Good morning, and welcome to State Street Corporation third quarter 2022 earnings conference call and webcast. Today's discussion is being broadcast live on State Street's website at investors.statestreet.com. This conference call is also being recorded for replay. State Street's conference call is copyrighted and all rights are reserved. This call may not be recorded for rebroadcast or distribution in whole or in part without the express written authorization from State Street Corporation. The only authorized broadcast of this call will be housed in the State Street website. Now I'd like to introduce Ilene Fiszel Bieler, Global Head of Investor Relations at State Street. Good morning, and thank you all for joining us. On our call today, our CEO, Ron O'Hanley, will speak first. Then Eric Aboaf, our CFO, will take you through our third quarter 2022 earnings slide presentation, which is available for download in the investor relations section of our website, investors.statestreet.com. Afterwards, we'll be happy to take questions. During the Q&A, please limit yourself to two questions and then re-queue. Before we get started, I would like to remind you that today's presentation will include results presented on a basis that excludes or adjusts one or more items from GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP or regulatory measure are available in the appendix to our slide presentation, also available in the IR section of our website. In addition, today's presentation will contain forward-looking statements. Actual results may differ materially from those statements due to a variety of important factors, such as those factors referenced in our discussion today and in our SEC filings, including the risk factors in our Form 10-K. Our forward-looking statements speak only as of today, and we disclaim any obligation to update them, even if our views change. Now, let me turn it over to Ron. Thank you, Ilene, and good morning, everyone. 2022 continues to unfold like no other year in recent memory, with the challenges faced today arising partly out of, but acutely different from, those the world faced in 2020 during the onset of the COVID-19 pandemic. While the global operating environment continues to be very challenging, our third quarter results clearly demonstrate the resilience of our business model and our focus on maintaining and further improving State Street's pre-tax margin, which was a solid 29% in the third quarter, excluding notable items. During the third quarter, financial markets were negatively impacted by the adverse effects of the ongoing war in Ukraine and several macroeconomic headwinds, including continued price and wage inflation, dramatically higher interest rates, significant U.S. dollar strength, and heightened fears of a global recession. These factors collectively drove heightened uncertainty, which contributed to meaningful declines in both global equity and fixed income markets, as well as increased market volatility, which in turn impacted flows. We continue to carefully navigate the business through this environment. While the operating climate created a number of fee revenue headwinds for our business in third quarter, the savings and efficiency of our Alpha and enterprise outsourcing offering makes our value proposition even more attractive to asset managers and asset owners in the current market and inflationary environment. We maintained a solid balance sheet and strong capital position, delivered significant NII growth as well as healthy FX trading revenues, and remained laser-focused on intensely managing what we can control, as demonstrated by our expense management. Turning to slide three of our presentation, I will review our third quarter highlights before Eric takes you through the quarter in more detail. Starting with our financial performance, third quarter 2022 EPS was $1.80 or $1.82, excluding notable items, compared to $1.96 or $2, excluding notable items in 3Q 2021. Double-digit year-over-year declines in average global equity market values drove most of this decrease. Total fee revenue for the third quarter declined 8% year-over-year, primarily reflecting the impact of significantly lower global equity and fixed income market levels on servicing and management fees, as well as the stronger U.S. dollar. Within total fee revenue, our global markets franchise once again continued to perform well, with FX trading services and securities finance revenues increasing 14% and 4% year-over-year respectively, as the business was able to benefit from increased volatility while supporting our clients. We also drove a solid result within front office software and data, with third quarter revenue increasing 9% year-over-year. Total revenue for the third quarter declined just 1% year-over-year, as lower total fee revenue was largely offset by a very strong NII result, which increased 36% relative to the year ago period, driven primarily by higher interest rates. Faced with continued market-related fee revenue headwinds and inflationary pressures, we remain focused on controlling expense growth. Even as we invested in our people and business, third quarter total expenses were flat both year-over-year and quarter-over-quarter, primarily driven by the impact of the stronger U.S. dollar and expense management. Business momentum was solid in the third quarter, with new AUCA asset servicing wins amounting to $233 billion. Encouragingly, our third quarter wins include expanded relationships with two existing Alpha clients, demonstrating our ability to broaden and deepen client relationships and drive new back office mandates through our Alpha strategy. As a result of this quarter's solid sales performance, AUCA won, but yet to be installed, with $3.4 trillion at quarter end. Front Office and Data also experienced good business momentum in the third quarter, with annual recurring revenue increasing 20% year-over-year to $267 million. At Global Advisors, assets under management totaled $3.3 trillion. Overall, third quarter AUM flows and management fees were negatively impacted by weaker equity and fixed income markets, but we still saw positive net flows into our cash, SPDR, and U.S. low-cost ETF products during the quarter. Even in the volatile environment, our global institutional money market business has continued to gain market share this year, with AUM reaching a record level in the third quarter, having experienced four quarters in a row of inflows. We remain excited by our Global Advisors strategy and the growth potential of the franchise and announced new leadership in the third quarter as Yie-Hsin Hung will become SSGA's new president and CEO in December. I would now like to turn to the proposed acquisition of Brown Brothers Harriman's Investor Services business, which remains subject to regulatory approvals and other closing conditions. The current regulatory environment for M&A transactions involving GSIBs is challenging. We are engaged in ongoing dialogue with U.S. and international banking regulators regarding the prolonged regulatory review process. We have developed with BBH proposed modifications to the transaction, including changes to the operating model and legal entity structure and a reduction to the purchase price. We anticipate that a modified transaction would be somewhat more complex and include a delay in timing and amount of deal synergies, resulting in a slower path to accretion. While discussions with regulators on the proposed modified transaction are ongoing, the likelihood of a successful outcome is increasingly uncertain. There can be no assurance that a mutually acceptable modified transaction will be agreed and enter into, or as to the timing or outcome of any regulatory approvals and other closing conditions for a modified transaction. The modifications to the transaction remain subject to review and approval by both BBH's partners and our board of directors. As previously noted, the sale and purchase agreement allows each of State Street and BBH the right to terminate the transaction upon written notice without a contractual penalty at any time. We continue to believe the strategic rationale for the transaction remains compelling, and that has encouraged us to continue to seek an acceptable path forward. These efforts are actively underway and, as we previously stated, we expect to reach a decision on whether the transaction can proceed forward during this quarter. Turning to our balance sheet and capital. Despite a continued rise in interest rates, our CET1 capital ratio was a strong 13.2% at quarter end. As I have noted previously, we recognize the importance of capital return to our shareholders, and it remains an integral component of our medium-term targets. Accordingly, having already announced a 10% per share increase to our quarterly common stock dividend earlier this year, we now intend to repurchase approximately $1 billion of State Street's common stock in the fourth quarter under the existing common stock repurchase program authorization, which expires at the end of 2022. Additionally, in keeping with our medium-term targets, it is also our intention to return greater than 80% of earnings in 2023 in the form of common stock dividends and share repurchases, subject to approval by our board of directors and market conditions at the time. If the proposed acquisition of BBH Investor Services does not progress, we would expect capital return to be significantly more than that amount. To conclude, the events of the last two and a half years have demonstrated the resilience of State Street's business model during times of heightened market volatility and macroeconomic uncertainty. Even as financial markets broadly declined in the third quarter, we delivered a healthy pre-tax margin of 29%, notable items, in addition to solid new business wins. While the environment is challenging and uncertain, we remain confident in our ability to continue to successfully execute against our strategic agenda and improve our operating model and financial performance over the medium term for the benefit of our clients and shareholders. As we look ahead, we will continue to adapt to the highly uncertain environment by remaining intensely focused on managing what we can control as our solid expense discipline in 2022 to date has demonstrated with year-to-date total expenses flat to the same nine month period in 2021, even as we invested meaningfully in our people and business. With that, let me turn it over to Eric to take you through the quarter in more detail. Thank you, Ron, and good morning, everyone. I'll begin my review of our third quarter results on slide four. We reported EPS of $0.80 or $0.82, excluding acquisition restructuring costs, as detailed in the panel on the right of the slide. As you know, the operating environment in the third quarter remained challenging, with persistent market volatility related to ongoing geopolitical tensions, inflationary pressures, rapidly rising interest rates, and concerns about the global economy. Despite these challenges, as you can see on the left panel of the slide, strong growth in both net interest income and our FX Trading Services business enabled us to partially offset the significant headwinds from lower equity and fixed income markets in the quarter. Additionally, we continued to demonstrate prudent expense management in the third quarter, even as we experienced ongoing price and wage increases while we continued to invest in the franchise. Turning to slide five. During the quarter, we saw a period-end investment services AUCA decrease by 18% on a year-on-year basis and 7% sequentially. The year-on-year change was largely driven by continued lower period-end market levels across equity and fixed income markets globally, a previously disclosed client transition, and the impact of currency translation, partially offset by net new business installations. The quarter-on-quarter decline was largely a result of these same factors. Similarly, at Global Advisors, period-end AUM decreased 15% year-on-year and 6% sequentially. The year-on-year decline in AUM was largely driven by lower period-end market levels, institutional net outflows, and the impact of currency translation, which was partially offset by positive net flows in both our ETF and cash businesses. Turning to slide six. On the left side of the page, you'll see third quarter total servicing fees down 12% year-on-year, largely driven by lower average equity and fixed income market levels, lower client activity and adjustments, normal pricing headwinds, and the impact of currency translation, partially offset by net new business. Excluding the impact of currency translation, servicing fees were down 9% year-on-year. Even with the negative impact of the market environment in the quarter, I would highlight that we're pleased to see good double-digit growth in our private markets businesses. Sequentially, total servicing fees were down 6%, primarily as a result of these same drivers. Lastly, we recorded traditional custody wins worth $233 billion in the quarter, with attractive fee rates across key client segments. We now have more than $3.2 trillion of assets to be installed, a good portion of which are attributed to large output deals that were won over the past year. Given our large backlog, we installed approximately $350 billion of assets this quarter, which is in line with our historical pace. Turning to slide seven. Third quarter management fees were $472 million, down 10% year-on-year, primarily reflecting lower average equity and fixed income market levels, a previously disclosed client-specific pricing adjustment, institutional net outflows, and the impact of currency translation, partially offset by the absence of the impact of money market fee waivers and positive net ETF and cash inflows. Management fees were down 4% quarter-on-quarter, largely due to equity and fixed income market headwinds and the impact of currency translation. Notwithstanding the challenging backdrop in the quarter, while we did see some outflows in our ETF business due to an exit of a low-yielding Asia-Pacific fund, our franchise still remains well-positioned for growth. In ETFs, we saw sustained ETF inflows into the SPDR low cost suite and fixed income funds. In our institutional business, there's continued momentum in defined contribution, with third quarter inflows of $10 billion, including the target date franchise. In our cash business, top quartile performance on our government money market fund was a major driver of net inflows, which contributed to market share gains in the institutional money market funds. On slide eight, FX Trading Services had yet another strong quarter. Relative to the period a year ago, third quarter FX Trading Services revenue was up 14%, primarily driven by higher FX spreads, driven by higher market volatility and the recent regulatory capital changes, partially offset by lower client FX volumes. Quarter-on-quarter, FX Trading Services revenue was down 4% as the benefit of higher FX spreads was more than offset by lower client FX volumes, which tend to be lower in the summer months. Securities Finance performed well in the third quarter, with revenues up 4% year-on-year, primarily driven by higher spreads due to higher specials activity, only partially offset by lower agency and enhanced custody balances due to falling market levels. Sequentially, revenues were up 3%, mainly reflecting higher agency spreads. Third quarter software and processing fees were up 2% year-on-year, primarily driven by higher front-office software revenues associated with CRD, which were up 9%, while lending fees were down 11% due to changes in product mix. Other fee revenues of -$5 million in the third quarter declined on a year-on-year basis, largely due to negative market-related adjustments. Sequentially, we saw an increase in other fee revenue, primarily reflecting fewer negative market-related adjustments. Moving to slide nine. Let me provide some details on the performance of the front-office software and data revenue in the third quarter on the left panel of the slide. Front-office software revenues increased 9% year-on-year as our more durable and recurring software-enabled revenue continues to grow nicely, driven by new client implementations and continued success in converting clients through our cloud-based SaaS platform environment. Sequentially, revenues were up 1% due to higher software-enabled revenue, partially offset by lower professional services revenue. Our revenue backlog remains healthy. Turning to some of the CRD and Alpha business metrics on the right panel, we continue to be pleased with our new bookings for the business. The $14 million of new bookings from this quarter was well diversified across client segments, particularly wealth and asset owners, demonstrating the benefit of and breadth of clients the platform can now support. As for middle office, we continue to have extremely healthy uninstalled revenue backlog of over $100 million, which is up 50% on a year-on-year basis, as I mentioned earlier. Now turning to slide 10. Third quarter NII increased 36% year-on-year and 13% sequentially, primarily reflecting the impact of higher short-term interest rates from central bank hikes, only partially offset by lower client deposits. More than 40% of this increase was driven by non-U.S. dollar rates as we saw central banks globally raise interest rates. On the right of the slide, we show our average balance sheet during the third quarter. As a result of a rapidly changing rate environment, industry-wide deposits have begun to trend lower, and we are seeing some of this play through our balance sheet as well. Excluding the impact of currency translation, average deposits were down 5% both year-on-year and sequentially, primarily driven by the global tightening in monetary policy by central banks and by the impact of significantly lower market levels on AUCA. The investment portfolio is down modestly as we continue to manage duration, and we now have more than 60% in HTM. Today's results reaffirm our balance sheet continues to be well positioned to recognize this interest rate and NII tailwind and also protect AOCI. Turning to slide 11. Third quarter expenses, excluding notable items, were once again proactively managed in light of the revenue environment and flat year-on-year were up approximately 4% adjusted for currency translation and notable items. We've been carefully executing on our continued productivity and optimization savings efforts, which generated approximately $80 million in year-on-year growth savings or approximately $230 million year-to-date, which puts us in line to achieve our full year expense optimization guidance of 3%-4% of the expense base. It also contributed to our year-to-date positive operating leverage, which we also expect to deliver for the full year. These savings, in addition to benefits from a stronger U.S. dollar, enabled us to offset some of the wage inflation we have been seeing in the industry while we continue to invest in the strategic parts of our company, including alpha, private markets, and operations automation. On a line-by-line basis compared to third quarter 2021, compensation employee benefits were down 1% as the impact of currency translation was partially offset by higher salary costs associated with wage inflation and higher headcount. Headcount increased 6%, primarily in our Poland and India global centers as we invested in important technology capabilities and added operations talent to support new products and services in growth areas such as alpha, private markets, and in middle office servicing. There was also a portion of the headcount increase associated with some hiring catch-up post-COVID. We expect headcount growth to start to level off. Information systems and communications expenses were down 2% as we began to see benefits from our insourcing efforts and continued vendor pricing optimization, partially offset by technology and infrastructure investments. Transaction processing was down 10%, mainly reflecting lower sub-custody costs related to equity market movements. Occupancy was down 5%, largely due to currency translation, and other expenses were up 17%, primarily reflecting higher securities processing costs, marketing costs, travel costs, and foundation grants. Moving to slide 12. On the right side of the slide, we show our capital highlights. We are pleased to report CET1 of 13.2%, up 30 basis points quarter-over-quarter, primarily driven by higher retained earnings and well-controlled RWA. With respect to RWAs, there is volatility, and I would caveat that they were lower than we expected this quarter. We would anticipate some RWA increases as we continue to both optimize the balance sheet and efficiently put capital to work across our businesses. Third quarter Tier 1 leverage ratio of 6.4% was up 40 basis points quarter-over-quarter, mainly due to the decrease in balance sheet size and higher retained earnings. As the slide highlights, our capital position is strong and our commitment to being stewards of shareholder capital remains steadfast. In keeping with that commitment, we returned $232 million to shareholders in the third quarter through dividends. As Ron highlighted, we now intend to repurchase approximately $1 billion of State Street's common stock in the fourth quarter. This higher than expected buyback amount is based on our healthy capital levels and our expected future uses of capital. The AFS mark to market in OCI this quarter amounted to $-170 million as compared to $-0.5 billion dollars in Q2 22, meaningfully improved as a result of the management actions we took despite another strong run-up in interest rates this quarter. Turning to slide 13, we provide a summary of our third quarter results. Despite the continued volatile market environment, I'm pleased with our quarterly performance. Even with the current macroeconomic environment and persistent geopolitical uncertainties, our strong growth in net interest income and FX trading services enabled us to partially offset another quarter of significant headwinds from both equity and fixed income markets, highlighting the resiliency of the franchise. Our expenses remained well controlled, demonstrating our laser focus on productivity. Turning to our outlook, let me share our current thinking regarding our fourth quarter and some of our macro assumptions as we look over the remainder of the year. At a macro level, while market rate expectations have been volatile, our current interest rate outlook is broadly in line with the current forwards, which suggests a year-end Fed Funds rate of 4.5%. We expect other international central banks to continue to raise rates in 4Q and beyond into 2023 as well. Our outlook assumes 4Q equity market levels will be flat to September month end, which would imply a 10% quarter-on-quarter decline in global daily average equity markets in 4Q. We also expect continued U.S. dollar strength to be worth about a percentage point of headwind to fee and a tailwind to expenses on a quarter-over-quarter basis, which is included in our guide. In terms of the fourth quarter of 2022, given the expected decline in average global equity market levels, we expect total fee revenue to be down about 3% on a sequential quarter-over-quarter basis, with servicing fees down 4%-5% quarter-over-quarter and management fees down 8% quarter-over-quarter. Turning to NII, following yet another strong sequential increase in NII in 3Q, we expect to deliver additional NII growth of 4%-10% quarter-over-quarter, driven by the tailwind from U.S. and foreign central bank rate hikes. This outlook includes our expectation for some continued deposit outflow in 4Q. For the full year, we now expect NII to increase 28%-30%, which is better than our prior full year guide of 24%-27%. We also expect continued good growth in NII in full year 2023. Next, we expect total expenses excluding notable items to be roughly flat quarter-over-quarter despite inflationary wage pressure as we continue to target productivity initiatives in the face of a challenging environment for fee revenue. This focus should enable us to drive positive total operating leverage and a healthy pretax margin for both the fourth quarter and the full year. Full year expenses are expected to be flat versus last year. Finally, we would expect the fourth quarter tax rate to be approximately 18%-19% for the quarter. With that, let me hand the call back to Ron. Thanks, Eric. Operator, let's open the line for questions. Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session. Should you have a question, please press the star key followed by the digit one on your touchtone phone. You'll hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline the polling process, please press the star key followed by the digit two. If you're using a speakerphone, please lift the handset before pressing any keys. We'll pause for a moment to assemble the queue, and we'll take our first question from Glenn Schorr with Evercore. Your line is now open. Hi there. Maybe just a wrap-up question on BBH, and I appreciate all the transparency along the way. You know, regulators hate it, more complex, market values have fallen. I definitely am with you on the strategic merits. I guess the question people have is why not just walk away? It seems like you could do some really creative stuff with the capital now, and at what point do you just say, "Mm, not worth it. Not as good creative. Too complex. Enough said. Glenn, it's Ron. Maybe needless to say, we go through that calculus that you're describing every day. That's part of what's led to this. I mean, obviously the regulatory environment is driving the timeframe here, but what's driving our work is that trade-off, the trade-off between the opportunity to consolidate on a global basis, a you know a very attractive firm versus what's the alternative uses of the capital, including returning it back to shareholders. We believe there's still the possibility that we can get this, we can structure this transaction in a way that it will work both for shareholders and to achieve that strategic objective. As we've said in the disclosure, the likelihood of that happening is going down. I think what you can take away from this is one of the reasons that's driving that decreased probability is the calculus that you're describing. Okay. Well, I guess we don't have to wait that much longer, so I can chill out for another couple of months. Just one follow-up on, I think you mentioned 60% of the securities portfolio has been moved into held-to-maturity. It shows in the smaller AOCI hits as rates go up. What's the other side of it? Like, can you calculate what the NII give up or any other offsets to moving that large of a piece into held-to-maturity? Glenn, it's Eric. You know, we've carefully considered what portion of the investment portfolio to move to held-to-maturity and in what amounts. But what we do as we make that consideration is the benefit is that you largely don't give up NII, right? By and large, you're earning the coupon on whether they're treasuries or agencies or MBS, just in a different accounting form and structure. But the earnings of the corporation are the same, and that's what's quite attractive about HTM. You know, the reason why you wouldn't put the whole portfolio in HTM is partly you want some flexibility. You want to from time to time rebalance the portfolio, and you might want to rebalance, you know, five, 10, 15, you know, yards, and that takes an AFS, you know, construct under which to do it. Partly you want to make sure that you have you always have monetization at the front end, you know, to maximize and to maintain the liquidity construct you'd like. We've now put that in place. You know, we can repo, you know, HTM securities in size. We test that in the marketplace, so we're quite comfortable. There's a point where you say, "Look, I'd rather sit on cash or I'd rather sit on available for sale." We feel like we're at a good balance now that really provides a real positive NII trajectory, and you see that. You know, we've guided now to 28%-30% up in NII this year. I've also started to signal that we're positive on the NII trajectory in 2023, and partly because the entire investment portfolio, whether it's in AFS or HTM, is contributing to that, to the upswing. Thanks, Eric. Sure. Okay. Next we'll go to Ken Usdin with Jefferies. Your line is now open. Hey, good morning, guys. I wanted to come back to putting the deal into context with the buyback that you announced. Which you had been clearly saying you'd want to get back into the buyback this quarter. Could you just help us understand the $1 billion sizing, and if that has anything to put in context with your thoughts around how the pricing and eventual outcome, if the deal goes through, might end up coming through? Or is it completely separate and just based on where capital sits regardless of the deal outcome? Ken, it's Eric. As I said in my prepared remarks, you know, the buyback was larger than anticipated. Part of that is we do two things. We look at our current capital levels, which have trended, you know, towards that 13% CET1 mark that we had guided to. Remember that discussion we had in the first quarter. Partly because partly as we consider the capital uses over the next couple quarters, including, you know, the possibility of the Brown Brothers Harriman Investor Services transaction. You would expect us to, you know, factor in, you know, any adjustments, downward adjustments to purchase price that we would expect. That's effectively what we've done. It's a mix of factors, but those are the components. I think we're quite pleased. You know, we can now proceed with $1 billion. As Ron said, we're planning on comfortably returning, you know, more than 80% of earnings to shareholders, you know, next year, you know, quarter by quarter by quarter, which is what our medium-term targets are. That still, you know, avails us the capacity to do a deal at an admittedly adjusted price if it's appropriate at the time. Okay. On the denominator side, I guess, of capital, can you give us a little color on how you expect deposits to trajectory from here? Pretty meaningful decline in both interest-bearing and non-interest-bearing. Just, you know, relative to where you're ending here, just your general outlook on your thoughts around deposit mix and flows. Thanks. Yeah. I think our deposit trends will probably be in line with some of what you're seeing in the industry. I think we're within that zone, you know, if you look at the Fed reports, if you look at, you know, other institutions. We've certainly begun to see that rotation out of deposits this quarter, down about 5%, both year-on-year and quarter-over-quarter, adjusted for currency translation. I think what we have seen over the last year is a series of factors that have impacted it. This is, you know, my way to say that I can give you some guidance, but it's gonna vary depending on how the factors play out. You know, you have U.S. dollar appreciation, and so you have non-dollar deposits come down as a result. We have equity markets falling, which means the AUCAs that we custody for are coming down. With that, you know, investors, institutions, retail hold similarly lower cash amounts. Part of what's happening here is the environment is actually affecting deposits somewhat independently of where we are on the rate with rising rates and quantitative tightening. Now we are seeing the effects of rising rates and quantitative tightening as well. I kind of give you that as a background because I think there are four or five factors at play here. which is more than expected. I think, as we look forward, you know, we continue to expect some deposit outflows in the fourth quarter. We expect those to be, you know, somewhat less than we saw in the third quarter. You know, we do expect some, and those are factored into our NII guide. One of the reasons why we have a wider NII guide than usual is because there's a range of outcomes. You know, we're seeing what we expected. We're seeing what we expected as rates rise and we price carefully and maintain, I think, some healthy betas, this quarter. You know, we're seeing non-interest-bearing begin to flow out because with the higher rates both in the U.S. and internationally, the U.S. in particular, you know, you have the difference that clients can earn. One of the things we're doing with our clients is to think about, you know, the full range of offerings for them. Sometimes it's the base account, sometimes it's special accounts with deposits. If you remember, you know, we've historically put in place deposit initiatives to have the right balance of deposits on the balance sheet. You know, the other thing that this is feeding is some of our other businesses, whether it's the cash business in GA, whether it's the repo business. There's a whole set of product offerings that are, you know, that cash flows to, that we're pleased to support our clients with. There's quite a bit going on in this area, you know, more to come. But you know, we're comfortable with some of these forecasts. What I find particularly important to keep in mind is NII continues to rise even with some of these deposit outflows. Part of that is the U.S. rates that we're all so familiar with. Given that, you know, so much of our balance sheet is international, you know, those foreign rate rises are particularly helpful, and those deposits are at good levels as well. Got it. Thanks, Eric. Thank you. Next, we'll go to Alex Blostein with Goldman Sachs. Your line's open. Hey, Ron, Eric. Good morning, guys. I was hoping we could speak a little bit more broadly around State Street's capital allocation strategy. If BBH does not go through, what's your appetite for any other deals, whether it's in the servicing space or asset management space? Obviously, macro conditions are pretty volatile, so I'm sure that'll impact that as well. Curious how you're thinking about the trade-off between accelerating buyback or other deals. If you do go down the path of more buybacks, should we be thinking about the upper end of your CET1 and leverage as sort of the target to which you will go to, or you might need to run with a buffer sort of on top of that given uncertain macro conditions? Yeah. Alex, why don't I begin on this, just on how we think about M&A? It's not like we have a shopping list here. BBH is a unique opportunity to consolidate the market on a global basis. By that, I mean, it's not just about, you know, adding to some particular geography, but it really does bolster us in all the major geographies that we're in. You know, having said that, we've got our own what we believe is a distinctive organic strategy in the servicing area led by our Alpha proposition, which continues to grow. There's a lot of development that was being completed this year and early next year, which will lead to a lot of new onboardings, and we think even make the proposition attractive to a broader set of clients. You know, we always are looking in the marketplace to see if there's something that makes sense, but it's not like the money's burning a hole in our pocket, and if this doesn't work, we're immediately gonna go out and come back with something else. Eric, you may wanna talk just about how we think about the context of buybacks. Yeah. Alex, I think I'd add that, you know, we're quite conscious that we raised almost $2 billion of equity from our investors, and diluted them. You know, we certainly expect that if the deal doesn't proceed, the bulk of our excess capital needs to go back to shareholders. That's, you know, that's deserved, and I think expected, and we would deliver on that. I think in terms of capital ratios, you know, I had said earlier this year when the economic environment felt more benign and we had simplified and attenuated a lot of the OCI, you know, risk in the investment portfolio that we might be willing to go down to the lower end and even below the lower end of our 10%-11% range. I think now given the economic uncertainties, you know, we'd for the time being expect to operate towards the middle of that range. You know, that might change over time. For now, I think our current expectation is we have reduced the volatility in the investment portfolio, which reduces, on one hand, the need for a capital buffer to some extent. On the other hand, the economic environment is much more, there's much more volatility in it, and that pushes us in the other direction. The net of that is that I think we're quite comfortable with the 10%-11% range and operating, you know, somewhere in the middle there. Great. Thank you. That's helpful. My follow-up question may be around the business side of things. You guys have a very sizable pipeline of installations on the servicing side. A lot of them are Alpha mandates, which obviously tend to be a little bit more complex. You talked to us, I think, on the last call, sort of the cadence of how that's gonna come through on the revenue side, but I'm just kind of curious how you would contextualize any incremental investments or expenses that will need to come with it, given sort of complexity of those installations over the next 12-18 months. Yeah. I'll start, Alex, on the investments, and Eric can talk to you for the patent. You know, on the investments, there is actually ongoing development as I mentioned earlier. That development, some of which is being completed this year, some of which is being completed next year. It's all part of our medium-term plan as well as our budget. There's nothing out of the ordinary that you should expect to do this. In fact, much of the development is behind us or will be behind us at year-end. These within the $3.4 trillion, as you would expect, it's the larger, more complex Alpha mandates. In some cases, they're development partners with us where we're developing new features and functionality, which will be available not just to that particular client, but more broadly to the client base. These are important things to get done right, and we think are a good use of our investment dollars because they'll result not just in being able to onboard that client, but to be able to broaden the offering. Alex, I'd add that, you know, we certainly need to plan and to set up onboarding teams. You know, those are well underway. You know, you saw a headcount tick up this quarter for example. Expenses though were well controlled. The headcount was in our hubs in some of the lower cost markets purposefully. We're you know, navigating through that. You know, some of the expenses have to be put on in advance of you know, as we're doing the onboarding in advance of the installation and the recognition of revenue, and some come as the revenue comes on. I think as Ron said, you know, all this is within our expense guidance. It'll be within our expense guidance when we get to that in January for next year. You know, our view is that we collectively need to continue to drive, you know, margins in the right direction, given our medium-term targets. There needs to be a mix of both the revenue lift we're getting from, you know, Alpha deals, as well as the expense and productivity initiatives, both within the Alpha environment and across the traditional franchise. You know, all that has to come together to deliver on our financial commitments. Great. Thank you both. Thank you. Next, we'll go to Brennan Hawken with UBS. Your line is open. Good morning, Ron and Eric. Thanks for taking the questions. I'd like to ask on BBH. It seems somewhat unusual to be getting regulatory approval before the approvals within the company. So why is that happening? And given that there's risk of deterioration, you know, loss of talent, customers, you know, Ron, you made reference to this during the last quarter call when you guys first said you were renegotiating, you know, would you have the ability to adjust price further if this process drags and or has that been set already? Yeah, on the approvals, our board has been actively involved in this, Brennan, as has the BBH partners on their side throughout this process. Obviously there was an approval before we announced this in September of 2021. There's an ongoing consultation with our board, and we've walked them through modifications. We, you know, don't have a final deal yet, largely because we have not actually gotten through the regulatory process and figured out what the actual structure would be that will satisfy all of the regulators. You know, it's not completely binary in that we're not talking to our board until it's all done. Obviously, our board needs to see the entire thing in total and be able to make that decision. You know, in terms of the ongoing kind of risk to clients and people, that's there. It continues. We are spending a lot of time with clients. As I think I've mentioned before, about half the client base is a shared client base, so these are clients that we talk to anyway. I think there's still a strong desire on the part of our clients that if this can be completed in a way that makes sense, they'd like to see it completed. I do not worry about further client attrition. We obviously are worried about people attrition on both sides, but largely on the BBH side, and we're monitoring that closely. You know, to the extent to which we felt like, after the price reduction we've already negotiated that circumstances have changed sufficiently further that we needed that again, of course, we would raise that if we needed to do that. Okay. Thanks for that, Ron. Second question is, you know, maybe a bit. Well, I'll just come right out. Why is this so strategically compelling? I mean, you know, it seemed as though it was largely a scale deal. Now, you know, it's deteriorated. You know, you said earlier, Ron, that the accretion is probably gonna be more drawn out, and it's gonna be lower than initially planned. It's more complicated, so you're introducing a lot of operational and legal complexity. You know, I get it, you're lowering the price, but, you know, is this really a good use of time? Is this really a good use of management focus? Why not just understand that the environment deteriorated, the regulatory approvals didn't come through, it couldn't work as constructed, and so, you know, it's better off just to walk? I mean, again, I'm probably repeating myself a little bit, Brennan, here, but that's exactly what we ask ourselves every day. You're right, it is taking a lot of management time. I think what's compelling about it is several things. You know, one is its footprint. Many of the things that are out there or supposedly out there or rumored to be out there tend to be single geography kinds of things. You know, if you have a strong desire to be in that geography, maybe it is something useful, but they're, I would describe as at best tactical. This one is adds scale to us everywhere where we are, really does set it apart from the others. Secondly- It's got some technology assets that we like. We've talked about those in the past. Third, it's got a set of people and professionals that we believe are equal to and sometimes even better than some of our people. That's attractive to us. That has to be weighed against all the factors that you and others have raised here. We continue to do that, which is why we're not coming here saying to you, yep, we're ready to go. We're not ready to go. It's also why we're coming here saying to you that we recognize this has gone on long enough and that we need to bring this to a close this quarter. Amen to that. Thanks for all the color. Next we'll go to Steven Chubak with Wolfe Research. Your line is now open. Hi, good morning. I wanted to ask one clarifying question on NII. Some of your bank peers, they've indicated 4Q exit rate could be close to the peak this cycle just as lag deposit pricing begins to catch up with rate hikes. You noted that the 2023 NII, Eric, will be up nicely year-over-year. Do you see the potential for 2023 NII coming in above that annualized 4Q level, suggesting that that fourth quarter NII guidance is not going to be representative of the peak? I think you're trying to get deeply into our 2023 forecast. I think it's a little premature to do that. I mean, to be honest, let's see how deposits flow and evolve this coming quarter. Let's see whether the U.S. central bank and the foreign central banks continue to have the wherewithal to tame inflation because that's important, right? Are they going to or not? It's quite dependent upon all that. I think the reason I made my positive statements about 2023 is that we don't see fourth quarter as the quarterly peak. We think there's more NII upside over subsequent quarters. We also have a balance sheet that has a mix of USD and non-USD. In some cases, we tend to have more foreign deposits. Those are areas if those foreign central banks continue to hike and address the serious inflationary environments in their geographies that give us an additional tailwind that may be different than a U.S. bank. There's certainly momentum here. I don't want to get into fourth quarter annualized versus my current view of 2023. I did say good continuing growth purposefully. I think there's more to come on NII. I think we'll know more in a quarter or two, to be honest. We see a trajectory that is good and reasonably positive given what we know in the environment today. Thanks for that, Eric. Reading the tea leaves, I may scrap my question on the expense growth algorithm and what that implies for next year. The one area I did want to unpack on expense is the margins in the investment management segment. They're down about 600 basis points year-over-year. That's an area where you made significant progress over the last couple of years. Certainly, you're going to see some pressures given the declining market. I want to get a sense as to how much expense flexibility you have there and where you think you can actually hold the line on the pre-tax margin for that particular business. I think I'd start answering that question by saying we're actually quite pleased by the progress we've made in growth and margins in the investment management business over, call it, the last three years. I think it had teens-level margins if you go back in time that we got into the 20s. Some of that was the market uptick which flowed through the management fee line. Some of it was, I think, delivering strongly on flows and net new revenues was positive across the franchise. Cash is an example, continues to be a standout. But each of the three franchises have new products and offerings have been quite good. I think what the team's done there well is as they have secured those flows, launched those new products, they've also managed the expense base. Just because it was a tailwind from equity markets or fixed income markets or from flows, they've actually kept expenses remarkably flat in that environment or flattish in that environment, which I think is a testament to how they've navigated the environment. I think what you should expect is that a couple things. If equity markets continue to operate at this level, we need to continue to work on expenses and productivity becomes an even bigger focus there as it should be across the company. I think on the flip side of that, if we get some kind of rebound in equity and fixed income markets that plays through the asset management business financials, I would expect expenses to continue to be disciplined there and margins to certainly go back to some of the higher levels that you saw. I would say, I think at 31% margins, we're quite pleased with where we are, and I think there's, you know, depending on where equity markets go, you know, I think the trajectory will continue in a generally positive direction. Helpful color, Eric. Thanks for taking my questions. Sure. Next, we'll go to Brian Bedell with Deutsche Bank. Your line is now open. Great. Thanks very much for taking my questions. Just one quick cleanup on BBH. Can you close that deal, if it all works well, can you close that on December thirty-first or earlier, and buy back the $1 billion? Do you need to have that Tier 1 leverage ratio be within or above your target range? In other words, can you do this and be at, say, the low end of the target range just temporarily for 4Q or even below? Brian, it's Eric. I think the timing of this deal is quite uncertain given, you know, given where we are. We've not been able to complete the regulatory process and, you know, there's still. I think the, you know, thinking about this in months as opposed to quarters is- Okay is premature. We've done the buyback calculation, though, fully considering, you know, the reduced price that would be part of a Brown Brothers transaction. Whether the timing is quarter X or quarter Y, we're comfortable proceeding with $1 billion. We're pleased to get it started in the coming days, you know. Regardless how that plays out, be able to return, as I said and as Ron said, you know, comfortably more than the 80% that we've committed to, you know, throughout next year, at a minimum. Great. No, that's great. Just one on the deposit betas. Maybe if you can just talk about how you see them right now as they exist in terms of, like, how you're defining them for both the U.S. versus the non-U.S. As we move into next year, maybe sort of an outlook without giving NII guidance, of course, but just sort of a range of where you think the terminal betas could be in the U.S. versus the non-U.S., even if it's a fairly wide range. Yeah. Let me describe it this way, and I'll cover U.S. and non-U.S. too, because both matter in a positive way for our books. I think the betas this quarter in the U.S. were, you know, in the 55% range. We're pleased to see that. You know, those are up from, you know, about 35% last quarter, but exactly where you'd expect us to be, where we expect it to be, given the uptick in rates. You know, next quarter, you know, if we go from 55% this quarter to 65% beta the next quarter, we'd be quite comfortable. You know, it just continues to inch up. That's just how it plays through. In euros, we're also, you know, in that 50% range, as we've started to cross into positive territory for central banks, and we expect that to continue. You know, part of the reason for the NII forecast into fourth quarter and into next year is that, you know, we expect betas in the 50%-60% range in euros. The market operates a little differently than the U.S., but, you know, that would be in the range. In pound sterling, you know, betas are lower. They tend to be in the 30%-35% range there. You know, then you can keep going Aussie dollars, Canadian dollars, and so forth. We have a balance sheet that is prepared for rate rises across those currencies as well. Then you'll just see, you know, betas notch up, you know, quarter-over-quarter. I think, you know, at the terminal level, there's always some amount of lagging that you do. That's just how it happens. You never get to 100% beta or anything near that, you know, because you have some non-interest bearing and you have some lag deposits. We'll see. You know, we're comfortable where we are in the 50% range going to, you know, 60%, and I think it'll play out well for the NII and the balance sheet accordingly. Okay. That's great, Eric. Thank you. Sure. Next, we'll go to Jim Mitchell with Seaport Global. Your line's open. Hey, good morning. Eric, maybe just one last question on NII, and I apologize. As we think about big picture, Fed funds being potentially 200 basis points or more higher than 2018, European rates being positive versus negative back then, do you see anything conceptually to suggest your NIM shouldn't be higher than back then? Or just wanna get your thoughts on that. Jim, it's Eric. You know, I'm a little more focused on NII than on NIM. The reason we've done that is because we've actually changed the shape of our balance sheet over time. You remember, you know, we added some deposit initiatives, which tend to be at lower NIMs, but they are NII accretive and positive. We do that because sometimes we wanna balance currencies around the balance sheet, we wanna raise deposits where we wanna lend, you know, we need to keep deposits for intraday. There are lots of reasons why we have, you know, different mix of the balance sheet. We've done that purposefully and in an engaging way with our clients. Over the last two, three years. I don't think as a result, the balance sheet is bigger. Part of the reason we've allowed it to be bigger is that the leverage ratio is not particularly constraining on us. Our intentionality is actually to maximize NII as opposed to NIM. I think as you play that out, I think our NIMs are lower at this point than they were, you know, last time in the cycle. I think they'll likely be below. The NIMs will be below the highs of the last cycle. On the other hand, I think if you calculate the forecast we've given you for NII for fourth quarter, so, you know, the next quarter that we're about to print, that will be a new high of NII relative to what we had seen in the last cycle. That's where we're a little more focused because that's what comes back to shareholders and what creates, you know, earnings and earnings momentum that contributes to the bottom line. Okay, fair enough. Just maybe on the BlackRock ETF transition, how much is left? Do you see that as any kind of a material impact on forward revenues? Our guidance has been pretty consistent on this. I think you'll find it in our Form 10-Q and 10-Ks that, you know, we estimate that the revenue outflow is about two percentage points of fees. Right You know, that hasn't changed. You saw some of that begin to come out this quarter, that was worth about $5 million this quarter. If you kind of get to the full quarter amount, it'll be just under $10 million for fourth quarter. That was worth about $1 trillion of AUCA. That did occur, and we'll continue to keep you updated on that. You know, as we previously disclosed and talked about, you know, deconversions just take time. You know, it'll play out sometime towards the second half of 2023 and then into 2024. We'll probably, you know, the majority of it. We'll just see. We're working closely with BlackRock. We continue to be quite pleased with, you know, all the existing business we do with them and the work we do for them in the alternative servicing area, which we're one of the largest providers and you know certainly help them as they want to evolve, diversify, and support their plans. Okay, great. Thanks. Thank you. Next, we'll go to Gerard Cassidy with RBC. Your line is now open. Thank you. Good afternoon, Eric and Ron. Eric, can you remind us you talked a little bit about it in your prepared remarks about fee revenues, you know, the pricing pressure that you see every year. Can you remind us if that number has changed a bit at all? Second, as part of that, I think you've also indicated in the past you needed a certain amount of assets under custody to neutralize that pressure. I don't remember, I think it was $1.5 trillion, but I could be wrong, of new business wins to neutralize that downward pricing pressure. Gerard, let me start that, it is an area that we continue to work on. You know, the pricing headwinds are just a condition of our industry. Why? Because, as you remember, you know, pricing is AUM or AUCA based. As equity markets go up, you know, clients expect some of that to come back to them. The pricing headwinds on an aggregate basis in the servicing fee line are about two percentage points of headwinds a year. You know, while we saw that bubble in 2017, 2018, 2019, that's come back down. You know, that ticked up, and then it's been well managed back down to that two percent or so level. That's what we are seeing today. We're not seeing anything different than that, and it's well within our expectations. In terms of wins, you know, we always wanna focus on net new business and, you know, for net new business to drive a positive impact on the revenues as they did this quarter. I was clear in my prepared remarks that net new business was positive. We had some nice wins. We actually had some nice wins at nice fee rates, right? Because both matter to your point. The benchmark I've put out there is that we expect about 1.5 trillion of AUCA wins a year to be in a good positive direction and trajectory for net new business. To be honest, as the CFO, I'd always like to see a little more. You've seen, you know, last year was particularly strong. This year to date, I think we're comfortably, you know, we're already comfortably at that level, and we still have another quarter to go. The sales momentum continues, and what I find important is it continues to cross both our traditional custody and accounting business and our Alpha offerings, and so it's been broad-based. Gerard. Gerard, what I would- Go ahead, Ron. Yeah, what I would add is on the topic of pricing. We mentioned to you at the end of the second quarter that we launched a targeted repricing initiative. That is well underway, and it's focused on the areas of high value or where costs are increasing higher than in other places. That is intended to achieve margin preservation. In other words, to offset the cost of delivering something high value or to offset the increasing costs in areas, for example, where we have disproportionate market data and things like that. That initiative is well underway. When we talked to you last time, it had just launched, so we were in the dozens of clients. Now we're in conversations with, you know, it's a triple-digit number, so we're pleased with that progress too. Has it been well received or understood, I should say? Nobody likes price increases, but are the clients understanding of why this conversation has to take place? Yeah. I think understood is the right word, Gerard. I think that these are sophisticated institutions themselves. They see what's going on, so I think it's been understood for the most part. Very good. Then Eric, as a follow-up, can you remind us what percentage of assets under custody or under management are variable rate priced products? Meaning, you know, your customers pay basis points on, you know, the assets under custody, and so therefore, to your point, when the value goes up and down, obviously it affects revenues. Yeah. It's a bit of a mix across different segments and across geographies. But you know a good rule of thumb is 50%-55% are you know asset under custody base so move up and down with market. There's another 20% that of the pricing tends to be based on transactional activity. And you know we actually saw transactions volumes DTCC trades wire transfers derivatives transactions and so forth come down this quarter. And then the last 20%-25% tend to be relatively fixed or sometimes semi-fixed. You know the number of funds you custody for or some flat fees. Gentlemen, thank you. Thank you. Okay. Next we'll go to Mike Brown with KBW. Your line is now open. Hi. Good afternoon. Thanks for taking my questions. I guess on BBH, I suppose it's been a while since we've gotten a financial update on the business and how it's performed in this volatile environment year to date. Clearly there's, you know, a possibility that you have a resolution that could end up moving forward with the acquisition. As we think about our models here and getting those kind of aligned with how BBH is performing, anything you can share on how the company has performed year to date? Yeah. We're obviously, you know, monitoring the business performance closely, you know, monthly, quarterly. I think you should expect. You can go back to some of the materials that we had shared, you know, a year ago, September, as the base case. You know, you could take that, Mike, and extrapolate some of what you've seen in our book of business, right? We're an asset management-oriented custodian. You could even look at some of our peers as benchmarks. I think you'd find what we've seen, which is that there's a sharp boost in NII in their book, or NII plus fees because of the mix of programs that they run for their clients' cash. You know, offset partially offset, I'd say, with some downdraft in servicing fee rates, you know, equity and bond markets. Then you'd see a bit of uptick on the FX services kind of business. I think it's ours and other large custodians are parallel to what you've seen. You know, it's something we're considering. You know, as we talked about earlier, you know, we're conscious that it's that we need to think about this, you know, from a couple different perspectives. It's performing, you know, in line with what we and you would expect at this point. Okay. Understood. Thanks for that color, Eric. Maybe just one last cleanup one for me. How should we think about how the unrealized losses on the AFS portfolio could accrue back over the next, call it 12-24 months as we think about your capital ratio or that, how that will impact the capital ratios over that time period? Yeah. It's part of our capital forecasting now. It was actually included in some of the buyback and capital return estimates that we provided not only for the fourth quarter, but also for our intentions related to next year. I think this quarter, you know, the accretion, you know, was worth, you know, $60 million or so of capital, and that's just the reversal of that mark, you know, accreting back as the bonds mature. There tends to be a little lumpiness to it, but that's the start of the accretion. It did provide, you know, some amount of modest tailwind, and you know, we'll certainly factor that in, right? Because just like earnings create an opportunity to return capital to shareholders, the accretion does as well. That'll be part of that build our capital ratios, which then we can share back with shareholders. Okay. Thank you for taking my questions. Okay. Next, we'll go to Mike Mayo with Wells Fargo Securities. Your line is now open. Hi. Just to clarify. In the next 10 weeks, we should either expect you to say that you'll proceed with the BBH deal, or that you won't be proceeding, and maybe there'll be an extra $2 billion buyback. Am I interpreting that correctly? What you should take away from what we've said, Mike, is that by the end of this quarter, we will have a decision on whether to proceed forward or not to proceed forward. You know, on the buyback, you know, first we need a board authorization for a further buyback and, you know, we'll communicate what we're intending on buybacks after that authorization. Okay. I just know that the first question this call was, you know, why not just walk away, and that's been the topic. Let me just take the flip side, just I'm sure you've invested a lot of resources and time and thought into this. Is the real issue just the regulators? I'm just wondering, it's like roughly what? Like 10% of your size. Other G-SIFIs are 10x-15x larger. I mean, when I worked at the Fed 30 years ago, it almost be considered de minimis, right? I mean, it's. I'm just trying to figure out the change. We all know the change in mindset as it relates to mergers generally. I'm just wondering, does this put you at a permanent strategic penalty box that you can't pursue any mergers, or is it something unique to this deal? Now, I know you can't talk particulars about this deal in general, but can you make any broader statements like when G-SIFIs do this or G-SIFIs do that, it gets extra scrutiny or it's not as easy to get through anymore? Yeah, Mike, what I would say is that the timing of our announcement in this deal, you know, in retrospect, probably couldn't have come at a worse time because if you think about the regulatory agencies, many of them, to some extent, were going through some kind of personnel change. That itself has slowed things down. In some cases, it's driven a very significant change in philosophy. Whether that change in philosophy will be permanent or not, I don't know. I'd like to think not. To answer, I think, the nub of your question is, you know, did anything change for us beyond the regulatory situation? The answer is no. I mean, for all the reasons that we've stated to you going back to September of last year, we feel like the deal is strategically compelling. In terms of longer- term, what does this mean for our position? I mean, again, that's something that we think about, and that's something that we certainly have conversations about with our primary regulator. I think there's some sympathy to all that. You know, I don't wanna talk about something in the abstract beyond the transaction that we're in, which is the BBH deal. It's not all regulators, it's a subset, and it's a situation that we're gonna work our way through, but work our way through very cognizant of what it means for shareholders, what it means for clients, et cetera. Last follow-up on this. Is there anything that you can do to help control the outcome of this at this time? Or is it simply, based on the analysis by the regulators? Well, I mean, we've talked about modifications to the transaction, and the modifications are meant to meet either regulatory concern or to navigate or to do what we believe is required to navigate through regulatory concerns. That's what we're up to now. Okay. All right. Thank you. Okay. Next, we'll go to Betsy Graseck with Morgan Stanley. Your line is now open. Hi. Just a couple of quick follow-ups. One, I know you've had some M&I charges, merger and integration charges over the past few quarters. I mean, if any of that is for the BBH deal. Was there anything in a walk away that, you know, you would be refunded for? I'm guessing the answer is no, but I just wanna make sure I understand how that works. Betsy, it's Eric. No, those are incurred charges that are about primarily our staffing and then some of the service providers. But we've also what we have done is avoided some of the, you know, obviously there are costs that are contingent on deal closing. You know, some of the advisory fees, et cetera. Those have not played through there, and those would not be incurred. Those are kind of the base level expenses. You know, we've had. No, and there's no, you know, tail on those by and large. Right. Okay. Is it possible to size how much of those have been for BBH or not? Since earlier this year, they've primarily been around the BBH transaction work. Okay. We've had two quarters of, you know, very strong dollar performance here, you know, dollar strengthening Q on Q. I see it in the deck, the ins and outs on, you know, the drag on revenues, the benefit to expenses, you know, a little bit of a drag on the AUCA, AUM volumes. You've got some benefit from volatility, you know, in the trading line. Just wanted to get your sense of how the dollar strengthening all in has impacted you and how do you think about managing that risk, just generally speaking? Thanks. Yeah. Betsy, it's Eric. What I'd describe to you is that the dollar has an effect, as do all the currencies on our P&L and balance sheet. But it's relatively symmetric and, I'll say almost neutral. I say that in EBIT terms and in balance sheet terms. You know, it, dollar strengthening reduces revenues, but also reduces expenses, not in all currencies and all the time, but it tends to have almost an EBIT neutral impact on the P&L. On the balance sheet, you also have a similar effect where, you know, as deposits are revalued, downwards in foreign jurisdictions as the U.S. appreciates, you know, so are the assets, in those jurisdictions. You have some symmetry. By and large, it's roughly neutral, which is why we don't do any particular hedging on it because we find that we can manage through it in a comfortable manner, except that it makes our reporting to all of you in the analyst and investment community a little more complicated. That's just what needs to happen. When you think about the, you know, footprint that you have today and the effort to, you know, continue to get scale in that footprint, is the international exposure strategically important from a diversification perspective, or do you feel that the growth outlook for the non-U.S. markets is higher? Just wondering. Betsy, it's Ron. Let me take that. I would say that, you know, we've got a good geographic mix now. The way we think about it, in virtually all of our locations, it's not like we're not at minimum efficient scale, but to the extent to which we can achieve more scale there, we'd like that. I think in general, the non-U.S. markets have continued, in most circumstances, not all, to grow faster than U.S. markets. On balance, if we could get a little bit more there, we'd like that. Got it. Thank you. Next we'll go to Vivek Juneja with J.P. Morgan. Your line is now open. Thanks. Sorry to beat a dead horse, but going back to BBH. Given that you talk about buying back $1 billion of stock, the deal value was $3.5 billion. That's a pretty substantial percentage. Would you still be buying the full entity you had intended to when you announced the deal? Or is there some elimination of a part of it, and flip it the other way? Could you buy just a piece of it, or is it only available as a whole thing? Vivek, it's Eric. The kind of the outlines, the perimeter of the deal with Brown Brothers Harriman hasn't really changed. It's around their investment services business. That's the business that we're attracted to, and that's the one that they'd like to transact. There's not been any real change there. Yeah. Vivek, we were never buying the whole business. I mean, it was always- What I meant was the whole investment services business. Oh, yeah. Could you buy a piece of it since it's different geographies, given the regulatory complexity to sort of if there are geographies that are more attractive and more difficult to replicate on your own? Yeah. I suppose that's something we could explore, Vivek. It's you know then the attraction goes down even more. Not clear that that accomplishes what Brown Brothers itself is trying to accomplish, which is you know they'd like to exit the business, not have even a smaller bit than they already have now. Ron, I wanna go back to a different topic. You mentioned about the price increase discussions you're having, and you said the operative word is understood with your clients. Should I interpret understood as understood and agreeing to it, or understood but not necessarily open to it and shopping it around with other providers? Yeah. I would say, again, this has been highly targeted, Vivek, it's not like we've said, you know, there's an X% across the board kind of thing. We've really tied it to one, where our costs are under the most pressure, and two, where there's high value added delivered to the client. I think you should interpret understood as we understand why you're asking for this. There's certainly some talk around it and, you know, is that the right number, et cetera. I would say in more cases than not, in fact, far more cases than not, we're getting agreement on it. Great. Thank you. Thank you. This concludes today's question- and-a nswer session. I'll now turn the call back over to Ron O'Hanley for any additional or closing remarks. Well, thank you, operator, and thanks to all of you for joining us on the call. Ladies and gentlemen, this concludes your conference call for today. We thank you for your participation and ask that you please disconnect your lines.