Northern Trust Corporation

Second 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, ma'am.

Thank you, Jenny, and good morning, everyone. Welcome to Northern Trust Corporation's Second Quarter 2023 Earnings Conference Call. Joining me on our call this morning is 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 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 19th 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 August 19th. 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 second quarter 2023 earnings call. Our results for the second quarter reflect solid sequential performance. Trust fees and assets under custody and management increased sequentially, which included positive organic growth in each business. Net interest income was down modestly on a linked quarter basis, reflecting higher funding costs associated with the highly competitive deposit backdrop. Expenses, excluding unusual items, were well controlled, reflecting the rigor of our cost discipline as well as the impact of various productivity initiatives. We reported $64 million in charges in the second quarter associated with these steps. Our wealth management business modestly grew assets under custody and management and trust fees on a sequential basis. We continue to see strength in the higher wealth tiers and within our global family office segment, where we captured several marquee wins. Our industry leadership position also stood out in the quarter. We held our third annual Northern Trust Wealth Planning Symposium, bringing together legal and financial experts to share innovative strategies and insights to shape the future of wealth management. Sessions averaged more than 1,000 participants and included attendees from North and South America, Europe, Asia, Africa, and the Middle East. We also released the second Family Office Trends Report, co-authored with the Wharton School. Notably, we received a utility patent for our cloud-based, goals-driven wealth management technology during the quarter and were named Best Digital Innovator of the Year and Best Private Bank for Digital Wealth Planning by the Financial Times Group. In asset management, we saw strong flows into our institutional money market platform and have recaptured share. We also won a number of key mandates across products, including outsourced investment solutions, tax-advanced equity, and quant active. Our new product launches in the quarter focused on alternatives. Within asset servicing, we continue to have good momentum in core custody and fund administration, particularly with asset managers in Europe, and our pipeline remains robust. In the UK, we were reappointed by Brightwell for middle office services. Brightwell is the primary service provider to the British telecom pension scheme, which has more than $50 billion in assets under management. Among asset owners, we clinched several key multimillion-dollar takeaway wins in North America, where our front office solutions, which provides a comprehensive view across public and private assets, was cited as a key differentiator. As a testament to our capabilities, we were recently awarded three prestigious industry awards, including Best Global Custodian for Asset Owners by Asian Investor. In the second quarter, we launched A-Suite, our content, community, and collaboration hub for global asset owners. Within the first few weeks of launch, we've seen significant client engagement. Going forward, we expect this new communications channel to create relationships with key target audiences and further showcase our expertise in the market. In closing, our balance sheet continues to be very strong with ample capital and liquidity. Our new business momentum is gathering steam and our pipeline remains robust. While there's still more work to be done, we're making solid progress following the trajectory of our expense growth. Rationalizing our cost base remains a top priority, and the governance and control mechanisms we're putting in place today should drive sustainable improvements for both the near term and for years to come. We head into the second half of the year well-positioned to support our clients and generate value for all of our stakeholders. I'll now turn the call over to Jason.