Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| We're well positioned to navigate the current uncertain environment including the proposed regulatory changes related to capital and long-term debt and generate value for our stakeholders |
| Our results for the third quarter reflect solid execution against the challenging phase of this interest rate cycle, particularly as rates appear close to be peaking |
| Our capital levels and ratios remained strong in the quarter |
| Expenses were well controlled, and we improved our capital position |
| If we can get 100 to 200 basis points in fee operating leverage, that sets us up really well based on where our pretax margin is for good EPS growth over time |
| We saw ongoing strength in the higher wealth tiers and within our Global Family Office segment, where momentum outside the U.S |
| Year-over-year levels benefited from favorable markets, currency improvements and asset inflows |
| For the fourth quarter, we expect continued improvement |
| Our second quarter adjusted results were even better up 5.3% year-over-year |
| In particular, during the third quarter, we had healthy new business generation with clients with assets over $50 million |
| In Asset Management, we saw positive flows into our institutional money market platform for the third consecutive quarter |
| Relative to benchmarks, our tax-advantaged equity product performance remained strong within the quarter cementing its 1, 3 and 5-year track record of out-performance |
| Our first quarter adjusted results were meaningfully better, up 5.8% year-over-year |
| Reinforcing our combined strength as One Northern |
| Within Asset Servicing, we had good momentum in core custody and fund administration and our pipeline remains solidly within historical levels |
| We expect to benefit from this strategy when rates decline |
| But the overall business is strong, again, net positive from an overall net new business perspective |
| Our liquidity remains strong |
| We're well positioned to meet the proposed regulatory requirements, that Mike referenced without significant changes to our operating model |
| Clients are -- they continue to see the strength of the balance sheet |
| The year-over-year strength was due to solid new business activity and favorable market and currency impacts |
| Our balance sheet continues to be very strong with ample capital and liquidity, and our credit quality remains excellent |
| New business momentum is healthy and our pipeline is robust |
| Expense growth has declined each quarter this year, and I'm confident that we'll continue to build on this discipline |
| We also had good success in the U.S |
| Sequential performance reflects favorable markets and new business activity, offset by weaker transaction volume |
| In those 2 areas, we're pleased with our performance |
| Overall, our credit quality remains very strong |
| Coming into this year, we knew we had to do better than that, and we've been grinding that down each quarter, quarter after quarter |
| And but it's -- the good news, it has stayed with us, and we've done a good job of holding on to the deposits |
| Statement |
|---|
| Net interest income on an FTE basis was $469 million for the quarter, down 10% sequentially and down 11% from the prior year |
| Excluding notable items in all periods, revenue was down 2% on both a sequential quarter and year-over-year basis |
| Third quarter deposit levels were generally in line with seasonal expectations, but funding costs were significantly higher, putting pressure on net interest income |
| They were essentially flat quarter-over-quarter, I guess, a little bit softer than we expected |
| Down 10% sequentially and down 11% from a year ago |
| Second quarter was a slight loss |
| Average deposits were $102 billion, down $4 billion or 4% sequentially, in line with our expectations for this seasonably weaker quarter |
| that assumes that net interest margin would be relatively flat, up a couple to a few basis points, but deposits would have to come down an average in the $93 billion to $95 billion for us to get down to that $430 million to $440 million |
| Deposit pricing pressure, our securities maturity schedule, investment outlook and other factors provide upside that's not reflected in the current quarter |
| and expecting to have that growth rate be lower next year than it has historically |
| Similarly, because a significant portion of our fees are billed on a lagged basis, the sequential decline in AUM will impact our fourth quarter trust fees |
| So every budget year is really, really difficult |
| And so coming last quarter, we came into it thinking we were going to be down 5%, the market ended up being more competitive |
| And so I think it shouldn't be -- again, it has tended to be a negative, that negative will go away |
| And then transaction volumes continue to be light |
| And so the prior run rates are probably too low and the current run rate might be too high |
| So you're looking to be down 6% to 8% in the fourth quarter to $430 million to $440 million -- and -- but you said don't take that as a run rate |
| And so what kind of run rate do you think you'll have? Because I guess you're guiding down NII 20% year-over-year in the fourth quarter |
| All in, this would put our full year adjusted expense growth rate at approximately 5% or roughly 400 basis points lower than 2022 levels |
| Our average balance sheet decreased 4% on a linked quarter basis, primarily due to lower client deposits |
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