Northern Trust Corporation

Good day, and welcome to Northern Trust's first quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Mark Betty, Director of Investor Relations. Please go ahead.

Thank you, Olivia. Good morning, everyone, and welcome to Northern Trust Corporation's first quarter 2021 earnings conference call. Joining me on our call this morning are Michael Grady, our Chairman and CEO of Jason Tyler, our Chief Financial Officer, Lauren Allnutt, our Controller, and Kelly Lernahan from our Investor Relations Team. Our first quarter earnings press release and financial trends report are both available on our website at northerntrust.com. Also on our website, you will find our quarterly earnings review presentation, which we will use to guide today's conference call. This April 20th call is being webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be available on our website through May 18th. Northern Trust disclaims any continuing accuracy of the information provided in this call after today. Now for our safe harbor statement. What we say during today's conference call may include forward-looking statements, which are Northern Trust's current estimates and expectations of future events or future results. Actual results, of course, could differ materially from those expressed or implied by these statements because the realization of those results is subject to many risks and uncertainties that are difficult to predict. I urge you to read our 2020 Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission for detailed information about factors that could affect actual results. During today's question and answer session, please limit your initial query to one question and one related follow-up. This will allow us to move through the queue and enable as many people as possible the opportunity to ask questions as time permits. Thank you again for joining us today. Let me turn the call over to Michael Grady.

Thank you, Mark. Let me join in welcoming you to our first quarter 2021 earnings call. Amid the ongoing public health crisis, I hope you and your families are healthy and well. At Northern Trust, we continue to operate in what we call resiliency mode. which means we are focused on providing our clients continuity of service while the majority of our employees worldwide are working remotely. Before turning the call over to Jason to walk through the financials in detail, I wanted to offer some brief comments on our performance for the quarter. Our results for the quarter resulted in earnings per share growth of 9% versus the prior year and a return on average common equity of 13.7%. Revenue was consistent with the prior year as declines in net interest income and trading-related revenue were offset by 6% growth in trust fees. The persistent low interest rate environment has pressured our net interest income as well as our trust fees as reflected by money market fee waivers. While overall year-over-year operating leverage was negative, the 6% growth in trust fees did produce one point of positive fee operating leverage despite the impact of fee waivers which reduced our trust fee growth versus the prior year by five percentage points. The current quarter's results also benefited from an improved economic outlook, which drove a $30 million release of reserves for credit losses. Throughout the past year, our strong capital base and liquidity profile enabled us to support the needs of our clients, and this was demonstrated further during the first quarter, as we saw 10% sequential growth in average total deposits and 3% sequential growth in average loan balances. Throughout this challenging environment, we have effectively executed on initiatives to continue to drive organic growth within each of our businesses, one of our key strategic initiatives. Within wealth management, our digital marketing efforts and Northern Trust Institute have driven more conversations and engagement, and we've experienced an increase in client engagement during the quarter. Within asset management, We have continued to see success and growth within ESG mandates, with assets under management of $139 billion at quarter end, and our quant-active strategies have experienced strong relative performance, providing us good momentum. In our asset servicing business, we continued to see organic growth during the quarter, with the success being well diversified across regions, products, and client segments. Moving forward, We remain focused on continuing to effectively navigate through the persistent low interest rate environment, focusing on driving greater efficiencies, as well as continuing to grow organically in a scalable and profitable manner. Finally, I want to express my sincere appreciation for our employees, whose commitment, expertise, and professionalism throughout these extraordinary times continues to be exceptional. Now, let me turn the call to Jason to review our financial results in greater detail for the quarter.