Northern Trust Corporation

Good day and welcome to the Northern Trust Second Quarter 2021 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mark Betty, Director of Investor Relations. Please go ahead.

Thank you, Stephanie. Good morning, everyone, and welcome to Northern Trust Corporation's Second Quarter 2021 Earnings Conference Call. Joining me on our call this morning are Michael Grady, our Chairman and CEO, Jason Tyler, our Chief Financial Officer, Warren Allmutt, our controller, and Briar Rose from our investor relations team. Our second 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 July 21st call will be in webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be available on our website through August 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 everyone to our second quarter 2021 earnings call. During the second quarter, we continue to successfully execute on our growth strategies across each of our businesses. In our wealth management business, our goals-driven approach and last year's launch of the Northern Trust Institute continue to resonate with our clients, further increasing client satisfaction levels. Our digital Navigate the Now campaign, which we introduced last year, is successfully generating new contacts and leads, creating more opportunity. Uncertainty in tax law changes has also contributed to new business momentum, and earlier in the quarter, we announced the launch of our Tax Policy Resource Center, an extension of the Northern Trust Institute. Within asset management, we continue to see momentum in our liquidity products, as well as strong growth in our FlexShares ETF and ESG strategies. We continue to focus on expanding sustainable investment solutions, and earlier this month announced the launch of the Quality, Low Volatility, Low Carbon World Strategy, an actively managed strategy focusing on high quality, low volatility stocks while maintaining a low carbon footprint relative to the MSCI World Index. We also introduced the Northern Trust ESG Vector Score, which measures financially relevant ESG-related criteria that could impact the operating performance of publicly traded companies. Within our asset servicing business, we continue to see growth that was well diversified across regions, products, and client segments. Recent notable public wins include Fundsmith, Marks & Spencer Pension Trust, Martin Curie Investment Management, and Cold Pension Trustees Services Limited. We continue to invest and expand our asset servicing solutions, as evidenced by us finalizing our acquisition of Parallax Investment Technology, which underscores our commitment to the front office solutions business. The execution of our growth strategies, combined with favorable markets, resulted in 12% year-over-year growth in our trust fees, despite significant headwinds from money market fee waivers. Our expense growth of 8%, inclusive of a pension settlement charge, generated four points of positive fee operating leverage. The expense growth reflected new business, as well as investments in both technology and our staff. as we continue to build a diverse, engaged workforce with skills for the future. I also want to draw your attention to our latest Corporate Social Responsibility Report, which we published last week, marking a full decade of transparent, detailed CSR reporting about the company. The report details our progress towards creating long-term value for our clients, employees, shareholders, communities, and other key stakeholders. Moving into the second half of 2021 and beyond, we remain focused on continuing to effectively navigate the persistent low interest rate environment, focusing on driving greater efficiencies as well as continuing to grow organically in a scalable and profitable manner. With respect to the public health environment, we continue to operate in what we call resiliency mode, which means we're focused on providing our clients continuity of service while the majority of our employees worldwide are working remotely. However, during the third quarter, we expect to see more of our staff returning to their respective locations. Our return to office plans are being driven first by robust health and safety protocols specific to each location, and second, by business function needs and timelines. Finally, I want to express my sincere appreciation for our employees, whose commitment, expertise, and professionalism continues to be exceptional. Now, let me turn the call to Jason to review our financial results in greater detail for the quarter.