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Operator
Good morning, ladies and gentlemen, and welcome to the third-quarter 2016 earnings conference call hosted by BNY Mellon. (Operator Instructions) Please note that this conference call webcast will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without BNY Mellon's consent.
I will now turn the call over to Ms. Valerie Haertel. Valerie Haertel, you may begin.
Valerie Haertel - Global Head IR
Thank you. Good morning and welcome, everyone, to the BNY Mellon third-quarter earnings conference call. With us today are Gerald Hassell, our Chairman and CEO; Todd Gibbons, our CFO; as well as members of our executive leadership team.
Our third-quarter earnings materials include a financial highlights presentation that will be referred to in the discussion of our results and can be found on the Investor Relations section of our website.
Before Gerald and Todd begin, let me take a moment to remind you that our remarks today may include forward-looking statements. Actual results may differ materially from those indicated or implied by our forward-looking statements as a result of various factors. These factors include those identified in the cautionary statement in the earnings press release, the financial highlights presentation, and in our documents filed with the SEC that are available on our website, bnymellon.com. Forward-looking statements made on this call speak only as of today, October 20, 2016, and we will not update forward-looking statements.
Now I would like to turn the call over to Gerald Hassell. Gerald?
Gerald Hassell - Chairman, CEO
Thanks, Valerie. And thank you for joining us this morning. As you may have seen from our release, we delivered strong results for the quarter.
On an adjusted basis, we earned $0.90 per share, up 22% year-over-year. Total revenues grew 4% while total noninterest expenses were down 1%. We generated more than 500 basis points of positive operating leverage, resulting in an adjusted pretax operating margin of 35%.
Since we shared our three-year strategic plan with you in October of 2014, we have delivered seven straight quarters of solid performance against these goals despite the relative lack of industry and market catalysts, building a strong track record of success, managing what we can control through all environments.
Our assets under custody and administration increased to $30.5 trillion, and our assets under management increased to $1.7 trillion. Our success reflects our relentless focus on creating new solutions for our clients, reducing costs, and improving our clients' experience.
It also reflects the progress we are making in our cultural, structural, and operational transformation. All of this has created a more collaborative and solutions-driven approach in working with our clients.
Now, central to our growth strategy is investing in future revenue-generating initiatives that leverage our expertise and scale as we seek to strike the right balance to deliver both near-term and long-term shareholder value. NEXEN, our digital ecosystem, is one of the most transformational of our investments. NEXEN is digitizing our Company and in the process enhancing our clients' experience and creating efficiencies for us.
Clients are just beginning to experience the ease with which they can connect with us at their desktops or on their mobile devices. While it's early days, we are confident in our future as we continue to invest, innovate, and transform into a digital, data-driven global financial services powerhouse.
Let me update you on the progress against our strategic priorities. Our top priority is enhancing the client experience and driving profitable revenue growth. These goals are interconnected: One enhances the other.
Some examples in Investment Services include building best-in-class technology and operations that deliver middle-office outsourcing solutions efficiently and profitably. Our timing to expand this business could not be better. We have a solid pipeline, reflecting the secular trend of asset managers seeking lower-cost solutions.
We continue to focus on growing our collateral management capability with global regulatory reform reshaping and redefining the way market participants post initial and variation margin. We've worked with the industry to implement new initial margin requirements that were effective on September 1 of this year.
We enhanced our capability, met a market need, and it is already positively contributing to earnings. Our margin segregation platform supports the new requirement with a high degree of automation and transparency and represents a growing new revenue stream for us.
The alternatives administration business, we've had some good recent wins including significant deals across three major alternative manager segments: real estate, private equity, and single-manager hedge funds. We are also executing on a comprehensive technology platform transformation program that will consolidate all alternative servicing onto a global platform that will leverage NEXEN. This will increase our scale, deliver seamless global capabilities, and improve the overall client experience. Our pipeline in alternative servicing remains strong, and we expect to see continued success.
BNY Mellon treasury services has just been named among the top five of all global cash managers in Euromoney's 2016 Cash Management Survey, based on a survey of treasury professionals.
In the payment space, we have been innovating and driving industry change. In the US we're working with our clients to provide early access to The Clearing House's Real-Time Payments network, which will also be accessed through NEXEN.
In Investment Management we had a strong quarter, with fees up 4% year-over-year and pretax income, excluding intangibles, up 7%. Inflows into alternatives and LDI continued their growth trend as we progressed with our approach of providing the strategies most in demand by our clients to meet their investment goals. Under Mitchell Harris's leadership, we've been laser focused on enhancing our core functions, improving the investment performance in key strategies, and strengthening our distribution capability.
We are centralizing business functions and further leveraging the resources of BNY Mellon, and we have curtailed initiatives that aren't core to our strategic priorities so we can better direct our resources. For example, this quarter we closed our reverse mortgage business.
Our disciplined execution against these areas of focus is helping drive near-term performance, positioning us to attract new asset flows and drive improved margin. In terms of our investment performance, over the last 12 months and at a time when few active managers are outperforming their benchmark, our top revenue-generating investment strategies have performed well.
Our second priority is executing on our business improvement process, which is benefiting us and our clients. The savings we generate are enabling us to fund regulatory change, invest in strategic revenue growth initiatives, and reward shareholders more consistently.
We are meeting or exceeding both our cost-saving goals and operating margin targets that we laid out on Investor Day -- and we are far from being done. In this quarter alone we further optimized our real estate portfolio. We shed 9% of rentable square footage occupied year-over-year. At the end of September, we closed on the sale of 525 William Penn Place, which eliminated 25% -- over 600,000 rentable square footage -- of our downtown Pittsburgh campus.
Our procurement and technology teams have continued to renegotiate key IT vendor contracts to reduce pricing and eliminate unnecessary spend.
We continue to manage our balance sheet and align the drivers of cost with client pricing. For example, we imposed new pricing that incented clients to reduce average daily overdraft balances.
Now this month we opened our seventh global innovation center, this one in central New York. This one will focus on harnessing robotics and machine learning to reduce our costs and free our staff to focus on higher-value activity. We continue to add bots to support processes in the areas of client onboarding, global institutional accounting, and corporate trust. Now, there's a good-sized pipeline of other projects under review, and we expect more robotics automation to be deployed in the near future.
Now, also during the third quarter, we held a sell-side tour of our innovation center in Pittsburgh. It was an opportunity to showcase our NEXEN ecosystem, and the applications available today, and what is in the pipeline to deliver to clients in the future. NEXEN provides a single gateway to deliver all of BNY Mellon's solutions as well as best-in-class third-party applications.
Let me give you a couple of examples of our current capabilities. In terms of blockchain, we're using distributed ledger technology for system resiliency in our new broker-dealer services system, which is up and running today. We created a tool called BDS 360, using a distributed ledger to reconcile transactions between clearance and repo platforms.
Our asset servicing businesses use our Digital Pulse Big Data analytics platform for real-time tracking of NAV production activities against client completion deadline. It's also used for predictive analytics to project completion times against historic trends. So there's many exciting developments that are going on in our technology area.
Our third priority centers on being a strong, safe, trusted counterparty. On September 30, we submitted our resolution plan to the regulators, outlining our strategy to further enhance the resolvability of our Company, including measures to ensure the recapitalization and liquidity support of our material entities.
We strengthened our capital ratios during the quarter. Our supplementary leverage ratio on a fully phased-in basis was up 70 basis points to 5.7%, and our Common Equity Tier 1 ratio was up 30 basis points.
We also issued $1 billion of preferred stock at one of the lowest rates ever, indicating the market's confidence in our financial strength.
Our fourth priority involves generating excess capital and deploying it effectively. During the third quarter we repurchased $464 million in common shares and we distributed $205 million in dividends.
As a reminder, our Board approved the repurchase of up to $2.7 billion of common stock over a four-quarter period, which includes the repurchase of approximately $560 million contingent upon the successful issuance of the preferred -- which obviously we've already done. We began our buyback program during the third quarter, and it will continue through the second quarter of 2017.
Our fifth priority is attracting, developing, and retaining top talent. We continue to prioritize bringing great talent into our Company while further developing and promoting the talent we have.
We welcome to our newest independent Board member, Elizabeth Robinson, a former Goldman Sachs Partner and Global Treasurer. Liz will be a great asset to BNY Mellon as we continue to execute on our strategic and regulatory initiatives.
Hanneke Smits joined us in August as the CEO-designate of Newton. She has long been recognized as a rising star in the investment world. Her proven expertise in growing a global firm across developed and emerging markets equip her well to lead Newton's phase of growth.
Niamh De Niese joined us to head up our EMEA Innovation Centre. She's held a number of senior technology and innovation leadership positions in the financial services and consulting industry, most recently heading Visa's European Innovation Labs.
Alex Batlin, respected crypto-currency expert, will be joining will be Niamh in our EMEA Innovation Centre to bolster our efforts around blockchain.
[Dana Hostipodi] will join us next month from Morgan Stanley as Chief Operating Officer of our HR area and Global Head of HR Solutions. Dana will help drive our efforts to reengineer our HR operating model to provide an even greater strategic value and impact to the organization.
We're already realizing some of the benefits of our talent-related effort. We were ranked fourth in Glassdoor's 50 Best Places to Interview in 2016 survey, which suggests we are getting the candidate experience right.
The Anita Borg Institute has named BNY Mellon to the 2016 Top Companies for Women Technology Leadership Index, reflecting our success in recruiting, retaining, and advancing more women in technology roles. And, very importantly, we also make it a priority to develop and provide more growth opportunities for our talent within the Company, and the diverse global teams we've built are making a real difference for our clients and our shareholders.
I would also like to take the opportunity to publicly thank Karen Peetz, who is retiring at the end of this year, for her leadership, partnership, and contribution to our firm over the last 19 years. We will miss her wise counsel and wish her and her family well as she moves to the next chapter of her life.
In summary, a strong quarter in terms of our financial performance. Our strategy is benefiting our clients and our shareholders through all market environments. We are executing on our key priorities, and we are confident in our future.
With that, let me turn it over to Todd.
Todd Gibbons - Vice Chairman, CFO
Thanks, Gerald, and good morning, everyone. My commentary will follow our financial highlights document, starting with slide 4, which details our non-GAAP or operating results for the quarter.
Our third-quarter adjusted EPS was $0.90; that's 22% higher than the year-ago quarter. On a year-over-year basis, third-quarter revenue was up 4%, expenses were down 1%, and we generated 511 basis points of positive operating leverage.
As we've noted in prior quarters, the strength of the dollar continues to impact results negatively for revenues, and it's positive for the expense categories. However, the net impact from currency translation is minimal to our consolidated pretax income.
Income before taxes was up 15% year-over-year on an adjusted basis, and it was up 12% sequentially. On a year-over-year basis, our adjusted pretax margin was up 4 percentage points to 35%. Now, while this reflects in part the progress we continue to make, it's not a watermark we would expect to match in coming quarters, as we benefited this quarter from seasonably higher DR fees.
Return on tangible common equity on an adjusted basis was nearly 24% for the quarter. That's up 3 percentage points.
Moving ahead to slide 8, I will discuss our consolidated fee and the other revenue. Asset servicing fees were up 1% year-over-year and flat sequentially. The year-over-year increase primarily reflects higher money market fees and securities lending revenue; and that was partially offset by the impact of a stronger dollar and the downsizing of our UK transfer agency business.
Clearing services fees were up 1% year-over-year, and they were down slightly sequentially. The year-over-year increase is primarily driven by higher money market fees, partially offset by the impact of the previously disclosed lost business largely driven by industry consolidation.
Issuer service fees were up 8% year-over-year and 44% sequentially. The year-over-year increase reflects higher fees from corporate actions in depositary receipts and higher money market fees in corporate trust. The sequential increase primarily reflects seasonally higher fees in depositary receipts.
Treasury service fees were unchanged year-over-year and 1% lower sequentially.
Third-quarter Investment Management anad performance fees were up 4% year-over-year and sequentially. The year-over-year increase primarily reflects higher market values in money market fees, offset by the unfavorable impact of a stronger US dollar, principally driven by the weaker pound, and net outflows of assets under management in prior periods. The sequential increase primarily reflects higher market values.
FX and other trading revenue on a consolidated basis was up 2% year-over-year and 1% sequentially. FX revenue of $175 million was down 3% year-over-year and up 5% sequentially.
The year-over-year decrease primarily reflects lower volumes and volatility, and that was partially offset by the positive net impact of foreign currency hedging activity. The year-over-year decrease also reflects the continued trend of clients migrating to lower-margin products. The sequential increase primarily reflects higher depositary receipt-related FX activity, partially offset by a little lower volatility.
Financing-related fees declined 18% versus the year-ago quarter to $58 million, and they were up 2% sequentially. The year-over-year decrease primarily reflects lower underwriting fees and lower fees related to secured intraday credit that we provided to dealers in connection with their third-party repo activity.
As we noted following the implementation of these facilities in the second quarter of 2015, we expected market participants to moderate their usage and rely less on our credit facilities in the following quarters, and that has played out pretty much as expected.
Distribution and servicing fees were $43 million, 5% higher year-over-year and flat sequentially. The year-over-year increase primarily reflects higher money market fees, partially offset by fees paid to introducing brokers.
Investment and other income was $92 million, compared with $59 million in the year-ago quarter and $74 million in the second quarter. Both increases primarily reflect higher asset-related and seed capital gains.
Moving to slide 9, which shows the drivers of our Investment Management business -- and I think that will help explain our underlying performance. Assets under management of $1.72 trillion was up 6% year-over-year. That's reflecting higher market values offset by the unfavorable impact of a stronger dollar. Sequentially, assets under management were up 3%.
Long-term flows of $1 billion included inflows of $3 billion into our actively managed strategies. We had $2 billion of outflows from index strategies. Additionally, we had $1 billion of short-term cash outflows.
Wealth management continued its multiyear pretax earnings growth trend year-over-year as we focused on high-growth US markets. Our successful program to extend banking solutions to wealth clients through Pershing continued to drive strong loan growth. Investment Management loans were up 20% and deposits were up 2% year-over-year.
Now turning to our Investment Services metrics on slide 10, you can see that assets under custody and administration at year-end were a record $30.5 trillion, up 7% or $2 trillion year-over-year, reflecting higher market values offset by the unfavorable impact of a stronger US dollar. Linked quarter, AUC/A was up 3% or $1 trillion.
We estimated new assets under custody or administration business wins were $150 billion in the third quarter. Now, we've heard some questions around this metric and what to remind you that we only include wins in this metric if they will add to the total AUC/A. For example, if a client who already has custody assets with us chooses to use us for fund accounting for those assets, we would not include that in this metric since the custody business already captured the AUC/A.
Looking at the other key Investment Services metrics, you will see the impact of us proactively managing the balance sheet and certain client relationships, with a focus on optimizing capital liquidity and profitability, as well as the impact of lost business in clearing.
Turning to net interest revenue on slide 11, you'll see that on a fully taxable equivalent basis, NIR was up 2% versus the year-ago quarter and 1% sequentially.
Both increases primarily reflect the actions we have taken to reduce the levels of our lower-yielding interest-earning assets and higher-yielding interest-bearing deposits, as well as the impact of higher market interest rates. The sequential increase also reflects higher average loans.
The actions we took and the higher market rates drove our net interest margin for the quarter to 106 basis points, 8 basis points higher than both the year-ago and prior quarter. As we previously indicated, we have been evaluating the impact of our resolution planning strategy on net interest revenue. We currently believe that it requires us to issue approximately $2 billion to $4 billion of incremental unsecured long-term debt above what would be our typical funding requirement by July 2017; and that is to satisfy the resource needs in a time of distress.
This estimate is subject to change, of course, as we further refine our strategy and related assumptions. This is currently expected to have only a modest negative impact to net interest revenue.
Turning to slide 12, you'll see that noninterest expense on an adjusted basis declined 1% year-over-year and increased slightly sequentially. The year-over-year decrease reflects lower expenses in almost all categories, primarily driven by the favorable impact of a stronger dollar, lower Other, software and equipment, legal, net occupancy, and business development expenses. And that was partially offset by higher staff and distribution and servicing expenses.
The increase in staff expense was primarily due to higher incentive and severance expenses and the annual employee merit increase. That was partially offset by lower temporary services expense.
We continue to benefit from the savings generated by the business improvement process, including the continued impact from vendor renegotiation and the execution of additional real estate actions that allow us to optimize our physical footprint and improve how our employees work. We are running the cost to generate these savings through our operating earnings each quarter because this is a continuous process; it's not a one-time project.
The sequential increase primarily reflects higher staff expense and M&I litigation and restructuring charges, partially offset by lower expenses in nearly all other expense categories including business development, sub custody, net occupancy, and Other and software and equipment expenses.
Now turning to capital on slide 13, our fully phased-in advanced approach Common Equity Tier 1 ratio -- and this is computed on a non-GAAP basis -- increased 30 basis points to 9.8% as we generated $286 million of capital after dividends and buybacks. Our supplemental leverage ratio on a fully phased-in basis was 5.7%; that's up 70 basis points, reflecting lower deposit and balance sheet levels and the benefit of the $1 billion preferred stock issued in the quarter.
Two other notes about the quarter. The effective tax rate was 24.6%, and on page 11 of the release we show some investment and securities portfolio highlights. At quarter end, our net unrealized pretax gain in the portfolio was $1.4 billion; that compares to $1.6 billion at the end of the second quarter, with the decrease primarily driven by a slight increase in market rates.
Now let me share a few thoughts to factor into your thinking about the fourth quarter. Fourth-quarter earnings are typically impacted by a seasonal decline in depositary receipts total revenue, with a limited offset in expenses. We currently estimate the decline in the fourth quarter from the third quarter to be approximately $130 million.
We expect performance fees in our Investment Management business in the fourth quarter to be flat to slightly down versus the fourth quarter of last year. NIR for the fourth quarter is expected to be flat to up slightly. SLR may decline slightly as we increase buybacks following the preferred issuance.
We expect total expenses for the full year now to be down 1% to 2%. And lastly, we expect our effective tax rate to be approximately 25% to 26%.
With that, let me hand it back to Gerald.
Gerald Hassell - Chairman, CEO
Thank you, Todd, and we can open it up for questions.
Operator
(Operator Instructions) Ashley Serrao, Credit Suisse.
Ashley Serrao - Analyst
Good morning. So, you've got some great margin improvement, but it feels like Investment Management isn't where you want it to be yet. So I was curious if you could provide us an update on how you are thinking about the margin potential for the segment. At this point, is margin expansion more dependent on your various revenue growth initiatives? Or is there more work to do on the expense side of the story, too?
Gerald Hassell - Chairman, CEO
Why don't I take the beginning of that and then ask Mitchell to comment. We do think there is additional margin improvement within Investment Management. I would note that we are running through the existing expense base the costs associated with severance and shutdown of certain businesses. So that's in the existing expense base.
I also will say that we were very pleased to see some positive flows into our active management areas, which have some good fees associated with them. So the expenses are bit high at the moment, as we've cleaned up a variety of activities, and we do think the revenues are starting to come on due to strong investment performance.
Mitchell, why don't you add some additional color?
Mitchell Harris - CEO, Investment Management
Yes, I think that on the expense side, we have taken some actions. There are some severance charges and one-offs in there as we've shut down a number of initiatives that you'll see really flow through into 2017. So it's the noise of the expense of reducing the run-rate costs that you are seeing this year, you won't see next year, number one.
Number two, the industry has had a lot of challenges on the asset flow side. But in saying that, we're well diversified.
People worry -- active versus passive. We have 18% of our assets in passive, so we're nicely diversified on that front.
Performance is looking very strong. With respect to our equity performance it's been good and flows have been slowing down -- negative outflows have been slowing down.
You do see -- we've been building more alternative strategies. Our alternative inflows have been increasing modestly over the last few quarters and have been positive for at least five or six quarters. Those have high margins.
The asset mix -- meaning that the equity outflows have slowed, you have some outflows in indexing, we're passive -- those are much lower margin. So the way the flow situation is looking, I think it will start to benefit us going forward.
And I think we're nicely positioned given the regulatory environment with the DOL to win some business next year. We had some idiosyncratic issues with sovereign wealth funds in the Middle East that we've been concentrated, and I think those have abated as well.
So I guess the long and short is, I see opportunities on the revenue side, and I think we've been quite aggressive on the expense side; but you'll see more flow through in the beginning of next year.
Ashley Serrao - Analyst
Thanks for all the color there. I guess our other question was -- I was curious what the client reception has been to some of the balance sheet actions taken this quarter on the deposit side, and if you feel you can do more here.
Todd Gibbons - Vice Chairman, CFO
Sure, this is Todd, Ashley; I'll take that. As we indicated in the second quarter, there were two things we were going to do. One is we were going to downsize the activity that was not client related that was taking place in treasury.
So we did have some deposit taking and some reverse repo and repo activity in treasury that expanded the balance sheet by about $20 billion or so. That we took down in the quarter.
Those were relatively high-yielding funding sources, and the margins on that was relatively low, and that's why you saw the NIM improve. That had very limited impact to zero impact on the clients.
There are some adjustments to clients. But again, it's just a -- it's a handful of clients and we're providing them alternatives to our balance sheet. So we don't think it's going to have a meaningful impact to the client relationships.
We have actually seen a little bit of a spike in the fourth quarter in our deposit base, primarily related to one-time events, very large escrow balances around some corporate trust activity. So we have then since seen that decline, but it will impact slightly the average deposits -- just for the quarter, but not for the long run.
So we think we can continue to bring down the balance sheet a little bit. We don't have to bring it down a whole lot more; we do need to bring it down a little bit.
But you can see the progress that we made in the quarter was a little ahead of what we had anticipated at a 5.70% SLR. So I think we're in pretty good shape without doing a lot more or impacting our NIR to meet our capital targets.
Ashley Serrao - Analyst
Great. Thank you for taking my questions.
Operator
Ken Usdin, Jefferies.
Ken Usdin - Analyst
Thanks. Good morning, everyone. First question, I just want to ask about the servicing business.
You mentioned you had good wins again. AUC/A was up really nicely; but it was down a couple million even ex-sec lending or just down slightly.
I'm just wondering, could you talk through -- is there seasonality in asset servicing on the collateral business? Is there fee capture challenge, or did some of the business just not convert yet?
Can you just walk us through your expectations for asset servicing and the trajectory there? Thanks.
Brian Shea - Vice Chairman and CEO, Investment Services
Yes, this is Brian Shea; happy to do that. I guess the asset servicing business was -- the fee revenue was flat year-over-year and sequentially, driven by a little bit of improved fee waivers and improved net new business, offset by the unfavorable impact of currency and a little bit lighter activity volume in this quarter. I think the other thing that's affecting the asset servicing business is that we're really focused on profitable growth over pure revenue and market share. There's a -- we've been going through a portfolio review of products, services, and solutions and reducing things that are not really profitable or don't drive adequate return.
The best example of that, which actually is putting downward fee revenue pressure on us but improving our profitability, is the repositioning of our UK TA business. We are committed to the global institutional TA business and growing that; but the UK local retail business we have been exiting, and so we're actually pushing out revenue and clients to other providers.
What's happening is it's reducing our fee revenue, but our operating margins and our fee-to-expense ratio and our profitability is improving. So that's really the focus of the asset servicing business.
We think longer term there's a secular trend where asset managers are under fee pressure, particularly active asset managers. So we think there's a longer-term trend that's in our favor around middle-office outsourcing, extending our technology solutions, the need for growth for collateral services and derivatives and [larger] requirements and all the other things that we think will drive longer-term growth in the asset servicing business.
Ken Usdin - Analyst
Great. Thanks, Brian. So second question just on the expense side. Todd, you mentioned that the year-over-year is still being helped a little bit by FX translation, but down 1% to 2% is still a great result regardless.
Can you help us understand, just of the full year benefits how much of that is FX translation? And then as you look out, depending on that first part, do you think you can replicate the type of stable, if not declining, growth as you look into in 2017 and beyond, given that you still seem to have a lot of this stuff still on the come?
Todd Gibbons - Vice Chairman, CFO
Sure. A couple of questions there, Ken. The first one, as to the impact, it's probably about 100 basis points. And if you look at our operating leverage, it's probably reflecting about 100 basis points in our operating leverage. So we are getting a tailwind to the expense base from the strength of the dollar.
And specifically the move in sterling, because we do have a fairly large expense base in sterling. Of course, that's offsetting us and offsetting our revenue lines. The one that Brian just walked you through, asset servicing, is one of the ones that has a significant component of non-dollar-related revenues that's being impacted.
That being said, the underlying trends -- we did make investments in this quarter to continue to manage down our costs across a number of different line items. I think we made some good progress that Gerald pointed out on the occupancy front, as we exited another building in Pittsburgh. And we got the benefit of our programs in New York kicking in on a year-over-year basis, as well as what we've done in Philadelphia and Boston. So there is a little more room in occupancy.
And we also have continued to make investments in automation, and I think there's more to come there. And we're also -- we did take some severance, which that gives us the opportunity to get our staff in the right locations as well.
So I think we're continuing to make good progress. I think we've -- Brian and I and Mitchell, lead a team that identify opportunities and continue to add to the list. And like Mike was saying, it's not a program, it's a process, and we are not complete yet.
I did give guidance for the full year in my opening remarks that we now anticipate expenses to be down 1% to 2%. Frankly, that did get the benefit of the stronger dollar; but it's also reflecting that we've been able to do some of the things at a little lower cost than we had anticipated.
Our compliance and regulatory costs continue to go up. So we're running -- right now, we absorbed at a pretty hot rate the cost associated with submitting our October 1 resolution submission; and we are continuing to work hard to July of next year. Those costs will be relatively high, but we're absorbing it into the run rate from the other things that we've been doing.
And there is also a virtuous cycle that we get. As we've invested in the actions to reduce our cost across the board and they are throwing off benefits, it's giving us the opportunity to invest in additional actions. So if we're saving 2% or 3% of expenses, we're putting 1% or 2% back into future benefits.
So, I guess the only guidance I would give right now is that we do expect to be down for the full year in the 1% to 2% range, and there is more to come.
Ken Usdin - Analyst
Thanks, Todd. Great color.
Operator
Glenn Schorr, Evercore ISI.
Glenn Schorr - Analyst
Hi, thanks very much. One quick follow-up in that whole balance sheet remixing and NIM dynamic. You gave us a lot of detail on the deposit front.
Was that the bulk of the 8 basis points? Or is there -- can you tell us what you're doing on the asset side also? In terms of -- there was some commentary in the release on moving towards higher-yielding assets. Just curious for some color.
Gerald Hassell - Chairman, CEO
Yes, Glenn, there was -- the driver of our balance sheet is the right-hand side. So the actions in borrowing through repo and reducing deposits, mostly out of treasury, of our treasury department, is what brought the balance sheet down. And what we did on the left-hand side was just reduce the lower-yielding assets.
We are seeing some -- we did see over the course of the quarter some growth in our loan book, which is one of the highest yielding portfolios. So the combination of those two things both increased NIR while bringing the balance sheet down. And we -- but there's no real remix, if you will, outside of the actions I just described.
Glenn Schorr - Analyst
Cool. I appreciate that. Then one other follow-up on the asset management conversation. So I guess I'm curious. You had mentioned some fee pressure for the industry. You also mentioned that you have some good performance.
But as you've been trying to build out the retail distribution side, we have the fee pressures you mentioned, but also distributors are now looking for more compensation in a post-DOL world. Can you talk about some of those pressures and how it impacts you guys specifically?
Mitchell Harris - CEO, Investment Management
Yes, sure. A couple things. More than the pressure, it's flow pressure. It's the amount of outflows in the industry, if you think about what's happened; though obviously it does impact fees as well and particularly on the DOL side.
I think there's a couple things on our retail basis where we're doing several things. First off, with the DOL the focus is really on the home office now, not on the field; so we don't need as much field coverage as we've had in the past, as the home office will be through a research-based model making decisions with respect to what goes on their platform.
I forget the exact amount, but if you look -- I think it's at Merrill, they had about 4,000 products on their platform, and they're looking to go to 1,000. So what happens is you have to have either highly active products or good priced passive products with scale, with performance, and the right pricing in order to be on that platform.
So we need to be in the position to be on that platform by making sure the pricing is right and that we've got the right performing products for them.
And as a result of that you will get a lot more scale, because with a reduction of that many products, the assets will be much more concentrated into fewer products. And we think we can position ourselves nicely to end up remaining on those platforms and achieving the scale that will offset some of the price pressures, quite frankly.
Gerald Hassell - Chairman, CEO
Glenn, just as a reminder, about 80% of our assets under management are institutional. So you're not feeling the same fee pressure there as opposed to being performance driven.
Second thing, from an enterprise perspective we have a very large distribution platform called Pershing. So what may be a negative effect on one side of the house is a positive effect on the other.
Glenn Schorr - Analyst
I definitely appreciate that. Thanks.
Operator
Alex Blostein, Goldman Sachs.
Alex Blostein - Analyst
Hey, guys; good morning. Hey, Todd, just a quick -- I guess another follow-up around the balance sheet and then an NIR discussion. If you look by bucket, it looked like security yield has dropped pretty meaningfully sequentially; and maybe some of that, it's just a lower rate backdrop in Europe. But curious if you guys can give us a little more color what's going on there. I don't know if there was any premium amortization that was hurting that this quarter that may or may not reverse.
Todd Gibbons - Vice Chairman, CFO
Yes, there was a little premium amortization. There wasn't a significant drop there. In fact, sequentially the securities yields were flat, Alex. It was down from a year ago about 4 basis points, and we actually think that we'll see that turn around a little bit.
The recent movement in the yield curve is a net positive, and some of the securities are repricing at LIBOR and they are getting the benefit of higher LIBOR. So we actually would expect securities -- the yield on securities to go up.
Alex Blostein - Analyst
Got you. Then your comment around flat to slightly up NIR next quarter, does that assume a December hike? I guess if not, given the balance sheet moved around a little bit, all else equal, how, I guess, should we be thinking about the NIM impact from a 25 basis point hike in December?
Todd Gibbons - Vice Chairman, CFO
Yes. Well, 27 or 25 basis points in December won't do much for us because it's such a short period. It would only be a couple of weeks during the -- in the entire quarter. So it wouldn't hurt, but it wouldn't drive the needle a whole lot.
We are getting some benefit from the LIBOR resets, so the LIBOR spreads are (technical difficulty) up on average in the quarter. So we're starting to see some of that benefit now, and that's primarily -- that's probably the number-one driver of why we think it is going to be up in the quarter.
Two good things that happened this quarter or that's happening right now is, number one, we're seeing the higher short-term LIBOR rates and the yield curve has steepened a little bit. As we have some reinvestments to do in this quarter we're picking up a little benefit from that yield curve. That's why we felt comfortable saying that flat to up, despite the smaller balance sheet that we're targeting for the quarter.
Alex Blostein - Analyst
Right. Sorry; I should have said just like in a run-rate steady-state benefit. So I get the fourth quarter; not a ton of benefit.
But I'm just saying like from a run-rate perspective, what kind of sensitivity to the NIM should we think about from a 25 basis point hike?
Todd Gibbons - Vice Chairman, CFO
Well, we've given you some color. If you look at the Qs and the sensitivity to 100 basis points, the rate move is typically in the vicinity of about $100 million to $150 million of benefit to net interest income. And that includes -- so the NIM is probably a little more positive because that includes some runoff in the size of the balance sheet, yet it's still positive to the net interest income.
Alex Blostein - Analyst
Got you. Great, thanks.
Operator
Betsy Graseck, Morgan Stanley.
Betsy Graseck - Analyst
Hi, good morning. A couple of questions. One, Gerald, you mentioned in your prepared remarks about the new growing revenue streams that you've got in some of your new businesses; I think specifically around investor services. Maybe you could speak to that a little bit and size it for us.
Gerald Hassell - Chairman, CEO
Yes. What I was referring to is a couple things. Generally collateral management and the initial margining we put in place for the large broker-dealers [today] they comply with the requirement as of September 1. We worked with all the market participants, got the documentation in place, so the business is up and running, and we're already seeing positive revenue flows as a result of that.
Collateral management broadly across the world continues to grow nicely. And Brian mentioned the mid-office outsourcing as a real opportunity. We've got a lot of people lined up.
We want to make sure those dialogs are in such a way that they are willing to do more standardized approach to in-office servicing so it's good for them and profitable for us. I'd say those are the key areas that we see opportunities, Betsy.
Betsy Graseck - Analyst
The collateral management side is coming through the fee line? Or is it also partly coming through the NII line?
Gerald Hassell - Chairman, CEO
Mostly fees.
Betsy Graseck - Analyst
Yes, okay. And then the other question, Todd, for you is on the real estate activities that you're doing and the shrinkage in real estate. You highlighted -- what was it -- 600,000 square feet coming off of your books.
Could you just give us a sense as to the size of that and how much it impacts your expense line? And then looking forward, how much of the real estate that you have today do you think that you could shed over the next year or so?
Todd Gibbons - Vice Chairman, CFO
Sure. Occupancy historically has been running -- it was over $600 million; we brought the run rate for the full year to under $600 million. And we've actually brought down, if we look at the -- we call it vacancy, but we look at the space per employee, and we brought that number down dramatically as we had a lot of vacant space throughout the Company.
So we're managing that far more aggressively. I wouldn't get fixated too much on that line because $600 million of expense on an over $10 billion baseline, but it does improve where we work, the efficiency of how we work, and making sure that we're getting in the locations that are most efficient for our staff.
So a little more on that line that we think we can do, and it's certainly nice to see it going down while revenues are actually going up.
Betsy Graseck - Analyst
Okay. But your run rate this quarter suggests that there should be more downward pressure there into next year as well. Right?
Todd Gibbons - Vice Chairman, CFO
It also, Betsy -- we're running any actions that we're taking to reduce further costs through that line. So from time to time you may see us take some action; if we shut something down, if we terminate a lease early, something like that where you might see a little bit of a bump up in that, and we're just eating through that line.
So I can't really say that from quarter to quarter it's going to just flat to down. You might see every now and then that we've done something to improve the future quarters.
Betsy Graseck - Analyst
Okay. Then just trajectory on the overall efficiency ratio, I know you spoke earlier to the asset manager side of the business. But maybe you could speak to the overall expense ratio, investor services in the Company generally. How much more legs do you think it has over the next cycle here?
Todd Gibbons - Vice Chairman, CFO
Why don't I start on that one and then I'll hand it over to Brian? If you look at the ratio that we show you, fees relative to expenses -- and we've moved that. There is some seasonality to it, but if you adjust on a year-over-year basis, we moved that meaningfully another 300 basis points this year versus 300 basis points last year. So this particular quarter we're now at 103% which is the best that we've printed.
So I think it's reflecting the strategies that we've got. One of the things that Brian pointed out, we're exiting some businesses that were not profitable, had a high cost. So we've given up a little revenue but it's really benefited us in the profitability.
It's also benefiting us in this particular metric. In terms of where we're -- more actions, where you think we can go, Brian?
Brian Shea - Vice Chairman and CEO, Investment Services
Yes. No, I think that 103% is a record for us. Even adjusted for this seasonality in depositary receipts, it's still up significantly year-over-year, so the core is improving.
I'd echo your comments, Todd, and Gerald's comments. Right? This business improvement process is really part of a cultural change, and we're gaining momentum, and we still have a pipeline of initiatives including -- people think of business portfolio revenues. We've done some of that, but we're looking more now deeply at products, services, and solution portfolio reviews and, again, making sure that we're getting an adequate return on the investments and adequate client adoption and value from the investments we're making.
So I think you'll see continued tweaking of the products, services, and solution portfolio in review, continued progress on every element of the business improvement process: the alignment of the drivers of our costs and our client pricing. Gerald mentioned the overdraft thing, but we have a pipeline of other initiatives there.
And we're driving more value from enterprise teamwork, which -- there's many examples of that. But one is the NEXEN platform is going to be able to deliver the whole Company in a way that enables us to drive cost to the solutions more and more. I guess the poster child for this working really well is the partnership between Pershing and the private Bank, where we now have well over $3 billion in credit facilities established from our private Bank to our independent broker-dealer and RIA clients of Pershing; and that's a significant revenue driver for the wealth management business and a great example of the leverage we can create connecting the solutions across the investment process.
So all of those things are captured and tracked in the business improvement process. And I think we have more to do (multiple speakers) --
Gerald Hassell - Chairman, CEO
Betsy, I would just add on the structural cost side, we're still finishing up converting a number of operating platforms, where I think we're still in the early innings of further automation through artificial intelligence, machine learning, and robotics. I think we've got more work to do and more opportunity on chopping away at the core structural costs. So we're actually fairly optimistic that we can keep on this pace.
Betsy Graseck - Analyst
Okay. The pace that you've had over the last year, fairly optimistic you can keep that going over the near term?
Gerald Hassell - Chairman, CEO
Yes. We can't get to infinite operating leverage or margins at 100%. We have to keep reinvesting in the businesses. But we feel good that we can keep chopping away at the core structural costs of the Company.
Betsy Graseck - Analyst
Thank you.
Operator
Mike Mayo, CLSA Bank.
Mike Mayo - Analyst
Hi, Gerald. I just want to know the punch line from what you just said: You can keep chopping away. We heard a lot of positive initiatives with the business improvement process, from real estate to cultural change to digitization and NEXEN to -- and you're optimistic that it can stay in place.
On the other hand, the guidance that you gave at the top of the call implies the profit margin, which was 35% in the third quarter, would decline in the fourth quarter. So where do you think the profit margin should be over time, and where do you think it will be?
And I guess I have some follow-ups to that. But subpoint to the question where will be pretax margin be: the Investment Management slide, slide 19, that hasn't shown the good year-over-year improvement. You have middle-market outsourcing, which in the past has caused some upfront cost; and I guess your money market fee waivers are mostly recaptured.
Todd Gibbons - Vice Chairman, CFO
Mike, this is Todd. I'll take the beginning of that and then turn it over the higher level to Gerald. In terms of -- I just want to remind you that the third quarter is a seasonally positive quarter to us because of our DR business. And we indicated in my remarks that we would expect that revenues associated with that business to decline by $130 million in the fourth quarter.
And there are no real costs. That's basically a fixed-cost business, so there's no costs that come out as a result of that.
I also pointed out that the operating margin -- this is -- it's a high-water mark for us, but not one that we would expect to see in more normal quarters. We'd expect to see it in the third quarter of next year.
So what we have done is we've -- if you seasonally adjust it, we are grinding the operating margins up and we're seeing positive leverage on a year-over-year basis, which I think is the way you have to look at us, because we did have some seasonality in our numbers. I don't know, Gerald, if you wanted to comment.
Gerald Hassell - Chairman, CEO
Well, on the Investment Management side, I think we said in the opening commentary -- and Mitchell alluded to it -- we are running through the expense base severance costs, restructuring costs, shutting down of business costs; and the margin did in fact improve. We said publicly -- and Mitchell and I are both committed to it -- that we can improve those margins further.
It does require a certain level of revenue mix, but we're not going to depend on that. So we think there's further opportunities to improve the core functions, then leverage the scale and breadth of the rest of the Firm, as well as making sure that they continue to have the investment process totally under the control of the Investment Management [unit].
So we think there's better ways to leverage the Company, improve the margins in that business as well. And as I said to Betsy's question, everything within operations and technology investments we're making are paying off. We're seeing it in the positive operating leverage.
I'm not going to change guidance from Investor Day, Mike. I know you keep asking me to do it each quarter, but I think we're fulfilling those goals. And we're going to talk to you this time next year about future goals for another three years.
Todd Gibbons - Vice Chairman, CFO
Mike, I think you also had a question in their around fee waivers. Our view of fee waivers right now is -- what we had indicated before the Fed move is that we thought a 50 basis point move would result in about a 70% reduction in our fee waivers. Our fee waivers, we had indicated, were running at about $0.06 to $0.08 a quarter.
With the first 25 basis point move, it looked like we got about 50% of that. So that is in our run rate.
In the asset management business, the business has gotten a bit competitive, so it's eaten in slightly to those numbers. We would expect an additional 25 basis points or so to fulfill that 70% target that we had -- or estimate that we had previously give. So if it's 7% -- if it's seasonally $0.07 a quarter, if we get another 25 basis point move we'd say there's probably about another 20% of that in there.
So about $0.01 a quarter, if we were to see another 25 basis point move. And that's probably maybe a little bit more if we go beyond that, but not a whole lot more.
Mike Mayo - Analyst
And then I think I snuck in a question about middle-market outsourcing. In the past that would cause some upfront fees and you'd get the benefit down the road. Is that still the case?
Gerald Hassell - Chairman, CEO
Generally that's the case. But as Brian and I both have said, we really want to make sure we have the right kind of client with the right kind of mindset in terms of trying to do more standardized work versus customized work. We do not want to take on business that will be long-term a drag on our Firm.
So we go through a very, very robust analysis. And we've had experience from these different mid-office outsourcing arrangements, so we're doing it in a very disciplined fashion, Mike.
Mike Mayo - Analyst
Thank you.
Operator
Brian Bedell, Deutsche Bank.
Brian Bedell - Analyst
Great; thanks very much. Maybe just to tag along on that question and tie it into the longer-term trend post-DOL. On the mid-office, the standardized versus the customized, obviously the T. Rowe deal and large deals like that tend to be more customized. Are you willing to look at taking on those big deals, or really going back to that more standardized strategy? And then do you think asset managers will essentially adopt that standardized strategy?
Then also on the clearing side, I think, Brian, you mentioned some benefits longer-term from your business on DOL in clearing; if you can elaborate on that a little more.
Brian Shea - Vice Chairman and CEO, Investment Services
It's Brian, I'll start with the middle-office solution. So, as Gerald mentioned, we really are taking a business disciplined approach to this. We're really making sure we're aligned with the asset manager client on what they're trying to accomplish.
What they're really trying to accomplish is lower variable cost, lower capital investment in technology, and creating shared economies of scale. So the best way to do that is to drive a more common operating model and platform that more than one client can leverage, because that's where the benefit comes for us and for all the clients.
So we're only getting into these arrangements when we have the mindset of the partner, as Gerald indicated, that enables us to create those shared economies of scale. But we're also driving a technology platform strategy that's going to enable us to onboard these clients faster and make it easier for them to get the customized information and data they want.
We've talked a lot about NEXEN, and we showcased it in August to a number of analysts, including many on this call. And basically NEXEN is an API-driven system and it enables the asset managers to get data they want on-demand the way they need it. So it's a much more effective way of helping clients get the customized information they want without creating customized development.
So that's going to be one of the ways we're able to not only meet asset manager needs effectively without creating extra cost. We're also going to be able to speed the onboarding of these clients in the future.
Brian Bedell - Analyst
And then on the Pershing side?
Brian Shea - Vice Chairman and CEO, Investment Services
Yes, on the clearing side, look, we expect the Department of Labor Fiduciary Standard to drive more RIA activity. People are going to shift from commission-based traditional brokerage business to RIA. That's been a cyclical trend for a long time; we expect it to accelerate.
So we expect real growth in our RIA custody business, and we are helping our broker-dealer clients who want to take advantage of the best interest contract component of the Department of Labor ruling. Pershing is developing the capabilities to help clients comply, which we think will help them.
But we're also providing all of the RIA custody and managed account tools and capabilities they need to shift their business much more toward an advisory model. Our RIA custody business is growing at double digits in terms of revenue and in terms of AUC. So we're pretty well positioned to take advantage of the shift that's going to happen in the RIA market.
Brian Bedell - Analyst
And you think that could be fairly immediate, like next year?
Brian Shea - Vice Chairman and CEO, Investment Services
Well, it's happening already. It's been happening, but it's accelerating.
Yes, the DOL rule is effective next year, so you'll see -- I think you're going to see real shifts in broker-dealer business models as a result.
Brian Bedell - Analyst
Great. Then just a longer-term question for both Gerald and Mitchell, as we think about the active and passive trends. If they continue, how does that make you feel about consolidation or appetite for acquisitions there? I guess the question is: Do you think there will be more consolidation in the asset management industry? And do you think you can be a participant in that on the buying side?
Gerald Hassell - Chairman, CEO
I do think there will be further consolidation. You just saw an announcement fairly recently, because it's going to become a scale business, like our servicing business. We continue to look at our boutiques and whether they have sufficient scale and capabilities. Virtually all of them do, and they are very strong in terms of their investment performance and the size and scale of what they can offer the marketplace.
So I do think it's going to be a scale business. We're always mindful of looking at our portfolio the right way from a business and a shareholder perspective; so we'll see.
Brian Bedell - Analyst
Okay. Great, thank you.
Mitchell Harris - CEO, Investment Management
(multiple speakers) just a little more color perhaps is that one thing I would just remind everyone is that on the passive side, let me just mention that it's about revenues. And people talk about the assets on the passive side; they don't make a lot of money, the margins on that. You're making 1 or 2 basis points and your operational risks are enormous. So that clearly is a scale business that you'll a handful of players consolidating into.
On the equity side, what you saw with Janus and Henderson, if you don't have good performance you're not going to survive. So you're going to see a lot of third-, fourth-quartile equity performers having to merge or get out of the market. It's not sustainable.
But in saying that, active is going to continue to survive and thrive. We're largely in that space; but we do have, as I said, 18% exposure to the passive side.
And there's some cyclicality to it. We've been in a seven- or eight-year bull market that favors indexing. When those markets start to blip, and they will, active equity management, active management is going to do well again.
So, it's a mix story is what I'm saying. I think we're nicely positioned for it, and we'll see what opportunities come up that make sense given where we're going with it all.
Brian Bedell - Analyst
Great. Thanks for that color.
Operator
Brennan Hawken, UBS.
Brennan Hawken - Analyst
Yes, hey. Good morning. Thanks for taking the question. I actually want to follow up on that RIA discussion briefly. We've seen increasing M&A and consolidation in the RIA channel.
So when you think about going forward, one of the potential outcomes from DOL may be being a shift and a need for scale, a greater need for scale certainly amongst the RIAs, do you think or are you already seeing some of that consolidation leading to more negotiating power for some of your counterparties in that business, and then maybe either current or the potential for some pressure on those revenue yields and margins?
Brian Shea - Vice Chairman and CEO, Investment Services
I think there will be consolidation in the retail advice business. So, one, broker-dealers need to shift toward an advisory model pretty rapidly. We're providing them the tools to do that successfully, and I think many of them will really make that pivot and succeed, and they are deeply already on that trail.
Some will struggle, and I think there will be more consolidation in the broker-dealer market as a result. And to your point, there may also be consolidation in the advisory market.
Our model in the RIA market is more focused on larger registered investment advisory businesses. So they are not individual practitioners. We serve registered investor advisory companies, and they tend to have groups of advisors and they tend to be larger advisors.
So to the extent that there is consolidation in that space, we think we will be a beneficiary of it because we tend to serve -- our average advisor is bigger and more likely to be an acquirer than not, although we're not immune from the market forces that are out there.
Brennan Hawken - Analyst
Great. Thanks for that.
Brian Shea - Vice Chairman and CEO, Investment Services
On the margin side, yes, I think they should be pretty steady. I don't think we're going to have fee compression in terms of competitive pressure. I think overall, there's a broader-based change underway in advisor fees generally, driven by a variety of factors including DOL, including the rise of digital advice and things like that, which could put some downward pressure.
But if you look at the growth of assets and the growth of the wealth market overall, I think that fundamental growth should offset some of the pressure on markets.
Brennan Hawken - Analyst
Okay, great. Thanks for that. Then for my second question, the spread improvement in sec lending, apologies if you hit this before, but I don't remember hearing it. Could you maybe break down how much of that was rate versus hard to borrow?
Todd Gibbons - Vice Chairman, CFO
Yes. I think we benefit in the securities lending and the agency book on both of those counts. I don't have an exact split between the two.
But we did benefit from the higher LIBOR rates and some of the resets that come along with that. And there were quite a few specials in the quarter where we did benefit as well.
So I'd say it was a combination of the two, specials probably being the greatest.
Brennan Hawken - Analyst
Okay, thanks for the color.
Valerie Haertel - Global Head IR
I think we have time for one more question.
Operator
Brian Kleinhanzl, KBW.
Brian Kleinhanzl - Analyst
Great, thanks. Just one question on the asset management and the flows in the LDI business. They were little bit lower than what they have been in recent quarters.
But could you also remind us: How do those flows react when rates rise? Would that put less pressure on clients to use the LDI strategy?
Mitchell Harris - CEO, Investment Management
A couple things. First off, let me just touch on the flows. The average flows per quarter last year were about $11 billion. I'm sorry, that's this year. They're actually averaging $11 billion even though they were only $4 billion in the third quarter.
They averaged $9 billion last year per quarter. So from an average perspective we're still seeing strong flows into LDI, and the pipeline is showing quite consistently -- we see a pretty strong and consistent pipeline for LDI business, number one.
Number two, what you saw in the third quarter a little bit is the impact because so much of it is related to sterling. The 15% drop in sterling has had an FX impact on what you're seeing from the flows.
With respect to the interest rate rise and its impact, from a UK perspective we don't foresee any interest rate rises. And since the core of the business is there we really don't see a significant impact there.
The amount of business we have or will start to have in the US is fairly nascent, so we don't believe it will have a material impact on us as we start to enter new markets and grow quite frankly where there hasn't been a lot of growth in the past. So we see it as still a significant opportunity for us irrespective of what happens to interest rates. With respect to interest rates, we don't see them moving that much.
Gerald Hassell - Chairman, CEO
Yes, interest rates are a long, long way away from where they are on a normalized basis. And pension funds all around the planet can't get the returns they are looking for to satisfy the liabilities, so I think this business still has a lot of legs.
With that, I want to -- before closing the call, first of all, thank you all for dialing in and your interest in us. And, of course, you can ask some follow-up questions with Valerie Haertel; but I also want to encourage you to watch the premiere of the documentary Hamilton's America which is this Friday night on Public Broadcasting System's Great Performance series. It's a biography of our founder, Alexander Hamilton, as seen through the lens of Lin-Manuel Miranda; and he obviously created the hit show Hamilton over a six-year period of time.
I saw it the other night. It's fascinating. It's part of American history. I think you'll be enthralled with it, particularly if you're a history buff and interested in how the financial markets started and evolved, so it's a great documentary and I encourage you to watch it.
And of course, we helped sponsor it. And we also believe that Alexander Hamilton's inventiveness and vision is still part of the DNA of our Company, and we're going to continue that legacy forward. So again, thank you for dialing in today and look forward to catching up with you soon. Thanks, everybody.
Operator
If there any additional questions or comments you may contact Ms. Valerie Haertel at 212-635-8529. Thank you, ladies and gentlemen. This concludes today's conference call webcast. Thank you for participating.