Northern Trust Corp (NTRS) 2023 Q2 法說會逐字稿

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.

今天的會議正在錄製中。現在，我想將會議交給投資者關係總監 Jennifer Childe。請繼續，女士。

Thank you, Jenny, and good morning, everyone. Welcome to Northern Trust Corporation's Second Quarter 2023 Earnings Conference Call. Joining me on our call this morning is Michael Grady, our Chairman and CEO; Jason Tyler, our Chief Financial Officer; Lauren Allnutt, our Controller; and Grace Higgins from our Investor Relations team.

謝謝你，珍妮，大家早上好。歡迎參加北方信託公司 2023 年第二季度收益電話會議。今天早上與我一起參加電話會議的是我們的董事長兼首席執行官邁克爾·格雷迪 (Michael Grady)。 Jason Tyler，我們的首席財務官； Lauren Allnutt，我們的財務總監；以及我們投資者關係團隊的格蕾絲·希金斯 (Grace Higgins)。

Our second quarter earnings press release and financial trends report are both available on our website at northerntrust.com. Also on our website, you find our quarterly earnings review presentation, which we will use to guide today's conference call. This July 19 call is being webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be made available on our website through August 19. Northern Trust disclaims any continuing accuracy of the information provided in this call after today. Please refer to our safe harbor statement regarding forward-looking statements on Page 12 of the accompanying presentation, which will apply to our commentary on this call.

我們的第二季度收益新聞稿和財務趨勢報告均可在我們的網站 Northerntrust.com 上獲取。此外，在我們的網站上，您還可以找到我們的季度收益回顧演示文稿，我們將用它來指導今天的電話會議。 7 月 19 日的電話會議正在 Northerntrust.com 上進行網絡直播。本次電話會議的唯一授權重播是在 8 月 19 日之前在我們的網站上提供的重播。Northern Trust 否認今天之後本次電話會議中提供的信息的任何持續準確性。請參閱隨附演示文稿第 12 頁上有關前瞻性陳述的安全港聲明，該聲明將適用於我們對本次電話會議的評論。

During today's question-and-answer session, please limit your initial query to one question and one related follow-up. This will allow us to move through the queue and enable as many people as possible the opportunity to ask questions as time permits. Thank you again for joining us today. Let me turn the call over to Michael O'Grady.

在今天的問答環節中，請將您的初始詢問限制為一個問題和一個相關的後續問題。這將使我們能夠在隊列中移動，並讓盡可能多的人有機會在時間允許的情況下提問。再次感謝您今天加入我們。讓我把電話轉給邁克爾·奧格雷迪。

Thank you, Jennifer. Let me join and welcome you to our second quarter 2023 earnings call. Our results for the second quarter reflect solid sequential performance. Trust fees and assets under custody and management increased sequentially, which included positive organic growth in each business. Net interest income was down modestly on a linked-quarter basis, reflecting higher funding costs associated with the highly competitive deposit backdrop. Expenses, excluding unusual items, were well controlled, reflecting the rigor of our cost discipline as well as the impact of various productivity initiatives. We reported $64 million in charges in the second quarter associated with these steps.

謝謝你，詹妮弗。讓我加入並歡迎您參加我們的 2023 年第二季度財報電話會議。我們第二季度的業績反映了穩健的連續業績。信託費用以及託管和管理的資產連續增長，其中包括各項業務的有機增長。淨利息收入環比小幅下降，反映出與高度競爭的存款背景相關的融資成本上升。費用（不包括不尋常的項目）得到了很好的控制，反映了我們成本紀律的嚴格性以及各種生產力計劃的影響。我們報告第二季度與這些步驟相關的費用為 6400 萬美元。

Our Wealth Management business modestly grew assets under custody and management and trust fees on a sequential basis. We continue to see strength in the higher wealth tiers and within our Global Family Office segment, where we captured several marquee wins.

財富管理業務託管管理資產和信託費用環比小幅增長。我們繼續看到較高財富層和全球家族辦公室領域的實力，我們在該領域取得了多項重大勝利。

Our industry leadership position also sit out in the quarter. We held our third annual Northern Trust Wealth Planning Symposium bringing together legal and financial experts to share innovative strategies and insights to shape the future of wealth management. Sessions average more than 1,000 participants. It included attendees from North and South America, Europe, Asia, Africa and the Middle East. We also released the second family office trends report coauthored with the Wharton School. Notably, we received a utility patent for our cloud-based goals-driven wealth management technology during the quarter, and were named Best Digital Innovator of the Year and Best Private Bank for digital wealth planning by the Financial Times Group.

我們的行業領導地位在本季度也保持不變。我們舉辦了第三屆年度北方信託財富規劃研討會，法律和金融專家齊聚一堂，分享創新策略和見解，塑造財富管理的未來。會議平均參與人數超過 1,000 人。其中包括來自北美和南美、歐洲、亞洲、非洲和中東的與會者。我們還發布了與沃頓商學院合著的第二份家族辦公室趨勢報告。值得注意的是，我們在本季度獲得了基於雲的目標驅動財富管理技術的實用專利，並被英國《金融時報》集團評為年度最佳數字創新者和最佳數字財富規劃私人銀行。

In Asset Management, we saw strong flows into our institutional money market platform and have recaptured share. We also won a number of key mandates across products, including outsourced investment solutions, tax-advantaged equity and quant active. Our new product launches in the quarter focused on alternatives. Within Asset Servicing, we continue to have good momentum in core custody and fund administration, particularly with asset managers in Europe, and our pipeline remains robust. In the U.K., we were reappointed by Brightwell for middle office services. Brightwell is the primary service provider to the British Telecom pension scheme, which has more than $50 billion in assets under management. Among asset owners, we clinched several key multimillion dollar takeaway wins in North America where our front office solutions, which provides a comprehensive view across public and private assets was cited as a key differentiator.

在資產管理領域，我們看到大量資金流入我們的機構貨幣市場平台，並重新奪回了份額。我們還贏得了多個產品的關鍵授權，包括外包投資解決方案、稅收優惠股票和主動量化。我們本季度推出的新產品側重於替代品。在資產服務領域，我們在核心託管和基金管理方面繼續保持良好勢頭，特別是與歐洲的資產管理公司合作，並且我們的管道仍然強勁。在英國，Brightwell 再次任命我們負責中台服務。 Brightwell 是英國電信養老金計劃的主要服務提供商，該計劃管理的資產超過 500 億美元。在資產所有者中，我們在北美贏得了幾項價值數百萬美元的關鍵勝利，我們的前台解決方案提供了公共和私人資產的全面視圖，被認為是一個關鍵的差異化因素。

As a testament to our capabilities, we are recently awarded 3 prestigious industry awards, including best global custodian for asset owners by Asian investor. In the second quarter, we launched A-Suite, our content, community and collaboration hub for global asset owners. Within the first few weeks of launch, we've seen significant client engagement.

為了證明我們的能力，我們最近榮獲了 3 項享有盛譽的行業獎項，其中包括亞洲投資者授予的資產所有者全球最佳託管人獎。在第二季度，我們推出了 A-Suite，這是我們面向全球資產所有者的內容、社區和協作中心。在推出的最初幾週內，我們看到了大量的客戶參與。

Going forward, we expect this new communications channel to create relationships with key target audiences and further showcase our expertise in the market. In closing, our balance sheet continues to be very strong with ample capital and liquidity. Our new business momentum is gathering steam, and our pipeline remains robust.

展望未來，我們希望這個新的溝通渠道能夠與主要目標受眾建立關係，並進一步展示我們在市場上的專業知識。最後，我們的資產負債表仍然非常強勁，資本和流動性充足。我們的新業務勢頭正在增強，我們的管道仍然強勁。

While there's still more work to be done, we're making solid progress following the trajectory of our expense growth. Rationalizing our cost base remains a top priority, and the governance and control mechanisms we're putting in place today should drive sustainable improvements for both the near term and for years to come. We head into the second half of the year well positioned to support our clients and generate value for all of our stakeholders.

儘管還有更多工作要做，但我們正在沿著支出增長的軌跡取得紮實的進展。合理化我們的成本基礎仍然是首要任務，我們今天建立的治理和控制機制應該推動近期和未來幾年的可持續改進。進入下半年，我們已做好充分準備來支持我們的客戶並為所有利益相關者創造價值。

I'll now turn the call over to Jason.

我現在將電話轉給傑森。

Thank you, Mike. And let me join Jennifer and Mike in welcoming you to our second quarter 2023 earnings call. Let's dive into the financial results of the quarter starting on Page 4. This morning, we reported second quarter net income of $332 million, earnings per share of $1.56 and our return on average common equity was 12.4%. Currency movements had an immaterial impact on our revenue and expense growth in both periods. Our second quarter results were impacted by 2 notable items. We recognized a $38.7 million pretax severance charge impacting both our compensation and outside services line items. We recorded a $25.6 million pretax charge associated with the write-off of an investment in a client capability. Notable items from previous periods are listed on the slide.

謝謝你，邁克。讓我與 Jennifer 和 Mike 一起歡迎您參加我們的 2023 年第二季度財報電話會議。讓我們從第 4 頁開始深入了解本季度的財務業績。今天早上，我們報告第二季度淨利潤為 3.32 億美元，每股收益為 1.56 美元，平均普通股回報率為 12.4%。貨幣變動對我們這兩個時期的收入和支出增長產生了非實質性影響。我們第二季度的業績受到兩個值得注意的因素的影響。我們確認了 3870 萬美元的稅前遣散費，影響了我們的薪酬和外部服務項目。我們記錄了與客戶能力投資沖銷相關的 2560 萬美元稅前費用。幻燈片上列出了以前時期的值得注意的項目。

Excluding notable items in all periods, revenue was up 1% on a sequential quarter basis and down 1% over the prior year. Expenses were down 1% on a sequential quarter basis and up 5% over the prior year. This reflects an expense to trust fee ratio of 116%, down from 120% in the first quarter and 122% in the fourth quarter of last year. Pretax income was up 13% sequentially but down 9% over the prior year. Trust, investment and other servicing fees, representing the largest component of our revenue, totaled $1.1 billion, which reflected a 3% sequential increase, but a 4% decrease as compared to last year. All other noninterest income was flat sequentially but down 10% over the prior year. Net interest income on an FTE basis, which I'll discuss in more detail in a few moments, is $525 million, down 4% sequentially but up 12% from a year ago.

排除所有時期的顯著項目，收入環比增長 1%，比上年下降 1%。費用環比下降 1%，比去年同期增長 5%。這反映了費用與信託費用的比率為 116%，低於第一季度的 120% 和去年第四季度的 122%。稅前收入環比增長 13%，但比上年下降 9%。信託、投資和其他服務費是我們收入的最大組成部分，總計 11 億美元，環比增長 3%，但與去年相比下降 4%。所有其他非利息收入與上一季度持平，但比上年下降 10%。基於 FTE 的淨利息收入為 5.25 億美元，比上一季度下降 4%，但比一年前增長 12%，我稍後將對此進行更詳細的討論。

We had a $15 million credit reserve release in the second quarter due to improved credit quality on a small number of larger loans, which was offset in part by expectations for higher future economic stress in the commercial real estate market. Turning to our asset servicing results on Page 5.

由於少數大額貸款的信貸質量改善，我們在第二季度釋放了 1500 萬美元的信貸準備金，這在一定程度上被商業房地產市場未來經濟壓力加大的預期所抵消。轉向第 5 頁的資產服務結果。

Assets under custody and administration for asset servicing clients were $13.5 trillion at quarter end, up 2% sequentially and up 5% year-over-year. Asset servicing fees totaled $621 million, which were up 3% sequentially, but down 3% year-over-year. Custody and fund administration fees, the largest component of fees in the business were $427 million, up 3% sequentially, but down 1% year-over-year. Custody and fund administration fees increased on a linked quarter basis for the second consecutive quarter due to solid new business activity, higher transaction activity and favorable markets. The decrease from the prior year quarter, primarily due to unfavorable markets.

截至季度末，資產服務客戶託管和管理的資產為 13.5 萬億美元，環比增長 2%，同比增長 5%。資產服務費總計 6.21 億美元，環比增長 3%，但同比下降 3%。託管和基金管理費是該業務中最大的費用組成部分，為 4.27 億美元，環比增長 3%，但同比下降 1%。由於新業務活動穩健、交易活動增加和有利的市場，託管費和基金管理費連續第二個季度環比增長。較去年同期有所下降，主要是由於市場不利。

Assets under management for asset servicing clients were $990 billion, up 14% sequentially and up 4% year-over-year. Investment management fees within asset servicing were $134 million, up 6% sequentially, but down 10% year-over-year. Investment management fees increased sequentially, primarily due to asset inflows and favorable market. They've decreased from the prior year quarter, primarily due to asset outflows and unfavorable markets.

資產服務客戶管理的資產規模為 9,900 億美元，環比增長 14%，同比增長 4%。資產服務內的投資管理費用為 1.34 億美元，環比增長 6%，但同比下降 10%。投資管理費環比增加，主要是由於資產流入和有利的市場。與去年同期相比有所下降，主要是由於資產外流和不利的市場。

Moving to our Wealth Management business on Page 6. Assets under management for our wealth management clients were $376 billion at quarter end, up 2% sequentially and up 7% year-over-year. Trust, investment and other servicing fees were $475 million, up 3% sequentially, but down 5% compared to the prior year. Sequentially, the increase in fees in the regions was driven primarily by favorable markets. Sequentially, the increase in GFO fees was driven by net inflows. Relative to the prior year, the decrease in fees in the regions was primarily due to unfavorable markets and product-related asset outflows. Within GFO, the decrease in fees was due largely to unfavorable markets.

轉到第 6 頁的財富管理業務。截至季度末，我們的財富管理客戶管理的資產為 3,760 億美元，環比增長 2%，同比增長 7%。信託、投資和其他服務費用為 4.75 億美元，環比增長 3%，但比上年下降 5%。因此，這些地區費用的增加主要是由有利的市場推動的。隨後，GFO 費用的增加是由淨流入推動的。與上一年相比，這些地區的費用下降主要是由於不利的市場和與產品相關的資產外流。在 GFO 內部，費用下降主要是由於市場不利。

Moving to Page 7 and our balance sheet and NII trends. Our average balance sheet decreased 1% on a linked-quarter basis, primarily due to lower client deposits, partially offset by higher leveraging activity. Earning assets averaged $134 billion in the quarter, down 1% sequentially and down 4% versus the prior year. Money market assets primarily absorbed the decrease. Client liquidity continued to grow during the second quarter. While we saw a decline in average deposits was more than offset by increases in other categories. Relative to the first quarter, our money market funds were up $8 billion or 6% and our CDs were up 29%. Average deposits were $106 billion, down $6.6 billion or 6% sequentially but remained consistent with late April levels. We experienced a $2.6 billion sequential decline in noninterest-bearing deposits, mostly within the institutional channel as clients continue to shift to higher-yielding alternatives. This reduced the mix of noninterest-earning deposits to 17%.

轉到第 7 頁，我們的資產負債表和 NII 趨勢。我們的平均資產負債表環比下降 1%，主要是由於客戶存款減少，但槓桿活動增加部分抵消了這一影響。本季度盈利資產平均為 1,340 億美元，比上一季度下降 1%，比上年同期下降 4%。貨幣市場資產主要吸收了跌幅。第二季度客戶流動性繼續增長。雖然我們看到平均存款的下降被其他類別的增長所抵消。與第一季度相比，我們的貨幣市場基金增長了 80 億美元，即 6%，我們的 CD 增長了 29%。平均存款為 1,060 億美元，比上一季度減少 66 億美元，即 6%，但與 4 月底的水平保持一致。我們的無息存款連續下降了 26 億美元，主要是在機構渠道內，因為客戶繼續轉向收益率更高的替代方案。這使得非生息存款的比例降至 17%。

At quarter end, operational deposits comprised approximately 2/3 of institutional deposits. These tend to be the stickiest deposits as clients use them to operate their businesses. Approximately 3/4 of our average deposits are institutional with the remainder related to wealth clients, including GFO. Shifting to the asset side of the balance sheet.

截至季度末，經營性存款約佔機構存款的 2/3。當客戶使用它們來經營業務時，這些存款往往是最具粘性的存款。我們的平均存款中約 3/4 是機構存款，其餘與包括 GFO 在內的財富客戶有關。轉向資產負債表的資產方。

Average securities were down 2% sequentially, reflecting the natural runoff, which we've seen to reinvest at the short end of the curve. Our $50 billion investment portfolio consists largely of highly liquid U.S. treasury Agency and sovereign wealth on bonds and it's split approximately evenly between available for sale and held to maturity. The duration of the securities portfolio continued to edge down in the second quarter to 2.1 years. The total balance sheet duration is now less than a year. Loan balances averaged $42 billion and were up 1% sequentially.

平均證券價格連續下跌 2%，反映了自然流失，我們看到自然流失在曲線的短端進行了再投資。我們 500 億美元的投資組合主要由高流動性的美國財政部和債券主權財富組成，在可供出售和持有至到期之間大致平均分配。第二季度證券投資組合久期繼續小幅下降至2.1年。資產負債表的總期限現在還不到一年。貸款餘額平均為 420 億美元，環比增長 1%。

Our loan portfolio is well diversified across geographies, operating segments and loan types. Approximately 75% of the portfolio is floating and the overall duration is less than 1 year. Our liquidity remains strong, with cash held at the Fed and other central banks up 9% to $43 billion. More than 45% of our overall balance sheet is comprised of cash, money market assets and available-for-sale securities. This translates to $73 billion of immediately available liquidity for more than 60% of the total deposit base. Net interest income on an FTE basis was $525 million for the quarter, down 4% sequentially but up 12% from the prior year.

我們的貸款組合在不同地區、經營部門和貸款類型上實現了多元化。大約75%的投資組合是浮動的，總期限不到1年。我們的流動性依然強勁，美聯儲和其他央行持有的現金增加了 9%，達到 430 億美元。我們整體資產負債表的 45% 以上由現金、貨幣市場資產和可供出售證券組成。這意味著 730 億美元的即時可用流動性佔總存款基礎的 60% 以上。本季度按 FTE 計算的淨利息收入為 5.25 億美元，比上一季度下降 4%，但比上年同期增長 12%。

NII reflected the impact of several dynamics. We saw continued client migration out of deposits and into higher-yielding alternatives, noninterest-bearing deposits as a percentage of total deposits slid to 17%. And deposit costs increase with our interest-bearing deposit beta during the quarter, reaching 88% and our cumulative beta for the cycle at 68%.

NII 反映了多種動態的影響。我們看到客戶不斷從存款轉向收益更高的另類投資，無息存款佔總存款的比例下滑至 17%。存款成本隨著本季度帶息存款貝塔值的增加而增加，達到 88%，本週期的累積貝塔值達到 68%。

The net interest margin on an FTE basis was 1.57% for the quarter, down 5 basis points sequentially, but up 22 basis points from a year ago. The sequential decline reflects the impact of higher funding costs, partially offset by higher short-term market rates. Our NII in the third quarter will continue to be driven by client behavior, which has been less predictable given the speed and velocity of the cycle's rate hikes. Our average client deposits thus far in the quarter are approximately $106 billion. Deposit outflows are expected to continue in part due to seasonality as August is typically our low point in the year as European activity slows materially. The pace of the outflows is expected to moderate.

本季度按 FTE 計算的淨息差為 1.57%，比上一季度下降 5 個基點，但比去年同期上升 22 個基點。環比下降反映了融資成本上升的影響，但短期市場利率上升部分抵消了這一影響。我們第三季度的NII將繼續由客戶行為驅動，考慮到週期加息的速度和速度，客戶行為不太可預測。本季度迄今為止，我們的平均客戶存款約為 1,060 億美元。預計存款外流將持續，部分原因是季節性因素，因為歐洲活動大幅放緩，八月通常是一年中的最低點。預計資金外流速度將會放緩。

Turning to Page 8. As reported, noninterest expenses were $1.3 billion in the second quarter, 4% higher sequentially and 9% higher than the prior year. Excluding charges in both periods, as noted on the slide, expenses in the second quarter were down 1% sequentially but up 5% year-over-year. I'll hit on just a few highlights.

翻到第 8 頁。據報導，第二季度非利息支出為 13 億美元，比上一季度增長 4%，比去年同期增長 9%。如幻燈片所示，不包括這兩個時期的費用，第二季度的費用環比下降 1%，但同比增長 5%。我只講幾個亮點。

Compensation and technology expense continue to be the areas of highest spend. Compensation expense, excluding severance charges, was down 5% sequentially, but up 4% compared to the prior year. It was down sequentially due to the payment of our annual retirement-eligible incentives in the first quarter. This is partially offset by the impact of this year's base pay adjustments, which are granted in the second quarter. The year-over-year growth in compensation expense largely reflects the impact from inflationary wage pressures and last year's employee expansion, partially offset by lower incentives. Excluding charges, noncompensation expense was up 3% sequentially. Primary driver of the increase was growth in the outside services line, which is up 9% sequentially. The increase is largely due to timing as we reported a sequential decline in outside services of 9% in the first quarter due to delays in technical services projects. With our heightened focus on expense control, we expect our operating expenses to grow more modestly and our expense-to-trust fee ratio to show further improvement.

薪酬和技術費用仍然是支出最高的領域。補償費用（不包括遣散費）環比下降 5%，但與上年相比增長 4%。由於第一季度支付了我們的年度退休資格獎勵，該數字連續下降。這被今年第二季度批准的基本工資調整的影響部分抵消。薪酬支出的同比增長主要反映了通脹工資壓力和去年員工擴張的影響，但部分被較低的激勵措施所抵消。不計費用，非補償費用環比增長 3%。增長的主要推動力是外部服務業務的增長，該業務環比增長 9%。這一增長主要是由於時間安排造成的，我們報告稱，由於技術服務項目的延誤，第一季度外部服務環比下降了 9%。隨著我們對費用控制的高度重視，我們預計我們的運營費用將更加溫和地增長，我們的費用與信託費用的比率將進一步改善。

Turning to Page 9. Our capital ratios remained strong in the quarter and continue to be well above our required regulatory minimums. Our common equity Tier 1 ratio under standardized approach was flat to the prior quarter at 11.3%, despite continued common stock repurchases. This reflects a 430 basis point buffer above regulatory requirements. Our Tier 1 leverage ratio was 7.4%, up slightly from the prior quarter. We returned $257 million to common shareholders in the quarter through cash dividends of $158 million and common stock repurchases of $99 million. And with that, Jenny, please open the line for questions.

翻到第 9 頁。本季度我們的資本比率仍然強勁，並繼續遠高於我們要求的最低監管要求。儘管我們持續進行普通股回購，但標準化法下我們的普通股一級資本比率與上一季度持平，為 11.3%。這反映了高於監管要求 430 個基點的緩衝。我們的一級槓桿率為 7.4%，較上季度略有上升。本季度，我們通過 1.58 億美元現金股息和 9900 萬美元普通股回購，向普通股股東返還 2.57 億美元。珍妮，接下來請打開提問線路。

(Operator Instructions) And I do have a question from Steven Chubak with Wolfe Research.

（操作員說明）我確實有 Wolfe Research 的 Steven Chubak 提出的問題。

This is actually Sharon Leung calling in for Steven. Just a question on deposit betas. They came in a little bit better than expected this quarter. Can you help us understand how to think about the incremental betas from here?

這實際上是梁莎朗給史蒂文打電話的。只是關於存款貝塔的問題。他們本季度的表現比預期要好一些。您能幫助我們了解如何從這裡考慮增量測試版嗎？

Sure. So betas have continued to increase. And from here, I think we still have to separate the institutional client base health client base. we noted that we're cumulatively across the platform within this quarter in the high 80% range. The institutional channel is likely going to be at 100% at this point. The wealth channel still provides some benefit. There's -- the betas there are a lot lower. But at this point, we're seeing about 100% in the institutional channel and still much less than that and well. And that seems to those -- both of those trends seem to be continuing as what we've seen early signs in the quarter.

當然。所以貝塔值持續增加。從這裡開始，我認為我們仍然必須將機構客戶群健康客戶群分開。我們注意到，本季度整個平台的累計利用率處於 80% 的高位。此時機構渠道可能會達到 100%。財富渠道仍然提供一些好處。那裡的貝塔值要低得多。但目前，我們在機構渠道看到的情況大約為 100%，但仍然遠低於這個數字。在這些人看來，這兩種趨勢似乎都在持續，就像我們在本季度看到的早期跡像一樣。

Great. And then as a follow-up, noted you're at about 17% noninterest-bearing deposits today. I think you had trough closer to about 15% in the '04, '06 cycle. Can you help us think through where that potentially goes from here? And once that starts to normalize where you see NII exiting the year?

偉大的。然後作為後續行動，我注意到今天的無息存款約為 17%。我認為 04 年、06 年周期的低谷接近 15%。您能幫助我們思考一下接下來的發展方向嗎？一旦這種情況開始正常化，您認為 NII 會在今年退出嗎？

Sure. Well, like you, we've looked back a lot at where it's troughed. And the data we have showed it a little higher than the 15%. You mentioned, I think it's 16%. But I don't think about that as a floor. There's nothing structural in the base to consider that a floor. Now that said, it has been moderating significantly. And we don't see -- we haven't seen much movement at this point. Obviously, there's a step down this quarter of another percentage point, but it seems to be leveling off at this point.

當然。好吧，和你一樣，我們也經常回顧過去的低谷。我們的數據顯示，這個比例略高於 15%。你提到的，我認為是16%。但我不認為這是一個地板。底座中沒有任何結構可以視為地板。話雖如此，它已經顯著放緩。我們目前還沒有看到太多的動靜。顯然，本季度又下降了一個百分點，但目前似乎已趨於平穩。

Next question comes from Alex Blostein from Goldman Sachs.

下一個問題來自高盛的 Alex Blostein。

So a couple of questions around expense trends. I guess, one, a little bit more near term. You guys announced some action, obviously, over the course of the quarter, there's a severance charge. So maybe help us quantify what it means in terms of savings and your just updated views on the overall sort of firm-wide expense growth for the year, I guess excluding the charges occurred in the second quarter. I think last time you talked about bringing that down to below 7%, but maybe an update there would be helpful. And then a bigger picture question. You guys are running at a kind of high 20-ish percent pretax margin that used to be north of 30%. So as you kind of think about the fee environment getting a little bit better with the market, but NII has clearly peaked, as we talked about before, is there an opportunity to get back to that 30% plus? And how do you see sort of achieving that, if that's the goal? And what's the time frame around that?

關於費用趨勢的幾個問題。我想，第一，更近期一些。你們宣布了一些行動，顯然，在本季度期間，有遣散費。因此，也許可以幫助我們量化這在節省方面意味著什麼，以及您剛剛更新的對今年公司整體費用增長的看法，我想不包括第二季度發生的費用。我想上次您談到將這一比例降至 7% 以下，但也許更新一下會有所幫助。然後是一個更大的問題。你們現在的稅前利潤率高達 20% 左右，而過去則高達 30% 以上。因此，當您考慮隨著市場的變化，費用環境會變得更好一些時，但 NII 顯然已經達到頂峰，正如我們之前討論的那樣，是否有機會回到 30% 以上？如果這是目標的話，您如何看待實現這一目標？大概的時間範圍是多少？

Sure. So let me tackle the expense. The compensation related first. First, I'm sure people are curious, where is the base from here. So let me just provide some background on kind of first quarter to second quarter, second quarter to third quarter. I think from here, we'd say flat to down from second quarter ex the severance charge in the compensation line. So if I go back to last quarter, we explained that the significant movements for second quarter would be the $40 million seasonal decline in equity awards and then the $20 million increase in the base pay coming online. That would have put comp at about $575 million for the quarter. And obviously, ex the charge, we ended up about $8 million better than that, including currency.

當然。那麼讓我來解決一下費用吧。首先是補償相關。首先，我相信人們很好奇，這裡的基地在哪裡。因此，讓我提供一些有關第一季度到第二季度、第二季度到第三季度的背景信息。我認為從這裡開始，我們會說，扣除補償金中的遣散費後，與第二季度持平或下降。因此，如果我回到上個季度，我們解釋說，第二季度的重大變動將是股權獎勵季節性下降 4000 萬美元，然後基本工資增加 2000 萬美元。這將使該季度的淨利潤約為 5.75 億美元。顯然，扣除費用後，我們最終比這多了大約 800 萬美元，其中包括貨幣。

So 2 factors led to that. First, we pulled a lot of levers in the quarter to flatten compensation, including accelerating and close to completing the actions that we launched in fourth quarter of last year. So in January, we communicated that the projected reduction by late '23 would be about 300 roles. And about $5 million to $7 million in quarterly comp benefit net of reinvestments. So we got a portion of that work done in the first quarter, and we mostly finished it in second quarter, and that was a big part of the reason it put us ahead of schedule. Second, as we saw the timing of that first program, accelerating and coming to completion, we launched a new effort during the second quarter, specifically related to what you referenced, Alex, and the severance charge that we announced this morning.

有兩個因素導致了這一點。首先，我們在本季度採取了很多措施來壓平薪酬，包括加速並接近完成我們在去年第四季度啟動的行動。因此，在 1 月份，我們表示預計到 23 年末將減少約 300 個職位。扣除再投資後，季度補償收益約為 500 萬至 700 萬美元。因此，我們在第一季度完成了部分工作，大部分在第二季度完成，這是我們提前完成計劃的一個重要原因。其次，當我們看到第一個計劃的時間安排、加速並即將完成時，我們在第二季度啟動了一項新的工作，特別是與你提到的內容相關，亞歷克斯，以及我們今天早上宣布的遣散費。

We've already gotten some benefit of that within the quarter, and that's reflected in the results. So overall, this new program, to your question, should impact about an incremental 600 roles many of that will be backfilled based on a lens of skills or geography, but same goal, we should be able to get $5 million to $7 million a quarter in run rate savings and a portion of that got embedded in the second quarter. So we've got to remember that we did pull the lever hard this quarter, so there's some hiring that's in the queue, but we also pushed a fair amount back. And so that's why with various puts and starts, it's good to think about a flat to down from the comp levels you see in second quarter ex charges going into third quarter. So that's hopefully helpful background there.

我們已經在本季度獲得了一些好處，這也反映在結果中。因此，總體而言，針對您的問題，這個新計劃應該會影響大約 600 個增量職位，其中許多職位將根據技能或地理位置進行補充，但同樣的目標是，我們每個季度應該能夠獲得 500 萬至 700 萬美元的收入運行率節省，其中一部分已納入第二季度。因此，我們必須記住，本季度我們確實大力拉動了槓桿，因此有一些招聘正在排隊，但我們也推遲了相當多的招聘。因此，這就是為什麼在各種投入和開始的情況下，最好考慮從第二季度扣除費用到第三季度的補償水平持平或下降。希望這對背景有幫助。

To get to your questions on -- for the rest of the year, where do we see expenses -- at a high level, we've taken about a point out of the curve for the year based on the trajectory that we're on. If you take out -- to your point, if you take out the notable items, this year on each quarter has been under 6%, and we think we've taken that point out of the curve at this point and that should continue through the rest of the year.

為了回答您關於今年剩餘時間裡我們在哪裡看到支出的問題，我們在高水平上從今年的曲線中選取了一個點，基於我們所處的軌跡。如果你剔除——就你的觀點而言，如果你剔除值得注意的項目，今年每個季度的增長率都低於 6%，我們認為此時我們已經將這一點從曲線中剔除，並且這種情況應該會持續下去今年剩下的時間。

To margins, you're right that we -- we've been in the 30s and had -- and now in the 20s, our target has us one of our key performance indicators is for us to be in the 30s. And no way have we lost sight on that. That is where we're trying to get. That gets impacted largely by what's going to happen in our minds, we can control the expense side. And obviously, we're doing a lot of work there. And we're also getting good benefit because we saw good organic growth in the quarter. And so both levers are working in the right way, but we have definitely not changed our target of being in the 30s from a margin perspective.

就利潤而言，你說得對，我們——我們已經在30多歲了——現在已經到了20多歲，我們的目標是我們的關鍵績效指標之一是讓我們進入30多歲。我們絕不會忽視這一點。這就是我們想要達到的目標。這在很大程度上受到我們腦海中發生的事情的影響，我們可以控制費用方面。顯然，我們在那裡做了很多工作。我們還獲得了良好的效益，因為我們在本季度看到了良好的有機增長。因此，這兩個槓桿都在以正確的方式發揮作用，但從利潤角度來看，我們絕對沒有改變 30 多歲的目標。

Got it. Super comprehensive. Just a quick follow-up around deposits. So good news, you guys were kind of in line with what you updated us on around $105 billion. sounds like deposits are fairly stable. I think you said $106 billion right now with a kind of similar noninterest-bearing mix as we saw over the course of the quarter. Can you help just frame the seasonal deposit outflows and any other kind of client conversations you're hearing that could give us a sense where deposits could ultimately trough in the cycle. It sounds like there's a little bit more to go, but just curious to hear what the endpoint might be?

知道了。超級全面。只是對存款進行快速跟進。好消息，你們與我們更新的有關 1050 億美元左右的消息有點一致。聽起來存款相當穩定。我認為您現在所說的是 1060 億美元，具有與我們在本季度看到的類似的無息組合。您能否幫助描述一下季節性存款流出以及您聽到的任何其他類型的客戶對話，這些對話可以讓我們了解存款最終可能在周期中的低谷。聽起來還有更多的事情要做，但只是想知道終點可能是什麼？

Yes, you heard right. It's held in quite well so far in July. And we didn't -- June, you see the end of the quarter and there's a spike there. But in general, June and July have been at about this level and have been holding in well. Our client activity is good. We've taken action here to make sure we're talking to clients aggressively and telling them we want to continue providing good liquidity services for them, whether it's lending or holding on to their deposits. But we've got -- we talked last quarter about the fact that we think about liquidity broadly. It's about client liquidity. And it was good to see money market funds up this quarter. That adds to margins really well, too. And even as we think about what clients are holding in brokerage. And so all of the client liquidity seems to be holding in well.

是的，你沒聽錯。七月份到目前為止，它的表現還不錯。我們沒有——六月，你會看到季度末，那裡出現了峰值。但總體而言，6 月和 7 月一直處於這個水平，並且保持得很好。我們的客戶活動很好。我們已採取行動，確保我們積極與客戶交談，並告訴他們我們希望繼續為他們提供良好的流動性服務，無論是貸款還是保留他們的存款。但我們上個季度談到了我們廣泛考慮流動性的事實。這是關於客戶的流動性。很高興看到本季度貨幣市場基金上漲。這也很好地增加了利潤。即使我們考慮客戶在經紀業務中持有什麼。因此，所有客戶的流動性似乎都保持良好。

On the seasonality dynamic, August is a low point but it's not -- it doesn't go dramatically, we've looked back several years. And so we're feeling that deposits at these levels seems to be holding in okay. So I can even give a little bit of thought from our perspective at this point, based on our outlook, I think it's prudent to think about another decline, even though deposits are holding in pretty well, but we see the competition. And so I think it's prudent to think about another NII decline of about 5% for the quarter. Again, June and July volumes have held in at about $100 billion to $110 billion, but we just have to be conscious of the competitive environment and what the summer tends to hold in terms of volume pressure.

就季節性動態而言，八月是一個低點，但事實並非如此——它不會急劇變化，我們已經回顧了幾年。因此，我們認為目前的存款水平似乎還不錯。因此，我現在甚至可以從我們的角度進行一些思考，根據我們的前景，我認為考慮再次下降是謹慎的做法，儘管存款保持得很好，但我們看到了競爭。因此，我認為謹慎的做法是考慮本季度 NII 再次下降約 5%。同樣，6 月和 7 月的成交量保持在 1000 億至 1100 億美元左右，但我們只需要意識到競爭環境以及夏季的成交量壓力。

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

我們的下一個問題將來自德意志銀行的布萊恩·比德爾（Brian Bedell）。

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

也許只是為了回到開支上。我很欣賞你給的顏色，傑森。通常開始談論下半年通常在設備、軟件和外部服務等方面獲得的季節性提升。我想知道你是否想對那裡的任何預測發表評論？

Sure. Well, it's good to call it out. I think in equipment and software, in particular, we were better than what we thought we were going to be, but that was really 2 factors led to that. One, we did have some delays in projects coming from WIP into being depreciated. Those will come online, so that's more timing. And then secondly, we've been working very aggressively as far as the productivity office to just negotiate on and then try and push inflation down, and we had some good results there, bringing costs down. And so from here, we think third quarter up $5 million to $10 million in that line item. Fourth quarter, we can even tell because some of it's baked an additional $5 million to $10 million lift from that perspective and outside services, not no update to make there.

當然。嗯，能叫出來就好了。我認為，特別是在設備和軟件方面，我們比我們想像的要好，但這實際上是兩個因素導致的。第一，我們確實延遲了來自 WIP 的項目的折舊。這些將上線，所以時機更充足。其次，我們一直在非常積極地與生產力辦公室進行談判，然後嘗試壓低通貨膨脹，我們在那裡取得了一些良好的成果，降低了成本。因此，從現在開始，我們認為第三季度該項目的金額將增加 500 萬至 1000 萬美元。我們甚至可以看出第四季度的情況，因為從這個角度和外部服務來看，其中一些額外增加了 500 萬至 1000 萬美元的提升，而不是沒有更新。

Okay. Great. And then, Mike, you started off the call talking about the new business wins in asset servicing and wealth management. I guess how should we think about that contributing to organic revenue growth? Maybe just broadly, if we're in a, say, a flat -- flattish market situation, would you expect this to have a positive impact in the next couple of quarters and going to '24 on revenue?

好的。偉大的。然後，邁克，您在電話會議開始時談論了資產服務和財富管理方面的新業務勝利。我想我們應該如何看待這對有機收入增長的貢獻？也許從廣義上講，如果我們處於平穩的市場形勢，您是否認為這會對未來幾個季度以及 24 世紀的收入產生積極影響？

Yes, Brian. So the answer is yes. And to your point, we only consider it organic growth once it's transitioned and in. And yet we know the pipeline of business or mandates that we've won that have not transitioned in yet. And in each of the businesses, it's a little bit different. There's more of a, I'll call it, forward pipeline with asset servicing, but the pipeline looks very good based on recent activity that I mentioned there. Within Wealth Management, there's not as much of a forward pipeline, if you will. But similarly there, I would say very steady, steady activity. And as much as anything with wealth management, keeping in mind that this -- I'll say, company, but also that business has been built on doing what's right for the client. And sometimes, that results in different financial implications for the company, but over time is best for the company and the shareholders. And my point being the discussion around deposits and money market funds and treasuries and managing things like that. They all have different implications for us, but the client activity has been very good.

是的，布萊恩。所以答案是肯定的。就你的觀點而言，我們只有在轉型後才將其視為有機增長。然而，我們知道我們已經贏得的尚未轉型的業務或任務的渠道。在每個企業中，情況都略有不同。我稱之為帶有資產服務的轉發管道，但根據我在那裡提到的最近活動，該管道看起來非常好。如果你願意的話，在財富管理領域，沒有那麼多的遠期管道。但同樣，我想說的是非常穩定的活動。與財富管理的任何事情一樣，請記住，我會說，公司以及業務都是建立在為客戶做正確的事情的基礎上的。有時，這會對公司產生不同的財務影響，但隨著時間的推移，這對公司和股東來說是最好的。我的觀點是圍繞存款、貨幣市場基金和國債以及管理此類事物的討論。它們對我們都有不同的影響，但客戶活動非常好。

And we're, I would say, optimistic about how some of the shifts with rates will have implications on where those funds get redeployed. So again, positive on the wealth management front in a steady fashion. And then Asset Management, as Jason mentioned, we've seen strong flows into the money market platform there. but that also in some other areas as well. And likewise, I like to see those get redeployed in other ways over time. So good across the board.

我想說，我們對利率的一些變化將如何影響這些資金的重新部署方向持樂觀態度。再次強調，財富管理方面的積極態度是穩定的。然後是資產管理，正如傑森提到的，我們看到大量資金流入那裡的貨幣市場平台。但在其他一些領域也是如此。同樣，我希望看到這些隨著時間的推移以其他方式重新部署。總體來說都很好。

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

公平地說，至少現在就有機增長方程而言，費用方面的收入增長肯定優於國家信息基礎設施方面。

Yes. No, that's right, Brian. And I view it as you're kind of implying there. On the fee side, it tends to kind of grind up more gradually subject to the markets. and NII can be more volatile. And the only other area I would just highlight is around our capital markets activity, FX and brokerage and trading there, which has been relatively subdued during this time period with lower volatilities, lower activity, which that can also change and that has different implications to just meaning those can be more profitable.

是的。不，沒錯，布萊恩。我認為這就像你所暗示的那樣。在費用方面，它往往會隨著市場的變化逐漸上漲。 NII 的波動性可能更大。我要強調的唯一另一個領域是我們的資本市場活動、外彙和經紀業務以及那裡的交易，在這段時間內相對低迷，波動性較低，活動較低，這也可能發生變化，這對只是意味著這些可以更有利可圖。

And Robert [Bradchao] from Wells Fargo.

還有來自富國銀行的羅伯特[布拉德喬]。

I guess the first question is on fee growth kind of more broadly. You sort of indicated that you're the 5% expense growth rate. Does that go down? But do the fees -- where do you see fees growing to get up to that expense level so that you could grow fees faster than expenses?

我想第一個問題是更廣泛的費用增長。你有點表明你的費用增長率是 5%。那會下降嗎？但是費用——您在哪裡看到費用增長到該支出水平，以便您可以比支出更快地增加費用？

Well, I mean, in the short run, I think we're still -- I don't think we're still absorbing an inflationary environment from an expense perspective. And so would like to be able to do better even than what we're doing right now in the long run from an expense growth perspective.

嗯，我的意思是，從短期來看，我認為我們仍然——我不認為我們仍然從支出的角度吸收通脹環境。因此，從長遠來看，從費用增長的角度來看，我們希望能夠做得比我們現在所做的更好。

On the revenue side, as you know, the lift -- the financial model enables us to have lift from 2 different areas. One is the market left, and that's tended to provide low single-digit growth rates, but it's a very strong component of the financial model. And then secondly, the organic growth. And if we can have low single-digit growth in wealth management organically and then mid-single-digit growth in asset servicing, that provides a good model for us to get well above the expense rates that we think we can lead to in the long run and provide good operating leverage.

在收入方面，如您所知，財務模型使我們能夠從兩個不同的領域獲得提升。一個是剩下的市場，它往往會提供較低的個位數增長率，但它是金融模型的一個非常強大的組成部分。其次，有機增長。如果我們能夠在財富管理方面有機地實現低個位數增長，然後在資產服務方面實現中個位數增長，這將為我們提供一個很好的模型，使我們能夠遠遠高於我們認為長期可以實現的費用率運行並提供良好的運營槓桿。

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

好的。如果我能追踪財富的話。你也改善了那裡的增長。高端和低端的競爭動態是否存在差異？您是否取得了更大的成功，您在全球家族辦公室也取得了更大的成功。我想你能談談漏斗、中間層的新客戶以及你正在採取哪些措施來發展這一點嗎？

Yes. It's interesting. It's actually not just the family office the very top end of wealth advisory and those clients can be similar size. They just happen to not have a family office and are leaning more toward us for wealth advice as opposed to the broader set of more operational and reporting services that the Global Family Office provides, we are doing better at the top end. And looking at the new business that came on board and at the pipeline, the accounts above $20 million, just that was where there was more velocity. And that's been consistent for a while on that business. And so there is something to that dynamic, we seem to be doing better at the top end. That's where a disproportionate percentage of the growth has come from.

是的。這真有趣。實際上，不僅僅是家族辦公室是財富諮詢的最高端，而且這些客戶的規模也可能相似。他們只是碰巧沒有家族辦公室，並且更傾向於向我們提供財富建議，而不是全球家族辦公室提供的更廣泛的運營和報告服務，我們在高端做得更好。看看新出現的和正在醞釀中的業務，賬戶超過 2000 萬美元，這就是速度更快的地方。在該業務上，這種情況已經持續了一段時間。因此，這種動態是有原因的，我們似乎在高端領域做得更好。這就是不成比例的增長的來源。

Our next question is going to come from Brennan Hawken from UBS.

我們的下一個問題將由瑞銀集團 (UBS) 的布倫南·霍肯 (Brennan Hawken) 提出。

Just a quick clarification point. Jason, you referenced a point of expense benefit. Is it right to interpret that as coming off of your prior 7% or better expectation or was that meant in a different way?

只是一個快速澄清點。傑森，您提到了費用福利點。將其解釋為低於您之前 7% 或更好的預期是否正確，還是有不同的含義？

It is correct to interpret that as saying we don't see at this point. We've said 7% or better. And at this point, we should be doing 6% or better. We've done that first half, and we see a path to that in the second half as well.

將其解釋為我們目前還沒有看到這一點是正確的。我們說過 7% 或更好。此時，我們應該做到 6% 或更好。我們已經完成了上半場的工作，我們也看到了下半場實現這一目標的道路。

Perfect. And then -- sure -- you guys had a write-off of a client capability. I don't remember seeing that in the past, just a little confusing to me. So maybe if you can help me understand it. When did you build that capability and then what happened that caused you to write it off?

完美的。然後——當然——你們註銷了客戶端能力。我不記得過去見過這個，只是讓我有點困惑。所以也許你能幫助我理解它。你什麼時候建立了這種能力，然後發生了什麼導致你取消它？

Yes, I can give you some thoughts on it. Just from a timing perspective, it's been in the works for many quarters. But one of the pillars of the productivity office is to look at what we refer to as internal investments to ensure that they're on track to meet our hurdle rates or returns and margins. The charge was a project to build out a new client capability in asset servicing, specifically in the asset owners channel. So after working and eventually discussing with different stakeholders, we didn't reach commercial agreement on terms that would meet our hurdles. And so we halted the project. I think it's importantly, I'd presume you'd ask, are there others like this in inventory, absolutely not. We don't -- this is a large project endeavor that we've been working on and didn't reach resolution that got to our hurdle rates and so stop the project.

是的，我可以給你一些想法。僅從時間角度來看，這項工作已經進行了多個季度。但生產力辦公室的支柱之一是審視我們所說的內部投資，以確保它們能夠滿足我們的最低迴報率或回報率和利潤率。該項目旨在建立資產服務方面的新客戶能力，特別是在資產所有者渠道中。因此，在與不同利益相關者合作並最終討論之後，我們沒有就能夠克服我們障礙的條款達成商業協議。所以我們停止了這個項目。我認為這很重要，我想你會問，庫存中是否還有其他類似的產品，絕對沒有。我們不——這是一個我們一直在努力的大型項目，但沒有達到達到我們預期目標的解決方案，因此停止了該項目。

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

好的。與您計劃的情況相比，是否發生了諸如收入機會之類的事情導致收入減少？因為我確信你們在破土動工之前就經歷過這個過程，可以這麼說，至少是比喻意義上的。或者是它真的很貴，結果建造起來更貴。是費用方面損害了前景還是計劃？或者這是收入機會？

Yes. Well, it was more costly to build than we thought, and the revenue dynamics were not at that point, going to get to our hurdle rate. And this -- it really is reflective of us taking an extremely disciplined approach on items like this where we're not going to devote resources to areas where we're not going to achieve our hurdle rate. And so well before we talked about this, even internally, one of the pillars that we talked about for the productivity office was looking at our internal investments. And this fits squarely in one of those areas. We define that as areas where we're allocating resources, whether it's capital or expense dollars, and we're not at our hurdle rate. And so this is one where we were disciplined in saying we're going to stop now, halt it and not make -- not invest more into this.

是的。嗯，建造成本比我們想像的要高，而且收入動態還沒有達到我們的最低門檻。這確實反映出我們在此類項目上採取了極其嚴格的方法，我們不會將資源投入到無法達到預期目標的領域。早在我們談論這個問題之前，即使是在內部，我們談論的生產力辦公室的支柱之一就是考慮我們的內部投資。這正好適合其中一個領域。我們將其定義為我們分配資源的領域，無論是資本還是支出，而且我們沒有達到我們的最低門檻。因此，在這一點上，我們有紀律地表示，我們現在要停止，停止，不做——不對此進行更多投資。

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

傑森，這實際上比我在紙上解釋的要令人鼓舞得多。

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

不，謝謝你的詢問。這可能對您澄清有所幫助。這對其他人有幫助。所以謝謝。

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

只是一個關於費用的更大問題。我想，從長遠來看，您想要的費用與信任比率在哪裡，或者您的目標是什麼？那麼要達到這個目標需要哪些必要的要素呢？

Yes. If we can be in the 110% to 110% range, then that's 105% to 110%, then we feel like we're in good shape to do well. And we're grinding to get down there. We got down there before. We've been well above it. We got down into that range, in fact, even slightly below it for a quarter or 2. And now all the factors we've talked about, higher inflation, markets coming down, and the effects of NII going up not helping that metric, we're outside that range, but it is an important part of our financial model to be in that range. And so we're -- it's the first thing I look at is where are we. And it's good to see us getting back toward the number that we -- the range that we've articulated. It's another one of the key performance indicators that we talk about internally.

是的。如果我們能在 110% 到 110% 的範圍內，那就是 105% 到 110%，那麼我們就會感覺自己處於良好的狀態，可以做得很好。我們正在努力到達那裡。我們之前就到過那裡。我們已經遠遠超過了它。事實上，我們已經跌入這個範圍，甚至略低於它一個季度或兩個季度。現在我們討論的所有因素，通脹上升，市場下跌，以及NII上升的影響都對這個指標沒有幫助，我們超出了這個範圍，但處於這個範圍內是我們財務模型的重要組成部分。所以我們——我首先看的是我們在哪裡。很高興看到我們回到了我們所確定的數字——我們已經闡明的範圍。這是我們內部討論的另一個關鍵績效指標。

Got it. And just one follow-up on the positive organic growth commentary this morning. If you saw a big acceleration in organic growth or a sustained period of strong organic growth, multiple quarters even several years. How do you think that would impact expense growth, if at all?

知道了。這只是對今天早上積極的有機增長評論的一個後續評論。如果您看到有機增長大幅加速或持續強勁的有機增長，多個季度甚至幾年。如果有的話，您認為這會如何影響費用增長？

Yes. So Rob, your 2 questions relate to each other, which is the primary way that we can drive that ratio to the range that Jason talked about is through organic growth on the fee side and then controlling organic expenses, all right? And to your point, if you have higher organic growth, that is going to require more resources. And to the extent that you don't achieve that, then you have to make sure that you're reducing the organic growth on the expense side to get there. But those are the 2 areas that we control the most. And then you say, okay, but beyond that, as Jason mentioned, on the fee side, it's going to have the impact of markets and sometimes currency. And on the expense side, you're going to have the impact from inflation and to some extent, currency. And so try to focus on what you can control the most, which are those 2 items, organic growth on fees and organic growth on expenses to ultimately drive it to the target range.

是的。所以羅布，你的兩個問題相互關聯，這是我們將這一比率提高到傑森談到的範圍的主要方法，那就是通過費用方面的有機增長，然後控制有機費用，好嗎？就你而言，如果你有更高的有機增長，那就需要更多的資源。如果你沒有實現這一目標，那麼你必須確保減少費用方面的有機增長才能實現這一目標。但這些是我們控制最多的兩個領域。然後你說，好吧，但除此之外，正如傑森提到的，在費用方面，它將產生市場的影響，有時還會影響貨幣。在費用方面，您將受到通貨膨脹以及某種程度上貨幣的影響。因此，請嘗試專注於您最能控制的事情，即這兩項，費用的有機增長和支出的有機增長，以最終將其推向目標範圍。

And Betsy Graseck from Morgan Stanley is next.

摩根士丹利的貝特西·格拉塞克（Betsy Graseck）是下一個。

This is actually Connell Schmitz filling in for Betsy. So just 1 question, a little bit nuanced on the credit portfolio. It seems like a little bit of an outlier. I know it's small, but on the reserve release, it seems like an outlier that there's an improved outlook on your CRE book. Can you just explain what's going on there and where you see this line item from here?

這實際上是康奈爾·施密茨（Connell Schmitz）代替貝特西（Betsy）。所以只有一個問題，關於信貸投資組合有一點細微差別。這似乎有點異常。我知道它很小，但在儲備版本中，您的 CRE 書籍的前景有所改善，這似乎是一個異常值。您能否解釋一下那裡發生了什麼以及您在哪裡看到此訂單項？

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

是的。所以實際上，只是為了澄清一下，有發布，這是由於該書中少數借款人進行了一些改進而發布的。但這足以抵消我們對商業房地產整體實際惡化的前景的看法。因此，這並不戲劇性，但我們對這本書這部分的看法實際上會導致儲備金增加。

Got it. Okay. That makes more sense. I guess one other question on the investment portfolio. You mentioned the duration still sub 1 year and you're mostly in cash. At what point just given the context of potential future rate hikes, where do you see like this duration heading in the coming months? And how are you planning to mix shift this book in that context to protect NII? Yes.

知道了。好的。這更有意義。我猜還有一個關於投資組合的問題。你提到期限還不到一年，而且你大部分都是現金。考慮到未來可能加息的背景，您認為未來幾個月的持續時間會走向何方？您打算如何在這種背景下混合轉變這本書來保護 NII？是的。

Yes, absolutely. So the duration of the securities book is it to one, the duration of the balance sheet is just under 1%. And you're absolutely right to call out that this is -- it is an interesting time in what we think was the evolution of the of the yield curve. And so we've been allowing the maturity of securities to go -- to become more liquid as we reinvest them, that's brought down duration at this point with the yield curve, we are talking about where to go from here. That's not indicating it's going to go up. But it's not on a -- at this point, we are thinking about where is the yield curve, where is it going? And how does that influence what we want to do as the large securities book continues to mature and provide opportunity for reinvestment.

是的，一點沒錯。所以證券賬簿的久期是1%，資產負債表的久期不到1%。您指出，這是一個有趣的時期，我們認為這是收益率曲線演變的時期，這是絕對正確的。因此，我們一直在允許證券到期——當我們對它們進行再投資時變得更具流動性，這降低了收益率曲線在這一點上的久期，我們正在討論從這裡走向何方。這並不表明它會上漲。但這並不是——此時，我們正在考慮收益率曲線在哪裡，它會走向何方？隨著大型證券賬簿不斷成熟並提供再投資機會，這將如何影響我們想要做的事情。

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

好的。然後我猜想還有一個關於同一主題的後續行動。如果存款可能一對一地流出，我們應該如何考慮在存款流出的情況下盈利資產的增長？或者你會維持一定的資產負債表規模還是......

Yes. Our -- as deposits come down, the securities can act as obviously, the funding mechanisms for it. It doesn't -- that doesn't move very quickly. And so the deposit size is always going to influence the earning asset size. And -- so what we have to then think about the constraining factor at that point becomes what does leverage look like. And we've got a lot of room from a leverage perspective. And so that's what sometimes will lead us to think about discretionary leveraging just to make sure that we're not missing opportunities to pick up some NII even if it's a very thin NIM based on where the size of the balance sheet is because it doesn't flex super quickly.

是的。隨著存款下降，證券顯然可以充當其融資機制。事實並非如此——進展不是很快。因此，存款規模總是會影響盈利資產規模。而且——所以我們必須考慮此時的限制因素就是槓桿是什麼樣的。從槓桿角度來看，我們還有很大的空間。因此，有時這會導致我們考慮酌情利用槓桿，以確保我們不會錯過獲得一些NII的機會，即使它是基於資產負債表規模的非常薄的NIM，因為它並沒有'彎曲得非常快。

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

我們的下一個問題將來自 KBW 的 Mike Brown。

Maybe just actually following up on that question there. We noticed that the complexion of your balance sheet has been shifting on the funding side, naturally, and that makes sense. But your deposits, they declined by 6%, but we saw that the higher cost Fed fund purchased balance actually jumped meaningfully quarter-over-quarter has been growing this year. I guess, why not just let the balance sheet decline more? Like what's kind of going on there in terms of the mix? And how could that progress from here should -- if the deposits continue to trend down. As you talked about, will that balance -- the Fed funds purchase balance continue to grow as an offset to fund the assets.

也許只是實際跟進這個問題。我們注意到，您的資產負債表的情況在資金方面自然發生了變化，這是有道理的。但是你的存款下降了 6%，但我們看到，成本較高的聯邦基金購買餘額實際上比上一季度大幅增長，今年一直在增長。我想，為什麼不讓資產負債表進一步下降呢？就混合而言，那裡發生了什麼？如果存款繼續呈下降趨勢，那麼接下來的進展又如何呢？正如您所說，聯邦基金購買餘額是否會繼續增長，作為資產融資的補償。

Yes. And part of it is in this -- the deposits have just been so volatile and so you don't want to commit to significant movement in shrinking the balance sheet. And we want to be there for our clients. We've got plenty of capital. We've got plenty of room for a leverage perspective. And so just not anxious to quickly do any significant moves. And so to that extent, as deposits come down, you have the opportunity to then say, maybe we want to use some discretionary leveraging, again, we printed a 7.4% Tier 1 leverage, which is -- leaves you a lot of room. And so if we hadn't done leveraging that incremental leveraging would be even higher in the 7s. And at a point, you just have to say it just prudent to make sure you're taking advantage of the opportunities that exist. So.

是的。部分原因在於——存款波動太大，所以你不想在縮減資產負債表方面做出重大舉措。我們希望為我們的客戶提供幫助。我們有充足的資本。我們有足夠的空間來發揮槓桿作用。因此，不急於迅速採取任何重大舉措。因此，在這個程度上，隨著存款的下降，你有機會說，也許我們想使用一些可自由支配的槓桿，我們再次打印了 7.4% 的一級槓桿，這給你留下了很大的空間。因此，如果我們沒有充分利用槓桿，增量槓桿在 7 秒內將會更高。在某種程度上，你只需謹慎地說，以確保你正在利用現有的機會。所以。

Okay. Great. And then I guess maybe just following up on that point there on the capital side. You guys increased the share buyback or you bought back about $100 million or so of stock this quarter. Any expectation on how that could progress from here? What should we think about in terms of your capital return.

好的。偉大的。然後我想也許只是在資本方面跟進這一點。你們增加了股票回購，或者本季度回購了大約 1 億美元左右的股票。對接下來如何進展有什麼期望嗎？就您的資本回報率而言，我們應該考慮什麼？

Sure. Well -- sorry, yes, the overall theme of what you saw in this quarter makes sense in the near term, where you'd see us be in the market for share repurchase. The thing that worked against us, the AOCI actually worked slightly against us this quarter. Usually, in a neutral rate environment, the pull to par will give us some lift there. But it did in this quarter, that's fine. But even so, the $100 million we did is about what -- it's kind of -- that's the model we're thinking about. In the short run, big caveat is that the FDIC special assessment coming online, presumably in third quarter, that would be a similar dollar amount as what we did from a repurchase perspective this quarter. And so you could see us saying hold off for a quarter, get that payment done and then get back to your game plan.

當然。嗯——抱歉，是的，您在本季度看到的總體主題在短期內是有意義的，您會看到我們在股票回購市場上。對我們不利的是，AOCI 本季度實際上對我們略有不利。通常，在中性利率環境下，拉平利率會給我們帶來一些提升。但本季度確實如此，這很好。但即便如此，我們所做的 1 億美元就是關於我們正在考慮的模型。從短期來看，需要注意的是，聯邦存款保險公司的特別評估可能會在第三季度上線，這將與我們本季度從回購角度所做的金額類似。因此，您可能會看到我們說推遲一個季度，完成付款，然後回到您的遊戲計劃。

Next question comes from Gerard Cassidy from RBC.

下一個問題來自加拿大皇家銀行的杰拉德·卡西迪。

Jason, can you share with us -- I think you gave us the cumulative beta through the cycle of 68% and then the incremental beta, of course, is higher. And I think you touched on it this quarter may be 100%. The question is this, how is the beta behaving relative to past tightening cycles? I don't know if 2016 to '18 is cycle that really is that comparable? Maybe I have to go back a little further. And then second, how quickly -- if the Fed does start cutting rates cutting Fed fund rates in 2024 sometime, how quickly can you guys reduce your deposit costs?

Jason，你能和我們分享一下嗎——我想你給了我們 68% 週期的累積貝塔值，然後增量貝塔值當然更高。我想你這個季度接觸到的可能是100%。問題是，貝塔值相對於過去的緊縮週期表現如何？我不知道2016年到18年是否是一個週期，真的有那麼可比嗎？也許我得再往前走一點。其次，如果美聯儲確實在 2024 年某個時候開始降息，降低聯邦基金利率，你們能多快降低存款成本？

Sure. Well, on the first, just to make sure I said it right earlier, the 100% going forward would be for the institutional side of the business, not for the overall deposit base. And Yes.

當然。嗯，首先，為了確保我之前說的是對的，未來 100% 的進展將針對機構業務，而不是針對整體存款基礎。是的。

Yes. And to the question of how does that compare historically it's -- this is higher than it has been historically. And there's different dynamics that you and I could talk about, I think, that are driving that. But there's very strong competition for deposits right now and for various reasons. And so we want to make sure that we're there for our clients. And we still -- we've got the ability to do that. And so we want to make sure that we're holding on to our fair share and providing that liquidity capability for clients. I think about reductions, the reductions can -- they can come quickly. And our -- the way we price, the way we the way our agreements work, we get fast movement on the way down. And so we should be able to get deposit costs down quickly as rates come down.

是的。至於與歷史相比如何的問題——這比歷史上的水平要高。我認為，你和我可以談論不同的動力，這些動力正在推動這一點。但由於各種原因，目前存款競爭非常激烈。因此，我們希望確保我們隨時為客戶服務。我們仍然有能力做到這一點。因此，我們希望確保我們保留我們的公平份額，並為客戶提供流動性能力。我想到了削減，削減可以——它們可以很快到來。我們的定價方式、我們協議的運作方式，我們在下跌過程中會快速移動。因此，隨著利率下降，我們應該能夠迅速降低存款成本。

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

非常好。作為後續行動，您還談到了存款的波動性。是不是更多——根據你們在北方的經驗，你們是否發現這一時期的波動性甚至比過去時期更大？是因為數量緊縮或行動導致你們的估計出現更大的波動嗎？

Well, it is more volatile, not just over the long run, and we went from $90 billion to $138 billion down to $106 billion. And -- but even within the quarters, a lot of volatility. And -- but I think that's driven by some of the macro factors and what we saw in early March spooked a lot of depositors, obviously, and then another trend of debt ceiling and then leading to another trend of deposit competition, all of those things are having -- or driving significant different preferences that clients have, not just between which bank to go to but whether to use banks versus money market funds versus treasuries. I think all of those factors are what's leading to the heightened volatility we're seeing.

嗯，它的波動性更大，不僅僅是從長遠來看，我們從 900 億美元到 1,380 億美元，再下降到 1,060 億美元。而且——但即使在幾個季度內，也存在很大的波動。但我認為這是由一些宏觀因素驅動的，我們在 3 月初看到的情況顯然嚇壞了很多儲戶，然後是債務上限的另一種趨勢，然後導致存款競爭的另一種趨勢，所有這些正在擁有或推動客戶具有顯著不同的偏好，不僅是選擇哪家銀行，還包括是否使用銀行、貨幣市場基金和國債。我認為所有這些因素都是導致我們所看到的波動加劇的原因。

Next question comes from Vivek Juneja from JPMorgan.

下一個問題來自摩根大通的 Vivek Juneja。

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

有幾個問題。我將從無息存款開始。您在第二季度看到的大量資金外流，是哪個部分的資金流出更多以及在哪裡——您在這一趨勢中看到了什麼？抱歉，如果我重複一個問題，那麼剛才已經有重疊的電話了——我希望我沒有這樣做。

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

重大變動幾乎總是會發生——嗯，在這種情況下幾乎來自資產服務。

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

好的。至於穩定，您在哪裡看到更多的穩定，哪個部分？

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

資產服務板塊其實整體上還是比較穩定的。我們會看到大塊的進出運動，但總體水平大致相同。財富細分更加細化。 GFO 的客戶群要大得多，但你只要考慮一下財富領域的客戶數量，它只會讓它變得更加細化。

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

在財富管理領域，費用增長僅為個位數。是因為你們在那裡進行了你們都談到的大量裁員嗎？對那裡的服務有何影響？

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

服務很棒。我們沒有提供業務部門之間費用分配的詳細信息。但總的來說，您會注意到員工人數減少了，但對服務水平沒有任何影響。我提到的低個位數增長與財富管理內部的有機增長有關。

Next question comes from [Robert Richal] from Wells Fargo.

下一個問題來自富國銀行的 [Robert Richal]。

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

只是快速跟進。您提到設備和軟件，您有一些項目被推遲。這是否意味著下半年非盈利費用將面臨一定的上漲壓力？

Yes. In certain categories, it will. And so in equipment and software, we'll see -- in that line item, in particular, we'll see upward pressure, $5 million to $10 million third and fourth quarter. But not -- I didn't reference other line items. We mentioned outside services relatively flat. So that's really the only forward-looking information we provided, except for the comp number, which you referenced.

是的。在某些類別中，它會。因此，在設備和軟件方面，我們將看到，特別是在該項目中，我們將看到第三季度和第四季度 500 萬至 1000 萬美元的上漲壓力。但不是——我沒有引用其他訂單項。我們提到外部服務相對平穩。因此，除了您提到的公司編號之外，這確實是我們提供的唯一前瞻性信息。

And Brian Bedell from Deutsche Bank.

還有德意志銀行的布萊恩·比德爾。

Just wanted to clarify on the FDIC special assessment, is that included in that expense guide of 6% or better. And I don't know if you're able to frame the size of the essential assessment yet.

只是想澄清 FDIC 特別評估是否包含在 6% 或更高的費用指南中。我不知道您是否能夠確定基本評估的規模。

It's not included in the 6%. And we haven't talked publicly about what the number is.

不包括在6%之內。我們還沒有公開談論這個數字是多少。

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

好的。非常感謝您今天加入我們。我們期待很快再次與您交談。