Good day, everyone, and welcome to the Northern Trust Corporation Fourth Quarter 2012 Earnings Call. Today's call is being recorded. At this time, I would like to turn the call over to Director of Investor Relations, Bev Fleming, for opening remarks and introductions.

Thank you, Christie, and welcome to Northern Trust Corporation's Fourth Quarter 2012 Earnings Conference Call. Joining me on our call this morning are Mike O'grady, Northern Trust Chief Financial Officer; Rick Kukla, our Controller; and Allison Quaintance from our Investor Relations team. For those of you who did not receive our fourth quarter earnings press release or financial trends report via e-mail this morning, they are both available on our website at northerntrust.com. In addition, and also on our website, you will find our quarterly earnings review presentation, which we will use to guide today's conference call. This January 16 call is being webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be available through February 13. 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 indicated by these statements because the realization of those results is subject to many risks and uncertainties. I urge you to read our 2012 annual report and our periodic reports to the Securities and Exchange Commission for detailed information about the factors that could affect actual results. Thank you again for joining us today. Let me turn the call over to Mike O'grady.

Thank you, Bev. I also welcome you to Northern Trust's Fourth Quarter 2012 Earnings Conference Call. We've organized today's call into 4 sections. I'll review both our fourth quarter and full year results, update you on Driving Performance and comment on our capital. Bev and I will then be pleased to answer your questions. Starting with some overview comments on Slide 2. This morning, we reported fourth quarter earnings per share of $0.69 and a return on equity of 8.8%. This quarter closed the year of solid performance for the company. We achieved robust growth in both our personal and institutional businesses and improved our profitability against the backdrop of a challenging operating environment. Full year earnings per share of $2.81 and a return on equity of 9.3% were both higher than last year. New business was excellent in the quarter and for the full year, increasing client asset levels and trust fees. The growth in clients is broad and diversified across our businesses, services and geographies. In our institutional business, for example, just last week, we announced that Bridgewater Associates, one of the world's largest hedge fund managers, appointed Northern Trust to independently replicate certain middle and back-office services for their approximately $140 billion in assets under management. In addition, in the fourth quarter, we finalized the implementation of our investment operations outsourcing relationship with Australia's Queensland Investment Corporation or QIC, capping off an on-boarding process that was first announced in March of 2011. The fourth quarter was also strong for our personal business as we were well-positioned to provide Wealth Management and Asset Management solutions to new and existing clients that address the uncertainties presented by the changing tax and investment environment. Winning mandates such as these from new and existing clients is the primary driver of growth…

[Operator Instructions] And we'll go first to Cynthia Mayer from Bank of America.

I guess just a little bit on expenses. Within other bucket, it sounded like some was seasonal or onetime and some might repeat. I can see the 3.3, but within the rest, I'm just wondering if you could give us a sense of what wouldn't repeat and what is maybe a step-up.

Sure. Why don't I, on that, Cynthia, just step back a little bit, given that there are a number of items in other, and it's that category that went up sequentially. Our expenses fluctuate from quarter-to-quarter for various reasons, and we did see that in the fourth quarter. When you look year-over-year, expenses were only up 1%, but quarter-over-quarter, they were up 6%. Third quarter expenses often can be lower. Often just with the summer months, they're slower from an activity standpoint, whereas fourth quarter expenses can be higher, given that we just have much more activity at the end of the year, which we certainly did this year. Much of it across our businesses, as I talked about, some due to things that were different this year, like the fiscal cliff and other things that I think just happen every year where you try to get a lot done by the end of the year. This year, we definitely saw the change in outside services and other operating expenses. Outside services includes a number of expenses, but certain things like sub custodian costs and third-party advisor fees, which fluctuate throughout the year. And there's no real definitive seasonal pattern to those fluctuations, but they were higher in the fourth quarter. Other outside services, such as contracted, technical, legal and consulting services, are required to on-board new clients. I mentioned QIC, but there were some other large clients which we finished the on-boarding in the fourth quarter. And so we saw those expenses go higher. And then similarly, as you point out in other operating expense, you have various charges such as accounting service charges related to accounting service -- accounting -- excuse me, account servicing activities, and those also tend to fluctuate. And we're higher in the fourth quarter.…

Yes. That really anticipates what my next question was going to be, which was what carries into the first quarter. I guess -- actually, one more, which is on expenses, which is you have ongoing technology investments. And I'm just wondering what you consider a normalized growth rate for that on an annual basis.

There's no question that the technology costs for certain investments will continue going forward. That scenario, where in order to provide the services both on the personal side and the institutional side that not only that our clients demand but that our competitors are looking to provide as well, will require us to continue to make those investments. And as a result, the equipment and software line that you have there is one of the lines where we would expect that to continue to grow. Again, it's more than just the depreciation and amortization in that line. So there's not just a steady-state rate that will continue. There is some fluctuation, but for the most part, that's one where you saw approximately 6% growth in that line, both sequentially and year-over-year. And we expect that we'll continue to have growth in that line. And frankly, that's part of what we're doing with Driving Performance. It's not to say that we don't look at potential efficiencies and technology because we are. But given that we know we're going to have the growth in that expense category, we have to find other areas where we can find ways to reduce the rate of growth.

And we'll go to our next question from Alex Blostein from Goldman Sachs.

Just, I guess, a follow-up on expenses but maybe a little bit of a bigger picture question. When you guys think about the initiatives you put into place early part of last year or 2012, I guess, if the environment is probably tracking a little bit worse than you anticipated, so NII is down a couple of percent, FX down substantially, clearly, you're tracking, I guess, a little bit above, ahead of where you thought you'd be. So -- but if we continue in this kind of a malaise throughout 2013, and who knows what 2014 would look like, I guess, are there any other initiatives that you could consider to kind of keep driving the costs down from here?

Sure. And you're right, Alex, that unfortunately, due to the environment, many of the gains that we made in Driving Performance essentially were taken away by lower FX and spread income. And with the environment at least at this point, looking that it's going to continue like that, the first priority is to make sure that we continue to execute on the set of initiatives that we have in place. And with that, as I pointed out and you just did as well, we are ahead of schedule on executing on that set of initiatives from a timing standpoint. So we got to the levels of savings and benefit faster than what we had originally laid them out for, that also if you look at some of them, we're a little bit above where we thought we would get, and some of them, we're a little bit below. And we will look to continue to execute on the remainder of those initiatives. And hopefully, we can get to that $250 million level sooner than what we expected. So that's the first part. The second part is, it's not a 2-year program and then we're done with it, but it's something that we're looking to continue going forward. So in 2013, we're executing on a number of those initiatives, but we're also looking to find additional initiatives that will help potentially later in 2013 but, more importantly, will be incremental in 2014 and beyond. And then the last thing I would say is, beyond just specific initiatives, what we're really trying to do with this is change the way that the corporation looks at productivity and that we just constantly look to improve our productivity. And doing that will beyond -- will be beyond just initiatives but also looking to just drive various metrics or measures of productivity so that this is a longer-term permanent change in our approach.

Got you. That's helpful. Shifting gears a little bit. I want to touch base on the core business and specifically C&IS. You obviously mentioned the big Bridgewater mandate you guys won that, I guess, is going to fund some point in 2014. And without, I guess, getting in the weeds on specific client relationships, it feels like that part of the business post Omnium acquisition continues to do quite well. Should we -- how should we think about, I guess, those type of mandates, your pipeline for those type of mandates, and then more importantly, the fee rate and then maybe profitability on kind of this middle office hedge fund solutions business relative to your current C&IS mix of businesses?

Okay. A number of questions in there, but let me see if I can get them, Alex. As far as the growth in C&IS, yes, agreed it's been very strong in the last couple of years, certainly. And if just -- with looking at the growth that we've had in new business, the one thing I would add beyond just the rate is the breadth of the new business. So you pointed out the growth in Global Fund Services, which has been very healthy. But likewise, in 2012, we saw very good growth in our traditional business of working with pension plans and corporations, and we also saw very good growth in our investment management products and solutions with our institutional clients. So when I look at our net new business, it's somewhat equally distributed between those 3 broad categories. Now going specifically to hedge fund services, which you mentioned there, very successful year in winning mandates in that business. But you are correct in pointing out that the revenue impact from that is going to be seen more in 2013. So the pipeline is very strong for that business. And then Bridgewater, for example, is the beginnings of, I would call, the 2014 pipeline because that's when the revenues will begin to come online there. So healthy growth across the -- kind of across the businesses. And from a pipeline standpoint, you'll see that coming through in '13. As far as the fee levels and profitability, I will just say that each of these businesses has a fee structure that works for that client base and for that marketplace. So they price things very differently because the services -- and it's not just the individual services, but it's the collection or bundle of services being provided to a pension plan, maybe very different than what we provide to one of the hedge funds. For example, just with the hedge funds, it's primarily a admin fee, if you will, hedge fund administration fee, asset servicing fee. There's less with regard to custody balances and, therefore, net interest income. There's less with regard to foreign exchange at this point and things like that. So it's more around the fees. So hopefully that addressed it. But then I would say as far as profitability, certainly, with all of those businesses and all of those clients, we're looking to achieve the appropriate profitability for the company and for that group overall. And there is a rigorous process around that in order to make sure that business is appropriately priced.

Got it. That's helpful. And then the last one for me. I'm just hoping you guys could dissect net interest income picture a little bit. So average balance is down, I guess, a little bit quarter-over-quarter, slightly different, I guess, what we've seen from other so far, given that the level of deposits has been, I guess, fairly healthy. And the ending balance, I guess, was a little bit higher than the average. So should we expect, I guess, the balance sheet to pick up a little bit or the average balance should pick up a little bit heading into the first quarter? And then the second part to that, Mike, I think you and I spoke in the past that there's a little more flexibility for you guys to kind of reinvest and maybe given the liquidity on the balance sheet, as well as the conservative position you have within your securities portfolio to do a little bit more to protect the net interest margin. Is that still the plan? Or should we think about reinvestments being kind of where they are today so the NIM could continue to kind of roll further down from here?

Again, a number of questions in there. Let me try to go through it. So as far as net interest income, on the asset side -- so our average earning asset is down a little bit in the quarter sequentially. And if you look at the categories, and again, for us, just 3 primary categories, the loans and leases, our securities portfolio and then the deposits with banks, each of those categories, relatively constant, where we saw the decrease was with our balances at the Fed, which -- that allows us to handle deposits as they come and go. As you pointed out, Alex, at the end of the year, our deposit levels and, therefore, our asset levels were a little bit higher. I would say we're at a little bit of a point of transition with regard to the size of the balance sheet. And what I mean by that is, with the fiscal cliff at the end of the year, we did see increased balances on the balance sheet. Having said that, now that we're past at least the first fiscal cliff and now we're dealing with other cliffs, we've seen further movement of those balances, often into just deploying them into different asset categories. The other factor, which I think is important, is at the end of the year, the TAG program or Transaction Account Guarantee program by the FDIC expired. So that was unlimited FDIC insurance on deposits. When that was put in place, we saw an inflow of deposits under our balance sheet, some very large, both personal and institutional deposit balances. And now we're seeing some level of diversification of those deposits on the part of our clients as opposed to concentration on any 1 institution. So there are inflows and outflows, I would…

And we'll go next to Howard Chen with Credit Suisse. Howard Chen - Crédit Suisse AG, Research Division: Mike, you just spoke to some of the deposit dynamics but was hoping you could provide a bit more color on how your institutional and PFS clients behaved into the uncertainty created by the fiscal cliff and how that's maybe changed or not changed in recent weeks. I'm just trying to get a sense of level of re-risking and how you think that might sort of play through into fee yields and ultimately, fee revenues.

Yes. Particularly, as you mentioned, Howard, on the PFS side, we did see an increase in activity with regard to our clients at the end of the year. But it was very much focused on dealing with the uncertainties of the I'll call it the tax and investment environment going forward and less about re-risking or de-risking per se. So high level of activity, whether that's because they were receiving special dividends or again for some of our larger clients, selling businesses, things like that, that had more of a tax impact, if you will, than an investment impact. We also saw when that happened, Howard, that some of their balances came on to our balance sheet as deposits. But also, we saw a pretty sizable increase for the quarter in our money market mutual funds with PFS. And that accounted for most of that sequential increase in our assets under management. So it was about getting those types of transactions done. I think now as we go into 2013, there's still a level of uncertainty as to how this is all going to play out, but it's less around executing transactions and changing the structures of their estate, things like that where we were very active and more now looking at the environment and whether they want to deploy some of those proceeds and distributions into different asset classes, be it higher risk or otherwise. Howard Chen - Crédit Suisse AG, Research Division: Great. And then, with respect to Driving Performance, what do the remainder of the expense savings exactly encapsulate? And looking back to when you announced the plan, would you say you're in reinvesting more in general than you originally thought given the new business momentum that you've noted a couple of times, Mike?

Sure. So on the first part, as far as the expenses, the incremental benefit that we're going to see in 2013 is mostly focused around what we call the either process optimization, if you recall that category, or it's often called end-to-end initiatives. So these are things that run across the institutions and in many ways are -- take longer to map out the plan and then to actually execute on that plan because it touches so many parts of the business. So many times I've talked about client administration, that's something that involves changing our processes and also changing the technology. And so, we saw very little benefit in 2012 from that, but expect to get a benefit from it in 2013. Another area, Howard, which is in that same category but I think is even easier to understand is in our procurement area where we made a number of changes in the way we approach procurement. In certain areas, it was easy to get the benefit upfront of what I would consider more of just purchasing leverage. But we think that there's still significant opportunity in that category and probably represents the biggest opportunity for us in 2013 as far as savings. So those are the types of things that are more of these end-to-end initiatives that are going to deliver the expense savings. Howard Chen - Crédit Suisse AG, Research Division: Great. And then, I wanted to get your latest thought, Mike, on -- your latest base case as to how you think about money market reform. We've now heard from the FSOC, and the SEC has some commentary from their commissioners. And then, within that, Schwab has proposed delineating between the institutional retail channels. And I'm curious, as a player in both, what you think about that proposal.

Sure. As far as just reform, we, as you mentioned, are a significant participant in that market. And we have submitted our own comment letter to FSOC. And I would say that the summary of that letter is that we don't believe that any of the 3 alternatives that they put forward in and of themselves are the answer. But we do believe that there are components that, to the extent they head down that direction, are reforms, if you will, that could be beneficial. So the idea of a floating right NAV, for example, in the right context is something that we think can work for our clients, as well as the managers and providers of this. Where there are other components, such as holdbacks, which we just don't think will meet with client expectations for these types of vehicles. So we know it's going to continue to evolve. As we've said before, we're really trying to just make sure we're positioned for whatever the change is because, to the extent that a money market fund becomes less attractive for our clients, we want to make sure we can provide other alternatives for them, like deposits on the balance sheet or like other ultrashort vehicles. We did introduce in the fourth quarter I mentioned the 6 new ETFs. One of them is a very short duration product, so in many ways, it acts as an alternative for our money market fund. It has the equivalent of a floating rate NAV, if you will. So we're trying to make sure that we're going to be positioned to deal with the clients and have a view on the reforms that -- as to things that make sense and don't make sense. And at this point, as far as differentiating between channels, I don't necessarily have a comment on that. I guess we haven't really tried to think about trying to differentiate in the channels, but rather just trying to provide products and alternatives that will meet with the various needs. Howard Chen - Crédit Suisse AG, Research Division: Great. And then finally, on capital management. I realized it's always been a Northern's DNA to be conservative, but there's this growing gap of conservatism between now, 13% Tier 1 common and growing and where capital standards are ultimate landing. So I'm just curious, Mike, are you in a position yet where you feel comfortable asking for that ratio to come down? And what's that ultimate landing point?

Sure. We do feel very good about our capital position, Howard. And in 2012, we paid back -- our total payout ratio was about 65%, so obviously, we were accreting capital. And as much as maybe you and we look at those total capital ratios, at this point, the capital plan process that they have in place is more focused on payout ratio. And so, we're looking to put forth a very strong plan to the regulators. We submitted our plan the beginning of January. We'll work our way through that process. We don't think it's appropriate really at this point to talk about what's in the plan because we are working through it with the regulators. But needless to say, the ratios that we have, we are very, very comfortable with that level of capital and would like to return more capital to our shareholders.

And we'll go next to Glenn Schorr with Nomura.

On that 13%, how about -- why wouldn't it be 100% or more? And I know a lot goes into it. And I'm not asking what's in your plan. But you're getting to a point where Switzerland would be proud of you. So just curious, what would be a hypothetical holdback on why it wouldn't be 100% payout?

Yes, it's -- first of all, Glenn, we clearly have the objective of wanting to have our plan not objected to by the regulators. So that's kind of point number 1. Point number 2 is that when they evaluate these plans, it's a very kind of holistic evaluation. So as much as we have a particular capital ratio, others may have particular capital ratios. In the regulators' mind, that's one component. We feel good about the other components of our capital process and our capital adequacy, but I'm just pointing out the fact that it's a holistic approach. The reason why they don't give us an answer right away, of course, is because they're in here doing their work and there's a lot of interaction between now and when they actually give a response. As you know, they run various stress scenarios, so they want to ensure that they can -- that we, in fact, are running idiosyncratic risks to our capital basis. And there's various things also that are uncertainties, if you will, in the sense that -- the ability to do acquisitions, for example, certainly would consume capital going forward. So my only point in it is it's not a simple, just a comparison between your current capital level and whether you'll be at a particular payout ratio. It's a more holistic process and dialogue with the regulators. And again, we feel good about where we are. Certainly, returning capital to our shareholders is a priority. We have a very good relationship with the regulators, and so we're going to continue to try to work through with them. And over time, we do think that this process will evolve. And it will evolve in a way, Glenn, I think where it's less about that payout ratio that you talked about. So we won't necessarily -- 100% plus or minus won't necessarily mean that much. It much more will be where you are in your overall capital adequacy.

Understood. And for the record, I think you checked out very well on all those other touchy-feely metrics. One last follow-up, you gave an unbelievable amount of detail on the puts and takes on expenses this quarter versus last and what some seasonality pokes its head on the first quarter, so I'll go back and run through the transcript. But in a nutshell, first, flat revenue world, first quarter versus fourth quarter, with all the puts and takes. Can you give us a bigger than a breadbox how it all net out?

Yes. I think -- here's one thing I would look at, Glenn, which is there's always going to be fluctuations, and I won't go back through some of those categories that -- again, we can't predict necessarily when we're going to have charges for account servicing activities, we can't necessarily determine we have sub-custody, et cetera. So it's hard to necessarily say, "Okay, where is it going to be?" But if you look at the year, adjusted for the charges, our expenses were up 4%. Obviously, they were up only 2% just on a reported basis. But if you adjust for the charges, up 4% in a year when granted revenues were up about 3%. But our trust fees were up 11%. And the trust fee has been really where we're growing the business, granted there's some impact from equity markets, but it was mostly due to new business. If we roll forward here, we're going to continue to try to grow the trust fees at a healthy clip. We don't know what revenue growth is going to be because of those other factors. Certainly, we're going to try to maximize on those other revenue streams. But not knowing that and going through the year that we just went through and expecting that environment, we're certainly going to try to keep our expense growth in line with what we've achieved in 2012.

And next we'll go to Luke Montgomery with Sanford Bernstein. Luke Montgomery - Sanford C. Bernstein & Co., LLC., Research Division: JPMorgan reported fairly good flows in private banking and wealth management this morning. It looks like they had some help from the alternatives business. I think in the past, you singled out an expansion alternative investment capabilities of -- as one of your growth initiatives for Northern Trust Global Investments. So I was just wondering an update on how that's progressing. I know there wasn't much of evidence of an increased risk-taking among clients last quarter, but there's any indication that you're getting more traction on the alternatives business.

You're correct, Luke, that alternatives is an area that is, I would say, a strategic focus for our asset management business. And the primary focus there for our clients is to be able to provide them with a robust set of alternatives within the alternatives space. So the way we've approached it is through both hedge funds of funds and private equity funds of funds primarily. And that business, and I don't have any specific numbers in front of me, but continues to do well. But as you pointed out, we haven't seen an increased level of risk appetite, if you will, on the clients' part that has changed the trajectory in a meaningful way where we're seeing outsized growth in that category. It'll continue to be one of the things that's at the top of the list for NTGI. And I think it's going to have to be a combination of our ability to offer more alternatives for them, and at the same time, the risk appetite of the clients also increasing. Luke Montgomery - Sanford C. Bernstein & Co., LLC., Research Division: Got you. Another question kind of on longer-term strategy. In the past, you've indicated that transporting the PFS business to Europe was difficult largely because your success in the U.S. had to do with your knowledge of U.S. tax regulation, so on and so forth. But I think, you're evaluating a more formal international strategy. And when I look around the world, I think the Swiss banks are retrenching, they're focusing more on private banking, but they've also lost some advantages with the international tax treaties, and there's been a migration of client assets away from small players in Europe. So I'm wondering if any of that has really resulted in the change to your outlook regarding opportunity you might have to put capital to work by growing PFS abroad.

International expansion for PFS is another strategic initiative for us, and it's one where I would say that, that initiative is also progressing. We've made a number of personnel changes earlier in the year, placing more partners over in Europe to continue that strategy. And one of the things I would point out is, the way we're approaching that market is where we feel that we have the strongest offering, so it's at the higher end. And with that, you mentioned some of the areas that can be challenges for us, one of the strengths we think we have is that given the institutional side of our business, our Global Family office, part of our PFS business, can benefit from the custody platform, our technology platform, that we offer to our institutional clients. And so, that's something where, while we might be -- we're not an incumbent in some of the jurisdictions that you've talked about there, we think that we can present a better service offering which will help us grow that. So still early stages, and it's a long-term strategy, it's not something that I would look for immediate impact on. But we talked about, for NTGI, that alternatives is at the -- towards the top of their list, in the same way for PFS international is towards the top of their list for strategic initiatives.

And next we'll go to Ken Usdin from Jefferies. Kenneth M. Usdin - Jefferies & Company, Inc., Research Division: Just to expand on the operating leverage equation as we think about looking long out of next year or 2. Can you -- you're spending, obviously, a lot of money in terms of landing these new wins. And you mentioned that you'll see some ramps from some of the specific ones and broadly. Can you talk about time to implement and cost to implement versus revenue ramp in terms of what you're seeing in your current pipelines and how the pipeline has changed with -- or strengthening, weakening in terms of what's happened in the environment over the course of last year?

Sure. So let me start with the pipeline part of it because I think that's easier, which is, continues to be strong. And it's -- when I say across the board, I've talked about difference businesses, but it's also in the size of transactions as well or new clients. So at the top end, it is things like Bridgewater or QIC, but it runs all the way down the list. When I look at the list for 2012 of our new client wins or business that's actually been implemented, it's a very diversified list in the sense of size as well. Obviously, the larger ones require more in the way of time and resources, meaning dollars, to get implemented. And that's not -- it's not perfectly smooth, as you would expect. I mentioned the QIC in the fourth quarter. There's certainly, as I think is only natural, often target dates for implementation that are put out there as well, and we certainly had some that were end of the year. And so in the C&IS business, they were on-boarding some clients which did cause some of these expense categories that I've talked about to be higher. So it's not going to be smooth. But at the same time, I don't think that we're going to have quarters where it's extremely high and then other quarters where it's really low. With the largest clients, we do look to pace the level of cost there. There are certain costs, not all of them -- there are certain costs that we can defer as part of the implementation, so that also helps somewhat. But that's the pattern, if you will, for these. But I would say that every time that we look at -- we look primarily at the economics of that new client as opposed to necessarily what the individual period accounting might be. And for some of these, the front end is more challenging from the accounting standpoint, but certainly, the longer-term economics are very favorable. And they're not necessarily -- yes, I don't want to give the impression they're back end weighted. It's just the fact that the startup can have more expenses than the revenues. Kenneth M. Usdin - Jefferies & Company, Inc., Research Division: Okay. So I mean, to your point, you made about spending on to close some deals, I mean, that's the type of thing you're -- that's going to be ongoing, right? I mean, you might have had some things that were above trend this quarter, but I would presume that you guys are working on big deals that you will have similar business-related expenses as we look ahead, right? So I just want to try to understand that back-and-forth between a good deal closing which causes an extra increment of expense versus an ongoing push you guys are making on these bigger, more complex deals that, that's just, like you said, it costs you a little bit more money upfront.

Okay. And let me address that maybe a little more pointedly, Ken, to, which is as much as I think we were a little bit higher in the fourth quarter, I do not want to give the impression that we were much higher in this quarter and for some reason, those aren't going to repeat because to your point, we are constantly looking to win new clients and there's costs involved with that, but also to on-board them. So these are ongoing costs. If you ask, okay, how do we think about that from a trend standpoint? I've mentioned a couple of times here, looking at our expenses relative to the fees, and so as much as every quarter, that ratio is not necessarily going to improve. There's no doubt that we want that trend to improve. So in 2012, that ratio was down meaningfully from where it was in 2011. Now the ratio in fourth --- in the fourth quarter is a little bit higher than the third quarter. So you're going to -- it's going to bump a little bit, but definitely we want that trend to be coming down. Kenneth M. Usdin - Jefferies & Company, Inc., Research Division: Got it. And then I wanted just to ask you to talk a little bit about the FX business. I think you made it very clear that the key driver of the market related challenge was -- is the reduction in volatility. But I just wonder if you could give us an update on also just underlying trends on the FX side, any change in terms of custody related flows or volume trends that's also -- that you've seen either because of some of the secular changes in the business and/or the environment that we've been within.

Sure. So volatility, obviously, a big driver for us and just for the market for FX. And with foreign exchange, if we look at just our custody clients, their level of FX activity was lower sequentially in the quarter and definitely year-over-year. So they're just doing less. Obviously, our objective is, for anything that they are doing, we would like them to transact with us. So the strategy part primarily comes into how can you increase your share with your clients based on their activity because you can't really impact volatility and you probably don't have much impact on how much your client is actually transacting. So that's with our custody clients. The other thing that we're doing, Ken, is we are definitely looking to do more with non-custody clients. And that's an area where I would say we may have trailed others with the level of activity that we have with non-custody clients, but it's something that we're looking to continue to expand going forward here in 2013.

And next we'll go to Brian Foran with Autonomous.

I guess, just listening to how much of the [indiscernible] are interest rate related, I was wondering if you could circle back to the rate disclosures you've given in the 10-K and 10-Q, and it just surprises me that there's not more upside from rising rates. Is that just a timing thing, or they way you're modeling interest rates building in some conservatives and more, or how should we think about that?

Yes, as you pointed out, Brian, I mean, that's very much a modeling exercise and one that we have to look at and make various assumptions about the behavior of both the asset side and the liability side. And on the liability side, the big question, of course, is as rates move up or move down, but your question is directed more towards the up, how quickly do we expect that we would need to also increase the rate that we pay on the various types of deposits. So one could make arguments about how aggressive or conservative we are in making those assumptions. But bottom line, I would say, is clearly, we expect in an increasing rate environment that, that will be very beneficial to us. The pace or timing of that is difficult to anticipate. And as you know with those models as well, you look at defined time periods and also the speed of the ramp, which I think are largely artificial and impossible to predict. And so I would say, it's mostly directional as opposed to being able to really forecast what's going to happen in a particular rate environment.

Got it. And then I guess a follow-up, and I guess it might be somewhat answered by your comments that it's a modeling exercise and more directional. But the other thing that always trips me up is the 100 basis point increase and 200 basis point increase scenarios are almost on top of each other in terms of earnings impact. I mean, does that imply all the benefit really comes from the first 100 basis points and the next 100 basis points isn't that meaningful, or is, again, that's just an outcrop of a modeling exercise?

Well, it is an outcrop of the modeling exercise but also the rationale or the assumption behind it. Generally speaking, you're correct in the sense of saying at what point do those liabilities behave in a way that you need to be essentially passing along the increase in rates, right? So you may -- the timing of when the increase in rates helps your yield versus when it impacts your cost, and once you get to a certain level of that, those 2 things become more correlated, if that makes sense.

It does. And then, I guess, the last one and not to beat a dead horse here, but -- so on the deposit repricing. I guess, on the one hand everyone has tons of deposits and you can argue the deposit lag or pass-through or deposit betas, whatever term you want to use, would be better or more beneficial to you. On the other hand, you could argue, the depositors will want it quicker because it's such a low level of rates that every 25 basis points really makes a big difference. So I mean, are you thinking about deposit behavior and deposit pricing similar to '04 or bigger deposit lag or less of a deposit lag when you think about that?

Yes. I can't tell you the exact because I don't know relative to '04 what our assumptions are, but we do have a lag assumption that's in there. I would also say though what's tricky on this, particularly tricky, Brian, is we've never seen rates that are as low as they are right now across all the currencies that we have. So there are certain currencies, as you know, that are actually negative rates. And so, to be able to compare it to a different time period and, frankly, to be able to project out what is going to happen when those rates change and come back into positive territory and what the expectation of depositors are is just particularly a tricky exercise.

And we'll go next to Marty Mosby with Guggenheim.

I have 2 quick questions. First, when you look at the growth in the trust fees, both on the institutional and PFS side, what you see is that the fees are growing a little bit faster than even the balances. So I was just curious, you all had done several pricing initiatives, do you feel like you're getting some traction out of those initiatives as a part of Driving Performance?

Marty, this is Bev. I would say on the PFS front, we absolutely believe that we are getting traction on the pricing methodology change that we made at the beginning of the year, and that has been a big part of the revenue enhancements that we saw as 2012 unfolded. The phenomenon that you're talking about specific to the fourth quarter is that we did see a little bit of a mix shift in our private client assets under management and that we had a higher level of cash in the fourth quarter for reasons that Mike spoke about earlier, and of course, we would earn less on cash than we would on other assets. So on the private client side, I feel like -- we feel like the Driving Performance initiatives have been very effective and hopefully, that would help you understand the fourth quarter phenomenon. On the custody side, I'm not quite sure where you're coming from because the note that I have in front of me is that we actually had fee growth that was better than custody asset growth. So for that one, you might be...

No, no. I was suggesting that there was pricing improvement given that the fee growth was 3% to 4% and that's rolling about 1% sequentially.

There you go. That's exactly right.

Yes, and I would just add on that, Marty, and I didn't mention this earlier, but just with regard to Driving Performance. We've talked in previous calls about the fact that with PFS, they had their change in pricing structure at the beginning of the year, so essentially, it was implemented. On C&IS, we've talked about in previous quarters the fact that, that's a different process where we need to essentially work our way through with -- one by one with each of these clients in order to determine the appropriate approach and then outcome with them. And so, the revenue pickup for C&IS has increased each quarter. And on the revenue side, the fact that we are up a couple of million dollars over the previous quarters is due to C&IS, and you're seeing that through the metric that you just mentioned as well.

And the second last question was, given that we're in the second half of the Driving Performance, so the quarterly restructured charges begin to kind of taper off as we go through the year -- or when do you expect that those quarterly charges would be behind us?

Yes. So the charges that we had in 2012 were a combination of integration costs related to finalizing the integration of the 2 acquisitions that we did in 2011 and then also restructuring charges related to Driving Performance. And to your point, Marty, we would expect that both of those charges related to those things and we can't -- I don't know outside of that, but with regard to those 2 things, those would definitely go down. They were higher in the fourth quarter because of some of the actions that we took with regard to Driving Performance, so particularly on the real estate front, for example, where we closed various offices both on the PFS side and also reorganized space on the corporate side, as well, but those involved charges. And at this point, we're not expecting to have as many real estate moves like that.

We'll go next to Brian Bedell from ISI Group.

Most of my questions have been asked and answered, but maybe just to go back to the pricing side. On the C&IS or the custody business, I guess, if you could comment on to what extent you're effectively cross-selling more into that custody base. Are you seeing a better revenue -- realization rate on a custody asset when in fact, you might be selling a hedge fund admin service that's not included in the denominator? And then also, can you comment on your ongoing conversations with a lot of the pension plan clients in terms of raising the core pricing, sort of where you are in that evolution?

Sure. So on both of them, I'm going to answer them somewhat together, which is we are seeing benefits in both categories, so both the cross-sell and with specific fee increases. And in the traditional business, part of that conversation is just the other revenue streams are not at the levels that either we nor our clients anticipated, and so an increase in the fee is something that they believe is appropriate as well. So that's been a positive. And then the other thing I would say is, as far as how far we are, the way I think about it is, we keep track of where we are with client discussions. And at this point, we're at 3/4 of the way through the dialogue. So in other words, we've had discussions on this front with 3/4 of our clients. That doesn't mean that we've necessarily seen 3/4 of the benefit that we're going to get. But as far as having a specific dialogue related to Driving Performance, related to overall profitability for that particular client, we're 3/4 of the way through.

Is there an expectation that most of these clients will accept fee increases, or do you think it's a -- sort of a minority portion?

Yes, I don't know the specific answer. So I don't necessarily want to say majority of them are. But it is not one where I would say that we're looking to change the pricing on every client by any means. It is -- it's looking -- that's why it's taken so long and it is very methodical is because each of these are different. And some of them were very much at a point in what I call the value proposition was balanced at the beginning. It's very balanced right now. So there's really not much of a need to change, and others are much further out of line.

Okay, great. That's helpful. And just one last one on -- just coming back to the capital deployment. What's the timeline for the goal to be within the 10% to 15% ROE area? And where would you ultimately in a -- in potentially, like a more normal environment like to be within that, closer to the lower end, low to mid end of the 10% or closer to the higher end? And I guess this will be in conjunction with returning capital.

Right. So clearly, we'd like to be in that range sooner and be towards the upper end of it. We do not have a specific corporate timeline for when we believe that we need to be within the 10% to 15%. Frankly, with a little bit better environment, we would have been -- we would already be in the 10% plus range. But we gave up, as I've talked about, the majority of the savings from Driving Performance through reductions in FX and in net interest income this year. So that's why our objective this year is to continue to move along the lines with Driving Performance so that we could get ourselves into that range. And then really the driver of where we end up within the range will have to do with the broader environment. Our plan is to continue to improve our profitability, but at the same time, given the impact of the environment, it's also going to be up to those factors to determine whether we get towards the higher end of the 10% to 15% or more towards the middle for various time periods. But for the things that we can control, it's about trying to continue to move up into the range and then further up in the range.

Great, great. That's -- I have just one last one on -- I think you said it was a record year for C&IS net new business. I don't know if I missed it, was it also a record year for PFS?

It was a record year for PFS new business.

And our last question will come from Betsy Graseck from MSSB.

All my questions were asked and answered. I’m good.

All right. Thank you, everybody, for dialing in today's call.

That concludes our call for today. Thank you for your participation.