Northern Trust Corporation

Good day and welcome to the Northern Trust Corporation first quarter 2023 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jennifer Child, Director of Investor Relations. Please go ahead.

Thank you, Cynthia. Good morning, everyone, and welcome to Northern Trust Corporation's first quarter 2023 earnings conference call. Joining me on our call this morning are Mike O'Grady, our Chairman and CEO, Jason Tyler, our Chief Financial Officer, Lauren Allnutt, our controller, and Grace Higgins 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 25th call is being webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be made available on our website through May 25th. Northern Trust disclaims any continuing accuracy of the information provided in this call after today. Please refer to our safe harbor statement regarding forward-looking statements on page 12 of the accompanying presentation, which will apply to our commentary on this call. 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 Mike O'Grady.

Thank you, Jennifer. Let me join in welcoming you to our first quarter 2023 earnings call. The recent disruption in the banking sector reminds us of the importance of resiliency to be able to meet the needs of clients in all operating environments. During the past six weeks, much like over the past 130 years, our strong balance sheet and conservative approach to risk management have enabled us to provide the support, liquidity, and exceptional service our clients have come to expect from us. Northern Trust continues to be viewed as a source of strength and stability, as symbolized by our anchor. During the quarter, we continued to assist our clients manage their liquidity, including deposits, money market funds, and short-term treasuries, through the transition from a period of quantitative easing and low interest rates to one of rapid tightening and higher rates. Overall, we saw client liquidity increase during the quarter, as a decline in deposits was more than offset by increases in higher yielding money market funds. Our results for the first quarter reflect sequential improvement in revenue and expense growth. The sequential growth in trust fees outpaced a slight decrease in net interest income, which still experienced healthy year-over-year growth. Expense growth moderated from recent quarters, which was attributable to both our renewed spending discipline and certain timing differences. Within our wealth management business, assets under management grew mid-single digits sequentially, while our trust fees increased modestly. The turmoil in the banking space contributed to a flurry of new business activity later in the quarter. We saw solid new account openings, particularly at the upper end of the wealth market. We took in almost $1 billion in inflows from the $50 million and over segment alone, and discussions are continuing with a solid pipeline of prospective clients. In asset management, we had a strong start to the year with a sequential increase in new business, including large inflows into our institutional money market platform. New product launches focused on alternatives and extending securities lending capabilities in our collective fund space, with three new funds launched. Within asset servicing, we saw continued momentum with particularly good traction in Europe. For example, during the quarter, we transitioned in Artemis Investment Management, a large UK-based investment manager for whom we are providing a full suite of services, including custody, fund administration, investment operations outsourcing, and risk and analytics services for both their UK and Luxembourg funds. In closing, we are well-positioned to continue to serve our clients and navigate the ongoing economic uncertainty from a position of strength. I'll now turn the call over to Jason.