Item 1. Consolidated Financial Statements (unaudited)

CONSOLIDATED BALANCE SHEETS (UNAUDITED)			NORTHERN TRUST CORPORATION

(In Millions Except Share Information)			MARCH 31, 2024			DECEMBER 31, 2023
ASSETS
Cash and Due from Banks			$	5,308.7		$	4,791.5
Federal Reserve and Other Central Bank Deposits			40,269.9			34,326.2
Interest-Bearing Deposits with Banks			1,372.1			1,939.0
Securities Purchased under Agreements to Resell			500.1			784.7
Debt Securities
Available for Sale (Amortized cost of $25,941.9 and $23,659.0)			25,638.9			23,089.8
Held to Maturity (Fair value of $21,641.4 and $24,473.0)			23,497.9			26,221.7
Total Debt Securities			49,136.8			49,311.5
Loans
Commercial			25,417.1			25,412.8
Personal			21,925.5			22,204.2
Total Loans (Net of unearned income of $6.6 and $5.9)			47,342.6			47,617.0
Allowance for Credit Losses			(175.8)			(192.3)
Buildings and Equipment			488.0			502.2
Client Security Settlement Receivables			116.4			212.6
Goodwill			697.5			702.3
Other Assets			11,054.7			10,788.4
Total Assets			$	156,111.0		$	150,783.1
LIABILITIES
Deposits
Demand and Other Noninterest-Bearing			$	16,484.5		$	14,246.4
Savings, Money Market and Other Interest-Bearing			25,893.5			25,252.1
Savings Certificates and Other Time			5,636.6			4,109.7
Non U.S. Offices — Noninterest-Bearing			8,842.4			8,584.7
— Interest-Bearing			67,084.7			63,971.1
Total Deposits			123,941.7			116,164.0
Federal Funds Purchased			2,600.5			3,045.4
Securities Sold Under Agreements to Repurchase			511.4			784.7
Other Borrowings			6,526.2			6,567.8
Senior Notes			2,743.5			2,773.2
Long-Term Debt			4,069.0			4,065.0
Other Liabilities			3,616.9			5,485.1
Total Liabilities			144,009.2			138,885.2
STOCKHOLDERS' EQUITY
Preferred Stock, No Par Value; Authorized 10,000,000 shares:
Series D, authorized and outstanding shares of 5,000			493.5			493.5
Series E, authorized and outstanding shares of 16,000			391.4			391.4
Common Stock, $1.66 2/3 Par Value; Authorized 560,000,000 shares;
Outstanding shares of 204,591,724 and 205,126,224			408.6			408.6
Additional Paid-In Capital			983.5			1,009.6
Retained Earnings			14,278.9			14,233.8
Accumulated Other Comprehensive Loss			(917.6)			(1,137.9)
Treasury Stock (40,579,800 and 40,045,300 shares, at cost)			(3,536.5)			(3,501.1)
Total Stockholders’ Equity			12,101.8			11,897.9
Total Liabilities and Stockholders’ Equity			156,111.0			150,783.1

See accompanying notes to the consolidated financial statements.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)			NORTHERN TRUST CORPORATION

			THREE MONTHS ENDED MARCH 31,
(In Millions Except Share Information)			2024			2023
Noninterest Income
Trust, Investment and Other Servicing Fees			$	1,142.9		$	1,063.6
Foreign Exchange Trading Income			57.0			53.0
Treasury Management Fees			9.3			8.4
Security Commissions and Trading Income			37.9			34.7
Other Operating Income			61.0			46.8
Investment Security Gains (Losses), net			(189.4)			6.9
Total Noninterest Income			1,118.7			1,213.4
Net Interest Income
Interest Income			2,445.6			1,455.4
Interest Expense			1,917.5			924.2
Net Interest Income			528.1			531.2
Provision for Credit Losses			(8.5)			15.0
Net Interest Income after Provision for Credit Losses			536.6			516.2
Noninterest Expense
Compensation			627.1			595.2
Employee Benefits			101.1			101.0
Outside Services			229.3			210.8
Equipment and Software			252.7			231.7
Occupancy			54.1			61.3
Other Operating Expense			100.4			85.6
Total Noninterest Expense			1,364.7			1,285.6
Income before Income Taxes			290.6			444.0
Provision for Income Taxes			75.9			109.4
Net Income			$	214.7		$	334.6
Preferred Stock Dividends			16.2			16.2
Net Income Applicable to Common Stock			$	198.5		$	318.4
Per Common Share
Net Income – Basic			$	0.96		$	1.51
– Diluted			0.96			1.51
Average Number of Common Shares Outstanding
– Basic			204,628,796			208,186,841
– Diluted			205,134,845			208,730,389

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)			NORTHERN TRUST CORPORATION

			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
Net Income			$	214.7		$	334.6
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications)
Net Unrealized Gains (Losses) on Available for Sale Debt Securities			213.4			180.2
Net Unrealized Gains (Losses) on Cash Flow Hedges			(0.7)			(0.1)
Net Foreign Currency Adjustments			4.6			22.7
Net Pension and Other Postretirement Benefit Adjustments			3.0			0.2
Other Comprehensive Income (Loss)			220.3			203.0
Comprehensive Income (Loss)			$	435.0		$	537.6

See accompanying notes to the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)			NORTHERN TRUST CORPORATION

			THREE MONTHS ENDED MARCH 31, 2024
(In Millions Except Per Share Information)			PREFERRED STOCK			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL			RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)			TREASURY STOCK			TOTAL
Balance at December 31, 2023			$	884.9		$	408.6		$	1,009.6		$	14,233.8		$	(1,137.9)		$	(3,501.1)		$	11,897.9
Net Income			—			—			—			214.7			—			—			214.7
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications)			—			—			—			—			220.3			—			220.3
Dividends Declared:
Common Stock, $0.75 per share			—			—			—			(153.4)			—			—			(153.4)
Preferred Stock			—			—			—			(16.2)			—			—			(16.2)
Stock Awards and Options Exercised			—			—			(26.1)			—			—			97.1			71.0
Stock Purchased			—			—			—			—			—			(132.0)			(132.0)
Excise Tax on Share Repurchases			—			—			—			—			—			(0.5)			(0.5)
Balance at March 31, 2024			$	884.9		$	408.6		$	983.5		$	14,278.9		$	(917.6)		$	(3,536.5)		$	12,101.8

See accompanying notes to the consolidated financial statements.

			THREE MONTHS ENDED MARCH 31, 2023
(In Millions Except Per Share Information)			PREFERRED STOCK			COMMON STOCK			ADDITIONAL PAID-IN CAPITAL			RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)			TREASURY STOCK			TOTAL
Balance at December 31, 2022			$	884.9		$	408.6		$	983.5		$	13,798.5		$	(1,569.2)		$	(3,246.8)		$	11,259.5
Net Income			—			—			—			334.6			—			—			334.6
Other Comprehensive Income (Loss) (Net of Tax and Reclassifications)			—			—			—			—			203.0			—			203.0
Dividends Declared:
Common Stock, $0.75 per share			—			—			—			(158.6)			—			—			(158.6)
Preferred Stock			—			—			—			(16.2)			—			—			(16.2)
Stock Awards and Options Exercised			—			—			(19.0)			—			—			85.4			66.4
Stock Purchased			—			—			—			—			—			(100.9)			(100.9)
Balance at March 31, 2023			$	884.9		$	408.6		$	964.5		$	13,958.3		$	(1,366.2)		$	(3,262.3)		$	11,587.8

See accompanying notes to the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)			NORTHERN TRUST CORPORATION

			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income			$	214.7		$	334.6
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities
Investment Security Losses/(Gains)			189.4			(6.9)
Amortization and Accretion of Securities and Unearned Income, net			(7.7)			7.0
Provision for Credit Losses			(8.5)			15.0
Depreciation and Amortization			170.3			154.9
Pension Plan Contributions			(208.0)			(16.5)
Change in Receivables			(173.4)			(193.1)
Change in Interest Payable			56.4			59.8
Change in Collateral With Derivative Counterparties, net			(1,118.0)			(717.8)
Other Operating Activities, net			(567.8)			198.1
Net Cash Used in Operating Activities			(1,452.6)			(164.9)
CASH FLOWS FROM INVESTING ACTIVITIES
Change in Securities Purchased under Agreements to Resell			251.9			36.4
Change in Interest-Bearing Deposits with Banks			523.3			360.0
Net Change in Federal Reserve and Other Central Bank Deposits			(6,267.8)			1,021.6
Purchases of Held to Maturity Debt Securities			(6,134.3)			(9,867.8)
Proceeds from the Maturity and Redemption of Held to Maturity Debt Securities			8,606.3			10,412.9
Purchases of Available for Sale Debt Securities			(5,537.5)			(1,273.9)
Proceeds from the Maturity and Sales of Available for Sale Debt Securities			2,894.5			3,626.5
Change in Loans			253.7			528.9
Purchases of Buildings and Equipment			(14.3)			(11.5)
Purchases and Development of Computer Software			(113.5)			(117.6)
Change in Client Security Settlement Receivables			90.7			400.2
Other Investing Activities, net			653.6			(196.5)
Net Cash (Used in) / Provided by Investing Activities			(4,793.4)			4,919.2
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Deposits			7,982.9			(10,478.1)
Change in Federal Funds Purchased			(445.0)			2,590.4
Change in Securities Sold under Agreements to Repurchase			(273.3)			(204.3)
Change in Short-Term Other Borrowings			(30.5)			3,766.3
Treasury Stock Purchased			(132.0)			(100.9)
Net Proceeds from Stock Options			4.1			1.6
Cash Dividends Paid on Common Stock			(153.6)			(156.5)
Cash Dividends Paid on Preferred Stock			(16.2)			(16.2)
Other Financing Activities, net			(0.4)			—
Net Cash Provided by / (Used in) Financing Activities			6,936.0			(4,597.7)
Effect of Foreign Currency Exchange Rates on Cash			(172.8)			15.1
Change in Cash and Due from Banks			517.2			171.7
Cash and Due from Banks at Beginning of Period			4,791.5			4,654.2
Cash and Due from Banks at End of Period			$	5,308.7		$	4,825.9
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest Paid			$	1,857.0		$	864.1
Income Taxes Paid			39.3			31.2
Reclassification of certain cash collateral received from Other Operating Activities to Deposits (1)			765.3			—

(1) Beginning January 1, 2024, Northern Trust reclassified certain cash collateral received from Other Liabilities to Deposits on the consolidated statement of financial condition. Prior periods have not been restated.

See accompanying notes to the consolidated financial statements.

Notes to Consolidated Financial Statements (unaudited)

Note 1 – Basis of Presentation

The consolidated financial statements include the accounts of Northern Trust Corporation (Corporation) and its wholly-owned subsidiary, The Northern Trust Company (Bank), and various other wholly-owned subsidiaries of the Corporation and Bank. Throughout the notes to the consolidated financial statements, the term “Northern Trust” refers to the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements, as of and for the periods ended March 31, 2024 and 2023, have not been audited by the Corporation’s independent registered public accounting firm. In the opinion of management, all accounting entries and adjustments, including normal recurring accruals, necessary for a fair presentation of the financial position and the results of operations for the interim periods have been made. The accounting and financial reporting policies of Northern Trust conform to U.S. generally accepted accounting principles (GAAP) and reporting practices prescribed for the banking industry. For a description of Northern Trust’s significant accounting policies, refer to Note 1—Summary of Significant Accounting Policies included under Item 8. Financial Statements and Supplementary Data in the Annual Report on Form 10-K for the year ended December 31, 2023.

Note 2 – Recent Accounting Pronouncements

On January 1, 2024, Northern Trust adopted Accounting Standards Update (ASU) No. 2023-02, “Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method—a consensus of the Emerging Issues Task Force” (ASU 2023-02). The amendments in ASU 2023-02 allow entities to elect the proportional amortization method to account for tax equity investments if certain conditions are met regardless of the tax credit program from which the income tax credits are received. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the income tax credits and other income tax benefits received and recognizes the net amortization and income tax credits and other income tax benefits in the income statement as a component of income tax expense (benefit). In addition, ASU 2023-02 requires specific disclosures that must be applied to all investments that generate income tax credits and other income tax benefits for which the entity has elected to apply the proportional amortization method in accordance with Subtopic 323-740. Upon adoption of ASU 2023-02, there was no significant impact to Northern Trust’s consolidated balance sheets or consolidated statements of income. Please refer to Note 19—Variable Interest Entities for further information.

On January 1, 2024, Northern Trust adopted ASU No. 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (ASU 2022-03). The amendments in ASU 2022-03 clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. Additionally, ASU 2022-03 introduces new disclosure requirements to provide investors with information about contractual sale restrictions including the nature and remaining duration of these restrictions. Upon adoption of ASU 2022-03, there was no impact to Northern Trust’s consolidated balance sheets or consolidated statements of income.

Notes to Consolidated Financial Statements (unaudited) (continued)

Note 3 – Fair Value Measurements

Fair Value Hierarchy. The following describes the hierarchy of valuation inputs (Levels 1, 2, and 3) used to measure fair value and the primary valuation methodologies used by Northern Trust for financial instruments measured at fair value on a recurring basis. Observable inputs reflect market data obtained from sources independent of the reporting entity; unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. GAAP requires an entity measuring fair value to maximize the use of observable inputs and minimize the use of unobservable inputs and establishes a fair value hierarchy of inputs. Financial instruments are categorized within the hierarchy based on the lowest level input that is significant to their valuation. No transfers into or out of Level 3 occurred during the three months ended March 31, 2024 or the year ended December 31, 2023.

Level 1 — Quoted, active market prices for identical assets or liabilities.

Northern Trust’s Level 1 assets are comprised primarily of available for sale (AFS) investments in U.S. Treasury securities.

Level 2 — Observable inputs other than Level 1 prices, such as quoted active market prices for similar assets or liabilities, quoted prices for identical or similar assets in inactive markets, and model-derived valuations in which all significant inputs are observable in active markets.

Northern Trust’s Level 2 assets include AFS and certain trading account debt securities, the fair values of which are determined predominantly by external pricing vendors. Prices received from vendors are compared to other vendor and third-party prices. If a security price obtained from a pricing vendor is determined to exceed predetermined tolerance levels that are assigned based on an asset type’s characteristics, the exception is researched and, if the price is not able to be validated, an alternate pricing vendor is utilized, consistent with Northern Trust’s pricing source hierarchy. As of March 31, 2024, Northern Trust’s AFS debt securities portfolio included 910 Level 2 debt securities with an aggregate market value of $19.5 billion. Substantially all were valued by external pricing vendors. As of December 31, 2023, Northern Trust’s AFS debt securities portfolio included 929 Level 2 debt securities with an aggregate market value of $19.5 billion. All 929 debt securities were valued by external pricing vendors.

Level 2 assets and liabilities also include derivative contracts which are valued internally using widely accepted income-based models that incorporate inputs readily observable in actively quoted markets and reflect the contractual terms of the contracts. Observable inputs include foreign exchange rates and interest rates for foreign exchange contracts; interest rates for interest rate swap contracts and forward contracts; and interest rates and volatility inputs for interest rate option contracts. Northern Trust evaluates the impact of counterparty credit risk and its own credit risk on the valuation of its derivative instruments. Factors considered include the likelihood of default by Northern Trust and its counterparties, the remaining maturities of the instruments, net exposures after giving effect to master netting arrangements or similar agreements, available collateral, and other credit enhancements in determining the appropriate fair value of derivative instruments. The resulting valuation adjustments have not been considered material.

Level 3 — Valuation techniques in which one or more significant inputs are unobservable in the marketplace.

Northern Trust’s Level 3 liabilities consist of swaps that Northern Trust entered into with the purchaser of 1.1 million and 1.0 million shares of Visa Inc. Class B common stock (Visa Class B common shares) previously held by Northern Trust and sold in June 2016 and 2015, respectively. Pursuant to the swaps, Northern Trust retains the risks associated with the ultimate conversion of the Visa Class B common shares into shares of Visa Inc. Class A common stock (Visa Class A common shares), such that the counterparty will be compensated for any dilutive adjustments to the conversion ratio and Northern Trust will be compensated for any anti-dilutive adjustments to the ratio. The swaps also require periodic payments from Northern Trust to the counterparty calculated by reference to the market price of Visa Class A common shares and a fixed rate of interest. The fair value of the swaps is determined using a discounted cash flow methodology. The significant unobservable inputs used in the fair value measurement are Northern Trust’s own assumptions about estimated changes in the conversion rate of the Visa Class B common shares into Visa Class A common shares, the date on which such conversion is expected to occur and the estimated growth rate of the Visa Class A common share price. See “Visa Class B Common Shares” under Note 20—Commitments and Contingent Liabilities for further information.

Northern Trust believes its valuation methods for its assets and liabilities carried at fair value are appropriate; however, the use of different methodologies or assumptions, particularly as applied to Level 3 assets and liabilities, could have a material effect on the computation of their estimated fair values.

The following table presents the fair values of Northern Trust’s Level 3 liabilities as of March 31, 2024 and December 31, 2023, as well as the valuation techniques, significant unobservable inputs, and quantitative information used to develop significant unobservable inputs for such liabilities as of such dates.

Notes to Consolidated Financial Statements (unaudited) (continued)

TABLE 30: LEVEL 3 SIGNIFICANT UNOBSERVABLE INPUTS

			MARCH 31, 2024
FINANCIAL INSTRUMENT			FAIR VALUE			VALUATION TECHNIQUE			UNOBSERVABLE INPUTS			INPUT VALUES									WEIGHTED-AVERAGE INPUT VALUES**(1)**
Swaps Related to Sale of Certain Visa Class B Common Shares			$21.0 million			Discounted Cash Flow			Conversion Rate			1.59x									1.59x
Visa Class A Appreciation			9.22%									9.22%
Expected Duration			6			-			24 months			10 months

(1) Weighted average of expected duration based on scenario probability.

			DECEMBER 31, 2023
FINANCIAL INSTRUMENT			FAIR VALUE			VALUATION TECHNIQUE			UNOBSERVABLE INPUTS			INPUT VALUES									WEIGHTED-AVERAGE INPUT VALUES(1)
Swaps Related to Sale of Certain Visa Class B Common Shares			$25.4 million			Discounted Cash Flow			Conversion Rate			1.59x									1.59x
Visa Class A Appreciation			10.49%									10.49%
Expected Duration			9			-			27 months			13 months

(1) Weighted average of expected duration based on scenario probability.

The following table presents assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, segregated by fair value hierarchy level.

TABLE 31: RECURRING BASIS HIERARCHY LEVELING

			MARCH 31, 2024
(In Millions)			LEVEL 1			LEVEL 2			LEVEL 3			NETTING			ASSETS/LIABILITIES AT FAIR VALUE
Debt Securities
Available for Sale
U.S. Government			$	6,112.3		$	—		$	—		$	—		$	6,112.3
Obligations of States and Political Subdivisions			—			295.0			—			—			295.0
Government Sponsored Agency			—			12,351.4			—			—			12,351.4
Non-U.S. Government			—			307.6			—			—			307.6
Corporate Debt			—			250.2			—			—			250.2
Covered Bonds			—			296.8			—			—			296.8
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			—			2,860.8			—			—			2,860.8
Other Asset-Backed			—			2,523.0			—			—			2,523.0
Commercial Mortgage-Backed			—			641.8			—			—			641.8
Total Available for Sale Debt Securities			6,112.3			19,526.6			—			—			25,638.9
Other Assets
Money Market Investment			95.0			—			—			—			95.0
Derivative Assets
Foreign Exchange Contracts			—			1,357.1			—			(699.0)			658.1
Interest Rate Contracts			—			404.0			—			(215.2)			188.8
Total Derivative Assets			—			1,761.1			—			(914.2)			846.9
Other Liabilities
Derivative Liabilities
Foreign Exchange Contracts			—			1,318.1			—			(1,051.2)			266.9
Interest Rate Contracts			—			477.9			—			(2.7)			475.2
Other Financial Derivatives(1)			—			—			21.0			(16.2)			4.8
Total Derivative Liabilities			$	—		$	1,796.0		$	21.0		$	(1,070.1)		$	746.9

Note: Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting arrangements or similar agreements exist between Northern Trust and the counterparty. As of March 31, 2024, derivative assets and liabilities shown above also include reductions of $181.0 million and $336.9 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

Notes to Consolidated Financial Statements (unaudited) (continued)

			DECEMBER 31, 2023
(In Millions)			LEVEL 1			LEVEL 2			LEVEL 3			NETTING			ASSETS/LIABILITIES AT FAIR VALUE
Debt Securities
Available for Sale
U.S. Government			$	3,622.2		$	—		$	—		$	—		$	3,622.2
Obligations of States and Political Subdivisions			—			295.8			—			—			295.8
Government Sponsored Agency			—			11,553.0			—			—			11,553.0
Non-U.S. Government			—			264.4			—			—			264.4
Corporate Debt			—			279.5			—			—			279.5
Covered Bonds			—			347.1			—			—			347.1
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			—			2,899.9			—			—			2,899.9
Other Asset-Backed			—			2,962.6			—			—			2,962.6
Commercial Mortgage-Backed			—			865.3			—			—			865.3
Total Available for Sale			3,622.2			19,467.6			—			—			23,089.8
Trading Account			—			—			—			—			—
Total Available for Sale Debt Securities			3,622.2			19,467.6			—			—			23,089.8
Other Assets
Money Market Investment			95.0			—			—			—			95.0
Derivative Assets
Foreign Exchange Contracts			—			3,266.7			—			(2,937.2)			329.5
Interest Rate Contracts			—			301.5			—			(189.5)			112.0
Total Derivative Assets			—			3,568.2			—			(3,126.7)			441.5
Other Liabilities
Derivative Liabilities
Foreign Exchange Contracts			—			3,255.2			—			(2,175.7)			1,079.5
Interest Rate Contracts			—			369.2			—			(6.0)			363.2
Other Financial Derivatives(1)			—			—			25.4			(23.7)			1.7
Total Derivative Liabilities			$	—		$	3,624.4		$	25.4		$	(2,205.4)		$	1,444.4

Note: Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting arrangements or similar agreements exist between Northern Trust and the counterparty. As of December 31, 2023, derivative assets and liabilities shown above also include reductions of $2,093.8 million and $1,172.5 million, respectively, as a result of cash collateral received from and deposited with derivative counterparties.

(1) Consists of swaps related to the sale of certain Visa Class B common shares.

The following table presents the changes in Level 3 liabilities for the three months ended March 31, 2024 and 2023.

TABLE 32: CHANGES IN LEVEL 3 LIABILITIES

(In Millions)			SWAPS RELATED TO SALE OF CERTAIN VISA CLASS B COMMON SHARES
THREE MONTHS ENDED MARCH 31,			2024			2023
Fair Value at January 1			$	25.4		$	34.8
Total (Gains) Losses:
Included in Earnings(1)			1.2			7.6
Purchases, Issues, Sales, and Settlements
Settlements			(5.5)			(7.8)
Fair Value at March 31			$	21.1		$	34.6

(1) (Gains) losses are recorded in Other Operating Income on the consolidated statements of income.

Carrying values of assets and liabilities that are not measured at fair value on a recurring basis may be adjusted to fair value in periods subsequent to their initial recognition, for example, to record an impairment of an asset. GAAP requires entities to separately disclose these subsequent fair value measurements and to classify them under the fair value hierarchy.

Assets measured at fair value on a nonrecurring basis at March 31, 2024 and December 31, 2023, all of which were categorized as Level 3 under the fair value hierarchy, were comprised of nonaccrual loans whose values were based on real estate and other available collateral, and of other real estate owned (OREO) properties.

Fair values of real estate loan collateral were estimated using a market approach typically supported by third-party valuations and property-specific fees and taxes. The fair values of real estate loan collateral are subject to adjustments to reflect management’s judgment as to realizable value. The fair value of collateral-dependent nonaccrual loans totaled $0.1 million at

Notes to Consolidated Financial Statements (unaudited) (continued)

March 31, 2024. Due to immateriality, management did not apply a discount factor to the balance as of March 31, 2024. Collateral-dependent nonaccrual loans that have been adjusted to fair value totaled $43.3 million at December 31, 2023. Management adjustments consisted of a range of discount factors from 0.0% to 20.0% with a weighted average of 2.0% as of December 31, 2023. Other loan collateral, which typically consists of accounts receivable, inventory and equipment, is valued using a market approach adjusted for asset-specific characteristics and in limited instances third-party valuations are used. OREO assets are carried at the lower of cost or fair value less estimated costs to sell, with fair value typically based on third-party appraisals.

The following table presents the fair values of Northern Trust’s Level 3 assets that were measured at fair value on a nonrecurring basis as of March 31, 2024 and December 31, 2023, as well as the valuation technique, significant unobservable inputs and quantitative information used to develop the significant unobservable inputs for such assets as of such dates.

TABLE 33: LEVEL 3 NONRECURRING BASIS SIGNIFICANT UNOBSERVABLE INPUTS

			MARCH 31, 2024
FINANCIAL INSTRUMENT			FAIR VALUE**(1)**			VALUATION TECHNIQUE			UNOBSERVABLE INPUTS			INPUT VALUES									WEIGHTED-AVERAGE INPUT VALUES
Loans			$0.1 million			Market Approach			Discount factor applied to real estate collateral-dependent loans to reflect realizable value			N/A									N/A

(1) Includes real estate collateral-dependent loans and other collateral-dependent loans.

			DECEMBER 31, 2023
FINANCIAL INSTRUMENT			FAIR VALUE(1)			VALUATION TECHNIQUE			UNOBSERVABLE INPUTS			INPUT VALUES									WEIGHTED-AVERAGE INPUT VALUES
Loans			$43.3 million			Market Approach			Discount factor applied to real estate collateral-dependent loans to reflect realizable value			0.0		%	-			20.0%			2.0%

(1) Includes real estate collateral-dependent loans and other collateral-dependent loans.

Notes to Consolidated Financial Statements (unaudited) (continued)

The following tables present the book value and estimated fair value, including the fair value hierarchy level, of Northern Trust’s financial instruments that are not measured at fair value on the consolidated balance sheets as of March 31, 2024 and December 31, 2023. The following tables exclude those items measured at fair value on a recurring basis.

TABLE 34: FAIR VALUE OF FINANCIAL INSTRUMENTS

			MARCH 31, 2024
									ESTIMATED FAIR VALUE
(In Millions)			BOOK VALUE			TOTAL ESTIMATED FAIR VALUE			LEVEL 1			LEVEL 2			LEVEL 3
FINANCIAL ASSETS
Cash and Due from Banks			$	5,308.7		$	5,308.7		$	5,308.7		$	—		$	—
Federal Reserve and Other Central Bank Deposits			40,269.9			40,269.9			—			40,269.9			—
Interest-Bearing Deposits with Banks			1,372.1			1,372.1			—			1,372.1			—
Securities Purchased under Agreements to Resell			500.1			500.1			—			500.1			—
Debt Securities - Held to Maturity			23,497.9			21,641.4			—			21,641.4			—
Loans
Held for Investment			47,180.1			47,179.4			—			—			47,179.4
Other Assets			1,505.7			1,490.3			95.2			1,395.1			—
FINANCIAL LIABILITIES
Deposits			123,941.7			123,996.6			—			123,996.6			—
Federal Funds Purchased			2,600.5			2,600.5			—			2,600.5			—
Securities Sold Under Agreements to Repurchase			511.4			511.4			—			511.4			—
Other Borrowings			6,526.2			6,544.3			—			6,544.3			—
Senior Notes			2,743.5			2,771.3			—			2,771.3			—
Long-Term Debt			4,069.0			4,135.7			—			4,135.7			—
Unfunded Commitments			163.3			163.3			—			163.3			—
Other Liabilities			42.7			42.7			—			—			42.7

			DECEMBER 31, 2023
									ESTIMATED FAIR VALUE
(In Millions)			BOOK VALUE			TOTAL ESTIMATED FAIR VALUE			LEVEL 1			LEVEL 2			LEVEL 3
FINANCIAL ASSETS
Cash and Due from Banks			$	4,791.5		$	4,791.5		$	4,791.5		$	—		$	—
Federal Reserve and Other Central Bank Deposits			34,326.2			34,326.2			—			34,326.2			—
Interest-Bearing Deposits with Banks			1,939.0			1,939.0			—			1,939.0			—
Securities Purchased under Agreements to Resell			784.7			784.7			—			784.7			—
Debt Securities - Held to Maturity			26,221.7			24,473.0			—			24,473.0			—
Loans
Held for Investment			47,438.3			47,598.3			—			—			47,598.3
Other Assets			1,476.6			1,458.0			86.1			1,371.9			—
FINANCIAL LIABILITIES
Deposits			116,164.0			116,207.6			—			116,207.6			—
Federal Funds Purchased			3,045.4			3,045.4			—			3,045.4			—
Securities Sold Under Agreements to Repurchase			784.7			784.7			—			784.7			—
Other Borrowings			6,567.8			6,607.4			—			6,607.4			—
Senior Notes			2,773.2			2,798.1			—			2,798.1			—
Long-Term Debt			4,065.0			4,186.8			—			4,186.8			—
Unfunded Commitments			178.8			178.8			—			178.8			—
Other Liabilities			74.9			74.9			—			—			74.9

Notes to Consolidated Financial Statements (unaudited) (continued)

Note 4 – Securities

Available for Sale Debt Securities. The following tables provide the amortized cost and fair values as of March 31, 2024 and December 31, 2023, and remaining maturities of AFS debt securities as of March 31, 2024.

TABLE 35: RECONCILIATION OF AMORTIZED COST TO FAIR VALUE OF AVAILABLE FOR SALE DEBT SECURITIES

			MARCH 31, 2024
(In Millions)			AMORTIZED COST			GROSS UNREALIZED GAINS			GROSS UNREALIZED LOSSES			FAIR VALUE
U.S. Government			$	6,121.6		$	11.0		$	20.3		$	6,112.3
Obligations of States and Political Subdivisions			309.6			—			14.6			295.0
Government Sponsored Agency			12,501.9			12.5			163.0			12,351.4
Non-U.S. Government			325.0			0.1			17.5			307.6
Corporate Debt			256.5			0.2			6.5			250.2
Covered Bonds			302.7			0.3			6.2			296.8
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			2,912.6			3.8			55.6			2,860.8
Other Asset-Backed			2,552.4			1.6			31.0			2,523.0
Commercial Mortgage-Backed			659.6			0.2			18.0			641.8
Total			$	25,941.9		$	29.7		$	332.7		$	25,638.9

			DECEMBER 31, 2023
(In Millions)			AMORTIZED COST			GROSS UNREALIZED GAINS			GROSS UNREALIZED LOSSES			FAIR VALUE
U.S. Government			$	3,681.5		$	2.2		$	61.5		$	3,622.2
Obligations of States and Political Subdivisions			315.8			—			20.0			295.8
Government Sponsored Agency			11,744.3			9.0			200.3			11,553.0
Non-U.S. Government			284.8			—			20.4			264.4
Corporate Debt			287.5			0.1			8.1			279.5
Covered Bonds			356.8			—			9.7			347.1
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			3,013.8			0.1			114.0			2,899.9
Other Asset-Backed			3,061.0			1.6			100.0			2,962.6
Commercial Mortgage-Backed			913.5			0.2			48.4			865.3
Total			$	23,659.0		$	13.2		$	582.4		$	23,089.8

TABLE 36: REMAINING MATURITY OF AVAILABLE FOR SALE DEBT SECURITIES

MARCH 31, 2024			ONE YEAR OR LESS						ONE TO FIVE YEARS						FIVE TO TEN YEARS						OVER TEN YEARS						TOTAL
(In Millions)			AMORTIZED COST			FAIR VALUE			AMORTIZED COST			FAIR VALUE			AMORTIZED COST			FAIR VALUE			AMORTIZED COST			FAIR VALUE			AMORTIZED COST			FAIR VALUE
U.S. Government			$	348.1		$	344.2		$	3,422.0		$	3,412.9		$	2,351.5		$	2,355.2		$	—		$	—		$	6,121.6		$	6,112.3
Obligations of States and Political Subdivisions			—			—			111.2			106.5			198.4			188.5			—			—			309.6			295.0
Government Sponsored Agency			2,631.6			2,606.9			5,460.5			5,396.1			3,409.8			3,375.2			1,000.0			973.2			12,501.9			12,351.4
Non-U.S. Government			64.8			63.5			260.2			244.1			—			—			—			—			325.0			307.6
Corporate Debt			103.1			102.3			153.4			147.9			—			—			—			—			256.5			250.2
Covered Bonds			66.4			65.9			236.3			230.9			—			—			—			—			302.7			296.8
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			126.8			125.4			2,564.7			2,525.9			221.1			209.5			—			—			2,912.6			2,860.8
Other Asset-Backed			218.3			213.5			2,108.8			2,083.8			122.7			123.0			102.6			102.7			2,552.4			2,523.0
Commercial Mortgage-Backed			21.7			20.6			577.1			570.2			60.8			51.0			—			—			659.6			641.8
Total			$	3,580.8		$	3,542.3		$	14,894.2		$	14,718.3		$	6,364.3		$	6,302.4		$	1,102.6		$	1,075.9		$	25,941.9		$	25,638.9

Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments.

Notes to Consolidated Financial Statements (unaudited) (continued)

Available for Sale Debt Securities with Unrealized Losses. The following table provides information regarding AFS debt securities with no credit losses reported that had been in a continuous unrealized loss position for less than twelve months and for twelve months or longer as of March 31, 2024 and December 31, 2023.

TABLE 37: AVAILABLE FOR SALE DEBT SECURITIES IN UNREALIZED LOSS POSITION WITH NO CREDIT LOSSES REPORTED

MARCH 31, 2024			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			$	87.4		$	12.0		$	819.5		$	8.3		$	906.9		$	20.3
Obligations of States and Political Subdivisions			295.0			14.6			—			—			295.0			14.6
Government Sponsored Agency			145.3			7.9			8,865.2			155.1			9,010.5			163.0
Non-U.S. Government			63.5			1.3			189.5			16.2			253.0			17.5
Corporate Debt			36.9			0.9			55.7			0.9			92.6			1.8
Covered Bonds			60.4			0.5			104.9			5.7			165.3			6.2
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			110.0			5.0			1,066.0			50.6			1,176.0			55.6
Other Asset-Backed			13.9			0.7			995.0			30.3			1,008.9			31.0
Commercial Mortgage-Backed			6.0			0.4			607.4			17.6			613.4			18.0
Total			$	818.4		$	43.3		$	12,703.2		$	284.7		$	13,521.6		$	328.0

Note: Two corporate debt AFS securities with a fair value of $80.1 million and unrealized losses of $4.7 million have been excluded from the table above as these AFS securities have a $0.5 million allowance for credit losses reported as of March 31, 2024. Refer to the discussion further below and Note 6—Allowance for Credit Losses for further information.

DECEMBER 31, 2023			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			$	—		$	—		$	3,364.7		$	61.5		$	3,364.7		$	61.5
Obligations of States and Political Subdivisions			87.8			5.9			208.0			14.1			295.8			20.0
Government Sponsored Agency			331.0			11.5			9,486.6			188.8			9,817.6			200.3
Non-U.S. Government			—			—			264.5			20.4			264.5			20.4
Corporate Debt			4.4			0.1			143.0			2.1			147.4			2.2
Covered Bonds			—			—			213.2			9.7			213.2			9.7
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			—			—			2,477.0			105.8			2,477.0			105.8
Other Asset-Backed			19.8			2.0			1,998.7			98.0			2,018.5			100.0
Commercial Mortgage-Backed			60.0			4.6			776.6			43.8			836.6			48.4
Total			$	503.0		$	24.1		$	18,932.3		$	544.2		$	19,435.3		$	568.3

Note: Three corporate debt AFS securities with a fair value of $98.4 million and unrealized losses of $5.9 million and one sub-sovereign, supranational and non-U.S. agency bonds AFS security with a fair value of $71.0 million and unrealized loss of $8.2 million have been excluded from the table above as these AFS securities have a $1.2 million allowance for credit losses reported as of December 31, 2023. Refer to the discussion further below and Note 6—Allowance for Credit Losses for further information.

As of March 31, 2024, 784 AFS debt securities with a combined fair value of $13.5 billion were in an unrealized loss position without an allowance for credit losses, with their unrealized losses totaling $328.0 million. As of March 31, 2024, unrealized losses related to AFS debt securities of $163.0 million, $55.6 million, and $31.0 million related to government-sponsored agency securities, sub-sovereign, supranational and non-U.S. agency bonds and other asset-backed, respectively, which are primarily attributable to higher intermediate rates.

As of December 31, 2023, 898 AFS debt securities with a combined fair value of $19.4 billion were in an unrealized loss position without an allowance for credit losses, with their unrealized losses totaling $568.3 million. As of December 31, 2023, unrealized losses related to AFS debt securities of $200.3 million, $105.8 million, and $100.0 million related to government-sponsored agency, sub-sovereign, supranational and non-U.S. agency bonds, and other asset-backed, respectively, which are primarily attributable to lower yields and tighter spreads.

Notes to Consolidated Financial Statements (unaudited) (continued)

AFS debt securities impairment reviews are conducted quarterly to identify and evaluate securities that have indications of possible credit losses. A determination as to whether a security’s decline in market value is related to credit impairment takes into consideration numerous factors and the relative significance of any single factor can vary by security. Factors Northern Trust considers in determining whether impairment is credit-related include, but are not limited to, the severity of the impairment; the cause of the impairment; the financial condition and near-term prospects of the issuer; activity in the market of the issuer, which may indicate adverse credit conditions; Northern Trust’s intent regarding the sale of the security as of the balance sheet date; and the likelihood that Northern Trust will not be required to sell the security for a period of time sufficient to allow for the recovery of the security’s amortized cost basis. For each security meeting the requirements of Northern Trust’s internal screening process, an extensive review is conducted to determine if a credit loss has occurred. In January 2024, the Corporation sold certain AFS debt securities that were in an unrealized loss position. The $189.4 million loss is recognized in Investment Security Gains (Losses), net on the consolidated statements of income for the period ended March 31, 2024. In November 2023, the Corporation sold certain AFS debt securities that were in an unrealized loss position. The $176.4 million loss is recognized in Investment Security Gains (Losses), net on the consolidated statements of income for the period ended December 31, 2023.

There was a $0.7 million negative Provision for Credit Losses for AFS securities for the three months ended March 31, 2024. There was a $0.5 million Provision for Credit Losses for AFS securities for the three months ended March 31, 2023. There was a $0.5 million allowance for credit losses for AFS securities as of March 31, 2024 which was related to corporate debt securities and $1.2 million allowance for credit losses for AFS securities as of December 31, 2023, which was related to corporate debt securities and non-U.S. agency bonds. The process for identifying credit losses for AFS securities is based on the best estimate of cash flows to be collected from the security, discounted using the security’s effective interest rate. If the present value of the expected cash flows is found to be less than the current amortized cost of the security, an allowance for credit losses is generally recorded equal to the difference between the two amounts, limited to the amount the amortized cost basis exceeds the fair value of the security. For additional information, please refer to Note 6— Allowance for Credit Losses.

Held to Maturity Debt Securities. Held to maturity (HTM) debt securities consist of securities that management intends to, and Northern Trust has the ability to, hold until maturity. The following tables provide the amortized cost and fair values as of March 31, 2024 and December 31, 2023, and remaining maturities of HTM debt securities as of March 31, 2024.

TABLE 38: RECONCILIATION OF AMORTIZED COST TO FAIR VALUE OF HELD TO MATURITY DEBT SECURITIES

			MARCH 31, 2024
(In Millions)			AMORTIZED COST			GROSS UNREALIZED GAINS			GROSS UNREALIZED LOSSES			FAIR VALUE
Obligations of States and Political Subdivisions			$	2,571.6		$	0.3		$	89.5		$	2,482.4
Government Sponsored Agency			9,223.3			1.6			1,099.2			8,125.7
Non-U.S. Government			2,742.1			0.1			92.3			2,649.9
Corporate Debt			610.3			—			24.7			585.6
Covered Bonds			2,110.3			0.7			103.8			2,007.2
Certificates of Deposit			403.2			—			0.2			403.0
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			5,024.5			1.6			289.4			4,736.7
Other Asset-Backed			193.7			1.3			0.2			194.8
Commercial Mortgage-Backed			37.6			—			0.3			37.3
Other			581.3			—			162.5			418.8
Total			$	23,497.9		$	5.6		$	1,862.1		$	21,641.4

			DECEMBER 31, 2023
(In Millions)			AMORTIZED COST			GROSS UNREALIZED GAINS			GROSS UNREALIZED LOSSES			FAIR VALUE
Obligations of States and Political Subdivisions			2,563.9			0.5			72.4			2,492.0
Government Sponsored Agency			9,355.3			2.3			1,012.4			8,345.2
Non-U.S. Government			4,789.1			0.2			90.7			4,698.6
Corporate Debt			646.1			—			28.2			617.9
Covered Bonds			2,208.6			0.3			108.3			2,100.6
Certificates of Deposit			585.1			—			0.7			584.4
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			5,245.5			3.2			294.9			4,953.8
Other Asset-Backed			214.2			0.4			0.2			214.4
Commercial Mortgage-Backed			37.6			—			0.8			36.8
Other			576.3			—			147.0			429.3
Total			$	26,221.7		$	6.9		$	1,755.6		$	24,473.0

Notes to Consolidated Financial Statements (unaudited) (continued)

As of March 31, 2024, the $23.5 billion HTM debt securities portfolio had unrealized losses of $1.1 billion and $289.4 million related to government-sponsored agency and sub-sovereign, supranational and non-U.S. agency bonds, respectively, which are primarily attributable to higher intermediate rates. As of December 31, 2023, the $26.2 billion HTM debt securities portfolio had unrealized losses of $1.0 billion and $294.9 million related to government-sponsored agency and sub-sovereign, supranational and non-U.S. agency bonds, respectively, which are primarily attributable to lower yields and tighter spreads.

TABLE 39: REMAINING MATURITY OF HELD TO MATURITY DEBT SECURITIES

MARCH 31, 2024			ONE YEAR OR LESS						ONE TO FIVE YEARS						FIVE TO TEN YEARS						OVER TEN YEARS						TOTAL
(In Millions)			Amortized Cost			Fair Value			Amortized Cost			Fair Value			Amortized Cost			Fair Value			Amortized Cost			Fair Value			Amortized Cost			Fair Value
Obligations of States and Political Subdivisions			$	60.4		$	60.0		$	1,206.8		$	1,174.1		$	1,039.9		$	998.1		$	264.5		$	250.2		$	2,571.6		$	2,482.4
Government Sponsored Agency			990.3			883.6			3,419.8			3,038.5			3,138.9			2,768.6			1,674.3			1,435.0			9,223.3			8,125.7
Non-U.S. Government			1,569.9			1,564.7			1,139.3			1,056.5			32.9			28.7			—			—			2,742.1			2,649.9
Corporate Debt			247.8			243.0			347.3			329.8			15.2			12.8			—			—			610.3			585.6
Covered Bonds			493.8			492.7			1,389.9			1,310.4			226.6			204.1			—			—			2,110.3			2,007.2
Certificates of Deposit			403.2			403.0			—			—			—			—			—			—			403.2			403.0
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			1,058.4			1,035.1			3,960.5			3,697.1			5.6			4.5			—			—			5,024.5			4,736.7
Other Asset-Backed			1.2			1.2			120.7			121.5			71.8			72.1			—			—			193.7			194.8
Commercial Mortgage-Backed			—			—			37.6			37.3			—			—			—			—			37.6			37.3
Other			50.7			49.2			319.8			285.0			33.1			24.9			177.7			59.7			581.3			418.8
Total			$	4,875.7		$	4,732.5		$	11,941.7		$	11,050.2		$	4,564.0		$	4,113.8		$	2,116.5		$	1,744.9		$	23,497.9		$	21,641.4

Note: Mortgage-backed and asset-backed securities are included in the above table taking into account anticipated future prepayments.

Credit Quality Indicators. The following table provides the amortized cost of HTM debt securities by credit rating.

TABLE 40: AMORTIZED COST OF HELD TO MATURITY DEBT SECURITIES BY CREDIT RATING

			MARCH 31, 2024
($ In Millions)			AAA			AA			A			BBB			NOT RATED			TOTAL
Obligations of States and Political Subdivisions			$	956.9		$	1,614.7		$	—		$	—		$	—		$	2,571.6
Government Sponsored Agency			9,223.3			—			—			—			—			9,223.3
Non-U.S. Government			896.7			707.4			812.9			325.1			—			2,742.1
Corporate Debt			2.2			298.7			309.4			—			—			610.3
Covered Bonds			2,110.3			—			—			—			—			2,110.3
Certificates of Deposit			355.4			—			—			—			47.8			403.2
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			3,840.8			1,153.1			29.5			1.1			—			5,024.5
Other Asset-Backed			193.7			—			—			—			—			193.7
Commercial Mortgage-Backed			37.6			—			—			—			—			37.6
Other			52.5			—			—			—			528.8			581.3
Total			$	17,669.4		$	3,773.9		$	1,151.8		$	326.2		$	576.6		$	23,497.9
Percent of Total			75		%	16		%	5		%	1		%	3		%	100		%

Notes to Consolidated Financial Statements (unaudited) (continued)

			DECEMBER 31, 2023
($ In Millions)			AAA			AA			A			BBB			NOT RATED			TOTAL
U.S. Government			$	—		$	—		$	—		$	—		$	—		$	—
Obligations of States and Political Subdivisions			954.7			1,609.0			—			—			0.2			2,563.9
Government Sponsored Agency			9,355.3			—			—			—			—			9,355.3
Non-U.S. Government			813.3			1,179.6			2,463.3			332.9			—			4,789.1
Corporate Debt			2.1			302.6			341.4			—			—			646.1
Covered Bonds			2,208.6			—			—			—			—			2,208.6
Certificates of Deposit			545.9			—			—			—			39.2			585.1
Sub-Sovereign, Supranational and Non-U.S. Agency Bonds			4,047.9			1,166.5			30.0			1.1			—			5,245.5
Other Asset-Backed			214.2			—			—			—			—			214.2
Commercial Mortgage-Backed			37.6			—			—			—			—			37.6
Other			54.8			—			—			—			521.5			576.3
Total			$	18,234.4		$	4,257.7		$	2,834.7		$	334.0		$	560.9		$	26,221.7
Percent of Total			70		%	16		%	11		%	1		%	2		%	100		%

Credit quality indicators are metrics that provide information regarding the relative credit risk of debt securities. Northern Trust maintains a high quality debt securities portfolio, with 96% and 97% of the HTM portfolio at March 31, 2024 and December 31, 2023, respectively, comprised of securities rated A or higher. The remaining HTM debt securities portfolio was comprised of 1% rated BBB at both March 31, 2024 and December 31, 2023 and 3% and 2% which were not rated by Moody’s, S&P Global, or Fitch Ratings at March 31, 2024 and December 31, 2023, respectively. Securities not explicitly rated were grouped where possible under the credit rating of the issuer of the security.

Investment Security Gains and Losses. Proceeds of $2.0 billion from the sale of debt securities resulted in an investment security loss of $189.4 million for the three months ended March 31, 2024. The loss was comprised of $56.6 million in other asset-backed securities, $48.2 million in sub-sovereign, supranational and non-U.S. agency bonds, $34.8 million in U.S. government securities, $23.0 million in government-sponsored agency securities, $22.6 million in commercial mortgage-backed securities, and $4.2 million in covered bonds. Proceeds of $2.1 billion from the sale of debt securities resulted in investment security gains of $6.9 million for the three months ended March 31, 2023. The gain was comprised of a $9.8 million gain in obligations of states and political subdivisions, offset by losses of $1.2 million in corporate debt, $0.9 million in commercial mortgage-backed, and $0.8 million in other asset-backed securities.

Note 5 – Loans

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

TABLE 41: LOANS

(In Millions)			MARCH 31, 2024			DECEMBER 31, 2023
Commercial
Commercial and Institutional(1)			$	10,980.6		$	11,555.3
Commercial Real Estate			5,333.0			5,134.2
Non-U.S.(1)			2,372.7			2,778.5
Other			6,730.8			5,944.8
Total Commercial			25,417.1			25,412.8
Personal
Private Client			14,092.2			14,360.0
Residential Real Estate			6,315.2			6,327.1
Non-U.S.			387.2			428.8
Other			1,130.9			1,088.3
Total Personal			21,925.5			22,204.2
Total Loans			$	47,342.6		$	47,617.0

(1) Commercial and institutional and commercial-non-U.S. combined include $5.1 billion and $4.5 billion of private equity capital call finance loans at March 31, 2024 and December 31, 2023, respectively.

Residential real estate loans consist of traditional first lien mortgages and equity credit lines that generally require a loan-to-collateral value of no more than 65% to 80% at inception. Northern Trust’s equity credit line products generally have draw periods of up to 10 years and a balloon payment of any outstanding balance is due at maturity. Payments are interest-only with variable interest rates. Northern Trust does not offer equity credit lines that include an option to convert the outstanding balance to an amortizing payment loan. As of March 31, 2024 and December 31, 2023, equity credit lines totaled $229.9 million and

Notes to Consolidated Financial Statements (unaudited) (continued)

$228.7 million, respectively, and equity credit lines for which first liens were held by Northern Trust represented 98% and 96% of the total equity credit lines as of March 31, 2024 and December 31, 2023, respectively.

Included within the commercial-other, commercial-non-U.S., and personal-other classes are short-duration advances primarily related to the processing of custodied client investments, totaling $9.0 billion and $8.4 billion at March 31, 2024 and December 31, 2023, respectively. Demand deposit overdrafts reclassified as loan balances, primarily in personal-other, totaled $10.7 million and $12.1 million at March 31, 2024 and December 31, 2023, respectively.

Loans classified as held for sale are recorded at the lower of cost or fair value. There were no loans classified as held for sale at March 31, 2024 or December 31, 2023. There were no loans sold for the three months ended March 31, 2024 and March 31, 2023.

Credit Quality Indicators. Credit quality indicators are statistics, measurements or other metrics that provide information regarding the relative credit risk of loans. Northern Trust uses a variety of credit quality indicators to assess the credit risk of loans at the segment, class, and individual credit exposure levels.

As part of its credit process, Northern Trust utilizes an internal borrower risk rating system to support identification, approval, and monitoring of credit risk. Borrower risk ratings are used in credit underwriting and management reporting. Risk ratings are used for ranking the credit risk of borrowers and their probability of their default. Each borrower is rated using one of a number of ratings models, which consider both quantitative and qualitative factors. The ratings models vary among classes of loans in order to capture the unique risk characteristics inherent within each particular type of credit exposure. Provided below are the more significant performance indicator attributes considered within Northern Trust’s borrower rating models, by loan class.

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

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

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

• Non-U.S.: leverage, profit margin, liquidity, return on assets and capital levels;

• Residential Real Estate: payment history, credit bureau scores and loan-to-value ratio;

• Private Client: cash-flow-to-debt and net worth ratios, leverage and liquidity; and

• Personal-Other: cash-flow-to-debt and net worth ratios.

While the criteria vary by model, the objective is for the borrower ratings to be consistent in both the measurement and ranking of risk. Each model is calibrated to a master rating scale to support this consistency. Ratings for borrowers not in default range from “1” for the strongest credits to “7” for the weakest non-defaulted credits. Ratings of “8” or “9” are used for defaulted borrowers. Borrower risk ratings are monitored and are revised when events or circumstances indicate a change is required. Risk ratings are generally validated at least annually.

Loan segment and class balances as of March 31, 2024 and December 31, 2023 are provided in the following table, segregated by borrower ratings into “1 to 3,” “4 to 5” and “6 to 9” (watch list and nonaccrual status) categories by year of origination at amortized cost basis. Loans that are held for investment are reported at the principal amount outstanding, net of unearned income.

Notes to Consolidated Financial Statements (unaudited) (continued)

TABLE 42: CREDIT QUALITY INDICATOR AT AMORTIZED COST BASIS BY ORIGINATION YEAR

March 31, 2024			TERM LOANS																		REVOLVING LOANS			REVOLVING LOANS CONVERTED TO TERM LOANS
(In Millions)			2024			2023			2022			2021			2020			PRIOR			TOTAL
Commercial
Commercial and Institutional
Risk Rating:
1 to 3 Category			$	40.2		$	411.4		$	458.1		$	715.7		$	69.9		$	539.6		$	4,735.9		$	15.0		$	6,985.8
4 to 5 Category			51.1			757.9			757.4			627.1			117.6			218.3			1,196.2			78.6			3,804.2
6 to 9 Category			—			4.2			75.5			57.6			3.9			1.7			45.9			1.8			190.6
Total Commercial and Institutional			91.3			1,173.5			1,291.0			1,400.4			191.4			759.6			5,978.0			95.4			10,980.6
C&I Gross Charge-offs			—			(7.3)			(1.3)			—			—			—			—			—			(8.6)
Commercial Real Estate
Risk Rating:
1 to 3 Category			9.3			346.9			411.7			277.7			25.7			78.6			67.0			—			1,216.9
4 to 5 Category			151.9			1,617.5			1,087.7			392.9			208.6			340.6			204.5			7.8			4,011.5
6 to 9 Category			—			16.1			35.3			30.3			2.5			20.4			—			—			104.6
Total Commercial Real Estate			161.2			1,980.5			1,534.7			700.9			236.8			439.6			271.5			7.8			5,333.0
Commercial Real Estate Gross Charge-offs			—			—			(2.4)			—			—			—			—			—			(2.4)
Non-U.S.
Risk Rating:
1 to 3 Category			950.4			—			—			43.0			44.7			22.3			933.5			—			1,993.9
4 to 5 Category			176.9			26.9			0.8			—			—			100.7			58.2			—			363.5
6 to 9 Category			1.1			—			14.2			—			—			—			—			—			15.3
Total Non-U.S.			1,128.4			26.9			15.0			43.0			44.7			123.0			991.7			—			2,372.7
Other
Risk Rating:
1 to 3 Category			3,865.8			—			—			—			—			—			—			—			3,865.8
4 to 5 Category			2,865.0			—			—			—			—			—			—			—			2,865.0
Total Other			6,730.8			—			—			—			—			—			—			—			6,730.8
Other Gross Charge-offs			—			—			—			—			—			—			—			—			—
Total Commercial			8,111.7			3,180.9			2,840.7			2,144.3			472.9			1,322.2			7,241.2			103.2			25,417.1
Commercial Gross Charge-offs			—			(7.3)			(3.7)			—			—			—			—			—			(11.0)
Personal
Private Client
Risk Rating:
1 to 3 Category			28.9			472.7			109.5			49.5			60.1			96.0			5,056.1			168.2			6,041.0
4 to 5 Category			21.8			324.3			449.6			519.5			96.3			190.3			5,970.2			451.9			8,023.9
6 to 9 Category			—			16.2			0.2			—			—			—			10.9			—			27.3
Total Private Client			50.7			813.2			559.3			569.0			156.4			286.3			11,037.2			620.1			14,092.2
Residential Real Estate
Risk Rating:
1 to 3 Category			42.8			272.2			409.4			430.1			367.5			863.2			230.9			—			2,616.1
4 to 5 Category			44.3			203.3			738.1			766.8			675.2			1,042.9			161.7			—			3,632.3
6 to 9 Category			—			—			7.3			0.1			0.4			45.6			13.4			—			66.8
Total Residential Real Estate			87.1			475.5			1,154.8			1,197.0			1,043.1			1,951.7			406.0			—			6,315.2
Residential Real Estate Gross Charge-offs			—			—			—			—			—			(0.1)			—			—			(0.1)
Non-U.S.
Risk Rating:
1 to 3 Category			0.4			3.8			—			0.6			—			4.5			43.9			—			53.2
4 to 5 Category			—			23.9			15.5			23.3			—			24.9			231.0			7.4			326.0
6 to 9 Category			8.0			—			—			—			—			—			—			—			8.0
Total Non-U.S.			8.4			27.7			15.5			23.9			—			29.4			274.9			7.4			387.2
Other
Risk Rating:
1 to 3 Category			636.3			—			—			—			—			—			—			—			636.3
4 to 5 Category			494.6			—			—			—			—			—			—			—			494.6
Total Other			1,130.9			—			—			—			—			—			—			—			1,130.9
Total Personal			1,277.1			1,316.4			1,729.6			1,789.9			1,199.5			2,267.4			11,718.1			627.5			21,925.5
Personal Gross Charge-offs			—			—			—			—			—			(0.1)			—			—			(0.1)
Total Loans			$	9,388.8		$	4,497.3		$	4,570.3		$	3,934.2		$	1,672.4		$	3,589.6		$	18,959.3		$	730.7		$	47,342.6
Total Loans Gross Charge-offs (1)			$	—		$	(7.3)		$	(3.7)		$	—		$	—		$	(0.1)		$	—		$	—		$	(11.1)

(1) There was $4 million of charge-offs for the three months ended March 31, 2023.

Notes to Consolidated Financial Statements (unaudited) (continued)

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

Notes to Consolidated Financial Statements (unaudited) (continued)

Past Due Status. Past due status is based on the length of time from the contractual due date a principal or interest payment has been past due. For disclosure purposes, loans that are 29 days past due or less are reported as current.

The following table provides balances and delinquency status of accrual and nonaccrual loans by segment and class, as well as the other real estate owned and nonaccrual asset balances, as of March 31, 2024 and December 31, 2023.

TABLE 43: DELINQUENCY STATUS

			ACCRUAL																					NONACCRUAL WITH NO ALLOWANCE
(In Millions)			CURRENT			30 – 59 DAYS PAST DUE			60 – 89 DAYS PAST DUE			90 DAYS OR MORE PAST DUE			TOTAL ACCRUAL			NONACCRUAL			TOTAL LOANS
March 31, 2024
Commercial
Commercial and Institutional			$	10,963.0		$	7.3		$	—		$	2.7		$	10,973.0		$	7.6		$	10,980.6		$	7.6
Commercial Real Estate			5,265.2			56.0			—			6.1			5,327.3			5.7			5,333.0			5.7
Non-U.S.			2,372.7			—			—			—			2,372.7			—			2,372.7			—
Other			6,730.8			—			—			—			6,730.8			—			6,730.8			—
Total Commercial			25,331.7			63.3			—			8.8			25,403.8			13.3			25,417.1			13.3
Personal
Private Client			13,941.1			112.6			18.5			18.0			14,090.2			2.0			14,092.2			—
Residential Real Estate			6,261.2			18.5			10.8			3.0			6,293.5			21.7			6,315.2			21.7
Non-U.S.			354.8			32.4			—			—			387.2			—			387.2			—
Other			1,130.9			—			—			—			1,130.9			—			1,130.9			—
Total Personal			21,688.0			163.5			29.3			21.0			21,901.8			23.7			21,925.5			21.7
Total Loans			$	47,019.7		$	226.8		$	29.3		$	29.8		$	47,305.6		$	37.0		$	47,342.6		$	35.0
			Other Real Estate Owned															$	—
			Total Nonaccrual Assets															$	37.0

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

Interest income that would have been recorded for nonaccrual loans in accordance with their original terms was $0.7 million for the three months ended March 31, 2024 and 2023.

Northern Trust may obtain physical possession of real estate via foreclosure on an in-substance repossession. As of March 31, 2024 and December 31, 2023, Northern Trust held foreclosed real estate properties with an immaterial carrying value as a result of obtaining physical possession. In addition, as of March 31, 2024 and December 31, 2023, Northern Trust had loans with a carrying value of $3.7 million and $3.5 million, respectively, for which formal foreclosure proceedings were in process.

Notes to Consolidated Financial Statements (unaudited) (continued)

Loan Modifications to Borrowers Experiencing Financial Difficulty

For borrowers experiencing financial difficulties, Northern Trust may provide payment relief by modifying the terms of the

original loan. Loan modifications to borrowers experiencing financial difficulty involve primarily extensions of term,

deferrals of principal and interest, interest rate concessions, and other modifications or a combination thereof. Northern Trust

considers payment deferrals of less than 90 days as insignificant, absent any material modifications to other loan terms.

The following table shows the amortized cost basis of loan modifications provided to financially distressed borrowers that impacted the respective cash flows of the underlying loans as of March 31, 2024 and March 31, 2023, disaggregated by relevant class of financing receivable and type of modification provided.

TABLE 44: LOAN MODIFICATIONS MADE TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

						THREE MONTHS ENDED MARCH 31, 2024									THREE MONTHS ENDED MARCH 31, 2023
($ In Millions)			LOAN MODIFICATION DETAIL			AMORTIZED COST BASIS			% OF TOTAL SEGMENT						AMORTIZED COST BASIS			% OF TOTAL SEGMENT
Commercial
Total Commercial						$	—		—		%				$	—		—		%
Personal
Residential Real Estate			Deferred Principal and Interest			$	—		—		%				$	2.9		0.05		%
Residential Real Estate			Extension of Term			0.1			—						—			—
Private Client			Extension of Term			0.2			—						—			—
Total Personal						$	0.3		—		%				$	2.9		0.05		%
Total Loans						$	0.3		—		%				$	2.9		0.05		%

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty.

TABLE 45: FINANCIAL EFFECT OF MODIFICATIONS MADE TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

			THREE MONTHS ENDED MARCH 31, 2024						THREE MONTHS ENDED MARCH 31, 2023
			FINANCIAL EFFECT						FINANCIAL EFFECT
PRINCIPAL AND INTEREST DEFERRAL
Personal
Residential Real Estate			—						Northern Trust provided a weighted average of 180 days payment deferrals to borrowers for immaterial principal and interest deferral amounts. These payments are, in general, due at the end of the deferral period.
TERM EXTENSION
Personal
Residential Real Estate			Northern Trust provided weighted average term extensions of 14 months.						—
Private Client			Northern Trust provided weighted average term extensions of 22 months.						—

The effectiveness of Northern Trust’s modification efforts is measured by the loans’ respective past due status under the modified terms as of the end of the period. Of the loans that were modified in the last 12 months, and were not performing in accordance with their modified terms and considered past due for purposes of these disclosures as of March 31, 2024, there were $0.5 million 30-89 days past due and $7.8 million 90 days and greater past due. Given that principal and interest were deferred under the modified terms for all financially distressed modifications processed in the first quarter of 2023, none of the modified loans were considered past-due as of March 31, 2023. As of three months ended March 31, 2024, Northern Trust charged-off $8.2 million related to modifications to borrowers experiencing financial difficulty that had been modified in the last 12 months. There were no defaults and related charge-offs since the adoption of the ASU 2022-02 as of January 1, 2023 through the three months ended March 31, 2023.

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

The expected credit loss for nonaccrual loans including loan modifications to borrowers experiencing financial difficulty is measured based on either the expected future cash flows, the value of collateral, or other factors that may impact the borrower’s ability to pay. If the discounted cash flow method is utilized, the credit loss is measured based upon the present value of expected future cash flows, discounted at the effective interest rate based on the post-modification contractual rate. If a loan’s

Notes to Consolidated Financial Statements (unaudited) (continued)

contractual interest rate varies based on subsequent changes in an independent factor, such as an index or rate, the loan’s effective interest rate is calculated based on the factor as it changes over the life of the loan. Northern Trust elected not to project changes in the factor for purposes of estimating expected future cash flows. Further, Northern Trust elected not to adjust the effective interest rate for prepayments. If the loan is collateral dependent, the expected loss is measured based on the fair value of the collateral at the reporting date. If the loan valuation is less than the recorded value of the loan, either an allowance is established or a charge-off is recorded for the difference. The nature and extent of further deterioration in credit quality, including a subsequent default, is considered in the determination of an appropriate level of allowance for credit losses for all loan modifications to borrowers experiencing financial difficulty.

Note 6 – Allowance for Credit Losses

Allowance and Provision for Credit Losses. The allowance for credit losses—which represents management’s best estimate of lifetime expected credit losses related to various portfolios subject to credit risk, off-balance-sheet credit exposures, and specific borrower relationships—is determined by management through a disciplined credit review process. Northern Trust measures expected credit losses of financial assets with similar risk characteristics on a collective basis. A financial asset is measured individually if it does not share similar risk characteristics with other financial assets and the related allowance is determined through an individual evaluation.

Management’s estimates utilized in establishing an appropriate level of allowance for credit losses are not dependent on any single assumption. In determining an appropriate allowance level, management evaluates numerous variables and takes into consideration past events, current conditions, and reasonable and supportable forecasts.

The results of the credit reserve estimation methodology are reviewed quarterly by Northern Trust’s Credit Loss Reserve Committee, which receives input from Financial Risk Management, Treasury, Corporate Finance, the Economic Research Department, and each of Northern Trust’s reporting business units. The Credit Loss Reserve Committee determines the probability weights applied to each forecast approved by Northern Trust’s Macroeconomic Scenario Development Committee, and also reviews and approves qualitative adjustments to the collective allowance in line with Northern Trust’s qualitative adjustment framework.

The Provision for Credit Losses on the consolidated statements of income represents the change in the Allowance for Credit Losses on the consolidated balance sheets after accounting for net charge-offs or recoveries and is the charge to current period earnings. It represents the amount needed to maintain the Allowance for Credit Losses on the consolidated balance sheets at an appropriate level to absorb lifetime expected credit losses related to financial assets in scope. Actual losses may vary from current estimates and the amount of the Provision for Credit Losses may be either greater or less than actual net charge-offs.

The following table provides information regarding changes in the total allowance for credit losses during the three months ended March 31, 2024 and 2023.

TABLE 46: CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES

			THREE MONTHS ENDED MARCH 31, 2024
(In Millions)			LOANS			UNDRAWN LOAN COMMITMENTS AND STANDBY LETTERS OF CREDIT			HELD TO MATURITY DEBT SECURITIES			OTHER FINANCIAL ASSETS			TOTAL
Balance at Beginning of Period			$	178.7		$	26.9		$	12.7		$	0.9		$	219.2
Charge-Offs			(11.1)			—			—			—			(11.1)
Recoveries			0.7			—			—			—			0.7
Net Recoveries (Charge-Offs)			(10.4)			—			—			—			(10.4)
Provision for Credit Losses(1)			(5.9)			(1.7)			(0.3)			0.1			(7.8)
Balance at End of Period			$	162.4		$	25.2		$	12.4		$	1.0		$	201.0

(1) The table excludes a negative provision for credit losses of $0.7 million for the three months ended March 31, 2024 for AFS debt securities. See further detail in Note 4—Securities.

Notes to Consolidated Financial Statements (unaudited) (continued)

			THREE MONTHS ENDED MARCH 31, 2023
(In Millions)			LOANS AND LEASES			UNDRAWN LOAN COMMITMENTS AND STANDBY LETTERS OF CREDIT			HELD TO MATURITY DEBT SECURITIES			OTHER FINANCIAL ASSETS			TOTAL
Balance at Beginning of Period			$	144.3		$	38.5		$	16.0		$	0.8		$	199.6
Charge-Offs			(4.0)			—			—			—			(4.0)
Recoveries			1.1			—			—			—			1.1
Net Recoveries (Charge-Offs)			(2.9)			—			—			—			(2.9)
Provision for Credit Losses(1)			18.5			(4.2)			—			0.2			14.5
Balance at End of Period			$	159.9		$	34.3		$	16.0		$	1.0		$	211.2

(1) The table excludes a provision for credit losses of $0.5 million for the three months ended March 31, 2023 for AFS debt securities. See further detail in Note 4—Securities.

Excluding the impact of the negative provision for available for sale debt securities, there was a negative Provision for Credit Losses of $7.8 million in the current quarter, as compared to a $14.5 million provision in the prior-year quarter. The negative provision resulted from decreases in both individual and collective reserves. The decrease in individual reserves was driven by one Commercial and Institutional (C&I) loan that was charged-off in the current quarter. The decrease in collective reserve was primarily in the C&I portfolio, driven by improvement in the quality of the portfolio, and in the Commercial Real Estate (CRE) portfolio, driven by improved macroeconomic factors. The reserve evaluated on a collective basis relates to pooled financial assets sharing similar risk characteristics.

There were net charge-offs of $10.4 million during the three months ended March 31, 2024, as compared to net charge-offs of $2.9 million for the three months ended March 31, 2023. For further detail, please see the Allowance for the Loan Portfolio and the Allowance for Held to Maturity Debt Securities Portfolio sections below.

The portion of the allowance assigned to loans, HTM debt securities, and other financial assets is presented as a contra asset in Allowance for Credit Losses on the consolidated balance sheets. The portion of the allowance assigned to undrawn loan commitments and standby letters of credit is reported in Other Liabilities on the consolidated balance sheets. For credit exposure and the associated allowance related to fee receivables, please refer to Note 13—Revenue from Contracts with Clients. For information related to the allowance for AFS debt securities, please refer to Note 4—Securities. For all other financial assets recognized at amortized cost, which include Cash and Due from Banks, Other Central Bank Deposits, Interest Bearing Deposits with Banks, and Other Assets, please refer to the Allowance for Other Financial Assets section within this footnote.

Forecasting and Reversion. Estimating expected lifetime credit losses requires the consideration of the effect of future economic conditions. Northern Trust employs multiple scenarios over a reasonable and supportable period (currently two years) to project future conditions. Key variables determined to be relevant for projecting credit losses on the portfolios in scope include macroeconomic factors, such as corporate profits, unemployment, disposable income, and real estate price indices, as well as financial market factors such as market volatility and credit spreads. For periods beyond the reasonable and supportable period, Northern Trust reverts to its own historical loss experiences on a straight-line basis over four quarters. The primary forecast in the current quarter reflects an outlook of steady growth, with inflation and labor markets stabilizing and interest rates falling. Recognizing the uncertainty in the primary forecast, an alternative scenario is also considered, which reflects a recession that incorporates the experiences of a wider set of historical economic cycles.

Contractual Term. Northern Trust estimates expected credit losses over the contractual term of the financial assets adjusted for prepayments, unless prepayments are not relevant to specific portfolios or sub-portfolios. Extension and renewal options are typically not considered since it is not Northern Trust’s practice to enter into arrangements where the borrower has the unconditional option to renew, or a conditional extension option whereby the conditions are beyond Northern Trust’s control.

Notes to Consolidated Financial Statements (unaudited) (continued)

Allowance for the Loan Portfolio. The following table provides information regarding changes in the total allowance for credit losses related to loans, including undrawn loan commitments and standby letters of credit, by segment during the three months ended March 31, 2024 and 2023.

TABLE 47: CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES RELATED TO LOANS

			THREE MONTHS ENDED MARCH 31, 2024
			LOANS									UNDRAWN LOAN COMMITMENTS AND STANDBY LETTERS OF CREDIT
(In Millions)			COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL
Balance at Beginning of Period			$	146.8		$	31.9		$	178.7		$	24.9		$	2.0		$	26.9
Charge-Offs			(11.0)			(0.1)			(11.1)			—			—			—
Recoveries			—			0.7			0.7			—			—			—
Net Recoveries (Charge-Offs)			(11.0)			0.6			(10.4)			—			—			—
Provision for Credit Losses			(4.1)			(1.8)			(5.9)			(2.4)			0.7			(1.7)
Balance at End of Period			$	131.7		$	30.7		$	162.4		$	22.5		$	2.7		$	25.2

			THREE MONTHS ENDED MARCH 31, 2023
			LOANS AND LEASES									UNDRAWN LOAN COMMITMENTS AND STANDBY LETTERS OF CREDIT
(In Millions)			COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL
Balance at Beginning of Period			$	116.2		$	28.1		$	144.3		$	36.3		$	2.2		$	38.5
Charge-Offs			(4.0)			—			(4.0)			—			—			—
Recoveries			—			1.1			1.1			—			—			—
Net Recoveries (Charge-Offs)			(4.0)			1.1			(2.9)			—			—			—
Provision for Credit Losses			18.6			(0.1)			18.5			(5.0)			0.8			(4.2)
Balance at End of Period			$	130.8		$	29.1		$	159.9		$	31.3		$	3.0		$	34.3

Allowance Related to Credit Exposure Evaluated on a Collective Basis. Expected credit losses are measured on a collective basis as long as the financial assets included in the respective pool share similar risk characteristics. If financial assets are deemed to not share similar risk characteristics, an individual assessment is warranted.

The allowance estimation methodology for the collective assessment is based on data representative of the Corporation’s financial asset portfolio from a historical observation period that includes both expansionary and recessionary periods. The estimation methodology and the related qualitative adjustment framework segregate the loan portfolio into homogeneous segments based on similar risk characteristics or risk monitoring methods.

Northern Trust utilizes a quantitative probability of default/loss given default approach for the calculation of its credit allowance on a collective basis. For each of the different parameters, specific credit models or qualitative estimation methodologies for the individual loan segments were developed. For each segment, the probability of default and the loss given default are applied to the exposure at default for each projected quarter to determine the quantitative component of the allowance. The quantitative allowance is then reviewed within the qualitative adjustment framework, through which management applies judgment by assessing internal risk factors, potential limitations in the quantitative methodology, and environmental factors that are not fully contemplated in the forecast to compute an adjustment to the quantitative allowance for each segment and class of the loan portfolio.

Allowance Related to Credit Exposure Evaluated on an Individual Basis. The individual allowance is determined through individual evaluation of loans and lending-related commitments that have defaulted, generally those with borrower ratings of 8 and 9, that are based on expected future cash flows, the value of collateral, and other factors that may impact the borrower’s ability to pay. For defaulted loans for which the amount of allowance, if any, is determined based on the value of the underlying real estate collateral, third-party appraisals are typically obtained and utilized by management. These appraisals are generally less than twelve months old and are subject to adjustments to reflect management’s judgment as to the realizable value of the collateral.

The following table provides information regarding the recorded investments in loans and the allowance for credit losses for loans and undrawn loan commitments and standby letters of credit by segment as of March 31, 2024 and December 31, 2023.

Notes to Consolidated Financial Statements (unaudited) (continued)

TABLE 48: RECORDED INVESTMENTS IN LOANS

			MARCH 31, 2024									DECEMBER 31, 2023
(In Millions)			COMMERCIAL			PERSONAL			TOTAL			COMMERCIAL			PERSONAL			TOTAL
Loans
Evaluated on an Individual Basis			$	14.5		$	38.7		$	53.2		$	33.7		$	62.6		$	96.3
Evaluated on a Collective Basis			25,402.6			21,886.8			47,289.4			25,379.1			22,141.6			47,520.7
Total Loans			25,417.1			21,925.5			47,342.6			25,412.8			22,204.2			47,617.0
Allowance for Credit Losses on Loans
Evaluated on an Individual Basis			0.5			2.0			2.5			11.4			2.0			13.4
Evaluated on a Collective Basis			131.2			28.7			159.9			135.4			29.9			165.3
Allowance Assigned to Loans			131.7			30.7			162.4			146.8			31.9			178.7
Allowance for Undrawn Loan Commitments and Standby Letters of Credit
Evaluated on a Collective Basis			22.5			2.7			25.2			24.9			2.0			26.9
Allowance Assigned to Undrawn Loan Commitments and Standby Letters of Credit			22.5			2.7			25.2			24.9			2.0			26.9
Total Allowance Assigned to Loans and Undrawn Loan Commitments and Standby Letters of Credit			$	154.2		$	33.4		$	187.6		$	171.7		$	33.9		$	205.6

Northern Trust analyzes its exposure to credit losses from both on-balance-sheet and off-balance-sheet activity using a consistent methodology for the quantitative framework as well as the qualitative framework. For purposes of estimating the allowance for credit losses for undrawn loan commitments and standby letters of credit, the exposure at default includes an estimated drawdown of unused credit based on credit utilization factors, resulting in a proportionate amount of expected credit losses.

Allowance for Held to Maturity Debt Securities Portfolio. The following table provides information regarding changes in the total allowance for credit losses for HTM debt securities during the three months ended March 31, 2024 and 2023.

TABLE 49: CHANGES IN THE ALLOWANCE FOR CREDIT LOSSES RELATED TO HELD TO MATURITY DEBT SECURITIES

			THREE MONTHS ENDED MARCH 31, 2024
(In Millions)			CORPORATE DEBT			NON-U.S. GOVERNMENT			SUB-SOVEREIGN, SUPRANATIONAL, AND NON-U.S. AGENCY BONDS			OBLIGATIONS OF STATES AND POLITICAL SUBDIVISIONS**(1)**			COVERED BONDS			OTHER			TOTAL
Balance at Beginning of Period			$	0.9		$	3.5		$	2.2		$	1.2		$	0.1		$	4.8		$	12.7
Provision for Credit Losses			(0.1)			—			(0.1)			(0.1)			—			—			(0.3)
Balance at End of Period			$	0.8		$	3.5		$	2.1		$	1.1		$	0.1		$	4.8		$	12.4

(1) The allowance for Obligations of States and Political Subdivisions is related to (non pre-refunded) municipal securities that do not fall under Northern Trust’s zero-loss assumption.

			THREE MONTHS ENDED MARCH 31, 2023
(In Millions)			CORPORATE DEBT			NON-U.S. GOVERNMENT			SUB-SOVEREIGN, SUPRANATIONAL, AND NON-U.S. AGENCY BONDS			OBLIGATIONS OF STATES AND POLITICAL SUBDIVISIONS			COVERED BONDS			OTHER			TOTAL
Balance at Beginning of Period			$	1.9		$	3.6		$	4.0		$	1.5		$	0.1		$	4.9		$	16.0
Provision for Credit Losses			—			0.3			0.1			(0.2)			—			(0.2)			—
Balance at End of Period			$	1.9		$	3.9		$	4.1		$	1.3		$	0.1		$	4.7		$	16.0

HTM debt securities classified as U.S. government, government sponsored agency, and certain securities classified as obligations of states and political subdivisions are considered to be guarantees of the U.S. government or an agency of the U.S. government and, therefore, an allowance for credit losses is not estimated for such investments as the expected probability of non-payment of the amortized cost basis is zero.

HTM debt securities classified as “other asset-backed securities” represent pools of underlying receivables from which the cash flows are used to pay the bonds that vary in seniority. Utilizing a qualitative estimation approach, the allowance for other asset-backed securities is assessed by evaluating underlying pool performance based on delinquency rates and available credit support.

HTM debt securities classified as “other” relate to investments purchased by Northern Trust to fulfill its obligations under the Community Reinvestment Act (CRA). Northern Trust fulfills its obligations under the CRA by making qualified investments

Notes to Consolidated Financial Statements (unaudited) (continued)

for purposes of supporting institutions and programs that benefit low-to-moderate income communities within Northern Trust’s market area. The allowance for CRA investments is assessed using a qualitative estimation approach primarily based on internal historical performance experience and default history of the underlying CRA portfolios to determine a quantitative component of the allowance.

The allowance estimation methodology for all other HTM debt securities is developed using a combination of external and internal data. The estimation methodology groups securities with shared characteristics for which the probability of default and the loss given default are applied to the total exposure at default to determine a quantitative component of the allowance.

Allowance for Other Financial Assets. The allowance for Other Financial Assets consists of the allowance for Due from Banks, Other Central Bank Deposits, Interest Bearing Deposits with Banks, and Other Assets. The Other Assets category includes other miscellaneous credit exposures reported in Other Assets on the consolidated balance sheets. The allowance estimation methodology for Other Financial Assets primarily utilizes a similar approach as the one used for the HTM debt securities portfolio. It consists of a combination of externally and internally developed loss data, adjusted for the appropriate contractual term. Northern Trust’s portfolio of Other Financial Assets is composed mostly of institutions within the “1 to 3” internal borrower rating category and is expected to exhibit minimal to modest likelihood of loss. The Allowance for Credit Losses related to Other Financial Assets was $1.0 million and $0.9 million as of March 31, 2024 and December 31, 2023, respectively.

Accrued Interest. Accrued interest balances are reported within Other Assets on the consolidated balance sheets. Northern Trust elected not to measure an allowance for credit losses for accrued interest receivables related to its loan and securities portfolio as its policy is to write-off uncollectible accrued interest receivable balances in a timely manner. Accrued interest is written off by reversing interest income during the period the financial asset is moved from an accrual to a nonaccrual status.

The following table provides the amount of accrued interest excluded from the amortized cost basis of the following portfolios.

TABLE 50: ACCRUED INTEREST

(In Millions)			MARCH 31, 2024			DECEMBER 31, 2023
Loans			$	253.0		$	241.7
Debt Securities
Held to Maturity			69.8			72.0
Available for Sale			175.0			129.2
Other Financial Assets			110.3			86.0
Total			$	608.1		$	528.9

The amount of accrued interest reversed through interest income for loans was immaterial for the three months ended March 31, 2024 and 2023, and there was no accrued interest reversed through interest income related to any other financial assets for the three months ended March 31, 2024 and 2023.

Note 7 – Pledged Assets, Accepted Collateral and Restricted Assets

Pledged Assets. For our liquidity management strategy, we may pledge loans and/or securities to various financial market utilities to allow for client payment, clearing and settlement processing as part of our custody services. We may pledge loans or securities to Central Banks, Federal Home Loan Bank (FHLB) of Chicago and third parties for various purposes, for example: securing public and trust deposits, repurchase agreements, borrowings and derivative contracts.

As of March 31, 2024 and December 31, 2023, respectively, $1.4 billion and $1.1 billion of collateral we pledge, related to loans and/or securities, is eligible to be repledged or sold by the secured party. The following table presents the carrying value of Northern Trust's pledged assets by type.

TABLE 51: TYPE OF PLEDGED ASSETS

(In Billions)			MARCH 31, 2024			DECEMBER 31, 2023
Debt Securities(1)			$	30.8		$	33.0
Loans(2)			10.6			10.3
Total Pledged Assets			$	41.4		$	43.3

(1) Debt securities are comprised of held to maturity and available for sale securities.

(2) Loans pledged at the FHLB of Chicago and the Federal Reserve Bank of Chicago.

Accepted Collateral. Northern Trust accepts financial assets as collateral that it may, in some instances, be permitted to repledge or sell. The collateral is generally obtained under certain reverse repurchase agreements and derivative contracts.

The following table presents the fair value of securities accepted as collateral.

Notes to Consolidated Financial Statements (unaudited) (continued)

TABLE 52: ACCEPTED COLLATERAL

(In Millions)			MARCH 31, 2024			DECEMBER 31, 2023
Collateral that may be repledged or sold
Reverse repurchase agreements(1)(2)			$	66,327.9		$	62,767.8
Derivative contracts			3.6			12.2
Collateral that may not be repledged or sold
Reverse repurchase agreements			—			—
Total Collateral Accepted			$	66,331.5		$	62,780.0

(1) The fair value of securities collateral that was repledged or sold totaled $65.7 billion and $62.0 billion at March 31, 2024 and December 31, 2023, respectively.

(2) This includes collateral accepted as related to the sponsored member program. Refer to Note 20—Commitments and Contingent Liabilities for further information.

Restricted Assets. Certain cash may be restricted in terms of usage or withdrawal. As a result of the continuing military conflict involving Ukraine and the Russian Federation and related sanctions and legal restrictions in place, cash balances denominated in Russian rubles received for the benefit of certain clients in our Asset Servicing business are subject to distribution restrictions. As of March 31, 2024 and December 31, 2023, these balances totaled $818.9 million and $722.2 million, respectively, and are reported in Cash and Due from Banks on the consolidated balance sheets.

At March 31, 2024 and December 31, 2023, Northern Trust held cash of $563.4 million and $575.2 million, respectively, to meet non-U.S. reserve requirements. As a result of the economic environment arising from the COVID-19 pandemic, the Federal Reserve reduced the U.S. reserve requirement to zero percent on March 26, 2020. There were no average deposits required to meet Federal Reserve Bank reserve requirements for the three months ended March 31, 2024 and 2023, respectively.

Note 8 – Goodwill and Other Intangibles

Goodwill. Changes by reporting segment in the carrying amount of Goodwill for the three months ended March 31, 2024, including the effect of foreign exchange rates on non-U.S. dollar denominated balances, were as follows.

TABLE 53: GOODWILL

(In Millions)			ASSET SERVICING			WEALTH MANAGEMENT			TOTAL
Balance at December 31, 2023			$	621.9		$	80.4		$	702.3
Foreign Exchange Rates			(4.8)			—			(4.8)
Balance at March 31, 2024			$	617.1		$	80.4		$	697.5

Other Intangible Assets Subject to Amortization. The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of March 31, 2024 and December 31, 2023 were as follows.

TABLE 54: OTHER INTANGIBLE ASSETS

(In Millions)			MARCH 31, 2024			DECEMBER 31, 2023
Gross Carrying Amount			$	130.9		$	135.0
Less: Accumulated Amortization			63.9			63.4
Net Book Value			$	67.0		$	71.6

Other intangible assets consist primarily of the value of acquired client relationships and are included within Other Assets on the consolidated balance sheets. Amortization expense related to other intangible assets totaled $2.3 million for the three months ended March 31, 2024 and March 31, 2023. Amortization for the remainder of 2024 and for the years 2025, 2026, 2027, and 2028 is estimated to be $6.9 million, $8.6 million, $8.3 million, $8.0 million, and $7.4 million, respectively.

Capitalized Software. The gross carrying amount and accumulated amortization of capitalized software as of March 31, 2024 and December 31, 2023 were as follows.

TABLE 55: CAPITALIZED SOFTWARE

(In Millions)			MARCH 31, 2024			DECEMBER 31, 2023
Gross Carrying Amount			$	3,905.3		$	3,781.7
Less: Accumulated Amortization			1,893.9			1,754.2
Net Book Value			$	2,011.4		$	2,027.5

Notes to Consolidated Financial Statements (unaudited) (continued)

Capitalized software, which is included in Other Assets on the consolidated balance sheets, consists primarily of purchased software, software licenses, and allowable internal costs, including compensation relating to software developed for internal use. Fees paid for the use of software licenses that are not hosted by Northern Trust are expensed as incurred. Amortization expense, which is included in Equipment and Software on the consolidated statements of income, totaled $140.4 million and $121.3 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

Note 9 – Reporting Segments

Northern Trust is organized around its two client-focused reporting segments: Asset Servicing and Wealth Management. Asset management and related services are provided to Asset Servicing and Wealth Management clients primarily by the Asset Management business. The revenue and expenses of Asset Management and certain other support functions are allocated fully to Asset Servicing and Wealth Management.

Reporting segment financial information, presented on an internal management-reporting basis, is determined by accounting systems used to allocate revenue and expense to each segment, and incorporates processes for allocating assets, liabilities, equity and the applicable interest income and expense utilizing a funds transfer pricing (FTP) methodology. Under the methodology, assets and liabilities receive a funding charge or credit that considers interest rate risk, liquidity risk, and other product characteristics on an instrument level. Additionally, segment information is presented on an FTE basis as management believes an FTE presentation provides a clearer indication of net interest income. The adjustment to an FTE basis has no impact on Net Income.

Revenues, expenses and average assets are allocated to Asset Servicing and Wealth Management, with the exception of non-recurring activities such as certain corporate transactions and costs incurred associated with acquisitions, divestitures, litigation, restructuring, and tax adjustments not directly attributable to a specific reporting segment, which are reported within the Other segment.

Effective January 2024, Northern Trust implemented certain enhancements to its FTP methodology, impacting the allocation of Net Interest Income to the Asset Servicing and Wealth Management segments. As a result, the approximate impact on the Asset Servicing and Wealth Management segments was a $31 million decrease and a $31 million increase in Net Interest Income, respectively, for the three months ended March 31, 2024. Prior-period segment results have not been revised to reflect this methodology change.

Reporting segment results are subject to reclassification when organizational changes are made. The results are also subject to refinements in revenue and expense allocation methodologies, which are typically reflected on a prospective basis.

Notes to Consolidated Financial Statements (unaudited) (continued)

The following table presents the earnings contributions and average assets of Northern Trust’s reporting segments for the three-month periods ended March 31, 2024 and 2023.

TABLE 56: RESULTS OF REPORTING SEGMENTS

($ In Millions)			ASSET SERVICING						WEALTH MANAGEMENT						OTHER						RECONCILING ITEMS						TOTAL CONSOLIDATED
THREE MONTHS ENDED MARCH 31,			2024			2023			2024			2023			2024			2023			2024			2023			2024			2023
Noninterest Income
Trust, Investment and Other Servicing Fees			$	639.6		$	603.0		$	503.3		$	460.6		$	—		$	—		$	—		$	—		$	1,142.9		$	1,063.6
Foreign Exchange Trading Income (Loss)			59.9			54.9			(2.9)			(1.9)			—			—			—			—			57.0			53.0
Other Noninterest Income (Loss)			70.8			63.2			38.5			34.3			(190.5)			(0.7)			—			—			(81.2)			96.8
Total Noninterest Income (Loss)			770.3			721.1			538.9			493.0			(190.5)			(0.7)			—			—			1,118.7			1,213.4
Net Interest Income			293.8			312.1			241.6			232.3			—			—			(7.3)			(13.2)			528.1			531.2
Revenue			1,064.1			1,033.2			780.5			725.3			(190.5)			(0.7)			(7.3)			(13.2)			1,646.8			1,744.6
Provision for Credit Losses			(5.8)			(2.9)			(1.7)			17.9			(1.0)			—			—			—			(8.5)			15.0
Noninterest Expense			852.7			801.0			491.7			469.2			20.3			15.4			—			—			1,364.7			1,285.6
Income before Income Taxes			217.2			235.1			290.5			238.2			(209.8)			(16.1)			(7.3)			(13.2)			290.6			444.0
Provision for Income Taxes			56.6			60.5			81.4			66.1			(54.8)			(4.0)			(7.3)			(13.2)			75.9			109.4
Net Income			$	160.6		$	174.6		$	209.1		$	172.1		$	(155.0)		$	(12.1)		$	—		$	—		$	214.7		$	334.6
Percentage of Consolidated Net Income			N/M			52		%	N/M			52		%	N/M			(4)		%	N/A			N/A			100		%	100		%
Average Assets			$	106,955.0		$	111,215.3		$	38,163.3		$	36,844.6		$	—		$	—		N/A			N/A			$	145,118.3		$	148,059.9

Note: Segment results are stated on an FTE basis. The FTE adjustments are eliminated in the reconciling items column with the Corporation’s total consolidated financial results stated on a GAAP basis. The adjustment to an FTE basis has no impact on Net Income.

Note 10 – Stockholders’ Equity

Preferred Stock. The Corporation is authorized to issue 10 million shares of preferred stock without par value. The Board of Directors is authorized to fix the particular designations, preferences and relative, participating, optional and other special rights and qualifications, limitations or restrictions for each series of preferred stock issued.

As of March 31, 2024, 5,000 shares of Series D Non-Cumulative Perpetual Preferred Stock (Series D Preferred Stock) and 16,000 shares of Series E Non-Cumulative Perpetual Preferred Stock (Series E Preferred Stock) were outstanding.

Series D Preferred Stock. As of March 31, 2024, the Corporation had issued and outstanding 500,000 depositary shares, each representing a 1/100th ownership interest in a share of Series D Preferred Stock, issued in August 2016. Equity related to Series D Preferred Stock as of March 31, 2024 and December 31, 2023 was $493.5 million. Shares of the Series D Preferred Stock have no par value and a liquidation preference of $100,000 (equivalent to $1,000 per depositary share).

Dividends on the Series D Preferred Stock, which are not mandatory, accrue and are payable on the liquidation preference amount, on a non-cumulative basis, at a rate per annum equal to (i) 4.60% from the original issue date of the Series D Preferred Stock to but excluding October 1, 2026; and (ii) a floating rate equal to the three-month CME Term Secured Overnight Finance Rate (SOFR), as administered by CME Group Benchmark Administration, Ltd., plus a statutory spread adjustment of 0.26161% (as set forth in the final rule to implement the LIBOR Act) plus 3.202% from and including October 1, 2026. Fixed rate dividends are payable in arrears on the first day of April and October of each year, through and including October 1, 2026, and floating rate dividends will be payable in arrears on the first day of January, April, July and October of each year, commencing on January 1, 2027. On January 17, 2024, the Corporation declared a cash dividend of $2,300.00 per share of Series D Preferred Stock payable on April 1, 2024, to stockholders of record as of March 15, 2024.

Series E Preferred Stock. As of March 31, 2024, the Corporation had issued and outstanding 16 million depositary shares, each representing 1/1,000th ownership interest in a share of Series E Preferred Stock, issued in November 2019. Equity related to Series E Preferred Stock as of March 31, 2024 and December 31, 2023 was $391.4 million. Shares of the Series E Preferred Stock have no par value and a liquidation preference of $25,000 (equivalent to $25 per depositary share).

Dividends on the Series E Preferred Stock, which are not mandatory, will accrue and be payable on the liquidation preference amount, on a non-cumulative basis, quarterly in arrears on the first day of January, April, July and October of each year, at a

Notes to Consolidated Financial Statements (unaudited) (continued)

rate per annum equal to 4.70%. On January 17, 2024, the Corporation declared a cash dividend of $293.75 per share of Series E Preferred Stock payable on April 1, 2024, to stockholders of record as of March 15, 2024.

Common Stock. The Corporation’s current stock repurchase authorization to repurchase up to 25 million shares was approved by the Board of Directors in October 2021. Shares are repurchased by the Corporation to, among other things, manage the Corporation’s capital levels. Repurchased shares are used for general purposes, including the issuance of shares under stock option and other incentive plans. The repurchase authorization approved by the Board of Directors has no expiration date. For the three months ended March 31, 2024, the Corporation repurchased 1,647,526 shares of common stock, at a total cost of $132.0 million ($80.11 average price per share), including 373,623 shares withheld to satisfy tax withholding obligations related to share-based compensation. For the three months ended March 31, 2023, the Corporation repurchased 1,050,227 shares of common stock, at a total cost of $100.9 million ($96.04 average prices per share), including 326,811 shares withheld to satisfy tax withholding obligations related to share-based compensation.

Note 11 – Accumulated Other Comprehensive Income (Loss)

The following tables summarize the components of Accumulated Other Comprehensive Income (Loss) (AOCI) at March 31, 2024 and 2023, and changes during the three months then ended.

TABLE 57: SUMMARY OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

			THREE MONTHS ENDED MARCH 31, 2024
(In Millions)			NET UNREALIZED GAINS (LOSSES) ON AVAILABLE FOR SALE DEBT SECURITIES			NET UNREALIZED GAINS (LOSSES) ON CASH FLOW HEDGES			NET FOREIGN CURRENCY ADJUSTMENT			NET PENSION AND OTHER POSTRETIREMENT BENEFIT ADJUSTMENTS			TOTAL
Balance at December 31, 2023			$	(923.9)		$	0.8		$	203.6		$	(418.4)		$	(1,137.9)
Net Change			213.4			(0.7)			4.6			3.0			220.3
Balance at March 31, 2024			$	(710.5)		$	0.1		$	208.2		$	(415.4)		$	(917.6)

			THREE MONTHS ENDED MARCH 31, 2023
(In Millions)			NET UNREALIZED GAINS (LOSSES) ON AVAILABLE FOR SALE DEBT SECURITIES			NET UNREALIZED GAINS (LOSSES) ON CASH FLOW HEDGES			NET FOREIGN CURRENCY ADJUSTMENT			NET PENSION AND OTHER POSTRETIREMENT BENEFIT ADJUSTMENTS			TOTAL
Balance at December 31, 2022			$	(1,367.6)		$	1.2		$	164.6		$	(367.4)		$	(1,569.2)
Net Change			180.2			(0.1)			22.7			0.2			203.0
Balance at March 31, 2023			$	(1,187.4)		$	1.1		$	187.3		$	(367.2)		$	(1,366.2)

Notes to Consolidated Financial Statements (unaudited) (continued)

TABLE 58: DETAILS OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED MARCH 31,			2024									2023
(In Millions)			PRE-TAX			TAX			AFTER TAX			PRE-TAX			TAX			AFTER TAX
Unrealized Gains (Losses) on Available for Sale Debt Securities
Unrealized Gains (Losses) on Available for Sale Debt Securities			$	73.2		$	(19.4)		$	53.8		$	229.3		$	(60.3)		$	169.0
Reclassification Adjustments for (Gains) Losses Included in Net Income:
Interest Income on Debt Securities(1)			24.4			(6.2)			18.2			21.9			(5.5)			16.4
Net (Gains) Losses on Debt Securities(2)			189.4			(48.0)			141.4			(6.9)			1.7			(5.2)
Net Change			$	287.0		$	(73.6)		$	213.4		$	244.3		$	(64.1)		$	180.2
Unrealized Gains (Losses) on Cash Flow Hedges
Foreign Exchange Contracts			$	4.5		$	(1.1)		$	3.4		$	0.5		$	(0.1)		$	0.4
Reclassification Adjustment for (Gains) Losses Included in Net Income(3)			(5.5)			1.4			(4.1)			(0.6)			0.1			(0.5)
Net Change			$	(1.0)		$	0.3		$	(0.7)		$	(0.1)		$	—		$	(0.1)
Foreign Currency Adjustments
Foreign Currency Translation Adjustments			$	(58.5)		$	2.9		$	(55.6)		$	46.8		$	0.2		$	47.0
Long-Term Intra-Entity Foreign Currency Transaction Gains (Losses)			(0.6)			0.1			(0.5)			—			—			—
Net Investment Hedge Gains (Losses)			81.3			(20.6)			60.7			(32.5)			8.2			(24.3)
Net Change			$	22.2		$	(17.6)		$	4.6		$	14.3		$	8.4		$	22.7
Pension and Other Postretirement Benefit Adjustments
Net Actuarial Gains (Losses)			$	1.1		$	(0.5)		$	0.6		$	(1.1)		$	0.1		$	(1.0)
Reclassification Adjustment for (Gains) Losses Included in Net Income(4)
Amortization of Net Actuarial Loss			3.2			(0.8)			2.4			1.6			(0.4)			1.2
Net Change			$	4.3		$	(1.3)		$	3.0		$	0.5		$	(0.3)		$	0.2
Total Net Change			$	312.5		$	(92.2)		$	220.3		$	259.0		$	(56.0)		$	203.0

(1) The before-tax reclassification adjustment is related to the unrealized gains (losses) amortization on AFS debt securities that were transferred to HTM debt securities during the second quarter of 2021 and third quarter of 2022.

(2) The net gains (losses) on AFS debt securities before-tax reclassification adjustment is recorded in Investment Security Gains (Losses), net on the consolidated statements of income.

(3) See Note 21—Derivative Financial Instruments for the location of the reclassification adjustment related to cash flow hedges.

(4) The pension and other postretirement benefit before-tax reclassification adjustment is recorded in Employee Benefits expense on the consolidated statements of income.

Note 12 – Net Income Per Common Share

The computations of net income per common share are presented in the following table.

TABLE 59: NET INCOME PER COMMON SHARE

			THREE MONTHS ENDED MARCH 31,
($ In Millions Except Per Common Share Information)			2024			2023
Basic Net Income Per Common Share
Average Number of Common Shares Outstanding			204,628,796			208,186,841
Net Income			$	214.7		$	334.6
Less: Dividends on Preferred Stock			16.2			16.2
Net Income Applicable to Common Stock			198.5			318.4
Less: Earnings Allocated to Participating Securities			2.4			3.2
Earnings Allocated to Common Shares Outstanding			196.1			315.2
Basic Net Income Per Common Share			$	0.96		$	1.51
Diluted Net Income Per Common Share
Average Number of Common Shares Outstanding			204,628,796			208,186,841
Plus: Dilutive Effect of Share-based Compensation			506,049			543,548
Average Common and Potential Common Shares			205,134,845			208,730,389
Earnings Allocated to Common and Potential Common Shares			$	196.1		$	315.2
Diluted Net Income Per Common Share			0.96			1.51

Note: For the three months ended March 31, 2024, there were de minimis common stock equivalents excluded from the computation of diluted net income per common share because their inclusion would have been antidilutive. For the three months ended March 31, 2023, there were no common stock equivalents excluded in the computation of diluted net income per share.

Note 13 – Revenue from Contracts with Clients

Trust, Investment, and Other Servicing Fees. Custody and Fund Administration income is comprised of revenues received from our core asset servicing business for providing custody, fund administration, and middle-office-related services, primarily

Notes to Consolidated Financial Statements (unaudited) (continued)

to Asset Servicing clients. Investment Management and Advisory income contains revenue received from providing asset management and related services to Wealth Management and Asset Servicing clients and to Northern Trust sponsored funds. Securities Lending income represents revenues generated from securities lending arrangements that Northern Trust enters into as agent, mainly with Asset Servicing clients. Other income largely consists of revenues received from providing employee benefit, investment risk and analytic and other services to Asset Servicing and Wealth Management clients.

Other Noninterest Income. Treasury Management income represents revenues received from providing cash and liquidity management services to Asset Servicing and Wealth Management clients. The portion of Security Commissions and Trading Income that relates to revenue from contracts with clients is primarily comprised of commissions earned from providing securities brokerage services to Wealth Management and Asset Servicing clients. The portion of Other Operating Income that relates to revenue from contracts with clients is mainly comprised of service fees for banking-related services provided to Wealth Management and Asset Servicing clients.

Performance Obligations. Clients are typically charged monthly or quarterly in arrears based on the fee arrangement agreed to with each client; payment terms will vary depending on the client and services offered.

Substantially all revenues generated from contracts with clients for asset servicing, asset management, securities lending, treasury management and banking-related services are recognized on an accrual basis, over the period in which services are provided. The nature of Northern Trust’s performance obligations is to provide a series of distinct services in which the customer simultaneously receives and consumes the benefits of the promised services as they are performed. Fee arrangements are mainly comprised of variable amounts based on market value of client assets managed and serviced, transaction volumes, number of accounts, and securities lending volume and spreads. Revenue is recognized using the output method in an amount that reflects the consideration to which Northern Trust expects to be entitled in exchange for providing each month or quarter of service. For contracts with multiple performance obligations, revenue is allocated to each performance obligation based on the price agreed to with the client, representing its relative standalone selling price.

Security brokerage revenue is primarily represented by securities commissions received in exchange for providing trade execution related services. Control is transferred at a point in time, on the trade date of the transaction, and fees are typically variable based on transaction volumes and security types.

Northern Trust’s contracts with its clients are typically open-ended arrangements and are therefore considered to have an original duration of less than one year. Northern Trust has elected the practical expedient to not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less.

The following table presents revenues disaggregated by major revenue source.

TABLE 60: REVENUE DISAGGREGATION

			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
Noninterest Income
Trust, Investment and Other Servicing Fees
Custody and Fund Administration			$	467.4		$	441.6
Investment Management and Advisory			593.9			540.5
Securities Lending			18.6			19.1
Other			63.0			62.4
Total Trust, Investment and Other Servicing Fees			$	1,142.9		$	1,063.6
Other Noninterest Income
Foreign Exchange Trading Income			$	57.0		$	53.0
Treasury Management Fees			9.3			8.4
Security Commissions and Trading Income			37.9			34.7
Other Operating Income			61.0			46.8
Investment Security Gains (Losses), net			(189.4)			6.9
Total Other Noninterest Income			$	(24.2)		$	149.8
Total Noninterest Income			$	1,118.7		$	1,213.4

On the consolidated statements of income, Trust, Investment and Other Servicing Fees and Treasury Management Fees represent revenue from contracts with clients. For the three months ended March 31, 2024, revenue from contracts with clients also includes $33.7 million of the $37.9 million total Security Commissions and Trading Income and $9.3 million of the $61.0 million total Other Operating Income.

Notes to Consolidated Financial Statements (unaudited) (continued)

For the three months ended March 31, 2023, revenue from contracts with clients also includes $29.9 million of the $34.7 million total Security Commissions and Trading Income and $9.1 million of the $46.8 million total Other Operating Income.

Receivables Balances. The table below represents receivables balances from contracts with clients, which are included in Other Assets on the consolidated balance sheets, at March 31, 2024 and December 31, 2023.

TABLE 61: CLIENT RECEIVABLES

(In Millions)			MARCH 31, 2024			DECEMBER 31, 2023
Trust Fees Receivable, net(1)			$	949.4		$	863.5
Other			47.7			64.9
Total Client Receivables			$	997.1		$	928.4

(1) Trust Fees Receivable is net of a $14.8 million and $15.9 million fee receivable allowance as of March 31, 2024 and December 31, 2023, respectively.

Note 14 – Net Interest Income

The components of Net Interest Income were as follows.

TABLE 62: NET INTEREST INCOME

			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
Interest Income
Federal Reserve and Other Central Bank Deposits			$	459.7		$	377.0
Interest-Bearing Due from and Deposits with Banks(1)			34.6			28.2
Federal Funds Sold			—			0.2
Securities Purchased under Agreements to Resell			823.9			125.9
Securities — Taxable			445.3			337.8
— Nontaxable(2)			0.3			0.3
Loans			653.6			578.2
Other Interest-Earning Assets(3)			28.2			7.8
Total Interest Income			$	2,445.6		$	1,455.4
Interest Expense
Deposits			$	881.7		$	564.6
Federal Funds Purchased			33.6			40.1
Securities Sold Under Agreements to Repurchase			813.9			116.1
Other Borrowings			88.6			135.0
Senior Notes			44.1			39.2
Long-Term Debt			55.6			29.2
Total Interest Expense			$	1,917.5		$	924.2
Net Interest Income			$	528.1		$	531.2

(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.

(2) Non-taxable Securities represent securities that are exempt from U.S. federal income taxes.

(3) Other Interest-Earning Assets include certain community development investments, collateral deposits with certain securities depositories and clearing houses, Federal Home Loan Bank and Federal Reserve stock, and money market investments which are classified in Other Assets on the consolidated balance sheets.

Note 15 – Other Operating Income

The components of Other Operating Income were as follows.

TABLE 63: OTHER OPERATING INCOME

			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
Loan Service Fees			$	15.7		$	18.7
Banking Service Fees			13.3			12.2
Bank Owned Life Insurance			20.6			16.7
Other Income(1)			11.4			(0.8)
Total Other Operating Income			$	61.0		$	46.8

(1) Other Income includes the mark-to-market gain or loss on derivative swap activity primarily related to the sale of certain Visa Class B common shares.

Notes to Consolidated Financial Statements (unaudited) (continued)

Note 16 – Other Operating Expense

The components of Other Operating Expense were as follows.

TABLE 64: OTHER OPERATING EXPENSE

			THREE MONTHS ENDED MARCH 31,
In Millions)			2024			2023
Business Promotion			$	16.7		$	16.2
Staff Related			14.2			7.8
FDIC Insurance Premiums(1)			18.7			6.2
Charitable Contributions			2.0			3.2
Other Expenses			48.8			52.2
Total Other Operating Expense			$	100.4		$	85.6

(1) FDIC Insurance Premiums include an additional FDIC Special Assessment of $12.5 million for the three months ended March 31, 2024. Refer to Note 20—Commitments and Contingent Liabilities for further information.

Note 17 – Pension

The following table sets forth the net periodic pension expense for Northern Trust’s U.S. Qualified Plan, Non-U.S. Pension Plans, and U.S. Non-Qualified Plan for the three months ended March 31, 2024 and 2023.

TABLE 65: NET PERIODIC PENSION EXPENSE (BENEFIT)

U.S. QUALIFIED PLAN			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
Service Cost			$	13.4		$	11.5
Interest Cost			13.9			13.5
Expected Return on Plan Assets			(28.9)			(25.3)
Amortization
Net Actuarial Loss			1.9			0.4
Net Periodic Pension Expense			$	0.3		$	0.1

NON-U.S. PENSION PLANS			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
Service Cost			$	0.5		$	0.3
Interest Cost			1.1			1.2
Expected Return on Plan Assets			(1.6)			(1.5)
Amortization
Net Actuarial (Gain)			—			(0.1)
Net Periodic Pension (Benefit)			$	—		$	(0.1)

U.S. NON-QUALIFIED PLAN			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
Service Cost			$	1.2		$	1.2
Interest Cost			1.2			1.3
Amortization
Net Actuarial Loss			1.3			1.3
Net Periodic Pension Expense			$	3.7		$	3.8

The components of net periodic pension expense are recorded in Employee Benefits expense on the consolidated statements of income.

There were $200.0 million of contributions to the U.S. Qualified Plan during the three months ended March 31, 2024. There were no contributions to the U.S. Qualified Plan during the three months ended March 31, 2023. There were $8.0 million and $16.5 million of contributions to the U.S. Non-Qualified Plan during the three months ended March 31, 2024 and 2023, respectively.

Notes to Consolidated Financial Statements (unaudited) (continued)

Note 18 – Share-Based Compensation Plans

The Northern Trust Corporation 2017 Long-Term Incentive Plan provides for the grant of non-qualified and incentive stock options; tandem and free-standing stock appreciation rights; stock awards in the form of restricted stock, restricted stock units and other stock awards; and performance awards.

Restricted stock unit and performance stock unit grants continue to vest in accordance with the original terms of the award if the applicable employee retires after satisfying applicable age and service requirements.

The Corporation granted 1,086,910 stock units awards with a total grant-date fair value of $86.0 million during the three months ended March 31, 2024, compared to 1,029,713 stock units awards with a total grant-date fair value of $95.9 million during the three months ended March 31, 2023. Compensation expense for the three months ended March 31, 2024 included $28.8 million attributable to restricted stock units granted to retirement-eligible employees that were expensed in their entirety on the date of grant, compared to $31.4 million in the prior-year quarter.

The Corporation granted 262,557 performance stock units with a total grant-date fair value of $21.0 million during the three months ended March 31, 2024, compared to 219,314 performance stock units with a total grant-date fair value of $20.6 million during the three months ended March 31, 2023. Compensation expense for the three months ended March 31, 2024 included $12.8 million attributable to performance stock units granted to retirement-eligible employees that were expensed in their entirety on the date of grant, compared to $14.2 million in the prior-year quarter.

Restricted stock unit award compensation expense for the three months ended March 31, 2024 and 2023 included $4.5 million and $4.2 million, respectively, attributable to restricted stock units vested in full and expensed in their entirety upon date of grant.

Total compensation expense for share-based payment arrangements and the associated tax impacts were as follows for the three months ended March 31, 2024 and 2023.

TABLE 66: TOTAL COMPENSATION EXPENSE FOR SHARE-BASED PAYMENT ARRANGEMENTS

			THREE MONTHS ENDED MARCH 31,
(In Millions)			2024			2023
Restricted Stock Unit Awards			$	49.4		$	50.3
Performance Stock Units			17.0			14.1
Total Share-Based Compensation Expense			66.4			64.4
Tax Benefits Recognized			$	16.8		$	16.2

Note 19 – Variable Interest Entities

Northern Trust is involved with various entities in the normal course of business that are deemed to be variable interest entities (VIEs). VIEs are defined within GAAP as entities which either (1) lack sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support, (2) have equity investors that lack attributes typical of an equity investor, such as the ability to make significant decisions through voting rights affecting the entity’s operations, or the obligation to absorb expected losses or the right to receive residual returns of the entity, or (3) are structured with voting rights that are disproportionate to the equity investor’s obligation to absorb losses or right to receive returns, and substantially all of the activities are conducted on behalf of the holder of the equity investment at risk with disproportionately few voting rights. Investors that finance a VIE through debt or equity interests are variable interest holders in the entity and the variable interest holder, if any, that has both the power to direct the activities that most significantly impact the entity’s economic performance and, through its variable interest, the obligation to absorb losses or the right to receive returns that could potentially be significant to the entity is deemed to be the VIE’s primary beneficiary and is required to consolidate the VIE.

Tax credit structures. Northern Trust holds tax-advantaged investments in unconsolidated entities that own and operate affordable housing and projects through the new markets tax credit program. These entities, which are limited partnerships and similar entities, are primarily VIEs and are designed to generate a return primarily through the realization of tax credits and other tax benefits, such as tax deductions from operating losses of the investments. Northern Trust invests as a limited partner/investor member and lacks both the power to direct the entities’ most significant activities and the obligation to absorb losses or right to receive benefits that could potentially be significant to the entities. Northern Trust is not required to consolidate these entities as it does not have a controlling financial interest and thus is not the primary beneficiary.

Northern Trust’s maximum exposure to loss as a result of its involvement with these entities is limited to the carrying amounts of its investments, including any undrawn commitments. Northern Trust’s funding requirements are limited to its invested capital and undrawn commitments for future equity contributions. Northern Trust has no exposure to loss from liquidity arrangements and no obligation to purchase assets of these entities.

Notes to Consolidated Financial Statements (unaudited) (continued)

Northern Trust’s investments in these unconsolidated entities and related unfunded commitments are reported in Other Assets and Other Liabilities, respectively, on the consolidated balance sheets.

TABLE 67: SUMMARY OF UNCONSOLIDATED TAX CREDIT STRUCTURES

(In Millions)			MARCH 31, 2024			DECEMBER 31, 2023
Investment Carrying Amount
Affordable Housing			$	603.3		$	622.8
New Markets			263.1			266.3
Total Investment Carrying Amount(1)			$	866.4		$	889.1
Unfunded Commitments
Affordable Housing			$	163.3		$	178.8
New Markets			—			—
Total Unfunded Commitments(2)			$	163.3		$	178.8

(1) As of March 31, 2024 and December 31, 2023, $835.7 million and $857.0 million are VIEs, respectively.

(2) As of March 31, 2024 and December 31, 2023, $156.6 million and $172.0 million relate to undrawn commitments on VIEs, respectively.

Upon adoption of ASU 2023-02 on January 1, 2024, Northern Trust elected to account for qualifying new markets tax credit investments under the proportional amortization method. Prior to the adoption of ASU 2023-02, Northern Trust accounted for qualifying affordable housing investments under the proportional amortization method and continues to do so subsequent to the adoption of ASU 2023-02. Under the proportional amortization method, the carrying amount of the investment is amortized in proportion to the income tax credits and other income tax benefits received in the current period as compared to the total income tax credits and income tax benefits expected to be received over the life of the investment. Income tax credits and other income tax benefits and amortization expense associated with unconsolidated tax credit structures are primarily reported in the Provision for Income Tax on the consolidated statement of income.

Northern Trust adopted ASU 2023-02 on a modified retrospective basis. As a result, amortization expense related to new markets tax credit investments is reported in the Provision for Income Tax beginning January 1, 2024. Prior to January 1, 2024, amortization expense related to new markets tax credit investments was previously reported in Other Operating Expense. Refer to Note 2—Recent Accounting Pronouncements for additional information.

TABLE 68: INCOME TAX CREDITS AND OTHER TAX BENEFITS AND AMORTIZATION EXPENSE ASSOCIATED WITH TAX CREDIT STRUCTURES

(In Millions)			MARCH 31, 2024			MARCH 31, 2023
Income Tax Credits and Other Income Tax Benefits
Affordable Housing			$	21.7		$	22.4
New Markets			5.0			5.9
Total Income Tax Credits and Other Income Tax Benefits			$	26.7		$	28.3
Amortization Expense
Affordable Housing			$	19.5		$	19.8
New Markets			4.4			4.7
Total Amortization Expense			$	23.9		$	24.5

Investment funds. Northern Trust acts as asset manager for various funds in which clients of Northern Trust are investors. As an asset manager of funds, Northern Trust earns a competitively priced fee that is based on assets managed and varies with each fund’s investment objective. Based on its analysis, Northern Trust has determined that it is not the primary beneficiary of these VIEs under GAAP.

Some of the funds for which Northern Trust acts as asset manager comply or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds and, therefore, the funds are exempt from the consolidation requirements in ASC 810-10. Northern Trust voluntarily waived $2.3 million and $2.0 million of money market fund fees for the three months ended March 31, 2024 and 2023, respectively, related to certain competitive factors. Northern Trust does not have any contractual obligations to provide financial support to the funds. Any potential future support of the funds will be at the discretion of Northern Trust after an evaluation of the specific facts and circumstances.

Periodically, Northern Trust makes seed capital investments to certain funds. As of March 31, 2024 and December 31, 2023, Northern Trust had no seed capital investments and no unfunded commitments related to seed capital investments.

Notes to Consolidated Financial Statements (unaudited) (continued)

Note 20 – Commitments and Contingent Liabilities

Off-Balance Sheet Financial Instruments, Guarantees and Other Commitments. Northern Trust, in the normal course of business, enters into various types of commitments and issues letters of credit to meet the liquidity and credit enhancement needs of its clients. The contractual amounts of these instruments represent the maximum potential credit exposure should the instrument be fully drawn upon and the client default. To control the credit risk associated with entering into commitments and issuing letters of credit, Northern Trust subjects such activities to the same credit quality and monitoring controls as its lending activities. Northern Trust does not believe the total contractual amount of these instruments to be representative of its future credit exposure or funding requirements.

The following table provides details of Northern Trust's off-balance sheet financial instruments as of March 31, 2024 and December 31, 2023.

TABLE 69: SUMMARY OF OFF-BALANCE SHEET FINANCIAL INSTRUMENTS

			MARCH 31, 2024									DECEMBER 31, 2023
(In Millions)			ONE YEAR AND LESS			OVER ONE YEAR			TOTAL			ONE YEAR AND LESS			OVER ONE YEAR			TOTAL
Undrawn Commitments(1)			$	10,322.2		$	18,957.1		$	29,279.3		$	11,849.5		$	18,909.6		$	30,759.1
Standby Letters of Credit and Financial Guarantees(2)(3)			90,610.8			327.2			90,938.0			85,752.0			639.0			86,391.0
Commercial Letters of Credit			17.2			0.1			17.3			29.2			1.3			30.5
Securities Lent with Indemnification			138,278.1			—			138,278.1			140,539.1			—			140,539.1
Unsettled Reverse Repurchase Agreements			16,442.4			—			16,442.4			27,667.7			—			27,667.7
Total Off-Balance Sheet Financial Instruments			$	255,670.7		$	19,284.4		$	274,955.1		$	265,837.5		$	19,549.9		$	285,387.4

(1) These amounts exclude $259.1 million and $222.2 million of commitments participated to others at March 31, 2024 and December 31, 2023, respectively.

(2) These amounts include $41.0 million and $39.1 million of standby letters of credit secured by cash deposits or participated to others as of March 31, 2024 and December 31, 2023, respectively.

(3) These amounts include a $89.3 billion and $84.6 billion guarantee to the Fixed Income Clearing Corporation (FICC) under the sponsored member program, without taking into consideration the related collateral, as of March 31, 2024 and December 31, 2023, respectively. Northern Trust became a sponsored member during the third quarter of 2021.

Undrawn Commitments generally have fixed expiration dates or other termination clauses. Since a significant portion of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future loans or liquidity requirements.

Standby Letters of Credit obligate Northern Trust to meet certain financial obligations of its clients, if, under the contractual terms of the agreement, the clients are unable to do so. These instruments are primarily issued to support public and private financial commitments, including commercial paper, bond financing, initial margin requirements on futures exchanges and similar transactions. Northern Trust is obligated to meet the entire financial obligation of these agreements and in certain cases is able to recover the amounts paid through recourse against collateral received or other participants. Since the vast majority of the standby letters of credit are never drawn, the total standby letters of credit amount does not necessarily represent future loans or liquidity requirements.

Financial Guarantees are issued by Northern Trust to guarantee the performance of a client to a third party under certain arrangements.

Commercial Letters of Credit are instruments issued by Northern Trust on behalf of its clients that authorize a third party (the beneficiary) to draw drafts up to a stipulated amount under the specified terms and conditions of the agreement and other similar instruments. Commercial letters of credit are issued primarily to facilitate international trade.

Securities Lent with Indemnification involves Northern Trust lending securities owned by clients to borrowers who are reviewed and approved by the Northern Trust Capital Markets Credit Committee, as part of its securities custody activities and at the direction of its clients. In connection with these activities, Northern Trust has issued indemnifications to certain clients against certain losses that are a direct result of a borrower’s failure to return securities when due, should the value of such securities exceed the value of the collateral required to be posted. Borrowers are required to collateralize fully securities received with cash or marketable securities. As securities are loaned, collateral is maintained at a minimum of 100% of the fair value of the securities plus accrued interest. The collateral is revalued on a daily basis. The amount of securities loaned as of March 31, 2024 and December 31, 2023 subject to indemnification was $138.3 billion and $140.5 billion, respectively. Because of the credit quality of the borrowers and the requirement to fully collateralize securities borrowed, management believes that the exposure to credit loss from this activity is not significant and no liability was recorded as of March 31, 2024 or December 31, 2023, related to these indemnifications.

Unsettled Repurchase and Reverse Repurchase Agreements. Northern Trust enters into repurchase agreements and reverse repurchase agreements which may settle at a future date. In repurchase agreements, Northern Trust receives cash from and provides securities as collateral to a counterparty. In reverse repurchase agreements, Northern Trust advances cash to and receives securities as collateral from a counterparty. These transactions are recorded on the consolidated balance sheets on the

Notes to Consolidated Financial Statements (unaudited) (continued)

settlement date. As of March 31, 2024 and December 31, 2023, there were $16.4 billion and $27.7 billion unsettled reverse repurchase agreements, respectively, and no unsettled repurchase agreements.

Sponsored Member Program**.** Northern Trust is an approved Government Securities Division (GSD) netting and sponsoring member in the FICC sponsored member program, through which Northern Trust submits eligible repurchase and reverse repurchase transactions in U.S. government securities between Northern Trust and its sponsored member clients for novation and clearing. Northern Trust may sponsor clients to clear their eligible repurchase transactions with the FICC. As a sponsoring member, Northern Trust guarantees to the FICC the prompt and full payment and performance of its sponsored member clients’ respective obligations under the FICC GSD’s rules. To mitigate Northern Trust’s credit exposure under this guarantee, Northern Trust obtains a security interest in its sponsored member clients’ collateral. See Note 23—Offsetting of Assets and Liabilities for additional information on Northern Trust’s repurchase and reverse repurchase agreements.

Clearing and Settlement Organizations**.** The Bank is a participating member of various cash, securities and foreign exchange clearing and settlement organizations. It participates in these organizations on behalf of its clients and on its own behalf as a result of its own activities. A wide variety of cash and securities transactions are settled through these organizations, including those involving U.S. Treasuries, obligations of states and political subdivisions, asset-backed securities, commercial paper, dollar placements, and securities issued by the Government National Mortgage Association.

Certain of these industry clearing and settlement exchanges require their members to guarantee their obligations and liabilities and/or to provide liquidity support in the event other members do not honor their obligations as stipulated in each clearing organization’s membership agreement. Exposure related to these agreements varies, primarily as a result of fluctuations in the volume of transactions cleared through the organizations. At March 31, 2024 and December 31, 2023, Northern Trust has not recorded any material liabilities under these arrangements as Northern Trust believes the likelihood that a clearing or settlement exchange (of which Northern Trust is a member) would become insolvent is remote. Controls related to these clearing transactions are closely monitored by management to protect the assets of Northern Trust and its clients.

FDIC Special Assessment**.** In November 2023, the Federal Deposit Insurance Corporation (FDIC) issued a final rule to implement a special assessment to recoup losses to the deposit insurance fund associated with bank failures in the first half of 2023. In conjunction with the special assessment, $84.6 million was recognized as an accrued liability and related expense in the fourth quarter of 2023. During the current quarter, the FDIC published revised estimated losses as well as estimated recoveries from the related bank failures As a result, Northern Trust estimated an additional cost of $12.5 million in the current quarter, recorded to Other Operating Expense.

Legal Proceedings. In the normal course of business, the Corporation and its subsidiaries are routinely defendants in or parties to pending and threatened legal actions, and are subject to regulatory examinations, information-gathering requests, investigations, and proceedings, both formal and informal. In certain legal actions, claims for substantial monetary damages are asserted. In regulatory matters, claims for disgorgement, restitution, penalties and/or other remedial actions or sanctions may be sought.

Based on current knowledge, after consultation with legal counsel and after taking into account current accruals, management does not believe that losses, fines or penalties, if any, arising from pending litigation or threatened legal actions or regulatory matters either individually or in the aggregate, after giving effect to applicable reserves and insurance coverage will have a material adverse effect on the consolidated financial position or liquidity of the Corporation, although such matters could have a material adverse effect on the Corporation’s operating results for a particular period.

Under GAAP, (i) an event is “probable” if the “future event or events are likely to occur”; (ii) an event is “reasonably possible” if “the chance of the future event or events occurring is more than remote but less than likely”; and (iii) an event is “remote” if “the chance of the future event or events occurring is slight.”

The outcome of litigation and regulatory matters is inherently difficult to predict and/or the range of loss often cannot be reasonably estimated, particularly for matters that (i) will be decided by a jury, (ii) are in early stages, (iii) involve uncertainty as to the likelihood of a class being certified or the ultimate size of the class, (iv) are subject to appeals or motions, (v) involve significant factual issues to be resolved, including with respect to the amount of damages, (vi) do not specify the amount of damages sought or (vii) seek very large damages based on novel and complex damage and liability legal theories. Accordingly, the Corporation cannot reasonably estimate the eventual outcome of these pending matters, the timing of their ultimate resolution or what the eventual loss, fines or penalties, if any, related to each pending matter will be.

In accordance with applicable accounting guidance, the Corporation records accruals for litigation and regulatory matters when those matters present loss contingencies that are both probable and reasonably estimable. When loss contingencies are not both probable and reasonably estimable, the Corporation does not record accruals. No material accruals have been recorded for pending litigation or threatened legal actions or regulatory matters.

For a limited number of matters for which a loss is reasonably possible in future periods, whether in excess of an accrued liability or where there is no accrued liability, the Corporation is able to estimate a range of possible loss. As of March 31,

Notes to Consolidated Financial Statements (unaudited) (continued)

2024, the Corporation has estimated the range of reasonably possible loss for these matters to be from zero to approximately $25 million in the aggregate. The Corporation’s estimate with respect to the aggregate range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate.

In certain other pending matters, there may be a range of reasonably possible loss (including reasonably possible loss in excess of amounts accrued) that cannot be reasonably estimated for the reasons described above. Such matters are not included in the estimated range of reasonably possible loss discussed above.

In 2015, Northern Trust Fiduciary Services (Guernsey) Limited (NTFS), an indirect subsidiary of the Corporation, was charged by a French investigating magistrate judge with complicity in estate tax fraud in connection with the administration of two trusts for which it serves as trustee. Charges also were brought against a number of other persons and entities related to this matter. In 2017, a French court found no estate tax fraud had occurred and NTFS and all other persons and entities charged were acquitted. The Public Prosecutor’s Office of France appealed the court decision and in June 2018 a French appellate court issued its opinion on the matter, acquitting all persons and entities charged, including NTFS. In January 2021, the Cour de Cassation, the highest court in France, reversed the June 2018 appellate court ruling, requiring a re-trial at the appellate court level. This re-trial concluded in October 2023. On March 5, 2024 the appellate court rendered a judgment against all defendants, including NTFS. NTFS was ordered to pay a fine of €187,500 in conjunction with the judgment. In addition, the court ordered that certain of those convicted in relation to tax fraud or aiding and abetting tax fraud, including NTFS, are jointly and severally liable for any allegedly unpaid estate taxes owing, plus penalties and interest. NTFS provided no tax advice and was not involved in the preparation or filing of the challenged estate tax filings in this case. Further, NTFS believes it acted in accordance with all applicable laws and fully complied with its fiduciary duties. Accordingly, NTFS filed an appeal of the judgment on March 5, 2024. Under applicable law, upon the filing by NTFS of its appeal, the judgment, as well as its effects (including the fine and joint and several liability) will be stayed pending the outcome of the appeal.

Visa Class B Common Shares. Northern Trust, as a member of Visa U.S.A. Inc. (Visa U.S.A.) and in connection with the 2007 restructuring of Visa U.S.A. and its affiliates and the 2008 initial public offering of Visa Inc. (Visa), received certain Visa Class B common shares. The Visa Class B common shares are subject to certain transfer restrictions until the final resolution of certain litigation related to interchange fees involving Visa (the covered litigation), at which time the shares are convertible into Visa Class A common shares based on a conversion rate dependent upon the ultimate cost of resolving the covered litigation. Since 2018, Visa has deposited an additional $2.8 billion into an escrow account previously established with respect to the covered litigation. As a result of the additional contributions to the escrow account, the rate at which Visa Class B common shares will convert into Visa Class A common shares was reduced to 1.5875 as of March 31, 2024.

In September 2018, Visa reached a proposed class settlement agreement covering damage claims but not injunctive relief claims regarding the covered litigation. In December 2019, the district court granted final approval for the proposed class settlement agreement. In March 2023, the Second Circuit Court of Appeals affirmed the district court’s approval of the class settlement agreement. Certain merchants have opted out of the class settlement and are pursuing claims separately. In March 2024, Visa announced it reached a settlement agreement covering injunctive relief claims regarding the covered litigation, this settlement is subject to court approval. The ultimate resolution of the covered litigation, the timing for removal of the selling restrictions on the Visa Class B common shares and the rate at which such shares will ultimately convert into Visa Class A common shares are uncertain.

On April 8, 2024, Visa commenced an offer to exchange outstanding shares of its Class B common stock (Exchange Offer). Under the Exchange Offer, Visa Class B common shareholders have the option to tender some or all of their Class B common shares and in return receive shares of a newly issued series of Visa Class B common shares with a value equal to half the value of the tendered shares and Visa Class C common shares with value equal to the other half of the tendered shares. The newly issued series of Visa Class B common shares are subject to the same transfer and convertibility restrictions as the currently outstanding Visa Class B common shares. The Visa Class C common shares will automatically be converted at the then applicable conversion rate into shares of Visa Class A common stock if transferred to a person other than a Visa member or an affiliate of a Visa member. One third of the Visa Class C common shares received are transferable within the first 45 days following the accepted exchange, up to two-thirds are transferable within the first 90 days, and all such shares are transferable after 90 days. After the initial exchange offer, Visa can, at its discretion, conduct up to three successive potential exchange offers, in each case, if more than 12 months have passed since the previous exchange offer and after a further 50% reduction of interchange fees at issue in the unresolved claims for damages in the covered litigation. Northern Trust has submitted its election to participate in the Exchange Offer and is tendering all of the Class B shares that it currently holds.

In June 2016 and 2015, Northern Trust recorded a $123.1 million and $99.9 million net gain on the sale of 1.1 million and 1.0 million of its Visa Class B common shares, respectively. These sales do not affect Northern Trust’s risk related to the impact of the covered litigation on the rate at which such shares will ultimately convert into Visa Class A common shares. Northern Trust continued to hold approximately 4.1 million Visa Class B common shares, which are recorded at their original cost basis of

Notes to Consolidated Financial Statements (unaudited) (continued)

zero, as of March 31, 2024 and December 31, 2023. Based upon the March 28, 2024, closing price of $279.08 for a Visa Class A common share, the estimated value of Northern Trust’s Visa Class B shares was approximately $1.8 billion at the current conversion rate of Visa Class B to Visa Class A common shares. The estimated value does not represent fair value given the shares’ limited transferability.

Note 21 – Derivative Financial Instruments

Northern Trust is a party to various derivative financial instruments that are used in the normal course of business to meet the needs of its clients, as part of its trading activity for its own account and as part of its risk management activities. These instruments may include foreign exchange contracts, interest rate contracts, total return swap contracts, and swaps related to the sale of certain Visa Class B common shares.

Foreign exchange contracts are agreements to exchange specific amounts of currencies at a future date, at a specified rate of exchange. Foreign exchange contracts are entered into primarily to meet the foreign exchange needs of clients. Foreign exchange contracts are also used for trading and risk management purposes. For risk management purposes, Northern Trust uses foreign exchange contracts to reduce its exposure to changes in foreign exchange rates relating to certain forecasted non-functional-currency-denominated revenue and expenditure transactions, foreign-currency-denominated assets and liabilities, including debt securities, and net investments in non-U.S. affiliates.

Interest rate contracts include swap and option contracts. Interest rate swap contracts involve the exchange of fixed and floating rate interest payment obligations without the exchange of the underlying principal amounts. Northern Trust enters into interest rate swap contracts with its clients and also may utilize such contracts to reduce or eliminate the exposure to changes in the cash flows or fair value of hedged assets or liabilities due to changes in interest rates. Interest rate option contracts may include caps, floors, collars and swaptions, and provide for the transfer or reduction of interest rate risk, typically in exchange for a fee. Northern Trust enters into option contracts primarily as a seller of interest rate protection to clients. Northern Trust receives a fee at the outset of the agreement for the assumption of the risk of an unfavorable change in interest rates. This assumed interest rate risk is then mitigated by entering into an offsetting position with an outside counterparty. Northern Trust may also purchase or enter into option contracts for risk management purposes including to reduce the exposure to changes in the cash flows of hedged assets due to changes in interest rates.

The following table shows the notional and fair values of all derivative financial instruments as of March 31, 2024 and December 31, 2023.

TABLE 70: NOTIONAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS

			MARCH 31, 2024									DECEMBER 31, 2023
			NOTIONAL VALUE			FAIR VALUE						NOTIONAL VALUE			FAIR VALUE
(In Millions)			ASSET**(1)**			LIABILITY**(2)**			ASSET(1)			LIABILITY(2)
Derivatives Designated as Hedging under GAAP
Interest Rate Contracts
Fair Value Hedges			$	9,466.4		$	182.4		$	420.1		$	7,042.7		$	94.7		$	71.0
Foreign Exchange Contracts
Cash Flow Hedges			164.9			4.0			—			1,453.6			15.0			42.2
Net Investment Hedges			4,086.7			21.2			0.8			4,077.4			13.3			31.9
Total Derivatives Designated as Hedging under GAAP			$	13,718.0		$	207.6		$	420.9		$	12,573.7		$	123.0		$	145.1
Derivatives Not Designated as Hedging under GAAP
Non-Designated Risk Management Derivatives
Foreign Exchange Contracts			$	—		$	—		$	—		$	20.7		$	—		$	0.1
Other Financial Derivatives(3)			930.4			—			21.0			867.9			—			25.4
Total Non-Designated Risk Management Derivatives			$	930.4		$	—		$	21.0		$	888.6		$	—		$	25.5
Client-Related and Trading Derivatives
Foreign Exchange Contracts			$	317,051.6		$	1,331.9		$	1,317.3		$	313,336.9		$	3,238.4		$	3,181.0
Interest Rate Contracts			15,892.9			221.6			57.8			13,584.1			206.8			298.2
Total Client-Related and Trading Derivatives			$	332,944.5		$	1,553.5		$	1,375.1		$	326,921.0		$	3,445.2		$	3,479.2
Total Derivatives Not Designated as Hedging under GAAP			$	333,874.9		$	1,553.5		$	1,396.1		$	327,809.6		$	3,445.2		$	3,504.7
Total Gross Derivatives			$	347,592.9		$	1,761.1		$	1,817.0		$	340,383.3		$	3,568.2		$	3,649.8
Less: Netting(4)						914.2			1,070.1						3,126.7			2,205.4
Total Derivative Financial Instruments						$	846.9		$	746.9					$	441.5		$	1,444.4

(1) Derivative assets are reported in Other Assets on the consolidated balance sheets.

(2) Derivative liabilities are reported in Other Liabilities on the consolidated balance sheets.

(3) Includes swaps related to sales of certain Visa Class B common shares.

Notes to Consolidated Financial Statements (unaudited) (continued)

(4) See further detail in Note 23—Offsetting of Assets and Liabilities.

Notional amounts of derivative financial instruments do not represent credit risk and are not recorded in the consolidated balance sheets. They are used merely to express the volume of this activity. Northern Trust’s credit-related risk of loss is limited to the positive fair value of the derivative instrument, net of any collateral received, which is significantly less than the notional amount.

All derivative financial instruments, whether designated as hedges or not, are recorded on the consolidated balance sheets at fair value within Other Assets or Other Liabilities. Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting arrangements or similar agreements exist between Northern Trust and the counterparty.

Hedging Derivative Instruments Designated under GAAP. Northern Trust uses derivative instruments to hedge its exposure to foreign currency, interest rate, and equity price. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP as fair value, cash flow or net investment hedges. Other derivatives that are entered into for risk management purposes as economic hedges are not formally designated as hedges and changes in fair value are recognized currently in Other Operating Income within the consolidated statements of income (see below section “Derivative Instruments Not Designated as Hedging under GAAP”).

In order to qualify for hedge accounting, a formal assessment is performed on a calendar-quarter basis to verify that derivatives used in designated hedging transactions continue to be highly effective in offsetting the changes in fair value or cash flows of the hedged item. If a derivative ceases to be highly effective, matures, is sold or is terminated, or if a hedged forecasted transaction is no longer probable of occurring, hedge accounting is terminated and the derivative is treated as if it were a trading instrument.

Fair Value Hedges. Derivatives are designated as fair value hedges to limit Northern Trust’s exposure to changes in the fair value of assets and liabilities due to movements in interest rates. Northern Trust may enter into interest rate swaps to hedge changes in fair value of AFS debt securities and long-term subordinated debt and senior notes. Northern Trust applied the “shortcut” method of accounting, available under GAAP, which assumes there is perfect effectiveness in a hedge, for all of its fair value hedges during the three month periods ended March 31, 2024 and 2023. Changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability attributable to the hedged risk are recognized currently in earnings within the same income statement line item.

Cash Flow Hedges. Derivatives are also designated as cash flow hedges in order to minimize the variability in cash flows of earning assets or forecasted transactions caused by movements in interest or foreign exchange rates. Northern Trust may enter into foreign exchange contracts to hedge changes in cash flows due to movements in foreign exchange rates of forecasted foreign- currency-denominated transactions and foreign-currency-denominated debt securities. Northern Trust may also enter into interest rate contracts to hedge changes in cash flows due to movements in interest rates of AFS debt securities. The change in fair value of cash flow hedging derivative instruments are recorded in AOCI and reclassified to earnings when the hedged forecasted transaction impacts earnings within the same income statement line item.

There were no material gains or losses reclassified into earnings during the three month periods ended March 31, 2024 and 2023, as a result of the discontinuance of forecasted transactions that were no longer probable of occurring. It is estimated that net gains of $4.0 million will be reclassified into Net Income within the next twelve months relating to cash flow hedges of foreign-currency-denominated debt securities. As of March 31, 2024, one month was the maximum length of time over which the exposure to variability in future cash flows of forecasted foreign-currency-denominated debt securities was being hedged.

Notes to Consolidated Financial Statements (unaudited) (continued)

The following tables provide fair value and cash flow hedge derivative gains and losses recognized in income during the three month periods ended March 31, 2024 and 2023.

TABLE 71: LOCATION AND AMOUNT OF FAIR VALUE AND CASH FLOW HEDGE DERIVATIVE GAINS AND LOSSES RECORDED IN INCOME

(In Millions)			INTEREST INCOME						INTEREST EXPENSE						OTHER OPERATING INCOME
THREE MONTHS ENDED MARCH 31,			2024			2023			2024			2023			2024			2023
Total amounts on the consolidated statements of income			$	2,445.6		$	1,455.4		$	1,917.5		$	924.2		$	61.0		$	46.8
Gains (Losses) on fair value hedges recognized on
Interest Rate Contracts
Recognized on derivatives			123.0			(18.5)			(30.1)			49.1			—			—
Recognized on hedged items			(123.0)			18.5			30.1			(49.1)			—			—
Amounts related to interest settlements on derivatives			22.3			12.3			(19.9)			(18.4)			—			—
Total gains (losses) recognized on fair value hedges			$	22.3		$	12.3		$	(19.9)		$	(18.4)		$	—		$	—
Gains (Losses) on cash flow hedges recognized on
Foreign Exchange Contracts
Net gains (losses) reclassified from AOCI to net income			$	5.5		$	—		$	—		$	—		$	—		$	0.6
Total gains (losses) reclassified from AOCI to net income on cash flow hedges			$	5.5		$	—		$	—		$	—		$	—		$	0.6

The following table provides the impact of fair value hedge accounting on the carrying value of the designated hedged items as of March 31, 2024 and December 31, 2023.

TABLE 72: HEDGED ITEMS IN FAIR VALUE HEDGES

			MARCH 31, 2024						DECEMBER 31, 2023
(In Millions)			CARRYING VALUE OF THE HEDGED ITEMS			CUMULATIVE HEDGE ACCOUNTING BASIS ADJUSTMENT**(1)(3)**			CARRYING VALUE OF THE HEDGED ITEMS			CUMULATIVE HEDGE ACCOUNTING BASIS ADJUSTMENT(2)(3)
Available for Sale Debt Securities(4)			$	7,319.0		$	(45.5)		$	5,048.8		$	77.5
Senior Notes and Long-Term Subordinated Debt			2,469.9			(274.8)			2,495.9			(248.7)

(1) The cumulative hedge accounting basis adjustment includes $2.1 million related to discontinued hedging relationships of AFS debt securities and $25.6 million related to discontinued hedging relationships in the cumulative hedge accounting basis adjustment of senior notes and long-term debt as of March 31, 2024.

(2) The cumulative hedge accounting basis adjustment includes $2.2 million related to discontinued hedging relationships of AFS debt securities and $29.6 million related to discontinued hedging relationships in the cumulative hedge accounting basis adjustment of senior notes and long-term debt as of December 31, 2023.

(3) Positive (negative) amounts related to AFS securities represent cumulative fair value hedge basis adjustments that will reduce (increase) net interest income in future periods. Positive (negative) amounts related to Senior Notes and Long-Term Subordinated Debt represent cumulative fair value hedge basis adjustments that will increase (reduce) net interest income in future periods.

(4) Carrying value represents amortized cost.

Net Investment Hedges. Certain foreign exchange contracts are designated as net investment hedges to minimize Northern Trust’s exposure to variability in the foreign currency translation of net investments in non-U.S. branches and subsidiaries. Net investment hedge gains of $81.3 million and losses of $32.5 million were recognized in AOCI related to foreign exchange contracts for the three months ended March 31, 2024 and 2023, respectively.

Derivative Instruments Not Designated as Hedging under GAAP. Northern Trust’s derivative instruments that are not designated as hedging under GAAP include derivatives for purposes of client-related and trading activities, as well as other risk management purposes. These activities consist principally of providing foreign exchange services to clients in connection with Northern Trust’s global custody business. However, in the normal course of business, Northern Trust also engages in trading of currencies for its own account.

Non-designated risk management derivatives may include foreign exchange contracts entered into to manage the foreign currency risk of non-U.S.-dollar-denominated assets and liabilities, the net investment in certain non-U.S. affiliates, commercial loans and forecasted foreign-currency-denominated transactions. Swaps related to sales of certain Visa Class B common shares were entered into pursuant to which Northern Trust retains the risks associated with the ultimate conversion of the Visa Class B common shares into Visa Class A common shares. Total return swaps are entered into to manage the equity price risk associated with certain investments.

Changes in the fair value of derivative instruments not designated as hedges under GAAP are recognized currently in income. The following table provides the location and amount of gains and losses recorded in the consolidated statements of income for the three and three months ended March 31, 2024 and 2023 for derivative instruments not designated as hedges under GAAP.

Notes to Consolidated Financial Statements (unaudited) (continued)

TABLE 73: LOCATION AND AMOUNT OF GAINS AND LOSSES RECORDED IN INCOME FOR DERIVATIVES NOT DESIGNATED AS HEDGING UNDER GAAP

(In Millions)			DERIVATIVE GAINS (LOSSES) LOCATION RECOGNIZED IN INCOME			AMOUNT OF DERIVATIVE GAINS (LOSSES) RECOGNIZED IN INCOME
THREE MONTHS ENDED MARCH 31,
2024			2023
Non-designated risk management derivatives
Foreign Exchange Contracts			Other Operating Income			$	(0.2)		$	0.7
Other Financial Derivatives(1)			Other Operating Income			(1.2)			(8.8)
Gains (Losses) from non-designated risk management derivatives						$	(1.4)		$	(8.1)
Client-related and trading derivatives
Foreign Exchange Contracts			Foreign Exchange Trading Income			$	57.0		$	53.0
Interest Rate Contracts			Security Commissions and Trading Income			1.2			2.5
Gains from client-related and trading derivatives						$	58.2		$	55.5
Total gains from derivatives not designated as hedging under GAAP						$	56.8		$	47.4

(1) Includes swaps related to the sale of certain Visa Class B common shares.

Note 22 – Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase are accounted for as collateralized financings and recorded at the amounts at which the securities were sold plus accrued interest. To minimize any potential credit risk associated with these transactions, the fair value of the securities sold is monitored, limits are set on exposure with counterparties, and the financial condition of counterparties is regularly assessed. Securities sold under agreements to repurchase are either directly held by, or pledged to the counterparty until the repurchase. Northern Trust nets securities sold under repurchase agreements against those purchased under resale agreements when there is a legally enforceable master netting arrangement and the other conditions to net are met.

The following table provides information regarding repurchase agreements that are accounted for as secured borrowings as of March 31, 2024 and December 31, 2023.

TABLE 74: REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS

			REMAINING CONTRACTUAL MATURITY OF THE AGREEMENTS
			MARCH 31, 2024			DECEMBER 31, 2023
(In Millions)			OVERNIGHT AND CONTINUOUS
U.S. Treasury and Agency Securities			$	511.4		$	784.7
Total Borrowings			511.4			784.7
Net Amount of Recognized Liabilities for Repurchase Agreements in Note 23			511.4			784.7

Notes to Consolidated Financial Statements (unaudited) (continued)

Note 23 – Offsetting of Assets and Liabilities

The following table provides information regarding the offsetting of derivative assets and securities purchased under agreements to resell within the consolidated balance sheets as of March 31, 2024 and December 31, 2023.

TABLE 75: OFFSETTING OF DERIVATIVE ASSETS AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL

			MARCH 31, 2024
(In Millions)			GROSS RECOGNIZED ASSETS			GROSS AMOUNTS OFFSET IN THE BALANCE SHEET**(3)**			NET AMOUNTS PRESENTED IN THE BALANCE SHEET			GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET**(4)**			NET AMOUNT**(5)**
Derivative Assets(1)
Foreign Exchange Contracts Over the Counter (OTC)			$	923.3		$	699.0		$	224.3		$	3.6		$	220.7
Interest Rate Swaps OTC			399.5			215.2			184.3			—			184.3
Interest Rate Swaps Exchange Cleared			4.5			—			4.5			—			4.5
Total Derivatives Subject to a Master Netting Arrangement			1,327.3			914.2			413.1			3.6			409.5
Total Derivatives Not Subject to a Master Netting Arrangement			433.8			—			433.8			—			433.8
Total Derivatives			1,761.1			914.2			846.9			3.6			843.3
Securities Purchased under Agreements to Resell(2)			$	66,364.6		$	65,864.5		$	500.1		$	500.1		$	—

			DECEMBER 31, 2023
(In Millions)			GROSS RECOGNIZED ASSETS			GROSS AMOUNTS OFFSET IN THE BALANCE SHEET(3)			NET AMOUNTS PRESENTED IN THE BALANCE SHEET			GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET(4)			NET AMOUNT(5)
Derivative Assets(1)
Foreign Exchange Contracts OTC			$	3,006.3		$	2,937.2		$	69.1		$	12.2		$	56.9
Interest Rate Swaps OTC			301.4			189.5			111.9			—			111.9
Interest Rate Swaps Exchange Cleared			0.1			—			0.1			—			0.1
Total Derivatives Subject to a Master Netting Arrangement			3,307.8			3,126.7			181.1			12.2			168.9
Total Derivatives Not Subject to a Master Netting Arrangement			260.4			—			260.4			—			260.4
Total Derivatives			3,568.2			3,126.7			441.5			12.2			429.3
Securities Purchased under Agreements to Resell(2)			$	62,860.2		$	62,075.5		$	784.7		$	784.7		$	—

*(1)*Derivative assets are reported in Other Assets on the consolidated balance sheets. Other Assets (excluding derivative assets) totaled $10.2 billion and $10.3 billion as of March 31, 2024 and December 31, 2023, respectively.

*(2)*Offsetting of Securities Purchased under Agreements to Resell primarily relates to our involvement in the FICC.

*(3)*Including cash collateral received from counterparties.

*(4)*Including financial assets accepted as collateral which are received from counterparties.

*(5)*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, 2024 and December 31, 2023.

Notes to Consolidated Financial Statements (unaudited) (continued)

The following table provides information regarding the offsetting of derivative liabilities and securities sold under agreements to repurchase within the consolidated balance sheets as of March 31, 2024 and December 31, 2023.

TABLE 76: OFFSETTING OF DERIVATIVE LIABILITIES AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

			MARCH 31, 2024
(In Millions)			GROSS RECOGNIZED LIABILITIES			GROSS AMOUNTS OFFSET IN THE BALANCE SHEET**(3)**			NET AMOUNTS PRESENTED IN THE BALANCE SHEET			GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET**(4)**			NET AMOUNT**(5)**
Derivative Liabilities(1)
Foreign Exchange Contracts OTC			$	1,131.3		$	1,051.2		$	80.1		$	—		$	80.1
Interest Rate Swaps OTC			477.7			2.7			475.0			—			475.0
Interest Rate Swaps Exchange Cleared			0.2			—			0.2			—			0.2
Other Financial Derivatives			21.0			16.2			4.8			—			4.8
Total Derivatives Subject to a Master Netting Arrangement			1,630.2			1,070.1			560.1			—			560.1
Total Derivatives Not Subject to a Master Netting Arrangement			186.8			—			186.8			—			186.8
Total Derivatives			1,817.0			1,070.1			746.9			—			746.9
Securities Sold under Agreements to Repurchase(2)			$	66,375.9		$	65,864.5		$	511.4		$	511.4		$	—

			DECEMBER 31, 2023
(In Millions)			GROSS RECOGNIZED LIABILITIES			GROSS AMOUNTS OFFSET IN THE BALANCE SHEET(3)			NET AMOUNTS PRESENTED IN THE BALANCE SHEET			GROSS AMOUNTS NOT OFFSET IN THE BALANCE SHEET(4)			NET AMOUNT(5)
Derivative Liabilities(1)
Foreign Exchange Contracts OTC			$	2,411.7		$	2,175.7		$	236.0		$	—		$	236.0
Interest Rate Swaps OTC			368.3			6.0			362.3			—			362.3
Interest Rate Swaps Exchange Cleared			0.9			—			0.9			—			0.9
Other Financial Derivatives			25.4			23.7			1.7			—			1.7
Total Derivatives Subject to a Master Netting Arrangement			2,806.3			2,205.4			600.9			—			600.9
Total Derivatives Not Subject to a Master Netting Arrangement			843.5			—			843.5			—			843.5
Total Derivatives			3,649.8			2,205.4			1,444.4			—			1,444.4
Securities Sold under Agreements to Repurchase(2)			$	62,860.2		$	62,075.5		$	784.7		$	784.7		$	—

*(1)*Derivative liabilities are reported in Other Liabilities on the consolidated balance sheets. Other Liabilities (excluding derivative liabilities) totaled $2.9 billion and $4.0 billion as of March 31, 2024 and December 31, 2023, respectively.

*(2)*Offsetting of Securities Sold under Agreements to Repurchase primarily relates to our involvement in the FICC.

*(3)*Including cash collateral deposited with counterparties.

*(4)*Including financial assets accepted as collateral which are deposited with counterparties.

*(5)*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, 2024 and December 31, 2023.

All of Northern Trust’s securities sold under agreements to repurchase (repurchase agreements) and securities purchased under agreements to resell (reverse repurchase agreements) involve the transfer of financial assets in exchange for cash subject to a right and obligation to repurchase those assets for an agreed upon amount. In the event of a repurchase failure, the cash or financial assets are available for offset. All of Northern Trust’s repurchase agreements and reverse repurchase agreements are subject to a master netting arrangement, which sets forth the rights and obligations for repurchase and offset. Under the master netting arrangement, Northern Trust is entitled to offset receivables from and collateral placed with a single counterparty against obligations owed to that counterparty. In addition, collateral held by Northern Trust can be offset against receivables from that counterparty. Northern Trust has elected to net securities sold under repurchase agreements against those purchased under resale agreements when the GAAP requirements to net are met.

Derivative asset and liability positions with a single counterparty can be offset against each other in cases where legally enforceable master netting arrangements or similar agreements exist. Derivative assets and liabilities can be further offset by cash collateral received from, and deposited with, the transacting counterparty. The basis for this view is that, upon termination of transactions subject to a master netting arrangement or similar agreement, the individual derivative receivables do not represent resources to which general creditors have rights and individual derivative payables do not represent claims that are equivalent to the claims of general creditors. Northern Trust has elected to net derivative assets and liabilities when legally enforceable master netting arrangements or similar agreements exist between Northern Trust and the counterparty.

Credit risk associated with derivative instruments relates to the failure of the counterparty and the failure of Northern Trust to pay based on the contractual terms of the agreement, and is generally limited to the unrealized fair value gains and losses on

Notes to Consolidated Financial Statements (unaudited) (continued)

these instruments, net of any collateral received or deposited. The amount of credit risk will increase or decrease during the lives of the instruments as interest rates, foreign exchange rates, or equity prices fluctuate. Northern Trust’s risk is controlled by limiting such activity to an approved list of counterparties and by subjecting such activity to the same credit and quality controls as are followed in lending and investment activities. Credit support annexes and other similar agreements are currently in place with a number of Northern Trust’s counterparties which mitigate the aforementioned credit risk associated with derivative activity conducted with those counterparties by requiring that significant net unrealized fair value gains be supported by collateral placed with Northern Trust.

Additional cash collateral received from and deposited with derivative counterparties totaling $78.3 million and $60.5 million, respectively, as of March 31, 2024, and $373.1 million and $21.3 million, respectively, as of December 31, 2023, was not offset against derivative assets and liabilities in the consolidated balance sheets as the amounts exceeded the net derivative positions with those counterparties.

Certain master netting arrangements Northern Trust enters into with derivative counterparties contain credit-risk-related contingent features in which the counterparty has the option to declare Northern Trust in default and accelerate cash settlement of net derivative liabilities with the counterparty in the event Northern Trust’s credit rating falls below specified levels. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position was $92.7 million and $1.2 billion at March 31, 2024 and December 31, 2023, respectively. Cash collateral amounts deposited with derivative counterparties on those dates included $75.3 million and $1.1 billion, respectively, posted against these liabilities, resulting in a net maximum amount of termination payments that could have been required at March 31, 2024 and December 31, 2023, of $17.4 million and $52.2 million, respectively. Accelerated settlement of these liabilities would not have a material effect on the consolidated financial position or liquidity of Northern Trust.