Good day, everyone, and welcome to the Northern Trust Corporation Second Quarter 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Biff Bowman, Chief Financial Officer and Director of Investor Relations, Mark Bette for opening remarks and introductions. Please go ahead.

Thank you, Anthony. Good morning, everyone, and welcome to Northern Trust Corporation's second quarter 2017 earnings conference call. Joining me on our call this morning are Biff Bowman, our Chief Financial Officer; Aileen Blake, our Controller; and Kelly Moen from our Investor Relations team. For those of you who did not receive our second quarter earnings press release and financial trends report via e-mail this morning, they 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 19 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 August 16. 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 expectation of future events or future results. Actual results, of course, could differ materially from those expressed or implied by this statement because the realization of those results is subject to many risks and uncertainties that are difficult to predict. I urge you to read our 2016 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 people as possible the opportunity to ask questions as time permits. Before turning the call over to Biff, I would like to review with you some of the larger nonrecurring items that are impacting the year-over-year comparison. These items…

Good morning, everyone. Let me join Mark in welcoming you to Northern Trust second quarter 2017 earnings conference call. Starting on Page 2 of our quarterly earnings review presentation, this morning we reported second quarter net income of $268 million. Earnings per share were $1.12 and our return on common equity was 11.6%. Excluding the current quarter severance charge that Mark noted, net income was $283 million, earnings per share were $1.18 and our return on common equity was 12.2%. Our assets under custody and administration, assets under custody and assets under management increased 15%, 16% and 14% respectively compared to the prior year reflecting favorable markets and our continued success in winning new business. A number of environmental factors impact our businesses as well as our clients. Before going through our results in detail, let me review how some of those factors unfolded during the second quarter. Equity markets performed well during the quarter. In U.S. markets, the S&P 500 ended the quarter up 15.5% year-over-year and up 2.6% sequentially. In international markets, the MSCI EAFE Index was up 18.9% year-over-year and up 1.7% sequentially. Recall that some of our fees are based on lagged market values and first quarter markets were also up compared to the prior year, as well as sequentially. In bonds markets, the Barclays U.S. aggregate Index was down 3.4% compared to the last year and up 0.7% sequentially. Currency volatility as measured by the G7 Index was 28.3% lower compared to last year and 21% lower sequentially. Foreign exchange market volumes were also lower during the quarter. As measured by two of the interbank brokers, volumes were down 6% to 14% year-over-year and down 2% to 8% sequentially. You'll recall that currency volatility and client activity influence our foreign exchange trading income. Currency rates…

[Operator Instructions] Our first question comes from Ken Usdin with Jefferies.

Biff, just I'll focus on the net interest margin and balance sheet side. Could you help us explain if you separate the sides of the balance sheets, how much of that mix shift effect from U.S. to non-U.S. was either temporary, permanent, something you control, something you can't control meaning, is this the new run rate or are there some certain things across the business it just happened that were out of your control?

So let me break that into two parts because the first part of that was the growth in the foreign office deposits that you saw. I would characterize that growth that we saw which is $4 billion to $5 billion that we saw grow there, as largely business as usual. It reflected new business and it reflects our clients normal activities where they’re transitioning in and out of portfolios, and in and out of different currencies. I would call that growth that we saw there, business as usual nothing structural. The $3 million that you see that left the balance sheet from the non-interest-bearing deposits in dollars, I would say has been driven by client reactions to a rising rate environment. So, in that non-interest bearing component we have clients who heretofore have bits remained in that bucket but as we've seen the rate rises, many had comments that I need to look at alternatives for my cash. Of the $3 billion that moved off, a $1 billion or so moved into our cash vaults so they chose an off-balance sheet solution. $1 billion or so we retained but have moved to an interest-bearing because they represent broader clients of the Northern and about $1 billion left in the balance sheet where that relationship with us was either very narrow or did not exist other than it just being a deposit. So that bucket of non-interest bearing deposits I think is a very important part of the story Ken. That $3 billion runoff it sits in a line item today that represents about 20% of the balance sheet which is non-interest bearing deposits. Pre crisis that represented about 12% of the balance sheet, it’s been as high as 23% of the balance sheet. We're looking at how that part of the balance sheet will move in a rising rate environment. I can tell you that much of it is still core operating deposits but there is a portion that has been here temporarily particularly as we've grown our hedge fund servicing business and our GFS business our Global Fund Service business, they attract large asset-based clients. So we probably need to calibrate or the analysts need to calibrate between kind of where we're at 20 and historical 12 as to where do you think as a portion of the balance sheet. Those could go in a rising rate environment. Our current dialogues in many cases have led them to consider as I just pointed out our own off-balance sheet opportunities so this may move from a net interest income line to an investment fee line in that case.

Okay. So that explains the right side of the balance sheet which makes a lot of sense. Can you now also just follow-up, I think the bigger surprise then that is the fact that a lot of the asset side line items on the average earning income statement actually had flat to down yield. So can you just give us kind of that same kind of understanding of why the assets of the asset side sensitivity did not show through on many if any lines at all aside from the expected premium amortization? Thanks.

So first let me give - the $14 million of that was premium amortization and you can see that flowing largely if you’re on our trend report through the government sponsored agency that you would have expected probably to see move up with a rate rise and in fact it moved down. If you go to the loans, let's look at the asset side, so if we go to the loans while that did move up there a couple of factors inside of loans that I think are worthy of call out. The first is that we actually had about $2 million worth of lease residual write-downs in the quarter so that constrained it by about three basis points the loan yield. And then we also have somewhat of the phenomenon of the repricing timing in those loans based on their structural elements that we see more of that repricing happened in the first quarter just from a unique timing of that component. So that probably - people were looking for larger yield move on that loan and lease line. Those are some of the factors that somewhat constrain that. If you look on any of the other asset lines that I don't know if you had any Ken in particular that you wanted to highlight rather me going through asset-by-asset but…

I would just, you know just - I would just say I mean - if you can just focus on even the ones that were just down like interest-bearing deposits was down, the Fed fund line only moved up five, U.S. government was down, Munis was flat and the other was flat. So either the rate - the short-term nature of the securities book just didn't pull through in most of those lines so I don't know if there is a specific reason on each but that's what people were asking?

So Ken on interest-bearing due from banks, the 91 bps move in the first quarter down to 74, that would mainly be a currency impact. So the fact that we've highlighted that we've had U.S. dollar deposits decline but we had non-U.S. dollar deposits increase and that mix would also come through on the asset side. So that's a little bit of what we’re seeing on the asset side as well and especially on net interest-bearing deposit with bank line.

So I guess if you could wrap NIM just any thoughts – just on the trajectory of NIM from here, I'll leave it there? Thanks.

Sure. Obviously there's a series of factors there you know them well Ken. If we talk about the deposit betas that we've seen on the retail side, they’ve remained low although we are sensing that maybe there is some movement in the marketplace for that to come under pressure. And we monitor and track that to remain competitive. So the deposit betas on the retail side that's a story. On the institutional side, we've seen the deposit betas obviously move up and you can see that in our cost of funding fallen through the balance sheet. It's continued to move kind of on a trajectory that we would have anticipated and continues to be competitive on that front. On the asset side, remember that in the third quarter traditionally we have seen premium amortization be high so that could be a factor in the third quarter as a second and third quarters typically our highest two quarters for premium amortization. Generally because of retail deposit beta is low and because the institutional deposit beta isn't the one, there is still upward possibilities in the NIM. Those factually say there are still upward NIM possibilities that we will see in a normalized environment. In any given quarter that can be matched with the premium amortization, but we still think that there is based on the beta score I just gave you upward NIM possibilities.

Our next question comes from Brian Bedell with Deutsche Bank.

Maybe just shift to expenses, if you could talk a little bit about some of the legal and consulting expenses in the outside services bucket is - do you see that as sort of continuing to recur or more oriented to the second quarter. And then the other expense line you mentioned the accounts - servicing charges are those more like processing errors or something related to that that are also one-time?

Sure. Let's me if I could maybe walk through a little bit of the expense story and some detail and I'll start with the last question you had Brian is, we did see a higher than normal run rate if you will in the costs associated with account servicing. Those are operational cost and errors associated with servicing clients. We had approximately one full point of expense growth above our normal run rate in that area. So if you look at our 8.5% expense growth rate that we talked about early, about 1% of that was in a couple of instances in the quarter in that line item. The second item that I would point out in the expense structure is that we did have about one point of expense growth that was still residual from the LTI the long-term incentive decision around equity that we took in the first quarter which we said would be in this quarter as well, and told you it would be about $8 million that was flow through this quarter. That was about another one point of the expense growth, so that explains two. And the third item is which we talked about in the script is the fact that our comparison for salary increases, we have two salary increases in this quarter versus none in the comparative quarter a year ago. If you had a normalized view where you were - if you were lapping just one, that would have produced about one more point of growth. So those areas drop three points of growth or they explain, I should say drop they explain three points of the growth. In terms of your question around the sequential increase on consulting and legal, I think what's important here is year-over-year both of those are down, consulting is down meaningfully year-over-year but in a sequential period, you can have some spiky nature to that. It could be that we need assistance on specific regulatory matters for instance or specific operational initiatives that we've embarked on but we look at it in kind of six-month buckets and over the last four sets of those six-month periods, we've actually seen the consulting spend come down. It did have a spike in the second quarter around some specific items that we're working on. Resolution planning which would be familiar with being one of those. You can read our 10-Q but our IPO is very modest so the legal can just have some spikiness this quarter.

Just looking forward to getting to the third and fourth quarters, of course you've got the golf outing in the third quarter and then you’re establishing the bank in Luxembourg. Is that mostly in the run rate in terms of that cost or is that still in process?

So we gave you the Northern Trust ramp in the third quarter. There are some cost we've already incurred as we've embarked on the Luxembourg and there will be some going forward. Those are modest in terms of the way you should think about those flowing through in terms of the cost of those and they will be spread out over the coming quarters. So probably in any one quarter not worthy of any special callout.

And just a clarification, thanks for all the detail on the balance sheet. The loan repricing, if I recall that's a better one year lag, so would we expect I guess to the December '16 hike. Fee material loan repricing shifted to the fourth quarter of this year, or do you think it’s a little bit either before that or after that. And then, do you plan on changing your investment strategy on the balance sheet as a result of the things that you're monitoring for client deposit behavior in a rising rate environment?

So actually about 75% of our loans reprice within a year but that repricing - that 's not necessarily been a floating repricing necessarily so a lot of it will depend on the timing and there are more of those renewals that kind of come up in the fourth quarter early in the first quarter so they would've been more fully realized in the first quarter run rate than what we saw come through on the second quarter. So it can fluctuate just based on the timing of when certain renewal come up.

And it in terms of changing the portfolio strategy, the investment strategy, again we're liability driven, so we're out crying and winning new business and serving our existing client base and they bring their balances and others and we always have and continue have philosophy of conservatively managing those liabilities and turning them into what is and what we see as a relatively conservative but one that’s produced I think consistent net interest income for the firm.

Our next question comes from Michael Carrier with Bank of America/Merrill Lynch.

Just looking at on Page 8, where you have the operating leverage and the efficiencies. Since 2015 both the fee to expenses and the margin, it was kind of flat line yet the environment has been very favorable both rate in market. Just wanted to get your perspective, like something changing on the investment side, the run rate expenses is so much higher that we would expect. And going forward I know you guys have talked about some of the things that you’re working on in order to try to bring efficiencies but the expense growth rate continues to be elevated. So just wanted to get some sense, when we can start to see those - like the profitability metrics will improve?

You're right, the line has flattened out and I would suggest in this quarter we remain focused on it and would like to see that continue to widen out we did not - we did have some fee leverage in the quarter but with – the backdrop of a pretty strong market. So we remain focused on that. Let me try to pull that part a little bit. Take the equipment software line it's up 13%. Underpinning that has been a capital expenditure program over the past one, two, and three years that we think will drive investment for our franchise going forward but you're seeing right now run through that that depreciation and amortization in some cases ahead of the expense savings initiatives. We clearly have got to keep that balance correct. As I just highlighted, there were some unique items in this quarter's expense rate, so that the leverage can be different depending on how you look at those items that I called out. So there was probably wider than sort of flat leverage but we continue to remain focused on the initiatives around location and moving our people to the right place to drive that fee leverage as wide as we can, but yet still produce what we think was pretty strong top line fee growth in 9%. So we need some expense to do that. The last part of that question Mike was, in some areas like the outside services line remember that while that item grows when you saw sequentially or year-over-year, much of the expense in there is actually sort of tied to market levels and revenue levels and volume levels. For instance market data is often priced off of AUM or AUC. We got sub-custody expense that is tied to our holdings around the globe. So there is a linkage that will naturally flow in the growth in some of those line items to that. How far we can widen that out from our fee growth is what we remain focused on.

And then this is a follow-up, getting back to the net income, I get your comment on into the balance sheet is liability driven. When you look at some of those clients as you mentioned as the normal course of business, on the non-U.S. deposit side. How do you guys think about that client like overall for Northern meaning obviously it pressures, like the net interest income but what else is going on with that client as these balances are coming in. Are you benefiting more on the fee side or the transaction revenues and then anything on the cost that overtime your increase scale. Just trying to put the pieces together.

So we actually look at our clients and their profitability on a client by client basis and we do it not only on the margins but we do it on a return on capital. So we look at our clients individually to understand that do they bring the right mix of services, albeit they may bring deposits, they may bring fee-based business, in some cases they bring credit and loan income, we look at that land and we look at the capital allocated to another client level. And so to your question clearly that - the growth rate that you saw there, certain clients were utilizing capital and they were utilizing or pressuring if you will in some cases our net interest margin. But we look at them across the broad array services and have great dialogues with them about you know if they are not producing the right kinds of relationship with this we have dialogues about other products and services and capabilities that we can bring to the table to help balance that out. And that's generally - this quarter that allowed us to generate a 12.2% return on equity that type of approach in one of - as we say were committed to deliver between that 10% to 15% range on a client-by-client kind of approach.

Our next question comes from Brennan Hawken with UBS.

I just wanted to follow up on some of Ken's questions but instead of the start out maybe on the funding cost side. We saw the U.S. office interest-bearing deposit costs increase this quarter and given that there is growth there and given how low the yields are overseas, I guess I'm just - get how putting those assets to work way on yields wouldn't that though also or shouldn't that translate into a cheaper funding costs. So could you help me understand either why I’m thinking about that incorrectly or what was going on that might have created some noise there?

I think you're referring to the non-U.S. growth and the fact that the interest expense on that increased as well is part of the question.

Yes, exactly and thanks Mark.

So for the non-U.S. office deposit, a significant part of those deposits are actually in U.S. dollars but you know they're on that line of the balance sheet because we collect them in non-U.S. offices. So if we look at the totality of the deposits though, we’re at about for this quarter about 71% of our total deposits were U.S. dollar and that compares to 74% of our total deposits one quarter ago and 75% one year ago. So the movement that you see in the interest rate on the non-US office interest-bearing from 17 bps to 24 bps is actually a function of the U.S. dollar or the U.S. dollar interest rate and there been a significant proportion of U.S. dollar within that category. And then on the savings money market and other line I think you referred to the U.S. deposits that our rates going up in that that there would be most of that is retail which we haven’t seen a lot of movement, but there is some institutional that sits on that line. So when we have U.S. rates going up we expect both the non-U.S. office deposit line, as well as the savings money market and other line to move higher.

So I guess following up on that with the non-U.S. side, if you collect in non-U.S. offices and you put it on the balance sheet in U.S. dollar, but then you put it to work in other markets where the yield may not be as favorable. Are you basically allowing your clients to negatively - yield geographies and is that the best way necessarily to price out the funding construct for those assets, I'm just a little confused there so if you could help out that will be great?

So we do match off the currency on the balance sheet. So if we do collect in our non-U.S. office locations and we collect U.S. dollar deposits, we do put those to work - on the asset side in U.S. dollars. So we do match those up. It just so happened that the growth that we had this quarter in non-U.S. offices was not in the U.S. dollar part of it, it was in the non-U.S. dollar part of it.

Yes, sterling and euro.

I’m still a bit confused but I can follow up no need to drag on the call. Thanks for taking the questions.

Our next question comes from Gerard Cassidy with RBC.

Can you give us your 30,000-foot kind of view with the Federal Reserve's actions that are coming with the unwind of the balance sheet? There's an expectation that the deposits in the banking system will be affected by this, where there'll be a decline. Can you give us a view what you guys think you may see on your balance sheet from the Fed action as it goes full speed next year?

As you know when the QE was put in place many and in particular the Trust banks saw their balance sheets grow. If you believe that the unwind will drive the interest rates up faster than expectations it's not unreasonable to think that our clients and money that's on balance sheets will be looking at alternative places to find that treasury portfolio and funds et cetera. Our view right now, our house view is that it will be very orderly and that we would see any rate rises be reasonably measured and that deposit flows would be measured to in their movement on and off balance sheet in that environment. I think one of the things that we have to think about is we’re not constrained not really terribly constrained by leverage ratio and other items. So if there's opportunities to take some of those deposits on to the balance sheet if they make sense from a relationship standpoint, we don’t have some of the regulatory constraints if they’re flowing between banks or between funds and banks balance sheet. I think right now we think it will be done in a measured way and have a moderate to modest impact for us.

And can you also share with us - quite often, business customers use compensating balances to pay for services rendered by you and your peers. And obviously, as rates go higher, I would assume then that the amount of the compensating balance doesn't need to be as great when we're in a lower rate environment. Is that a safe assumption? And if it is, should we see some deposit outflow if rates continue to move for compensating balances?

So I think compensating balances is generally only linked to our treasury management business which is fairly modest on our revenue line. Our trust and custody balances are not traditionally build on a compensating balances type format. So, I would say that for our overall financial statements that would have a very limited potential impact for us.

And then just a technical question. You gave us that, I think, $0.05 per share for the golf expense in the third quarter. Was that after tax or pretax, the $0.05, if I heard you correctly?

$0.05 after, after.

Our next question comes from Glenn Schorr with Evercore.

Just a couple of quicky follow-ups. Share count flat to drop up year-on-year but you got a pretty big buyback in place. Can you just talk about the offsets and if any that’s related to timing?

Yes, largely you have option exercise and other share issuances in the quarter, but largely from an option exercise driver.

I mean with the cap rate on it?

No share count that’s not capital because that’s the capital - that share count - yes, I’m sorry that’s on the capital on the share count you would ask share count not capital. On the share count I’m going to have get back to you I’m not sure we bought back but we stayed relatively flat so we'll get back to you.

I mean it’s something that I assume would trend down given the size of your capital return. You mentioned when you talked about sec lending down 8% year-on-year, you talked about the spread lags but eventually lists in a rising rate environment. Is there a particular reason why that is it just that market dynamic in other words it gets passed initially off a low base and then eventually you get to keep little a bit more?

There's really there is a lag from the time when the - we do think a higher interest rate environment is a positive factor overall for sec lending. So eventually when you get to the higher level, that's a positive thing but the process getting there sometimes pinches the margin and it's really because the rebate rates on loans against the cash collateral adjust more quickly than the cash reinvestment returns. Those cash reinvestment returns are pretty short, so it doesn't take long for them to reprice, but if they’re out 30 days or so that could have a minimal impact on the spread. And spreads were - they were minimally down sequentially it wasn’t a large decline but they were minimally down.

And last one, I had heard that there might have been some strategic decisions on passive versus active in part of your asset management business. Is that something that you’ve been thinking about and have been contemplating lately?

I don't have any comment on that I’m not sure what that it's in reference to.

I can ask in a different way, I guess you have a fantastic passive franchise and good in parts active franchise and I guess how are you growing the asset management business I know - there's is a piece that there to service the current client base but there's also another great piece that has asset management only customers?

So we remain focused on all of the capabilities from passive, we've grown our ETFs to about $14 billion and AUM and we’ve continue to grow our engineered equity program across all asset classes. Internally we have traditionally distributed through our - and maybe this was what you're trying to get to, we've traditionally distributed through our existing client base. We continue though to be committed to distributing through third-party and intermediary as well and there is investment in that product and capability that we've really been going after for few years but in earnest in the last year or so.

And as an example of the growth that we seen on ETF side, a pretty good share of that has come through a third-party as opposed to directly through the wealth management or C&IS channels.

Our next question comes from Betsy Grasic with Morgan Stanley.

I just wanted to get a sense of when you do close the acquisition of Luxembourg Bank, could you give us a sense as to how we should anticipate the impact on the balance sheet and on the income statement if there is going to be a mix shift even further in certain currencies that we should anticipate?

Yes, for the acquisition I don't know that the balance sheet - we would see a significant impact on the balance sheet side unless.

No, there will be limited to know balance sheet impact from the acquisition. So we are acquiring fee-based services from - in the acquisition.

So there is no deposit coming in?

I don’t know if we’ve disclosed that at this point, but we bought the fund administration and the fees associated with that business. So yes, that’s how we keep the assumption.

And then at the quarter you mentioned that there was an influx of deposits in the European region. Could you just give us a sense as to what drove that because the end of period balances obviously did go up quite a bit relative to the average. And I'm just wondering what type of activity would drive that big of a move.

So, they're likely two areas that could drive that. One could be we could have clients with large pools of assets particularly in Europe that could be restructuring portfolios and moving certain portions of their assets around in transitional type periods while they reconfigure or restructure portfolios. And that could have very short-term impacts. And we also have an Edge Act subsidiary that does certain clearing for certain foreign entities and they can in important time keep large euro or other balances that could be the client could leave those balances with us at period ends. So we do typically see some spiking from those two types of activities.

So one is transition management and one is Edge Act clearing related I guess?

So clients themselves transition not necessarily our transition management business, but the clients are moving some of their assets around in periods near quarter and significantly?

Sure. And then is there anything in there around just the rate outlook on the euro that you think - based on what you saw in this quarter that you would expect would drive increased behavior like this going forward I am just wondering if there is a link in it all to improving outlook and rates in Europe that would lead us to expected this kind of activity would continue?

Yes, I don't believe so. I don't know that there is anything fundamentally that’s triggered the activity and the growth we saw that fundamental to either and improving or an increasing rate environment in Europe at least at this stage.

Our next question comes from Brian Kleinhanzl with KBW.

I have a quick question follow up on the loan yields here. So if I'm thinking about this right, is the right way to think about it that since most of your loans repriced later in the fourth quarter and beginning of the first quarter, you’re not really seeing much of the pickup in the March Fed funds increase, you’re not seeing a pickup in the June and if there is another Fed funds increase in December that you’ll really be - you’ll have a three Fed funds hike catch up in your loan yields in the first quarter of 2018?

Yes, so I think it's a portion of the story that you just described is because of that, what I will say earlier in the first quarter. I think you also have to look at the loan mix where some of our loans that are driven by more fixed basis may not follow the pattern you just described. You really have to decompose that loan portfolio and look at the repricing structures of that loan portfolio to make the assumption you just did. Might be a little - it maybe on the high side that it's all going to catch-up in one year from now from a repricing perspective, but what you think that would be some lumpiness to that.

I'm not saying it goes up by 75 basis points, what I’m saying is can you refresh maybe your memories as to what the percentage of variable is as a percentage of loans.

75% - I don't have the actual flowing but 75% does reprice within a year - but we're not necessarily implying that most of that all happens around year end. It's just that there will be on average probably a larger part of it that would happen at the beginning of the year which would impact the first quarter but that's not to say that every year would be in the first quarter when we would see the stuff up for loans.

You mean they don’t follow a similar repricing schedule, so it would be year-over-year?

It would depend on the timing, it would depend on timing of loan renewals and a lot of those might be - a handful of those more in proportion might be set up to roll over at the beginning of the year versus at the beginning of April let’s say as an example. So in this sequential comparison we picked up a little more maybe in the first quarter then what we would have picked up just from a timing perspective in the second quarter.

What if I compare first quarter 2018 to first quarter 2017, shouldn't that be an accurate comparison?

On a year-over-year basis, yes you’d probably - you’re right yeah.

And then just a second question on the other operating expenses. I mean how much of that spend this quarter was discretionary, I heard you say business promotion to me that sounds discretionary, you could pull that back to help improve operating leverage, staffing, maybe or maybe not but how of much of that $17 million increase that you saw sequentially really could drop off next quarter?

In the other operating…

Other operating expenses.

Yes, so first of all we saw as I said about one point of growth so you can do that - that was due to account servicing losses. So call that $8 million to $9 million, I can't tell you if it will repeat we certainly hope it doesn't repeat, but the reality is that you can call that discretionary and that's one item in there and there is clearly items, while the Northern Trust Open is in the next quarter and we gave that there are clearly discretionary items in there like business promotion. There's other discretionary items in there that we look carefully at and manage carefully on an ongoing basis but we'll continue to be laser focused on them going forward.

Okay.

The other thing Brian I would mention on the expense side is, we did take the $22.8 million severance charge in the current quarter and indicated approximately an $18 million run rate savings on that. And it will be - the timing of that will come in over the next six quarters. So the full run rate impact of that wouldn't really be in place until the end of 2018. So that's just one other thing on the expense side as far as looking out beyond the current quarter.

And at this time, I'd like to turn the conference back over to our presenters for any additional or closing remarks.

Appreciate you joining us for the quarter, and we look forward to talking to you next quarter. Thank you.

Thank you.