Northern Trust (NTRS) 25 Apr 232023 Q1 Earnings call transcript

Good day and welcome to the Northern Trust Corporation First Quarter 2023 Earnings Conference Call. Today’s conference is being recorded.

At this time, I’d like to turn the conference over to Jennifer Childe, Director of Investor Relations. Please go ahead.

Thank you Cynthia. welcome call. Trust and XXXX first everyone conference earnings morning to Corporation’s Northern quarter Good

on call Chief me from and Allnut, Joining our Controller, our CEO; our Mike our Jason Chairman Investor O’Grady, Relations Tyler, Grace our and Financial team. Lauren this Officer; Higgins morning are

call. use report which this our northerntrust.com. conference call first our Also will to being the Our trends website, today’s our earnings we XX quarterly on available you release press both guide This quarter only find is on that webcast April The website northerntrust.com. earnings on authorized replay XX. presentation, through review be available live call our will on made financial will and rebroadcast are May website at of is

any the accuracy this commentary to which Safe Harbor our information provided disclaims today. refer on Trust statements accompanying call. on of forward-looking this the continuing Page to in Please of XX presentation, statement our after call apply Northern will regarding

During allow opportunity query and time This as as the to people follow-up. limit questions one ask through related today’s one will your initial many session, permits. and to queue and question move possible the enable question as to us please answer

Thank today. you for us again joining

me over Let turn to call the Mike O’Grady.

Thank Jennifer. you

in the meet operating reminds of to the us clients join first quarter resiliency disruption sector banking be XXXX of to able environments. me welcoming Let our in recent importance you the earnings call. in The needs to all of

management continues and from come our us provide viewed symbolized expect the stability of have us. XXX to sheet anchor. strength the a source conservative years be enabled past six and to Northern as our to like risk balance much liquidity and clients exceptional as Trust over support, our by During strong to approach the service past weeks, have

higher period assist market treasuries of funds the transition manage including and our a During continued their one from through low rates of and the clients interest liquidity, term tightening short quarter, to to rates. and quantitative we easing deposits, money rapid

saw in deposits was funds. during money client quarter higher Overall, by as yielding liquidity the market we increased more offset in increases than a decline

Our sequential quarters, results in fees trust income, to expense and which the slight attributable reflect and growth in experience recent sequential renewed discipline spending improvement certain Expense quarter revenue net The was growth for healthy growth. the timing interest still outpaced moderated year-over-year growth. differences. which both our from and first decrease

the increased business, wealth at single segment The continuing of institutional and turmoil grew We solid from we a the $X took large over in inflows million platform. with $XX clients. in billion strong openings, almost assets pipeline and in contributed We the the solid Within inflows the saw activity to upper the money to a of discussions later are sequentially business, flurry including increase with asset modestly. management our new banking a of management had year mid market quarter. trust in particularly market. wealth sequential start new prospective into digits account our a under business our space fees management in end alone, In while new

New capabilities funds new product lending collective space on securities alternatives with launched. our extending launches in funds focused three and

continued Europe. saw Within asset good servicing, we momentum particularly traction in with

manager Artemis operations full investment administration, of well-positioned closing, and we and For Luxembourg including services to from custody, are funds. management, suite clients for the navigate their economic In strength. UK for a and we we services, risk both uncertainty and serve investment position a in continue to of transitioned example, providing large our UK the ongoing handling investment a are during whom quarter, outsourcing based fund

to the over turn Jason. call now I'll

earnings call. welcoming and Thank Jennifer quarter XXXX join me you our let you, Mike and And first Mike. to

$X.XX results Let's growth on common first Earnings return X. net share favorably the unfavorably average morning, $XXX.X into This expense revenue of by starting the by million. our dive impacted XXX income basis per approximately of equity year-over-year of reported basis, financial quarter and Page we points. movements approximately our on and points, was XX.X%. a currency our growth impacted XXX quarter On basis

On a our XX points movements sequential basis, growth points. by favorably unfavorably impacted XX approximately revenue our approximately and basis impacted growth currency basis by expense

optimize pre-tax Our reported gain footprint. we also $X.X last listed executed real further two terminations items taken January. the notable lease million in securities we of repositioning $X.X the items. impacted on first by previous are actions announced to charges on early quarter from we results slide. quarter and are One recognize estate various Notable global with our the associated Two, pre-tax periods million

items and revenue expense a all to notable Expenses ratio on basis a quarter an trustee totaled billion sequentially. but down and up Trust, servicing sequentially year, sequential prior XX% income prior down down up periods, of Pre-tax sequential basis from $X X% over the was other the Excluding revenue XXX%. X% X% were year. on our prior we're quarter up representing the and component X% of was X% over largest and in flat investment the fees reflecting year. over flat year, the and last

income, sequential driven and income. trading and year-over-year primarily lower had we items exchange is all by non-interest declines which notable foreign Excluding other

months a an the We $XXX March. a saw detail XX% million, in in X% few a of from volumes was down which first up in more two basis, pickup discuss significantly FTE also with quarter ago, I'll modest income the year in moments interest Net reduced on sequentially.

in quarter the real million portfolio. of loan $XX credit estate Our commercial for provision duration first for growth losses and the the size reflecting was

equal of to or comprise XX%. placed of than attention be provide a felt to of loans and loans are loan real detail on Commercial increased comprise we of estate ratio being some want estate of office XX% we would real approximately loans. X% guaranteed XX% estate the our commercial and total commercial loans, portfolio value personally Given loans Approximately real total interest. commercial less have XX% to

assets our Page X. results servicing to on Turning

and X% under quarter $XX year-over-year, servicing administration asset Assets custody clients X% but at sequentially. down trillion for were end up

year-over-year, million largest totaled were $XXX but also X% which of $XXX fund X% fees Custody Asset and but fees million up sequentially. were X% sequentially. component business down down X% the servicing fees year-over-year, the in administration up

our in Transactional custody the fees favorable Custody decreased volumes year sequentially weaker which due activity, from and prior fund increase translation. business quarter. particularly one new fund lower fees. fees lower comprises primarily solid unfavorable and was translation quarter to XX% administration due to time administration markets, approximately later and currency unfavorable of and favorable The markets to due currency generally activity and

servicing sequentially. billion servicing XX% fees down up were but $XXX management X% management year-over-year, for down sequentially. Investment asset clients million, year-over-year, but under management fees X% Investment $XXX were XX% up Assets within asset due prior management fee favorable primarily from sequentially to fees and increased asset waivers. outflows lower currency favorable the year markets decreased market due fund offset and Investment unfavorable translation. markets quarter partially money to by

on to Page wealth X. our Moving business management

$XXX for million the sequential under at up X% management but X% clients $XXX X% year-over-year, down other to year, end investment fees X% for our Assets quarter but were billion management servicing and down a basis. compared wealth up prior Trust, sequentially. on

product acid Sequentially, the year-over-year outflows. fee upturn the declines and the regions were of within later favorable by saw offset AUM our by the impacts money in partially was markets, market by partially The offset our primarily level increase GFO the not unfavorable outflows and waivers. product primarily we regions quarter in fully Within in trust fees. driven was reflected asset both and occurred elimination the level driven market by GFO fund

we Importantly, growth modest our continue fees. to advisory see core organic in

NII trends. Moving to Page and sheet X balance in our

first and treasuries. attention in might some balance With few saw about quarter three data can points we Given categories; and deposits, data being short the be on in sheet trends, funds, the liquidity through placed this market what we also term some thought weeks money on interested client April. additional of We think quarter. background, throughout that and we color provide the you

both liquidity importantly, it's the rise up in wealth And for the April. servicing management. weeks Most first and to three continued was during asset of client quarter meaningfully

higher for deposits there more we clients quarter the money migrate as than into was funds products. While offset kind market continue yielding to increases by the saw in of

funds Relative $XX money up to market or X%. the fourth quarter are billion, our

sequentially quarters run down mentioned, institutional segment, average wealth As XX% are approximately down $XXX considered our three clients billion stickiest operations. Within their deposits X% management of and X%. down the Approximately funds operational, with deposits X% to as average deposits these this were are institutional. use ongoing

and liquidity shifted Across stress $X We rate we organization, to higher non-interest deposits decline and a bearing scenarios, our of the This may considering they to of risks, XX%. a interest clients non-interest wide as alternatives. mix liabilities how yielding and range assets actively reduced in the manage affect deposits bearing possible including billion experienced capital.

investments to shift of asset see the are side sheet let's to So allocated. balance the how

at had $XX held and Fed earning we the was up billion available approximately averaged immediately other banks down liquidity reflecting $XX balances And assets. of XX% billion Average average XX% $XX of Loan were and X% central sequentially. billion. cash to

the duration geographies, the one loan diversified overall floating portfolio across is is year. operating well and XX% Approximately own segments portfolio Our types. of than is and less

quarter, of Securities early the repositioning in short reinvest chosen we've curve. both natural the run reflecting our end X% and were to sequentially which of the off the impact down at the

was to sheet And balance XX/XX sovereign in wealth several down investment occurring XX% between Net dynamics from the for agency of X.X X.X consists quarter, split year impact NII duration billion the portfolio and income and total held aggregate, the $XXX of duration of year. available prior liquid portfolio reflected is maturity. securities interest and up In for the the the has X% quarter. sequentially. The years. largely million $XX highly many late sale Our U.S. bonds. Treasury, fund it's a

improvement continued funds treasuries. sheet As mentioned, we money our market and saw from balance deposits to

have a beta costs interest the funding XX%. XX with sequential rates. market two with costs. rates impact prior up the quarter. in fewer data term points to the in deposit increases our The cycle prior The year bearing finally, cumulative average quarter. days the impact of quarter higher XX our margin higher due And XX%. as of during reflect quarter, from from Deposit by of the for the Net primarily was and year interest roughly X.XX% And short we increased at ago flat interest March higher the offset basis results

which demand NII was client XX driven is our continue days be less quarter, second the by ago. it For than predictable to will

in average decline billion observed quarter a of typical Our far thus an are dollars. billion tax season, to client few and we've $XXX approximately the incremental deposits subsequent

to Turning X. Page

but As reported were sequentially. in year X% quarter, than higher $X.X prior lower the X% billion non-interest expenses first the

control. year-over-year, charges the reducing on those Excluding rate on first up our costs Expenses periods controlling slide. are X% the but expense we're were of flat the quarter and focused in Overall, noted most in both is that sequentially. under growth

just continued highlights. sequentially. expense pressure, on up areas growth of of expense up to Compensation highest last largely few hit Compensation charges a be I'll spend. year, year-over-year headcount compared the and the by reflects inflationary year's expansion technology prior wage incentives. excluding X% the was offset lower annualization to partially X% The and

in retirement followed up The than of investment, payment spending to lesser driven security, due XX% risk was spending quarter. to our eligible on of year-over-year, our spend modernization reflecting a and XX% and core areas. annual spend X% regulatory extent is and on equity sequentially. software, sequential infrastructure More technology comprised increases information business of but largely by our incentives first Equipment up the

Turning X. Page to

above and improved ratios minimum. the capital well regulatory to continue be Our our in quarter required

XX under the despite basis above to basis ratio Our approach stock reflects standardized requirements. one up repurchases. points XXX from This common common quarter XX.X% our the buffer was point regulatory tier resuming prior equity

Federal sale a our for the on under ratios. capital and reminder, a two framework, calculation. category losses losses our securities Reserve's institution already Thus, immediately as in unrealized mark-to-market available include in we occur this capital As

prior Our was X.X% XX the up points one tier from ratio basis leverage quarter.

for other comprehensive the of quarters, million quarters ratios. and loan dividends $XXX were the $XXX common in repositioning income, cash primary pausing and share We lower quarter five meaningful million factors returned Higher securities in accumulated the over million in to prior common increase this shareholders net after buybacks repurchased of the we've through income, capital improved stock. balances $XXX

And questions. that, please line with open Cynthia, the for

Morgan [Operator Stanley. you. with And ahead. Graseck will go take Instructions] we our question Thank first Please from Betsy

want though here. Hi, Really managing an and be environment quarter. under balance the deposits in understand Thanks information might all detail sheet about to did for modest. incremental great you're good how just even the are pressure, where thinking the I morning. it

I Q-to-date last And average think around XXX. believe. is you X% deposits indicated down quarter, that's that from I around

Thanks. So just understand thinking wanted you're about to how that.

the And environment. on is what is as liquidity, it and the Fed also economic an Sure. at referenced have. you we the $XX it's uncertain have The most we just around securities hand short in refer it's we've and got banks which and billion here although important over the that cash thing we world central to well term

So maintain as the environments that provides and of liquidity, and much just as want ton so just greedy. to possible some not be ways, a in but uncertain we liquidity

And us. available we from other balance liquidity to or the for on either want room means sheet a leave also the always side, that for need might And particularly clients with plenty want to deposit is lending from us, perspective. clients that of

uncertain for be patience can whatever available for that we maximum and clients for these just maximum call so flexibility And times, want. our us so

going because demanded like book that, us decent capacity to And about could just you extent follow a is there how understand amount thinking of you're you've loan the got a there. to seems help the as forward Thanks. up

to you're is of to the from sheet. types do the going book yes. But maintaining start existing clients balance billion in about thing always capacity then acts securities working, certainly mechanism do with more. the loans. think and prudent fulfillment right. approach. But And existing you loans. best on with ultimate at have quality do we it's perspective can effectively, with credit, There of lot a we work the $XX is all this, We incompletion Sure, of do that our couldn't as

was have increase to very about years more book. existing dramatically did that's initiatives heard we're clients. to we looking That of forward, any why not to you an loan with couple so that. an initiative here us And largely a lending, ago, talk From do the

But look we at of if that we're looking internally lot turmoil look a opportunity. it From to have, categories. our opportunities as the, the perspective, clients you it's at need if different responding at that provide opportunities they does in the you there's that

to to is or there there. clients this prospects And about we out so we grow. have be how to where a period with opportunities want thoughtful what grow and But are

you. Thank

Betsy. Thanks, Sure.

with go We will Goldman Sachs. Blostein ahead. take our next Alex question from Please

Good morning Alex.

the Good morning. for you Morning. Thank question.

hoping I you mentioned back on the channel with you the of opportunities of was activity guys space. of in the seeing we a So in towards obviously the dislocation wealth could are the banking the start end flurry Mike, quarter.

I in in little in and So the what does terms prospects what maybe maybe and continues guess revenues happen has a does zooming wealth to guess help means out channel? banking of frame happening, I and your us that world that what kind bit been the growth extent to increase of organic

Sure, Alex.

the did I activity. we've talked before, to as little bit a do there as in have more And motion, So there's a money when about faster. has been opportunity we grow mention, lot of

as we fact half so on work quarter with serve meaningful. pretty we that activity result the to a We've And look that interest see that less bring first clients we rate the board in did back year. the the the environment. that this about are and of after and of talked the something where pickup said of there last was is nature That we that

fact building that And well. $XX it's lot upper say that so what would the area we to do I saw would momentum prospects a a we million the of a mentioned, than I And some longer sales process of and the above of process. in in call that term the market that. part I as have business process

approaching that's running a So rather And would quarter, how a quarter one as we than say see more this I two longer it. we're opportunity. opportunity

the talking my again, it. common and follow these for just about around detail. extra Got thanks then up And Great. deposits

bit mix, tending a tax things of down guess, than see average interest quarter. bit so a and right far bearing and the sounds institutional particular, more the bearing deposits as interest more comes it when the in where the So, were season balances non little and the like What's guys little April, in is wealth to back now. on in down you way the April, like XXX, maybe between in sounds I now it they

approach rate think lot as still guys it like on into forward, the So wealth rolling ultimately seems here, guess are since of their a you I sorting from a deposits what's market funds? money it to about you paying is

Sure.

So Alex, with. average. in to about has data and incremental non early up. growth of to incremental mix well, or in give $X $X that And you're obviously, the than for peak time points few a billion down from us out, it's the so the not billion higher work of But talked a rates drop the mix even of mix. right range different a to flattened see there. seeing on. and you average anything from And that rates tax the is bearing perspective, last season, probably couple within since as shift a that fact One we Mike come typical, to it relative then said, after as we that wealth And less that if interest dramatically were particular, mentioned the

right And a going mentioned to you're that in lift overall out cash. of lot I calling And and it client there's liquidity. exactly a

So was of about channel alone the the the of billion quarter. over wealth that seen cash lift in that X in we've

the offsets than channel. more deposit that that so saw that in decline we And

you get there's the positive, are flows give good business in that a that just that us and sense activity And a so there. sense

you. Got

paying Sorry. that And now? deposit you what's right rate just wealth guys the on are the

It by by dependent. size, region highly varies It's by, type.

call to about might on look as of XXX XXX it more to it's it. the an average But thinking give, what instructive, give basis at is impossible it's overall you're cost number if is specific book, so be it, you points. hard a And which the to across

there's competitive. everything is for happened that that's with would add whatever that deposits I with no more Alex, here, just the And market question

to of looking or pricing with more gain and banks price aggressively do to there's that. competition So deposits, retain lots

Of it's get certain away. go going to for away course, if them to to clients. to going relationships, a have we just to make as some our priced price see at likewise, attractive opposed price point, then But you're on

running understand important on wealth than more different these but base, other just their deposits just, think, are broadly as on a managers institutions. of operations. of characteristics well, to have the the asset that And lot have clients, asset Certainly, just side I our deposits, it's owners, they operational client part a of nature that which

in the flows, sticky very hand on so performance. the are per evaluated on And that rate based And that their on other se. these than transaction necessarily based rather sense it's institutions are

And so as when overall. have have they to they're earning rates go they fast as up returns make here sure

wealth overall. they're our to sure be returns as they So looking them well with get with And we're attractive to working make clients efficient. that

lot a So I of our and at base, think characteristics important of others. it's understand the play, relative client dynamics to

for Yes, for it. all the Appreciate you thank sure. And detail. guys,

Sure. Thanks Alex.

question Steven Wolfe next Chubak with Please our We'll go take from Research. ahead.

good Hi, morning.

Good a start morning. the with question to non-comps. off I wanted on

to that made about Looking variable saw a trying at know a next an the component beat there. the to component. outside jumping reasonable amount has A consistent Just that the heavy link point of pick that pieces or us be to you really normalize off quarter? what's Should think was you activity end what services. good of activity expect I at as up some progress levels modeling good for for guys with March? we

Yes. absolutely.

can move around that And item lot. line right. a You're

term In give run, line by short dynamic. me it some item a let was a two maybe the impacted one, timing. short term, that it then So longer call you things; and

back in will there's that some know online we So quarter. improvement second that come likely of

category. in we've then actions expense taken And secondly, that

to advisory And consulting, hard down other hard so work third we've negotiating services, really work down fees. tech worked on party sub-custody, to

we related too. there's measures it related some is the but the broadly office, timing productivity expense definitely so of some also to And to talked about that there

growth million next business a you million not is processing quarter-over-quarter $XX About as we're lifts call one outside as on-premise that's think there's going up in quarter. meaningful But to year. $X see it also timing moving so $XX We're just that an obviously software and related equipment is second that this from see second under consistently. and quarter, likely one And a show about up would there movement see into just million, going where area you'll services. to well. just going into But into increase,

Got just some this NII. in had it. of on know And to your up my follow I for commentary. you alluded

additional so NII cycle. it previously the NII last deposit particular the if peaked debate the alluded detail been eclipse NIM, was on at side. balance room there's juncture, think I appreciate trajectory it's on seeing of duration on whether really to NII some how sheet trajectory, hoping level as just perspective or There's at give we peaked could be if some Fed terms to you easing for had juncture, I should And whether the you growth, this given the helpful. shortening cycle this a or about repositioning and in would in side, in the the asset could

Sure.

on providing about is client And focus reality culturally, advice whatever quarter, in how even on funds. is we talk see conjunction strong about We can a could just to with just just deposits introduced is So call, that have money them often them. across factor don't is appropriate on which that into you clients NII first. morning market even of you just talk this this incredibly a an part see And this we in isolation. The preference. the new there's for

periodic funds. to think are There We tracked And And term basis. being are being at to inside are an short we in about very, periodic, were there advantages the advantages on that's we market looking a very on in in deposits. being money a advantages very company, closely very frequent to what There treasuries. that.

for about each. think the talking of nudging we're clients or I direction just other; understand advantages to them in that's not the so one people And important to

on on talking QT, about impact talking to And here on we more of NII and so taxes. volumes to quarter, we and the volumes It's rates. were from be going last based about than were based is is reality the be interest going

of been And as that is pillars to liquidity, either introduced us, this for those client long in as we continuing preference factor what between that's and three direction. fine, is totally Now, we're grow client liquidity. going could client new see that's

And increases, hard we're traditional to XX% about business, the that's the think Fed short flattened kind run. institutional But of model XX% about in to which deposits, factors, XXX% at beta if our called so out. there. it's the we rate is And of

the betas In meaningfully They XX% call channel, to the lower. are wealth are it XX%.

NII. so with to that because that's and the just that impacted then ratio a client there's U.S. opportunity still an the the from then still. you to in with and But what down introduce That's us dollars, in it's lift more perspective, want to Xs. still obviously, pillars. clients. is strong, preference positive to all carry, our benefit QT it And I'll maintain leveraging Fed saw if other our helpful And for do advantage liquidity action, take happens we make it comment And the mid it's got last with then great there's leverage NIM you've what across from happens if factors a brings is gives and And NIM.

perspective taking Jason. helpful questions. for Thanks Really my

you, You Steven. bet. Thank

We will ahead. Mike with Fargo question Wells Please Mayo go our Securities. next take from

Mike. Morning

actions expenses. [Mike], on you mentioned tougher taking

that showed think I quarter-over-quarter.

range expense is above. to from industry XXX% mentioned benefits above fee a still XXX% your your still But XXX, bit to You the dislocation. quite ratio

about think quarter-over-quarter do better when there? get you than Should we we you'll year-over-year, the looks look should because or So quarter-over-quarter year-over-year? think at progression

we're our I'll perspective same to the call of And it would sequentially sense the and both looking say denominator. and looking and is improvement in the the numerator make I on Mike, in they're that. quarter-over-quarter getting that

the on basis you quarter, seem then So through now markets, time go to reduce expense, side we on at on the as discipline importantly, while how trophy the we we you sequentially it the fees as bottomed go very if then that. fee in the to sequential bringing of slightly, growing We're a the underneath then growth side, can forward holding that but depending they're there, and the And increase tight we very, up more ratio where with but keep to trying we down. and fourth and organic at same side expense out there. expense look kind drive on the having fees looking as

take with next will ahead. question Evercore. go our from Glenn Please Schorr We

Glenn. morning Good

Good morning. other the Question on side. borrowing

I wholesale funding. nothing. And rate up know it's but XXX also basis And think most the up number, is not not paid be of XX%. on I It's it's grown that huge that is points. a to

I'm what just filling got So item to gap got do gap the for is deposits? you looking say? of term? line the think temporary and that down intermediate you know I that a do term of How you about to the in short do

Part the is us of part of And higher part and bar, that is. it think the for in doing clients way more it them. liquidity cost it elevated is more higher, reason but just netting options for entry the a [thick] providing a I accounting just Yes. for like the look the [thick] than higher it it it more doing with of that is to is makes cost works the repo the, the is that the is of that what leads

movement talk to going future that bit the But on And we're because the maybe it's about that short separately it reason break out in more your a see detail even so whether just on little run. to becoming you larger. provide the exact it's that's and becoming point,

actually Okay. helpful. Because it's a Yes. That'd then distraction for you. be

actually clients the as advise more money maybe, is money see capturing? from trends directions? and about versus there you're to from and could are you into just selecting talked And things holistically opposed talk that Okay. going in what coming much it you're deposits treasuries. minuses in? picture, to plusses dollars self past funds, you capturing have How market you than is and about other actually liquidity And different as markets then you tracking your that to client words, it money big of In your it

Yes. Sure.

two did they So might just let a to illustrate case. we example on rate with than say go treasuries. much of it's market service, We've might could large they that. and to track the more park use fine. fund is. able we're that variety or broker a might money for We could more if, institutional quarter their if couple the And really could a reasons they being me them have have If the what give an sheet. prime small are to just that One, then use that's to that's And we might ago, clients prime term money short thoughts. they're it be have why they we a balance that be accurate to Is to on likely some asset and very want of a said, manager, It say, to do fund, like treasuries. a us? worked number hedge a broker, actually we'd financial an that manage

of losing to deposit us on the confirm pricing It's a us certainly for not that's lot is be going the interest track but difficult net to really going. really income tight, because where and

and of in literally The clients is other rates financial management calling are higher. their the wealth saying advisors are end spectrum

You're $XXX,XXX sitting on in cash.

We CD? Would accurately. you'd you into start like out move to money to what ladder to that that. with fund? and Would can a talk it like Let's do market to more portfolio? track move treasury that into like a a about building like Would you much you

house. we And stayed that know so information we that statistics that are biased toward the and the in track different gave in components can we general, but

we're if of And you reflective that there's us here. stayed an bias, what toward telling are information so numbers the ensuring it's

that. Thank you. appreciate Okay,

Sure.

Brian from will with We Deutsche Bedell Bank. next take ahead. Please our go question

Good morning Brian.

pricing point that deposit Maybe keep the to as to alternatives? rates you you to I be How think a versus strategy inclined trends. specifically. And guess major my were rates the the in wealth deposits the deposit at the the raising first what money stay just view about rather, channels, sheet? sort would you you those would those wealth thing let into just Good morning. the on of deposit question, on, question the on balance ladders, do funds deposits raise or into would be incrementally go

Sure.

leaders individual also ability set But have the and right. to So each to at rate. the pricing the are do an overall then within regions levels in that down client of to work that managers there what's are relationship businesses there groups

about pricing a might they're very within peers, management even. relative times going clients there $XXX rate $XXX million. not sheet. And And $XX of But come off that's region geographical overall our thinking always million, with large so are priced be to we're what million, that wealth to is when by obviously then

looking We're talking and at again, we're when they're clients, versus about and with what us our going bias, on keep to if overall a having competition, we're just And it to do. to going the platform. keep deposit, talk about that conversations that

the for sure obviously, is base that though, even it at like again platform. sheet we're bias that we've not cannibalizing But our so looking out the volume. the talked range, to thrown business of And order and where our that deposits market and keep balance the we're whole it's deposits some the that about is may in is pick making in seem available, we've wealth in XX% and the to on making beta up strategic from beginning, XX% sure

we to maybe back And the that of color. given stress on made banking Right. That's then going an early comment up you March. maybe business, picking just that seen mike in great the

you was a I mentioned what Maybe I moving in that that if quickly on strong in of I wealth as internally think maybe past the a term we guess guess, of assets billion you're clients describe were next is phase? the sales the sort of like pitch just of panic longer getting provider in could the going of inflows of, quarters seeing environment to then clients, platform, those you sort but either guess, a that terms sort thinking next dynamic. about, where I the move dislocation? to Are because couple what's that what the of we And phase it Northern. dynamic?

like, would you people over so although where a phase start phase, around speak. have time caught panic of week saying it So is, Brian, I deposits by of the inflows pushing that kind the way that first strong to period, environment were I a wasn't we really the characterize the did panic counter

their why and relative they're there of to long say who it's is, somebody there periods. I what think play about dynamics other comfortable and that's thinking seeing prospects strength has going this more term out is be and the partner is clients were think that financial ensuring different And in at play I time we're longer kind to and the that stability. I

And a this playing see certain That, so history a for better strong brands. would consistent it is And year well. our it. We it's know, In us, plays say environment you call around playing we of off going that's very less long term, than XXX long as that of others. a why I a It's trend doubt, the where and without partner. is it it think been for blip of the time. it of being more off way has is an forward and of being a environments, I plays

Thank Great you. color.

Sure.

Usdin go take Jefferies. with from ahead. will question next We our Please Ken

Ken. Hey

like environment? it's this absolute to how think in about way moving, Hey, positive what to you quarters. the like environment wondering, costs? cost generate towards way everyone. absolute And know managing type we've on talked you're know, philosophically, here. more and But trustees question. to of Coming managing is adjusted thinking best thinking? its levels rate that just just The the growth about is from growth in on seen us right this are seven help just think I'm tough happened or cost a own what's you're back the is what's just leverage about there Thanks. through. walked about expense given operating how and X% you've six the you of I I ratio in

talking the last acceptable recently. then that's good been talked them the it expense we us. for it if this about back to way It's to internally take how to this going back Sure. think a Ken we've you on to one And step is is, frame I'm because charges, don't, not X% charges, because way internally, that's ignoring had the charges. way we've X year. And But we just growth about we not were

to And targeting getting given last part merit XXXX. full forward said, the adjustments growth we we're so We hiring year. bend and last environment about what know know of of the two year's aggressively. labor that and impact got we're year points cycle rate off that increase that we've out the for of carrying of curve But with

all areas rate. the to expense to to And are collectively in get be better general expense addressed going that growth X% or

notable, comp first look at that of look quarter. And at couple good are big look you movements for a so One, because got that and to them. they've couple

out, in also about we in $XX of into dynamics also other merit line. coming of seasonality The in quarter. know $XX coming incentive online we second You quarter, look grants the there's because is But second we've million eligible the know accrual and some retirement that there. million got

from equipment got like maybe talked outside we've services quarter. even that outside And big And happens be and things next by though is services. hiring profitability. to then software, software equipment move about how driven into is I'll a and actions else other from going expense one, the we measures varies and everything then got highlight step up that's from And And what in then last that there, that. and business

not in in visibility some maybe but coming We've clear online, quarter, second third. got incremental on depreciation

second $X know a third coming we line see then we've can you up quarter. million got step million depreciation in that in so item in but in quarter, And $XX

pieces So it. high then couple big the at the of and those a moves underneath are super a level big as well,

an, seven helpful. does there? or there impact super an FX on That's is better, embedded that currency within you And translation do have

mean No, lift expense. an of know I lift in had this quarter, we not we elevation a on just both here. from revenue

significant So side, on here. it not change expense from the really hurt modeling but

if kind bring more all and together it Okay, one of guess I question.

the balance about towards end changes happening a You talked lot sheet of of the quarter.

the understand range went put us see to a think you is XQ do of can We just NI are. of deposits way you where help us that what to versus about of what in beta where can do what to expectations talked have all XQ You help together?

many so and really are, a there's you from not you around got so this and just the on, one. are. it there were to been, hope information. with leave deposit nudge being been given good levels look I But to And just we're moving preference, to provide in think direction emphatic balances just where any advice where then the lot good on I we give deposit factors to try the client a would levels it where particularly saying We've answer there. going of have and

XXX factors I'm it's from far, big see we with I So it's hard to hard to bind see hard, pressed it. second the say down so have we volumes quarter. here, how match that the to of being

down, more the the deposits anticipation given are an but not than much market And volatility where say too client so I am to going do preference just in about give to that going. and

Okay, that's fair. Totally understood. Thanks, Jason.

you, Thank Sure. Ken.

next Jim Global. our Mitchell Seaport go with We will take question from Please ahead.

morning. Hey Jim, good

morning. Good

some the leverage with ratios on maybe the your maybe Just also any did talk thoughts you using on on buyback leverage. about but improving

think on quarters? was we a buyback the the from been here uptick do from last five what about thoughts how So nice doing you've your

no things like our couple up if basis event, on it's there's favor. in a And we this income. XX-XX got in It working from return reason good we've with that was can't good. in points market we One, continue to the something be equity picked

know maybe from a that also up, gives dividends. going we of a half is the over But give AOCI in You and lift pull getting time, to the lift. that we're that par

it's WA. also reduce the think a balance That creative was CETX to because I helped repositioning sheet noteworthy did. it we our

And so those things helped.

that if are we be increasing CETX term history, still buy the back you stock, at think levels the us in dividend gives to so it general, room AFCI what where at a pulling you And long more time to little with on were. our than where while apart is dynamics look about from then return perspective, bit of if a some at are ratio consistent same payout those equity, we and lower we're

always on but tell it And we sure our impact we're peers we and competition the thinking at where's day looking AOCI. we're I'll the making good you about that's nowadays. where the have buffers, how where we every you do look, know and of where's rates

a imagine about you intra thinking quarter. that's And can we're you so should factor

about a the maybe We've bigger maybe talked side. then picture. a And fee that's just fair. Okay, on lot

funds, you is products. higher had the fee which good quarter had one You've money the of end your rate two at and market flows of

you a in takes You're How about think fee we and the do any had How talking side. go flows the and think move puts wealth we income next in forward think into increased the to about perhaps as in beyond? about markets? do we total quarter

end Yes. talked sense averages. to the we a at are of we We've the of good the quarter get relative about where the

positive money to is market it you're so the general, gives we right for an frankly, where business funds fee that's in us. launch attractive the point, And relative And that us are.

our those as in markets but things also a in and much then we growth talk favor, impact have we really also big as business. organic playing know all so the And about

servicing What historical happens funded bigger short levels. short asset particular, The one with not in last that markets pipeline is one the above driver. in is I'll in an often is not run that the thing mention run the still onboarded of

the looks short so And run, it positive.

the side on even side but of the management is relative year, the in to I think, wealth attractive history. late out the also still visibility less we servicing have gave you more information, We And business. asset

Thanks. yes. Okay,

Sure.

go Brennan question from UBS. with Please next ahead. our take Hawken will We

Brennan. morning Good

good my Hey questions. Jason. for morning taking Thanks

Just try something expenses. understand sure on want and make I to

timers. on was Do XXXX can You and had we'd the getting I was that? thinking how expense And really one level And just number time I fully that so growth. X% believe one right? below is kind understand I spoken that understand back a if we X out based to what about that that was on of be set

it be to about very, XXXX Think very as Yes. specific.

Thank you. is. certainly Sure. That

clarifying. just So more one

most chatted we that that line think some in financing had You as how about wholesale. there's other about noise usually

financing were the balances. it you Is trends quarter core to that wholesale flagged. we is least up sum I probably at building when date what line deposits to the in given fair, be decline of assumption about if the out that out quarter strip that think that can of for model the Thanks. to would in with wholesale, and the date we fixed your coming down, thinking you'd just truing the term so near So appropriately then cost operating some we're

funding where what in of general, going and depend And to the how we in and it's on in that we we sources Yes. market wholesale use. go

I FHLB it's where forward, rates so in in to past it's it's doing sometimes Fed. happens But obviously and and general, going sources. been And the just, quarter. mid by And think with going this other be it's and impacted what we're fours the

information as that there's fair, borrowing on questions a so we'll also think well. impacting and we've you time the and means be the the the bit how little I costs. fact And more guys this gotten side And that's in FICC but two give future, try impact to impact on repo, probably asset of the

we'll some on So provide more information it.

That'd love this. do little expenses, really helpful. more on just do just be tacky, but thanks. don't love This Right, to you one if I'd of ticky I'd to is a bit mind. a

five comp, to to $XX non that on million going pickup, bucket like but quarter-to-quarter seemed one it spoke one another. from like was of just You

to mean just helpful. then million surface you should be another, clarify like is the up, that million or bucket mean is from there's quarter-over-quarter if the step underneath does non-comp that million that think we about total So one of it's could and that moving $XX $X $XX that for that

Yes. XXs. I there's I to, am Xs going a areas and where couple mentioned

Because them. of and be some into forgive was for So And XX there's a let gives reduce but forward. the a have some you what's okay, areas We're to referencing. make first movements That the for increase. going XX line. it add to merit to say, the retirement million then and incentive play decent happen that going other factors other business eligible starting with point by me, bit couple take been between XXX% repetitive no I thinking me On little that on quarter, that it'll I'm buckets. going sure comp might you different clear a

to services. and $X second quarter. that from to software. be million software, quarter, million there's I items. $X still It's going be that million million higher movement should equipment few dynamic is movement outside That's about up On services item second million happen Second in equipment from services between first about mentioned equipment think than between into a a going $XX Outside the quarter. includes dollars software. move. That outside and line And line software $XX equipment and does have

Thanks for walking through that.

bet. You

We Please Gerard our ahead. will Cassidy take with question go RBC. next from

Gerard. morning, Good

and on you Can on question on morning, quarter back landscape XXXX, Thomas saw and into Good as is behalf opportunities up see, bit further the Circling bit everyone. look you us Letty following on the of side Gerard. some you fee side. competitive Alex's this we calling organic growth give color institutional any a the This a on earlier.

just good institutional some the side, any wealth color there? the color side, give guys You on on additional but

The that additional I there highly color out there you are a give but is few are quite opportunities Tom. certainly Yes competitive, that there.

having more driving active put with it of year markets consolidate look pressure So or their either the impact to result, operating looking XX% on activities and and that them asset would the managers. down and being as a of I And providers. can what's a a at markets equity is market, last lot XX%, they on say models, outsource how become efficient, lot

being level on the has existing we're And they marketplace defensive and an or of other of I were both opportunities situations because where so mean ways. situations advantaged, where more it's again cut say client the client. in an but that increased two I'll existing can one the

than active at trying obviously more our to and point this So win share. very

of what you interest rate high lastly, an global environment like you an level markets and would in guys then just That's Thank can ideal for And you. helpful. perspective? us detail look for terms

It's interesting. Yes.

that actually ago. the steeper asked that matters few quarters think like a very a on And be secondly, matters slope having ago, first above a might thought seems you of that to low. is lot. a which trajectory, I curve And And want of somewhat Gerard ton. exact weeks question have curve my rates the yield the all

rates below rates but play the XX us call when or equity. days, basis just it for start so it's are we hard it's funds And on points below, return are, when good funds, if in then, Fed And XX fee economics you I to in not, hard, with to is get business, which of lose the lastly, waiver any we land, But not that it the money market a environment get just pace change which a to matters whole money lot. that lot. it's

pace it's banks Fed a just in a change. months why of And of tough it this And ago, the moving very It's time, with a, it's you'll yo struggle that's the literally to not period short XX pace. who of this deal today, creates and curve, aggressively lot time. relatively

of the that those So dynamics are be, three forefront mind from are lens. those would our

you Great, thank you. That's for questions. helpful. And the thank guys taking

You bet.

ahead. We Juneja will Please question from take with Morgan. our Vivek go JP next

Jason. Hi, the took through you've Mike. seen is that terms A Hi, the flow severance yet, numbers? One you. of in fourth the headcount in have couple that of the quarter, questions. Thank we cuts

much very in through where numbers. a So We those happen. we very yet. little happened on the and the head seen gotten play pretty them haven't business the have just good there's already in actually quarter start impact areas It but later they the of

light. but impact, Some

you color that not Any should benefit there numbers us those be or in that So coming through that? QX XQ. or gave some on Jason from in

Yes. think be we along we all I third visible said by think impact meaningful should the

quarter.

Okay.

places. getting we've said then And this jobs also right that remember the that, again, into is remember, about

lower many jobs cost costs, in is so locations. lower higher And instances, cost to this about transitioning from locations from

exiting what we'll on impact see not expense cost, exit our get categories about the in there's I we're focus think to the get benefit, we're the thinking these super earlier, target aggregate rate and average times the that about mentioned to taking some instructive is we're into roles some there. to expense instances. some all of Again, it's try so we growth in And And overall the thinking but that of right level. just different

Okay. gears completely Shifting different one.

increase? from over about separate want seem that doesn't It borrowings that billion now you're how billion. making a much think to should last of that. $X.X ago, diversity quarter your billion $X about like Any spread the that and from color driving other about year talked what's we on on went up You a to $XX

to the where reflected. activity is be But going also FICC -- That's Yes. repo

in borrowing on top repo line, that, of other and just the it? I see not in but line, is the

of to liquidity uncertainty previously I Home all you borrowings, the time other have also was Loan to this which sheet. wanted and period, period, the Federal with term in in during additional balance we this of the some just some think those overnight which, out, add Bank the borrowingsind more time

that's FHLB year-over-year. about line was in That's item. $X.X the There increase billion that [indiscernible] sequentially not

are leave to you're more And still with Michael, done Right. you looking do there? some

contemplating will, there. know, it, the No, up we for I not, you not opportunities high as us, come we're spreads still done, not as mean, extremely it's necessarily

there's liquidity borrowing. that's XX But the management So non-U.S. into Office opt was that big There's moving the XXX line is had line spread in also dynamic one other reclassed been combination that available. is move. there other that that item a to been also bearing some which Euro of leveraging interest but from investment a in has that

to, another And we that's capacity dynamic over is leveraging the back about but and and got there. just think to where to that we see to continue dollars will billion it increase for a use so little you it. so have

Okay. Thank you.

Sure.

additional to today's the will Childe remarks. That question-and-answer or back conference will I conclude turn for closing you session. Ms. any

to thanks for again this look and everyone speaking forward We soon. morning. you joining Cynthia us you Thank with

today's And This for call. you concludes participation. you now disconnect. may your thank