Northern Trust (NTRS) 18 Oct 232023 Q3 Earnings call transcript

Good day, and welcome to the Northern Trust Corporation Third Quarter 2023 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jennifer Childe, Director of Investor Relations.

Please go ahead, ma'am.

Thank you, Melissa, and good morning, everyone, and welcome to Northern Trust Corporation's Third Quarter 2023 Earnings Conference Call.

and call Jason is Officer; Tyler, Allnutt our our Chairman O’Grady, [ on our ], CEO; from and our Controller; me this team. Michael morning our Lauren Investor Joining Relations Higgins Grace Chief Financial .

October is the be only through call press on being northerntrust.com. will provided disclaims northerntrust.com. conference Our rebroadcast at authorized information this earnings trends The website report the Trust in our on webcast live replay review call on our use call any of this quarterly of our today. today's continuing website, November our XX presentation, and made are third release is XX. Northern This financial will we accuracy available to that both guide available call. after quarter on find which earnings Also website you will

safe forward-looking the our refer statement call. accompanying Please which on of commentary will presentation, harbor our apply to Page this XX to regarding on statements

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

today. for again Thank you joining us

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

Thank you, Jennifer.

our join earnings me third welcoming Let you call. in to XXXX quarter

Our phase be to peaking. results execution of solid particularly for challenging rates the appear close third against this cycle, the quarter reflect as interest rate

Namely were and funding the We're under Third line higher, trust control. levels focusing but of those seasonal costs pressure significantly on expenses. are business areas deposit on quarter were fees most in interest primarily generally putting our expectations, that net income. with

we sequentially up were controlled, well year-over-year. Trust X position. areas, those we're In capital our Expenses performance. with our and improved fee was revenue both pleased and

Office saw and with business grew where Family structures the strength complex in within where continue We to U.S. continues brisk. wealth ongoing excel. trust a area Families momentum large be Our be basis. to our the Wealth tiers fees Global and segment, an outside and higher both year-over-year sequential on Management truck we

helping affairs also their theme. owners various is third during sources. business generation attend business early personal a optimize with $XX and them to remains quarter, complex seeing over approaches we with particular, marketing also referral they with Activity million. success We're robust, the had healthy In new growing their with consistent businesses clients while assets new

our we positive money saw Management, within remained market consecutive into third strong performance and X-year product its Asset institutional record X quarter the the In of benchmarks, out-performance. platform X, our tax-advantaged flows quarter. track Relative for equity to cementing

recent strength levels. asset outsourced index Importantly, One fund servicing and asset good contain momentum Reinforcing X large wins management as our historical solidly remains pipeline our and solutions. within custody Servicing, Asset combined we administration had Within for fixed in core Northern. mandates and investment income

office solutions Pension particularly win Our quarter across front is third Dhabi notable front regions Abu different was office solutions well in $XX billion and resonating the One client Fund. types. the

and provide as across differentiator. ability cited Our private key a public assets comprehensive to a view was

in risk performance and also provide analytics management, global were custody, optimization. we Importantly, portfolio to liquidity selected

We also footing. take on we owner U.S. in In had share. where asset we quarter solid the good the space success fourth entered continue closing, to

our continues with capital very to ample and remains and sheet balance be Our excellent. strong liquidity, quality credit

related regulatory continue discipline. this year, stakeholders. Expense momentum pipeline the we'll each growth to is on build current proposed our the long-term debt We're and has navigate robust. is capital including for this and changes that and I'm and uncertain our environment positioned to well confident generate to business New declined healthy value quarter

to Jason. over I'll now turn the call

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

million. reported results XX.X%. the into third equity per Earnings This of we Page share common on on our average of morning, was quarter, $XXX return starting financial X. and $X.XX, income the of dive quarter Let's net

and management assets offset levels year-over-year currency XXX and impact custody/administration XX up favorable improvements Asset movements positive sharply relative approximate basis largely a to were the asset currency sequential on benefited period. on Unfavorable basis had on a inflows impacts point markets, an modestly on basis, but asset than point assets a a prior currency Services sequential inflows. under were markets from On down and unfavorable On division impact our Year-over-year growth, immaterial. currency more and Our favorable movements under year-over-year expenses. revenue a basis, within basis. basis

the and up of XXX% billion, largest $X.X Excluding totaled XXX%. X% income XX% the down sequential the component quarter reflects the increase compared higher revenue, on the but up a we sequentially our posted in notable year. year. and trust Down quarter increase were year-over-year second periods, prior up both sequential in third in representing over and ratio fees, to last of Expenses This XXX% a year. but servicing a year. over last of from sequentially, an Pre-tax X% than Trust, quarter investment other was was X% X% X% the down and items fee basis. to expense revenue all prior X%

income XX% All other was $XXX sequentially year income XX% from Net Down up down down was a on and ago. but over an X% FTE the sequentially, prior million. noninterest X% interest year. basis

losses was quarter. third credit $XX million for in the provision Our

increase remains quarter, strong. loans. quality the We there modest Overall, a and credit had small net our in for was nonperforming very recoveries

servicing Page results on our to Turning X. asset

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

component were administration million. markets and business reflects performance by favorable fees, Custody the Sequential million. $XXX offset new Asset business activity, weaker transaction of volume. servicing fees totaled the largest fund $XXX in fees and

due transaction currency volume. new to were solid activity and year-over-year lower strength was partially and market The That favorable offset by business impacts.

basis, will management fourth fees on Assets asset trust sequential asset $XXX but Similarly, our are X% the lagged $XXX portion fees. under million. management in fees were XX% servicing Investment clients a year-over-year. AUM significant within for because down our quarter sequentially, up billion, were servicing decline a of billed impact

Moving $XXX and on billion. wealth were $XXX under wealth Assets clients to administration management other Page business for clients Management our servicing X. management fees Trust were million. management Wealth our The for

average quarter. on during to basis, sequentially, in flat position. decline with Our was interest-bearing expectations the linked deposits reallocate channel sheet down continue liquidity Client seasonably as our Average largely third this due a to clients quarter. was or primarily client essentially quarter seen weaker lower in were cash X% balance decreased X% billion deposits. $XXX The $X billion, line for

slightly held and remained mix. deposits XX% institutional Noninterest-bearing remained down X/X institutional mix the steady XX%. At quarter reduced were X.X to deposits balance and years. comprised continues flat averaged the $XX asset side total to approximately of stable, XX% Loan less $X than be The Shifting of sequentially. of billion of the sheet billion operational sheet. the the sequentially, deposits securities The duration duration balances to a deposits and balance to at than at less end, portfolio total year.

is portfolio and diversified loan operating geographies, types. well loan segments across Our

XX% loan and duration the portfolio floating is below the of overall Approximately is X year.

strong. nearly basis the and than interest continued of the Net impact remains assets. over up Cash the absorption at reflecting XX% $XXX liquid funding decreases, FTE central several of from XX% comprise expected. was migration NII reflected cash XX down dynamics. basis highly on and slightly a deposit costs income banks the deposits some into of down sequentially the more prior alternatives, quarter, other increases liquidity Our as and the bigger our an the total moderated points Deposit was XX% assets year. but of million Fed the client earning factor held saw we second XX% cost pace We down higher-yielding but were quarter. with for

we ensure leaders, protecting our volumes. but a number deposits we're vigorously not an toward price the small We're Due meaningful long to the products competitive environment, to with eye deposit repriced game. playing we're of defending

Client They've when engagement clients to repricing benefit of to to stretch from sheet. a and led higher that on deposits. to existing expect question duration. term also But combination the strategy cycle There's peaking. on remain We our that specific rate no this shift close begun want is to balance to a for decline. sensing accounts paying rates

NII of speed has given behavior, Our the hikes. quarter client fourth predictable which by extent rate less the continue in cycle's to driven be this and will been

client $XXX Modest billion. outflows and expected in and known some to average related far continue, activity to other are deposits to part in the client outflows thus optimize M&A returns due to quarter are Our to needs. corporate efforts

portfolio. -- the offsetting mix with of $XXX should further level we deposit fourth in pressure further NIM of to Pricing the currently repricing shift under the could remain continue Factors which pace to $XXX the quarter the include outflows, we range swing We of extent from price impact the possible. that to million. see the compression to of see securities deposit pressure, NII and expect the outcome million [ be ]

which As income interest there Deposit and schedule, out wide are net could upside XXXX, maturity outlook under the a provide that's our trend. other we not investment pricing securities look to factors in reflected current pressure, quarter. of range scenarios

Page X. to Turning

$X.X year. up the expenses noninterest prior compared reported, X% billion third the X% were as in As down but quarter, sequentially to

and on just third Excluding quarter X% on I'll unusual highlights. noted up X% in hit sequentially were items in both a those up the slide, expenses periods, including over the year-over-year. few

reflects The in expense XXXX last count compensation increase pay items, and unusual reductions year-to-date. compensation This reflected taken down the incentive sequentially. X% head Excluding year adjustments. was base actions over

non-compensation expense periods, up sequentially. was unusual in X% Excluding all items

expense-to-trust sequentially Our our fee XXX% improved range basis to points than targeted of to XXX%, XXX%. higher remains XXX ratio but

to basis of began X%. adjusted the we reminder, a As year XXXX XXX our least points rate at off expense of growth take expecting

better, adjusted X.X% meaningfully up quarter results first year-over-year. Our were

even range currency third Our And X.X% were quarter same despite second were in year-over-year. quarter results impacts. adjusted unfavorable results up our better the

to to Equipment should adjusted of quarter to improvement. $XX million. our up million. occupancy million. And For quarter Outside increase million relative above normal adjusted approximately services and million quarter $XX $X is be fourth dollars third expected should Compensation $X be few to be expect be likely expense approximately we fourth quarter, third levels. is million lift up expected the up Benefits levels. a software to expense continued $X

components, has that roughly lower expense expense to or tended but XXX X% this rate basis increase quarter. at in, growth XXXX market-driven points our categories year adjusted full it including All operating levels. Other than are predictable, would in not approximately fourth has the many put

of trust this leverage growth organic is operating environments. trustee model generate appreciation. basis in points and we upon mid-single-digit combination a Against financial backdrop, normal Our growth XXX XXX from macro to hope market fee to based in

strong in capital Our remained and ratios the levels quarter.

continue We at above minimum. regulatory levels well operate to required our

approach common ratio buffer portfolio. securities our up This unfavorable Tier from as Our prior the impact basis point quarter offset under than a rates capital accretion reflects to slightly on our equity XX.X% the was more standardized higher X the regulatory from above requirements. XXX

X.X%, was ratio $XXX XX $X basis $X.X points common quarter end, our We leverage the second shareholders through of cash $XXX repurchases And over X Tier from was up a stock negative improvement to billion, AOCI Our dividends At quarter of returned quarter. prior slight a million million. million. common levels.

special We open ] for for meet positioned slowed Mike our the anticipated requirements, to assessment. model. without order proposed with FDIC in to We're please [ regulatory operating that well activity our Melissa, questions. referenced significant the reserve line buyback changes And the that, to

we Instructions] [Operator Glenn our from with go first And Evercore. Schorr with can question

like price it. like the That is I was right.

Okay.

for So control. can range next NII you outcomes I that appreciate of the year

you budget approach operating environment next uncertainty that leave just of approach your better target leverage overall and you you can with expenses mentioned . your of But second. So goals year around And a ratio, your in expense-to-trust I'm control? enter I'll that in within curious what's that a normalize. what as it can't do season fee or what you much mindset do aside terms that how the you things towards are? for

trying Yes. organic think -- time a good get bit we're mid-single-digit the sense time, the sets you a If for is XXX about. and be. based growth. operating get of a points we launch from to time. should little on -- where our low where in really leverage, if guys will XXX enter, well growth points year we'll as we're And is we fee I of financial lift this we That to have where up equity of basis also to Well, over EPS can us pretax get thinking through markets the over walked that for margin to model

don't look expenses get inflationary at at fee that's so the the one leverage it's the you that just and an that And the goal environment rates we're still we looking the on because -- to higher it's elevated line. are we of harder where closely. get And that that metrics benefit trust fees if in really you're operating from

growth. we that down. you effort amount working go hard grinding have. that year-over-year tell better the that, do an growth spent can and XXXX into we've rates X% back with that can quarter, and of this tackled we've And expense year that's this had quarter down to it biggest to you cost incredible the quarter. knew we printing Coming We you see working But And a after year, than on been each we first labor.

that accomplishments rate a company have So services. growth the be had terms get is then of we've than element has in That's to above to year the is historically. rate, have too. key lot of but next in expecting of outside lower we right. growth there, That and it equipment, elevated shows down, still another that technology. rest Headcount and software up and

year so which work growth And is we continue in this to similar that year could what can next another that think to to year-over-year that's rate have year, down. we did work -- we

Exactly we glance [indiscernible] curious in is? I'm help impact what box tons of curious talking? model, impact your of also. you for, But the as I impact, RWA if the know your some As just plenty -- first what all-in capital thought if is in, I'm big terms us or can what look doesn't are it as banks at you be. articulated they type curious, disrupt you you I impact have have might and and that mentioned agree. I'm it generate of I

and be I'm Sure. to to a X% the give that model. we will in going that's wide benefits of going one different the have things. a RWA, of like of to range the you that is by XX% -- Yes, impacted business diversification few But

we'll operational -- the got the get of from the some comes we've risk. actually obviously, most a some business That's of significant an custody RWA loan really lot treatments. so but And in benefit with driver perspective

the underlying a well as And RWA that dynamics loans. are given there Just other should some nature then on have of that we our basis. help on relative

thinking be But could XX%. at this we're anywhere X% it's -- it to it about from point,

earlier, levels liquidity where are As our we CETX and see we comfortable, feel we see our and really is. mentioned where

other but to And an keep got so eye well. on what flexibility we've We'll on are. that as we'll is manage keep peers our eye an where business in doing, the ways dynamic

Michael can We take Brown KBW. our from next with question

everyone. morning, Good

the I I softer that They we played custody out quarter. talk present of you guess, drivers and about were than wanted dynamics quarter, admin the guess a lower you fourth new of So quarter-over-quarter, levels some fund essentially fees. What on here on as a start key to I the flat bit headwind the a are little front. did but for business positive this bit And the market noted, expected. some

the the about quarter are puts over next what year? fourth think we then So and should and heading into that takes

Sure.

light. but digits, clients [indiscernible] volumes low net a toward we're as talk more to single active about just the was line, on the that and low And move of it and long be to that dynamic at you neighborhood fees in look sequential all, something more as push was how currency looked, was continue effectively more helped just to just fund positive. more we positive. single custody It of fact year-over-year. was at talked management. a about split the than we sequentially to It digits, transaction and then term, in might back quarter new if if look that X.X% that very opposed roughly admin our the as X%. go basis first business starting So But indexing And -- a be the the admin

There's transitions. less there's There's less trading activity, less reporting.

business And lower looks net so we overall new strong. of continuing mentioned, Mike net level the strong, a as an did transaction-related -- And we're business overall activity. see to the positive again, pipeline, But from is perspective.

the seeing are to on just of board? the gears change and just still a really maybe pressure client by some of the there perhaps maybe less seeing the kind we sounds you base a maybe deposit is that if just it those touch where stabilization remains. unpack Could side, of you type still Or underlying here? across then And dynamics Okay. pressure the like elements where bit of And are it is challenge. there's greatest deposit and the some

out clearly Definitely lot separated deposits. to a to wealth clients deposits. been of feel from of here. question their it's cycle to There's just a go we are obviously, it's because and increase of are going significant in it's get out ways. the clients lot your channel, hard side, side, to a at saw wealth to what it's in We stabilized It's the figure predict where trying a in saw terming volatile that by term how do

out an CDs. clients are is this So saying of into move opportunity to checking and

of part that they the a have deposits. where of amounts large clients of And nature is our

strategically And up their take think think if up in interestingly, institute a deposits if they're about and than the but somewhat. look actually And $XXX that that side, are [ so and payments. more about -- maintain day-to-day $XXX, component ] to for of deposits just to the you the need on liquidity less you they wealth can

like are the balance gives were indication we continue it the see -- worked that they actions pricing an strength us well. sheet. the sheet. Trust's so Northern And deposit on took to Clients to really They of balance

meaningful. was increase that So

across and moving that's to cumulatively. most channels of of flat. company the types -- the in liquidity either duration average is the lot -- of Across decline liquidity period-to-period longer clients or institutional what different comes the types. On to a the side, drove that Overall, and was higher-yielding

liquidity that's is out, look what in higher, we still They're thus anticipated the to just have the $XXX are just as to point. another. clearly And early is held be. the frankly, would than far from and quarter, one in in over And Northern quarter I we right place that moving clients it's it's overall at so see balance think the interesting higher that's to mechanism And this billion. that's but have saying

$XXX $XX And few but would interest a there. to give come $XXX the to have average points, that for down be $XXX net that would $XXX $XX flat, get us billion relatively the context assumes just to to margin million to a deposits million couple million. million, basis up in to billion some that an down to to

at thus varied the deposit a again, point, into than this are X so it's And in we're XX-week far, quarter, higher -- holding weeks that. levels

our question will next with And Alex come Goldman from Blostein Sachs.

you and incremental one catch the So to another bit guys need still around there September up the deposits. a in been you this in Or surprised, is? institutional feel there have caught you to kind or today. of conference at might by think move price of you played increase where kind you I do of obviously guess, you articulated latest Do up the like pricing be seem to that migration more? terms just

then we And is the things, of X Because on there limited, or day, competitor X. mean the base a channel is that's at Or fairly driving custody broad-based? know is side there you there with your compete client of the side. particular is I again, end this or the that where And right? set institutional on fairly pickup? that's internationally

where we are process? of kind curious that just I'm in So

up. thought to that like on the ended up. we made frame, August hit the what saw number what clearly were to not We're general, we're XX%. to We be deposit -- down seems in we We we And again, takers. in it, that. taking NII. -- going not and saw the market X% call We're And up get was right we we price reacted the mid-quarter that in happened It makers. if time down about caught pricing price we we

you to so leveled we that's deposit flattish. And things of very reacted very it kind activity. out that have see why to seems and the And much

be higher. also even And then levels at this thought into would quarter, stabilizing we

And custody number to And for where accounts. level so took but was were geography, be the it of MMDA. in small like in takeaway the institutional pricing actions it actions to book of needs think in we pricing I the seems clients wealth, big U.S. and side about pretty is took on were you asked is that it the And in the the business big out. things then the the bigger we

And approach early targeted those early so increase it, to we in took we reactions got a the hit look we well. pricings like mark

right. from Shifting constructive We've gears bit, on of All business. last heard guys for you Got new that couple pretty the the quarters. little it. a comments

to converting know, always and you a it's little fees is net opaque. hard, As a bit

you we business fee like scale So the it, you of revenues sort material way feel maybe in -- any pickup expenses. and mandates some XX work the you in that through next, of these the into especially onboard, backlog months, can as to frame larger over have call enough do a

So expense new in guys know, you 'XX. X% net other more words, to to Glenn's are point, it that X% don't I doable potentially sounds with for, Is business? growth aiming like in

is. growth, number It want that the than we year. didn't better give we to what expense on this we did And do just a

highly particular, relative is scalable. were on And the highly, so the just we've year, business growth which scalable asset come That managing of what this the line It's obviously top backdrop, focused, not servicing done in. in business, from can growth to tell we comes as a said, but that less it's with wealth, on expenses. business with that in you type

with incredible it. look such and a this an going compensation so was bring to at scrutiny very incredible be for count to focus, focus what what on head business board, so line, strong looking the there's us expenses come year, we an on at And along as

committed what on. they're business diligent bring that is effort going it's they're very be They're to The identifying saying to leading to that. that -- business do about

bring is we're to of the is Yes. add is the to that's foundation to able the And because out, productivity have then to to new business to also, we offset Alex, have you're hard to so and investments well. But of have just that as we Jason you to building well we're invest if why your point, business capacity there going the make. would portion what as has need I that in saying be resources, on what driving a on

Got it.

makes all That sense. Okay.

mean than in sounds like your just And less I the to X%. so words mouth X% It to on put X%.

[indiscernible] maybe thinking. it So

Okay.

next Brennan question comes UBS. from with Hawken Our

you XX% I would love And the like that of were -- further it that unpack XX% behind some girding bit to suggest to quarter-to-date? underlying a $XXX $XXX sort predicated a little Did for flat. through -- like the saying they've sounds walked that it . some to though that because million declines been interpret even million NIM of base stable and expectation deposit you of I the you through does assumptions for deposit walked correctly? you're sounded XQ. of It

mentioned Just be a the few accurate. that NIM to you deposit implies words. tweak are mentioned, basis I the up would but levels points,

And we've were we quarter, it the to be thinking to we've ended into up again, market more down X%, don't competitive. so we market react the is what last got coming came We it. doing. being set going And to got

coming did that could we into in further deposits. for so still happen. -- quarter, easily this And we And prepare decline just a

you $XXX rate also that. quarter as to and walking up $XXX higher securities million is trading there's And out in back, the saying which at reinvesting that million deposit it reinvesting -- that stages than even us X% look from is look are indicating go year, we're got as runoff yielding that yielding going the that. the that we for about of to and don't we believe next to and to the are above portfolio, not securities Xs run in to and still are security this just So reasons at the NII And we've there. think the of if early levels is

duration. taking more And risk without so or

And the that to balance so can positioned continue we also do. sheet things there had are very defensively. We've

the in the summer, very the saw frankly, to wanted industry stress We in was banking and the capacity. the spring on of can to as happening stay in use -- the and short, in the NII. do based deposits We positioned for about we stability balance the stretch that strength sheet. of ability more that the we feel we cannot have we the and confident defensively. But decline We stability of can non-HQLA the industry, deposits, we

have And to so we there's multiple work NII. on levers

much interpretation you trying as fourth necessarily the color be that quarter, that shouldn't we So about should can although as thinking we're something annualize about you to that's give XXXX.

Okay. All depend guess the competition that's the I will deposits. on for fair. XXXX

we'll So goes. see One how follow-up that here.

-- this of overlapping reference prepared said the made couple it calls the apologize if I you guys You remarks, in morning. here and

out in release, in laid quantify You Is a impact? gain to commentary. it quantified Visa didn't hear the the it press but that I possible

relative up $XX million to It's Yes. second million $XX quarter. to

a associated bit quarter of length loss. Visa swap, Second that extends the -- as was slight of the have the we with little of a our was position. just slight a to to the And that reduces it of This relates half -- was derivative news Visa a the that of color amount this gain. impact It view a And our that that news a that part -- an have to by has put quarter they that release shares. proposal shareholder there that mark-to-market. was reduces proposed or of out was And saying time in the swap. -- as

-- it be. therefore, what it what it so from changed otherwise would mark And normally the

Morgan from our And next with Stanley. question Kenny Ryan comes

] update at So expecting you $X securities are just million AFS on mentioned reinvesting taking securities mostly much and and through forward. per to HTM those cash? [ to roll-off reinvesting puts as here's you're you takes and mature, into And us how yielding in thinking that NII, going the quarter

got make I make just throw it repeat got can't You the to for to want you a I sure sure I want little me? soft. fully. I question Can it.

Yes.

X X, as you per into into just how ] HTM roll you you're as could are cash? you're know off let much reinvesting us securities that AFS and So from [ reinvesting you expecting quarter? And

that's of but just take And $X averages overall, reinvesting necessarily not a minutes probably reinvesting. amounts. maturing, cash. I And as little it at lot mentioned X%, schedule, be over And a just reinvestment billion the recently particularly ago, runoff again, has then about the to been averages a quarter that's look as we all currencies the A in about dollar-denominated before. -- we'll that's it the close there's Sure. let's the where U.S. few across

on Deutsche our from next question moving with to Bedell And Brian Bank.

Just Should that in rate million million $XX gain? think the million investment swap and quarter. noise $XX a given run the other on the we more clarification or normalized Visa as other of income quarter in the second one $XX the this the take -- that on versus that

] Yes, is away. Visa there's at did will I in announce [ think announcement. they to -- that time, going And item make think that go point didn't just I the Visa in ] this noise line some [

on that impact so the swap should And have an some at point.

be it And a shouldn't away. tended so be will negative to again, -- negative, it go has that I think

prior the be rates low are and too rate might run high. so And too current probably the run

think The best to way about it.

Okay.

NII that well, to then that. also clarify correct? me enough just then Is the million. $XXX That's that let ask Fair And million first. just on on guide, to just And -- the FTE, Okay. $XXX FTE?

Yes.

Okay.

deposits happen. the reemerge, sort you, grab that think but we to for of is predict. of would providers of it potentially actually of fact of on what the able get terms whether you as guess, sounded maybe and be this elements, in was some that lot the course, would Great. can it, is that that it's this not but quarter, competition I disincentive view might to rates got -- of, Okay. to then to you're a keep then And answer But always that level tough just move And at risk to resolved. fairly ranges And to it deposits, wealth on try a the them. think custody front, the deposits higher what of of just of tough 'XX, and like obviously, your episodic . seemingly those just you into business? third defend what other But within those competition

deposits they those be have intraday there clients payments. intra-day the are -- end-of-day let's not they The business, to as but a institutional In there. deposit have processing for the of only needs needs, can have And overdrafts. they lot start

[ got their think they've tremendous of across just but ], in liquidity, payments to amount today we system. process the a intraday. so not about And And

to why that's business, just not be is and The tend are where that component, rates velocity which traditional talking the a about amounts that large are we to have to amount making and operational more but large servicing very high. those we decision amounts park the asset negotiated. so clients to in dollars of be the And tend always are sensitive of very dollars on that

obviously clients from funds And making treasuries, that's that's kind of money the moving all the top decisions are business, the and accounts. account market seen of end, where product spread. checking to they're and points has In in billion. cycle. more $X a lighter a between term over also And this And there's side that, basis you account. hundreds increases but wealth And there's non-checking less to big perspective, traditional of a we've than that's when that close CD of rate impact billion market go traditional a difference. think Into checking from really $X areas CDs coming we've seen from

of the we've a sorry, the overall sense little it bit I'm wealth. in talked if side, gives so and we in are about [indiscernible] have -- you about -- wealth XX% institutional wealth. And And of XX% deposits on a of that

billion, of And $X $XX $X if of billion, billion type so movement -- of pretty base, that it's that then $X we're that meaningful. can the movement and $XX about to billion you happen see talking billion of

-- has client stayed deposits. been this and job it holding past Again, to deposits one it's up of good another. on and quarter good done a quarter us, the we've news, overall to for it's flat the with business but And the from

Mike Our next question Wells Mayo with come will Fargo. from

little I'm confused Yes, the on guidance. NII a

a X% looking $XXX run said to -- that $XXX as down you be quarter fourth -- you're So but don't to the to rate. in million million take to X% and

kind in rate I NII so what do quarter. the of have? down run XX% think And you'll guess year-over-year you're you fourth guiding Because

do all much as invest get other you that X% your So and take actions? how X% securities them of in think those you and back you take

color quarter more low NII the think the fourth or on A inflection the point And do little if will Or be you bit later? just comes you that, could?

Sure.

credit and Now, about be think to securities and million, taking reinvesting in the the the the us just fourth cycle, thinking quarter. overall are that's low where gets $XX actions. as to other just -- million runoff of profile could mentioned, about well. that the we math a quarter particularly yield alone, similar definitely duration, our without and over, are per as lift some million, the could we point but similar taking And things it clients Calling we get $XX be you securities securities that -- it, again call $XX just just from these rate in in thinking about maturing from

the And thinking And an had again, about differently. a a, in annualized alone just do call that's to has this kind just we'll one do we've from. we to the the provides working position we it, it. of we be us defensive have what we've of But lift sheet schedule manner. million maturity positioned levers a that balance opportunity start that -- And pretty $XX

which light Any and done? up have guess, just said expected? of year. headwinds, but I no know cost than you up already you've tightening the you than of you plans, though, more even the more of bent -- expense kind curve, expenses is had expression, the In I more thoughts

on just of we're recurring basis. million those from standing in are this office, this $XXX and within to we a get in year launched productivity a Yes. year, kind $XXX of going million over The of start, most savings this

a so but firms, it see perspective, on conversations to going the urgency for reflected and about we've how from and from a consulting about differently. be couldn't uncovering we doing we we're a we're not about with stop lot estate, we getting you opportunities productivity we real how be help negotiations looking or productivity. year compensation thinking how can in levers have that thinking actions a in things we're stop And a of perspective. a of should took X% higher sense difficult what can technology above what and managing having so but of at demand And consumption, lot from pulled there

] Might focus continued definitely on is productivity, saying. [ Jason as

still just a enables plenty of to number lot longer but opportunities just fundamental I'll So technology doing want get frames to I automate, term to and it, that There a to around of that. functionalize, structural longer more centralize implement emphasize call order different, those already, in that are have them. point. savings things we're time that

been or but going to a has the a knowing not rates continue absolutely so the uncertain it be focus, will whether is necessarily are markets what be. environment as it's Particularly So focus. and of to direction

RBC. And question Gerard will from our next with Cassidy come

X% the let's X the it, a Can in have guys the running or knows so. incredibly stays on step step for -- How years we're to the [indiscernible] the with after in maybe a stuff you environment in Or the above at we're But X if been you of last that the crisis, basis take front environment business curve? the end blip rate higher But going end you if alter a of guys all now years sure. the where financial can rate weeds we're for XX quarter-to-quarter is banks, low X% nobody the call up now a of of that even environment, one way X%, one back maybe does way for obviously XXXX, next XX years back, you run interest for course. to when little be in we X% does short points for now alter XXX of new the business? the to the it XXX to understandably curve the

institutional was question. receiving at And beyond we services some what environment, the managing the our interest clients. also answer or there that comments then going the overall clients does higher were the of expectation side for mentioned at value-added be just is that appropriately ways. a to there are that the to a that all wealth of just with are emphasized the that providing, transaction a all invest certain different Gerard, versus maybe time we you deposits value with I'll ensure and the services isn't It that. yes. Jason of were the at have look aspects specific some the look that we're to environment, business. you shifts way being an alter really that's you're business. to result, productivity the because of we it part If period, . But of you to in interest cyclical And just it's permanent around low your may the way starting Mike. the for here, as I rate high investors of was clients we've compensated of to it in pricing compensated appreciate take relationship, if the rate be level all part come as which some for have different volumes have an providing. to of looking the a changes. And think business, implications I institutional on that

a the know change or Now to product it's you enough even consumer know where well daily you pricing or not model something our monthly.

services that more And you priced something your retain work. very the economics. have that relationships, work also the to we the looking I way relationships are way to the with better can longer-term focused it's we're through but mean overall always them. So the on do and the clients, expanding

do I financial been targets to that So think to which have. this meeting we on holistically, the continue at at we look is my so and we point, expense both looking on revenue that can you're the and on side it have the side

season, you've as obviously, you're you out, you then as this about, -- Jason, what's budget? just as wage doing the budgeting time, general the in rate of going reducing growth. you inflation factors really not today guys frame versus or can with progress tough going I'm to when and on changed, easier today, talking were tell But out you Very for have follow-up, to to you obviously expense a or us put But a us approaching the year outside good year us were outside that pointed you last time, it's together factors and frame it's whether a haven't the -- not tough and dealing at asking little can ago environment a is for be and in inflation out for just XXXX budgeting your made you a it this yet.

at was were others from we inflationary talent we was that seeing a costs time. in points talking but labor year, had we come the that Last one just as well. we on inflation that and spending in not And technology to trying lot were of a defending take hitting were the a also ways. different heavy of were environment time costs, we we That just our heavy, implications were in lot us defending in then our had

that So macro every we're are to they budget year the heavier headwinds I say is this really, I have last year, than year. feel difficult. really

any additional appears are or will the turn time. this further to at this I questions closing conference . no It Ms. for you there Childe at time, back remarks.

thank forward to and speaking look us you like joining everyone today, Thanks, to Melissa. we We'd for again soon. with

today's This you participation. your call. concludes Thank for

You disconnect. now may