Northern Trust (NTRS) 19 Jul 232023 Q2 Earnings call transcript

Good day, and welcome to the Northern Trust Corporation Second 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 ma'am.

Thank you, Jenny and good morning, everyone. Corporation's XXXX Trust conference Northern to second earnings quarter call. Welcome

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

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

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

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

us today. for Thank again you joining

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

Jennifer. you, Thank

XXXX welcome to and join me Let our earnings second you quarter call.

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turn to the I'll now Jason. call over

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

the an million, growth morning, results periods. X. quarter we immaterial Page both equity Let's quarter the dive common financial $XXX share This revenue in net $X.XX on our on income average and of impact was reported expense and Currency movements our earnings starting on had second into per for return of XX.X%.

and Our Notable items. recorded second investment notable with charge We $XX.X charge the recognized both a pretax quarter write-off results outside two slide. on a compensation impacting services capability. items and our pretax items. million associated COVID were We client $XX.X listed and impacted line are previous the million an periods a severance by from

down to year. quarter XXX% over income and was of the up up the over prior X% a on sequential Expenses year. down X% the sequential revenue quarter in the reflects fee the year. X% in ratio an periods, XXX% and basis first all was on prior down were This X% fourth last basis quarter Pretax expense over trust in XXX%, items up prior from and X% notable year. a XX% Excluding quarter sequentially, of down but

a investment component which representing as compared year. and but fees, our last X% year. down other All but the XX% noninterest increase, $X.X to a flat largest the reflected of revenue, totaled X% was other sequentially, over servicing decrease sequential income billion, Trust, prior

had XX% discuss in second year future part number X% FTE an We ago. by $XX million commercial Net to $XXX quarter estate credit loans, sequentially, moments, up down million, due real credit market. quality detail reserve in release the the a which small for a stress in larger on is from and higher interest economic expectations offset more improved but in income a I'll few a was on which basis, of

X. Turning servicing to our on results Page asset

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

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

Custody transaction and activity, the a business increased fund and to primarily for markets. favorable markets. year due activity due higher linked quarter solid decreased basis the new consecutive second on quarter to fees administration unfavorable prior quarter They from

X% for management under up clients up billion, X% and Assets asset were $XXX servicing sequentially year-over-year.

million, due but markets. primarily management year prior decrease due unfavorable management markets. up and favorable servicing within were from fees inflows increased asset asset the outflows Investment XX% $XXX The sequentially, sequentially, fees and down Investment year-over-year. X% asset to quarter primarily to

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

the due prior in increase unfavorable in primarily Relative largely was markets. in by the favorable outflows. markets. asset the year, fees was in in the Within fees by increase net Sequentially product-related in regions to to primarily inflows. the to decrease markets was due GFO, Sequentially the fees was unfavorable fees decrease and the driven driven GFO regions

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

billion client Money primarily by average and due X% assets activity. lower year. in Our decrease. quarter partially down on prior the offset X% deposits quarter decreased sequentially absorbed averaged to balance linked the leveraging Earning basis, the sheet versus to higher $XXX down X% market a assets primarily

Client to liquidity during the quarter. second continued grow

up funds money average While the market Average or $X.X we XX%. deposits levels. offset first saw than and a our $XXX were to billion in categories. Relative late increases were but quarter, billion remained with more X% $X billion X% by were sequentially decline was or in consistent CDs deposits other our April down up

thirds the tend deposits two deposits. XX%. to of billion average GFO. including of mostly to Approximately of three approximately institutional within sequential them wealth use continued with clients stickiest shift reduced quarters as deposits be noninterest-bearing decline the $X.X This institutional, our deposits deposits, in deposits are the clients the higher comprised channel institutional noninterest-bearing to to their related At quarter mix businesses. a operational experienced remainder as end clients yielding operate alternatives. These to to We

side runoff of reflecting curve. reinvest Shifting sequentially, end of the the sheet, balance X% securities natural short down to was the at to were asset seen the which the average

continued than Our a to edge $XX Treasury highly largely is The balances available U.S. in evenly approximately securities held split averaged Loan sale up agency it's X.X investment and and bonds $XX of year. to portfolio sequentially. second liquid portfolio between were duration total less to billion sheet and quarter balance billion years. fund X% of and consists now The sovereign for down wealth duration the maturity.

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

Fed total cash our sale This of up than to available of and more remains liquidity other central base. available of the XX% overall is translates and assets, sheet liquidity held deposit of than of money comprised Our market $XX balance for to with strong billion. immediately securities. banks billion X% cash, More at $XX XX% the

Net cumulative during basis the increased the NII alternatives. up down XX% migration saw yielding of continued the X% deposits deposit year. and but deposit reaching $XXX prior FTE slid interest-bearing to percentage interest and from sequentially, of with cycle for our was XX%. as total XX%. income impact beta client for several reflected higher at the costs on a Noninterest-bearing of an out million We dynamics. into beta And XX% quarter deposits quarter deposits our the

FTE points sequential from down of the for by net XX costs an up interest margin short-term points impact basis The quarter rates. higher ago. the basis but market a sequentially, partially higher offset X.XX% basis decline on reflects year was funding X The

continue and will rate has less Our hikes. NII of to third the predictable velocity by the driven which given been speed in behavior be the quarter client cycles

typically materially. activity the far approximately in client the are expected quarter seasonality as the billion. our part The to of moderate. thus in due average pace are to European is outflows is Our in point deposits outflows year August continue slows expected Deposit as low $XXX to

Page X. to Turning

X% were the than quarter second As X% prior the $X.X reported, noninterest expenses and year. in higher sequentially higher billion

Excluding noted a year-over-year. slide. in up few on the highlights. just I'll Expenses on in were sequentially, charges but periods hit X% both the is quarter down X% second

down offset pay to X% annual last by are year's severance spend. X% the eligible was lower but first quarter. pressures, continued year-over-year and Compensation in employee of from incentives. impact payment is second prior in sequentially to growth up base expense technology by sequentially retirement down wage impact compared the due to be and compensation excluding inflationary the This year's the partially of reflects offset granted quarter. partially expense largely in The this the expansion, year, of adjustments, the the expense incentives was highest charges areas our Compensation which

non-compensation to in charges, was we in was reported which Excluding The growth X% as sequential a sequentially. The services decline the first in increase to projects. driver due timing, outside quarter, sequentially. the X% of largely expense up services up increase outside line in delays primary X% the technical is of services due is

expense modestly, operating we focus trustee control, ratio show expect expense our We on heightened improvement. our to grow and to have further more expenses to

X. Turning to Page

well remain Our strong regulatory in we be required above our capital minimums. quarter ratios the continue to

point equity Our XX.X% XXX regulatory reflects was under requirements. to at basis the approach Tier-X common prior buffer stock common continued repurchases. despite ratio flat This quarter standardized a above

$XXX X.X% the up repurchases of to questions. line million shareholders million. with common stock We And $XXX open that, please for in prior ratio the $XX the million leverage Jenny, from returned is of quarter. common and quarter cash Tier-X through Our dividends slightly

Thank with have ahead. a Please do question Research. Wolfe Steven Chubak you. go Instructions] And [Operator I from

This is actually Leung in coming morning. Sharon good for Hi, Steven.

bit think help deposit came little on a Can how They quarter. about you betas. the betas question understand from expected a to better incremental in this Just than us here?

Sure.

that betas as provides wealth we continued about range. likely increase in the seeing those at we're to cumulatively at is still seen to base seems the the early within We quarter. The be still still at here, But have there both less point. from across to this to be point, separate channel the trends there's in signs a that and are high to noted betas institutional client this the from that and benefit than that much this XX% - some institutional we're platform wealth XXX client institutional channel, lot The think channel we've And the base. lower. I So of going in seem have well. and continuing the those XXX% quarter

about Great. you you're then a And today. as deposits follow-up, noted XX% out noninterest-bearing

potentially you to Can you ’XX I the in normalize, NII year? where closer you goes about that think think starts that trough through cycle. had from here? XX% help once exiting the see where to us ’XX, And

data we than troughed. you have showed And a we it's lot XX%. where Well, higher the have looked it back the little a like

XX%. about to You the consider think I floor. mentioned, in that don't base structural a But think floor. nothing a it's I that There's as

Now it to movement a this there's point. much but been seen another we this haven't point. seems it be percentage said, And leveling quarter that Obviously, has moderating at significantly. point, at of step off this down

comes Next ahead. Alex from Sachs. Blostein from Goldman Please go question

couple a trends. So one, bit questions more little of term. I a around near expense guess,

there's over You announced a obviously, the quarter, guys severance charge. some of action, course the

the overall the So second what of terms it year, on quantify us maybe expense guess, the just views quarter. of savings growth in I excluding help updated in your charges for the means and occurred sort firm-wide

would to below but helpful. maybe there I you down update talked X%, think last an that bringing be about time

a then picture bigger question. And

are percent used pretax be XX%. You to high that of margin guys north kind XX-ish a of running at

And think the of before. achieving to around you with that time market, So as the bit fee there but that, get plus? an talked if environment the sort the do to Is a we that? you frame that's how opportunity XX% kind peaked, of about as about goal? see little And has getting back clearly better NII what's

Sure.

the tackle compensation-related me let expense. So first. The

where sure people are is curious, base I'm from here. First, the

second first me third So some let to on provide second quarter just kind quarter background of to quarter. quarter,

the second here, the severance to I line. we'd quarter flat compensation from down think in charge say ex from

XXX last million that, And obviously, the currency. that and the the the be in increase online. explained quarter about the would quarter, would than for base That $XX $X then pay in movements decline to So seasonal better put we about at coming ex quarter. we million significant ended have charge, comp million including go up second back I for equity if the awards $XX

that. So factors two to led

to First, that we including compensation, accelerating pulled a actions close of to quarter flatten in fourth year. in and launched last we levers lot the of quarter the completing

January, late comp million by So of million the and reinvestments. be $X 'XX in about projected in reduction $X we would quarterly communicated benefit XXX roles that net to about

ahead finished in that done the So portion of and in it schedule. of quarter a a reason we us and of second quarter, put got work was big mostly part first that the we it

effort of of morning. timing launched what we Second, already coming to program, quarter, some referenced, as and we during specifically first the within that's we completion, reflected second charge the the accelerating the results. the Alex, We've you related and saw that quarter, benefit to that a and that new in severance this announced gotten

second this in roles, able the question, your rate got be an backfilled but we lens a $X run of of in will quarter. be of overall, to should same portion XXX million to goal, incremental should new savings $X a embedded impact or that skills on program, many that to million quarter and So get a about geography, based

we So in queue, some amount lever we pull this fair also the hard there's did hiring we've pushed got the a that's to quarter, remember so but back. that

that's and starts, a flat And about with comp to you the second down see to good why quarter ex going in various from so charges it's puts into third quarter. levels think

hopefully helpful that's there. So background

a of about do To on a on based year. X, has At that point at take think the we've questions we're rest get the that each notable high the year level, the taken should To curve continue and quarter we point, we've of items, of year a out through of your point we you if for this the where the been on year, see trajectory rest on. under taken that for expenses? your this the to curve the the and point out out --

To margins, in we've and XXs. you're been now XXs right the that in the

trying going is benefit our of minds, saw quarter. good one work is And getting doing way performance happen our And that. we be of in us side. expense in gets we the on lost has where for there. target in we also because a That control by XXs. to us sight organic And we're growth obviously, good can Our That lot the impacted key no we're what's largely indicators get. we're the have to to

And from definitely we so target but both levers XXs way, changed the in a right margin of have in our working are the not being perspective.

it. Got comprehensive. Thanks. Super

Just a around follow-up quick deposits.

So good news, line in around updated you XXX. us guys of what were kind with you on

Sounds stable. like are deposits fairly

a we client the of now right other trough just us sounds noninterest-bearing bit I help just outflows there's deposit ultimately you're curious like to that a over similar of cycle? you might and go, the give saw more mix could a the of with be? conversations the It course where could said kind what hear to frame think any as sense the Can hearing XXX seasonal quarter. endpoint kind deposits you in little but

quite But Yes, in you July. so have didn't June this a -- have and see in in and the general, you been held well we holding heard well. far quarter end right. about there's It's in July and of there. the at spike June, level been And

Our We've really market want we clients good was quarter. telling that liquidity sure we liquidity this It's think well, adds client activity here And think their holding what on as lending about too. services continue fact the in or That to up make good is about aggressively client margins quarter to liquidity. about about to broadly. good. brokerage. and see even talking for we to clients holding talked money And funds providing it's them it to are deposits. whether them, We we're to action taken last

to seems holding liquidity client in so And of be all the well.

-- dramatically. We've back looked a but dynamic, years. seasonality August is it's it the go not several point low doesn't On

okay. be levels these deposits And so in we're that holding feeling to seems at

bit perspective a point, on based even little outlook. So our give thought I from of at can our this

pretty think but the I even about deposits competition. another in it's we decline, to though holding think see prudent are well,

think to about I $XXX the summer prudent in billion, terms Again, what of and it's X% and in to July volume billion June conscious but so And $XXX to at have of held competitive have decline volumes tends pressure. another of environment think for we be the the NII about quarter. just to about hold

going Our Bank. to from from is next Brian Deutsche question Bedell come

lift in to Normally seasonal comment wonder software talk to there? you go in I you services. Maybe and things equipment like projection the color gave, half get just and to appreciate outside to second back the you expenses. start about typically the Jason. want if that on I any

Sure. good it Well, it's out. call to

Those the negotiate come working And that's then online, think try to very I office have going into software, will than did factors aggressively costs and in as led and really inflation thought projects in push equipment coming we had particular, some as and be, productivity we so we've was more down. some WIP bringing from depreciated. being then there, secondly, what that. in to better but results and down, good One, far that been timing. delays were we just we were two on to we

additional $XX And so quarter, from here, we line an item. tell perspective because there. of to update that even quarter that it's million from $XX baked we lift no Fourth $X and think million $X some outside make services, to in million third to up can million

that we off think about and positive situation. organic wins servicing guess Maybe management. new on revenue quarters of going to have flattish a expect 'XX then, in broadly, this how call in business to and should contributing revenue? growth? Great. to the the about the Mike, couple asset market you we're in a, just wealth if you started next Okay. say, talking And impact Would I

Brian. Yes,

recent forward of, we we've it's consider of the the with yes. little pipeline call bit So on that And mentioned your but asset pipeline a point, different. we in I the once to activity servicing, have growth yet in won is only that There's And transitioned there. it each not pipeline in. and or good know the it, yet. businesses, business of answer it's I'll looks based that organic And very mandates more transitioned

wealth that There's not steady client. I Management. that activity. say, anything say keeping of as a but the forward built in management, -- pipeline, you if much there, for on mind Wealth has business as much but similarly also with Within very doing steady, would company, been And I'll will, what's this as right

the results And for and financial sometimes, but best time the that over for different the company implications in is shareholders. company,

and And will we're, being that. how my us, on would money deposits like around They shifts very say, funds those and has have some for treasuries but get all I about the point managing good. the implications been optimistic discussion market where activity rates things client implications and have And different of the with funds redeployed.

on areas the well. Asset also a So as to Management, in wealth but in platform other management market And in strong see get we've mentioned, again, then redeployed Jason fashion. as into positive there. some flows seen ways the money like front steady other that those over I time. And likewise,

So good across the board.

definitely fair growth it now. side fee is than at NII for least side on better that organic the the revenue say to equation growth the Is

Yes. kind I it as implying No, of view that's Brian. right, And there. you're

be would kind subject other there, just profitable. just our On period only I lower gradually side, and tends FX has volatile. lower to highlight it And area also volatilities, more this capital more up and the brokerage that activity, be been around can trading subdued markets of is can NII markets change meaning fee has which and during the those grind that the more time relatively to can implications with which and to different activity,

Wells from [Indiscernible] Fargo.

guess I more kind is broadly. first fee of question growth the on

expenses? you do that faster fees level expense you're get of than fees X% do could that sort You But up fees expense down? go to -- so that the the rate. to see you growing Does growth indicated where that grow

in an perspective. environment Well, absorbing expense think I from we're short the an don't still I mean, run, inflationary

from we're what And perspective. the an even so would like expense better now be to doing in than run growth right long do able to

And lift And enables different One the side, areas. the tended you it's component left, model X strong a if very we model. and asset operating then, know, a above well growth secondly, good for but the mid-single-digit low in to that's to have that single-digit management the and long financial model can as market is expense have good revenue the growth growth the we wealth organically us financial that growth. think us can servicing, lead get organic provide single-digit leverage. rates from and rates, to provide low we in On then the provides to in of run

Okay. And if I could follow up on wealth.

You've improved guess growth like funnel differences the end? that? doing Office. what and there tier I dynamic about said, end having new low the Global of clients can you you're as the more success any middle you well. Are you competitive and in sort Are of talk in there having top grow you Family the in the among success, to more are

just more Yes. be a not have the They those opposed office to and services but for It's Family the end happen reporting of as clients family It's Global interesting. more size. family leaning actually similar not just broader Office provides. to are set can toward office top and wealth the advisory advice operational the us very and of that wealth

there that top business that new consistent We better a that on was are million, for board more end just velocity. where been was and at And the the that's at business. pipeline, and looking on above accounts at the $XX doing came the while

That's of come a dynamic, be has percentage at better seem that to to end. growth the we disproportionate there top from. doing is so where something the And

from And from Please question Brennan our going next go is UBS. ahead. come to Hawken

in quick or coming way? clarification your expense it prior Jason, referenced point to Is benefit. meant a better off of was of X% a Just that or right point. different as expectation you that a interpret

that interpret to better. said that well. point, We've and X done the We've don't to correct as half saying we second X we as in better. a we should see point. or And path doing this first that be X at at is half, It see this or

a a client you don't that I you write-off had seeing that. guys capability. confusing Thank past, the then, to remember Perfect. little of just And clarifying a in me. for

to understand you that and When you build it. you caused off? that capability then if So maybe can me help what it happened did write

thoughts you on can I give some it. Yes,

a that of refer the Just margins. to The returns for one a quarters. in ensure they're from asset timing meet internal of productivity our channel. at in pillars asset rates office works to in investments is and the as new hurdle it's perspective, build But look what a charge to servicing, the many been project to out client track on was to or capability specifically the owners we

So after didn't would that hurdles. and terms discussing agreement stakeholders, commercial with on reach different our we working eventually meet

halted And the so we project.

the didn't I think presume hurdle is it's and This working I'd a in so been project. not. resolution reach are importantly, endeavor you'd we've absolutely ask, like that on stop got inventory, there this project others large that to our rates and

was that build. least versus went expense it out through be metaphorically. the because was side diminished at where the to you planned Or Was turned to really happen to the versus Okay. so pricey that hurt in of sort before you process it broke Or opportunity? opportunity you was it the speak, revenue that more revenue plan? it it expensive outlook the I'm like Did sure guys something ground,

to of Yes. thought, where it going to was to areas to taking get Well, us our revenue like costly and not reflective items build were on point, disciplined more to rate. extremely is we're really hurdle rate. to going that an this not we resources our going we're approach devote hurdle than achieve the It not where dynamics at

And We areas squarely our rate. fits hurdle one of dollars, where was in or we're office at for this, this allocating the we're at so well about talked capital as about that one looking our we productivity define talked it's whether of internal internally, even investments before the not we pillars resources, expense that those and and areas.

disciplined And so saying where invest this it in we is we're now, stop were halt going not to this. one into and more

that for paper. on interpreted that than it encouraging a actually explaining Thanks lot it's more Jason, I

asking. for It help probably clarify. others. It's No, to to thanks you for is helpful

you. thank So

Research. Autonomous Wildhack, Go ahead Robert from comes question next Our please.

or a Where ingredients Just sort on for guess run? your target, do there? to want what to And ratio necessary picture expense question get over of I you expenses. the that the are long bigger trust what's then,

and can do get that XXX shape above of the we've effects like talked before. good And there part be we an range, we're below it down range. X. that's be is well that XXX, slightly down We quarter helping We've If financial that been our of about, Yes. we it or then outside grinding NII down now there. we're fact, We the well. we're got factors all to even in got higher but to feel going range, XXX metric, then important up coming into to in -- in range, the that it. a model markets down, not in for And to inflation,

is are about us see And number the that at thing so of It's first I articulated. that getting indicators range we've it's to back key we toward And another performance that the look good the talk where we. internally. one it's the

positive this one Thanks. And just on follow-up Got morning. growth commentary organic the it.

if you organic even If multiple growth, years. period growth or think sustained a at several you impact in saw How a quarters do big organic expense that growth, would acceleration of all? strong

Yes.

side that that have organic you that, it's the the okay, organic that talked organic going side, on the relate extent on to fee resources. each to that And then is you two the there. drive beyond growth right? make Jason if then is on Jason all the those we most. point, your that, two the extent, have some is as sure you're of areas fee way achieve inflation and to don't growth the growth, expenses, range higher impact control questions which And are mentioned, markets that can to from you And and on reducing your and the through other primary But going going we the sometimes to but have the to side the get expense organic to currency. have that you're controlling to require to expense that And say, impact currency. side, the Rob, So ratio then to more you about

you organic are ultimately can growth two range. it what to fees growth on most, the drive control to on focus to try so those the items, And organic target expenses and on which

Stanley ahead. And go Please Morgan from Betsy Graseck is next.

actually is filling Betsy. in Cornell for Schmitz This

little question, know on bit on release, CRE Can one It where like there this there's So small, you book. seems line here? outlier. and seems your just it a it's you like bit nuanced an just I see little that but what's reserve outlook going the from item on improved explain portfolio. the on a an outlier of credit an

Yes.

book of result not more to actually the of release, release in for increase it's offset was And portion some a that just but as dramatic, a CRE. our caused But small have actually, of So that in the worsening we that book. clarify, improvements would overall the outlook number actually than that in there reserve. have borrowers the outlook on an an

Got it.

Okay. That portfolio. other guess on investment I one sense. the more question makes

of point book potential how in given You just mentioned you the to Yes. the this you're mix heading At hikes, duration context shift do context duration where in planning in still like one months? protect and to see rate that this future NII? the you are sub coming And year what cash. mostly

Yes, absolutely.

So balance of one, securities the it duration under the the is book one. to sheet the duration just is of

absolutely that right we yield is an the was curve. interesting in it evolution to of think out time what You're call the

point maturity been we go how is as That's to go book are the we as more to so reinvest it's securities do it the of continues large allowing curve, down about from where does And where here. to liquid opportunity where the become going to we've brought not that with that's duration for at indicating and them, yield we up. talking we going? But provide at reinvestment. mature the about to what And influence yield curve, securities thinking is are this want point, this

X you asset certain same then Okay. we guess maintain or that should the I How of potentially And think about will a balance growth in size should sheet on context flow outflows out one-to-one topic. deposit or… on earning basis follow-up those

Yes.

down, doesn't can quickly. funding it. to move As act the That deposits obviously, for come mechanisms securities very the

deposit so the asset influence size going is always And to the earning size.

have room lot leverage point of a got does about we've look we factor leverage that to like. what then becomes constraining perspective. a from think And the at what So

leveraging if about NII And balance to just discretionary so lead because the sheet even is pick super will the missing that's NIM that quickly. based to sure to on where up what it's us of flex opportunities a thin some think make sometimes doesn't not very we're size it

And KBW. from our go next ahead. Mike Brown question is going to come from Please

sheet the that on naturally, funding in should But up Fed trend has has what's actually the been could like year. going makes sheet balance higher kind of your fund question balance continue X%, meaningfully terms on saw quarter-over-quarter been actually that purchased cost decline sense. the down. more to mix? deposits, just deposits that progress your declined there balance shifting -- the not We guess, jumped following of how on here just side. by this the And growing let and Maybe the but that complexion there. we that why of from if they noticed I

an Fed continue as fund talked you to balance the As grow about, purchase the offset to funds assets.

And in that clients. sheet. the want the be of just and plenty volatile a there for of for shrinking been movement got in want perspective. you room is We've significant it plenty balance to so don't Yes. to of have our we And so to We've leverage this deposits got capital. commit part

anxious just to so any And significant not quickly moves. do

to leaves X.X we which that say, a of opportunity discretionary maybe to you we come want some deposits lot printed you a extent, leveraging, the down, X Tier again, to so And have then as leverage, use room.

taking have the in the you're to And you would just so Xs. if higher be say that prudent a done at it just make even incremental of point, exist. And that advantage opportunities sure hadn't to leveraging leveraging we

So.

guess on for there. that Thanks up color just Great. then following Okay. And side. on the maybe I capital the there point

you progress in What increased return. $XXX buyback or capital stock of so terms we about back that quarter. guys think million your Any how You of expectation bought about here? from should the could this share on or

actually quarter neutral rate The par similar that's Sure. thinking against did quarter, presumably market there. in even sense the run, repurchase this that give against us you'd overall theme us The that for thing model online, usually, this of repurchase. we fine. big quarter. quarter, what amount makes $XXX this coming short But it lift is what -- will environment, special where in assessment so, did the AOCI this worked in near a would see is but the about you million us we're the be in that saw -- term, slightly quarter, pull in some share In the as be that's about. we perspective to the us, third worked FDIC a did it's caveat the dollar a kind of the from in

quarter, saying hold back And payment for so then get a you done to get could us plan. your off and see that game

Cassidy Next ahead. question comes RBC. from go from Please Gerard

beta question then I quickly share this, XXXX you the go Fed us, how further. the cycle gave cycles? comparable? that XX% to if tightening may reduce is little XXXX cutting second, start think Maybe guys us how incremental course, rates this that rates have you -- really behaving a on I deposit to is cumulative the can and is The then back Fed how And does And be don't the is sometime, your touched can in you cutting is Jason, 'XX with if know quickly of of fund to quarter it costs? past I through the I beta XXX%. cycle beta, you higher. relative think

it I think, Sure. competition And historically, driving said about, make could for XXX% various dynamics of would But And question of the that are does the I Well, earlier, there's the institutional that side it deposit there's for on overall now different the I this that. strong compare not how sure going just the for right that historically. for to forward than talk deposits to been first, be very is base. and higher business, right has you reasons. and the

the And do that. we've so that our sure clients. there for we want got make we're And to to ability

clients. so on want capability make fair And share holding we're to and that our we that providing to sure for liquidity

work, And our the we I reductions, fast agreements think movement they can the reductions, the way quickly. price, about get the way we on we way come down. the way

get able come down rates to And so as we deposit costs should be quickly down.

good. quantitative your Fed also is based And follow-up, you deposits. greater Very Is greater volatility as on or Northern, that of the this volatility even it is it volatility tightening then guys' at than estimate? past you causing touched finding on actions are in of And experience more is your periods? because that guys' a period's

use or significant and of depositors, another not to banks XXX think whether we obviously, I of of clients debt Well, and which by but spooked is that having a all and to trend go in then preferences leading then to driven treasuries. of bank lot just but between versus to quarters, from different not to those some -- more long the over volatility. trend March ceiling things to another the have, early driving are versus within deposit market competition, funds run, XX money down it volatile, just of factors we what the But and even lot of XXX went macro saw a that's

factors I we're heightened think the seeing. what's all those volatility are of to leading

Juneja Please Next ahead. JPMorgan. question go comes from Vivek from

big the just segment that it, seeing questions. noninterest-bearing in I'm you overlapping out Sorry, there outflow The doing of hope which more I'm that in I'll couple come did been second you deposits. and A calls repeating quarter, of what trend? if question, with I a have not start that. saw made are

significant movements The to from always well, this asset almost case are going in came servicing. almost come,

you stabilization, seeing of Okay. are that, And where which segment? more the

wealth level amount and the is of relatively actually overall makes client has you same. segment, segment just more GFO but been it just the The the base more about stable. out but think chunkier, The segment wealth it asset the movements granular. been is in is overall see in We'll The about chunky granular. clients much big servicing

where expense you the And that on there? because talked segment, headcount service low growth. are cutting that's that Management a lot the single-digit the Wealth you've the done of implications what all about? for And Is

headcount that expense Service general, whatsoever. is Management. units. service organic no detail has note was levels been growth in single-digit allocation between But impact to the down The just great. you'll I Wealth in but provide the And referenced within the low to growth we business related didn't

from comes Next from question [indiscernible] Wells Fargo.

quick follow-up. a Just

mean non-comp Does see the that being software You year? expense and had mentioned the you some in that that half some pressure equipment second of projects will delayed. upward

certain categories, it will. Yes. In

other equipment in so see in third quarter. $XX line items. we'll -- particular, outside upward million didn't $X in we'll and and fourth And line relatively reference flat. million to We item, mentioned that I services see software, pressure,

we provided, for So the forward-looking you referenced. comp except the only information that's really number, which

ahead. And go Brian Bedell from Deutsche Bank. Please

Just assessment I guide or better. able you're clarify that is yet. frame expense size X% know if the the in to assessment, don't to the that And FDIC of of essential special on wanted included

we It's publicly not talked included haven't in the what the is. X%. And about number

today. Okay. look forward joining Thank soon. speaking to We us with again for very you much you