Good day, and welcome to the Northern Trust Corporation Fourth Quarter 2023 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jennifer Childe, Director of Investor Relations. Please go ahead. Thank you, Ruth, and good morning, everyone, and welcome to Northern Trust Corporation's fourth quarter 2023 earnings conference call. Joining me on our call this morning is Mike O'Grady, our Chairman and CEO, Jason Tyler, our Chief Financial Officer, John Landers, our Controller, and Grace Higgins from our Investor Relations team. Our fourth quarter earnings press release and financial trends report are both available on our website at northerntrust.com. Also on our website, you will find our quarterly earnings review presentation, which we will use to guide today's conference call. This January 18 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 February 18. 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 13 of the accompanying presentation, which will apply to our commentary on this call. 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 Mike O'Grady. Thank you, Jennifer. Let me join in welcoming you to our fourth quarter 2023 earnings call. Similar to the last few years, 2023 presented a challenging operating environment. We experienced a combination of geopolitical instability, highly visible bank failures, and elevated inflation and interest rates. I would like to thank our teams across the company for their tireless efforts to serve our clients under these difficult circumstances. Turning to our numbers. Our fourth quarter results capped off a solid year of progress towards driving improved long-term financial performance. On a year-over-year basis, reported fourth quarter revenue was $1.6 billion, expenses were $1.4 billion, and earnings per share were $0.52. Our performance in the quarter included the impact of $261 million in notable items. Adjusting for the notable items in both periods, fourth quarter revenue on a year-over-year basis was flat, with trust fees up 5% and expenses up 3%. We focused much of our efforts in 2023 on expense control, making various structural and governance changes to enable sustained long-term productivity improvements. Actions included disciplined headcount management, vendor consolidation, rationalization of our real estate footprint, and process automation. Although we brought our year-over-year expense growth down in each quarter this year, our expense growth in 2023 was still too high relative to our trust fee and revenue growth levels in recent years. As such, lowering the trajectory of our expense growth further remains a top priority this year as well. Turning to the businesses, our organic growth continued to be below historical levels, although we saw improvement throughout the year. Within wealth management, for the fourth quarter in the year, solid growth in client advisory fees was largely offset by product-level asset outflows. We continued to see ongoing strength in the higher wealth tiers above $50 million in client assets, where our expertise, track record, and industry leadership are significant differentiators. Our ability to harness the data and analytics from serving the wealthiest people in the world for more than 130 years, coupled with our holistic, advice-driven culture, sets us apart in the marketplace and will continue to be an important driver of our success. Drawing from our experience working with some of the most sophisticated families around the globe, next month, the Northern Trust Institute will publish its first book, Secrets of Enterprising Families. The book will provide a window into what works for ultra-high net worth families who have succeeded generation after generation, and what doesn't, to help other families gain important insights and unlock value. The book will be launched with a series of client and prospect events around the country, giving us a new channel to establish relationships and develop business. Finally, as a testament to our exceptional client service and expertise, in 2023, we were named Best Private Bank for Family Offices in the U.S. and Best Private Bank for Succession Planning in the U.S. by the Financial Times. Asset servicing generated solid new business growth in both the fourth quarter and full year, but this was largely offset by continuing asset outflows at the client level and generally lower transaction volumes in capital markets activities. We performed particularly well with asset owners in the Americas in the fourth quarter. Notable wins included the State of Nebraska Investment Council Pension Plan and Costco's Retirement Plan. We were also reappointed as asset servicing provider for the Healthcare of Ontario Pension Plan. Throughout the year, we also generated healthy momentum with asset managers in the U.K. and EMEA regions, where our solutions for alternatives and private credit were particularly well received. We recently finalized terms with one of the world's largest private markets firms, which will add significant scale to our alternatives division. This appointment is a testament to our ability to successfully compete for some of the largest and most complex mandates. Our asset servicing business received numerous awards in 2023 for its innovation and industry leadership, including Best Outsourcing Provider by Waters, European Transfer Agent of the Year and Administrator of the Year by Funds Europe, Best Global Custodian for Asset Owners by Asian Investor. In asset management, following several quarters of client outflows, we generated positive overall inflows in the fourth quarter, including healthy growth in index equity and our fourth consecutive quarter of positive liquidity inflows. We've seen particularly good momentum in our high yield complex, with 93% of our taxable active funds outperforming their one-year benchmarks. Our alternatives funds have also continued to generate solid growth and remain an important driver of our fee revenue. As a result, our product launches during the year focused largely on alternatives capabilities. In closing, we enter 2024 with positive momentum, well-positioned to navigate the ongoing macroeconomic and market uncertainty. Our focus is squarely on accelerating profitable organic growth, maintaining our expense discipline, and driving greater resiliency and efficiency in our operating model. With that, I'll turn it over to Jason to review our financial performance. Jason? Thank you, Mike. Let me join Jennifer and Mike in welcoming you to our fourth quarter 2023 earnings call. Let's dive into the financial results of the quarter, starting on page 4. This morning, we reported GAAP fourth quarter net income of $113 million. Earnings per share are $0.52, and our return on average common equity was 4%. As noted on the slide, our reported results included a $176 million loss on the sale of securities related to a repositioning of the portfolio that we completed in November. They also included an $85 million FDIC special assessment. Our assets under custody and administration and assets under management were up sharply on both a sequential and year-over-year basis. Strong equity and fixed income markets, coupled with favorable currency movements, drove most of the improvement in both periods, offset slightly by asset outflows in both periods. Given the intra-period market movements and lag effects of our fee arrangements, markets had an unfavorable impact on sequential trust fee growth and a favorable impact on year-over-year trust fee growth. On a year-over-year basis, currency movements had an approximate 90 basis point favorable impact on revenue growth, largely within our asset servicing segment, and a 110 basis point unfavorable impact on expenses. On a sequential basis, currency impacts were immaterial. Excluding notable items in all periods, revenue was flat on both a sequential quarter and year-over-year basis. Expenses were well controlled, up 1.9% sequentially and up 2.6% over the prior year. Trust, investment, and other servicing fees totaled $1.1 billion, 2% sequential decrease and a 5% increase compared to last year. All other non-interest income on an FTE basis was down 6% sequentially and down 5% over the prior year. Net interest income on an FTE basis was $501 million, up 7% sequentially and down 9% from a year ago. Our provision for credit losses was $11 million in the fourth quarter. Overall, our credit quality remains very strong. Net charge-offs during the quarter were $2 million. Non-performing loan levels decreased to $64 million from $69 million in the prior period, and non-performing loans as a percentage of total loans remained stable. Turning to our asset servicing results on page 5. Assets under custody and administration for asset servicing clients were $14 trillion at quarter end. Asset servicing fees totaled $612 million. Custody and fund administration fees were $420 million. Assets under management for asset servicing clients were $1 trillion, and asset management fees within asset servicing were $131 million. Moving to our wealth management business on page six. Assets under management for our wealth management clients were $423 billion. Assets and trust, investment, and other servicing fees for wealth management clients were $478 million. Moving to page seven in our balance sheet and net interest income trends. Our average balance sheet decreased 3% on a linked quarter basis, primarily due to lower borrowing activity. It declined 8% compared to the prior year due to lower client deposits. Average deposits were $102 billion, essentially flat with the prior quarter and meaningfully better than our expectations. We experienced a stronger than anticipated increase in deposits late in the quarter, ending the year at $116 billion. At quarter end, operational deposits comprised approximately two-thirds of institutional deposits, and institutional deposits comprised 75%-80% of the total mix. Despite significant leverage capacity, we reduced our average borrowings by $4 billion relative to the third quarter, or nearly 4%, reducing both our FHLB advances and Fed funds purchased. Shifting to the asset side of the balance sheet, $3.2 billion securities repositioning we completed in November involved the sale of both high-quality liquid assets and non-high-quality liquid assets available for sale securities with a weighted average maturity of 2-3 years. Earlier this week, we completed another $2.1 billion repositioning, which enhances our flexibility given the dynamic rate environment. We'll record an associated loss in the first quarter of approximately $200 million. The proceeds of both sales were invested in short floating rate securities, further reducing the duration of the portfolio, which is now 1.8 years. Average loan balances were $42 billion, flat both sequentially and relative to the prior year. Our end of period loan balances were up $4 billion or 9% over the third quarter, reflecting an increase in overdrafts related to higher levels of year-end trading and settlement activity. Our loans have since returned to $42 billion. The heightened activity at the end of the quarter did not have a material impact on net interest income in either the fourth quarter or first quarter. As a reminder, approximately 75% of the loan portfolio is floating. The total balance sheet duration continues to be less than a year. Our average liquidity levels remain strong. Cash held at the Federal Reserve and other central banks was down, reflecting the decrease in borrowings. But high-quality liquid assets comprise more than 50% of our deposits and more than 40% of total earning assets on average. Our net interest income in 2024 will continue to be driven largely by client deposit behavior, which has been less predictable given the unique aspects of this rate cycle. We expect the November and January securities repositioning to provide an incremental $30 million in net interest income per quarter in 2024 relative to fourth quarter levels. We currently expect first quarter net interest income to be in the range of $480 million to $500 million. This assumes deposits remain stable, but deposit pricing continues to be under some pressure, with further NIM compression possible as long as quantitative tightening persists and the deposit environment stays highly competitive. Turning to page eight. As reported, non-interest expenses were $1.4 billion in the fourth quarter, up 9% sequentially and up 5% as compared to the prior year. Excluding notable items in both periods, as listed on the slide, expenses in the fourth quarter were up just under 2% sequentially and under 3% year-over-year. I'll hit on just a few highlights. Excluding all notable items, compensation expense was up 2% year-over-year. This reflected the impact from 2023 base pay adjustments, partially offset by reductions in incentive compensation and headcount actions taken year to date. Full-time equivalent headcount was down 200, or 1% sequentially, and down 500, or 2% over the prior year. Excluding notable items in all periods, non-compensation expense was up 3% year-over-year. Equipment and software expense was up 10% year-over-year, largely due to increased amortization expense. Recall that as much as two-thirds of this line item is comprised of depreciation and amortization expense. Finally, we realized 200 basis points of trust fee operating leverage in the quarter. Turning to the full year results on page 9. Trust fees were down 2% in 2023, largely due to asset outflows and weaker transaction volume, partially offset by the elimination of rate-driven fee waivers and new business generation. Excluding the impact of the two securities repositionings, other non-interest income was down 9%, reflecting weakness in foreign exchange trading and other capital markets activities. Net interest income was up over $100 million or 6%, which largely offset the decline in the other non-interest income categories. This translated to flat total revenue growth. Reported expenses were up 6% for the full year to $5.3 billion. Excluding notable items in both periods, as listed on the slide, expenses were $5.1 billion in 2023, up 4.8%, which compares favorably to 2022. As we've noticed previously, we expect to bring the expense growth rate down further in 2024. We have clear line of sight to two key areas of increase: base pay adjustments within compensation expense and depreciation and amortization increases within equipment and software. On a blended rate, we expect to provide base pay adjustments of approximately $65 million in 2024, which will hit our compensation line beginning in the second quarter. This compares to base pay adjustments of $80 million in 2023. Within equipment and software expense, we expect a $65 million or 10% increase in 2024. Combined, these two line items will drive approximately 3% increase in operating expenses above 2023 levels alone. That said, we expect to continue to generate meaningful efficiency gains from our productivity office and have identified further opportunities for improvement. As we look out to the first quarter, we expect the following: First quarter compensation expense will include our annual equity incentive payments, including those for retirement-eligible employees, along with modest employee headcount growth associated with growth in the underlying businesses. This should translate to a sequential increase of $50 million to $55 million. Employee benefits expense is expected to increase by approximately $10 million due to seasonally higher payroll taxes. Turning to page 10. Our capital levels and regulatory ratios remained strong in the quarter. We continue to operate at levels well above our required regulatory minimums. Our Common Equity Tier 1 ratio under the standardized approach was flat with the prior quarter at 11.4%, as capital accretion offset a modest increase in risk-weighted asset levels. This reflects a 440 basis point buffer above our regulatory requirements. Our Tier 1 Leverage Ratio was 8.1%, up 20 basis points from the prior quarter. At quarter end, our unrealized pre-tax loss on available-for-sale securities was $924 million. We returned over $300 million to common shareholders in the quarter through cash dividends of $156 million, and common stock repurchases of $146 million. For the full year, we returned approximately $980 million to common stockholders, including common stock repurchases of approximately $350 million. With that, Ruth, please open the line for questions. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. Please limit yourself to one question and one follow-up. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star one to ask a question. We'll pause for just a moment. We'll go first to Glenn Schorr with Evercore. Morning, Glenn. Hello there. Good morning. So I appreciate all the, all the numbers you helped us with. I'm going to try to peek a little bit more under the covers. So deposits stable. Heard your thoughts on 1Q NII, on the further deposit pricing pressure. So the question is, as we go throughout the year, do you have, do you have any window into, that stability and deposits sticking around? And, and then with the combination of 75% floating rate loan book and still pressure on deposits, is it, is it reasonable to assume that NII might go, you know, down in, in second quarter forward before stabilizing later in the year and, and rising? I, I know that's a little bit further look into the future, but. Yeah, but it's—I think it's a very reasonable way to frame looking out farther into the year. And you're right, it's for us to say full year numbers at this point; it's just too early. But it is good to think about how the assets and liabilities are going to react with looming rate cuts. And I think it's helpful to think back on how the impact in NIM occurred with rates rising initially was very different than what happened eventually when betas were much higher. And I think on the way down, we might have a similar situation where the first cuts may be different than the later ones. And two things jump out in my mind. One is we have never tried to be a price setter in deposits. Our goal has always been to keep the deposits in the house, and we were very aggressive at following what we saw market pricing was. And the second thing is that as we get these initial cuts, we could see the market reacting in a way to keep deposit costs, deposit yields for clients higher to hold on to deposits. And so I think initially might be tougher than what happens eventually. Now, you know, all that said, volumes matter a lot, and it's obviously been extremely hard for us to predict where volumes were going to go. And we saw October better than we anticipated. November was better than October, December was better than November, and so volumes are going to be critical in what happens in the first half of the year, and it's just super hard to predict. I definitely appreciate that. This one might be a little bit easier. The follow-up is on Fee Operating Leverage. I mean, just by means of pricing alone or the markets alone, the markets had a strong end to the fourth quarter, so your fee run rate should probably be a lot better going into the first quarter and with your comments on even more sharper discipline on expenses. Could you expect to make some meaningful progress early on in the year in this fee to expense ratio? Yeah, you're right to call out that there's a lift, the launch point's higher coming into the year. And I don't know if I'd say meaningful, but it's definitely higher, and the lag effects will help us as we walk into the year. And so that's the math of it. But then more strategically, we do feel positive about the pipeline in both asset servicing and in wealth management. And underneath both businesses, our asset management business is incredibly important. And Mike mentioned in his commentary some early signs of flows back in, and we always think, just as we do on deposits, just keep the money in the house, keep the client assets in the house. But if our asset management business does better, then that helps as well. And so I think the strategic component is also we're feeling early signs of some positive movement from an organic perspective. ... We'll go next to Steven Chubak with Wolfe Research. Excuse me. Good morning, Steven. Hi, good morning. So I was hoping to maybe just unpack, like, the deposit discussion a bit further, and specifically just get a sense as to how you're thinking through the impact of ongoing Fed QT. It does feel like a lot of the liquidity in the system has come out of RRP. That's provided a bit of stability, or at least has helped drive better deposit resiliency over the last six months. But with the RRP expected to be exhausted over the next, call it 3-4 months, just wanted to get a sense, once that happens, how you expect deposit flows to ultimately trend? Yeah, I'll start, and Mike may have thoughts, too, 'cause we talk about this a lot, and it's more predictive than it is quantitatively spitting out results, frankly. But you're right that my sense is that the RRP program had a really significant impact on deposits. And it was effectively competing with banks for deposits, and now that it's come down, I do think that that's been a help. Now, from here is different, and I think we have to think about the fact that rate movements are going to also have an impact on how clients think about deposits. And with the deposit costs having gone up so much in the second half of the year, again, that was that had a big impact on deposit costs and client behavior, could see that having an impact this year as rates come down. And so I think it's not just the RRP program, but how clients think about instead of 5% rates, how they think about 3% rates, and comparing that to maybe more of a risk on trade. And so I think we've got to think both about the program and the rate environment. Yeah, and I would agree with what Jason said there. And just as there was, you know, transition on the way up with QE, there's going to be a transition on the way down. Unchartered territory, you know, for everyone on QT and how they go about that and when they might stop, you know, more aggressively seeing their portfolio come down. So I think that the timing of that will matter. And then also we saw with client behavior, that, you know, as rates went up, more of the liquidity moved into Treasuries, and that had an impact on us. And as we come down, I think over time, a lot of the funds that have moved into Treasuries, you know, will start to move into other alternatives. As Jason said, our objective is to work with the clients and really try to meet any of those needs and keep the dollars in the house. That's great. And just for my follow-up, the duration on the asset side of the balance sheet admittedly has been a little bit more volatile, especially given some of the repositioning actions you talked about. The asset betas with rate hikes were quite elevated for you guys and some of your trust peers as well. Just wanted to get a sense as to what percentage of the asset side of the balance sheet, if we took a snapshot today, is sensitive to movement in short rates as we do prepare for eventual rate cuts? We can do it in three buckets, and if you just take cash, obviously 100% of that. The second, loans in roughly three-quarters are rate sensitive. And you think about the securities portfolio, and I'll give you two numbers to play with. One is the duration is meaningful. It, at now about 1.8, but also just the weighted average maturity of the portfolio, I think is also helpful, which is a little under 4 years. And we quote this balance sheet duration, that's just us doing a weighted average across those effectively, just to give a sense of the impact of the large size of the cash component and the large floating component of the loan book. Jason, can we just clarify what percentage of the securities book today is floating? Yeah, it's about a third of the book is floating. It is floating. We'll go next to Alex Blostein with Goldman Sachs. Hey, Alex. Hey, Jason. Hey, Mike. Good morning, everybody. Just building on Steven's questions for a second. You know, I guess given the fact that rates are expected to come down and you guys have actually been, I guess, shifting the balance sheet to be maybe a little bit more floating for the right reason, and obviously been a good trade for NII for last quarter, this quarter. Any expectations to actually start locking in higher yields going forward and maybe extending duration a little bit? I know this is pretty quick. You guys have just kind of gotten the other way, but the balance sheet effectively became a little more floating as rates are about to come down. So just curious how you're thinking about that. Yeah, it's on our mind a lot, and as we're talking about it, and we have brought the duration down, and one of the benefits of that is that it does make us just a lot more flexible because the markets have been really dynamic. And so there will come a time when I anticipate where we would say it's time to step out a little bit. Our bias over the last year has obviously been to go shorter, and that's played out. I think the way rates have played out, we had a view and not materially, but it worked in our favor. But from here, I think we do have to think about... It's not locking in as much as just taking the downside risk off the table of a dramatic reduction in rates. And so there's some component there that we'd say we can naturally hedge against. I got you. Makes sense. I wanted to follow up on my second one, just around the expense outlook. Twenty-three was super noisy. There's a bunch of one-timers, obviously. So just want to clarify a couple of things. So I guess the ultimate message is that 2024 expense growth expected to be lower than 2023. I think the core expense growth in 2023 was about 5%, so just want to confirm that. And then the core base you're speaking to, is it still kind of $5.1 billion to maybe $5.2 billion in sort of, you know, core expense base off of which we should think about 2024? Yeah. So confirm the 2024—the 2023 number we think of is 5%, just a little bit less than that, right at about 4.8%. And we are working from a base in 2023 of 5.1%. And if you and probably worthwhile to invest a minute and just explain, because you're right, there have been a few things. So if you walk the reported $5,284 million, and then you take out in the year severance-related charges with two occupancy charges that totaled about $13 million. There was that client capability write-off we mentioned in second quarter, $26 million; FDIC special assessment, $85 million. And then there was a small equipment credit of $4 million in the third quarter that we mentioned as well. And the severance-related charge in Q2 is $39 million, just to make sure I give you the numbers on everything. That tells us we'd work from a base of 51. We'll go next to Brennan Hawken with UBS. Hey, Brennan. Hey, good morning. Thanks for taking my question. Would love to follow up on that, on that last question, actually. So, thanks for clarifying the base. That's helpful. You—number one, just to confirm, you did mention that I think it would be inclusive of adjusting for the write-off of the, of the client capability. Just want to confirm that. And just to clarify the message on the investing, super clear that you're looking to drive expense growth lower than you saw in 2023, but you also laid out an uplift of 3% from base pay and software. So does that represent like a floor to growth, or do you have sufficient levers to offset at least some of that? It's not a floor, but it does give you a sense of what's already in the 2024 base from which we're working. And so we've got to use productivity to get aggressively at that. Some of our productivity work is already reflected in that, but we've got to do more this year. And I just want, we wanted to be super transparent in the things that we already know that are in the 2024 increase so that you guys can predict what that level is. Okay. And is the write-off of the capability that was in other operating expense part of the adjustments, too? Sorry if I missed that. Yes. Our next question comes from the line of Mike Brown with KBW. Mike? Hey, Great, good morning. Thanks for taking my questions. The sequential increase in the non-interest-bearing deposits, that was a positive to see this quarter. Can you just touch on maybe some of the key drivers there? Was this supported by some of the new business activity that you referenced in the prepared remarks? And then, you know, I appreciate the comments on the deposits and the potential for the stability here near term, but I guess focusing on the NIBs, can they stabilize at this level, either in terms of like an absolute dollar basis or as a percentage of the total deposits? My observation in looking at it is that it's, it's less percentage-driven and more, what is that base? And the reason I mention it that way is a lot of that NIB, it comes from one of the channels in our institutional business, and it actually performed better than the rest of the institutional business in looking at it over the last few weeks. And so it just tells me that that client, that sub-client channel behaves on its own, and it looks like that has flattened out somewhat. Not necessarily calling it a plateau at this point, but it certainly behaved a little bit better than the rest of the institutional book. And another component is the wealth book, which that deposit base increased in the quarter. It was not dramatically, but it was nice to see that up on average. And obviously, we saw overall the whole deposit book very flat, but nice to see that the wealth book doing well, because even though the non-interest-bearing is obviously highly attractive economically, the wealth deposits are very attractive as well. Not at zero, but they're very attractive, and that component did well on the quarter. ... Okay, great. Thank you for those thoughts, Jason. I guess on the servicing side of the business, I was hoping you could maybe just touch on the competitive landscape and the alternative asset side of the business. How do you think about maybe that opportunity for Northern Trust, and if you could just talk about your capabilities today and maybe where you're investing to, you know, take some share in that space? Yeah, Mike, so I'll address that. We believe that the alternative space or, you know, broadly speaking, just private markets is a major opportunity for us on the asset servicing side. And, you know, that largely follows with what's happened in the marketplace from an investor perspective. And so we expect that market to grow, and we think we have the value proposition that is compelling within that. You heard in my comments earlier that, you know, we recently won a very large mandate with one of the large private markets firms, and it was after an exhaustive process that we went through to win that business. Very capabilities-oriented, very global as to the capabilities necessary and the footprint necessary to do it. So again, it's an area of focus for us and one where we think we're going to be able to continue to grow as the market grows and as we're able to take share. Thanks, Mike. I appreciate the commentary there. Sure. We'll go next to Ryan Kenny with Morgan Stanley. Hi, good morning. Have a question on capital. So your CET1 ratio, 11.4%, it's well above the regulatory minimum, well above last year's level. And then we got the comment letter from Basel Endgame a couple of days ago, and there's clearly a lot of industry pushback there. Your earnings generation from NII looks a little bit higher than consensus expected. So putting that all together, how should we think about how Northern's approaching buybacks this year and this quarter? Is there any room to maybe lean in a little bit there? Sure. So you're right in the tee up of the numbers, there's obviously room. We did a fair amount of buybacks in the quarter, a little bit more than we do on average, and we're always looking at that relative to other opportunities we have to invest capital. And so in the near term, we're thinking about, does it make more sense to invest in RWA effectively, to say we could grow the loan book more, we could do more in FX, we could do more in sec lending, or do we want to reposition, take a different repositioning in the securities portfolio? The repositionings we did this year were all helpful to capital because in going shorter, we and out of non-HQLA into HQLA on net, we those were all helpful to capital. But you also know how closely we look at peers, and we, we take pride in the capital levels we have. We think it's part of our financial model and our business model, and talking to clients and being able to evidence to them how strong the capital base is. And so there's definitely room, but I w-we also got to have in mind that Basel Endgame, which you referenced briefly; it's still unclear. We did do a comment letter, which you referenced, but it's unclear what the impacts are going to be. We, we think we're in good position relative to peers, but want to keep an eye on that. But we're, we'll also think about additional stock repurchases as we always do, given alternatives we have. Okay, great. And can you also update us on your expectations regarding ability and timing to dispose of the Class B Visa shares? And would that potentially have any impact on capital and buyback outlook? Yeah. So just for people who don't follow it as closely, we own just over 4 million Visa B shares, and at the current exchange rate, that translates to about $1.7 billion. And there's a proposal that is going to be voted on next week, I think, that would enable the B shareholders to monetize half of the holdings. So what are we planning to do? One, there's, at this point, there's nothing to do. The, the proposal is still outstanding, and we've got to wait and see what the shareholder vote looks like. Even assuming it passes, there are timing restrictions to it. And, but that said, this is not a strategic asset for Northern Trust, and so you should read into that. It's not something that we're saying we're going to, we're going to hold on to beyond what the restrictions would enable us to do, and we're discussing all the options. There's likely going to be a combination of a few tools that we'll take, but early to give details on that at this point. We'll go next to Brian Bedell with Deutsche Bank. Hey, Brian. Great, thanks. Hey, good morning. If I could just clarify, Jason, a couple of things you, you guys done earlier, just to make sure I had it, heard it right. The incremental NII from the two portfolio security sales is $30 million annualized, and that comparison period is one Q versus four Q. Is that correct? Yeah. So you broke up a tiny bit, but I, I, I think I'm following where you are, but don't hesitate to tell me if, if I miss it. So the November repositioning helped in the, in the quarter by, call it $6 million, and—but that should be helpful going forward to the tune of, in the neighborhood of $15 million a quarter.... The January repositioning, which we mentioned for the first time a little while ago, that should help in the quarter, about $15 million, round numbers, about $15 million a quarter. 15 per quarter. Okay. And then on the expense side, maybe just try to get some more clarity on the total expense growth. I think you said comp expense being up 50 to 55 in 1Q versus 4Q because of the retirement eligible options, and then employee benefits up $10 million versus 4Q. So, correct me if I'm wrong on that, and then just translating that into expense growth through the year. Obviously, there's lots of different levers, but is the idea to try to improve on the 3% expense contribution from that, from a total growth perspective, or should we be thinking of expense growth, say, better than 5%, you know, lower than 5%, but potentially higher than 3%? You know, can you improve that trust expense-to-trustee ratio in 2024 from 2023? Yeah. So couple things. One, confirm your numbers are right on first quarter and the step up. Remember, both of those are fully seasonal, Brian. So the step up in first quarter is just because that's when that's the booking of our retirement-eligible equity grants, and so that, in and of itself, represents the vast majority of that step up. And then similarly, we've got a higher payroll tax in first quarter, just as we hit the caps on that level. But both of those numbers come back down for second, third, fourth quarter. That said, second quarter got to build in the base pay adjustments that we referenced, which is that $65 million, that'll be second, third, fourth quarter. So all that said, the goal is to do better than the roughly 5% we did this year. The 3% was not seen as the—again, back to, it's not seen as a floor, but also it's—that's a big difference to go from 5 down to 3. And so we're using the productivity to do everything we can to get materially better than the 5. But the fact that we're walking in with 3 already in the base is just going to make it difficult. And so I think it's the... And the last thing I'll mention is, for us, we're anticipating organic growth. That's our—we target—we have organic growth targets for each of the three businesses, and there—we want to continue to be a growth company. That is important, and that drives some expenses in addition to expectation of what we're doing from a revenue perspective. And so it's hard to fine-tune much with, you know, to say is it between three and five. You know, if we're not doing as well from an organic perspective, we're going to be working really hard to say: "What else do we do to make sure we're doing the right thing, and we get positive fee operating leverage? We'll go next to Jim Mitchell with Seaport Global. Good morning, Jim. Hey, good morning. Maybe just follow up on that last comment, just maybe a little more detail. It seems like organic growth in 2023, you know, it was a tough environment, a little mixed. So it seems like you're more optimistic across the board. So you can kind of just give us a little more thoughts, detail on the organic growth prospects this year? Sure, Jim. It's Mike. I'll start off here. So you're absolutely right. You know, we've gone through, I would say, a time period where the organic growth has definitely been strained and lower than our historical levels. And there's a number of factors behind that that we've talked about, you know, over the preceding earnings calls that relate to, you know, client activity, that relate to some of the outflows that we had in the asset management business, which obviously impacts then wealth management and asset servicing. And the reason why we're so positive going forward here on organic growth, some of those trends, as we've talked about, have turned around, and so we see good inflows into asset management. So that aspect of it is a lift, you know, going forward to our organic growth. But then also the strategies that we have in place to drive profitable organic growth. You know, where we've been focused as a company is in a couple areas or a few areas. One is really looking at the portfolio of our growth. So historically, asset servicing has been the majority of the organic growth. And looking forward, you know, we're looking to shift that more towards the more scalable parts of our business, so wealth management and asset management. That doesn't mean that the asset servicing business will not be growing. It's just we're very focused within that business to the areas that scale the most. So if you think about the nature of all the things we do for clients on that front, some of those activities are more scalable, more profitable than others. And so we'll lean towards those, you know, areas. I mentioned the success we've had with asset owners in the Americas. You know, a lot of that is the custody and related services on that front. That's some of the more scalable services that we have. And it's, again, not to say that we won't be doing the business with the asset managers, so fund services, but some of those areas are more resource-intensive, and so we're gonna be really disciplined about the types of business that we take in that require, you know, hiring more people, investing more in particular technologies around that. The last thing I would say, just around the organic growth and why we're optimistic on it is the businesses are working, I would say, much more closely together in how we go to market. As we would call it here, One Northern Trust is our approach to the marketplace. It's not, you know, separate businesses, but rather to the extent that we're going to approach a you know a client or a prospect to work with them, it's going to include, you know, multiple offerings from across the businesses. You know, particularly asset management with asset servicing on the front end, as part of a bundle that we're offering to the clients, and then certainly with wealth management as well. You heard in some of our earlier comments here, the advisory fee component of wealth management has been, you know, growing nicely through the year. We think that it can grow at a higher rate. But importantly, the more that we can do on the product side with those clients as well. So as we talk about the transitioning with quantitative tightening, for example, and the move out of short-term Treasuries, to the extent that we can help those clients move into fixed income funds, for example, that's a real opportunity for us. So a number of things that we're doing to proactively try to drive that organic growth. That's, that's really great color, Mike. Maybe just a quick follow-up on deposit pricing. Jason, you talked about still some pressure on overall deposit costs. Is that lags still on pricing, or is that an assumption of a negative mix shift out of NIBs? What's kind of driving further pricing pressure in deposits? Yeah, it lags. And we actually, in the fourth quarter, made some agreements on pricing that will come into play in first quarter more than they did in fourth quarter. And it didn't drive deposit volumes higher in fourth quarter, but it is something that as we try to do more fine-tune predictions of what first quarter would look like, it's something that we factored in. We think that costs will be higher. And that's part of the reason why, even though we ended it at 501, and I indicated that December was better than November and October, we think we're still gonna be flat to down a little bit in first quarter, largely because that pricing element. In general, our view is that as the Fed does reduce rates, we're gonna have client conversations about it, and again, we're not a price setter, but highly committed to making sure our clients leave their deposits here. We'll go next to Rob Wildhack with Autonomous Research. Hey, Rob. Good morning, guys. One more question on expenses. I'm curious how you would approach a hypothetical year where revenue growth comes in a lot better than expected, and what that might mean for expense growth. I guess the core question is: what takes precedence, your expense to fee ratio or the absolute level of expense growth this year? I'll start. Mike may wanna add to it. Historically, we'd say, well, we wanna, we wanna grow and, but we have talked about ensuring that we were committed to more of an absolute number in terms of the expenses, and we've also committed to more scalable growth. And so we're already having conversations internally about ensuring that we're highly disciplined on bringing on business that is scalable. And so I think that is a change relative to how we've thought about it before, where there was more of a desire to bring on business at always at attractive margin, but our commitment to scalable growth is gonna be is higher at this point, and that means that the expenses shouldn't be as volatile with anticipation or even line of sight on new business coming on that brings with it a high degree of expense. Yeah. So I agree with what Jason said there. Just to add to your point, we're outside of our range on expense to trust fee ratio, so we're trying to drive that into the range. And so as Jason's indicating, we're leaning towards, you know, trying to get into that range sooner rather than later. Okay, thanks. And then on NII, I would just love to get your thoughts on the sensitivity there as it relates to, you know, different scenarios from the Fed. What's the impact of, say, one or two Fed cuts this year, as opposed to, say, six Fed cuts? Yeah, those are the scenarios we're looking at, but I come back to this theme. It's just gonna depend on how well we're able to hang on to spread. And there's just been highly variable, and I think our ability to predict just over the last couple of quarters has been really hard. But I feel really good about the volumes that stayed in place, and so I think our approach has worked, but it makes it's gonna make it less predictable. It's the opposite of what we just talked about on the expense side, ironically, where we're saying we wanna be more predictable in the expenses to try and get that expense to trust fee ratio where we want it to be. On the deposit side, there's more flexibility and more willingness to follow where the market goes to make sure we're holding onto client assets. ... We'll go next to Mike Mayo with Wells Fargo. Good morning, Mike. Hey, good morning. This is Rob Rutschow for Mike. Just wanted to follow up on the custody commentary a little bit more. You know, as we calculated, your fees that's under custody were down about 5% year-over-year. You mentioned client outflows. So how much of that is kind of risk off versus actual pricing pressure? You know, what was the new business this year, and what's the outlook for pricing pressure versus new business as we look into 2024? Yeah, I'll start, and then Jason, you can fill it out. But, first of all, I just think you need to take into account that we are compensated sometimes on the asset level, sometimes on the transaction levels. And transaction volumes were lower during the year, so that drove some of the weakness in the custody fees there. You know, from a pricing perspective, I would say, you know, nothing in particular as far as the competitive environment that is, you know, driving custody pricing to, you know, much lower levels, if you will. I would say it's relatively stable on the pricing front there. As I look at just the underlying details of how we did, I think you're leaning more toward the asset servicing business. The net new business for the year was positive, and year-over-year for the quarter, asset servicing hit its mark on net new business. The issue with the company is some of the other things happening as we get into transactions, and then what we referenced earlier in our clients going through their asset levels declining. But much less of a repricing story relative to prior years, and the business is winning. If we just look at their win rate in the market, it is strong. So a lot of this year, the impact came from these other dynamics of lower transaction volumes and same number of clients, but less assets. Okay, thanks. And if I could follow up on wealth, I guess. Can you talk about the competitive dynamic there, and especially in Global Family Office, you saw a little bit of deceleration in the growth rate. Any changes or any areas that you're looking to grow, either inside the U.S. or out? Yeah. You're right to call it. GFO had a much lower growth rate than it has over the last couple of years. It's been... The last couple of years have been excellent for that business, and this year was weaker, but it's—we always talk about the fact that it is the spikiest business that we have. Very small number of client activity can lead to meaningful change, and it's also one of the businesses where, with what happens underneath from an investment management perspective, can have a meaningful impact on how the business is doing. So, but we, we've actually invested heavily in that business. They've got a lot of accomplishments in technology and some of the things that they have done with their Wealth Passport, their overall technology platform, we feel is industry-leading. It is industry-leading. Just the way that they're now interacting with clients from that platform perspective, what clients are able to do with multiple accounts and reporting and client asset movement, all coming. And it's all cloud-enabled, is what we've done recently. And so it's highly market leading from our view in terms of what we're doing, and we're continuing to invest in that business from a technology perspective. So there's more coming, which makes us feel very optimistic about what that business is going to do over the next couple of years. This does conclude the question and answer portion of today's call. I would like to turn the call back over to Jennifer Childe for any closing comments. Thanks, Ruth, and thanks everyone for joining us today. We look forward to speaking with you again soon.