Okay. Up next, we have State Street, and we're delighted to have with us today John Woods, CFO of State Street. John, welcome back to the conference. Great to be here. All right. John, let's start with the operating environment and talk about how you see the overall environment today versus what you expected, maybe heading into the year, and maybe even as you got past 1Q. Yeah, sure. It's been pretty constructive. When we go back to what we were thinking about in April, we had the equity markets being basically flat to year-end in terms of what our assumptions were in terms of driving our outlook for the year. It's been a little bit of a wild ride, but we're still up 6%, 7%, year- to- date. That equity tailwind is nice to have, comparing and contrasting to where we were in April. Rates also a little bit of a U-turn from earlier in the year, at least. We were talking about cuts, and now hikes seem to be priced in, not just here, but also in Europe, where we have exposure. The whole volatility story, or I guess volatility of volatility, if you will. We had that large spike in the first quarter; we had a view that that was going to moderate throughout the rest of the year. For most of this quarter, that's what's been going on. Then Friday happened with the jobs report, and we saw volatility kick back up. Yeah, it's been playing out a little differently than we expected, but in a constructive way, in the context of how our businesses are performing and operating. We should get into some of the balance sheet side of things and how you're managing that rate volatility. Before that, can you talk a bit about 2Q, what you're seeing quarter- to- date, and maybe update us on the full-year guide as well? Yeah, I'll make a few comments about 2Q. Maybe just the headline. I think we're seeing revenues coming in year-over-year up around the low- teens percentage. That's a little better than expected. Unpacking that a little bit, if I talk about servicing, I mentioned equity markets being a little bit more of a tailwind, but nevertheless, I think the story is organic growth. When I look at servicing fees, we have positive contributions coming from client activity and flows. We have positive contributions coming from net new business and net installs. From that standpoint, we're having both the organic growth story play out in the second quarter for our largest revenue line item, as well as a constructive backdrop from an equity market standpoint. Pretty similar story in management fees when you think about our investment management business. Very strong flows in the second quarter, meaningfully higher than 1Q. That's really being driven predominantly in the ETF space from both equities, fixed income, and cash. From a regional standpoint, it's primarily a North American story, whereas last quarter it was Europe leading the way. We're seeing, again, in management fees, both organic growth, which is really attractive, as well as the uplift that we typically get when market levels are higher. Speaking of markets, our markets business itself, even though we had volatility moderating into the second quarter, and that's what was playing out. Quarter- to- date, even with average volatility, frankly, being lower than the end of the first quarter, our client volumes were very resilient. We're feeling good about the contributions coming from the markets business. Those are the Big Three, really, and the reason why we're feeling good about revenue trends being a little better than expected, in the low teens year-over-year. I'll also add that I think what we're seeing is likely that translating into an operating leverage number that's 400 basis points or more for the quarter. For the quarter. Got it. Yep. Got it. Great. What does it mean for the full- year guide? Yeah. We'll see. Well, I think certainly the trends in the second quarter coming in a little better than expected could imply some upside for the year. We'll go ahead and digest these results and absorb where we are from a macro standpoint, and give you further insight on that in July. All right. Another reason to look forward to July. Yeah. I know we'll get into the other. Absolutely. In a second. Let's focus on the strategic priorities, JR. You laid out a number of areas of focus, like alts, wealth services, and digital assets. I know there's a lot to unpack there. There's a lot of recent developments there, a lot of investments that you've made. Can you talk about how you think the path to scale across alt servicing wealth, digital assets, and what your major priorities are there? Yeah. I'd say we're excited about those three. I'll hasten to add that the core franchise is pretty exciting too. Even without those three, just the global scale that we've got across our core businesses is something we can also talk about. Jumping into the three here for a second. In the alternative space, this is a big part of our business. In terms of our servicing business, it's a big part of our innovation and investment management, and it's a large client base for markets as well. It's across all three. Within investment services, it's now up to around 15%-20% of our servicing fees. It typically grows faster than the traditional space. The growth and return profile is quite good. We've been investing in that. The alternative space is probably the one that's most at scale, given those numbers. We've got the investment services business driving that. Investment management, as part of their innovative product- launch mentality, they've been partnering with key alternative asset managers like Apollo and Bridgewater to democratize access to private assets. As I mentioned, the market's business is a liquidity and securities finance provider in the alternative space. That's a big part of what's driving our momentum. I think the second one, which was wealth for us, also cuts across the businesses. When you think about what's going on with respect to wealth services, we're really excited about our partnership with Apex, which is a global digital-first wealth manager, custody, and clearing platform. It's scalable, and so from a services standpoint, we have that anchoring our wealth back office capabilities. When you put that together with CRD Wealth, that's an investment management platform that is a holistic solution for wealth managers. Rounding it out with investment management, they've got approximately 30% of our AUM is in the wealth space, coming out of investment management. We're wrapping that together from a wealth standpoint. Maybe lastly, digital. It's early days in digital. As we've mentioned, we want to be there for our customers as they want to support traditional finance and digital finance, and the interoperability among all of that. As part of that roadmap, we've launched our Digital Asset Platform. Our product roadmap leads with tokenized money funds. There's a strong business case and conviction around that being the right first place to go. There's a number of reasons for that. It creates liquid collateral out of current collateral that's sort of trapped and not in motion. It sets that in motion. It provides a yield for those who want to stay on-chain, and they like the safety of stablecoins. Flipping to tokenized money funds, which has a yield, is something that's attractive. Opening up asset manager distribution to digital investors. We like that as the first part of the roadmap, and that'll be followed up with tokenized ETFs and tokenized deposits down the line. Those are the Big Three, and they touch a number of our businesses. Maybe I'll ask the question on AI and the impact on deposit costs here, because as you have, say, tokenized money funds and you have tokenized deposits as well, that allows people to move their money around a lot faster. How does that impact, in your mind, how you think about deposit costs in the medium term? Well, I think most of our clients are fiduciaries. This may have an impact over time. I suspect that the holistic value proposition that we will provide to our customers could shift around to the extent that if the balance of value that we provide and that we extract changes because deposit levels are impacted by other services, I think that'll show up in maybe fee pools. Right. Potentially versus balance sheet pools. Nevertheless, we've migrated over the decades with various impacts to the deposit franchise of commercial banks and trust banks overall. That can change over time. I feel like the value proposition that we're providing in the digital space will nevertheless be really attractive and be part of a strong growth and return profile. Got it. Okay, let's talk about the strength of the franchise overall. You've talked about the power of the combined franchise across investment services, investment management, and in markets, this idea of One State Street. How does that show up in practice today? Where do you see the biggest opportunities as you showcase that part of the business? Yeah. I think I would go back to the three that we talked about. Each one of those is an example of One State Street. Yeah. How we're deriving that distinctive strategic portfolio into the future. I won't go back over that, but investment services, investment management, and markets each of them has a role to play in those three. If I come back to the core, maybe as just a reminder, as our core value that we provide across different client segments, maybe starting with the asset manager space itself. We have investment services and markets business go to market together with a holistic solution for investment services, plus markets financing and liquidity solutions to serve asset managers. Not just traditional asset managers, which is a big part of our business. It's 80+% of our business, but also alternative asset managers, which we talked about in the alternative space. It's kind of an 80%-85% in the traditional space, but the 15%-20% in the alternative space. Investment services and markets go as One State Street to deliver those services. If I flip to asset owners, maybe the pension funds of the world and insurance companies, sovereign wealth, that's more of an investment services plus investment management go to market, where that customer base will be in need of custody services, but they need investment management products as well. That's an opportunity for those two businesses to go to market together. We've talked about wealth managers, where we put together the capabilities of Apex in the investment services space, covering the back office and CRD in the front office, and put that together in terms of serving wealth managers. Again, another example of our core One State Street offering across the big customer segments, asset managers, asset owners, and wealth managers. It's pretty powerful, and the connectedness of the enterprise is something that is pretty attractive when you think about the opportunities going forward. All right. I know we have an exciting update in July. I think a lot of what you spoke about right now will go into that update. When you think about that strategic update that you're giving, without giving too much away, or let me rephrase that, giving away as much as you care to give away. Yeah. Can you provide some more color on what metrics you think are important? What should investors focus on as we think about that path forward? Yeah, I can make a few comments about this. I think you'll just hear us repeat that we're very excited about the core franchise, and you'll see how that momentum plays out over the medium term. We are going to highlight, we think, exciting and distinctive portfolio strategic initiatives as well, and how that plays out through our three big businesses. I think the third thing to highlight is that underpinning this and creating capacity for investment is our transformation program, which we're accelerating and communicating the impact of in July. Within that transformation program, you'll hear us talk about we're migrating to a new operating model, a product platform operating model, which is tech and AI- enabled. What does that mean? It means that we're taking an end-to-end process view of the entire company, and not just re-engineering, where you take steps out and interfaces, and sure, we'll do that, but we're going to rewire the company, where we're infusing AI and technology into these business processes. We're excited about that. When you put all that together, we think there's an earnings profile that's highly attractive. I think you'll hear us talk about pre-tax margin over the medium term, getting to your metrics question. We do look at return on tangible common equity as another metric that's important to talk about. Those are the big two. I think we'll also cover operating leverage, and our commitment to positive operating leverage, and how that will play out. We'll have a description of how the businesses that I just walked through, investment services management and markets, what business goals will play out with respect to those businesses. I think that's what you're likely to see and possibly a little more. All right. That's exciting. Tune in in July, and we're excited about being able to communicate it. Very exciting. It'll be here before we know it. Yeah. Okay, great. You mentioned AI, and you mentioned transformation. Any examples of bigger use cases of AI and the highest value use cases that you're implementing right now? I think today, the ones that are really up and running primarily revolve around code. I think you're seeing us modernize our code from legacy languages to modern languages pretty quickly now with the use of AI. Code generation itself is becoming extremely efficient, as we all know. That's the second big driver. Third is just risk managing and identifying vulnerabilities in code, which is now much more efficient using AI. Those are three big ones, all revolving around code. I would add, we've made the platform investments to give access to standardized agents across the whole company. Research and analysis agents are on all State Street desktops. That's important, and we're seeing augmentation and productivity that comes from that. I think going forward, we either have just or are imminently launching our internal agentic platform and factory, which will allow us to generate customized agents. Going from standardized agents to customized agents is more of a 2H 26 heading into 2027 story. Those customized agents won't exist in a vacuum. I'll take you back to the point we made about the operating model. We're going to be embedding agentic capabilities in an end-to-end process view. That's what we mean by AI enablement and rewiring processes. It's really embedding AI capabilities into that, and I think that's what you'll see. We're kind of heading into the second half and into 2027, going forward. There's an investment spend also associated with this. I'm sure you're getting productivity benefits already there, and with more to come. As we think about nine consecutive quarters of operating leverage at this stage, how are you thinking about the right balance between this investment spend, as well as dropping some of that benefit to the bottom line? If I think about productivity, there are multiple objectives. I think the first one that comes to mind, since you mentioned it, is to demonstrate progress from a profitability, returns, and growth standpoint. That's really great, it's important, and it is a high priority for us. I will say, though, that I guess a second point would be that productivity creates a buffer and a mitigant in downturns. It gives you some flexibility in downturns when, in fact, they do arrive. That's helpful, too, the second one. The third one, and maybe even more interesting, is the capacity that productivity creates to invest in your strategic capabilities. I think that's where the differentiation comes from. Productivity is necessary but insufficient in order to deliver. I think they come hand in hand. I think it's productivity plus strategic investment. The differentiation shows up in customer experience, launching new products, and new kinds of business models broadly to continue that growth profile over time. Just wrapping it up, productivity helps you in the near term, but if you don't invest it right, then you're not going to own the medium and long term. I think that's how I think about it in terms of balancing near-term goals against medium- and long-term durability and excitement of the franchise. It seems like we're pretty early innings into this whole productivity improvement game here. Well, we've been kind of delivering $500+ million in the last couple of years. I think it's been $2 billion over four years or five years. We've been at it, but there's some low-hanging fruit there that's been picked. I think what you're hearing from us is that we're going to climb that tree a little bit. Yeah. Go after the deeper productivity that you're hearing us talk about when we talk about operating model transformation to deliver durable capacity for strategic investment over multiple years. That's what you're hearing from us is that we've always been committed to productivity, but we're looking to put a several-year program in place to give us the confidence for several years of investments to support the strategic initiatives we talked about earlier. Got it. Okay. Let's talk about NII and the balance sheet. One of your initial projects as CFO has been focused on the balance sheet, and we've seen a nice improvement over the last three quarters. Can you remind us of your strategy to optimize the balance sheet from both a funding mix and a loan perspective? Just as you mentioned, NII, I think NII is a little better than expected this quarter as well. I may not have mentioned that earlier. Some of that is due to the work that we did in 2025 on kind of some optimization actions that we took on both the asset and liability side. I think, as you mentioned, primarily short-term wholesale funding was something that was maybe becoming smaller. In the loan book was another example on the assets side where we. This is an ongoing activity, but we're constantly looking at any capital and liquidity that can be recycled from lower strategic- profile clients into higher strategic and risk- return profile clients. A lot of the actions that we talked about last year have been taken, and much of the benefit of that has blown through. This is ongoing. We'll continue to optimize the balance sheet; much of the benefit that you could expect to see from balance sheet optimization has played through. The net interest margin and the NII have responded to that quite nicely. Right. Again, NII is coming in a little better in 2Q than we expected. You brought up NII. I guess anything to say on the deposit side? I know the first- quarter deposit growth was fairly strong. Anything driving the NII this quarter? Yeah. I think we gave a 250-260 range for the year. 2Q deposits are coming in a little better than that. A little bit north of that range. Got it. All right, perfect. Great. Let's talk about capital and liquidity a little bit here. I think, as you've had more time to digest some of these NPRs that have come out, do you have anything incremental to share on the RWA impacts of these new rules? No, I think we're pretty constructive on it. I think we're going to end up with credit RWA benefits that more than offset the operational RWA that's going to have to be coming through. There'll be a net positive benefit. Again, pretty constructive on that rulemaking, and we'll see how that plays out in terms of getting finalized. As you think about the target payout ratio of 80%, is there any room to move higher in the near term, given just the level of excess capital that you have? Well, I think we've been operating in the around 11% or so, which is at the upper end of our policy range. I think the way we think about it is, I may have mentioned this in previous conversations, is that there's a waterfall here where we commit to supporting an attractive and growing dividend. That's top of the list. The next level down would be supporting organic growth of our businesses, as well as bolt-on partnerships and acquisitions that can accelerate our strategies faster than organic investment might. If that's attractive, we'll think about those kinds of things, and we did a couple of those transactions in 2025 as an example. Then, what falls out of that is the buyback. I think we've been able to demonstrate an attractive buyback over time, and here into the second quarter, I think we're going to be able to indicate that our buyback level is about the same as it was in the first quarter from a dollar standpoint. Got it. All right, perfect. Then, there's other areas in the regulatory agenda. There could be changes in liquidity rules. There might be other changes coming down the pike. Is there anything else that you're focused on that might benefit State Street? No. I think we've got a pretty attractive G-SIB score at this point, and I think a lot of the rulemaking seems to be headed in the right direction in terms of trying to calibrate and refresh what's gone on in terms of growth in the banking, in the G-SIB sector. Some attention given to short-term wholesale funding, et cetera, but nothing significant that we're concerned about in that rulemaking. Got it. Okay. I did want to come back to rates because one of the things you did mention is the changes, not just in U.S. rates, but also in- Europe. Europe. Yeah. How are you thinking about the sensitivity of the balance sheet to both of those, and how are you managing that? Yeah. I think we can say that our U.S. balance sheet, which is maybe 75% or more of our overall balance sheet, is neutral to asset sensitive to the Fed on the short end. Even if there's a hike or two, at the margin, we'll generate additional NII, but it's not significant. Nevertheless, that's our positioning. In Europe, we have more asset sensitivity, and I think the ECB is slated to have a couple of hikes this year, one in 3Q and one in 4Q. We benefit something in the neighborhood of $5 million or so per- hike per- quarter from our European balance sheet, which is, I don't know, 10% or 15% of our overall balance sheet, but we're more asset sensitive there and positioned to benefit if the ECB begins to hike. Got it. Okay. Any changes in how you're thinking about managing it from here, just given the amount of rate volatility? Yeah. I think nothing significant in the near term. Got it. We've been well-served when the Fed was expected to hike to hold the asset sensitivity, and so we didn't chase that in the U.S., and so that's played out nicely. Things are moving around a fair bit, even as of Friday, and what we saw in CPI this morning. Inflation pressures seem to be building from an energy perspective, predominantly. There are other forces, though, in terms of the consumer. Consumer balance sheets are strong, but they're spending that down now. We'll be absorbing that and playing that through in our interest rate positioning. We've been well-served with our lack of action in terms of trying to chase a Fed cut, which evaporated. I think we like for now our neutral to slightly asset-sensitive position in the U.S. and our clear asset-sensitive position in Europe. All right. Perfect. Maybe to conclude here, what do you see as the most underappreciated part of the State Street story, and what do you think the market's missing here? Yeah. I would say back into the core aspects of this, when you think about One State Street and our exceptional client base, I think there are durable moats there. How we go to market for traditional asset managers with the number one custodian for ETFs in the world and the number one FX provider for asset managers in the world is really powerful. We have an extremely innovative investment management platform, number four in the world, 30% in the wealth space, which is growing faster, potentially, than some other categories. I think that, that core aspect is sometimes forgotten. Increasingly, we're going to make sure that's not the case. Our market business is a global business. They're regionally diversified. They benefit from a number of forces around the world. This quarter, U.S. equities have helped our market's business. APAC equities, in particular in Korea and Taiwan, I think it's underappreciated, our onshore presence in global markets that benefits us. Even when volatility was low this quarter, we've been doing quite well. Of course, I mentioned all of the three strategic initiatives that we're excited about. To close it all out, I think the potential of our transformation to create capacity to invest in all of this and the earnings power that we're going to talk about in July, you wrap all that together, and I think that's something that investors will want to pay attention to. All right. We'll look forward to July. John, thanks so much for joining us. Yeah. Fantastic. Good to be with you.