Good morning, and welcome to the 2022 third quarter earnings conference call hosted by BNY Mellon. At this time, all participants are in listen only mode. Later, we'll conduct a question-and-answer session. Please note that this conference call and webcast will be recorded and will consist of copyright material. You may not record or rebroadcast these materials without BNY Mellon's consent. I will now turn the call over to Marius Merz, BNY Mellon Head of Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone, and welcome to our third quarter 2022 earnings call. As always, we will reference our financial highlights presentation, which can be found on the investor relations page of our website at bnymellon.com. I'm joined by Robin Vince, President and Chief Executive Officer, and Emily Portney, our Chief Financial Officer. Robin will make introductory remarks, and Emily will then take you through the earnings presentation. Following their prepared remarks, there will be a Q&A session. Before we begin, please note that our remarks include forward-looking statements and non-GAAP measures. Information about these statements and non-GAAP measures are available in the earnings press release, financial supplement, and financial highlights presentation, all available on the investor relations page of our website. Forward-looking statements made on this call speak only as of today, October 17, 2022, and will not be updated. With that, I will turn it over to Robin Vince. Thank you, Marius, and thank you everyone for joining us this morning. Having formally taken over as CEO a little over a month ago, it is a tremendous honor to usher in a new chapter for this great institution. After spending a significant portion of the past few months engaging with clients, regulators, employees, and other business leaders, I'm excited about our exceptional client franchise, our central role in global financial markets, and the opportunity that lies ahead. Now, as a new CEO and considering the current environment, and it being the time of year when budgets and strategic plans are healthily debated and brought together. Naturally, I'm using this opportunity to take a particularly close look at our priorities. While I'm still reviewing everything, it's apparent to me that while we've made good progress in a number of areas over the last couple of years, there are also clearly opportunities to further enhance BNY Mellon's performance for our clients and shareholders alike. First, I see exciting growth opportunities and numerous examples of innovation like Pershing X, the reimagining of our collateral and custody platforms, digital assets, and real-time payments that we need to continue to invest in and execute on with great discipline and urgency. Second, we're not just reviewing the top line. We are also closely examining our cost base and margins. I'm questioning how we do things, and I'm of the view that our margins should be better in some areas. For example, we talked to you about improving our pre-tax margin in security services to 30% over the medium term. More broadly, we are also going to be looking for efficiency opportunities as we drive our operating model transformation, and we'll be very determined to see them through. Third, while we have been providing more holistic solutions to clients that we believe our unique collection of businesses is better placed to deliver, we have the potential to do a lot more. I touched on this on the last earnings call, but I continue to believe that the opportunity to deliver the whole firm through a more unified one BNY Mellon is meaningful. As we continue to work through and bottom out all of these opportunities in the coming months, we will be regularly providing you with progress updates along the way. Moving on to the quarter. I'll start with some broader perspectives before I run through a few financial highlights, and then I'll turn it over to Emily to review our financial results in more detail. As you are aware, during the quarter, we continued to see high levels of volatility across both global equity and fixed income markets. Persistently high inflation, driving increased expectations for significant rapid rate increases by central banks in developed countries, a strengthening U.S. dollar, and a complex geopolitical landscape. We also began to see some government intervention. For example, Japan stepping into the FX market to manage their currency. This was particularly on display in the U.K., where in the last few weeks there has been extraordinary volatility in the gilt market as a result of the U.K. government's spending and taxation plans. This led to a series of actions by the Bank of England, including delaying their QT plans, announcing a gilt purchase program, and a liquidity facility aimed to stabilize the market. Our business model as a core provider touching so much of the financial system gives us a terrific vantage point on what's going on in markets. For example, our data shows that building up throughout the quarter and heading into quarter end, the market was extremely short euros to levels not seen in quite a few years. We've seen international holders selling U.S. Treasuries. More broadly, it's clear that market liquidity continues to be challenged in some markets, more so than in others. As we sit here today, most markets have continued to function in a relatively orderly fashion. Trades are settling, and fails and overdrafts are at fairly normal levels. Clearly risks are elevated, and the system feels more fragile than it was a few months ago. While the environment is quite uncertain, our platform of trust and innovation is very much in demand by our clients. As their cost pressures rise, we are seeing a lot of interest in engaging with us to review operating models. The scale of our platforms should allow us to lower operating costs for our clients, enabling them to focus on their core strengths. Turning to our performance in the quarter and referring to page two of our financial highlights presentation, we reported EPS of $0.39 on $4.3 billion of revenue and a return on tangible common equity of 7%. These results were impacted by a goodwill impairment charge that Emily will discuss in more detail shortly. Excluding the impact of notable items, EPS was $1.21, up 11% year-over-year, and our return on tangible common equity was 22%. Revenue grew 6% year-over-year, a testament to the diversity and resiliency of our business model. This performance reflected the benefit of higher interest rates as well as continued strength in client volumes and balances across our security services and market and wealth services segments. While investment and wealth management was naturally more affected by the continued decline in global market values, particularly in investment management, the business delivered positive net inflows in the quarter and continued to deliver solid investment performance for our clients. Touching on a few business highlights. Asset servicing continued to deliver solid top-line results, and our sales momentum remains strong with wins and mandates up from a strong 2021, and yet to be installed AUCA meaningfully higher than last quarter. In ETFs, we continue to see strong net inflows, and the total number of funds serviced is up almost 10% from the beginning of the year. We're also seeing strong momentum and traction in the alts space and have an active pipeline across credit, private equity, and real estate. We were pleased to announce that Aviva Investors, a large European-based global asset manager, recently appointed us to provide a fully integrated operating model for certain front-office support services as well as middle and back-office activities, allowing them to focus on delivering an exceptional client experience, powered in no small part by the scale and capabilities of our platform. Finally, following the formation of our digital assets unit in 2021, we are now live with our digital asset custody platform in the U.S. To this point, we continue to see significant institutional demand for resilient, scalable financial infrastructure built to accommodate both traditional and digital assets. We see digital asset custody as an important foundational capability for the future of financial markets as blockchain technology allows for tokenization of all kinds of assets and currencies. Just to be clear, we did not invest in this space just for the purpose of custody and crypto. We see this as the beginning of a much broader journey. Pershing had a solid and resilient quarter benefiting from its diverse revenue mix that includes not only market-based fees, but also transaction fees, balance-based fees, subscription fees, and net interest revenue, with many of these income streams playing well in the current environment. We also gathered a strong $45 billion of net new assets in the quarter, and the pipeline remains healthy, boding well for flows in the months ahead. Pershing X reached another milestone through an equity investment and partnership with Conquest Planning, a fintech which uses AI and powerful analytics tools to help advisors improve their efficiency and create highly customizable financial plans for their clients. X's minimum viable product remains on track to launch in the fourth quarter. Our client engagement, together with the product design input which that brings, is helping us to accelerate and enhance the delivery of an exciting end-to-end digital experience for advisors. Clearance and collateral management delivered strong growth on the back of higher U.S. clearance volumes as market volatility continues to drive secondary trading activity in U.S. Treasuries. In fact, in September, settlement volumes were the highest they've been since March of 2020. We also saw growth in margin-related services reflecting the industry-leading work that the team is doing to help our clients comply with uncleared margin rules in derivatives trading. Treasury services achieved a number of wins this quarter as we continue to bring innovative new solutions to the market. We were awarded a contract for white label trade processing for a major U.S. bank. We sponsored our first supply chain financing program for a major investment-grade corporate client, and we were awarded and will be managing payroll and digital asset transfers for a major digital asset client. Recognizing our momentum in this business, The Banker named us 2022 Global Transaction Bank of the Year. We're also proud to have been recognized by them with additional awards for our work to transform the real-time and digital payment space and optimize trade finance payments by leveraging emerging technologies. Let me conclude with a note of humility about the uncertainty that we're all witnessing in markets these days. None of us can predict the exact path of markets and economic conditions from here, and the level of uncertainty is greater than many have become used to. As a firm, we are positioning ourselves conservatively in this environment and recognize that the strength and stability of our platform is important for the uninterrupted functioning of a significant part of global capital markets. We're proud of this role and the service that we deliver to our clients around the world. With that, I'll hand it over to Emily for the more detailed review of our financial performance in the quarter. Thank you, Robin, and good morning, everyone. As I walk you through the details of our results for the quarter, all comparisons will be on a year-over-year basis unless I specify otherwise. Starting on page three, to.tal revenues increased by 6% to $4.3 billion in the third quarter. Fee revenue was down 1% as the benefit of lower money market fee waivers and organic growth across our security services and market and wealth services segments was offset by the impact of lower market values across equity and fixed income markets and the unfavorable impact of the stronger U.S. dollar. Firm-wide assets under custody and/or administration of $42.2 trillion decreased by 7%. The impact of lower market values and currency headwinds was tempered by continued growth from new and existing clients. Assets under management of 1.8 trillion decreased by 23%, also reflecting lower market values and the unfavorable impact of the stronger U.S. dollar, partially offset by cumulative net inflows. Investment and other revenue was $117 million in the quarter. This included a $37 million gain on the sale of our HedgeMark subsidiary. Through a minority equity stake in the combined company, we will continue participating in their growth, and our clients will certainly benefit from a robust suite of managed account solutions. Net interest revenue increased by 44%, primarily reflecting higher interest rates. Reported expenses were up 26%. This included a $680 million impairment of goodwill associated with our investment management reporting unit, which was driven by lower market values and a higher discount rate. While having impacted our earnings for the quarter, this impairment represented a non-cash charge and did not affect the firm's liquidity position, tangible common equity, or regulatory capital ratios. Excluding notable items, expenses were up 4%. Provision for credit losses was a benefit of $30 million, primarily reflecting reserve releases related to cash balances and exposure to Russia, as well as a modest benefit from our commercial real estate portfolio. Our effective tax rate was 38.4% or 19.5% excluding notable items. Reported EPS was $0.39. Pre-tax margin was 15%, and return on tangible common equity was 7%. Excluding the impact of notable items, EPS was $1.21, pre-tax margin was 31%, and return on tangible common equity was 22%. Now on to capital and liquidity on page four. Our consolidated Tier 1 leverage ratio was 5.4%, up 19 basis points sequentially, reflecting the benefit of lower average assets, which was partially offset by a decrease in Tier 1 capital. The sharp increase in interest rates, especially in the last two weeks of the quarter, resulted in an increase of the unrealized loss on our available-for-sale securities portfolio of approximately $900 million after tax during the quarter. We distributed approximately $300 million of earnings to our shareholders through common stock dividends. As I mentioned earlier, the goodwill impairment did not affect our regulatory capital ratios. Our CET1 ratio was flat sequentially at 10%. Finally, our LCR was 116%, up 5 percentage points sequentially. Turning to our net interest revenue and balance sheet trends on page five, which I'll also talk about in sequential terms. Net interest revenue of $926 million was up 12% sequentially. This increase primarily reflects higher interest rates on interest-earning assets, partially offset by higher funding expense. Average deposit balances decreased 7%. The strengthening of the U.S. dollar contributed approximately one percentage point to this decline. Overall, this is largely consistent with our previously expressed expectations for the trajectory of deposit balances through the remainder of the year amid continuously rising interest rates, as well as typical seasonal declines in deposit balances in the third quarter, while non-interest-bearing deposit balances continue to hold up better than we had previously expected. Average interest-earning assets decreased by 5%. Underneath that, cash and reverse repo declined by 10%, loan balances decreased by 1%, and our securities portfolio balances were down 2%. Moving on to expenses on page six. Expenses for the quarter were $3.7 billion on a reported basis. Excluding notable items, expenses of $3 billion were down 1% quarter-over-quarter and up 4% year-over-year. This year-over-year increase reflects investments net of efficiency saves, higher revenue related expenses, including higher distribution expenses related to the abatement of fee waivers, as well as the impact of inflation, partially offset by the benefit of the stronger U.S. dollar. A few additional details regarding noteworthy year-over-year expense variances. Distribution and servicing expense was up 16%, driven by higher distribution costs associated with money market funds. Business development expenses increased as travel and entertainment expense continued to normalize off a low base last year. Lastly, the change in other expenses reflects litigation expenses in the prior year. Turning to page seven for a closer look at our business segments. Security services reported total revenue of $2.1 billion, an increase of 13% compared to the prior year. Fee revenue was up 1% and net interest revenue increased by 54%, driven by higher interest rates, partially offset by lower deposit balances. As I discuss the performance of our security services and market and wealth services segments, I will focus my comments on investment services fees for each line of business, which you can find in our financial supplement. In asset servicing, investment services fees were down 3% as growth from abating money market fee waivers, high client activity and net new business was more than offset by the impact of lower market values and the strengthening of the U.S. dollar. We continue seeing healthy organic growth from both new and existing clients, and our sales momentum continues with wins year to date up meaningfully compared to an already strong 2021. In issuer services, investment service fees were up 2%, primarily reflecting the reduction of money market fee waivers, partially offset by previously disclosed lost business in corporate trust in the prior year and lower fees from depository receipts programs for Russian issuers. Next, market and wealth services on page eight. Market and wealth services reported total revenue of $1.4 billion, up 17% compared to the prior year. Fee revenue increased 11% and net interest revenue was up 34%, reflecting higher interest rates and higher loan balances, partially offset by lower deposit balances. In Pershing, investment services fees were up 16%. The positive impact of lower money market fee waivers and higher client activity was partially offset by the impact of previously disclosed lost business in the second half of last year and lower market levels. Net new assets were $45 billion in the quarter. On an annualized basis, this translates into a 9% growth rate, highlighting a strong quarter of inflows for both new and existing clients, especially in this current environment. Average active clearing accounts increased by 3% year-on-year. In treasury services, investment services fees were up 3%, driven by lower money market fee waivers, new business and slightly higher payment volumes, partially offset by higher earnings credits for our clients on the back of higher interest rates. In clearance and collateral management, investment services fees were up 5%, primarily reflecting higher U.S. government clearance volumes driven by continued demand for U.S. Treasury securities due to elevated volatility amid a rapidly evolving monetary policy backdrop. Now turning to investment and wealth management on page nine. Investment and wealth management reported total revenue of $862 million, down 16%. Fee revenue was also down 16%, and net interest revenue was up 21%, reflecting higher interest rates and higher loan balances. As I mentioned earlier, assets under management of $1.8 trillion decreased 23% year-on-year. The decrease primarily reflects lower market values and the unfavorable impact of the stronger U.S. dollar as about 40% of our AUM are denominated in foreign currencies, partially offset by cumulative net inflows. As it relates to flows in the quarter, we saw $23 billion of net inflows into long-term products and $2 billion of net outflows from cash. In investment management, revenue was down 20%, primarily reflecting lower market values, the unfavorable impact of the stronger U.S. dollar as well as changes in the AUM mix, partially offset by lower fee waivers. Robin mentioned the extraordinary volatility in the U.K. government bond market earlier. This has caused some significant challenges for U.K. pension schemes over the past few weeks. As a manager of liability driven investment strategies, Insight has been working closely with our clients to maintain the appropriate hedging levels in their portfolios. I'd like to note that as an agent between our LDI clients and their market counterparties, we have no balance sheet exposure. In wealth management, revenue was down 7% as the decline in fee revenue resulting from lower market values was partially offset by higher net interest revenue reflecting higher interest rates. Client assets of $256 billion were down 17% year-over-year, primarily driven by lower market values. Page 10 shows the results of the other segments. As always, I'd like to close with a few comments on our outlook for the remainder of the year as we see it today, acknowledging the heightened uncertainty about the macroeconomic environment and continued market volatility. Based on current market implied interest rates, we now expect net interest revenue for the full year to be up approximately 30% compared to 2021, as we expect another quarter of sequential NIR growth. Given the continued decline in equity and fixed income markets, as well as the continued strengthening of the U.S. dollar, we now expect fee revenue for the full year to be down slightly compared to 2021. Assuming equity and fixed income values as well as currency stay at the levels where they ended the third quarter. We continue to expect expenses excluding notable items for the full year to be within the range of up 5%-5.5% that we had guided to throughout the year. That being said, we are intensely focused on disciplined expense management and are working hard to drive this towards the bottom half of that range. We still expect an effective tax rate between 19.5%-20% in the fourth quarter. Finally, I'll note that we continue to manage to a Tier 1 leverage ratio target of 5.5% as well as a CET1 ratio target of 10%. As we think about the right timing for a resumption of buybacks in the coming months, we will continue to be prudent and consider capital levels, the expected trajectory of deposit bal.ances at AOCI, as well as the economic outlook at that time. With that, operator, can you please open the line for questions? Thank you. If you would like to ask a question, please press star one on your telephone keypad. As a reminder, we ask you that you please limit yourself to one question and one related follow-up question. Our first question comes from the line of Glenn Schorr from Evercore. Please go ahead. Hi. Thank you. I appreciate your comments about acting as agent in the LDI cases in the U.K.. I wonder if we could get a little more of the ins and outs of the impact to both BNY and clients, because Insight has been a great acquisition that's produced a lot of flows for you in the past. I'm curious on impacting the quarter. You get more collateral, but clients have lower balances. What you think clients are going to do with this business going forward. Thank you. Sure. Well, good morning, Glenn, and thanks for the question. Obviously, this topic's been in the news a lot over the course of the past few weeks. Let's maybe just start by stepping back and remember what LDI actually stands for and what it is. It's liability driven investing. The principle at work, as I think you know, but let me just recap it, is really the investment approach that ensures that the assets ultimately are moving more in line with the value of the liabilities. We think that principle, which has been very important to the pension space over time, is an important one, and is going to be something that we would expect to continue. I mean, these strategies have been employed for many years. They've been extensively embraced by the pension regulators in the U.K. and then the consultants who advise our pension clients in the space. You know, the second thing I'd say is that more broadly, higher interest rates have actually served to improve the funding positions of most pension funds because the value of the liabilities has decreased by more than the decreases in their gilt holdings. That has been a net positive in terms of contributing to the pension fund's funding status. Look, clearly, as you pointed out, the speed and the magnitude of the rise in the U.K. government bond yields has been pretty unprecedented and certainly has created challenges in the market with the sort of speed and magnitude of everything that's been going on. That's created issues, including liquidity issues for many of these pension funds. You've had to sell gilts and mobilize other forms of liquidity in order to be able to meet the margin calls on derivatives. As you know, they are the principal on the derivatives. This has clearly put a strain on the markets. I mean, you know, the sheer size of the pension market versus the U.K. gilt market just sort of shows the degree of impact that they can have. It's also highlighted some operational challenges. If you just think about the two-day settlement of margin versus the time to liquidate assets across the wider asset pools, and that's been exacerbated actually by some operational providers. We actually don't provide direct operational support to Insight. That's done by a third party. You know, what's happened as a result of all of that, well, clearly people are raising additional liquidity, which makes a lot of sense. Now, to the other part of your question, we've been pleased with Insight's performance. They've been focused actually on building collateral buffers throughout the year. This prudence, I think, has been quite helpful in protecting client portfolios. Insight's also been over time working on a strategy that they called Integrated Solutions, which is really encouraging pension funds to be able to look across all of the types of assets that they have so that they see the whole and not just the individual pieces. The investment of maybe less liquid components is done with a mind and a view to what's being done and where leverage might exist elsewhere in the portfolio. I think that integrated approach, which they've been a big proponent of, has actually been a good solution in this particular crisis. We actually think that net-net, our solution's been strengthened in the market. Insight's reputation has done quite well. In fact, they are turning away new business as they've seen and benefited, frankly, from the incomings and a bit of the flight to quality. You know, clearly a situation that's still evolving. Today's market looks a little bit better following some of the news at the end of last week and over the weekend. We're watching it very closely. I appreciate all that color. I followed everything, and it feels like nothing on balance sheet risk. Didn't have major client outflows. The last part I wasn't sure about is why would they be turning away new business or are clients not going to use this as much forward or just use less leverage? I'm curious on your outlook. Again, I think it was a good source of flows in the past and just what you think going forward. Yeah. The reason why we've been turning away some new business is because really we want to protect the interest of our existing clients. Taking on more problematic situations, and there are some in the market which have less funding and liquidity available, and then essentially taking them into our franchise and having to deal with that problem, this didn't seem like the smartest moment to do that, and also, frankly, wasn't in the interest of our existing clients who've been along with Insight along the journey. That's actually the reason there. More broadly, we do expect to continue to get incoming phone calls given some of the differentiated nature of how Insight's performed through this. We view that to be positive for the franchise. Actually, I view that as something of a tailwind because these types of reputational events in the market, frankly, can sift out some of the different players. Okay. I appreciate all that, Robin. Thank you. The next question comes from Mike Brown from KBW. Please go ahead. Hi. Good morning. Good morning. Robin, I noticed that the AUCA declined just about 2% quarter-over-quarter. This would be less than we'd expect given the market backdrop here. You talked about the strong sales momentum and in recent wins. How much did organic growth contribute this quarter, if you could kinda quantify that, and when did that come in in the quarter? Hi. Good morning. It's Emily. I'll take that. The AUCA. It really speaks to the trends, and AUCA speak to the diversity of the franchise overall. Firm-wide AUCA was down about 7%. That was based on lower security services AUCA of about 11%, but very much tempered by growth in market and wealth services led by CCM. If you wanna kinda drill down a bit more, in terms of security services and what you're seeing there about the 11% decline, about 13% of that was due to lower market values as well as the strengthening U.S. dollar, and that was partially offset by about 2% of net new business. Okay, great. Thank you, Emily. Emily, if I heard your comments correctly on the share buybacks, it sounds like it's really dependent on the capital levels. Did I understand that correctly, that it's still possible that you could be in the market for buybacks this quarter if the capital levels perform as expected? As I said in my prepared remarks, you know, it's very important that everyone really understands we're gonna continue to be prudent with respect to buybacks. I think that's natural given the continued volatility that we're seeing across the markets and frankly the uncertain macroeconomic environment. We also wanna be above our internal targets for our capital ratios before we consider resuming buybacks. You know, it is true that when we think about capital distribution, frankly, our approach hasn't changed. You know, whether it's this quarter or next quarter, you know, it's always gonna be informed by the rate trajectory and the corresponding impact on AOCI, you know, the size of our balance sheet, market conditions of course, and frankly our forward outlook. What I would remind, you know, everybody is that, you know, beyond the near term, you know, we have a business model that really allows a meaningful, you know, amount of return to of our capital to shareholders. You know, pending the sale of Alcentra as well as over time, as, you know, as rates do move in a different direction, that AOCI will be pulling back to par, and that will, both of those things will free up meaningful capital levels. Okay, great. Thank you for taking my questions. Thank you, Mike. We will now take our next question from Steven Chubak from Wolfe Research. Please go ahead. Hi, good morning. Good morning. Wanted to start off with a question on the operating margin. While the operating backdrop, Robin, as you noted, remains highly uncertain, in the last Fed tightening cycle, the company was generating mid-30s% operating margins fairly consistently, so well above current levels. I just wanted to get your perspective or take on whether you see a credible path to getting back to those types of operating margins, and what are some of the drivers that could potentially help you close the gap here? Sure, Steven Chubak. Well, I'll just start by reminding you, and I mentioned this in my prepared remarks, but when we announced our resegmentation in December last year, Emily and I both commented on the fact that we were driving towards a 30%+ margin in our Security Services segment, which, as you know, is not where we have been. We said at the time that was gonna be made up of a variety of different components. It was gonna be top line organic growth. It was also gonna be, of course, the rate cycle, which is a meaningful contributor, and we do view that as an important contributor to our firm. Then third, it was gonna be through focus on the bottom line. If you take that as a microcosm for a second, that's exactly how I think about the strategy for the whole firm. We're laser-focused on executing on our growth investments, things like Pershing X, real-time payments, and some of the other things that I've detailed before. We also have to be a very good steward of expenses. Although we've made significant investments in resiliency over the course of the past four to five years, I feel that there is more room for us to be able to invest in efficiency-related technology. So investing in technology on the top line and the bottom line, but with a more sense of tangible payoffs that are available than maybe we've seen in the resiliency space, which was really a cost of doing business. You know, Emily can comment maybe just for a moment on our budget process because we're in that season, and we've adjusted our budget process to really try to get at this margin question that you raised. Sure. We are, as Robin said, intensely focused on our forward expense trajectory. In the budget cycle that we've just kicked off, we're actually doubling down on a rubric that we've actually used historically but mostly just for tech. Now we're looking at it and applying that rubric across the entire company. In effect, what we're doing is stratifying all of our expenses across three buckets. First is really structural or run the bank. Second is change the bank, and we're really drilling into that category to be very clear about, you know, if we're making investments, are they for growth, are they to transform, or for that matter, are they to continue to meet ongoing regulatory obligations. Third, of course, the third bucket is just revenue related, which obviously rise with top line growth. I, you know, I can share that, you know, as we go through this, you know, more than 50% of our expenses are structural in nature. They are certainly higher, you know, higher than we think they should be, as Robin has alluded to. We're very heavily focused on driving these down. In some areas, we have multi-year programs like transfer agency, fund accounting, et cetera, which are businesses that are highly manual in nature, and we do have programs to make them more efficient. We'll come back to you when we finish the planning process. No, thanks for all that color. It's really helpful perspective. Maybe just for my follow-up on the deposit outlook. Emily, you noted that the non-interest-bearing outflows have been tracking better so far this cycle. As a percentage of total deposits, it's still fairly elevated at 28%. I believe last cycle it dropped somewhere around 22%. What's your expectation in terms of the pace of non-interest-bearing outflow? What's driving the better outcome this cycle? Where do you expect NIBs to ultimately trough this cycle relative to last? I think I've mentioned and we still, you know, believe that NIBs will ultimately revert to what we saw pre-pandemic, which would be about 20%-25% of our total deposit base. We actually think that that might happen here, you know, in the fourth quarter. In terms of, you know, why they've held, you know, so steady, I think some of that is probably, you know, risk off behavior. Some of that is just our businesses are, you know, a bit bigger. You know, ultimately, you know, what I would say is that, you know, we have seen when we look at our deposit trend overall, and this is, you know, very important, irrespective NIBs or IBs, the runoff we've seen thus far has been largely non-operational in nature, and that's actually good. You know, we're seeing the right runoff, and I think very much due to our, you know, what's become much more sophisticated pricing across clients and segments and businesses. Full color. Thanks so much for taking my questions. We will now take our next question from Ken Usdin from Jefferies. Please go ahead. Please go ahead, sir. Your line is open. Ken, we can't. Please ensure- Ken, we can't hear you. Please ensure your mute function is turned off to allow your signal to reach our equipment. Maybe we should move on. Yeah. Operator, let's move on to the next question and come back to Ken later. We will now take our next question from Betsy Graseck from Morgan Stanley. Please go ahead. Hi, this is Ryan Kenny on behalf of Betsy. Good morning. Morning. Wondering if you could give us some more color on the goodwill charge? What specifically was the driver of the charge this quarter, and does it give you more flexibility on your strategy and investment management? Sure. Happy to. First of all, let's be clear about what it is and what it isn't. It's not the outcome of any changes in our strategy. It's also not related to the pending sale of Alcentra, and it's also not a statement about the fundamental health of the business as we see it, today and going forward. It is the outcome of our regular impairment testing process, and it's a reflection of both the lower market values that we've seen across equity and fixed income markets, and also a higher discount rate. Inevitably wrapped up in your question is the strategy. Maybe I just recap for a second where we are on that investment management journey. As you know, over the course of the past 15 years or so, we've streamlined the investment portfolio. We used to have 27 independent investment management firms. That's down to seven, once Alcentra is closed. That helps us to sharpen our focus, as does the fact that we've improved substantially the alignment between strategy and the individual firms. We've realigned Mellon's investment capabilities into parts of Newton and Insight and Dreyfus. We think that helps make it less confusing for our clients externally and sharpens the focus internally. We're also investing in the types of solutions that, of course, people want in this day and age, and some of those outcome-oriented solutions, active ETFs, responsible investing. We talked about BOLD, I think, on our last earnings call. In the money market fund space, it's another example of that. Very importantly, in the investment management space, the investment performance has improved and remains healthy. Kinda that's where we are. Thank you. You're welcome. We will now take our next question from Alex Blostein from Goldman Sachs. Please go ahead. Hey, good morning, everybody. Thanks for the question. There's been a number of liquidity challenges in the market, and Robin, you alluded to those in your prepared remarks as well. As BNY serves obviously a fairly critical function in sort of the capital markets plumbing globally, what are some of the risks, I guess, you're most mindful of that we should be looking after? As you think about any opportunities that this kind of environment creates for the bank as well, we'd love to hear your thoughts on that. Sure. Alex, you know, we've got a bunch of different crosscurrents at the moment in the system. On the cash side, you know, we're coming off the back of QE. Central banks obviously driving very aggressively at inflation, clearly necessary given the continued prints. On the flip side, these two things don't necessarily always happen at the same time, which is what makes it complicated, we've got supply chain issues ongoing, geopolitics, energy prices, you know, risks of recession, you know, already very much front and center. We've got sort of a risk on and a risk off angles sort of happening at the same time. We've also seen some pretty unprecedented starting places for some of these markets. I think that's a little bit for us where we see some of the concern, which is that the usual toolkits around market stability aren't available in maybe quite the same way. You saw that in the U.K., where, just to take that as a microcosm for a second, their bond market goes through a little bit of tumult as a result of some news and the government actions. At the time, the Bank of England was still in the QT process, which they had to suspend to then go do some buying. You can't really be doing buying and selling at the same time. That's a good example of the fact that the toolkits aren't fully available. We look at the scale of moves in the market, and we look at the amounts of liquidity. Much has been done in the banking sector, particularly over the course of the past decade, post-financial regulatory reform. The regulators have been very much at it. Banks, massive amounts of liquidity, large amounts of capital, very well set up for this. If you have huge selling from other market constituents, there is a little bit of a question there of where are the buyers gonna be. We've seen, we see echoes of that in the UK market. There are legitimate concerns about that in the US market. If there was a significant episode as we've seen in the past, you know, what does that pivot looks like? To some extent, those are the consequences of having and benefiting from the most liquid markets in the world on a normal basis, and also being the place where people store their cash. When they want cash, they need it back and they're selling. The question becomes, who are the buyers? We've seen the Bank of Japan having to be sellers of treasuries as they defend their currency. There's a lot going on in the world, and it's a bit complex. I think we have a healthy amount of caution as we see all this play out over the course of the coming weeks and months. Gotcha. All right. Thanks. My follow-up just around the LDI dynamic again. Appreciate your comments around Insight on the asset management side. I guess as a servicer, curious how you're thinking about your exposure to U.K. pension plans on the asset servicing side of the business, either as custodian or, you know, middle or back office administrator. Any sort of implications for fees or deposits we should be thinking about as U.K. pensions post more collateral? Yeah, it's been pretty business as usual for us on the servicing side. As I mentioned before, that isn't the case everywhere. I think clearly there have been issues in that market, and there are a couple of providers who've had some more stresses associated with the massive upsurge in volumes, but that has not been our experience. Clearly, there is more cash in the market, generally. Look, let me just make a broader point about cash because I think it's a very interesting position for us as a company, the various different roles that we play in cash. Because, yes, we have deposits on our balance sheet, and that tends to be a lot of the focus that we talk about in terms of cash. We actually manage over $1 trillion of daily liquidity for our clients in markets all around the world. This goes way beyond deposits on our balance sheet. It goes to our money market fund business. It goes to our market-leading LiquidityDirect portal, which helps treasurers and other cash managers be able to direct cash through the system. We actually feel pretty well-positioned as a company on the topic of cash because sort of irrespective of exactly where the flow is heading, we sit ourselves in a little bit of an orchestration role in the middle of that, which we think is really quite good for our franchise over time. Great. That makes sense. Thanks for that. Thanks. We will now take our next question from Mike Mayo from Wells Fargo Securities. Please go ahead. Hi. Can you hear me? Yep. Yes, Mike. Okay, great. I'm going to ask my question, I think, which you're guiding a little bit lower for fees, but you're not guiding lower for expenses. I guess the answer is because you're looking to invest through the cycle, if you could validate that. Then just more on the digital asset custody platform. You said that custody of digital assets and crypto are simply the start of a journey. And there's a lot written pro and con as it relates to digital currencies. Clearly, you think this has legs. Maybe that's one reason why you're going to invest maybe more even with softer fees. But if you could elaborate on that. Sure. Mike, I'll take the whole thing. First of all, in terms of NIM, we're not re-guiding on expenses. Emily said that the original guidance of 5%-5.5% is intact, but she also said that we're aiming towards the lower end of that range. That's meant to be sort of a vote of confidence in our own active management of expenses, which we're really driving at. You know, we are very, very focused, as Emily said earlier on this journey. You should expect us to continue to give you updates on how we do on that over time. Let me talk a little bit about digital assets, because it is a very important question, and I tried to stress this in my prepared remarks around the fact that it really isn't just about crypto. One of the things that we did recently was we did a survey of large, institutional, asset managers, asset owners, hedge funds. About 40% of them already hold crypto in their portfolios. About 75% of them are actively investing or exploring investing in digital assets. Here's the important stat, which is over 90% of them are interested in investing in some type of tokenized asset within the next few years. What we've heard from our clients is they want institutional-grade solutions in the space. The way that we think about the world is, yeah, sure, there are cryptos, and those are things that are clearly have had a lot of spotlight recently. We view the tokenization of other types of assets, whether they're traditional financial assets or maybe assets that haven't been as easy to manage in the financial system, like, you know, like hard commodities, real estate, forests. There are all sorts of things. You could think about certificates and with the world of ESG, some of those things could be much better managed using tokens. Then also tokenized currencies, where real currencies, fiat currencies, or proxies for fiat currencies, we also think could be quite interesting. Now, all of this is over the course of the next few years. The actual dematerialization of assets from paper into technology back in the sixties and seventies took a long time to actually happen. It was not coincidentally happening with the rise of computing in business. Now we've got a new technology. The rise of that in business, we think is gonna be important, but I'm not gonna put an exact timescale on it, but it's years, maybe it's even decades for full adoption. We thought that with a longer-term view, this was an important space. Now, we're not spending a ton of money on it, but we're deliberately investing in small places in that ecosystem so that we are prepared to be there for our clients over the long term on this important journey. What was the tipping point, just as a follow-up, the tipping point for you to really, you know, highlight this? I mean, this is, you know, front and center here. This was the third area that you mentioned investing. You You said Pershing X collateral, digital assets, real-time payments. This was number three on your list. Certainly it's moved up in priority. You know, crypto has been around a little while now. What was the tipping point here? Was it a new survey of your clients? Did you see something in the market? What's changed? The answer to your question is client demand. Our clients want institutional-grade custody and solutions in this space. You know, I enjoyed a quip that I read in the media maybe a year or so ago, which is, you know what? It's not a real asset until BNY Mellon say they'll look after it. Got it. Thank you. We will now take our next question from Brennan Hawken from UBS. Please go ahead. Good morning. Thanks for taking my questions. A couple follow-ups on deposits. Emily, you've previously indicated that you had expected by the fourth quarter that deposits on an average basis would be down 5%-10%. They were actually down. They're already down 7% based on the 3Q average. Should we still think about that range of 5%-10%, or might that end up being different? Maybe if you could update on how beta is tracking and your expectation there too. Sure. Good morning, Brennan. You're correct. I did guide, I think it was around second quarter, that we'd expect a decline of about 5%-10% by, well, average to average Q2 to Q4. In the third quarter, as you also rightfully point out, deposits down 7%. Now, that's in part due to the strengthening of the U.S. dollar, which was a headwind of about 1%, and also just seasonality, just that you normally see lower deposit levels in the third quarter. For the fourth quarter, you know, we are anticipating a decline of about, you know, 3%-4%. As I mentioned before, we expect it to be mostly in NIBs as, you know, the percentage of NIBs as a total of our deposit base kind of reverts back to pre-pandemic levels. Like anything, you know, there are, you know, there's a lot of uncertainty out there, so this is, you know, what we are anticipating based on the forward curve and ultimately what we have been seeing so far in the, you know, so far this year. In terms of betas do continue to be a little better than we had anticipated. Just as a note, they do vary widely by line of business. You know, treasury services and markets, you know, are certainly have much higher betas than, say, asset servicing or corporate trust. It's just, you know, important to keep that in mind. Looking ahead, you know, we do expect, you know, marginal betas to continue to ramp higher as rates continue to rise. You know, but at the end of the day, we do think that they will largely retrace what we saw in the last cycle, and so ultimately end up higher than where they are today. Again, I would just say that's just another factor, you know, whether it's, you know, deposit balances or betas, you know, those are all factors that are somewhat uncertain based upon the macroeconomic backdrop. Yeah. Okay. Thanks for that. Another sort of related question, helpful to get the full year 2022 NII expectation for sure. When we step back a bit and think about, I know it's too early to comment on next year, but just sorta generally speaking, you know, at this point, we've gotten back to triple digit NIM. Rates continue to be pretty robust. You know, you think your beta is gonna largely retrace last cycle, as you just said. You know, is there any reason why the NIM can't retrace the prior cycle NIM? When we think about the securities reinvestment tailwinds for 2023, you know, any reason why once policy rates stop moving higher, you know, you're gonna largely see some stabilization because that's what kicks off most of your deposit repricing, and then you've got a tailwind from reinvestment that continues to flow through into 2023. Is there anything wrong with thinking about things that way? You know, how long do you think it might take for the NIM to, is it possible to retrace the last cycle and how long do you think that might take? Well, there's a lot there, so let me try to unpack it a bit. As you know, as you have seen from our financials, we've seen several consecutive quarters of sharp increases in NIM. We do expect another step up in the fourth quarter and even beyond the fourth quarter, based on a lot of the factors that you mentioned. You know, we do expect that NIM will continue to expand, but probably at a slower rate. In terms of portfolio positioning, you know, we do actually think that rates will continue to surprise to the upside. We're therefore really positioned for greater asset sensitivity. But of course, we'll continue to be nimble there. you know, as we think about the portfolio overall, obviously we're managing it with the objective of, you know, optimizing capital liquidity as well as NIR. Okay. Thanks for that color. We will now take our next question from Brian Bedell from Deutsche Bank. Please go ahead. Great. Thanks. Good morning, folks. Morning, Brian. Good morning. That was kinda my question on net interest income as well. Maybe just one point on that, just a technical on the Fed funds purchased spread that's on the asset and liability side. I see that spread went up to about $72 million in 3Q versus $38 million in the second quarter. I guess, how should we think about that book as more of a matched book with a spread sorta contained in that area or actually is that poised to dramatically rise in the next couple quarters? Yeah. I think on that particular question, I think it's just best to follow up specifically with IR. Okay. If you're asking more, you know, specifically about the kind of the outlook for NIR, which is kind of the broader-based question, you know, based on, you know, the forward curve that we see today, we would probably expect some growth from our Q4 exit rate. Just to kind of talk a bit about the drivers there, you know, of course, as I mentioned earlier, we expect central banks to continue to increase rates, and they'll probably remain elevated for most of the year. We do think that a large majority of the deposit outflows will be, you know, behind us by year-end. You know, again, that's largely because our client base is institutional, more rate sensitive than sensitive to the size of the balance sheet. We could have a little bit more runoff, but you know, we do expect also some organic growth, NIBs, as I've already talked about, and marginal betas will increase. All of those factors just are kind of coming into the fact that we would expect you know, some growth from our fourth quarter exit rate. Of course, lots of uncertainties. Yep. No, that's great color. Maybe if I can pivot to the organic growth initiatives that you talked about in your prepared remarks, Robin. Maybe if you could just focus on real-time payments. You've talked a lot about Pershing X recently and of course, the digital platform. But maybe just if you can talk a little bit about sort of what you're thinking in that area and you know, to what extent you think these initiatives can enhance that organic growth rate. I don't know if it's too early to put out a target there for you know, 2% or 3%, or do you think you know, we're gonna stay in this sort of 1% plus range for a little while? It's a little too early for a specific target. As I mentioned in my prepared remarks, we're working through all of the various different businesses, understanding the priorities for each one. As we come out of all of that, we'll have a better sense on that part of the question. Let me talk about real-time payments because I think this is quite interesting for a few different reasons. You know, it is a new payment rail, and whenever there's a disruption or a change in the ecosystem, you have some degree of change in sort of the established order or at least the opportunity for that disruption. For us, we think that those opportunities don't come along every day. We're quite focused on taking advantage of that. It's also part of a broader solution set because providing faster payments is nice and safer payments is good, but when it's combined with the ability to do digital invoicing in the request for payments, and when that's combined with payment validation, fraud protection, and other data services, they can become very interesting solutions for clients. We view ourselves as not just a payment provider, but a platform provider for entry into the banking system. We think this is where it overlaps very nicely. You'll remember that we cover 97% of the world's top 100 banks. That makes us, with that installed customer base and then the leadership on the product side, it makes us a very appealing partner for fintechs and regional banks as they are thinking about wanting to take advantage of all those capabilities, but either because they don't actually wanna be a bank in the case of some fintechs or in the case of the fact that it's very expensive to make all of this investment, and we've done that. In the case of other regional banks, we're now providing access to RTP, Zelle, account validation, soon to be FedNow white label solutions, and with the real-time invoicing. We think that whoever gets that collective set of rails up and running really frankly has an advantage. As you know, we were the first bank to make real-time payments. We were the first to launch a real-time e-billing, and we're leading in the whole process with FedNow as part of that rollout as well, working very closely with the Fed and other banks as well. It's for all of those reasons that I think this is an interesting space. We haven't put a number on it, but we're certainly getting franchise traction. That's great color. Thank you. Our final question comes from Gerard Cassidy from RBC Capital Markets. Please go ahead. Thank you. Good morning, everyone. Emily Good morning. Can you share with us your way you guys are managing your securities portfolio and view? I think you said you think rates will be going higher, as we go forward. In terms of the strategies of moving some into held to maturity versus available for sale to protect you on the AOCI. As you go forward, how are you looking at the AOCI issue? Sure. You know, as I did say before, we do expect the environment to remain volatile and actually rates to continue to surprise to the upside. You know, frankly, we really would need you know, some change in tone from central banks or, you know, some evidence that inflation is declining, probably to change our view on that. We are continuing to position the portfolio for greater asset sensitivity. Year to date, we have reduced DV01 by about 50%. Duration is also the lowest it's been in a really long time. You do mention that, you know, certainly we did also take measures earlier in the year to protect against AOCI volatility. We did move a portion of the portfolio. About 40% of it now is in held to maturity. That certainly has helped with diminishing AOCI, you know, unrealized losses. They would have been more, of course, than they have been if we had not taken that action. But ultimately, the portfolio is positioned for greater asset sensitivity. Having said that, you know, we are gonna be very, very nimble. Should the environment change, you know, we do benefit actually from the fact that 60% of the portfolio is designated as available for sale and has a short duration, so we can be pretty flexible and act very swiftly. Does it make sense since you have so much in available for sale, you're an advanced approach bank, so it's already going through your CET1 ratio to actually take some realized losses and then redeploy those funds at higher yields? We feel very comfortable where we are in terms of held to maturity. We really wanna retain, you know, flexibility and also, you know, certainly, you know, want the flexibility around not only managing interest rate risk, but of course, liquidity as well. Very good. Just as a follow-up question, I know you've touched a lot about your deposits today in your answers to questions. Just one last question on deposits. QT now is in full speed operation here in the United States. Have you noticed any change in the deposit outflows since we've gone to the $94 billion-$95 billion a month? How do you think, and I know you pointed out deposits are gonna come down in the fourth quarter, but when you look out to next year, is that going to change your thinking at all, or is it behaving as you expected? Yeah. I think as I indicated, you know, deposit outflows are behaving pretty much as we anticipated. We do think the lion's share of the runoff will be behind us by the end of this year. You know, why we think that, you know, our client base is predominantly institutional in the past, and even now they've proven to be much more sensitive to rates than actually just the size of the Fed's balance sheet. Also, just as a reminder, our businesses are much bigger. They've grown significantly since what we've seen in the last cycle. You know, treasury services is much bigger. AUCA and asset servicing is much bigger. With that comes, you know, just naturally more deposits. Even what we've seen in the runoff, as I suggested or said before, it's been mostly non-operational. I think we feel pretty good about our expectations here and that the large majority is behind us. You know, having said that, could there be more runoff? Yes. I mean, there's so much uncertainty, whether it's, you know, you know, interest rate volatility, the levels of the RRP, you know, macroeconomic uncertainty in general. You know, that's our best guesstimate based on the forward curve of what we've seen thus far. Great. Thank you. With that does conclude our question and answer session for today. I will now hand the call over back to Robin with any additional or closing remarks. Thank you, operator, and thank you everyone for your interest in BNY Mellon. If you have any follow-up questions, please reach out to Marius and the IR team. Be well. Thank you. This does conclude today's conference and webcast. A replay of this conference call and webcast will be available on the BNY Mellon Investor Relations website at 2:00 P.M. Eastern Standard Time today. Have a great day.