
|
|
|
|
|
|||||
Assets
|
$
|
116,476.4
|
|
|
$
|
113,417.1
|
|
|
3
|
%
|
Earning Assets
|
108,951.8
|
|
|
104,617.4
|
|
|
4
|
|
||
Deposits
|
94,933.6
|
|
|
92,476.3
|
|
|
3
|
|
||
Stockholders’ Equity
|
9,791.4
|
|
|
8,691.2
|
|
|
13
|
|
CLIENT ASSETS (In Billions)
|
March 31, 2017
|
|
December 31, 2016
|
|
% Change
(1)
|
|||||
Assets Under Custody/Administration
(2)
|
$
|
8,924.7
|
|
|
$
|
8,541.3
|
|
|
4
|
%
|
Assets Under Custody
|
7,107.7
|
|
|
6,720.5
|
|
|
6
|
|
||
Assets Under Management
|
1,001.3
|
|
|
942.4
|
|
|
6
|
|
(1)
|
Percentage calculations are based on actual balances rather than the rounded amounts presented in the Consolidated Financial Highlights.
|
(2)
|
For the purposes of disclosing Assets Under Custody/Administration, to the extent that both custody and administration services are provided, the value of the assets is included only once.
|
|
Three Months Ended March 31,
|
||||
|
2017
|
|
2016
|
||
Financial Ratios:
|
|
|
|
||
Return on Average Common Equity
|
11.6
|
%
|
|
11.6
|
%
|
Return on Average Assets
|
0.96
|
|
|
0.87
|
|
Dividend Payout Ratio
|
34.9
|
|
|
35.0
|
|
Net Interest Margin
(1)
|
1.35
|
|
|
1.21
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||
|
Advanced
Approach
|
|
Standardized
Approach
|
|
Advanced
Approach
|
|
Standardized
Approach
|
||||
Capital Ratios:
|
|
|
|
|
|
|
|
||||
Northern Trust Corporation
|
|
|
|
|
|
|
|
||||
Common Equity Tier 1
|
12.9
|
%
|
|
12.2
|
%
|
|
12.4
|
%
|
|
11.8
|
%
|
Tier 1
|
14.2
|
|
|
13.4
|
|
|
13.7
|
|
|
12.9
|
|
Total
|
15.6
|
|
|
15.0
|
|
|
15.1
|
|
|
14.5
|
|
Tier 1 Leverage
|
8.2
|
|
|
8.2
|
|
|
8.0
|
|
|
8.0
|
|
Supplementary Leverage
(2)
|
6.9
|
|
|
N/A
|
|
|
6.8
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
||||
The Northern Trust Company
|
|
|
|
|
|
|
|
||||
Common Equity Tier 1
|
12.9
|
%
|
|
12.0
|
%
|
|
12.4
|
%
|
|
11.5
|
%
|
Tier 1
|
12.9
|
|
|
12.0
|
|
|
12.4
|
|
|
11.5
|
|
Total
|
14.6
|
|
|
13.8
|
|
|
14.0
|
|
|
13.3
|
|
Tier 1 Leverage
|
7.2
|
|
|
7.2
|
|
|
7.0
|
|
|
7.0
|
|
Supplementary Leverage
(2)
|
6.1
|
|
|
N/A
|
|
|
6.0
|
|
|
N/A
|
|
(1)
|
Net interest margin is presented on a fully taxable equivalent (FTE) basis, a non-generally accepted accounting principle (GAAP) financial measure that facilitates the analysis of asset yields. The net interest margin on a GAAP basis and a reconciliation of net interest income on a GAAP basis to net interest income on an FTE basis are presented on page 20.
|
(2)
|
Effective January 1, 2018, Northern Trust will be subject to a minimum supplementary leverage ratio of 3 percent.
|
Noninterest Income
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
($ In Millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Trust, Investment and Other Servicing Fees
|
$
|
808.2
|
|
|
$
|
748.2
|
|
|
$
|
60.0
|
|
|
8
|
%
|
Foreign Exchange Trading Income
|
48.1
|
|
|
60.5
|
|
|
(12.4
|
)
|
|
(21
|
)
|
|||
Treasury Management Fees
|
14.7
|
|
|
16.2
|
|
|
(1.5
|
)
|
|
(9
|
)
|
|||
Security Commissions and Trading Income
|
20.5
|
|
|
18.9
|
|
|
1.6
|
|
|
9
|
|
|||
Other Operating Income
|
39.7
|
|
|
38.1
|
|
|
1.6
|
|
|
4
|
|
|||
Investment Security Gains (Losses), net
|
(0.3
|
)
|
|
0.3
|
|
|
(0.6
|
)
|
|
N/M
|
|
|||
Total Noninterest Income
|
$
|
930.9
|
|
|
$
|
882.2
|
|
|
$
|
48.7
|
|
|
6
|
%
|
Assets Under Custody / Administration
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
|
Change Q1-17/Q4-16
|
|
Change Q1-17/Q1-16
|
||||||||
($ In Billions)
|
|||||||||||||||||
Corporate & Institutional
|
$
|
8,338.2
|
|
|
$
|
7,987.0
|
|
|
$
|
7,404.4
|
|
|
4
|
%
|
|
13
|
%
|
Wealth Management
|
586.5
|
|
|
554.3
|
|
|
522.0
|
|
|
6
|
|
|
12
|
|
|||
Total Assets Under Custody / Administration
|
$
|
8,924.7
|
|
|
$
|
8,541.3
|
|
|
$
|
7,926.4
|
|
|
4
|
%
|
|
13
|
%
|
Assets Under Custody
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
|
Change Q1-17/Q4-16
|
|
Change Q1-17/Q1-16
|
||||||||
($ In Billions)
|
|||||||||||||||||
Corporate & Institutional
|
$
|
6,533.3
|
|
|
$
|
6,176.9
|
|
|
$
|
5,700.3
|
|
|
6
|
%
|
|
15
|
%
|
Wealth Management
|
574.4
|
|
|
543.6
|
|
|
511.1
|
|
|
6
|
|
|
12
|
|
|||
Total Assets Under Custody
|
$
|
7,107.7
|
|
|
$
|
6,720.5
|
|
|
$
|
6,211.4
|
|
|
6
|
%
|
|
14
|
%
|
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
|||||||||||||||||||||
Assets Under Custody
|
C&IS
|
|
WM
|
|
Total
|
|
C&IS
|
|
WM
|
|
Total
|
|
C&IS
|
|
WM
|
|
Total
|
|||||||||
Equities
|
45
|
%
|
|
56
|
%
|
|
46
|
%
|
|
45
|
%
|
|
55
|
%
|
|
46
|
%
|
|
43
|
%
|
|
54
|
%
|
|
43
|
%
|
Fixed Income
|
37
|
|
|
21
|
|
|
36
|
|
|
37
|
|
|
22
|
|
|
36
|
|
|
39
|
|
|
23
|
|
|
38
|
|
Cash and Other Assets
|
18
|
|
|
23
|
|
|
18
|
|
|
18
|
|
|
23
|
|
|
18
|
|
|
18
|
|
|
23
|
|
|
19
|
|
Assets Under Management
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
|
Change Q1-17/Q4-16
|
|
Change Q1-17/Q1-16
|
||||||||
($ In Billions)
|
|||||||||||||||||
Corporate & Institutional
|
$
|
741.1
|
|
|
$
|
694.0
|
|
|
$
|
669.9
|
|
|
7
|
%
|
|
11
|
%
|
Wealth Management
|
260.2
|
|
|
248.4
|
|
|
230.1
|
|
|
5
|
|
|
13
|
|
|||
Total Assets Under Management
|
$
|
1,001.3
|
|
|
$
|
942.4
|
|
|
$
|
900.0
|
|
|
6
|
%
|
|
11
|
%
|
($ In Billions)
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
||||||
Equities
|
$
|
516.8
|
|
|
$
|
480.6
|
|
|
$
|
453.5
|
|
Fixed Income
|
165.8
|
|
|
160.5
|
|
|
148.5
|
|
|||
Cash and Other Assets
|
195.1
|
|
|
189.3
|
|
|
192.0
|
|
|||
Securities Lending Collateral
|
123.6
|
|
|
112.0
|
|
|
106.0
|
|
|||
Total Assets Under Management
|
$
|
1,001.3
|
|
|
$
|
942.4
|
|
|
$
|
900.0
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
|||||||||||||||||||||
Assets Under Management
|
C&IS
|
|
WM
|
|
Total
|
|
C&IS
|
|
WM
|
|
Total
|
|
C&IS
|
|
WM
|
|
Total
|
|||||||||
Equities
|
52
|
%
|
|
49
|
%
|
|
52
|
%
|
|
52
|
%
|
|
47
|
%
|
|
51
|
%
|
|
52
|
%
|
|
46
|
%
|
|
50
|
%
|
Fixed Income
|
13
|
|
|
27
|
|
|
17
|
|
|
13
|
|
|
28
|
|
|
17
|
|
|
12
|
|
|
29
|
|
|
17
|
|
Cash and Other Assets
|
18
|
|
|
24
|
|
|
19
|
|
|
19
|
|
|
25
|
|
|
20
|
|
|
20
|
|
|
25
|
|
|
21
|
|
Securities Lending Collateral
|
17
|
|
|
—
|
|
|
12
|
|
|
16
|
|
|
—
|
|
|
12
|
|
|
16
|
|
|
—
|
|
|
12
|
|
|
|
Three Months Ended
|
||||||||||||||
($ In Billions)
|
March 31, 2017
|
December 31, 2016
|
September 30, 2016
|
June 30, 2016
|
March 31, 2016
|
|||||||||||
Beginning Balance of AUM
|
$
|
942.4
|
|
$
|
945.8
|
|
$
|
906.2
|
|
$
|
900.0
|
|
$
|
875.3
|
|
|
Inflows by Investment Type
|
|
|
|
|
|
|||||||||||
|
Equity
|
41.6
|
|
44.5
|
|
27.2
|
|
34.9
|
|
29.4
|
|
|||||
|
Fixed Income
|
13.7
|
|
16.2
|
|
13.1
|
|
18.6
|
|
11.4
|
|
|||||
|
Cash & Other Assets
|
91.8
|
|
95.7
|
|
109.5
|
|
83.6
|
|
94.6
|
|
|||||
|
Securities Lending Collateral
|
29.6
|
|
24.8
|
|
27.1
|
|
21.5
|
|
20.4
|
|
|||||
|
|
|
|
|
|
|
||||||||||
Total Inflows
|
176.7
|
|
181.2
|
|
176.9
|
|
158.6
|
|
155.8
|
|
||||||
|
|
|
|
|
|
|
||||||||||
Outflows by Investment Type
|
|
|
|
|
|
|||||||||||
|
Equity
|
(38.4
|
)
|
(50.0
|
)
|
(26.6
|
)
|
(31.4
|
)
|
(28.1
|
)
|
|||||
|
Fixed Income
|
(13.0
|
)
|
(14.1
|
)
|
(8.8
|
)
|
(14.9
|
)
|
(10.2
|
)
|
|||||
|
Cash & Other Assets
|
(89.7
|
)
|
(98.4
|
)
|
(100.2
|
)
|
(84.7
|
)
|
(80.3
|
)
|
|||||
|
Securities Lending Collateral
|
(18.0
|
)
|
(26.8
|
)
|
(21.4
|
)
|
(19.3
|
)
|
(18.2
|
)
|
|||||
|
|
|
|
|
|
|
||||||||||
Total Outflows
|
(159.1
|
)
|
(189.3
|
)
|
(157.0
|
)
|
(150.3
|
)
|
(136.8
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||
Net Inflows / (Outflows)
|
17.6
|
|
(8.1
|
)
|
19.9
|
|
8.3
|
|
19.0
|
|
||||||
|
|
|
|
|
|
|
||||||||||
Market Performance, Currency & Other
|
|
|
|
|
|
|||||||||||
|
Market Performance & Other
|
38.9
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
|
Currency
|
2.4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Total Market Performance, Currency & Other
|
41.3
|
|
4.7
|
|
19.7
|
|
(2.1
|
)
|
5.7
|
|
||||||
|
|
|
|
|
|
|
||||||||||
Ending Balance of AUM
|
$
|
1,001.3
|
|
$
|
942.4
|
|
$
|
945.8
|
|
$
|
906.2
|
|
$
|
900.0
|
|
Other Operating Income
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
($ In Millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Loan Service Fees
|
$
|
12.4
|
|
|
$
|
13.4
|
|
|
$
|
(1.0
|
)
|
|
(7
|
)%
|
Banking Service Fees
|
12.4
|
|
|
12.4
|
|
|
—
|
|
|
—
|
|
|||
Other Income
|
14.9
|
|
|
12.3
|
|
|
2.6
|
|
|
21
|
|
|||
Total Other Operating Income
|
$
|
39.7
|
|
|
$
|
38.1
|
|
|
$
|
1.6
|
|
|
4
|
%
|
|
NORTHERN TRUST CORPORATION
|
||||||||||||||||||||
(Interest and Rate on a Fully Taxable Equivalent Basis)
|
FIRST QUARTER
|
||||||||||||||||||||
2017
|
|
2016
|
|||||||||||||||||||
($ In Millions)
|
Interest
|
|
Average
Balance
|
|
Rate
(6)
|
|
Interest
|
|
Average
Balance
|
|
Rate
(6)
|
||||||||||
Average Earning Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Reserve and Other Central Bank Deposits
(1)
|
$
|
29.7
|
|
|
$
|
21,806.9
|
|
|
0.55
|
%
|
|
$
|
26.0
|
|
|
$
|
21,170.2
|
|
|
0.49
|
%
|
Interest-Bearing Due from and Deposits with Banks
(1)(2)
|
14.9
|
|
|
6,684.3
|
|
|
0.91
|
|
|
17.5
|
|
|
9,056.8
|
|
|
0.78
|
|
||||
Federal Funds Sold and Securities Purchased under Agreements to Resell
|
6.5
|
|
|
2,011.7
|
|
|
1.32
|
|
|
3.2
|
|
|
1,593.7
|
|
|
0.82
|
|
||||
Securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
25.5
|
|
|
7,213.8
|
|
|
1.44
|
|
|
19.3
|
|
|
6,500.5
|
|
|
1.19
|
|
||||
Obligations of States and Political Subdivisions
|
3.6
|
|
|
989.7
|
|
|
1.47
|
|
|
1.8
|
|
|
189.1
|
|
|
3.77
|
|
||||
Government Sponsored Agency
|
68.9
|
|
|
17,796.8
|
|
|
1.57
|
|
|
48.8
|
|
|
16,764.2
|
|
|
1.17
|
|
||||
Other
(3)
|
54.6
|
|
|
18,777.4
|
|
|
1.18
|
|
|
38.9
|
|
|
15,349.5
|
|
|
1.02
|
|
||||
Total Securities
|
152.6
|
|
|
44,777.7
|
|
|
1.38
|
|
|
108.8
|
|
|
38,803.3
|
|
|
1.13
|
|
||||
Loans and Leases
(4)
|
215.5
|
|
|
33,671.2
|
|
|
2.59
|
|
|
202.7
|
|
|
33,993.4
|
|
|
2.40
|
|
||||
Total Earning Assets
|
419.2
|
|
|
108,951.8
|
|
|
1.56
|
|
|
358.2
|
|
|
104,617.4
|
|
|
1.38
|
|
||||
Allowance for Credit Losses Assigned to Loans and Leases
|
—
|
|
|
(160.8
|
)
|
|
—
|
|
|
—
|
|
|
(193.5
|
)
|
|
—
|
|
||||
Cash and Due from Banks and Other Central Bank Deposits
(5)
|
—
|
|
|
2,116.6
|
|
|
—
|
|
|
—
|
|
|
2,192.4
|
|
|
—
|
|
||||
Buildings and Equipment
|
—
|
|
|
465.9
|
|
|
—
|
|
|
—
|
|
|
445.9
|
|
|
—
|
|
||||
Client Security Settlement Receivables
|
—
|
|
|
829.6
|
|
|
—
|
|
|
—
|
|
|
1,190.5
|
|
|
—
|
|
||||
Goodwill
|
—
|
|
|
519.7
|
|
|
—
|
|
|
—
|
|
|
523.1
|
|
|
—
|
|
||||
Other Assets
|
—
|
|
|
3,753.6
|
|
|
—
|
|
|
—
|
|
|
4,641.3
|
|
|
—
|
|
||||
Total Assets
|
$
|
—
|
|
|
$
|
116,476.4
|
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
113,417.1
|
|
|
—
|
%
|
Average Source of Funds
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings and Money Market
|
$
|
3.2
|
|
|
$
|
15,446.7
|
|
|
0.09
|
%
|
|
$
|
2.9
|
|
|
$
|
15,367.3
|
|
|
0.07
|
%
|
Savings Certificates and Other Time
|
2.3
|
|
|
1,338.5
|
|
|
0.70
|
|
|
2.0
|
|
|
1,459.6
|
|
|
0.54
|
|
||||
Non-U.S. Offices — Interest-Bearing
|
22.1
|
|
|
52,435.9
|
|
|
0.17
|
|
|
17.3
|
|
|
49,434.9
|
|
|
0.14
|
|
||||
Total Interest-Bearing Deposits
|
27.6
|
|
|
69,221.1
|
|
|
0.16
|
|
|
22.2
|
|
|
66,261.8
|
|
|
0.13
|
|
||||
Short-Term Borrowings
|
9.0
|
|
|
5,659.1
|
|
|
0.65
|
|
|
3.4
|
|
|
5,584.1
|
|
|
0.25
|
|
||||
Senior Notes
|
11.7
|
|
|
1,496.7
|
|
|
3.17
|
|
|
11.7
|
|
|
1,497.4
|
|
|
3.15
|
|
||||
Long-Term Debt
|
7.4
|
|
|
1,324.9
|
|
|
2.26
|
|
|
6.1
|
|
|
1,399.3
|
|
|
1.75
|
|
||||
Floating Rate Capital Debt
|
1.1
|
|
|
277.4
|
|
|
1.56
|
|
|
0.8
|
|
|
277.3
|
|
|
1.15
|
|
||||
Total Interest-Related Funds
|
56.8
|
|
|
77,979.2
|
|
|
0.30
|
|
|
44.2
|
|
|
75,019.9
|
|
|
0.24
|
|
||||
Interest Rate Spread
|
—
|
|
|
—
|
|
|
1.26
|
|
|
—
|
|
|
—
|
|
|
1.14
|
|
||||
Demand and Other Noninterest-Bearing Deposits
|
—
|
|
|
25,712.5
|
|
|
—
|
|
|
—
|
|
|
26,214.5
|
|
|
—
|
|
||||
Other Liabilities
|
—
|
|
|
2,993.3
|
|
|
—
|
|
|
—
|
|
|
3,491.5
|
|
|
—
|
|
||||
Stockholders’ Equity
|
—
|
|
|
9,791.4
|
|
|
—
|
|
|
—
|
|
|
8,691.2
|
|
|
—
|
|
||||
Total Liabilities and Stockholders’ Equity
|
$
|
—
|
|
|
$
|
116,476.4
|
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
113,417.1
|
|
|
—
|
%
|
Net Interest Income/Margin (FTE Adjusted)
|
$
|
362.4
|
|
|
$
|
—
|
|
|
1.35
|
%
|
|
$
|
314.0
|
|
|
$
|
—
|
|
|
1.21
|
%
|
Net Interest Income/Margin (Unadjusted)
|
$
|
353.5
|
|
|
$
|
—
|
|
|
1.32
|
%
|
|
$
|
307.8
|
|
|
$
|
—
|
|
|
1.18
|
%
|
|
Three Months Ended March 31, 2017/2016
|
||||||||||
|
Change Due To
|
||||||||||
(In Millions)
|
Average
Balance
|
|
Rate
|
|
Total
|
||||||
Earning Assets (FTE)
|
$
|
6.6
|
|
|
$
|
54.4
|
|
|
$
|
61.0
|
|
Interest-Related Funds
|
2.0
|
|
|
10.6
|
|
|
12.6
|
|
|||
Net Interest Income (FTE)
|
$
|
4.6
|
|
|
$
|
43.8
|
|
|
$
|
48.4
|
|
(1)
|
To be consistent with the change in presentation to the consolidated balance sheets, the First Quarter 2016 presentation above combines non-US central bank deposits, which were previously included in Interest-Bearing Due From and Deposits with Banks, with Federal Reserve deposits.
|
(2)
|
Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheets.
|
(3)
|
Other securities include certain community development investments and Federal Home Loan Bank and Federal Reserve stock, which are classified in other assets in the consolidated balance sheets as of
March 31, 2017
and
2016
.
|
(4)
|
Average balances include nonaccrual loans. Lease financing receivable balances are reduced by deferred income.
|
(5)
|
Cash and Due from Banks and Other Central Bank Deposits includes the non-interest-bearing component of Federal Reserve and Other Central Bank Deposits as presented on the consolidated balance sheets on page 24.
|
(6)
|
Rate calculations are based on actual balances rather than the rounded amounts presented in the Average Consolidated Balance Sheets with Analysis of Net Interest Income.
|
Notes:
|
Net Interest Income (FTE Adjusted), a non-generally accepted accounting principle (GAAP) financial measure, includes adjustments to a fully taxable equivalent basis for loans and securities. Such adjustments are based on a blended federal and state tax rate of
37.8%
and
37.7%
for the three months ended
March 31, 2017
and
2016
, respectively. Total taxable equivalent interest adjustments amounted to
$8.9 million
and
$6.2 million
for the three months ended
March 31, 2017
and
2016
, respectively. A reconciliation of net interest income and net interest margin on a GAAP basis to net interest income and net interest margin on an FTE basis (each of which is a non-GAAP financial measure) is provided on page 20.
|
Noninterest Expense
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
($ In Millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Compensation
|
$
|
425.8
|
|
|
$
|
378.8
|
|
|
$
|
47.0
|
|
|
12
|
%
|
Employee Benefits
|
77.8
|
|
|
70.6
|
|
|
7.2
|
|
|
10
|
|
|||
Outside Services
|
153.1
|
|
|
149.9
|
|
|
3.2
|
|
|
2
|
|
|||
Equipment and Software
|
127.3
|
|
|
114.2
|
|
|
13.1
|
|
|
11
|
|
|||
Occupancy
|
45.4
|
|
|
40.9
|
|
|
4.5
|
|
|
11
|
|
|||
Other Operating Expense
|
65.1
|
|
|
74.4
|
|
|
(9.3
|
)
|
|
(13
|
)
|
|||
Total Noninterest Expense
|
$
|
894.5
|
|
|
$
|
828.8
|
|
|
$
|
65.7
|
|
|
8
|
%
|
Other Operating Expense
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
($ In Millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Business Promotion
|
$
|
16.1
|
|
|
$
|
26.9
|
|
|
$
|
(10.8
|
)
|
|
(40
|
)%
|
Staff Related
|
8.7
|
|
|
5.9
|
|
|
2.8
|
|
|
47
|
|
|||
FDIC Insurance Premiums
|
8.4
|
|
|
6.3
|
|
|
2.1
|
|
|
35
|
|
|||
Other Intangibles Amortization
|
2.4
|
|
|
2.1
|
|
|
0.3
|
|
|
13
|
|
|||
Other Expenses
|
29.5
|
|
|
33.2
|
|
|
(3.7
|
)
|
|
(11
|
)
|
|||
Total Other Operating Expense
|
$
|
65.1
|
|
|
$
|
74.4
|
|
|
$
|
(9.3
|
)
|
|
(13
|
)%
|
Three Months Ended March 31,
|
Corporate &
Institutional Services
|
|
Wealth
Management
|
|
Treasury and
Other
|
|
Total
Consolidated
|
||||||||||||||||||||||||
($ In Millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016 ^
|
|
2017
|
|
2016 ^
|
||||||||||||||||
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trust, Investment and Other Servicing Fees
|
$
|
462.9
|
|
|
$
|
433.4
|
|
|
$
|
345.3
|
|
|
$
|
314.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
808.2
|
|
|
$
|
748.2
|
|
Foreign Exchange Trading Income
|
49.1
|
|
|
51.7
|
|
|
0.9
|
|
|
4.5
|
|
|
(1.9
|
)
|
|
4.3
|
|
|
48.1
|
|
|
60.5
|
|
||||||||
Other Noninterest Income
|
44.2
|
|
|
45.6
|
|
|
25.5
|
|
|
26.8
|
|
|
4.9
|
|
|
1.1
|
|
|
74.6
|
|
|
73.5
|
|
||||||||
Net Interest Income*
|
166.5
|
|
|
138.4
|
|
|
177.0
|
|
|
158.5
|
|
|
18.9
|
|
|
17.1
|
|
|
362.4
|
|
|
314.0
|
|
||||||||
Revenue*
|
722.7
|
|
|
669.1
|
|
|
548.7
|
|
|
504.6
|
|
|
21.9
|
|
|
22.5
|
|
|
1,293.3
|
|
|
1,196.2
|
|
||||||||
Provision for Credit Losses
|
0.3
|
|
|
(3.2
|
)
|
|
(1.3
|
)
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
2.0
|
|
||||||||
Noninterest Expense
|
510.8
|
|
|
475.3
|
|
|
346.3
|
|
|
326.9
|
|
|
37.4
|
|
|
26.6
|
|
|
894.5
|
|
|
828.8
|
|
||||||||
Income before Income Taxes*
|
211.6
|
|
|
197.0
|
|
|
203.7
|
|
|
172.5
|
|
|
(15.5
|
)
|
|
(4.1
|
)
|
|
399.8
|
|
|
365.4
|
|
||||||||
Provision for Income Taxes*
|
66.9
|
|
|
62.2
|
|
|
76.8
|
|
|
64.9
|
|
|
(20.0
|
)
|
|
(7.1
|
)
|
|
123.7
|
|
|
120.0
|
|
||||||||
Net Income
|
$
|
144.7
|
|
|
$
|
134.8
|
|
|
$
|
126.9
|
|
|
$
|
107.6
|
|
|
$
|
4.5
|
|
|
$
|
3.0
|
|
|
$
|
276.1
|
|
|
$
|
245.4
|
|
Percentage of Consolidated Net Income
|
52
|
%
|
|
55
|
%
|
|
46
|
%
|
|
44
|
%
|
|
2
|
%
|
|
1
|
%
|
|
100
|
%
|
|
100
|
%
|
||||||||
Average Assets
|
$
|
77,803.5
|
|
|
$
|
75,372.9
|
|
|
$
|
26,661.8
|
|
|
$
|
26,237.8
|
|
|
$
|
12,011.1
|
|
|
$
|
11,806.4
|
|
|
$
|
116,476.4
|
|
|
$
|
113,417.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
($ In Millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Custody and Fund Administration
|
$
|
307.5
|
|
|
$
|
286.4
|
|
|
$
|
21.1
|
|
|
7
|
%
|
Investment Management
|
93.5
|
|
|
89.1
|
|
|
4.4
|
|
|
5
|
|
|||
Securities Lending
|
23.8
|
|
|
22.6
|
|
|
1.2
|
|
|
5
|
|
|||
Other
|
38.1
|
|
|
35.3
|
|
|
2.8
|
|
|
8
|
|
|||
Total C&IS Trust, Investment and Other Servicing Fees
|
462.9
|
|
|
$
|
433.4
|
|
|
$
|
29.5
|
|
|
7
|
%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
($ In Millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Central
|
$
|
137.4
|
|
|
$
|
124.4
|
|
|
$
|
13.0
|
|
|
10
|
%
|
East
|
85.2
|
|
|
81.0
|
|
|
4.2
|
|
|
5
|
|
|||
West
|
69.6
|
|
|
63.9
|
|
|
5.7
|
|
|
9
|
|
|||
Global Family Office
|
53.1
|
|
|
45.5
|
|
|
7.6
|
|
|
17
|
|
|||
Total Wealth Management Trust, Investment and Other Servicing Fees
|
$
|
345.3
|
|
|
$
|
314.8
|
|
|
$
|
30.5
|
|
|
10
|
%
|
Capital Ratios — Northern Trust Corporation
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
||||||||||||
Advanced
Approach
|
|
Standardized
Approach
|
|
Advanced
Approach
|
|
Standardized
Approach
|
|
Advanced
Approach
|
|
Standardized
Approach
|
|||||||
Common Equity Tier 1
|
12.9
|
%
|
|
12.2
|
%
|
|
12.4
|
%
|
|
11.8
|
%
|
|
11.6
|
%
|
|
10.6
|
%
|
Tier 1
|
14.2
|
%
|
|
13.4
|
%
|
|
13.7
|
%
|
|
12.9
|
%
|
|
12.1
|
%
|
|
11.1
|
%
|
Total
|
15.6
|
%
|
|
15.0
|
%
|
|
15.1
|
%
|
|
14.5
|
%
|
|
13.6
|
%
|
|
12.8
|
%
|
Tier 1 Leverage
|
8.2
|
%
|
|
8.2
|
%
|
|
8.0
|
%
|
|
8.0
|
%
|
|
7.4
|
%
|
|
7.4
|
%
|
Supplementary Leverage
(1)
|
6.9
|
%
|
|
N/A
|
|
|
6.8
|
%
|
|
N/A
|
|
|
6.1
|
%
|
|
N/A
|
|
Capital Ratios — The Northern Trust Company
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
||||||||||||
Advanced
Approach
|
|
Standardized
Approach
|
|
Advanced
Approach
|
|
Standardized
Approach
|
|
Advanced
Approach
|
|
Standardized
Approach
|
|||||||
Common Equity Tier 1
|
12.9
|
%
|
|
12.0
|
%
|
|
12.4
|
%
|
|
11.5
|
%
|
|
11.5
|
%
|
|
10.4
|
%
|
Tier 1
|
12.9
|
%
|
|
12.0
|
%
|
|
12.4
|
%
|
|
11.5
|
%
|
|
11.5
|
%
|
|
10.4
|
%
|
Total
|
14.6
|
%
|
|
13.8
|
%
|
|
14.0
|
%
|
|
13.3
|
%
|
|
13.2
|
%
|
|
12.3
|
%
|
Tier 1 Leverage
|
7.2
|
%
|
|
7.2
|
%
|
|
7.0
|
%
|
|
7.0
|
%
|
|
6.9
|
%
|
|
6.9
|
%
|
Supplementary Leverage
(1)
|
6.1
|
%
|
|
N/A
|
|
|
6.0
|
%
|
|
N/A
|
|
|
5.7
|
%
|
|
N/A
|
|
($ In Millions)
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
||||||
Nonperforming Loans and Leases
|
|
|
|
|
|
||||||
Commercial
|
|
|
|
|
|
||||||
Commercial and Institutional
|
$
|
60.6
|
|
|
$
|
33.7
|
|
|
$
|
41.7
|
|
Commercial Real Estate
|
12.1
|
|
|
11.6
|
|
|
13.5
|
|
|||
Total Commercial
|
72.7
|
|
|
45.3
|
|
|
55.2
|
|
|||
Personal
|
|
|
|
|
|
||||||
Residential Real Estate
|
107.0
|
|
|
114.6
|
|
|
108.5
|
|
|||
Private Client
|
0.2
|
|
|
0.3
|
|
|
0.3
|
|
|||
Total Personal
|
107.2
|
|
|
114.9
|
|
|
108.8
|
|
|||
Total Nonperforming Loans and Leases
|
179.9
|
|
|
160.2
|
|
|
164.0
|
|
|||
Other Real Estate Owned
|
6.9
|
|
|
5.2
|
|
|
10.4
|
|
|||
Total Nonperforming Assets
|
186.8
|
|
|
165.4
|
|
|
174.4
|
|
|||
90 Day Past Due Loans Still Accruing
|
$
|
9.9
|
|
|
$
|
31.0
|
|
|
$
|
10.2
|
|
Nonperforming Loans and Leases to Total Loans and Leases
|
0.54
|
%
|
|
0.47
|
%
|
|
0.48
|
%
|
|||
Coverage of Loan and Lease Allowance to
Nonperforming Loans and Leases
|
0.9
|
x
|
|
1.0x
|
|
|
1.2x
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2016
|
|||||||||||||||
($ In Millions)
|
Allowance
Amount
|
|
Percent of
Loans to
Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Loans to
Total
Loans
|
|
Allowance
Amount
|
|
Percent of
Loans to
Total
Loans
|
|||||||||
Specific Allowance
|
$
|
8.7
|
|
|
—
|
%
|
|
$
|
2.1
|
|
|
—
|
%
|
|
$
|
1.4
|
|
|
—
|
%
|
Allocated Inherent Allowance
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial and Institutional
|
34.9
|
|
|
28
|
|
|
34.7
|
|
|
28
|
|
|
38.6
|
|
|
29
|
|
|||
Commercial Real Estate
|
68.1
|
|
|
12
|
|
|
69.2
|
|
|
12
|
|
|
74.2
|
|
|
12
|
|
|||
Lease Financing, net
|
0.3
|
|
|
1
|
|
|
0.4
|
|
|
1
|
|
|
1.1
|
|
|
1
|
|
|||
Non-U.S.
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||
Other
|
0.6
|
|
|
1
|
|
|
0.6
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total Commercial
|
103.9
|
|
|
47
|
|
|
104.9
|
|
|
47
|
|
|
113.9
|
|
|
48
|
|
|||
Personal
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential Real Estate
|
65.9
|
|
|
22
|
|
|
69.0
|
|
|
23
|
|
|
95.2
|
|
|
25
|
|
|||
Private Client
|
8.3
|
|
|
31
|
|
|
13.8
|
|
|
30
|
|
|
19.5
|
|
|
27
|
|
|||
Other
|
2.2
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|||
Total Personal
|
76.4
|
|
|
53
|
|
|
85.0
|
|
|
53
|
|
|
117.3
|
|
|
52
|
|
|||
Total Allocated Inherent Allowance
|
$
|
180.3
|
|
|
100
|
%
|
|
$
|
189.9
|
|
|
100
|
%
|
|
$
|
231.2
|
|
|
100
|
%
|
Total Allowance for Credit Losses
|
$
|
189.0
|
|
|
|
|
$
|
192.0
|
|
|
|
|
$
|
232.6
|
|
|
|
|||
Allowance Assigned to
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans and Leases
|
$
|
162.0
|
|
|
|
|
$
|
161.0
|
|
|
|
|
$
|
195.6
|
|
|
|
|||
Undrawn Commitments and Standby Letters of Credit
|
27.0
|
|
|
|
|
31.0
|
|
|
|
|
37.0
|
|
|
|
||||||
Total Allowance for Credit Losses
|
$
|
189.0
|
|
|
|
|
$
|
192.0
|
|
|
|
|
$
|
232.6
|
|
|
|
|||
Allowance Assigned to Loans and Leases to Total Loans and Leases
|
0.48
|
%
|
|
|
|
0.48
|
%
|
|
|
|
0.57
|
%
|
|
|
▪
|
the balance sheet size and mix generally remains constant over the simulation horizon with maturing assets and liabilities replaced with instruments with similar terms as those that are maturing, with the exception of certain products such as securities (the assumed reinvestment of which is determined by management’s strategies); non-maturity deposits, of which some recent increases are assumed to be temporary in nature; and long-term fixed rate borrowings, which upon maturity are replaced with overnight wholesale instruments;
|
▪
|
prepayments on mortgage loans and securities collateralized by mortgages are projected under each rate scenario using a third-party mortgage analytics system that incorporates market prepayment assumptions;
|
▪
|
cash flows for structured securities are estimated using a third-party vendor in conjunction with the prepayments provided by the third-party mortgage analytics vendor;
|
▪
|
non-maturity deposit pricing and lives are projected based on Northern Trust’s actual historical patterns and management judgment, depending upon the availability of historical data and current pricing strategies/or judgment; and
|
▪
|
new business rates are based on current spreads to market indices.
|
($ In Millions)
|
Increase/(Decrease)
Estimated Impact on
Next Twelve Months of
Net Interest Income
|
||
Increase in Interest Rates Above Market-Implied Forward Rates
|
|
||
100 Basis Points
|
$
|
25
|
|
200 Basis Points
|
38
|
|
▪
|
the present value of nonmaturity deposits are estimated using remaining lives, which are based on a combination of Northern Trust’s actual historical runoff patterns and management judgment — some balances are assumed to be core and have long lives while other balances are assumed to be temporary and have comparatively shorter lives; and
|
▪
|
the present values of most noninterest-related balances (such as receivables, equipment, and payables) are the same as their book values.
|
($ In Millions)
|
Increase/(Decrease)
Estimated Impact on
Market Value of Equity
|
||
Increase in Interest Rates Above Market Implied Forward Rates
|
|
||
100 Basis Points
|
$
|
320
|
|
200 Basis Points
|
323
|
|
|
Total VaR
(Spot and Forward) |
|
Foreign Exchange
Spot VaR |
|
Foreign Exchange
Forward VaR |
||||||||||||||||||
($ In Millions)
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
High
|
$
|
1.6
|
|
|
$
|
1.4
|
|
|
$
|
1.6
|
|
|
$
|
1.5
|
|
|
$
|
1.1
|
|
|
$
|
0.7
|
|
Low
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
||||||
Average
|
0.5
|
|
|
0.3
|
|
|
0.1
|
|
|
0.1
|
|
|
0.5
|
|
|
0.3
|
|
||||||
Quarter-End
|
1.1
|
|
|
1.4
|
|
|
0.3
|
|
|
1.5
|
|
|
1.1
|
|
|
0.2
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||||||||||
($ In Millions)
|
Reported
|
|
FTE Adj.
|
|
FTE
|
|
Reported
|
|
FTE Adj.
|
|
FTE
|
||||||||||||
Interest Income
|
$
|
410.3
|
|
|
$
|
8.9
|
|
|
$
|
419.2
|
|
|
$
|
352.0
|
|
|
$
|
6.2
|
|
|
$
|
358.2
|
|
Interest Expense
|
56.8
|
|
|
—
|
|
|
56.8
|
|
|
44.2
|
|
|
—
|
|
|
44.2
|
|
||||||
Net Interest Income
|
$
|
353.5
|
|
|
$
|
8.9
|
|
|
$
|
362.4
|
|
|
$
|
307.8
|
|
|
$
|
6.2
|
|
|
$
|
314.0
|
|
Net Interest Margin
|
1.32
|
%
|
|
|
|
1.35
|
%
|
|
1.18
|
%
|
|
|
|
1.21
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
$
|
1,284.4
|
|
|
$
|
8.9
|
|
|
$
|
1,293.3
|
|
|
1,190.0
|
|
|
6.2
|
|
|
1,196.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
financial market disruptions or economic recession, whether in the United States, Europe, the Middle East, Asia or other regions;
|
•
|
volatility or changes in financial markets, including debt and equity markets, that impact the value, liquidity, or credit ratings of financial assets in general, or financial assets held in particular investment funds or client portfolios, including those funds, portfolios, and other financial assets with respect to which Northern Trust has taken, or may in the future take, actions to provide asset value stability or additional liquidity;
|
•
|
the impact of equity markets on fee revenue;
|
•
|
the downgrade of U.S. government-issued and other securities;
|
•
|
changes in foreign exchange trading client volumes and volatility in foreign currency exchange rates, changes in the valuation of the U.S. dollar relative to other currencies in which Northern Trust records revenue or accrues expenses, and Northern Trust’s success in assessing and mitigating the risks arising from all such changes and volatility;
|
•
|
a decline in the value of securities held in Northern Trust’s investment portfolio, particularly asset-backed securities, the liquidity and pricing of which may be negatively impacted by periods of economic turmoil and financial market disruptions;
|
•
|
Northern Trust’s ability to address operating risks, including cyber-security or data security breach risks, human errors or omissions, pricing or valuation of securities, fraud, systems performance or defects, systems interruptions, and breakdowns in processes or internal controls;
|
•
|
Northern Trust’s success in responding to and investing in changes and advancements in technology;
|
•
|
a significant downgrade of any of Northern Trust’s debt ratings;
|
•
|
the health and soundness of the financial institutions and other counterparties with which Northern Trust conducts business;
|
•
|
uncertainties inherent in the complex and subjective judgments required to assess credit risk and establish appropriate allowances therefor;
|
•
|
the pace and extent of continued globalization of investment activity and growth in worldwide financial assets;
|
•
|
changes in interest rates or in the monetary or other policies of various regulatory authorities or central banks;
|
•
|
changes in the legal, regulatory and enforcement framework and oversight applicable to financial institutions, including changes that may affect leverage limits and risk-based capital and liquidity requirements, require financial institutions to pay higher assessments, expose financial institutions to certain liabilities of their subsidiary depository institutions, or restrict or increase the regulation of certain activities carried on by financial institutions, including Northern Trust;
|
•
|
increased costs of compliance and other risks associated with changes in regulation, the current regulatory environment, and areas of increased regulatory emphasis and oversight in the United States and other countries, such as anti-money laundering, anti-bribery, and client privacy;
|
•
|
failure to satisfy regulatory standards or to obtain regulatory approvals when required, including for the use and distribution of capital;
|
•
|
changes in tax laws, accounting requirements or interpretations and other legislation in the United States or other countries that could affect Northern Trust or its clients;
|
•
|
geopolitical risks and the risks of extraordinary events such as natural disasters, terrorist events and war, and the responses of the United States and other countries to those events;
|
•
|
the referendum held in the United Kingdom in which voters approved a departure from the European Union, commonly referred to as “Brexit,” and any effects thereof on global economic conditions, global financial markets, and our business and results of operations;
|
•
|
changes in the nature and activities of Northern Trust’s competition;
|
•
|
Northern Trust’s success in maintaining existing business and continuing to generate new business in existing and targeted markets and its ability to deploy deposits in a profitable manner consistent with its liquidity requirements;
|
•
|
Northern Trust’s ability to address the complex needs of a global client base and manage compliance with legal, tax, regulatory and other requirements;
|
•
|
Northern Trust’s ability to maintain a product mix that achieves acceptable margins;
|
•
|
Northern Trust’s ability to continue to generate investment results that satisfy clients and to develop an array of investment products;
|
•
|
Northern Trust’s success in recruiting and retaining the necessary personnel to support business growth and expansion and maintain sufficient expertise to support increasingly complex products and services;
|
•
|
Northern Trust’s success in controlling expenses and implementing revenue enhancement initiatives;
|
•
|
uncertainties inherent in Northern Trust’s assumptions concerning its pension plan, including discount rates and expected contributions, returns and payouts;
|
•
|
Northern Trust’s success in improving risk management practices and controls and managing risks inherent in its businesses, including credit risk, operational risk, market and liquidity risk, fiduciary risk, compliance risk and strategic risk;
|
•
|
risks and uncertainties inherent in the litigation and regulatory process, including the possibility that losses may be in excess of Northern Trust’s recorded liability and estimated range of possible loss for litigation exposures;
|
•
|
risks associated with being a holding company, including Northern Trust’s dependence on dividends from its principal subsidiary;
|
•
|
the risk of damage to Northern Trust’s reputation which may undermine the confidence of clients, counterparties, rating agencies, and stockholders; and
|
•
|
other factors identified elsewhere in the Corporation’s Annual Report on Form 10-K for the year ended
December 31, 2016
, including those factors described in Item 1A, “Risk Factors,” and other filings with the SEC, all of which are available on Northern Trust’s website.
|
CONSOLIDATED BALANCE SHEETS
|
NORTHERN TRUST CORPORATION
|
(In Millions Except Share Information)
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and Due from Banks
|
$
|
4,649.2
|
|
|
$
|
5,332.0
|
|
Federal Reserve and Other Central Bank Deposits
|
25,959.5
|
|
|
26,674.2
|
|
||
Interest-Bearing Deposits with Banks
|
5,247.8
|
|
|
4,800.6
|
|
||
Federal Funds Sold and Securities Purchased under Agreements to Resell
|
1,933.8
|
|
|
1,974.3
|
|
||
Securities
|
|
|
|
||||
Available for Sale
|
34,997.6
|
|
|
35,579.8
|
|
||
Held to Maturity (Fair value of $8,933.4 and $8,905.1)
|
8,938.4
|
|
|
8,921.1
|
|
||
Trading Account
|
1.4
|
|
|
0.3
|
|
||
Total Securities
|
43,937.4
|
|
|
44,501.2
|
|
||
Loans and Leases
|
|
|
|
||||
Commercial
|
15,527.4
|
|
|
15,902.3
|
|
||
Personal
|
17,944.4
|
|
|
17,919.8
|
|
||
Total Loans and Leases (Net of unearned income of $39.1 and $41.2)
|
33,471.8
|
|
|
33,822.1
|
|
||
Allowance for Credit Losses Assigned to Loans and Leases
|
(162.0
|
)
|
|
(161.0
|
)
|
||
Buildings and Equipment
|
459.9
|
|
|
466.6
|
|
||
Client Security Settlement Receivables
|
1,559.9
|
|
|
1,043.7
|
|
||
Goodwill
|
519.3
|
|
|
519.4
|
|
||
Other Assets
|
3,912.1
|
|
|
4,953.8
|
|
||
Total Assets
|
$
|
121,488.7
|
|
|
$
|
123,926.9
|
|
Liabilities
|
|
|
|
||||
Deposits
|
|
|
|
||||
Demand and Other Noninterest-Bearing
|
$
|
20,698.6
|
|
|
$
|
22,190.4
|
|
Savings and Money Market
|
15,878.8
|
|
|
16,509.0
|
|
||
Savings Certificates and Other Time
|
1,346.8
|
|
|
1,331.7
|
|
||
Non U.S. Offices — Noninterest-Bearing
|
9,848.0
|
|
|
7,972.5
|
|
||
— Interest-Bearing
|
52,757.3
|
|
|
53,648.1
|
|
||
Total Deposits
|
100,529.5
|
|
|
101,651.7
|
|
||
Federal Funds Purchased
|
369.5
|
|
|
204.8
|
|
||
Securities Sold Under Agreements to Repurchase
|
433.2
|
|
|
473.7
|
|
||
Other Borrowings
|
4,077.1
|
|
|
5,109.5
|
|
||
Senior Notes
|
1,496.8
|
|
|
1,496.6
|
|
||
Long-Term Debt
|
1,321.8
|
|
|
1,330.9
|
|
||
Floating Rate Capital Debt
|
277.4
|
|
|
277.4
|
|
||
Other Liabilities
|
3,005.7
|
|
|
3,611.9
|
|
||
Total Liabilities
|
111,511.0
|
|
|
114,156.5
|
|
||
Stockholders’ Equity
|
|
|
|
||||
Preferred Stock, No Par Value; Authorized 10,000,000 shares:
|
|
|
|
||||
Series C, outstanding shares of 16,000
|
388.5
|
|
|
388.5
|
|
||
Series D, outstanding shares of 5,000
|
493.5
|
|
|
493.5
|
|
||
Common Stock, $1.66 2/3 Par Value; Authorized 560,000,000 shares;
|
|
|
|
||||
Outstanding shares of 229,585,949 and 228,605,485
|
408.6
|
|
|
408.6
|
|
||
Additional Paid-In Capital
|
1,010.2
|
|
|
1,035.8
|
|
||
Retained Earnings
|
9,074.4
|
|
|
8,908.4
|
|
||
Accumulated Other Comprehensive Loss
|
(352.0
|
)
|
|
(370.0
|
)
|
||
Treasury Stock (15,585,575 and 16,566,039 shares, at cost)
|
(1,045.5
|
)
|
|
(1,094.4
|
)
|
||
Total Stockholders’ Equity
|
9,977.7
|
|
|
9,770.4
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
121,488.7
|
|
|
$
|
123,926.9
|
|
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
NORTHERN TRUST CORPORATION
|
|
Three Months Ended March 31,
|
||||||
(In Millions Except Share Information)
|
2017
|
|
2016
|
||||
Noninterest Income
|
|
|
|
||||
Trust, Investment and Other Servicing Fees
|
$
|
808.2
|
|
|
$
|
748.2
|
|
Foreign Exchange Trading Income
|
48.1
|
|
|
60.5
|
|
||
Treasury Management Fees
|
14.7
|
|
|
16.2
|
|
||
Security Commissions and Trading Income
|
20.5
|
|
|
18.9
|
|
||
Other Operating Income
|
39.7
|
|
|
38.1
|
|
||
Investment Security Gains (Losses), net (Note)
|
(0.3
|
)
|
|
0.3
|
|
||
Total Noninterest Income
|
930.9
|
|
|
882.2
|
|
||
Net Interest Income
|
|
|
|
||||
Interest Income
|
410.3
|
|
|
352.0
|
|
||
Interest Expense
|
56.8
|
|
|
44.2
|
|
||
Net Interest Income
|
353.5
|
|
|
307.8
|
|
||
Provision for Credit Losses
|
(1.0
|
)
|
|
2.0
|
|
||
Net Interest Income after Provision for Credit Losses
|
354.5
|
|
|
305.8
|
|
||
Noninterest Expense
|
|
|
|
||||
Compensation
|
425.8
|
|
|
378.8
|
|
||
Employee Benefits
|
77.8
|
|
|
70.6
|
|
||
Outside Services
|
153.1
|
|
|
149.9
|
|
||
Equipment and Software
|
127.3
|
|
|
114.2
|
|
||
Occupancy
|
45.4
|
|
|
40.9
|
|
||
Other Operating Expense
|
65.1
|
|
|
74.4
|
|
||
Total Noninterest Expense
|
894.5
|
|
|
828.8
|
|
||
Income before Income Taxes
|
390.9
|
|
|
359.2
|
|
||
Provision for Income Taxes
|
114.8
|
|
|
113.8
|
|
||
Net Income
|
$
|
276.1
|
|
|
$
|
245.4
|
|
Preferred Stock Dividends
|
20.7
|
|
|
5.9
|
|
||
Net Income Applicable to Common Stock
|
$
|
255.4
|
|
|
$
|
239.5
|
|
Per Common Share
|
|
|
|
||||
Net Income — Basic
|
$
|
1.10
|
|
|
$
|
1.03
|
|
— Diluted
|
1.09
|
|
|
1.03
|
|
||
Average Number of Common Shares Outstanding
— Basic
|
229,059,540
|
|
|
228,619,089
|
|
||
— Diluted
|
230,630,876
|
|
|
229,797,945
|
|
||
|
|
|
|
||||
Note: Changes in Other-Than-Temporary-Impairment (OTTI) Losses
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
Other Security Gains (Losses), net
|
(0.2
|
)
|
|
0.3
|
|
||
Investment Security Gains (Losses), net
|
$
|
(0.3
|
)
|
|
$
|
0.3
|
|
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (UNAUDITED) |
NORTHERN TRUST CORPORATION
|
|||||||
|
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
|
2017
|
|
2016
|
||||
Net Income
|
|
$
|
276.1
|
|
|
$
|
245.4
|
|
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications)
|
|
|
|
|
||||
Net Unrealized Gains on Securities Available for Sale
|
|
19.3
|
|
|
74.7
|
|
||
Net Unrealized (Losses) Gains on Cash Flow Hedges
|
|
(5.3
|
)
|
|
6.1
|
|
||
Foreign Currency Translation Adjustments
|
|
2.0
|
|
|
3.9
|
|
||
Pension and Other Postretirement Benefit Adjustments
|
|
2.0
|
|
|
4.1
|
|
||
Other Comprehensive Income
|
|
18.0
|
|
|
88.8
|
|
||
Comprehensive Income
|
|
$
|
294.1
|
|
|
$
|
334.2
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
|
NORTHERN TRUST CORPORATION
|
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Preferred Stock
|
|
|
|
||||
Series D, Balance at January 1 and March 31
|
$
|
882.0
|
|
|
$
|
388.5
|
|
Issuance of Preferred Stock, Series D
|
—
|
|
|
—
|
|
||
Balance at March 31
|
882.0
|
|
|
388.5
|
|
||
Common Stock
|
|
|
|
||||
Balance at January 1 and March 31
|
408.6
|
|
|
408.6
|
|
||
Additional Paid-in Capital
|
|
|
|
||||
Balance at January 1
|
1,035.8
|
|
|
1,072.3
|
|
||
Treasury Stock Transactions — Stock Options and Awards
|
(81.8
|
)
|
|
(71.2
|
)
|
||
Stock Options and Awards — Amortization
|
56.2
|
|
|
26.4
|
|
||
Stock Options and Awards — Tax Benefit
|
—
|
|
|
(9.0
|
)
|
||
Balance at March 31
|
1,010.2
|
|
|
1,018.5
|
|
||
Retained Earnings
|
|
|
|
||||
Balance at January 1
|
8,908.4
|
|
|
8,242.8
|
|
||
Net Income
|
276.1
|
|
|
245.4
|
|
||
Dividends Declared — Common Stock
|
(89.4
|
)
|
|
(83.9
|
)
|
||
Dividends Declared — Preferred Stock
|
(20.7
|
)
|
|
(5.9
|
)
|
||
Balance at March 31
|
9,074.4
|
|
|
8,398.4
|
|
||
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
||||
Balance at January 1
|
(370.0
|
)
|
|
(372.7
|
)
|
||
Net Unrealized Gains on Securities Available for Sale
|
19.3
|
|
|
74.7
|
|
||
Net Unrealized Gains (Losses) on Cash Flow Hedges
|
(5.3
|
)
|
|
6.1
|
|
||
Foreign Currency Translation Adjustments
|
2.0
|
|
|
3.9
|
|
||
Pension and Other Postretirement Benefit Adjustments
|
2.0
|
|
|
4.1
|
|
||
Balance at March 31
|
(352.0
|
)
|
|
(283.9
|
)
|
||
Treasury Stock
|
|
|
|
||||
Balance at January 1
|
(1,094.4
|
)
|
|
(1,033.6
|
)
|
||
Stock Options and Awards
|
119.0
|
|
|
76.6
|
|
||
Stock Purchased
|
(70.1
|
)
|
|
(140.3
|
)
|
||
Balance at March 31
|
(1,045.5
|
)
|
|
(1,097.3
|
)
|
||
Total Stockholders’ Equity at March 31
|
$
|
9,977.7
|
|
|
$
|
8,832.8
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
NORTHERN TRUST CORPORATION
|
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net Income
|
$
|
276.1
|
|
|
$
|
245.4
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
|
|
|
|
||||
Investment Security Losses (Gains), net
|
0.3
|
|
|
(0.3
|
)
|
||
Amortization and Accretion of Securities and Unearned Income, net
|
18.9
|
|
|
12.5
|
|
||
Provision for Credit Losses
|
(1.0
|
)
|
|
2.0
|
|
||
Depreciation on Buildings and Equipment
|
23.3
|
|
|
22.4
|
|
||
Amortization of Computer Software
|
75.6
|
|
|
65.8
|
|
||
Amortization of Intangibles
|
2.4
|
|
|
2.1
|
|
||
Pension Plan Contributions
|
(11.5
|
)
|
|
(9.1
|
)
|
||
Change in Receivables
|
(5.6
|
)
|
|
(95.4
|
)
|
||
Change in Interest Payable
|
5.9
|
|
|
2.3
|
|
||
Change in Collateral With Derivative Counterparties, net
|
572.5
|
|
|
(200.1
|
)
|
||
Other Operating Activities, net
|
(172.2
|
)
|
|
(343.1
|
)
|
||
Net Cash Provided by (Used in) Operating Activities
|
784.7
|
|
|
(295.5
|
)
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Net Change in Federal Funds Sold and Securities Purchased under Agreements to Resell
|
52.7
|
|
|
(143.9
|
)
|
||
Change in Interest-Bearing Deposits with Banks
|
(327.8
|
)
|
|
721.9
|
|
||
Net Change in Federal Reserve and Other Central Bank Deposits
|
767.1
|
|
|
1,987.3
|
|
||
Purchases of Securities — Held to Maturity
|
(2,284.1
|
)
|
|
(1,287.7
|
)
|
||
Proceeds from Maturity and Redemption of Securities — Held to Maturity
|
2,450.9
|
|
|
726.3
|
|
||
Purchases of Securities — Available for Sale
|
(2,633.6
|
)
|
|
(3,285.2
|
)
|
||
Proceeds from Sale, Maturity and Redemption of Securities — Available for Sale
|
3,235.9
|
|
|
2,416.6
|
|
||
Change in Loans and Leases
|
153.0
|
|
|
(950.6
|
)
|
||
Purchases of Buildings and Equipment
|
(14.3
|
)
|
|
(12.0
|
)
|
||
Purchases and Development of Computer Software
|
(79.9
|
)
|
|
(65.0
|
)
|
||
Change in Client Security Settlement Receivables
|
(519.8
|
)
|
|
261.0
|
|
||
Other Investing Activities, net
|
226.4
|
|
|
293.8
|
|
||
Net Cash Provided by Investing Activities
|
1,026.5
|
|
|
662.5
|
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
Change in Deposits
|
(1,671.8
|
)
|
|
388.6
|
|
||
Change in Federal Funds Purchased
|
164.7
|
|
|
(88.2
|
)
|
||
Change in Securities Sold under Agreements to Repurchase
|
(40.4
|
)
|
|
(39.5
|
)
|
||
Change in Short-Term Other Borrowings
|
(1,030.6
|
)
|
|
(27.1
|
)
|
||
Repayments of Senior Notes and Long-Term Debt
|
(3.8
|
)
|
|
(1.4
|
)
|
||
Treasury Stock Purchased
|
(70.1
|
)
|
|
(140.3
|
)
|
||
Net Proceeds from Stock Options
|
37.2
|
|
|
5.3
|
|
||
Cash Dividends Paid on Common Stock
|
(86.9
|
)
|
|
(82.8
|
)
|
||
Cash Dividends Paid on Preferred Stock
|
(5.9
|
)
|
|
(5.9
|
)
|
||
Other Financing Activities, net
|
—
|
|
|
(8.9
|
)
|
||
Net Cash Used in Financing Activities
|
(2,707.6
|
)
|
|
(0.2
|
)
|
||
Effect of Foreign Currency Exchange Rates on Cash
|
213.6
|
|
|
203.1
|
|
||
(Decrease) Increase in Cash and Due from Banks
|
(682.8
|
)
|
|
569.9
|
|
||
Cash and Due from Banks at Beginning of Year
|
5,332.0
|
|
|
6,418.5
|
|
||
Cash and Due from Banks at End of Period
|
$
|
4,649.2
|
|
|
$
|
6,988.4
|
|
Supplemental Disclosures of Cash Flow Information:
|
|
|
|
||||
Interest Paid
|
$
|
50.8
|
|
|
$
|
41.8
|
|
Income Taxes Paid
|
43.5
|
|
|
215.0
|
|
||
Transfers from Loans to OREO
|
2.3
|
|
|
4.6
|
|
Consolidated Statements of Cash Flows
|
|
Three Months Ended March 31, 2016
|
||||||||||
(In Millions)
|
|
Previously Reported
|
|
Adjustment
|
|
Revised
|
||||||
Change in Interest-Bearing Deposits with Banks
|
|
$
|
716.7
|
|
|
$
|
5.2
|
|
|
$
|
721.9
|
|
Net Change in Federal Reserve Deposits
|
|
1,983.2
|
|
|
(1,983.2
|
)
|
|
—
|
|
|||
Net Change in Federal Reserve and Other Central Bank Deposits
|
|
—
|
|
|
1,987.3
|
|
|
1,987.3
|
|
|||
Net Cash Provided by Investing Activities
|
|
653.2
|
|
|
9.3
|
|
|
662.5
|
|
|||
Effect of Foreign Currency Exchange Rates on Cash
|
|
202.9
|
|
|
0.2
|
|
|
203.1
|
|
|||
Increase in Cash and Due from Banks
|
|
560.4
|
|
|
9.5
|
|
|
569.9
|
|
|||
Cash and Due from Banks at Beginning of Year
|
|
6,444.6
|
|
|
(26.1
|
)
|
|
6,418.5
|
|
|||
Cash and Due from Banks at End of Period
|
|
7,005.0
|
|
|
(16.6
|
)
|
|
6,988.4
|
|
Footnote 14 Net Interest Income
|
|
Three Months Ended March 31, 2016
|
||||||||||
(In Millions)
|
|
Previously Reported
|
|
Adjustment
|
|
Revised
|
||||||
Interest-Bearing Due from and Deposits with Banks
|
|
$
|
23.7
|
|
|
$
|
(6.2
|
)
|
|
$
|
17.5
|
|
Federal Reserve Deposits and Other
|
|
23.0
|
|
|
(23.0
|
)
|
|
—
|
|
|||
Federal Reserve and Other Central Bank Deposits
|
|
$
|
—
|
|
|
$
|
29.2
|
|
|
$
|
29.2
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2016
|
||||||
($ In Millions except per share data)
|
|
As Reported
|
|
As Adjusted
|
||||
Provision for Income Taxes
|
|
$
|
117.4
|
|
|
$
|
113.8
|
|
Net Income
|
|
241.8
|
|
|
245.4
|
|
||
Earnings Allocated to Participating Securities
|
|
4.1
|
|
|
4.1
|
|
||
Net Income Applicable to Common Stock
|
|
235.9
|
|
|
239.5
|
|
||
|
|
|
|
|
||||
Effective Tax Rate
|
|
32.7
|
%
|
|
31.7
|
%
|
||
|
|
|
|
|
||||
Basic Earnings per Share
|
|
1.01
|
|
|
1.03
|
|
||
Diluted Earnings per Share
|
|
1.01
|
|
|
1.03
|
|
||
Diluted Weighted Average Shares Outstanding (000s)
|
|
229,980
|
|
|
229,798
|
|
||
|
|
|
|
|
||||
Additional Paid-In Capital
|
|
1,022.1
|
|
|
1,018.5
|
|
||
Retained Earnings
|
|
8,394.8
|
|
|
8,398.4
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|||||||||||
Financial Instrument
|
Fair Value
|
|
Valuation
Technique
|
|
Unobservable Inputs
|
|
Range of Inputs
|
|||||
Auction Rate Securities
|
$
|
4.3
|
million
|
|
Comparables
|
|
Price
|
|
$84
|
—
|
99
|
|
Swaps Related to Sale of Certain Visa Class B Common Shares
|
$
|
26.4
|
million
|
|
Discounted Cash Flow
|
|
Visa Class A Appreciation
|
|
7.0
|
%
|
—
|
11.0%
|
|
|
|
Conversion Rate
|
|
1.63x
|
|
—
|
1.65x
|
||||
|
|
|
|
Expected Duration
|
|
1.25
|
|
—
|
4.25 years
|
|
December 31, 2016
|
|||||||||||
Financial Instrument
|
Fair Value
|
|
Valuation
Technique
|
|
Unobservable Inputs
|
|
Range of Inputs
|
|||||
Auction Rate Securities
|
$
|
4.7
|
million
|
|
Comparables
|
|
Price
|
|
$84
|
—
|
99
|
|
Swap Related to Sale of Certain Visa Class B Common Shares
|
$
|
25.2
|
million
|
|
Discounted Cash Flow
|
|
Visa Class A Appreciation
|
|
7.0
|
%
|
—
|
11.0%
|
|
|
|
Conversion Rate
|
|
1.63x
|
|
—
|
1.65x
|
||||
|
|
|
|
Expected Duration
|
|
1.50
|
|
—
|
4.50 years
|
(In Millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
|
|
Assets/Liabilities
at Fair Value
|
||||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Available for Sale
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
$
|
6,830.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,830.2
|
|
Obligations of States and Political Subdivisions
|
—
|
|
|
951.5
|
|
|
—
|
|
|
—
|
|
|
951.5
|
|
|||||
Government Sponsored Agency
|
—
|
|
|
17,936.4
|
|
|
—
|
|
|
—
|
|
|
17,936.4
|
|
|||||
Non-U.S. Government
|
—
|
|
|
218.1
|
|
|
—
|
|
|
—
|
|
|
218.1
|
|
|||||
Corporate Debt
|
—
|
|
|
3,559.0
|
|
|
—
|
|
|
—
|
|
|
3,559.0
|
|
|||||
Covered Bonds
|
—
|
|
|
884.9
|
|
|
—
|
|
|
—
|
|
|
884.9
|
|
|||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
|
—
|
|
|
1,761.3
|
|
|
—
|
|
|
—
|
|
|
1,761.3
|
|
|||||
Other Asset-Backed
|
—
|
|
|
2,351.9
|
|
|
—
|
|
|
—
|
|
|
2,351.9
|
|
|||||
Auction Rate
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
4.3
|
|
|||||
Commercial Mortgage-Backed
|
—
|
|
|
456.2
|
|
|
—
|
|
|
—
|
|
|
456.2
|
|
|||||
Other
|
—
|
|
|
43.8
|
|
|
—
|
|
|
—
|
|
|
43.8
|
|
|||||
Total Available for Sale
|
6,830.2
|
|
|
28,163.1
|
|
|
4.3
|
|
|
—
|
|
|
34,997.6
|
|
|||||
Trading Account
|
—
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|||||
Total Available for Sale and Trading Securities
|
6,830.2
|
|
|
28,164.5
|
|
|
4.3
|
|
|
—
|
|
|
34,999.0
|
|
|||||
Other Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts
|
—
|
|
|
1,882.3
|
|
|
—
|
|
|
—
|
|
|
1,882.3
|
|
|||||
Interest Rate Contracts
|
—
|
|
|
116.2
|
|
|
—
|
|
|
—
|
|
|
116.2
|
|
|||||
Total Derivative Assets
|
—
|
|
|
1,998.5
|
|
|
—
|
|
|
(1,352.5
|
)
|
|
646.0
|
|
|||||
Other Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts
|
—
|
|
|
1,874.7
|
|
|
—
|
|
|
—
|
|
|
1,874.7
|
|
|||||
Interest Rate Contracts
|
—
|
|
|
84.8
|
|
|
—
|
|
|
—
|
|
|
84.8
|
|
|||||
Other Financial Derivatives
(1)
|
—
|
|
|
—
|
|
|
26.4
|
|
|
—
|
|
|
26.4
|
|
|||||
Total Derivative Liabilities
|
$
|
—
|
|
|
$
|
1,959.5
|
|
|
$
|
26.4
|
|
|
$
|
(1,148.7
|
)
|
|
$
|
837.2
|
|
(1)
|
This line consists of swaps related to the sale of certain Visa Class B common shares.
|
(In Millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
|
|
Assets/Liabilities
at Fair Value
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Available for Sale
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
$
|
7,522.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,522.6
|
|
Obligations of States and Political Subdivisions
|
—
|
|
|
885.2
|
|
|
—
|
|
|
—
|
|
|
885.2
|
|
|||||
Government Sponsored Agency
|
—
|
|
|
17,892.8
|
|
|
—
|
|
|
—
|
|
|
17,892.8
|
|
|||||
Non-U.S. Government
|
—
|
|
|
417.9
|
|
|
—
|
|
|
—
|
|
|
417.9
|
|
|||||
Corporate Debt
|
—
|
|
|
3,765.2
|
|
|
—
|
|
|
—
|
|
|
3,765.2
|
|
|||||
Covered Bonds
|
—
|
|
|
1,143.9
|
|
|
—
|
|
|
—
|
|
|
1,143.9
|
|
|||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
|
—
|
|
|
1,340.7
|
|
|
—
|
|
|
—
|
|
|
1,340.7
|
|
|||||
Other Asset-Backed
|
—
|
|
|
2,085.1
|
|
|
—
|
|
|
—
|
|
|
2,085.1
|
|
|||||
Auction Rate
|
—
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
|||||
Commercial Mortgage-Backed
|
—
|
|
|
471.6
|
|
|
—
|
|
|
—
|
|
|
471.6
|
|
|||||
Other
|
—
|
|
|
50.1
|
|
|
—
|
|
|
—
|
|
|
50.1
|
|
|||||
Total Available for Sale
|
7,522.6
|
|
|
28,052.5
|
|
|
4.7
|
|
|
—
|
|
|
35,579.8
|
|
|||||
Trading Account
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Total Available for Sale and Trading Securities
|
7,522.6
|
|
|
28,052.8
|
|
|
4.7
|
|
|
—
|
|
|
35,580.1
|
|
|||||
Other Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts
|
—
|
|
|
3,609.6
|
|
|
—
|
|
|
—
|
|
|
3,609.6
|
|
|||||
Interest Rate Contracts
|
—
|
|
|
247.2
|
|
|
—
|
|
|
—
|
|
|
247.2
|
|
|||||
Total Derivative Assets
|
—
|
|
|
3,856.8
|
|
|
—
|
|
|
(2,170.4
|
)
|
|
1,686.4
|
|
|||||
Other Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign Exchange Contracts
|
—
|
|
|
3,242.9
|
|
|
—
|
|
|
—
|
|
|
3,242.9
|
|
|||||
Interest Rate Contracts
|
—
|
|
|
108.0
|
|
|
—
|
|
|
—
|
|
|
108.0
|
|
|||||
Other Financial Derivatives
(1)
|
—
|
|
|
—
|
|
|
25.2
|
|
|
—
|
|
|
25.2
|
|
|||||
Total Derivative Liabilities
|
$
|
—
|
|
|
$
|
3,350.9
|
|
|
$
|
25.2
|
|
|
$
|
(2,431.2
|
)
|
|
$
|
944.9
|
|
(1)
|
This line consists of swaps related to the sale of certain Visa Class B common shares.
|
Level 3 Assets
(In Millions)
|
Auction Rate Securities
|
||||||
Three Months Ended March 31,
|
2017
|
|
2016
|
||||
Fair Value at January 1
|
$
|
4.7
|
|
|
$
|
17.1
|
|
Total Gains (Losses):
|
|
|
|
||||
Included in Earnings
|
—
|
|
|
—
|
|
||
Included in Other Comprehensive Income
(1)
|
—
|
|
|
(0.4
|
)
|
||
Purchases, Issues, Sales, and Settlements
|
|
|
|
||||
Sales
|
—
|
|
|
(0.1
|
)
|
||
Settlements
|
(0.4
|
)
|
|
—
|
|
||
Fair Value at March 31
|
$
|
4.3
|
|
|
$
|
16.6
|
|
|
|
|
|
(1)
|
Unrealized gains (losses) are included in net unrealized gains (losses) on securities available for sale in the consolidated statements of comprehensive income.
|
Level 3 Liabilities
(In Millions)
|
Swaps Related to Sale of
Certain Visa Class B
Common Shares
|
||||||
Three Months Ended March 31,
|
2017
|
|
2016
|
||||
Fair Value at January 1
|
$
|
25.2
|
|
|
$
|
10.8
|
|
Total (Gains) Losses:
|
|
|
|
||||
Included in Earnings
(1)
|
2.9
|
|
|
(0.3
|
)
|
||
Included in Other Comprehensive Income
|
—
|
|
|
—
|
|
||
Purchases, Issues, Sales, and Settlements
|
|
|
|
||||
Purchases
|
—
|
|
|
—
|
|
||
Settlements
|
(1.7
|
)
|
|
(0.8
|
)
|
||
Fair Value at March 31
|
$
|
26.4
|
|
|
$
|
9.7
|
|
|
|
|
|
(1)
|
(Gains) losses are recorded in other operating income in the consolidated statements of income.
|
|
|
March 31, 2017
|
|||||||||
Financial Instrument
|
|
Fair Value
|
|
Valuation
Technique
|
|
Unobservable Input
|
|
Range of Discounts
Applied
|
|||
Loans
|
|
$28.7 million
|
|
Market Approach
|
|
Discount to reflect realizable value
|
|
15.0
|
%
|
-
|
25.0%
|
OREO
|
|
$0.6 million
|
|
Market Approach
|
|
Discount to reflect realizable value
|
|
15.0
|
%
|
-
|
20.0%
|
|
|
December 31, 2016
|
|||||||||
Financial Instrument
|
|
Fair Value
|
|
Valuation
Technique
|
|
Unobservable Input
|
|
Range of Discounts
Applied
|
|||
Loans
|
|
$6.7 million
|
|
Market Approach
|
|
Discount to reflect realizable value
|
|
15.0
|
%
|
-
|
25.0%
|
OREO
|
|
$0.7 million
|
|
Market Approach
|
|
Discount to reflect realizable value
|
|
15.0
|
%
|
-
|
20.0%
|
(In Millions)
|
March 31, 2017
|
||||||||||||||||||
|
Book
Value
|
|
Total
Fair Value
|
|
Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
Assets
|
|
|
|
|
|
||||||||||||||
Cash and Due from Banks
|
$
|
4,649.2
|
|
|
$
|
4,649.2
|
|
|
$
|
4,649.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Federal Reserve and Other Central Bank Deposits
|
25,959.5
|
|
|
25,959.5
|
|
|
—
|
|
|
25,959.5
|
|
|
—
|
|
|||||
Interest-Bearing Deposits with Banks
|
5,247.8
|
|
|
5,247.8
|
|
|
—
|
|
|
5,247.8
|
|
|
—
|
|
|||||
Federal Funds Sold and Resell Agreements
|
1,933.8
|
|
|
1,933.8
|
|
|
—
|
|
|
1,933.8
|
|
|
—
|
|
|||||
Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Available for Sale
(Note)
|
34,997.6
|
|
|
34,997.6
|
|
|
6,830.2
|
|
|
28,163.1
|
|
|
4.3
|
|
|||||
Held to Maturity
|
8,938.4
|
|
|
8,933.4
|
|
|
6.0
|
|
|
8,927.4
|
|
|
—
|
|
|||||
Trading Account
|
1.4
|
|
|
1.4
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|||||
Loans (excluding Leases)
|
|
|
|
|
|
|
|
|
|
||||||||||
Held for Investment
|
33,056.5
|
|
|
33,151.9
|
|
|
—
|
|
|
—
|
|
|
33,151.9
|
|
|||||
Held for Sale
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Client Security Settlement Receivables
|
1,559.9
|
|
|
1,559.9
|
|
|
—
|
|
|
1,559.9
|
|
|
—
|
|
|||||
Other Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Reserve and Federal Home Loan Bank Stock
|
158.1
|
|
|
158.1
|
|
|
—
|
|
|
158.1
|
|
|
—
|
|
|||||
Community Development Investments
|
209.8
|
|
|
209.8
|
|
|
—
|
|
|
209.8
|
|
|
—
|
|
|||||
Employee Benefit and Deferred Compensation
|
185.2
|
|
|
182.3
|
|
|
118.3
|
|
|
64.0
|
|
|
—
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
|
|
|
|
|
||||||||||||||
Demand, Noninterest-Bearing, Savings and Money Market
|
$
|
46,425.4
|
|
|
$
|
46,425.4
|
|
|
$
|
46,425.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Savings Certificates and Other Time
|
1,346.8
|
|
|
1,351.4
|
|
|
—
|
|
|
1,351.4
|
|
|
—
|
|
|||||
Non U.S. Offices Interest-Bearing
|
52,757.3
|
|
|
52,757.3
|
|
|
—
|
|
|
52,757.3
|
|
|
—
|
|
|||||
Federal Funds Purchased
|
369.5
|
|
|
369.5
|
|
|
—
|
|
|
369.5
|
|
|
—
|
|
|||||
Securities Sold under Agreements to Repurchase
|
433.2
|
|
|
433.2
|
|
|
—
|
|
|
433.2
|
|
|
—
|
|
|||||
Other Borrowings
|
4,077.1
|
|
|
4,079.7
|
|
|
—
|
|
|
4,079.7
|
|
|
—
|
|
|||||
Senior Notes
|
1,496.8
|
|
|
1,537.3
|
|
|
—
|
|
|
1,537.3
|
|
|
—
|
|
|||||
Long Term Debt (excluding Leases)
|
|
|
|
|
|
|
|
|
|
||||||||||
Subordinated Debt
|
1,302.5
|
|
|
1,315.5
|
|
|
—
|
|
|
1,315.5
|
|
|
—
|
|
|||||
Floating Rate Capital Debt
|
277.4
|
|
|
252.6
|
|
|
—
|
|
|
252.6
|
|
|
—
|
|
|||||
Other Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby Letters of Credit
|
36.8
|
|
|
36.8
|
|
|
—
|
|
|
—
|
|
|
36.8
|
|
|||||
Loan Commitments
|
37.5
|
|
|
37.5
|
|
|
—
|
|
|
—
|
|
|
37.5
|
|
|||||
Derivative Instruments
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset/Liability Management
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
$
|
30.5
|
|
|
$
|
30.5
|
|
|
$
|
—
|
|
|
$
|
30.5
|
|
|
$
|
—
|
|
Liabilities
|
42.1
|
|
|
42.1
|
|
|
—
|
|
|
42.1
|
|
|
—
|
|
|||||
Interest Rate Contracts
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
39.4
|
|
|
39.4
|
|
|
—
|
|
|
39.4
|
|
|
—
|
|
|||||
Liabilities
|
17.5
|
|
|
17.5
|
|
|
—
|
|
|
17.5
|
|
|
—
|
|
|||||
Other Financial Derivatives
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
(1)
|
26.4
|
|
|
26.4
|
|
|
—
|
|
|
—
|
|
|
26.4
|
|
|||||
Client-Related and Trading
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
1,851.8
|
|
|
1,851.8
|
|
|
—
|
|
|
1,851.8
|
|
|
—
|
|
|||||
Liabilities
|
1,832.6
|
|
|
1,832.6
|
|
|
—
|
|
|
1,832.6
|
|
|
—
|
|
|||||
Interest Rate Contracts
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
76.8
|
|
|
76.8
|
|
|
—
|
|
|
76.8
|
|
|
—
|
|
|||||
Liabilities
|
67.3
|
|
|
67.3
|
|
|
—
|
|
|
67.3
|
|
|
—
|
|
(1)
|
This line consists of swaps related to the sale of certain Visa Class B common shares.
|
(In Millions)
|
December 31, 2016
|
||||||||||||||||||
|
Book
Value
|
|
Total
Fair Value
|
|
Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Due from Banks
|
$
|
5,332.0
|
|
|
$
|
5,332.0
|
|
|
$
|
5,332.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Federal Reserve and Other Central Bank Deposits
|
26,674.2
|
|
|
26,674.2
|
|
|
—
|
|
|
26,674.2
|
|
|
—
|
|
|||||
Interest-Bearing Deposits with Banks
|
4,800.6
|
|
|
4,800.6
|
|
|
—
|
|
|
4,800.6
|
|
|
—
|
|
|||||
Federal Funds Sold and Resell Agreements
|
1,974.3
|
|
|
1,974.3
|
|
|
—
|
|
|
1,974.3
|
|
|
—
|
|
|||||
Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Available for Sale
(Note)
|
35,579.8
|
|
|
35,579.8
|
|
|
7,522.6
|
|
|
28,052.5
|
|
|
4.7
|
|
|||||
Held to Maturity
|
8,921.1
|
|
|
8,905.1
|
|
|
15.0
|
|
|
8,890.1
|
|
|
—
|
|
|||||
Trading Account
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|||||
Loans (excluding Leases)
|
|
|
|
|
|
|
|
|
|
||||||||||
Held for Investment
|
33,354.1
|
|
|
33,471.3
|
|
|
—
|
|
|
—
|
|
|
33,471.3
|
|
|||||
Held for Sale
|
13.4
|
|
|
13.4
|
|
|
—
|
|
|
—
|
|
|
13.4
|
|
|||||
Client Security Settlement Receivables
|
1,043.7
|
|
|
1,043.7
|
|
|
—
|
|
|
1,043.7
|
|
|
—
|
|
|||||
Other Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Reserve and Federal Home Loan Bank Stock
|
203.1
|
|
|
203.1
|
|
|
—
|
|
|
203.1
|
|
|
—
|
|
|||||
Community Development Investments
|
218.9
|
|
|
215.5
|
|
|
—
|
|
|
215.5
|
|
|
—
|
|
|||||
Employee Benefit and Deferred Compensation
|
166.2
|
|
|
162.5
|
|
|
107.2
|
|
|
55.3
|
|
|
—
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
|
|
|
|
|
|
|
|
|
||||||||||
Demand, Noninterest-Bearing, Savings and Money Market
|
$
|
46,671.9
|
|
|
$
|
46,671.9
|
|
|
$
|
46,671.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Savings Certificates and Other Time
|
1,331.7
|
|
|
1,337.5
|
|
|
—
|
|
|
1,337.5
|
|
|
—
|
|
|||||
Non U.S. Offices Interest-Bearing
|
53,648.1
|
|
|
53,648.1
|
|
|
—
|
|
|
53,648.1
|
|
|
—
|
|
|||||
Federal Funds Purchased
|
204.8
|
|
|
204.8
|
|
|
—
|
|
|
204.8
|
|
|
—
|
|
|||||
Securities Sold under Agreements to Repurchase
|
473.7
|
|
|
473.7
|
|
|
—
|
|
|
473.7
|
|
|
—
|
|
|||||
Other Borrowings
|
5,109.5
|
|
|
5,113.4
|
|
|
—
|
|
|
5,113.4
|
|
|
—
|
|
|||||
Senior Notes
|
1,496.6
|
|
|
1,535.5
|
|
|
—
|
|
|
1,535.5
|
|
|
—
|
|
|||||
Long Term Debt (excluding Leases)
|
|
|
|
|
|
|
|
|
|
||||||||||
Subordinated Debt
|
1,307.9
|
|
|
1,316.0
|
|
|
—
|
|
|
1,316.0
|
|
|
—
|
|
|||||
Floating Rate Capital Debt
|
277.4
|
|
|
251.0
|
|
|
—
|
|
|
251.0
|
|
|
—
|
|
|||||
Other Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby Letters of Credit
|
37.2
|
|
|
37.2
|
|
|
—
|
|
|
—
|
|
|
37.2
|
|
|||||
Loan Commitments
|
41.2
|
|
|
41.2
|
|
|
—
|
|
|
—
|
|
|
41.2
|
|
|||||
Derivative Instruments
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset/Liability Management
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
$
|
335.4
|
|
|
$
|
335.4
|
|
|
$
|
—
|
|
|
$
|
335.4
|
|
|
$
|
—
|
|
Liabilities
|
21.2
|
|
|
21.2
|
|
|
—
|
|
|
21.2
|
|
|
—
|
|
|||||
Interest Rate Contracts
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
160.2
|
|
|
160.2
|
|
|
—
|
|
|
160.2
|
|
|
—
|
|
|||||
Liabilities
|
22.8
|
|
|
22.8
|
|
|
—
|
|
|
22.8
|
|
|
—
|
|
|||||
Other Financial Derivatives
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
(1)
|
25.2
|
|
|
25.2
|
|
|
—
|
|
|
—
|
|
|
25.2
|
|
|||||
Client-Related and Trading
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
3,274.2
|
|
|
3,274.2
|
|
|
—
|
|
|
3,274.2
|
|
|
—
|
|
|||||
Liabilities
|
3,221.7
|
|
|
3,221.7
|
|
|
—
|
|
|
3,221.7
|
|
|
—
|
|
|||||
Interest Rate Contracts
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
87.0
|
|
|
87.0
|
|
|
—
|
|
|
87.0
|
|
|
—
|
|
|||||
Liabilities
|
85.2
|
|
|
85.2
|
|
|
—
|
|
|
85.2
|
|
|
—
|
|
(1)
|
This line consists of swaps related to the sale of certain Visa Class B common shares.
|
Securities Available for Sale
|
March 31, 2017
|
||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
||||||||||
(In Millions)
|
Gains
|
|
Losses
|
|
|||||||||||
U.S. Government
|
$
|
6,815.5
|
|
|
$
|
27.9
|
|
|
$
|
13.2
|
|
|
$
|
6,830.2
|
|
Obligations of States and Political Subdivisions
|
953.2
|
|
|
0.2
|
|
|
1.9
|
|
|
951.5
|
|
||||
Government Sponsored Agency
|
17,947.4
|
|
|
52.6
|
|
|
63.6
|
|
|
17,936.4
|
|
||||
Non-U.S. Government
|
219.8
|
|
|
—
|
|
|
1.7
|
|
|
218.1
|
|
||||
Corporate Debt
|
3,578.0
|
|
|
3.6
|
|
|
22.6
|
|
|
3,559.0
|
|
||||
Covered Bonds
|
887.3
|
|
|
1.1
|
|
|
3.5
|
|
|
884.9
|
|
||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
|
1,761.0
|
|
|
3.1
|
|
|
2.8
|
|
|
1,761.3
|
|
||||
Other Asset-Backed
|
2,349.0
|
|
|
4.4
|
|
|
1.5
|
|
|
2,351.9
|
|
||||
Auction Rate
|
4.6
|
|
|
—
|
|
|
0.3
|
|
|
4.3
|
|
||||
Commercial Mortgage-Backed
|
459.1
|
|
|
—
|
|
|
2.9
|
|
|
456.2
|
|
||||
Other
|
43.8
|
|
|
—
|
|
|
—
|
|
|
43.8
|
|
||||
Total
|
$
|
35,018.7
|
|
|
$
|
92.9
|
|
|
$
|
114.0
|
|
|
$
|
34,997.6
|
|
Securities Available for Sale
|
December 31, 2016
|
||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
||||||||||
(In Millions)
|
Gains
|
|
Losses
|
|
|||||||||||
U.S. Government
|
$
|
7,514.5
|
|
|
$
|
22.4
|
|
|
$
|
14.3
|
|
|
$
|
7,522.6
|
|
Obligations of States and Political Subdivisions
|
890.8
|
|
|
—
|
|
|
5.6
|
|
|
885.2
|
|
||||
Government Sponsored Agency
|
17,914.1
|
|
|
49.3
|
|
|
70.6
|
|
|
17,892.8
|
|
||||
Non-U.S. Government
|
420.0
|
|
|
—
|
|
|
2.1
|
|
|
417.9
|
|
||||
Corporate Debt
|
3,787.4
|
|
|
2.6
|
|
|
24.8
|
|
|
3,765.2
|
|
||||
Covered Bonds
|
1,148.6
|
|
|
0.8
|
|
|
5.5
|
|
|
1,143.9
|
|
||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
|
1,343.6
|
|
|
0.9
|
|
|
3.8
|
|
|
1,340.7
|
|
||||
Other Asset-Backed
|
2,083.7
|
|
|
2.7
|
|
|
1.3
|
|
|
2,085.1
|
|
||||
Auction Rate
|
5.0
|
|
|
—
|
|
|
0.3
|
|
|
4.7
|
|
||||
Commercial Mortgage-Backed
|
474.1
|
|
|
—
|
|
|
2.5
|
|
|
471.6
|
|
||||
Other
|
50.1
|
|
|
—
|
|
|
—
|
|
|
50.1
|
|
||||
Total
|
$
|
35,631.9
|
|
|
$
|
78.7
|
|
|
$
|
130.8
|
|
|
$
|
35,579.8
|
|
Securities Held to Maturity
|
March 31, 2017
|
||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
||||||||||
(In Millions)
|
Gains
|
|
Losses
|
|
|||||||||||
U.S Government
|
$
|
6.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.0
|
|
Obligations of States and Political Subdivisions
|
49.0
|
|
|
2.6
|
|
|
—
|
|
|
51.6
|
|
||||
Government Sponsored Agency
|
6.8
|
|
|
0.5
|
|
|
—
|
|
|
7.3
|
|
||||
Corporate Debt
|
252.6
|
|
|
0.1
|
|
|
0.4
|
|
|
252.3
|
|
||||
Covered Bonds
|
2,295.6
|
|
|
11.6
|
|
|
2.7
|
|
|
2,304.5
|
|
||||
Non-U.S. Government
|
3,282.6
|
|
|
6.6
|
|
|
0.4
|
|
|
3,288.8
|
|
||||
Certificates of Deposit
|
306.5
|
|
|
—
|
|
|
—
|
|
|
306.5
|
|
||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
|
2,422.3
|
|
|
10.8
|
|
|
1.3
|
|
|
2,431.8
|
|
||||
Other Asset-Backed
|
186.4
|
|
|
1.6
|
|
|
—
|
|
|
188.0
|
|
||||
Other
|
130.6
|
|
|
—
|
|
|
34.0
|
|
|
96.6
|
|
||||
Total
|
$
|
8,938.4
|
|
|
$
|
33.8
|
|
|
$
|
38.8
|
|
|
$
|
8,933.4
|
|
Securities Held to Maturity
|
December 31, 2016
|
||||||||||||||
|
Amortized
Cost
|
|
Gross Unrealized
|
|
Fair
Value
|
||||||||||
(In Millions)
|
Gains
|
|
Losses
|
|
|||||||||||
U.S Government
|
$
|
15.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15.0
|
|
Obligations of States and Political Subdivisions
|
63.6
|
|
|
2.7
|
|
|
—
|
|
|
66.3
|
|
||||
Government Sponsored Agency
|
7.4
|
|
|
0.5
|
|
|
—
|
|
|
7.9
|
|
||||
Corporate Debt
|
231.2
|
|
|
0.2
|
|
|
0.4
|
|
|
231.0
|
|
||||
Covered Bonds
|
2,051.6
|
|
|
10.1
|
|
|
3.7
|
|
|
2,058.0
|
|
||||
Non-U.S. Government
|
3,517.5
|
|
|
4.9
|
|
|
2.3
|
|
|
3,520.1
|
|
||||
Certificates of Deposit
|
606.0
|
|
|
0.2
|
|
|
0.1
|
|
|
606.1
|
|
||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
|
2,154.7
|
|
|
10.5
|
|
|
2.8
|
|
|
2,162.4
|
|
||||
Other Asset-Backed
|
143.4
|
|
|
0.1
|
|
|
—
|
|
|
143.5
|
|
||||
Other
|
130.7
|
|
|
—
|
|
|
35.9
|
|
|
94.8
|
|
||||
Total
|
$
|
8,921.1
|
|
|
$
|
29.2
|
|
|
$
|
45.2
|
|
|
$
|
8,905.1
|
|
|
March 31, 2017
|
||||||
(In Millions)
|
Amortized
Cost
|
|
Fair
Value
|
||||
Available for Sale
|
|
|
|
||||
Due in One Year or Less
|
$
|
6,665.1
|
|
|
$
|
6,660.1
|
|
Due After One Year Through Five Years
|
21,136.2
|
|
|
21,124.3
|
|
||
Due After Five Years Through Ten Years
|
6,015.5
|
|
|
6,017.7
|
|
||
Due After Ten Years
|
1,201.9
|
|
|
1,195.5
|
|
||
Total
|
35,018.7
|
|
|
34,997.6
|
|
||
Held to Maturity
|
|
|
|
||||
Due in One Year or Less
|
2,914.6
|
|
|
2,916.9
|
|
||
Due After One Year Through Five Years
|
5,764.1
|
|
|
5,783.4
|
|
||
Due After Five Years Through Ten Years
|
201.2
|
|
|
200.2
|
|
||
Due After Ten Years
|
58.5
|
|
|
32.9
|
|
||
Total
|
$
|
8,938.4
|
|
|
$
|
8,933.4
|
|
Securities with Unrealized Losses as of March 31, 2017
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
(In Millions)
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||||
U.S. Government
|
|
$
|
1,701.3
|
|
|
$
|
13.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,701.3
|
|
|
$
|
13.2
|
|
Obligations of States and Political Subdivisions
|
|
750.1
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
750.1
|
|
|
1.9
|
|
||||||
Government Sponsored Agency
|
|
7,455.5
|
|
|
51.5
|
|
|
2,433.8
|
|
|
12.1
|
|
|
9,889.3
|
|
|
63.6
|
|
||||||
Non-U.S. Government
|
|
1,729.3
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
1,729.3
|
|
|
2.1
|
|
||||||
Corporate Debt
|
|
1,555.2
|
|
|
9.6
|
|
|
807.3
|
|
|
13.4
|
|
|
2,362.5
|
|
|
23.0
|
|
||||||
Covered Bonds
|
|
829.3
|
|
|
6.0
|
|
|
139.2
|
|
|
0.2
|
|
|
968.5
|
|
|
6.2
|
|
||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
|
|
1,089.2
|
|
|
3.4
|
|
|
249.3
|
|
|
0.7
|
|
|
1,338.5
|
|
|
4.1
|
|
||||||
Other Asset-Backed
|
|
714.5
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
714.5
|
|
|
1.5
|
|
||||||
Auction Rate
|
|
0.4
|
|
|
0.1
|
|
|
3.8
|
|
|
0.2
|
|
|
4.2
|
|
|
0.3
|
|
||||||
Commercial Mortgage-Backed
|
|
439.3
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
439.3
|
|
|
2.9
|
|
||||||
Other
|
|
48.4
|
|
|
14.1
|
|
|
51.6
|
|
|
19.9
|
|
|
100.0
|
|
|
34.0
|
|
||||||
Total
|
|
$
|
16,312.5
|
|
|
$
|
106.3
|
|
|
$
|
3,685.0
|
|
|
$
|
46.5
|
|
|
$
|
19,997.5
|
|
|
$
|
152.8
|
|
Securities with Unrealized Losses as of December 31, 2016
|
|
Less than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
(In Millions)
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||||
U.S. Government
|
|
$
|
1,603.0
|
|
|
$
|
14.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,603.0
|
|
|
$
|
14.3
|
|
Obligations of States and Political Subdivisions
|
|
865.3
|
|
|
5.6
|
|
|
—
|
|
|
—
|
|
|
865.3
|
|
|
5.6
|
|
||||||
Government Sponsored Agency
|
|
8,252.5
|
|
|
58.5
|
|
|
2,121.0
|
|
|
12.1
|
|
|
10,373.5
|
|
|
70.6
|
|
||||||
Non-U.S. Government
|
|
2,957.1
|
|
|
4.4
|
|
|
—
|
|
|
—
|
|
|
2,957.1
|
|
|
4.4
|
|
||||||
Corporate Debt
|
|
1,601.7
|
|
|
11.2
|
|
|
1,054.4
|
|
|
14.0
|
|
|
2,656.1
|
|
|
25.2
|
|
||||||
Covered Bonds
|
|
809.0
|
|
|
8.6
|
|
|
138.9
|
|
|
0.6
|
|
|
947.9
|
|
|
9.2
|
|
||||||
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds
|
|
1,136.1
|
|
|
5.7
|
|
|
249.1
|
|
|
0.9
|
|
|
1,385.2
|
|
|
6.6
|
|
||||||
Other Asset-Backed
|
|
584.3
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
584.3
|
|
|
1.3
|
|
||||||
Certificates of Deposit
|
|
81.4
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
81.4
|
|
|
0.1
|
|
||||||
Auction Rate
|
|
0.4
|
|
|
0.1
|
|
|
4.3
|
|
|
0.2
|
|
|
4.7
|
|
|
0.3
|
|
||||||
Commercial Mortgage-Backed
|
|
471.5
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
471.5
|
|
|
2.5
|
|
||||||
Other
|
|
50.5
|
|
|
17.9
|
|
|
59.7
|
|
|
18.0
|
|
|
110.2
|
|
|
35.9
|
|
||||||
Total
|
|
$
|
18,412.8
|
|
|
$
|
130.2
|
|
|
$
|
3,627.4
|
|
|
$
|
45.8
|
|
|
$
|
22,040.2
|
|
|
$
|
176.0
|
|
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Cumulative Credit-Related Losses on Securities Held — Beginning of Period
|
$
|
3.4
|
|
|
$
|
5.2
|
|
Plus: Losses on Newly Identified Impairments
|
—
|
|
|
—
|
|
||
Additional Losses on Previously Identified Impairments
|
0.1
|
|
|
—
|
|
||
Less: Current and Prior Period Losses on Securities Sold During the Period
|
—
|
|
|
—
|
|
||
Cumulative Credit-Related Losses on Securities Held — End of Period
|
$
|
3.5
|
|
|
$
|
5.2
|
|
(In Millions)
|
March 31,
2017 |
|
December 31,
2016 |
||||
Commercial
|
|
|
|
||||
Commercial and Institutional
|
$
|
9,487.3
|
|
|
$
|
9,523.0
|
|
Commercial Real Estate
|
3,922.8
|
|
|
4,002.5
|
|
||
Non-U.S.
|
1,654.0
|
|
|
1,877.8
|
|
||
Lease Financing, net
|
253.6
|
|
|
293.9
|
|
||
Other
|
209.7
|
|
|
205.1
|
|
||
Total Commercial
|
15,527.4
|
|
|
15,902.3
|
|
||
Personal
|
|
|
|
||||
Private Client
|
10,375.8
|
|
|
10,052.0
|
|
||
Residential Real Estate
|
7,542.1
|
|
|
7,841.9
|
|
||
Other
|
26.5
|
|
|
25.9
|
|
||
Total Personal
|
17,944.4
|
|
|
17,919.8
|
|
||
Total Loans and Leases
|
33,471.8
|
|
|
33,822.1
|
|
||
Allowance for Credit Losses Assigned to Loans and Leases
|
(162.0
|
)
|
|
(161.0
|
)
|
||
Net Loans and Leases
|
$
|
33,309.8
|
|
|
$
|
33,661.1
|
|
•
|
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.
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
(In Millions)
|
1 to 3
Category
|
|
4 to 5
Category
|
|
6 to 9
Category
(Watch List)
|
|
Total
|
|
1 to 3
Category
|
|
4 to 5
Category
|
|
6 to 9
Category
(Watch List)
|
|
Total
|
||||||||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and Institutional
|
$
|
6,278.1
|
|
|
$
|
3,080.6
|
|
|
$
|
128.6
|
|
|
$
|
9,487.3
|
|
|
$
|
6,293.2
|
|
|
$
|
3,108.5
|
|
|
$
|
121.3
|
|
|
$
|
9,523.0
|
|
Commercial Real Estate
|
1,742.3
|
|
|
2,157.6
|
|
|
22.9
|
|
|
3,922.8
|
|
|
1,825.7
|
|
|
2,134.8
|
|
|
42.0
|
|
|
4,002.5
|
|
||||||||
Non-U.S.
|
379.9
|
|
|
1,272.8
|
|
|
1.3
|
|
|
1,654.0
|
|
|
602.8
|
|
|
1,273.5
|
|
|
1.5
|
|
|
1,877.8
|
|
||||||||
Lease Financing, net
|
200.8
|
|
|
52.8
|
|
|
—
|
|
|
253.6
|
|
|
214.3
|
|
|
79.6
|
|
|
—
|
|
|
293.9
|
|
||||||||
Other
|
113.4
|
|
|
95.5
|
|
|
0.8
|
|
|
209.7
|
|
|
135.5
|
|
|
67.9
|
|
|
1.7
|
|
|
205.1
|
|
||||||||
Total Commercial
|
8,714.5
|
|
|
6,659.3
|
|
|
153.6
|
|
|
15,527.4
|
|
|
9,071.5
|
|
|
6,664.3
|
|
|
166.5
|
|
|
15,902.3
|
|
||||||||
Personal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Private Client
|
6,526.9
|
|
|
3,839.4
|
|
|
9.5
|
|
|
10,375.8
|
|
|
6,373.2
|
|
|
3,668.4
|
|
|
10.4
|
|
|
10,052.0
|
|
||||||||
Residential Real Estate
|
2,564.4
|
|
|
4,664.3
|
|
|
313.4
|
|
|
7,542.1
|
|
|
2,617.8
|
|
|
4,913.9
|
|
|
310.2
|
|
|
7,841.9
|
|
||||||||
Other
|
14.4
|
|
|
12.0
|
|
|
0.1
|
|
|
26.5
|
|
|
17.1
|
|
|
8.5
|
|
|
0.3
|
|
|
25.9
|
|
||||||||
Total Personal
|
9,105.7
|
|
|
8,515.7
|
|
|
323.0
|
|
|
17,944.4
|
|
|
9,008.1
|
|
|
8,590.8
|
|
|
320.9
|
|
|
17,919.8
|
|
||||||||
Total Loans and Leases
|
$
|
17,820.2
|
|
|
$
|
15,175.0
|
|
|
$
|
476.6
|
|
|
$
|
33,471.8
|
|
|
$
|
18,079.6
|
|
|
$
|
15,255.1
|
|
|
$
|
487.4
|
|
|
$
|
33,822.1
|
|
March 31, 2017
|
|||||||||||||||||||||||||||
(In Millions)
|
Current
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
90 Days or
More Past
Due
|
|
Total
Performing
|
|
Nonperforming
|
|
Total Loans
and Leases
|
||||||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and Institutional
|
$
|
9,398.5
|
|
|
$
|
21.8
|
|
|
$
|
2.4
|
|
|
$
|
4.0
|
|
|
$
|
9,426.7
|
|
|
$
|
60.6
|
|
|
$
|
9,487.3
|
|
Commercial Real Estate
|
3,887.8
|
|
|
15.8
|
|
|
3.0
|
|
|
4.1
|
|
|
3,910.7
|
|
|
12.1
|
|
|
3,922.8
|
|
|||||||
Non-U.S.
|
1,654.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,654.0
|
|
|
—
|
|
|
1,654.0
|
|
|||||||
Lease Financing, net
|
253.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
253.6
|
|
|
—
|
|
|
253.6
|
|
|||||||
Other
|
209.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209.7
|
|
|
—
|
|
|
209.7
|
|
|||||||
Total Commercial
|
15,403.6
|
|
|
37.6
|
|
|
5.4
|
|
|
8.1
|
|
|
15,454.7
|
|
|
72.7
|
|
|
15,527.4
|
|
|||||||
Personal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential Real Estate
|
7,389.4
|
|
|
40.0
|
|
|
5.6
|
|
|
0.1
|
|
|
7,435.1
|
|
|
107.0
|
|
|
7,542.1
|
|
|||||||
Private Client
|
10,216.4
|
|
|
155.0
|
|
|
2.5
|
|
|
1.7
|
|
|
10,375.6
|
|
|
0.2
|
|
|
10,375.8
|
|
|||||||
Other
|
26.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26.5
|
|
|
—
|
|
|
26.5
|
|
|||||||
Total Personal
|
17,632.3
|
|
|
195.0
|
|
|
8.1
|
|
|
1.8
|
|
|
17,837.2
|
|
|
107.2
|
|
|
17,944.4
|
|
|||||||
Total Loans and Leases
|
$
|
33,035.9
|
|
|
$
|
232.6
|
|
|
$
|
13.5
|
|
|
$
|
9.9
|
|
|
$
|
33,291.9
|
|
|
$
|
179.9
|
|
|
$
|
33,471.8
|
|
|
Other Real Estate Owned
|
|
|
$
|
6.9
|
|
|
|
|||||||||||||||||||
|
Total Nonperforming Assets
|
|
|
$
|
186.8
|
|
|
|
December 31, 2016
|
|||||||||||||||||||||||||||
(In Millions)
|
Current
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
90 Days or
More Past
Due
|
|
Total
Performing
|
|
Nonperforming
|
|
Total Loans
and Leases
|
||||||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial and Institutional
|
$
|
9,470.0
|
|
|
$
|
5.3
|
|
|
$
|
2.3
|
|
|
$
|
11.7
|
|
|
$
|
9,489.3
|
|
|
$
|
33.7
|
|
|
$
|
9,523.0
|
|
Commercial Real Estate
|
3,974.4
|
|
|
10.9
|
|
|
1.0
|
|
|
4.6
|
|
|
3,990.9
|
|
|
11.6
|
|
|
4,002.5
|
|
|||||||
Non-U.S.
|
1,877.7
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
1,877.8
|
|
|
—
|
|
|
1,877.8
|
|
|||||||
Lease Financing, net
|
293.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293.9
|
|
|
—
|
|
|
293.9
|
|
|||||||
Other
|
205.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
205.1
|
|
|
—
|
|
|
205.1
|
|
|||||||
Total Commercial
|
15,821.1
|
|
|
16.3
|
|
|
3.3
|
|
|
16.3
|
|
|
15,857.0
|
|
|
45.3
|
|
|
15,902.3
|
|
|||||||
Personal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Private Client
|
9,988.7
|
|
|
40.8
|
|
|
8.5
|
|
|
13.7
|
|
|
10,051.7
|
|
|
0.3
|
|
|
10,052.0
|
|
|||||||
Residential Real Estate
|
7,675.7
|
|
|
44.5
|
|
|
6.1
|
|
|
1.0
|
|
|
7,727.3
|
|
|
114.6
|
|
|
7,841.9
|
|
|||||||
Other
|
25.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.9
|
|
|
—
|
|
|
25.9
|
|
|||||||
Total Personal
|
17,690.3
|
|
|
85.3
|
|
|
14.6
|
|
|
14.7
|
|
|
17,804.9
|
|
|
114.9
|
|
|
17,919.8
|
|
|||||||
Total Loans and Leases
|
$
|
33,511.4
|
|
|
$
|
101.6
|
|
|
$
|
17.9
|
|
|
$
|
31.0
|
|
|
$
|
33,661.9
|
|
|
$
|
160.2
|
|
|
$
|
33,822.1
|
|
|
Other Real Estate Owned
|
|
|
$
|
5.2
|
|
|
|
|||||||||||||||||||
|
Total Nonperforming Assets
|
|
|
$
|
165.4
|
|
|
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||
(In Millions)
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Specific
Allowance
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Specific
Allowance
|
||||||||||||
With No Related Specific Allowance
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and Institutional
|
$
|
31.9
|
|
|
$
|
34.5
|
|
|
$
|
—
|
|
|
$
|
32.2
|
|
|
$
|
34.6
|
|
|
$
|
—
|
|
Commercial Real Estate
|
11.6
|
|
|
14.1
|
|
|
—
|
|
|
14.7
|
|
|
18.6
|
|
|
—
|
|
||||||
Lease Financing, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Private Client
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
||||||
Residential Real Estate
|
91.8
|
|
|
127.5
|
|
|
—
|
|
|
101.2
|
|
|
138.4
|
|
|
—
|
|
||||||
With a Related Specific Allowance
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and Institutional
|
27.3
|
|
|
27.6
|
|
|
7.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial Real Estate
|
2.8
|
|
|
2.8
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Lease Financing, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Private Client
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Residential Real Estate
|
7.3
|
|
|
7.4
|
|
|
0.8
|
|
|
7.7
|
|
|
7.9
|
|
|
2.1
|
|
||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
73.6
|
|
|
79.0
|
|
|
7.9
|
|
|
46.9
|
|
|
53.2
|
|
|
—
|
|
||||||
Personal
|
99.2
|
|
|
135.0
|
|
|
0.8
|
|
|
109.2
|
|
|
146.6
|
|
|
2.1
|
|
||||||
Total
|
$
|
172.8
|
|
|
$
|
214.0
|
|
|
$
|
8.7
|
|
|
$
|
156.1
|
|
|
$
|
199.8
|
|
|
$
|
2.1
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
(In Millions)
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||||
With No Related Specific Allowance
|
|
|
|
|
|
|
|
||||||||
Commercial and Institutional
|
$
|
39.0
|
|
|
$
|
—
|
|
|
$
|
28.3
|
|
|
$
|
—
|
|
Commercial Real Estate
|
14.9
|
|
|
0.1
|
|
|
17.7
|
|
|
0.1
|
|
||||
Lease Financing, net
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.1
|
|
||||
Private Client
|
0.2
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Residential Real Estate
|
101.7
|
|
|
0.5
|
|
|
99.6
|
|
|
0.4
|
|
||||
With a Related Specific Allowance
|
|
|
|
|
|
|
|
||||||||
Commercial and Institutional
|
9.1
|
|
|
—
|
|
|
8.4
|
|
|
—
|
|
||||
Commercial Real Estate
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Lease Financing, net
|
—
|
|
|
—
|
|
|
2.1
|
|
|
—
|
|
||||
Private Client
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential Real Estate
|
2.4
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
||||
Total
|
|
|
|
|
|
|
|
||||||||
Commercial
|
63.9
|
|
|
0.1
|
|
|
56.9
|
|
|
0.2
|
|
||||
Personal
|
104.3
|
|
|
0.5
|
|
|
101.4
|
|
|
0.4
|
|
||||
Total
|
$
|
168.2
|
|
|
$
|
0.6
|
|
|
$
|
158.3
|
|
|
$
|
0.6
|
|
($ In Millions)
|
Three Months Ended March 31, 2017
|
|||||||||
|
Number of
Loans and Leases
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|||||
Commercial
|
|
|
|
|
|
|||||
Commercial and Institutional
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial Real Estate
|
1
|
|
|
1.4
|
|
|
1.4
|
|
||
Total Commercial
|
1
|
|
|
1.4
|
|
|
1.4
|
|
||
Personal
|
|
|
|
|
|
|||||
Private Client
|
1
|
|
|
—
|
|
|
0.1
|
|
||
Residential Real Estate
|
19
|
|
|
3.9
|
|
|
3.9
|
|
||
Total Personal
|
20
|
|
|
3.9
|
|
|
4.0
|
|
||
Total Loans and Leases
|
21
|
|
|
$
|
5.3
|
|
|
$
|
5.4
|
|
($ In Millions)
|
Three Months Ended March 31, 2016
|
|||||||||
|
Number of
Loans and Leases
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|||||
Commercial
|
|
|
|
|
|
|||||
Commercial and Institutional
|
2
|
|
|
$
|
4.0
|
|
|
$
|
6.0
|
|
Commercial Real Estate
|
5
|
|
|
5.4
|
|
|
7.7
|
|
||
Total Commercial
|
7
|
|
|
9.4
|
|
|
13.7
|
|
||
Personal
|
|
|
|
|
|
|||||
Private Client
|
—
|
|
|
—
|
|
|
—
|
|
||
Residential Real Estate
|
24
|
|
|
5.5
|
|
|
6.2
|
|
||
Total Personal
|
24
|
|
|
5.5
|
|
|
6.2
|
|
||
Total Loans and Leases
|
31
|
|
|
$
|
14.9
|
|
|
$
|
19.9
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
(In Millions)
|
Commercial
|
|
Personal
|
|
Total
|
|
Commercial
|
|
Personal
|
|
Total
|
||||||||||||
Balance at Beginning of Period
|
$
|
104.9
|
|
|
$
|
87.1
|
|
|
$
|
192.0
|
|
|
$
|
114.8
|
|
|
$
|
118.5
|
|
|
$
|
233.3
|
|
Charge-Offs
|
(1.1
|
)
|
|
(3.6
|
)
|
|
(4.7
|
)
|
|
(3.5
|
)
|
|
(1.8
|
)
|
|
(5.3
|
)
|
||||||
Recoveries
|
1.6
|
|
|
1.1
|
|
|
2.7
|
|
|
1.2
|
|
|
1.4
|
|
|
2.6
|
|
||||||
Net (Charge-Offs) Recoveries
|
0.5
|
|
|
(2.5
|
)
|
|
(2.0
|
)
|
|
(2.3
|
)
|
|
(0.4
|
)
|
|
(2.7
|
)
|
||||||
Provision for Credit Losses
|
6.4
|
|
|
(7.4
|
)
|
|
(1.0
|
)
|
|
2.7
|
|
|
(0.7
|
)
|
|
2.0
|
|
||||||
Balance at End of Period
|
$
|
111.8
|
|
|
$
|
77.2
|
|
|
$
|
189.0
|
|
|
$
|
115.2
|
|
|
$
|
117.4
|
|
|
$
|
232.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In Millions)
|
Commercial
|
|
Personal
|
|
Total
|
|
Commercial
|
|
Personal
|
|
Total
|
||||||||||||
Loans and Leases
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Specifically Evaluated for Impairment
|
$
|
73.6
|
|
|
$
|
99.2
|
|
|
$
|
172.8
|
|
|
$
|
46.9
|
|
|
$
|
109.2
|
|
|
$
|
156.1
|
|
Evaluated for Inherent Impairment
|
15,453.8
|
|
|
17,845.2
|
|
|
33,299.0
|
|
|
15,855.4
|
|
|
17,810.6
|
|
|
33,666.0
|
|
||||||
Total Loans and Leases
|
15,527.4
|
|
|
17,944.4
|
|
|
33,471.8
|
|
|
15,902.3
|
|
|
17,919.8
|
|
|
33,822.1
|
|
||||||
Allowance for Credit Losses on Credit Exposures
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Specifically Evaluated for Impairment
|
7.9
|
|
|
0.8
|
|
|
8.7
|
|
|
—
|
|
|
2.1
|
|
|
2.1
|
|
||||||
Evaluated for Inherent Impairment
|
83.6
|
|
|
69.7
|
|
|
153.3
|
|
|
83.7
|
|
|
75.2
|
|
|
158.9
|
|
||||||
Allowance Assigned to Loans and Leases
|
91.5
|
|
|
70.5
|
|
|
162.0
|
|
|
83.7
|
|
|
77.3
|
|
|
161.0
|
|
||||||
Allowance for Undrawn Exposures
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commitments and Standby Letters of Credit
|
20.3
|
|
|
6.7
|
|
|
27.0
|
|
|
21.2
|
|
|
9.8
|
|
|
31.0
|
|
||||||
Total Allowance for Credit Losses
|
$
|
111.8
|
|
|
$
|
77.2
|
|
|
$
|
189.0
|
|
|
$
|
104.9
|
|
|
$
|
87.1
|
|
|
$
|
192.0
|
|
(In Millions)
|
March 31,
2017 |
|
December 31,
2016 |
||||
Corporate & Institutional Services
|
$
|
448.3
|
|
|
$
|
448.4
|
|
Wealth Management
|
71.0
|
|
|
71.0
|
|
||
Total Goodwill
|
$
|
519.3
|
|
|
$
|
519.4
|
|
(In Millions)
|
March 31,
2017 |
|
December 31,
2016 |
||||
Gross Carrying Amount
|
$
|
90.9
|
|
|
$
|
89.0
|
|
Less: Accumulated Amortization
|
49.8
|
|
|
47.2
|
|
||
Net Book Value
|
$
|
41.1
|
|
|
$
|
41.8
|
|
Three Months Ended March 31,
|
Corporate &
Institutional Services |
|
Wealth
Management |
|
Treasury and
Other |
|
Total
Consolidated |
||||||||||||||||||||||||
($ In Millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trust, Investment and Other Servicing Fees
|
$
|
462.9
|
|
|
$
|
433.4
|
|
|
$
|
345.3
|
|
|
$
|
314.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
808.2
|
|
|
$
|
748.2
|
|
Foreign Exchange Trading Income
|
49.1
|
|
|
51.7
|
|
|
0.9
|
|
|
4.5
|
|
|
(1.9
|
)
|
|
4.3
|
|
|
48.1
|
|
|
60.5
|
|
||||||||
Other Noninterest Income
|
44.2
|
|
|
45.6
|
|
|
25.5
|
|
|
26.8
|
|
|
4.9
|
|
|
1.1
|
|
|
74.6
|
|
|
73.5
|
|
||||||||
Net Interest Income*
|
166.5
|
|
|
138.4
|
|
|
177.0
|
|
|
158.5
|
|
|
18.9
|
|
|
17.1
|
|
|
362.4
|
|
|
314.0
|
|
||||||||
Revenue*
|
722.7
|
|
|
669.1
|
|
|
548.7
|
|
|
504.6
|
|
|
21.9
|
|
|
22.5
|
|
|
1,293.3
|
|
|
1,196.2
|
|
||||||||
Provision for Credit Losses
|
0.3
|
|
|
(3.2
|
)
|
|
(1.3
|
)
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
2.0
|
|
||||||||
Noninterest Expense
|
510.8
|
|
|
475.3
|
|
|
346.3
|
|
|
326.9
|
|
|
37.4
|
|
|
26.6
|
|
|
894.5
|
|
|
828.8
|
|
||||||||
Income before Income Taxes*
|
211.6
|
|
|
197.0
|
|
|
203.7
|
|
|
172.5
|
|
|
(15.5
|
)
|
|
(4.1
|
)
|
|
399.8
|
|
|
365.4
|
|
||||||||
Provision for Income Taxes*
|
66.9
|
|
|
62.2
|
|
|
76.8
|
|
|
64.9
|
|
|
(20.0
|
)
|
|
(7.1
|
)
|
|
123.7
|
|
|
120.0
|
|
||||||||
Net Income
|
$
|
144.7
|
|
|
$
|
134.8
|
|
|
$
|
126.9
|
|
|
$
|
107.6
|
|
|
$
|
4.5
|
|
|
$
|
3.0
|
|
|
$
|
276.1
|
|
|
$
|
245.4
|
|
Percentage of Consolidated Net Income
|
52
|
%
|
|
55
|
%
|
|
46
|
%
|
|
44
|
%
|
|
2
|
%
|
|
1
|
%
|
|
100
|
%
|
|
100
|
%
|
||||||||
Average Assets
|
$
|
77,803.5
|
|
|
$
|
75,372.9
|
|
|
$
|
26,661.8
|
|
|
$
|
26,237.8
|
|
|
$
|
12,011.1
|
|
|
$
|
11,806.4
|
|
|
$
|
116,476.4
|
|
|
$
|
113,417.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Millions)
|
Balance at March 31, 2017
|
|
Net Change
|
|
Balance at December 31, 2016
|
||||||
Net Unrealized Gains (Losses) on Securities Available for Sale
|
$
|
(13.1
|
)
|
|
$
|
19.3
|
|
|
$
|
(32.4
|
)
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
|
0.8
|
|
|
(5.3
|
)
|
|
6.1
|
|
|||
Net Foreign Currency Adjustments
|
(16.5
|
)
|
|
2.0
|
|
|
(18.5
|
)
|
|||
Net Pension and Other Postretirement Benefit Adjustments
|
(323.2
|
)
|
|
2.0
|
|
|
(325.2
|
)
|
|||
Total
|
$
|
(352.0
|
)
|
|
$
|
18.0
|
|
|
$
|
(370.0
|
)
|
(In Millions)
|
Balance at March 31, 2016
|
|
Net Change
|
|
Balance at December 31, 2015
|
||||||
Net Unrealized Gains (Losses) on Securities Available for Sale
|
$
|
43.7
|
|
|
$
|
74.7
|
|
|
$
|
(31.0
|
)
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
|
3.1
|
|
|
6.1
|
|
|
(3.0
|
)
|
|||
Net Foreign Currency Adjustments
|
(13.7
|
)
|
|
3.9
|
|
|
(17.6
|
)
|
|||
Net Pension and Other Postretirement Benefit Adjustments
|
(317.0
|
)
|
|
4.1
|
|
|
(321.1
|
)
|
|||
Total
|
$
|
(283.9
|
)
|
|
$
|
88.8
|
|
|
$
|
(372.7
|
)
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
(In Millions)
|
Before Tax
|
|
Tax Effect
|
|
After Tax
|
|
Before Tax
|
|
Tax Effect
|
|
After Tax
|
||||||||||||
Unrealized Gains (Losses) on Securities Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Unrealized Gains (Losses) on Securities Available for Sale
|
30.9
|
|
|
(11.7
|
)
|
|
19.2
|
|
|
120.5
|
|
|
(45.6
|
)
|
|
74.9
|
|
||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income
|
0.2
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
(0.3
|
)
|
|
0.1
|
|
|
(0.2
|
)
|
||||||
Net Change
|
31.1
|
|
|
(11.8
|
)
|
|
19.3
|
|
|
120.2
|
|
|
(45.5
|
)
|
|
74.7
|
|
||||||
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized Gains (Losses) on Cash Flow Hedges
|
8.7
|
|
|
(10.8
|
)
|
|
(2.1
|
)
|
|
9.4
|
|
|
(3.7
|
)
|
|
5.7
|
|
||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income
|
(5.1
|
)
|
|
1.9
|
|
|
(3.2
|
)
|
|
0.6
|
|
|
(0.2
|
)
|
|
0.4
|
|
||||||
Net Change
|
3.6
|
|
|
(8.9
|
)
|
|
(5.3
|
)
|
|
10.0
|
|
|
(3.9
|
)
|
|
6.1
|
|
||||||
Foreign Currency Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign Currency Translation Adjustments
|
22.4
|
|
|
(1.5
|
)
|
|
20.9
|
|
|
17.3
|
|
|
(0.3
|
)
|
|
17.0
|
|
||||||
Long-Term Intra-Entity Foreign Currency Transaction Gains (Losses)
|
—
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
(1.0
|
)
|
|
3.2
|
|
||||||
Net Investment Hedge Gains (Losses)
|
(30.5
|
)
|
|
11.6
|
|
|
(18.9
|
)
|
|
(26.5
|
)
|
|
10.2
|
|
|
(16.3
|
)
|
||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net Change
|
(8.1
|
)
|
|
10.1
|
|
|
2.0
|
|
|
(5.0
|
)
|
|
8.9
|
|
|
3.9
|
|
||||||
Pension and Other Postretirement Benefit Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Actuarial Gain (Loss)
|
(2.3
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification Adjustment for (Gains) Losses Included in Net Income
|
6.4
|
|
|
(2.1
|
)
|
|
4.3
|
|
|
6.4
|
|
|
(2.3
|
)
|
|
4.1
|
|
||||||
Net Change
|
$
|
4.1
|
|
|
$
|
(2.1
|
)
|
|
$
|
2.0
|
|
|
$
|
6.4
|
|
|
$
|
(2.3
|
)
|
|
$
|
4.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Millions)
|
Location of
Reclassification Adjustments Recognized
in Income
|
Amount of Reclassification
Adjustments Recognized
in Income
|
||
Three Months Ended
|
||||
March 31, 2017
|
||||
Securities Available for Sale
|
|
|
||
Realized (Gains) Losses on Securities Available for Sale
|
Investment Security Gains (Losses), net
|
$
|
0.2
|
|
Realized Gains on Cash Flow Hedges
|
|
|
||
Foreign Exchange Contracts
|
Other Operating Income/Expense
|
(5.1
|
)
|
|
Pension and Other Postretirement Benefit Adjustments
|
|
|
||
Amortization of Net Actuarial Loss
|
Employee Benefits
|
6.5
|
|
|
Amortization of Prior Service Cost
|
Employee Benefits
|
(0.1
|
)
|
|
Gross Reclassification Adjustment
|
|
$
|
6.4
|
|
|
Three Months Ended March 31,
|
||||||
($ In Millions Except Per Common Share Information)
|
2017
|
|
2016
|
||||
Basic Net Income Per Common Share
|
|
|
|
||||
Average Number of Common Shares Outstanding
|
229,059,540
|
|
|
228,619,089
|
|
||
Net Income
|
$
|
276.1
|
|
|
$
|
245.4
|
|
Less: Dividends on Preferred Stock
|
20.7
|
|
|
5.9
|
|
||
Net Income Applicable to Common Stock
|
255.4
|
|
|
239.5
|
|
||
Less: Earnings Allocated to Participating Securities
|
4.5
|
|
|
4.1
|
|
||
Earnings Allocated to Common Shares Outstanding
|
250.9
|
|
|
235.4
|
|
||
Basic Net Income Per Common Share
|
$
|
1.10
|
|
|
$
|
1.03
|
|
Diluted Net Income Per Common Share
|
|
|
|
||||
Average Number of Common Shares Outstanding
|
229,059,540
|
|
|
228,619,089
|
|
||
Plus: Dilutive Effect of Share-based Compensation
|
1,571,336
|
|
|
1,178,856
|
|
||
Average Common and Potential Common Shares
|
230,630,876
|
|
|
229,797,945
|
|
||
Earnings Allocated to Common and Potential Common Shares
|
$
|
250.9
|
|
|
$
|
235.5
|
|
Diluted Net Income Per Common Share
|
1.09
|
|
|
1.03
|
|
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Interest Income
|
|
|
|
||||
Loans and Leases
|
$
|
213.4
|
|
|
$
|
200.9
|
|
Securities — Taxable
|
143.2
|
|
|
103.3
|
|
||
— Non-Taxable
|
2.6
|
|
|
1.1
|
|
||
Interest-Bearing Due from and Deposits with Banks
(1)
|
14.9
|
|
|
17.5
|
|
||
Federal Reserve and Other Central Bank Deposits
|
36.2
|
|
|
29.2
|
|
||
Total Interest Income
|
410.3
|
|
|
352.0
|
|
||
Interest Expense
|
|
|
|
||||
Deposits
|
27.6
|
|
|
22.2
|
|
||
Federal Funds Purchased
|
0.5
|
|
|
0.3
|
|
||
Securities Sold Under Agreements to Repurchase
|
0.9
|
|
|
0.4
|
|
||
Other Borrowings
|
7.6
|
|
|
2.7
|
|
||
Senior Notes
|
11.7
|
|
|
11.7
|
|
||
Long-Term Debt
|
7.4
|
|
|
6.1
|
|
||
Floating Rate Capital Debt
|
1.1
|
|
|
0.8
|
|
||
Total Interest Expense
|
56.8
|
|
|
44.2
|
|
||
Net Interest Income
|
$
|
353.5
|
|
|
$
|
307.8
|
|
(1)
|
Interest-Bearing Due from and Deposits with Banks includes the interest-bearing component of Cash and Due from Banks and Interest-Bearing Deposits with Banks as presented on the consolidated balance sheets.
|
Net Periodic Pension Expense
U.S. Plan
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Service Cost
|
$
|
9.6
|
|
|
$
|
9.3
|
|
Interest Cost
|
11.5
|
|
|
11.5
|
|
||
Expected Return on Plan Assets
|
(23.5
|
)
|
|
(23.6
|
)
|
||
Amortization
|
|
|
|
||||
Net Actuarial Loss
|
4.8
|
|
|
4.7
|
|
||
Prior Service Cost
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Net Periodic Pension Expense
|
$
|
2.3
|
|
|
$
|
1.8
|
|
Net Periodic Pension Expense
Non-U.S. Plans
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Interest Cost
|
$
|
0.9
|
|
|
$
|
1.3
|
|
Expected Return on Plan Assets
|
(1.1
|
)
|
|
(1.3
|
)
|
||
Net Actuarial Loss Amortization
|
0.3
|
|
|
0.3
|
|
||
Net Periodic Pension Expense
|
$
|
0.1
|
|
|
$
|
0.3
|
|
Net Periodic Pension Expense
Supplemental Plan
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Service Cost
|
$
|
0.9
|
|
|
$
|
0.9
|
|
Interest Cost
|
1.3
|
|
|
1.3
|
|
||
Amortization
|
|
|
|
||||
Net Actuarial Loss
|
1.4
|
|
|
1.5
|
|
||
Prior Service Cost
|
—
|
|
|
—
|
|
||
Net Periodic Pension Expense
|
$
|
3.6
|
|
|
$
|
3.7
|
|
Net Periodic Postretirement Expense
Postretirement Health Care Plan
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Service Cost
|
$
|
—
|
|
|
$
|
—
|
|
Interest Cost
|
0.4
|
|
|
0.4
|
|
||
Amortization
|
|
|
|
||||
Net Actuarial (Gain)
|
—
|
|
|
—
|
|
||
Net Periodic Postretirement Expense
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Restricted Stock Unit Awards
|
$
|
41.2
|
|
|
$
|
15.3
|
|
Stock Options
|
6.3
|
|
|
6.4
|
|
||
Performance Stock Units
|
8.5
|
|
|
4.1
|
|
||
Total Share-Based Compensation Expense
|
56.0
|
|
|
25.8
|
|
||
Tax Benefits Recognized
|
$
|
21.2
|
|
|
$
|
9.7
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Notional
Value
|
|
Fair Value
|
|
Notional
Value
|
|
Fair Value
|
||||||||||||||||
(In Millions)
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
||||||||||||||||
Foreign Exchange Contracts
|
$
|
286,237.9
|
|
|
$
|
1,851.8
|
|
|
$
|
1,832.6
|
|
|
$
|
273,213.1
|
|
|
$
|
3,274.2
|
|
|
$
|
3,221.7
|
|
Interest Rate Contracts
|
6,838.1
|
|
|
76.8
|
|
|
67.3
|
|
|
6,968.3
|
|
|
87.0
|
|
|
85.2
|
|
||||||
Total
|
$
|
293,076.0
|
|
|
$
|
1,928.6
|
|
|
$
|
1,899.9
|
|
|
$
|
280,181.4
|
|
|
$
|
3,361.2
|
|
|
$
|
3,306.9
|
|
|
|
Amount of Derivative
Gain Recognized in Income
|
||||||
|
Location of Derivative Gain Recognized in Income
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
|||||
Foreign Exchange Contracts
|
Foreign Exchange
Trading Income
|
$
|
48.1
|
|
|
$
|
60.5
|
|
Interest Rate Contracts
|
Security Commissions
and Trading Income
|
1.2
|
|
|
4.1
|
|
||
Total
|
|
$
|
49.3
|
|
|
$
|
64.6
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Derivative
Instrument
|
|
Risk
Classification
|
|
Notional
Value
|
|
Fair Value
|
|
Notional
Value
|
|
Fair Value
|
||||||||||||||||
(In Millions)
|
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
||||||||||||||||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available for Sale Investment Securities
|
Interest Rate Swap Contracts
|
|
Interest
Rate
|
|
$
|
3,670.3
|
|
|
$
|
9.6
|
|
|
$
|
11.0
|
|
|
$
|
3,873.4
|
|
|
$
|
88.3
|
|
|
$
|
16.8
|
|
Senior Notes and Long-Term Subordinated Debt
|
Interest Rate Swap Contracts
|
|
Interest
Rate
|
|
1,250.0
|
|
|
29.7
|
|
|
3.5
|
|
|
1,250.0
|
|
|
71.8
|
|
|
3.3
|
|
||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Forecasted Foreign Currency Denominated Transactions
|
Foreign Exchange Contracts
|
|
Foreign
Currency
|
|
351.5
|
|
|
10.2
|
|
|
6.2
|
|
|
329.3
|
|
|
8.5
|
|
|
7.8
|
|
||||||
Foreign Currency Denominated Investment Securities
|
Foreign Exchange Contracts
|
|
Foreign Currency
|
|
1,193.9
|
|
|
—
|
|
|
27.7
|
|
|
1,431.6
|
|
|
151.5
|
|
|
0.8
|
|
||||||
Available for Sale Investment Securities
|
Interest Rate Contracts
|
|
Interest
Rate
|
|
1,025.0
|
|
|
0.2
|
|
|
3.0
|
|
|
975.0
|
|
|
0.1
|
|
|
2.7
|
|
||||||
Net Investment Hedges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net Investments in Non-U.S. Affiliates
|
Foreign Exchange Contracts
|
|
Foreign
Currency
|
|
2,190.0
|
|
|
18.1
|
|
|
7.5
|
|
|
2,083.6
|
|
|
174.6
|
|
|
10.8
|
|
||||||
Total
|
|
|
|
|
$
|
9,680.7
|
|
|
$
|
67.8
|
|
|
$
|
58.9
|
|
|
$
|
9,942.9
|
|
|
$
|
494.8
|
|
|
$
|
42.2
|
|
|
|
|
Location of
Derivative
Gain/(Loss)
Recognized in
Income
|
|
Amount of Derivative
Gain/(Loss)
Recognized in Income
|
||||||
|
Derivative
Instrument
|
|
Three Months Ended March 31,
|
||||||||
(In Millions)
|
2017
|
|
2016
|
||||||||
Available for Sale Investment Securities
|
Interest Rate
Swap Contracts
|
|
Interest
Income
|
|
$
|
(2.4
|
)
|
|
$
|
(34.7
|
)
|
Senior Notes and Long-Term Subordinated Debt
|
Interest Rate
Swap Contracts
|
|
Interest
Expense
|
|
3.1
|
|
|
47.4
|
|
||
Total
|
|
|
|
|
$
|
0.7
|
|
|
$
|
12.7
|
|
(In Millions)
|
Foreign Exchange
Contracts (Before Tax)
|
|
Interest Rate
Contracts (Before Tax)
|
||||||||||||
Three Months Ended March 31,
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Gain/(Loss) Recognized in AOCI
|
$
|
8.9
|
|
|
$
|
4.2
|
|
|
$
|
(0.2
|
)
|
|
$
|
5.2
|
|
Net Gain/(Loss) Reclassified from AOCI to Net Income
|
|
|
|
|
|
|
|
||||||||
Other Operating Income
|
0.7
|
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
||||
Interest Income
|
4.4
|
|
|
—
|
|
|
0.1
|
|
|
0.9
|
|
||||
Other Operating Expense
|
(0.1
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
5.0
|
|
|
$
|
(1.5
|
)
|
|
$
|
0.1
|
|
|
$
|
0.9
|
|
|
|
|
|
|
|
|
|
|
Hedging Gain / (Loss)
Recognized in OCI (Before Tax)
|
||||||
|
Three Months Ended March 31,
|
||||||
(In Millions)
|
2017
|
|
2016
|
||||
Foreign Exchange Contracts
|
$
|
(30.5
|
)
|
|
$
|
(26.5
|
)
|
Total
|
$
|
(30.5
|
)
|
|
$
|
(26.5
|
)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(In Millions)
|
Notional
Value
|
|
Fair Value
|
|
Notional
Value
|
|
Fair Value
|
||||||||||||||||
Asset
|
|
Liability
|
|
Asset
|
|
Liability
|
|||||||||||||||||
Foreign Exchange Contracts
|
$
|
441.6
|
|
|
$
|
2.1
|
|
|
$
|
0.6
|
|
|
$
|
289.6
|
|
|
$
|
0.8
|
|
|
$
|
1.8
|
|
Other Financial Derivatives
(1)
|
307.6
|
|
|
—
|
|
|
26.4
|
|
|
270.0
|
|
|
—
|
|
|
25.2
|
|
||||||
Total
|
$
|
749.2
|
|
|
$
|
2.1
|
|
|
$
|
27.0
|
|
|
$
|
559.6
|
|
|
$
|
0.8
|
|
|
$
|
27.0
|
|
(1)
|
This line includes swaps related to sales of certain Visa Class B common shares.
|
(In Millions)
|
Location of
Derivative Gain / (Loss) Recognized
in Income
|
Amount of Derivative Gain / (Loss)
Recognized in Income
|
||||||
Three Months Ended March 31,
|
||||||||
2017
|
|
2016
|
||||||
Foreign Exchange Contracts
|
Other Operating Income
|
$
|
1.7
|
|
|
$
|
2.7
|
|
Other Financial Derivatives
(1)
|
Other Operating Income
|
(2.9
|
)
|
|
(0.8
|
)
|
||
Total
|
|
$
|
(1.2
|
)
|
|
$
|
1.9
|
|
(1)
|
This line includes swaps related to sales of certain Visa Class B common shares, total return swap contracts, and credit default swap contracts.
|
March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
(In Millions)
|
Gross
Recognized
Assets
|
|
Gross
Amounts
Offset
|
|
Net
Amounts
Presented
|
|
Gross
Amounts
Not Offset
|
|
Net
Amount
(3)
|
||||||||||
Derivative Assets
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts Over the Counter (OTC)
|
$
|
1,414.1
|
|
|
$
|
884.0
|
|
|
$
|
530.1
|
|
|
$
|
—
|
|
|
$
|
530.1
|
|
Interest Rate Swaps OTC
|
(10.3
|
)
|
|
17.8
|
|
|
(28.1
|
)
|
|
—
|
|
|
(28.1
|
)
|
|||||
Interest Rate Swaps Exchange Cleared
|
126.5
|
|
|
20.5
|
|
|
106.0
|
|
|
—
|
|
|
106.0
|
|
|||||
Cross Product Netting Adjustment
|
—
|
|
|
19.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cross Product Collateral Adjustment
|
—
|
|
|
411.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Derivatives Subject to a Master Netting Arrangement
|
1,530.3
|
|
|
1,352.5
|
|
|
177.8
|
|
|
—
|
|
|
177.8
|
|
|||||
Total Derivatives Not Subject to a Master Netting Arrangement
|
468.2
|
|
|
—
|
|
|
468.2
|
|
|
—
|
|
|
468.2
|
|
|||||
Total Derivatives
|
$
|
1,998.5
|
|
|
$
|
1,352.5
|
|
|
$
|
646.0
|
|
|
$
|
—
|
|
|
$
|
646.0
|
|
Securities Purchased under Agreements to Resell
(2)
|
$
|
1,933.8
|
|
|
$
|
—
|
|
|
$
|
1,933.8
|
|
|
$
|
1,933.8
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
(In Millions)
|
Gross
Recognized
Assets
|
|
Gross
Amounts
Offset
|
|
Net
Amounts
Presented
|
|
Gross
Amounts
Not Offset
|
|
Net
Amount
(3)
|
||||||||||
Derivative Assets
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts OTC
|
$
|
2,800.4
|
|
|
$
|
1,651.9
|
|
|
$
|
1,148.5
|
|
|
$
|
—
|
|
|
$
|
1,148.5
|
|
Interest Rate Swaps OTC
|
129.8
|
|
|
18.2
|
|
|
111.6
|
|
|
—
|
|
|
111.6
|
|
|||||
Interest Rate Swaps Exchange Cleared
|
117.4
|
|
|
21.8
|
|
|
95.6
|
|
|
—
|
|
|
95.6
|
|
|||||
Cross Product Netting Adjustment
|
—
|
|
|
17.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cross Product Collateral Adjustment
|
—
|
|
|
461.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Derivatives Subject to a Master Netting Arrangement
|
3,047.6
|
|
|
2,170.4
|
|
|
877.2
|
|
|
—
|
|
|
877.2
|
|
|||||
Total Derivatives Not Subject to a Master Netting Arrangement
|
809.2
|
|
|
—
|
|
|
809.2
|
|
|
—
|
|
|
809.2
|
|
|||||
Total Derivatives
|
3,856.8
|
|
|
2,170.4
|
|
|
1,686.4
|
|
|
—
|
|
|
1,686.4
|
|
|||||
Securities Purchased under Agreements to Resell
(2)
|
$
|
1,967.5
|
|
|
$
|
—
|
|
|
$
|
1,967.5
|
|
|
$
|
1,967.5
|
|
|
$
|
—
|
|
(1)
|
Derivative assets are reported in other assets in the consolidated balance sheets. Other assets (excluding derivative assets) totaled
$3.3 billion
as of
March 31, 2017
and
December 31, 2016
, respectively.
|
(2)
|
Securities purchased under agreements to resell are reported in federal funds sold and securities purchased under agreements to resell in the consolidated balance sheets. There were
no
Federal funds sold and
$6.8 million
Federal funds sold as of
March 31, 2017
and
December 31, 2016
, respectively.
|
(3)
|
Northern Trust did not possess any cash collateral that was not offset in the consolidated balance sheets that could have been used to offset the net amounts presented in the consolidated balance sheets as of
March 31, 2017
and
December 31, 2016
.
|
March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
(In Millions)
|
Gross
Recognized
Liabilities
|
|
Gross
Amounts
Offset
|
|
Net
Amounts
Presented
|
|
Gross
Amounts
Not Offset
|
|
Net
Amount
(2)
|
||||||||||
Derivative Liabilities
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts OTC
|
$
|
1,275.1
|
|
|
$
|
884.0
|
|
|
$
|
391.1
|
|
|
$
|
—
|
|
|
$
|
391.1
|
|
Interest Rate Swaps OTC
|
64.3
|
|
|
17.8
|
|
|
46.5
|
|
|
—
|
|
|
46.5
|
|
|||||
Interest Rate Swaps Exchange Cleared
|
20.5
|
|
|
20.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other Financial Derivatives
|
26.4
|
|
|
—
|
|
|
26.4
|
|
|
—
|
|
|
26.4
|
|
|||||
Cross Product Netting Adjustment
|
—
|
|
|
19.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cross Product Collateral Adjustment
|
—
|
|
|
207.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Derivatives Subject to a Master Netting Arrangement
|
1,386.3
|
|
|
1,148.7
|
|
|
237.6
|
|
|
—
|
|
|
237.6
|
|
|||||
Total Derivatives Not Subject to a Master Netting Arrangement
|
599.6
|
|
|
—
|
|
|
599.6
|
|
|
—
|
|
|
599.6
|
|
|||||
Total Derivatives
|
1,985.9
|
|
|
1,148.7
|
|
|
837.2
|
|
|
—
|
|
|
837.2
|
|
|||||
Securities Sold under Agreements to Repurchase
|
$
|
433.2
|
|
|
$
|
—
|
|
|
$
|
433.2
|
|
|
$
|
433.2
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
(In Millions)
|
Gross
Recognized
Liabilities
|
|
Gross
Amounts
Offset
|
|
Net
Amounts
Presented
|
|
Gross
Amounts
Not Offset
|
|
Net
Amount
(2)
|
||||||||||
Derivative Liabilities
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Exchange Contracts OTC
|
$
|
2,634.4
|
|
|
$
|
1,651.9
|
|
|
$
|
982.5
|
|
|
$
|
—
|
|
|
$
|
982.5
|
|
Interest Rate Swaps OTC
|
86.2
|
|
|
18.2
|
|
|
68.0
|
|
|
—
|
|
|
68.0
|
|
|||||
Interest Rate Swaps Exchange Cleared
|
21.8
|
|
|
21.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other Financial Derivatives
|
25.2
|
|
|
—
|
|
|
25.2
|
|
|
|
|
25.2
|
|
||||||
Cross Product Netting Adjustment
|
—
|
|
|
17.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cross Product Collateral Adjustment
|
—
|
|
|
722.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Derivatives Subject to a Master Netting Arrangement
|
2,767.6
|
|
|
2,431.2
|
|
|
336.4
|
|
|
—
|
|
|
336.4
|
|
|||||
Total Derivatives Not Subject to a Master Netting Arrangement
|
608.5
|
|
|
—
|
|
|
608.5
|
|
|
—
|
|
|
608.5
|
|
|||||
Total Derivatives
|
3,376.1
|
|
|
2,431.2
|
|
|
944.9
|
|
|
—
|
|
|
944.9
|
|
|||||
Securities Sold under Agreements to Repurchase
|
$
|
473.7
|
|
|
$
|
—
|
|
|
$
|
473.7
|
|
|
$
|
473.7
|
|
|
$
|
—
|
|
(1)
|
Derivative liabilities are reported in other liabilities in the consolidated balance sheets. Other liabilities (excluding derivative liabilities) totaled
$2.2 billion
and
$2.7 billion
as of
March 31, 2017
and
December 31, 2016
, respectively.
|
(2)
|
Northern Trust did not place any cash collateral with counterparties that was not offset in the consolidated balance sheets that could have been used to offset the net amounts presented in the consolidated balance sheets as of
March 31, 2017
and
December 31, 2016
.
|
Period
|
Total Number
of Shares Purchased |
|
Average
Price Paid per Share |
|
Total Number of
Shares Purchased as Part of a Publicly Announced Plan (1) |
|
Maximum Number of
Shares that May Yet Be Purchased Under the Plan |
|||||
January 1-31, 2017
|
60,762
|
|
|
$
|
83.52
|
|
|
60,762
|
|
|
4,025,632
|
|
February 1-28, 2017
|
191,132
|
|
|
84.96
|
|
|
191,132
|
|
|
3,834,500
|
|
|
March 1-31, 2017
|
148,967
|
|
|
88.57
|
|
|
148,967
|
|
|
3,685,533
|
|
|
Total (First Quarter)
|
400,861
|
|
|
$
|
86.09
|
|
|
400,861
|
|
|
3,685,533
|
|
(1)
|
Repurchases were made pursuant to the repurchase program announced by the Corporation on April 22, 2015, under which the Corporation’s board of directors authorized the Corporation to repurchase up to 15.0 million shares of the Corporation’s common stock. The repurchase program has no expiration date.
|
|
|
NORTHERN TRUST CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
May 2, 2017
|
By:
|
/s/ S. Biff Bowman
|
|
|
|
S. Biff Bowman
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
Date:
|
May 2, 2017
|
By:
|
/s/ Jane Karpinski
|
|
|
|
Jane Karpinski
Executive Vice President and Controller
(Principal Accounting Officer)
|
Exhibit
Number
|
Description
|
|
|
3.1
|
By-laws of Northern Trust Corporation, as amended through April 25, 2017 (incorporated by reference to Exhibit 3.1 to the Corporation's Current Report on Form 8-K filed April 26, 2017)
|
|
|
10.1
|
Northern Trust Corporation Executive Change in Control Severance Plan (incorporated by reference to Exhibit 10.1 to the Corporation's Current Report on Form 8-K filed April 28, 2017)
|
|
|
10.2
|
Northern Trust Corporation Key Officer Change in Control Severance Plan (incorporated by reference to Exhibit 10.2 to the Corporation's Current Report on Form 8-K filed April 28, 2017)
|
|
|
10.3
|
Northern Trust Corporation 2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Corporation’s Current Report on Form 8-K filed April 26, 2017)
|
|
|
10.4
|
Form of 2017 Stock Option Award Terms and Conditions
|
|
|
10.5
|
Form of 2017 Stock Unit Award Terms and Conditions
|
|
|
10.6
|
Form of 2017 Performance Stock Unit Award Terms and Conditions
|
|
|
10.7
|
Northern Trust Corporation 2017 Long Term Cash Incentive Plan
|
|
|
10.8
|
Form of Cash Incentive Award Terms and Conditions
|
|
|
10.9
|
Northern Partners Incentive Plan – EMEA Plan
|
|
|
10.10
|
Form of Director Stock Unit Agreement
|
|
|
10.11
|
Form of Director Stock Unit Agreement (prorated)
|
|
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
32
|
Certifications of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
101
|
Includes the following financial and related information from Northern Trust’s Quarterly Report on Form 10-Q as of and for the quarter ended March 31, 2017, formatted in Extensible Business Reporting Language (XBRL): (1) the Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016, (2) the Consolidated Statements of Income for the three months ended March 31, 2017 and 2016, (3) the Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and 2016, (4) the Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2017 and 2016, (5) the Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016, and (6) Notes to Consolidated Financial Statements
|
Vesting Date
|
Percentage of Stock Options Vesting
|
First Anniversary of Grant Date
|
25%
|
Second Anniversary of Grant Date
|
25%
|
Third Anniversary of Grant Date
|
25%
|
Fourth Anniversary of Grant Date
|
25%
|
Vesting Date
|
Percentage of Stock Options Vesting
|
|
|
|
|
|
|
|
|
Vesting Date
|
Percentage of Stock Units Vesting
|
First Anniversary of Grant Date
|
0%
|
Second Anniversary of Grant Date
|
0%
|
Third Anniversary of Grant Date
|
50%
|
Fourth Anniversary of Grant Date
|
50%
|
Vesting Date
|
Percentage of Stock Units Vesting
|
|
|
|
|
|
|
|
|
Average Annual Rate of Return on Equity
|
Less than 7.5%
|
7.5%
|
9.0%
|
12.0%
|
≥ 15%
|
PSU Multiplier
|
0%
|
25%
|
50%
|
100%
|
150%
|
(i)
|
The average annual rate of return on equity for the Performance Period attained by the Corporation is the return on average common equity, based on the Corporation’s net income, and shall be determined by the Committee in its sole and absolute discretion in accordance with generally accepted accounting principles (subject to the adjustments set forth below). For purposes of the foregoing, the average annual rate of return on equity shall be calculated as the simple average annual rate of return on equity for the three-year Performance Period measured across the Corporation as a whole.
|
(ii)
|
Notwithstanding anything herein to the contrary, for purposes of determining the average annual rate of return on equity for any individual fiscal year of the Corporation within the Performance Period, if any of the following items, individually or aggregated with other items as reflected herein, would produce a change to net income in excess of $100 million, net income shall be determined for such fiscal year by excluding such item(s) as aggregated:
|
(A)
|
the gains or losses resulting from, and the expenses incurred in connection with, the acquisition or disposition of a business, a merger, or a similar transaction, and integration in connection therewith;
|
(B)
|
the impact of securities issuances in connection with events described in item (A), above, and expenses incurred in connection therewith;
|
(C)
|
any gain, loss, income or expense resulting from changes in accounting principles, tax laws, or other laws or provisions affecting reported results, that become effective during the Performance Period;
|
(D)
|
any gain or loss resulting from, and expenses incurred in connection with, any litigation or regulatory investigations;
|
(E)
|
any charges and expenses incurred in connection with restructuring activity, including but not limited to, reductions in force;
|
(F)
|
the impact of discontinued operations;
|
(G)
|
asset write-downs;
|
(H)
|
the impact on goodwill impairment; or
|
(I)
|
any other gain, loss, income or expense with respect to the Performance Period that is extraordinary, unusual and/or infrequent.
|
1.
|
Purpose
. The purpose of the Plan is to promote the growth and profitability of the Corporation and its Subsidiaries by encouraging outstanding individuals to accept or continue employment with the Corporation and its Subsidiaries through the provision of incentive compensation opportunities in the form of Long Term Cash Incentive Awards (“Awards”).
|
2.
|
Administration
.
|
3.
|
Participants
.
|
4.
|
Long Term Cash Incentive
Awards
. The Committee may in its discretion award Long Term Cash Incentive Awards under the Plan to Participants hereunder. Each Award shall be subject to such terms and conditions as the Committee may determine at the time of grant, the general provisions of the Plan, the terms and conditions of the applicable Long Term Cash Incentive Award Agreement and the following specific rules:
|
5.
|
Nontransferability
. Except as provided below, each Award granted under the Plan to a Participant shall not be transferable by the Participant other than by will or the laws of descent and distribution. In the event of the death of a Participant during employment or prior to the termination, cancellation or forfeiture of any Award held by the Participant hereunder, each vested Award theretofore granted to the Participant shall be payable to the extent and to such persons as provided in, and in accordance with the terms of, the applicable Award Agreement.
|
6.
|
Change in Control.
|
(b)
|
A “Change in Control” shall be deemed to have occurred if:
|
(i)
|
any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities beneficially owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 30% or more of the combined voting power of the Corporation's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (iii) below;
|
(ii)
|
the election to the Board, without the recommendation or approval of two-thirds of the incumbent Board, of directors constituting a majority of the number of directors of the Corporation then in office, provided, however, that directors whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Corporation will not be considered as incumbent members of the Board for purposes of this section;
|
(iii)
|
there is consummated a merger or consolidation of the Corporation or any direct or indirect Subsidiary of the Corporation with any other company, other than (A) a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), at least 60% of the combined voting power of the securities of the Corporation or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Corporation or its Affiliates) representing 20% or more of the combined voting power of the Corporation's then outstanding securities; or
|
(iv)
|
there is consummated the sale or disposition by the Corporation of all or substantially all of the Corporation's assets, other than a sale or disposition by the Corporation of all or substantially all of the Corporation's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale or the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation;
|
7.
|
Other Provisions.
|
8.
|
Taxes
. The Corporation shall have the right to deduct from any payment to be made under the Plan the amount of any taxes required by law to be withheld from such payment, or to require a Participant to pay to the Corporation such amount required to be withheld prior to the payment of any Award under the Plan.
|
9.
|
Amendment, Suspension or Termination of Plan
. The Board may at any time amend, suspend or terminate the Plan as it deems advisable and in the best interests of the Corporation; provided, that no amendment, suspension or termination shall adversely affect the right of any Participant under any outstanding Award in any material way without the written consent of the Participant, unless such amendment, suspension or termination is required by applicable law. Anything in this Section 9 or elsewhere in the Plan to the contrary notwithstanding:
|
10.
|
No Contract of Employment
. Neither the adoption of the Plan nor the grant of any Award under the Plan shall be deemed to obligate the Corporation or any Subsidiary to continue the employment of any Participant for any particular period, nor shall the granting of an Award constitute a request or consent to postpone the retirement date of any Participant.
|
11.
|
Applicable Law
. All questions pertaining to the validity, construction and administration of the Plan and any Award Agreement, and all claims or causes of action arising under, relating to, or in connection with, the Plan or any Award granted under the Plan shall be determined in conformity with the laws of the State of Delaware, without regard to the conflict of law provisions of any state.
|
12.
|
Definitions
. As used in the Plan, the following terms shall have the meanings set forth below:
|
15.
|
The Long Term Cash Incentive Awards granted under the Plan are intended to be exempt from, or to comply in all applicable respects with, the requirements of Code Section 409A, and the Plan shall be construed and administered so as to cause such Awards to be exempt from or comply with that Code section, respectively, as applicable.
|
Vesting Date
|
Percentage of Cash Award Vesting
|
First Anniversary of Grant Date
|
0%
|
Second Anniversary of Grant Date
|
0%
|
Third Anniversary of Grant Date
|
50%
|
Fourth Anniversary of Grant Date
|
50%
|
Vesting Date
|
Percentage of Cash Award Vesting
|
|
|
|
|
|
|
|
|
1.
|
Purpose of Plan
|
•
|
The purpose of the Northern Partners Incentive Plan (the “Plan”) is to promote the achievement of superior financial and operating performance of Northern Trust Corporation and its subsidiaries (hereinafter referred to as “Northern Trust”), and further the objective of delivering unrivaled service to its clients and partners through the awarding of incentive payments to selected employees.
|
•
|
The Plan supersedes all incentive plans previously established or maintained by Northern Trust providing for any form of incentive, bonus or commission compensation.
1
|
2.
|
Plan Year / Effective Date / Termination
|
•
|
The Plan Year is the calendar year from January 1 to December 31.
|
•
|
The Plan was adopted by the Board of Directors of Northern Trust Corporation on July 19, 2004.
|
•
|
The Plan shall remain in effect until terminated by the Board of Directors of Northern Trust Corporation.
|
3.
|
Plan Performance Periods
|
•
|
Under the Plan, incentives may be determined and paid on a quarterly, semi-annual, or an annual basis, depending upon the incentive category to which a participant is assigned and the structure of the potential award determined for the participant. The applicable performance periods and frequency of award payments are determined by Business Unit Management.
|
•
|
The performance periods for the Plan Year for incentives with quarterly payments are as follows:
|
◦
|
January 1 to March 31;
|
◦
|
April 1 to June 30;
|
◦
|
July 1 to September 30; and
|
◦
|
October 1 to December 31.
|
•
|
The performance periods for the Plan Year incentives with semi-annual payments are as follows:
|
◦
|
January 1 to June 30; and
|
◦
|
July 1 to December 31.
|
•
|
The performance period for all other awards under the Plan is the Plan Year, unless otherwise approved by the Chief Human Resources Officer or his/her designee.
|
4.
|
Eligibility / Participation
|
•
|
Participants in the Plan for the Plan Year are those employees designated by their respective Business Units as eligible to participate in the Plan. Participants are generally designated at the beginning of the Plan Year. In addition, those employees who have a change in job duties, are promoted, or who are hired during the performance period may be considered for inclusion and designated by their respective Business Units for partial Plan Year participation.
|
•
|
Designation for participation in this Plan for one Plan Year or a portion thereof does not establish eligibility for participation in any subsequent Plan Year or for any form of incentive, bonus or commission compensation with respect to any subsequent period.
|
•
|
Participants are assigned for the Plan Year to one of the following incentive categories within the Plan as their primary eligibility for their current role. However, participants may receive payments under multiple incentive categories within a Plan Year:
|
◦
|
Northern Performance Incentives
|
◦
|
Northern Sales Incentives
|
◦
|
Northern Technical Incentives
|
5.
|
Award Targets
|
•
|
An award target, generally expressed as a percent of a participant’s base salary at the beginning of the Plan Year, will be communicated to each participant annually as a potential award goal provided that the applicable Corporate and Business Unit goals and individual performance expectations are achieved.
|
•
|
The payment of any incentive amount is at the absolute discretion of Northern Trust. Management has the discretion not to award participants an incentive payout or to reduce the amount of the incentive payout if either Corporate, Business Unit or individual performances are not in line with expectations or due to any other reason Management deems fit in its sole discretion. This may mean that, regardless of individual performance, where Corporate or Business Unit performance is not in line
|
6.
|
Individual Performance Measures
|
•
|
Each participant will receive performance expectations, including risk management expectations, for the Plan Year that will consist of both objective goals and subjective performance assessments.
|
•
|
Each participant’s manager will establish the participant’s performance expectations as early in the Plan Year as practicable.
|
7.
|
Plan Funding
|
•
|
At the beginning of each Plan Year, the Compensation and Benefits Committee of the Board of Directors of Northern Trust Corporation (the “Committee”) will determine a Corporate Earnings Target and projected funding for awards under the Plan. Management reserves the right to either increase or decrease the original projected funding amount for the Corporate level; provided, however, that the funding amount may not exceed the funding level established by the Committee without prior approval. Management has full discretion to allocate funding to the Business Unit level depending upon actual results and each Business Unit’s relative contribution to actual results, effective risk management, or for any other reason as Management deems fit in its sole discretion. Where funding is reduced in respect of Corporate or Business Unit amounts, this may result in no incentive payout, regardless of individual performance or any other factors. In addition, the funding amount is subject to final approval by, and may be further reduced by, the Committee after the end of the performance period, as described at Section 10, below.
|
8.
|
Individual Award Determination
|
•
|
All awards (if any) are impacted by available Plan funding, as determined and adjusted by Corporate and Business Unit Management in its discretion.
|
•
|
Awards (if any) are determined by Business Unit Management after the end of the applicable performance period, based upon an assessment of individual performance during the applicable performance period, taking into consideration:
|
◦
|
Individual performance expectations, including the risk management expectation;
|
◦
|
Overall contribution to Corporate and Business Unit earnings, relative to peers;
|
◦
|
Competitiveness of a participant’s total compensation; and
|
◦
|
Notification by the participant or by Northern Trust of a notice to terminate the participant’s employment prior to the first day in February after the close of the plan year.
|
•
|
Formula-driven performance measures are one of several factors for determination of award amounts. Both quantitative and qualitative performance criteria will be used to evaluate performance. Thus, Management has the full discretion both during and after the performance period, up to the actual settlement of the award, as described in Paragraph 10, not to make an award or to adjust all awards up or down based on a subjective performance evaluation, funding considerations, and any other factors which Management, in its absolute discretion, determines appropriate.
|
•
|
In addition to the foregoing, all awards must also comply with applicable regulatory requirements and may be risk-adjusted within Management's discretion for all individual employees or groups of employees who, individually or collectively, may expose Northern Trust to more substantial amounts of risk.
|
9.
|
Conditions on Eligibility for Payment of Awards.
|
•
|
In order for a participant to be eligible for payment of an award, except as specifically set forth herein, the participant must continue in employment with Northern Trust and the Business Unit that designated him or her as a participant, and contribute toward the achievement of Corporate and Business Unit goals, throughout the applicable performance period, and not be under notice of termination (whether given by him or Northern Trust).
|
•
|
A participant who was designated by a Business Unit and transfers to another Business Unit during the applicable performance period may, as determined by Management of the transferring Business Unit in its sole discretion, be determined eligible for a pro-rata payment of an award for work performed during the performance period for the transferring Business Unit, provided that Corporate and Business Unit goals and individual performance expectations, and any other factors which Management may determine applicable, are achieved. Payment of such pro-rata awards will be made at the same time all other awards are paid for such performance period.
|
•
|
In order for a participant to be eligible for consideration for an award, the participant must continue employment with Northern Trust in good standing during the entire performance period established for the award. Good standing means:
|
◦
|
The participant has satisfactorily met all performance expectations, including risk management performance expectations, as determined by the participant's manager;
|
◦
|
The participant has complied with all Northern Trust policies and standards of conduct;
|
◦
|
The participant has not engaged in any activity competitive with Northern Trust’s business or otherwise detrimental to Northern Trust’s business; and
|
◦
|
The participant has not served or been served with notice to terminate the participant’s employment.
|
•
|
Notwithstanding the foregoing, Management may, in its absolute discretion, determine that a pro-rata award will be paid in the event of termination of employment with Northern Trust by a participant on account of death, disability (as defined below), retirement (as defined below), or involuntary termination by Northern Trust without cause (as defined below), such as job elimination or redundancy, taking into consideration the portion of the performance period worked by the participant, the individual performance of the participant during such portion of the performance period worked, and the availability of Corporate, Business Unit and individual performance measurements as of the date of termination and any other factors as Northern Trust Management may from time to time take into account.
|
◦
|
For this purpose, “cause” means the participant’s conviction or no contest pleading, or the country specific equivalent, with respect to a criminal offence (other than a minor road traffic offence); the employee being prevented by regulatory requirements from carrying out his duties; or a determination by Management that the participant has failed to meet performance expectations to the extent that termination, whether with or without notice is warranted; the participant has violated Northern Trust policies or standards of conduct to the extent that termination with or without notice is warranted; the participant has been negligent to a material extent with respect to his or her responsibilities; the participant has been engaged in fraud upon Northern Trust, or has disclosed Northern Trust confidential or proprietary information to an unauthorized person, or his or her actions amount to misconduct under common law.
|
◦
|
For this purpose, termination on account of “retirement” means termination of the participant’s employment by reason of the participant having qualified for Normal or Early Retirement Pension benefits under any of Northern Trust’s Europe pension plans
.
|
◦
|
For this purpose, termination on account of “disability” means the participant's employment is terminated pursuant to Northern Trust's Long Term Ill Health Procedure as amended from time to time.
|
•
|
Subject to the final bullet point in this Paragraph 9, in no circumstances will a pro-rata award or any unpaid award referable to a previous Plan Year be paid to a participant who terminates employment by resigning (other than due to retirement, as defined above) before the end of the applicable performance period or whose employment is terminated by Northern Trust for cause (as defined above).
|
•
|
A participant who is terminated for cause (as defined above) after the end of the Plan Year but before the date of payment will forfeit entitlement to any unpaid award (and termination includes having received notice of termination).
|
•
|
A participant who resigns (other than due to retirement, as defined above) after the end of the Plan Year but prior to the first day in February after the close of the plan year will forfeit entitlement to any unpaid award (and resignation includes having given notice of resignation).
|
•
|
In respect only of those participants who have been designated as Senior Managers for the purposes of the UK Financial Conduct Authority’s and Prudential Regulation Authority’s Senior and Certified Persons Regime, in addition to those discretions reserved by Northern Trust above, and notwithstanding any rules of the Plan to the contrary, in the event that a participant’s employment terminates by reason of resignation, Management may at its absolute discretion, elect to pay a pro-rata award in respect of the Plan Year in which employment terminates, and/or to pay any unpaid award referable to a previous Plan Year.
|
10.
|
Payment of Awards
|
•
|
After the end of the performance period, Northern Trust Management shall make recommendations with respect to the final funding amount for the performance period, and whether each participant’s award shall be settled in cash, a grant of equity-based compensation (e.g., restricted stock units or options) under the equity plan of Northern Trust Corporation then in effect, or a combination thereof. Such recommendations (including the terms and conditions of each equity grant, which may include, but are not limited to, a deferred vesting schedule and possible forfeiture upon the occurrence of specified events (such as termination of employment, regulatory events, risk based events or behaviors, or changes in business conditions)), are subject to the review and approval of the Committee, and no grant of any equity award shall occur until the date of Committee action.
|
•
|
Notwithstanding anything herein to the contrary, until the date of settlement of the award (whether by actual payment in cash and/or the grant by the Committee of equity-based compensation in accordance with the preceding paragraph), Northern Trust may in its absolute discretion reduce or eliminate any award.
|
•
|
It is intended that all cash-settled awards made under the Plan shall constitute short-term deferrals for purposes of the regulations issued under Section 409A of the U.S. Internal Revenue Code (the “Code”), and shall be paid within the deadline for short term deferrals, that all other awards hereunder shall constitute short-term deferrals for purposes of the regulations under Code Section 409A or comply with that Code Section and the regulations thereunder, and all provisions of this Plan shall be interpreted in all events in a manner consistent with such intent, to the extent 409A could apply.
|
11.
|
Administration
|
•
|
The Plan shall be administered by the Chief Human Resources Officer and the Compensation Division of the Human Resources Department. Subject to the provisions of the Plan, the Chief Human Resources Officer shall be authorized to interpret the Plan, to establish, amend, and rescind rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The determination of the Chief Human Resources Officer in the administration of the Plan, as described herein, shall, upon consultation with members of the Management Group, be final and conclusive. The Chief Human Resources Officer shall be responsible for final approval of all awards to be paid under the Plan, subject to any
|
•
|
Responsibilities of the Compensation Division of the Human Resources Department:
|
◦
|
Guide incentive award calculations and determinations;
|
◦
|
Review and monitor financial accruals in conjunction with the Controller’s Department;
|
◦
|
Prepare communications to Plan participants;
|
◦
|
Participate in a yearly review of all compensation plans to evaluate whether the designs encourage imprudent risk taking;
|
◦
|
Participate in a yearly assessment of the full range of inherent risks in order to identify those partners whose responsibilities might lead to imprudent risk-taking; and
|
◦
|
Direct processing of incentive awards.
|
•
|
Business Unit Responsibilities:
|
◦
|
Identify Plan participants;
|
◦
|
Prepare and communicate individual performance expectations;
|
◦
|
Determine and recommend awards for approval by the Business Unit Head; and
|
◦
|
Communicate award decisions to participants.
|
•
|
Risk Management Responsibilities
|
◦
|
Participate in a yearly review of all compensation plans to evaluate whether the designs encourage imprudent risk taking;
|
◦
|
Undertake a yearly assessment of the full range of inherent risks in order to identify those partners whose responsibilities might lead to imprudent risk-taking; and
|
◦
|
Participate in the design of any Northern Partners Incentive Plan Addendum and any other new or revised incentive plan to assess plans’ effectiveness in balancing imprudent risk taking.
|
12.
|
Contractual Rights
|
•
|
Neither the Plan, nor any action taken thereunder, shall be construed as creating a contract or any contractually enforceable rights to any employee, retiree, terminated
|
13.
|
Other Provisions
|
•
|
Except in the event of death of a participant, the rights and interests of the participant under the Plan shall not be assigned, encumbered, or transferred. In the event of the death of a participant, the Plan will be administered in accordance with applicable local rules.
|
•
|
All awards are subject to legally required withholdings and deductions.
|
•
|
All questions pertaining to the validity, construction, interpretation and administration of the Plan and any award hereunder shall be determined in conformity with the applicable local laws of the jurisdiction in which the employee primarily provides services.
|
•
|
It is intended that no awards payable under the Plan will reward or incent prohibited proprietary trading.
|
14.
|
Internal Audit
|
•
|
All awards may be subject to review and approval by the Auditing Department and final review and approval by the Chief Human Resources Officer, prior to any award distribution.
|
15.
|
Plan Amendment and Termination
|
•
|
Northern Trust reserves the right to suspend or terminate the Plan, or to amend any or all of the provisions of the Plan, at any time, including during a performance period and without prior notice to participants. The Committee of Northern Trust Corporation shall approve any material amendments to the Plan. The Chief Human Resources Officer shall have the authority to make any non-material amendments to the Plan or amendments deemed required, authorized or desirable under applicable statutes, regulations or rulings without the approval of the Committee. In the event of termination of the Plan, only awards determined for completed performance periods and which are approved by the Chief Human Resources Officer shall be payable.
|
1.
|
Grant
. Northern hereby grants to the Participant an award of Stock Units equal in value to $[_____], as determined by the closing sale price of Northern’s Common Stock (as defined below) on the date of the 20[__] Annual Meeting of Stockholders, subject to the terms and conditions of the Plan and this Agreement. A Stock Unit is the right, subject to the terms and conditions of the Plan and this Agreement, to receive a distribution of a share of common stock (“Common Stock”), pursuant to Paragraph 6 of this Agreement.
|
2.
|
Stock Unit Account
. Northern shall maintain an account (“Stock Unit Account”) on its books in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant that the Participant is eligible to receive in distribution pursuant to Paragraph 6 of this Agreement.
|
3.
|
Dividend Equivalents
. Except as provided below in Paragraph 7 of this Agreement, upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s Stock Unit award pursuant to Paragraph 6 of this Agreement, Northern shall credit to a cash account maintained by Northern on its books in the name of the Participant with respect to the Stock Units (“Dividend Equivalent Account”) an amount equal in value to the dividends that the Participant would have received had the Participant been the actual owner on the record date of the number of shares of Common Stock represented by the Stock Units in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”). No interest or earnings shall be credited to the Dividend Equivalent Account. Such Dividend Equivalents shall be subject to the same forfeiture, vesting, and distribution provisions of this Agreement applicable to the Stock Units to which such Dividend Equivalents relate.
|
4.
|
Forfeiture
. If the Participant incurs a Separation from Service, as defined in Paragraph 7(c) below, prior to the vesting date set forth in Paragraph 5 of this Agreement, the Participant’s Stock Units shall be forfeited and revert to Northern, and Northern shall have no obligation after such date to pay Dividend Equivalents pursuant to Paragraph 3 of this Agreement or any other obligation to the Participant under this Agreement with respect to such Stock Units.
|
5.
|
Vesting
. The Participant shall become 100% vested in the Stock Units granted hereunder upon the date (the “vesting date”) that is the earliest to occur of (a) the date of Northern’s 20[__] Annual Meeting of Stockholders (the “regular vesting date”), (b) the date of the Participant’s death, or (c) the date of a Change in Control, provided that the Participant has not incurred a Separation from Service, as defined in Paragraph 7(c) below, prior to the earliest of the foregoing three events.
|
6.
|
Distribution
. Except as provided below in Paragraph 7 of this Agreement,
|
(a)
|
Subject to Paragraph 6(b), if the Participant has become 100% vested in the Stock Units granted hereunder upon the regular vesting date, the Stock Units shall be distributed upon such regular vesting date, provided that the distribution shall be treated as made on such date if made within the period described in Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the Participant shall in no event have the right directly or indirectly to designate the taxable year of payment. Stock Units shall be distributed only in shares of Common Stock so that, pursuant to Paragraph 1 of this Agreement and this Paragraph 6, a Participant shall be entitled to receive one share of Common Stock for each Stock Unit in the Participant’s Stock Unit Account.
|
(b)
|
If a Participant’s service on the Board of Directors of Northern shall terminate by reason of death prior to the regular vesting date, all cash (as provided in Paragraph 7) or Common Stock then distributable hereunder with respect to the Participant shall be distributed to such individual, trustee, trust or other entity (“Beneficiary”) as the Participant shall have designated by an instrument in writing last filed with, and in a form and manner acceptable to, Northern prior to death, or in the absence of a designation, according to the applicable laws of descent. Except as otherwise provided in Paragraph 7(c), such distribution shall be made on the date of death, provided that the distribution shall be treated as made on such date if made within the period described in Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that neither the Participant (nor the Beneficiary) shall have the right directly or indirectly to designate the taxable year of payment.
|
(c)
|
If the Participant dies on or after the regular vesting date, but prior to the distribution of all amounts to which the Participant is entitled hereunder, all cash or Common Stock then distributable hereunder with respect to the Participant shall be distributed to the Beneficiary designated by the Participant, or, if none,
|
(d)
|
In the case of Stock Units that become vested as a result of a Change in Control, the Participant shall not be entitled to a distribution of such Stock Units upon such Change in Control. Instead, any Stock Units that become vested as a result of a Change in Control shall be distributed only upon the date, or the occurrence of the event upon which, distribution would have been made in the absence of such Change in Control. For purposes of this Paragraph 6(d) the Annual Meeting of Stockholders in 20[__] shall be deemed to occur upon the third Tuesday in April in that year.
|
7.
|
Voluntary Deferral
.
|
(a)
|
Subject to applicable law, receipt of the payment of all or any portion of the Stock Units shall be deferred until the date on which the Participant incurs a Separation from Service, as defined in clause (c) below, if the Participant has filed a deferral election, subject to and in accordance with the provisions of Paragraph 7(b), no later than the deadline described in Paragraph 7(b). Any such election shall likewise apply to the Dividend Equivalents payable with respect to such deferred Stock Units. Deferred Dividend Equivalents shall be credited to a cash account with respect to the Stock Units (“Cash Account”) maintained by Northern on its books in the name of the Participant. Until the entire balance of a Cash Account has been paid to the Participant or to the Participant’s Beneficiaries (as defined in Paragraph 6), such balance shall be adjusted on the last day of each calendar quarter to reflect accrued interest on such balance based on the rate of interest determined from time to time by the Committee.
|
(b)
|
A Participant’s election to defer receipt of the payment of all or any portion of the Stock Units granted hereunder and related Dividend Equivalents to the date of his or her Separation from Service, as defined in clause (c) below, shall be effective if it was made on a deferral election form provided by the Committee and completed and delivered to the Committee no later than the last day of the calendar year preceding the calendar year in which the grant hereunder is made. Such election, if made, became irrevocable upon December 31 of the calendar year completed and delivered to the Committee. Such election shall remain in effect for grants of Stock Units in subsequent calendar years and becomes irrevocable as of each December 31 with respect to Stock Units granted for services performed in the immediately following calendar year, until modified or revoked by the Participant by the completion and delivery to the Committee of a form provided by the Committee for such purpose, setting out such modification or revocation; any such modification or revocation shall be effective only for Stock Units granted to the Participant for services performed in calendar years beginning after the calendar year in which such modification or revocation is
|
(c)
|
The entire balance of deferred Stock Units in the Stock Unit Account and deferred Dividend Equivalents in the Cash Account shall be paid to the Participant or to the Beneficiaries of the Participant (i) in a single lump sum on the 10th business day following the date the Participant incurs a Separation from Service, as defined below, or (ii) in up to 10 annual installments beginning on the 10th business day following the date the Participant incurs a Separation from Service, as defined below, as irrevocably designated by the Participant in the applicable form described in clause (b) above. In the absence of a designation, the entire balance of deferred Stock Units in the Stock Unit Account and deferred Dividend Equivalents in the Cash Account shall be paid in a single lump sum on the 10
th
business day following the date the Participant incurs a Separation from Service, as defined below. For purposes of this Agreement, the term “Separation from Service” shall mean the date on which the Participant dies or otherwise terminates his or her membership on the Board of Directors of Northern.
|
(d)
|
Deferred Stock Units in the Stock Unit Account shall be distributed only in shares of Common Stock. In the event of a single lump sum distribution in Common Stock, a certificate (or a non-certificated book entry) representing the number of full shares of Common Stock equal to the number of such Stock Units in the Stock Unit Account, registered in the name of the Participant or the Beneficiaries of the Participant, shall be distributed to the Participant or the Beneficiaries of the Participant, on the distribution date described in Paragraph 7(c) above. In the event of a distribution in Common Stock in up to 10 annual installments, a certificate (or a non-certificated book entry) representing the number of full shares of Common Stock equal to a fraction (the numerator of which shall be the number of Stock Units in the Stock Unit Account, and the denominator of which shall be the number of annual installments designated by the Participant), registered in the name of the Participant or the Beneficiaries of the Participant, shall be distributed to the Participant or the Beneficiaries of the Participant, on the distribution date described in Paragraph 7(c) above in each year of the installment period, provided that the number of shares in each of the installments shall be rounded to the nearest whole number of shares.
|
(e)
|
Deferred Dividend Equivalents in the Participant’s Cash Account shall be distributed in cash. In the event of a single lump sum distribution in cash, the entire balance of the Participant’s Cash Account shall be distributed to the Participant or the Beneficiaries of the Participant on the distribution date described in Paragraph 7(c) above. In the event of a distribution in cash in up to 10 annual installments, the balance of the Cash Account shall continue to accrue interest and shall be distributed to the Participant or the Beneficiaries of the Participant on the distribution date described in Paragraph 7(c) above in each year of the installment period in an amount equal to the then current balance in the
|
8.
|
Delivery of Shares
. Northern may delay the issuance or delivery of shares of Common Stock if Northern reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which Northern reasonably anticipates that such issuance or delivery will not cause such violation.
|
9.
|
Adjustment
. The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 5.7 of the Plan.
|
10.
|
No Obligation to Reelect
. Nothing in the Plan or this Agreement shall be deemed to create an obligation on the part of the Board of Directors to nominate the Participant for reelection by Northern’s stockholders or to fill any vacancy upon action of the Board of Directors.
|
11.
|
Nontransferability
. No interest hereunder of the Participant or any Beneficiary shall be assignable or transferable by voluntary or involuntary act or by operation of law other than by testamentary bequest or devise or the laws of descent or distribution, all rights hereunder shall be wholly unalienable and beyond the power of any person to anticipate or in any way create a lien or encumbrance thereon; and distribution shall be made only to (i) the Participant, (ii) the Participant’s personal representative in the event of the Participant’s adjudicated disability, or (iii) the Participant’s Beneficiaries in the event of the Participant’s death, upon his, her or their own personal receipts or endorsements. Any effort to exercise the powers herein denied shall be wholly ineffective and shall be grounds for termination by the Committee of all rights hereunder.
|
12.
|
Withholding
. In the event that federal, state or local taxes must be withheld from any distribution hereunder, (a) Northern shall deduct from any such distribution in cash the amount of such required withholding and, (b) with respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, withholding obligations, if any, shall be satisfied from one of the following elected by the Participant: (i) by cash payment by the Participant; (ii) through the surrender of shares of Common Stock already owned by the Participant that are acceptable to the Committee; or (iii) through the surrender of shares of Common Stock to which the Participant is otherwise entitled under the Plan, provided, however, that such shares under this clause (iii) may be used to satisfy not more than Northern’s minimum statutory withholding obligation, if any (based on minimum statutory withholding rates for Federal and state tax purposes, including payroll taxes, that are applicable to such taxable income).
|
13.
|
Administration
. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as
|
14.
|
No Rights as Shareholder
. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Stock Units.
|
15.
|
Interpretation
. Any interpretation by the Committee of the terms and conditions of the Plan, this Agreement or any guidelines shall be final. This Agreement shall be construed under the laws of the State of Delaware without regard to the conflict of law provisions of any state. Capitalized terms not defined in this Agreement shall have the meanings assigned to them in the Plan.
|
16.
|
Sole Agreement
. This Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of this Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors.
|
1.
|
Grant
. Northern hereby grants to the Participant an award of Stock Units equal in value to $[________], as determined by the closing sale price of Northern’s common stock (“Common Stock”) on [_________], 20[_], (which represents a prorated award based on the Participant’s service on the Board from the effective date of election on [__________], 20[_] to the regular vesting date set forth in Paragraph 5 below), subject to the terms and conditions of the Plan and this Agreement. A Stock Unit is the right, subject to the terms and conditions of the Plan and this Agreement, to receive a distribution of a share of Common Stock, pursuant to Paragraph 6 of this Agreement.
|
2.
|
Stock Unit Account
. Northern shall maintain an account (“Stock Unit Account”) on its books in the name of the Participant which shall reflect the number of Stock Units awarded to the Participant that the Participant is eligible to receive in distribution pursuant to Paragraph 6 of this Agreement.
|
3.
|
Dividend Equivalents
. Except as provided below in Paragraph 7 of this Agreement, upon the payment of any dividend on Common Stock occurring during the period preceding the distribution of the Participant’s Stock Unit award pursuant to Paragraph 6 of this Agreement, Northern shall credit to a cash account maintained by Northern on its books in the name of the Participant with respect to the Stock Units (“Dividend Equivalent Account”) an amount equal in value to the dividends that the Participant would have received had the Participant been the actual owner on the record date of the number of shares of Common Stock represented by the Stock Units in the Participant’s Stock Unit Account on that date (“Dividend Equivalents”). No interest or earnings shall be credited to the Dividend Equivalent Account. Such Dividend Equivalents shall be subject to the same forfeiture, vesting, and distribution provisions of this Agreement applicable to the Stock Units to which such Dividend Equivalents relate.
|
4.
|
Forfeiture
. If the Participant incurs a Separation from Service, as defined in Paragraph 7(c) below, prior to the vesting date set forth in Paragraph 5 of this Agreement, the Participant’s Stock Units shall be forfeited and revert to Northern, and Northern shall have no obligation after such date to pay Dividend Equivalents pursuant to Paragraph 3 of this Agreement or any other further obligation to the Participant under this Agreement with respect to such Stock Units.
|
5.
|
Vesting
. The Participant shall become 100% vested in the Stock Units granted hereunder upon the date (the “vesting date”) that is the earliest to occur of (a) the date of Northern’s 2018 Annual Meeting of Stockholders (the “regular vesting date”), (b) the date of the Participant’s death, or (c) the date of a Change in Control, provided that the Participant has not incurred a Separation from Service, as defined in Paragraph 7(c) below, prior to the earliest of the foregoing three events.
|
6.
|
Distribution
. Except as provided below in Paragraph 7 of this Agreement,
|
(a)
|
Subject to Paragraph 6(b), if the Participant has become 100% vested in the Stock Units granted hereunder upon the regular vesting date, the Stock Units shall be distributed upon such regular vesting date, provided that the distribution shall be treated as made on such date if made within the period described in Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that the Participant shall in no event have the right directly or indirectly to designate the taxable year of payment. Stock Units shall be distributed only in shares of Common Stock so that, pursuant to Paragraph 1 of this Agreement and this Paragraph 6, a Participant shall be entitled to receive one share of Common Stock for each Stock Unit in the Participant’s Stock Unit Account.
|
(b)
|
If a Participant’s service on the Board of Directors of Northern shall terminate by reason of death prior to the regular vesting date, all cash (as provided in Paragraph 7) or Common Stock then distributable hereunder with respect to the Participant shall be distributed to such individual, trustee, trust or other entity (“Beneficiary”) as the Participant shall have designated by an instrument in writing last filed with, and in a form and manner acceptable to, Northern prior to death, or in the absence of a designation, according to the applicable laws of descent. Except as otherwise provided in Paragraph 7(c), such distribution shall be made on the date of death, provided that the distribution shall be treated as made on such date if made within the period described in Treasury Regulation Section 1.409A-3(d), including without limitation the requirement that neither the Participant (nor the Beneficiary) shall have the right directly or indirectly to designate the taxable year of payment.
|
(c)
|
If the Participant dies on or after the regular vesting date, but prior to the distribution of all amounts to which the Participant is entitled hereunder, all cash or Common Stock then distributable hereunder with respect to the Participant shall be distributed to the Beneficiary designated by the Participant, or, if none,
|
(d)
|
In the case of Stock Units that become vested as a result of a Change in Control, the Participant shall not be entitled to a distribution of such Stock Units upon such Change in Control. Instead, any Stock Units that become vested as a result of a Change in Control shall be distributed only upon the date, or the occurrence of the event upon which, distribution would have been made in the absence of such Change in Control. For purposes of this Paragraph 6(d) the Annual Meeting of Stockholders in 20[__] shall be deemed to occur upon the third Tuesday in April in that year.
|
7.
|
Voluntary Deferral
.
|
(a)
|
Subject to applicable law, receipt of the payment of all or any portion of the Stock Units shall be deferred until the date on which the Participant incurs a Separation from Service, as defined in clause (c) below, if the Participant has filed a deferral election, subject to and in accordance with the provisions of Paragraph 7(b), no later than the deadline described in Paragraph 7(b). Any such election shall likewise apply to the Dividend Equivalents payable with respect to such deferred Stock Units. Deferred Dividend Equivalents shall be credited to a cash account with respect to the Stock Units (“Cash Account”) maintained by Northern on its books in the name of the Participant. Until the entire balance of a Cash Account has been paid to the Participant or to the Participant’s Beneficiaries (as defined in Paragraph 6), such balance shall be adjusted on the last day of each calendar quarter to reflect accrued interest on such balance based on the rate of interest determined from time to time by the Committee.
|
(b)
|
A Participant may elect to defer receipt of the payment of all or any portion of the Stock Units granted hereunder and related Dividend Equivalents to the date of his or her Separation from Service, as defined in clause (c) below only if the grant hereunder is made in the calendar year in which the Participant initially becomes eligible to participate in the Plan, and the election is made on a deferral election form provided by the Committee and completed and delivered to the Committee within 30 days after the date on which the Participant initially becomes eligible to participate in the Plan. Such election shall be effective with respect to Stock Units described in Paragraph 1 that are paid for services to be performed by the Participant after the date such deferral election form is completed and delivered to the Committee and becomes irrevocable with respect to such Stock Units and their related Dividend Equivalents upon completion and delivery of such deferral election form to the Committee. For purposes of applying the foregoing provisions of this clause (b), the plan aggregation rules of Treasury Regulation Section 1.409A-1(c) shall apply. A Participant’s election hereunder shall remain in effect for grants of Stock Units in subsequent calendar years and becomes irrevocable as of each December 31 with respect to Stock Units granted for services performed in the immediately following
|
(c)
|
The entire balance of deferred Stock Units in the Stock Unit Account and deferred Dividend Equivalents in the Cash Account shall be paid to the Participant or to the Beneficiaries of the Participant (i) in a single lump sum on the 10th business day following the date the Participant incurs a Separation from Service, as defined below, or (ii) in up to 10 annual installments beginning on the 10th business day following the date the Participant incurs a Separation from Service, as defined below, as irrevocably designated by the Participant in the applicable form described in clause (b) above. In the absence of a designation, the entire balance of deferred Stock Units in the Stock Unit Account and deferred Dividend Equivalents in the Cash Account shall be paid in a single lump sum on the 10
th
business day following the date the Participant incurs a Separation from Service, as defined below. For purposes of this Agreement, the term “Separation from Service” shall mean the date on which the Participant dies or otherwise terminates his or her membership on the Board of Directors of Northern.
|
(d)
|
Deferred Stock Units in the Stock Unit Account shall be distributed only in shares of Common Stock. In the event of a single lump sum distribution in Common Stock, a certificate (or a non-certificated book entry) representing the number of full shares of Common Stock equal to the number of such Stock Units in the Stock Unit Account, registered in the name of the Participant or the Beneficiaries of the Participant, shall be distributed to the Participant or the Beneficiaries of the Participant, on the distribution date described in Paragraph 7(c) above. In the event of a distribution in Common Stock in up to 10 annual installments, a certificate (or a non-certificated book entry) representing the number of full shares of Common Stock equal to a fraction (the numerator of which shall be the number of Stock Units in the Stock Unit Account, and the denominator of which shall be the number of annual installments designated by the Participant), registered in the name of the Participant or the Beneficiaries of the Participant, shall be distributed to the Participant or the Beneficiaries of the Participant, on the distribution date described in Paragraph 7(c) above in each year of the installment period, provided that the number of shares in each of the installments shall be rounded to the nearest whole number of shares.
|
(e)
|
Deferred Dividend Equivalents in the Participant’s Cash Account shall be distributed in cash. In the event of a single lump sum distribution in cash, the entire balance of the Participant’s Cash Account shall be distributed to the Participant or the Beneficiaries of the Participant on the distribution date
|
8.
|
Delivery of Shares
. Northern may delay the issuance or delivery of shares of Common Stock if Northern reasonably anticipates that such issuance or delivery will violate federal securities laws or other applicable law, provided that the issuance or delivery is made at the earliest date at which Northern reasonably anticipates that such issuance or delivery will not cause such violation.
|
9.
|
Adjustment
. The Stock Units provided herein are subject to adjustment in accordance with the provisions of Section 5.7 of the Plan.
|
10.
|
No Obligation to Reelect
. Nothing in the Plan or this Agreement shall be deemed to create an obligation on the part of the Board of Directors to nominate the Participant for reelection by Northern’s stockholders or to fill any vacancy upon action of the Board of Directors.
|
11.
|
Nontransferability
. No interest hereunder of the Participant or any Beneficiary shall be assignable or transferable by voluntary or involuntary act or by operation of law other than by testamentary bequest or devise or the laws of descent or distribution, all rights hereunder shall be wholly unalienable and beyond the power of any person to anticipate or in any way create a lien or encumbrance thereon; and distribution shall be made only to (i) the Participant, (ii) the Participant’s personal representative in the event of the Participant’s adjudicated disability, or (iii) the Participant’s Beneficiaries in the event of the Participant’s death, upon his, her or their own personal receipts or endorsements. Any effort to exercise the powers herein denied shall be wholly ineffective and shall be grounds for termination by the Committee of all rights hereunder.
|
12.
|
Withholding
. In the event that federal, state or local taxes must be withheld from any distribution hereunder, (a) Northern shall deduct from any such distribution in cash the amount of such required withholding and, (b) with respect to distributions in shares of Common Stock, subject to such rules and limitations as may be established by the Committee from time to time, withholding obligations, if any, shall be satisfied from one of the following elected by the Participant: (i) by cash payment by the Participant; (ii) through the surrender of shares of Common Stock already owned by the Participant that are acceptable to the Committee; or (iii) through the surrender of shares of Common Stock to which the Participant is otherwise entitled under the Plan, provided, however, that such shares under this clause (iii) may be used to satisfy not more than Northern’s minimum statutory withholding obligation, if any (based on minimum statutory
|
13.
|
Administration
. The Plan is administered by the Committee. The rights of the Participant hereunder are expressly subject to the terms and conditions of the Plan (including continued shareholder approval of the Plan), together with such guidelines as have been or may be adopted from time to time by the Committee. The Participant hereby acknowledges receipt of a copy of the Plan.
|
14.
|
No Rights as Shareholder
. Except as provided herein, the Participant will have no rights as a shareholder with respect to the Stock Units.
|
15.
|
Interpretation
. Any interpretation by the Committee of the terms and conditions of the Plan, this Agreement or any guidelines shall be final. This Agreement shall be construed under the laws of the State of Delaware without regard to the conflict of law provisions of any state. Capitalized terms not defined in this Agreement shall have the meanings assigned to them in the Plan.
|
16.
|
Sole Agreement
. This Agreement, together with the Plan, is the entire Agreement between the parties hereto, all prior oral and written representations being merged herein. No amendment or modification of the terms of this Agreement shall be binding on either party unless reduced to writing and signed by the party to be bound. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors.
|
1.
|
I have reviewed this report on Form 10-Q for the quarterly period ended
March 31, 2017
, of Northern Trust Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Frederick H. Waddell
|
Date:
|
May 2, 2017
|
Frederick H. Waddell
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this report on Form 10-Q for the quarterly period ended
March 31, 2017
, of Northern Trust Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ S. Biff Bowman
|
Date:
|
May 2, 2017
|
S. Biff Bowman
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
/s/ Frederick H. Waddell
|
Frederick H. Waddell
|
Chief Executive Officer
|
(Principal Executive Officer)
|
/s/ S. Biff Bowman
|
S. Biff Bowman
|
Chief Financial Officer
|
(Principal Financial Officer)
|