Northern Trust Corporation

Good day, everyone. Welcome to the Northern Trust's third quarter 2021 earnings call. Today's conference is being recorded. At this time, I'll turn the call over to Mr. Mark Betty. Please go ahead, sir.

Thank you, Alan. Good morning, everyone, and welcome to Northern Trust Corporation's third quarter 2021 earnings conference call. Joining me on our call this morning are Michael Grady, our chairman and CEO, and Jason Tyler, our chief financial officer. Our third 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 October 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 November 17th. 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 third quarter 2021 earnings call. During the third quarter, we continued to have success executing on our growth strategies across each of our businesses. In our wealth management business, we've driven strong growth across each of our regions and our global family offices business. We continue to see improved levels of engagement in new business activities with both existing and new clients. During the quarter, we've also invested and strengthened our depth of expertise. There's no question that labor markets are tight and competition for talent is fierce, but even amidst this environment, we are very pleased with the additions to our team across the country. Within asset management, we continue to see momentum in our quant-active flex shares ETFs and ESG strategies. We launched six new climate-themed ETFs, which incorporate our new ESG vector score. Two of the launch funds were in Europe, marking our second launch of FlexShares offerings in Europe. We've also continued to have growth in our liquidity products, and our money funds surpassed $300 billion in assets under management during the quarter for the first time. Additionally, our asset management business was recognized by Investment News as a 2021 Excellence in Diversity, Equity, and Inclusion Award winner for the third consecutive year. Our asset servicing business continues to see growth that is well diversified across regions, products, and client segments. We remain focused on driving profitable growth while investing and expanding our asset servicing solutions. The current environment has continued to pressure margins earned by investment managers, and as they rethink their operating models and whether to move to outsourced solutions, our whole office approach has put us in a position to help them achieve their goals. We're also positioned well to benefit from the trends of asset owners managing more assets in-house, as the flexibility of our model and ability to combine capabilities for these clients has been an area of strength. Our growth strategies within each of our businesses resulted in 11% year-over-year growth for our trust fees and 10% growth in our revenue. Our expenses also increased year-over-year, albeit at a lower rate, as we continued to invest in technology and our staff, including higher levels of compensation, as we built a diverse, engaged workforce with skills for the future. Taken together, this resulted in both positive fee operating leverage as well as positive total operating leverage. To close, I also want to express my sincere and immense appreciation for our employees around the world, whose commitment, expertise, and professionalism in serving our clients, communities, and one another continues to be truly extraordinary. Now, let me turn the call to Jason to review our financial results in greater detail for the quarter.