Good day, everyone and thanks for standing by. Welcome to today's Northern Trust's Third Quarter 2020 Earnings Call. A quick reminder that today's program is being recorded. And at this time, I'd like to turn the floor over to Mr. Mark Bette, Director of Investor Relations. Please go ahead, sir.

Thank you, Greg. Good morning, everyone and welcome to Northern Trust Corporation's third quarter 2020 earnings conference call. Joining me on our call this morning are Mike O’Grady, our Chairman and CEO; Jason Tyler, our Chief Financial Officer; Lauren Allnutt, our Controller; and Kelly Lernihan, from our Investor Relations team. Our third 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 October 21 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 November 18. 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 expressed or implied by these statements because the realization of those results is subject to many risks and uncertainties that are difficult to predict. I urge you to read our 2019 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 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. Mike O’Grady: Thank you, Mark. Let me join and welcome you to our…

Thank you, Mike. Let me join Mark and Mike in welcoming you to our third quarter 2020 earnings call. Before I start I would also like to take a brief moment to recognize all those affected by this ongoing crisis especially those working on the front lines. Our thoughts are with you and we hope you and your loved ones remain safe and healthy. Now let's dive into the financial results for the quarter starting on Page 2. This morning we reported third quarter net income of $294.5 million. Earnings per share were $1.32 a share and our return on average common equity was 10.5%. The quarter included a $43.4 million pretax charge related to a corporate action processing error. The issue was identified internally by our corporate actions team and to put the impacted clients in the same position as they would have been if the error had not occurred. We executed open market transactions which resulted in the loss. You can see on the bottom of Page 2 equity markets particularly domestic U.S. markets performed well during the quarter. Recall that a significant portion of our trust fees are based on quarter lag or month lag asset levels. And both the S&P 500 and EFA local had strong sequential performance-based on those calculations. It's worth noting that on a year-over-year basis the EFA local index remains negative which creates an unfavorable impact to our fees compared to the prior year. As shown on this page average one-month and three-month LIBOR rates continued to decline during the quarter. Let's move on to Page 3 and review the financial highlights of the third quarter. Year-over-year revenue was down 3% with non-interest income up 3% and net interest income down 21%. Expenses increased 6%. The provision for credit losses was $500,000…

[Operator Instructions] And first from Jefferies, we have Ken Usdin. Mike O’Grady: Hi, Ken.

Thanks. Hey, thanks. Good morning, guys. Just want to follow-up on the whole side of rates. So good news that NII was down better than the original guide. And I was just wondering if you can update us on what your thoughts are as far as the outlook for NII? And at what point do you expect NII to get close to just flattening out? Is that sometime early in 2021? Or how can you help us think through that? Thank you. Mike O’Grady: Yes. It's -- first of all I think it's important for people to realize that there's -- there are components of the securities portfolio that are longer dated. And there are securities we bought in 2017, 2018, 2019 that aren't going to mature for another two, three, four, five years. And so it's going to take a long-time to get this whole portfolio repriced. That said, at this point 75% of overall earning assets have been repriced on the new yield curve. And if you to break it down even a little bit farther from that, you can look and see that effectively all of the floating rate assets have been repriced, 80% of the loan book has been repriced and about 50% of the securities book has been repriced. And so I think the best way to think about it from what you can see is that from here about 1% to 2% of the overall earning asset base is going to reprice every quarter. And so we've gotten through most of it. And if you think about how aggressively we had to get through going from the first quarter where everything was on the prior book, to then in the second quarter, and now this third quarter movement we've got the vast majority of it done. That's why we think the flattening we're at that point now. It's just trickles from here, but it's not going to be 100% flat for a long-time as those longer-dated securities play through.

Okay. And I guess just relative to your prior comments I just want to give you the opportunity to just level set us on what your expectation would be for 4Q NII versus third Q? Mike O’Grady: Yes. I appreciate that. And I do think that -- well first of all and -- I'll answer the question. The way we look at it now and it comes back to that dynamic of about 2% repricing, you could say it's going to be down 2% give or take a point. And I think that's what you should expect from the math at this point. That said, now that we're at the point where so much of the book has been repriced. The movement in NII from here is going to be driven more by what happens in the business and more by what happens in loans and what happens in the deposit book and how that stays on. And frankly, our confidence level in reinvesting that into not just cash at central banks went into higher-yielding assets. And so from here, it's going to be much more business driven.

Okay. Thanks, Jason.

Thanks, Ken.

We have Glenn Schorr with Evercore. Mike O’Grady: Hi, Glenn.

Thanks. So definitely not the norm for you guys, but I think everyone has a little bit higher sensitivity to issues--. So I was going to ask just for a little more color on the corporate action item, was this a manual issue? What have you done to rectify? And have there been MRAs outstanding related to this? I think that some of the Q&A back and forth pre-call was about that such that you may just address it? Thanks. Mike O’Grady: Sure. I appreciate one. So first of all I just want to provide a little bit of context on this group for people that don't know it well, and how an item like this occurs. I think it's important to understand with $13 trillion in assets under custody or administration, the security services group is processing literally millions of transactions a year. We've got errors in the group on a consistent basis and they total somewhere between $5 million, $10 million a quarter on average. That's typically what we experienced there. And they're accounted for consistently in the other operating expense line on the income statement that you see. And so, the event itself is not unusual, it's the dollar amount. And if we focus on that a little bit, we think over the last 10 years we've actually never had a loss cumulatively in a quarter to even get to $20 million. And if you look back even on the years we've never had a full year that amounts to this level of a loss. And interestingly, this quarter in and of itself from a volume perspective of losses, it was light. And even, the other items added up to a less than normal level, it was at the bottom end of that kind of $5 million to $10 million range. And so then if you ask, what have we done you can imagine the first thing we do is unpack the situation. Once we're confident that there's been a mistake. We did everything we needed to do in order to make our clients whole. We did that. And then at that point, we look at the processes, identify ways to improve even process we felt strongly about, but we identified ways to strengthen it. We put those in place. And at this point, we move on. From an MRA perspective, we wouldn't be able to talk about that at this point, if it were even -- if that had even been surfaced. But obviously, we took this very seriously. This is not -- I think it's important to note, this isn’t -- this is not out of the normal course of servicing $13 trillion in assets in terms of the event. It was really the fact that, we had a very large exposure within it that was unusual.

Okay. Cool. Maybe, I do a follow-up on some related to the balance sheet. Tyler -- Jason the other securities line is up 30% year-on-year and it's almost the biggest part of earning assets now. The footnote talk about community development investments. But could you just expand a little bit more on that, because it's such a larger part and it's growing more? What benefit you get from that? What kind of yield pickup? And should we expect to see more of that? Thanks so much.

Sure. Just before you go on mute Glenn, I want to make sure we answer your question really specifically. So you're talking about the increase in the securities portfolio that is kind of $56 billion, $58 billion is that where you're looking? Mike O’Grady: I think most of that growth came on that other securities lines. So, if we address the growth in securities year-over-year I think that will --

Yeah. So in general if the group -- Glenn, were you going to add a clarification Glenn or --

No. You got it the other line in the securities line on the balance sheet. Thanks.

So the -- in general, the treasury group is always looking for opportunities to lean out a little bit from just cash and we feel confident. And there'll be types of investments that are short-term, where it's not cash, but it's -- but there are items where we pick up a little bit of yield. And so it could be short-term JGPs. It could be other short-term instruments where we pick up a little bit of cash, a little bit of yield, without taking too much incremental exposure. And so they've been looking at that in different ways. And part of it, I think we talked last time about the fact that part of this NII journey is going to be not just the size of the balance sheet, but when we felt confident that we could step out of central banks, and so as the treasury group is looking to do that, they're looking for not just these traditional -- what are we going to do with two-year, three-year, four-year securities or mortgage backs, but other items that can stay short, but still pick up a little bit in yield. And so that's not necessarily something you should see as a longer term trend. It's something that as we did this initial step out, we saw opportunity.

Great. Thanks so much. Appreciate it.

Sure.

Next question will come from Alex Blostein with Goldman Sachs. Mike O’Grady: Hi, Alex.

Hey, guys. Thanks. Good morning. So maybe just a quick clarification on NIR first. So, I hear you on the kind of 1% to 2% decline in NIR from here as the securities book re-price. Does that include any mitigation efforts to offset the roll-off roll-on dynamics? Or that's really kind of like a gross number? And then there are things you could do to help mitigate the remaining pressure albeit it's obviously some in small, which could get you to more of a kind of flattish NIR from here?

Well, the answer is it's very much just looking organically at the amount of -- that's in the book. So that doesn't include any other strategic items. That's just the math of what's rolling off from here. That said, I do want to caution people even though net interest income is down significantly obviously, we're not going to be looking to have dramatic changes in our strategy, or our risk profile to think about "offsetting" the decline in rates. And so we're constantly thinking about optimizing the investment book, and we continue to do that. No change in our risk appetite at all. But the 1% to 2% a quarter is very much just the math of what exists in the book right now, absent any other things that we would be. So you shouldn't be thinking that's exactly what's going to happen over time. There are other things we're thinking about in terms of the securities portfolio, other things we can do with the balance sheet, but those were things we were contemplating before rates came down frankly.

Got it. That's very clear. Thanks for that. My bigger picture question kind of revolves around fees. And this has obviously been a pretty volatile year with respect to both markets and new business and volumes et cetera. Maybe help us level set what has been the organic fee growth in the business, maybe kind of over the last 12 months, given your comments around strong pipeline and sort of the building momentum in C&IS, maybe help frame what that kind of organic fee growth could look like over the next 12 months? And then specifically, I was hoping you guys could also hit on the multi -- on the global family office business. That revenue has been kind of flattish for the last four quarters, despite a pretty significant growth in assets. I know there's a little bit of lag there, but still feels like the fees are lagging like in the asset base. So kind of bigger picture question, but if you guys could hit on all of that that will be awesome. Thanks.

Sure. So if I start on C&IS, I think the, we separated into two different buckets there interestingly. One is that, there has been significant growth that's come in the investment management fee line. And that's come from very good collaboration, between the asset management business and C&IS. And a lot of work we did in the last couple of years, setting up the liquidity business to be able to take on assets. So I'm going to do this at the corporate level, but a lot of these assets apply to C&IS. But if you go back to last year to the beginning of this year, the liquidity business had $215 billion in AUM. And now we're close to $285 billion $290 billion, very significant growth bigger than what's happened in the industry. And so that's led to good organic growth in the business, as a result of good collaboration. Again not 100% of that is in the C&IS business, but the vast majority of it is. The other aspects of C&IS as you just get to the traditional custody and other asset servicing type activities that the -- interestingly the organic growth this quarter was not great. It was positive, but it wasn't great. They do feel stronger about the pipeline that they have the one non-funded business. And part of that is a result of the fact that there were a lot of prospects that we won that delayed implementation partially because of COVID, but still very high confidence level that's going to be on-boarded in fourth quarter or first quarter. And so we see good opportunity set to bring on that business in the next couple of quarters. That said, the growth in the money market mutual fund business, it's been great. But it has flattened out at this point. And so it's good diversification in the business to sometimes get growth coming from the investment management side and sometimes from the other.

This is Mike. I'm going to pick up for Jason while he gets a chance to get a sip of water Alex. So I think importantly longer term, I -- that, again, we continue to see the opportunity to grow at a higher organic growth rate. Having said that, as we've always said, it's critical but that's profitable growth for us. And so that we're doing it in a way that is coming with operating leverage and fee operating leverage. Now with the change in the rate environment that dramatically impacts your ability in the short-term, to get the operating leverage. And so as a result, it makes -- it focuses us on ensuring that that growth does not come with the requirement for significant resources. So, looking at the expense side of the equation and just making sure that we keep those in line in this type of environment. And that the growth is high quality scalable growth for us. So that's on the asset servicing side. And Jason mentioned asset management just to close off on wealth management. Again, as you mentioned, this has been an unusual year. And so we've had to shift our sales and new business strategy as a result. And I would say that I'm very optimistic on the long-term prospects for that. But it has in this interim period has caused some additional volatility in the normal sales pattern that we would have. So, long-term very positive, but to your point, there's some bumpiness that we've had this year that we haven't had in previous years.

Alex, this is Mark. And I could comment on the GFO asset growth. I think you're seeing the growth to step-up in the second quarter. Can't get into a lot of the specifics there but, that type of client that type of segment for us, both clients can move pretty large concentrated asset holdings onto our custody platform. And that's what the majority of the increase was in the second quarter. There's not necessarily a corresponding noticeable increase in fees with that, just because of the nature of the holding -- single holding that we might be having on our platform for those clients.

Great. Thanks everybody for tackling and hold that. Thanks.

Thanks, Alex.

Next up from Morgan Stanley, we have Betsy Graseck.

Hi…

Hi, Betsy.

Hi, good morning. I had a couple of questions. On the capital ratios, I know you typically sit with a pretty nice cushion above your regulatory minimums and above what your management buffers might add to it. Obviously in this period with no buybacks that some capital ratio is improving even further. Could you give us a sense as to how you're thinking about utilizing that excess capital in the event that the cessation on buybacks continues? Is there anything that you might want to discuss about how you could be using that capital outside of buybacks? We've seen some acquisitions in the space recently on the asset management side. And wanted to get your sense on that if there's anything to do there? That's the first part of the question. Thanks.

All right. I'm going to -- I'll try it and see if I got my voice back. The good news is that Mike and I talk about this a lot. So if I don't he's going to -- we'll definitely be on the same page on it. So it's -- I'm going to start with and you've heard me talk about it a little bit Betsy, but I think there's four components to how firms -- at least how we think about, how we deploy capital and how we -- what capital levels we maintain. The first is we have very good genuine discussions with our Board about it. And that's not to say that there's any tension there. There's not at all. We're completely aligned, but we also want to make sure that we're not being presumptuous in saying where we want capital levels to be without having good conversations with them. So that it really does truthfully start with that discussion. And then secondly, we think about capital on an absolute basis, we want to have good cushion relative to where we need to be from a regulatory perspective. The third is we look very closely frankly out the side view mirror and we look at things on a relative basis. When we talk to clients and prospects they care and we want to be able to reflect. It's part of our overall value proposition that we've got strong capital levels and we have to be able to evidence that on a relative basis. And the fourth, maybe most instructively given the fact that the stock price has come down is thinking about things on a returns basis. And so we think about that deployment of capital not just do we take capital up or down, but what types of returns are we getting for it? And there we have to compare what returns are we getting by investing in our own stock effectively. And that has to do a lot with where we think things are from a price-to-book perspective and how it's trading and what we think. And secondly, what opportunities do we have to reinvest organically in the business. And then third we're looking at what examples there are where we can invest or non-organically outside. And so we've talked about the fact that we're very open. And I'd say particularly in the wealth management space where it is difficult to have organic growth. We feel very strong about the franchise and we feel like our ability to maintain a high-quality client base is very strong if we were to bring that in.

So when you're talking about wealth management you're talking about teams, firms, portfolios, is there any nuance to that?

Yes. The teams I think is harder. I think those tend to be -- first of all, culturally, it's not super consistent for us to do something like that for various reasons. I'm happy to talk about it a little bit more. I think firms where you've got more of a sense of scale that's been there, but they're maybe not at the scale that we are and we can bring that in. And we think about our different groups almost as large teams. And we think about the offices we have, the $320 billion in assets you split that between the offices we have. And you have a team of $1 billion, $2 billion, $3 billion. So something of that size or $10 billion -- up to $8 billion is kind of a couple of teams from our lens. But extracting a team out of another firm is not something that we have intended to do. And so thinking about an organization, an established organization with a client base. But with a leadership that hasn't been able to develop a succession plan in place or they think it just might be better to go to the infrastructure of a larger organization. And you think about the scale we represent at that asset level, we can be a good solution for firms that don't have that succession planning in place.

Okay. And what I'm hearing in your answer is wealth management over asset management. Is that fair?

There -- to the extent there are assets, there are opportunities in asset management. It's a little bit more nuanced. We've done some things there quietly more small that have been extremely consistent with our strategic desire to do more intermediary distribution. And so we look closely at those as well. I think the distinction might be probably a little bit of a higher bar right now to do something in size at the asset servicing side of the business.

Got it. And then what if the Fed does lift the restrictions on buybacks maybe you could give us a sense as to how you're thinking about -- how you would manage the capital in that scenario in terms of the pace that you might start buybacks back up at? And how quickly you want to get back down to the capital ratios that you think are most efficient for your business model?

Mike, can you answer that? Mike O’Grady: Yes. So Betsy, I think Jason laid out the framework. So, I won't go into that. But that is the framework that we would apply, should the Fed lift the restrictions and we'll see. But prior to the pandemic, we were repurchasing our shares. And so, it depends on that broader environment that we would lay over with the regulatory constraints. So, I would hope that to the extent that the Fed removes the restrictions that's also an indication that the environment is relatively favorable, which will put us back in a position similar to the beginning of the year where we were both able to and were repurchasing our stock.

Okay, got it. Thank you. Mike O’Grady: Sure.

Next question will come from Mike Carrier with Bank of America.

Good morning. Thanks for taking the question. First, you guys have been focused on both investing in the business, but also doing a good job on driving efficiencies and marketing leverage. The longer we're operating in this work from home backdrop. I'm just curious if you find additional areas of potential efficiencies whether it's in area out of real estate or other areas that could drive that longer term? Mike O’Grady: We -- this environment has been very -- obviously made everybody take a step back and think about that. We have. Frankly, there are things that we're accelerating the business. I mentioned super quickly in the opening comments that we're on a real estate strategy journey right now. We looked deeply at that just a couple of months ago kind of in the midst of this to say how does the health care crisis influence that strategy. And there are elements of it that it accelerates. And there are consolidations we were thinking about that frankly we're saying we can do that faster. And then there are other things that we were not considering before that this endeavor makes us consider. And I tell people kind of jokingly. A year ago, I did not know how many square feet we had off the top of my head and now I do. And I know where they are. And I know how much we're paying per foot. And so, we're talking about that element a lot to try and think about, what does real estate look like in the future not just domestically but internationally. And there are a lot of creative things we can do to try and be more efficient and try and leverage the technology that we've invested in into our partners in order to decrease reliance on square footage frankly, and that also leads to areas of saying, how we become more resilient, and how do we think about resiliency with our workforce overall. And we've had to make them more technologically equipped in order to be resilient and that adds flexibility as well obviously in very creative other ways the way we think our resiliency centers and other things like that.

Okay. Helpful. And then Jason, you mentioned in the past, the loan demand will be a key driver to NII going forward and we've seen fairly divergent trends across the industry. It's still fairly weak new loan demand, but pocket full of strength within the wealth area. So just wanted to get an update on your front in terms of the demand that you're seeing across the business?

Yes. You can't -- it's interesting. You can't see it from the financial statements, but loans are actually to pick up within September even. And that surprised us. And when you go back 90 days ago, we -- I think everyone felt like we were going to see balance sheets come down. We thought liquidity -- we thought cash was going to come down. Deposits are going to come down. We thought loans are going to come down. But our balance sheet on average was up in the quarter. And even there it's not that just the clients are holding more deposits, but loans were held in. And so, I -- it does seem like there -- some of the loan demand we have is coming from clients that are saying, they want to be ready to do things if to be more active if they see opportunities come up. It's unclear whether or not that will actually happen, whether or not the opportunity to come or whether or not, they'll actually pull the trigger on it. But that's certainly been the case that they've held in terms of loan volume. And we've been talking recently about the fact that, liquidity in general is a big component of what we do with our clients, and so if you think about liquidity more broadly as clients wanting to find safe high-quality places to park their cash and short-term assets. They view our balance sheet is strong and we've talked about the fact that our money market mutual funds, very strong investment performance, they're at size. Our treasury funds were $80 billion to $90 billion. And so various appealing places even for very large institutional investors to invest. And then on the other side, clients know that as they've worked with us, we understand their asset composition well. And so, we can be a thoughtful lender in terms of how to structure things in the most efficient way for that.

Thanks a lot.

Sure.

Moving on from Deutsche Bank, we have Brian Bedell.

Great. Thank you very much. Just a couple of 4Q questions just to get this out of the way. Just if you could comment on the typical seasonality that we see an uptick in expenses that we typically see in the fourth quarter in conjunction with the Gulf Open, which added some expense in 3Q. And also the exit rate for money market fee waivers in September to get a sense of where we're running into for 4Q on that?

Sure. Mike do you want to do this? Mike O’Grady: Yeah. So the first was on the seasonality in the Northern Trust?

No, just in general expenses. Mike O’Grady: Oh, in expenses.

Fourth quarter expenses. Mike O’Grady: Yeah, sure. So there are components of expenses in fourth quarter that are -- that we should actually curb because I think third quarter in some ways is not an ideal run rate for some of them. And so maybe just walk through it a little bit. First of all take benefits for example. There you see the trend that took place, but part of it is the fact that medical has gone -- and it's not an enormous line but it's had an enormous jump from second quarter. So medical in second quarter was something like $17.5 million went up to $26 million in third quarter. That's closer to a typical run rate but could still see some tweak up from there. And so I think that's just something to keep in mind that as our partners exited effectively doing normal things in their own health care maintenance that's coming back online. And it's had a surprisingly large level of volatility from my perspective frankly. And then outside services is another one where we believe we could see a similar step-up in fourth quarter to what we saw in third quarter. There's a lot of business volume related costs within that category that are likely to increase. And we're still running at relatively low levels of cost when you think about things like consulting, legal, technical services that dial down and we're doing everything we can to tamp those down but that could come back up. And then equipment and software -- on a year-to-date basis equipment software costs are up 11%. That's likely close to where we're going to land for the full year 2020, the category where the expenses are expected to have higher levels of growth this year as -- in fact we've invested in the business, we've got higher depreciation and amortization costs we've called that out. D&A is something like two-thirds of that line in general. And so that's kind of in the soup. It's hard to tamp that down as aggressively. And then I'll talk about occupancy. I've mentioned it a little bit. There's going to be volatility there. We're going to make some investments frankly in occupancy to try and get our longer-term run rate down a little bit. And so you're going to see that line item bounce around a little bit. And so in general, I'd say it's less about seasonality of run rate in expenses and it's more about two things. One is what how do we get back to undoing the COVID related influences on expenses, and second what are the investments we're going to make to try and decrease our run rate in the long run.

That's helpful. On the money market fee way per trajectory at the end of 3Q?

Yeah. Thanks. So let me -- I'll do a couple of comments there. One is as we -- you could pick it up from the opening comments, we're right at $5 million only in the third quarter. Now the reality is there's -- the $300 billion in money market mutual fund assets we have that is relatively stable at this point but rates are moving around a lot. So you've got to assume that rates and volumes stay the same but third quarter was $5 million. As we sit today the run rate on a quarterly basis is about $11.5 million as we sit today. The team thinks we could have waivers in the fourth quarter, $20 million to $25 million and exiting the year so as a launch point coming into 2021 could be $25 million to $35 million. And just to give you a sense of what does that mean I think it's super important to remember the fact that if you go back to the beginning of this year when we were at $215 billion in assets, the overall revenue run rate was much lower than what it is right now. And so now you go up to $290 billion and the run rate is over $400 million in revenue. And so we're talking about the fact that we have a decent amount of waivers but from a much higher revenue base and so the story there is kind of mixed in some ways.

Okay. That's very helpful. And then Mike maybe on just ESG. You mentioned that at the outset, the ESG analytic service that you have served. But maybe if you could just talk about where you are in the growth path of that and are you rolling that out to all of your asset servicing clients? And how is the take up? And then also on the wealth management side, are you seeing more demand from your wealth clients for investing in ESG product that you have and the organic growth outlook in the investment management side for your ESG products? Mike O’Grady: Right. So, Brian the reason why I did mention it upfront is because ESG does run across the company and each of our businesses and you started to highlight it there, but let me go back through a little bit. First of all, just from an investing perspective to your point we are seeing more and more demand from our clients both institutional, but to your point, on the wealth side, including our GFO clients in ESG investment product and investment strategies. So, as a result, we've -- as you would expect with our business model, we've looked to fulfill those demands with ESG product from our asset management group. And as I mentioned over $100 billion at this point, but I would say still in the early days of that trend and of the growth opportunity for us there. And then more broadly in thinking about our institutional clients, particularly asset owner clients they're being held to a higher standard as well as to how they're investing and -- from an ESG perspective. And as a result they need the analytics around that. So, I talked about the capabilities that we rolled out. And to your point I would say early days on that because I think this is a very long-term trend.

Great. That's super helpful. Thank you. Mike O’Grady: Sure.

And next we have of Vivek Juneja from JPMorgan. Mike O’Grady: Hi Vivek.

Hi Mike, hi Jason and Mark. I just want to follow-up on the operating error. I know you've had those for years and I know -- I recognize that's one item, but large amounts do get a lot of attention. You I'm sure are aware of what's happened to another -- to adjacent when the amount got much larger similar to their business. They do have those kind of errors. And I know you've been -- what do you plan to do to automate more of these processes so that you have less of these errors. Simply how do you talk about trying to do stuff where you need less reconciliation less checking? So, Mike what do you need to do to step up to limit these and hope that something like this doesn't get even to be a larger amount in the future? Mike O’Grady: Sure Vivek. So, as Jason mentioned this is the nature of our businesses and that part of the business is processing transactions for our clients broadly speaking. And there are certain aspects of that that have been automated and were automated years ago. And that's -- what you would expect is find the areas that lend themselves to automation you get the benefit of both efficiency, but also dramatic reduction in risk from incurring errors. And so that's the longer term path that we've been on for -- and I'd say the industry as well for some time period. And then you have other aspects of what we do that don't lend themselves as much to automation because of the idiosyncratic nature of the particular transactions. So, in this case corporate actions where certain aspects of corporate actions are very straightforward and so they've already been automated or portions of them have been automated,…

Understood. Thanks. A quick one for Jason. I'll take a minor one Jason the CIS fees you mentioned year-on-year benefit from FX translation. Could you give us a number ex-FX translation?

2%.

2% growth ex-FX translation?

Well, just to clarify this is Mark. The -- on the custody and fund services line, that's where most of the currency impact would be and that impact was about a 2% benefit on a year-over-year basis.

Okay. So, that means--

And that line -- I should also add even though you didn't ask, that is the area that we saw the EFA local is down on a year-over-year basis. So that was actually a drag for that line markets were, because that line as we've talked about before is probably 2:1 more based on EFA local than I would say what domestic indices are doing.

Okay, great. Yes, I did notice that you mentioned that markets were down and I wonder which ones, I'm glad you clarified that one. But is that -- and are you highlighting that because the fee rate is higher on that mark? Because I didn't think EFA was over 50% of your revenues.

No. Just to try and give you a sense of the importance as you try and predict asset levels, you are trying to just to appreciate the influence of EFA local within the C&IS trust fee base, as opposed to wealth that's much more exclusively driven by just domestic indices.

Sorry. Okay. I would clarify that with Jason and Mark offline. Thanks. Thank you.

Moving on we have Brennan Hawken with UBS.

Hi, Brennan.

Hey. Good morning. Thanks for taking my questions. Just actually sort of following up on that line of question from Vivek. When we look at the trends in AUC/A growth in C&IS versus revenue, it looks like at least the way all of us knuckleheads from the outside model, there was some fee rate pressure. I know that it doesn't always translate that way to how you run the business and how you strike the deals and the contracts and the way all the pricing works. But could you maybe provide some color in helping us understand what might have caused some of those dynamics? Are those sustainable? What was behind that, just to help us inform as we sit there and think about our modeling and where to go from here?

Understood. I think more and more frankly, there's going to be less of connectivity between the asset level and revenue level. And a lot of the negotiations to take place, we're thinking about trying to include a more holistic approach to the relationship which might be what we're doing with the firm with investment management, what we're doing with integrated trading solutions, what we might be doing from an IOO perspective how we're handling cash and suite. And so, I know it's super frustrating to not be able to just use that role on a model to predict the revenue. But more and more, the reality is it's just -- it's disconnected in terms of the way the business actually prices these relationships. Mark spent a lot of time thinking about this too, Mark, add your thoughts.

Right. I mean, part of it, I would also say, is fee structure. And as we've talked about before, 35% to 40% of those asset servicing fees in C&IS are not directly linked to assets. So in an environment where assets are rising, that factor alone would probably put the fees at a lower growth rate. And then more importantly and it gets a little bit to what Jason was saying is, as mix of business. And even within the actual asset servicing fee category, a very large domestic U.S. custody mandate large assets maybe not a large fee, a fund administration mandate could come with much less assets and the fees are significantly higher. So, there is a mix that's at play too, besides the timing which we've talked about before, end-of-period versus earning over a quarter. But hopefully that helps. It's a tough one to unpack, we understand, to the point that Jason mentioned.

Okay. So just -- that's all fair and I totally appreciate that. But to the point of -- can you give some color to the point of the third quarter as a jumping off point then? Like, were trends that you saw in the quarter then reasonably sustainable? Was there some sort of noise that might have caused that divergence to look a little wider, just to help us kind of -- any help you can give on that front as we think about it?

Yes. Well, a couple of thoughts. One is that in the spirit of -- the business does have some compression. Just to get to your specific point earlier, as you asked the question I want to make sure we come back to it and address it specifically. And those fee compressions are going to be honored, whether or not we're in a COVID environment or not. I actually think though that doesn't have as much of an influence on the dynamic that you're realizing, which is that there seems to be -- that there's a disconnect between the growth and asset levels and the growth trust fees. And in the short run, you can have flows into and out of the business that are going to be reported on -- the assets are going to be reported on where they are at the end of the period. And the revenue is going to be reported based on where they were a prior period, period before that, maybe average and so it's very misleading to try and do the math on short-term to try and get a sense of what the fee realization rates look like on the business on an incremental basis. And even the business that's being added if it's being -- if it's very large pieces of business, they could be at extremely low fee rates. And -- but if it's more middle market activity, it could be much higher. So the business mix itself will have an influence there, but much less on the ultimate profitability.

Okay. Thanks for your patience with that one. My second one -- second question is around just trying to get at the processing error again. And I think, Mike, you might have made some comment about this, but I just wanted to kind of explore it. I think you said that you all are continuing to review those processes, see opportunities for automation, control and process review which is, of course, is ongoing, but maybe an event or a loss like this might sharpen pencils, so to speak. Will this have some kind of impact do you think on investment in the near-term or some of the expense lines, as you guys look to maybe shift or invest in some automations, hire some additional staff for that effort or what have you? Or is it more operational focus rather than the potential for investment? Mike O’Grady: So Brennan, I would say it's some of both. So certainly, there are the operational aspects, which I talked about. And just to be clear, we've done the full scrub on this incident already and have changed the procedures already and changed the controls already in that area. And from a resource perspective, it was not a question of insufficient resources in the area that resulted in the error all the same. We're trying to ensure that that isn't the case at any point going forward as well. So, whatever resources, but that's not something that would result in a change in our financials, if you will, or expense run rate. And then on investments to your point there, it will -- the incident in and of itself. It doesn't change our investment plan. But the broader environment, without a doubt, you're always -- we are always impacted by the situation that we're in, and as a result, prioritizing our investments. So there's -- the opportunities we have to invest far outstretch what we would deploy in a given year. And as a result, you have to determine, okay, how do you prioritize those? And do you focus on productivity, investments for productivity, investments for risk management, investments for innovation and growth. And so that's a process we go through every year and ongoing. And I would say in the environment that we're in now, we have to ensure that, yes we have the operational resiliency and levels of automation to ensure that going forward. And then second, I would say productivity. We have to make sure that we're investing the technology dollars in a way to get the productivity improvements we think we need in this environment to be able to drive scalable growth.

Great. Thank you. Mike O’Grady: Sure.

And next from Seaport Global, we have Jim Mitchell.

Hi, Jim. Jim, you might be on mute. Jim?

Can you hear me?

Yes. I can hear you now.

Can you hear me? Okay. Sorry about that. So maybe just a follow-up on deposits. It seems like non-interest-bearing deposits for you guys grew pretty nicely both on an average and period end basis where your peers saw declines. And it seems like that helped you, I guess, outperform on NII a little bit. So just -- is there anything unusual in the non-interest-bearing side? Is that something you're trying to grow? Or is that just the episodic puts and takes?

I mean, maybe -- yeah, I'd put it a little bit in between. I mean first of all, I actually -- I think it's good for people to realize. The reason we did better than we anticipated with NII, frankly a little bit less around the size of deposits that certainly played a factor, but I come back to the fact that we were able to turn on non-cash and loans held in better. And -- but then to your specific question about the growth in that category, hard for us to comment on what the industry is experiencing, but we've -- back to the theme that we talk about liquidity a lot with our clients and they view -- they tend to comment to us that they view our balance sheet as very strong. We try to position it that way. And so, we're happy to be a liquidity partner for our clients there. And I do think that has an influence on where they tend to park their short-term assets.

Okay. That's fair. And maybe for Mike, you mentioned it upfront that you're trying to do more with current clients. What -- any examples you can give us in terms of what you see as the biggest opportunity set to do more with your current clients? Mike O’Grady: So, first of all I'd say within the businesses, there's definitely the opportunity and one we're pursuing to do more, particularly I would say with asset managers. So just thinking about our approach to the market from a whole office perspective, it's not just back office or middle office but also what we can do on the front office. So I mentioned for example, integrated trading solutions or essentially outsourced trading for those institutions that's doing more with those clients. So it's using really our position of strength, which is in the back and the middle office to be able to do more in the front office for them. So that's on that side. And I could use, I'll say other examples within the businesses but also I want to add though and highlight it's also across the businesses. And so it's a concerted effort to say if we have a let's say an administration client, fund administration client, are we providing wealth management to the executives of that firm or if we have a corporate client where we are the asset servicer for their pension plans, can we provide a wealth management solution or program what we would call firm to firm for their executive group. So it's those types of cross-business opportunities that historically we've done very well with these but I would say it's more because of the culture and the way that we operate and we're trying to be more purposeful and disciplined about how we do that.

Okay. Great. Thanks for the thought. Mike O’Grady: Sure.

All right. We'll move on to Steven Chubak with Wolfe Research. Mike O’Grady: Hi, Steve.

Hi, good morning. So I wanted to start off with a question on just some of the NII comments. And specifically, I was hoping you could help us think about the incremental capacity that you have currently to remix some of those excess reserves into securities. And just as we think about modeling the securities yield, where are you reinvesting today versus the 130 basis points on the back book?

The capacity is a trickier one, because it depends on how quickly the deposits come in. And if we -- and sometimes we have to let deposits season in order to get proper treatment for those and get the confidence level, they're going to be -- that they're going to stick around so that we know we can take more duration risk with those. And so the reality is the size of the deposit base doesn't necessarily correlate exactly to what we can think about in terms of non-cash reinvestment opportunity. In terms of the opportunities on where we are investing at the time, there is more of a distinction there frankly. We did step away from just Central Bank deposits, once we start to feel that the balance sheet was more stable. And frankly, this is something people have missed. Part of the reason that I think all banks were even going to the point of why did -- why were share repurchases suspended banks wanted to be there for their clients in case there were significant loan demand. And in case there is very significant demand to place deposits where we want to make sure that regulatory ratios were going to be adequate. And given the fact that we've got such a large custody base, we wanted to make sure that if those assets started to come toward the balance sheet, we were going to feel good about it. And so we were patient on that. And -- but the more we realized that there was stability from a client perspective, the other components of the regulatory environment were there and more stable, we could take a step away. And what we did in third quarter was really incremental in size and in asset class. But if you think about eventually the things we can start to move more toward longer-dated securities, we can start to move more toward CLOs, more toward MBS. Now the -- unfortunately in a typical environment, you might see more of a 50, 70 basis point differential between the non HQLA portfolio. And the HQLA portfolio that's compressed and it's more like a 30 basis point differential at this point. And there are other things that we can do and explore based on what the opportunity set is given the risk and return framework or the different securities we feel comfortable in. But that should at least give you a little bit of a framework on how we think about it and a little bit of the dynamics from a quantitative perspective as well.

Got it. Okay. That's helpful color. And then just thinking about the expense outlook. Now looking out to 2021, I just wanted to better understand how we should be thinking about the expense growth trajectory. NII is expected to decline about low double-digits assuming versus the current run rate things are relatively stable. The fee income growth potentially growing, mid-single digits at least on an organic basis. I'm just wondering is there room to do better on costs, where expense growth actually lags some of the organic fee growth to help dampen some of those pressures? How are you thinking about it in terms of the general internal philosophy?

Well, we still consider ourselves a growth firm and we're investing for growth. And things even like the growth in the money market mutual funds it takes investment upfront to get the cutoff times right and to get investments done with portals. It takes also expense growth on an incremental basis. When you think about the administration fees that we pay to some of the -- around some of the processing side. And so, I think, that's a good example just thinking we think about things more from an operating leverage perspective. And to the extent that we have good operating leverage in the business then we're going to feel okay about the expense growth. Otherwise, we have to be extraordinarily disciplined about it. And so let me just break it down in these three different levels of how -- to your question how do we think about it in three different levels. One is, total operating leverage; two, trust fee operating leverage; and three, organic trust fee operating leverage. Now on the first, with this total operating leverage that's including a very declining component of revenue, which is NII and so it's going to be very difficult. And I don't think it's a very pure test right now given the unpredictability and the disconnect of that line item from the rest of the business so think about that as the one we'd want you to focus on. The other end of the spectrum is organic trust fee leverage. Unfortunately, there that's not a GAAP number. And so we can give you some components of how we think about it, but we can't really ask you to track that and just trust us that it's going to what we're expecting. And so let's focus in the middle on trust fee…

Thanks for that context. And just two quick modeling questions, if I may. One is just how we should be thinking about the jumping-off point for other income given there's a lot of noise in the quarter as we just look out in 4Q and heading into 2021? And then just on the fee waivers, just to clarify quickly, $5 million was the impact this quarter, but it still sounds like your expectation is somewhere in the range of $25 million to $35 million for quarter headwind exiting this year. Is that right?

Yes. Yes.

That's right.

Yes. Again this is -- and I thought about mentioning it earlier, but I want to make sure we're giving you guys everything we can. The -- if you think about call it -- hopefully call it $300 billion base of business and say $200 billion of it is somewhere in flow for waivers. And the different funds jump into waiver mode at different levels. But if you look at where the overnight repo, for example, is right now and if you look at NIF treasure -- if you look at the treasury products, and those are the biggest products we have. And this is all -- you've got to imagine that over 50% of the assets are 30 days or less. And so -- and at $90 billion roughly, you're talking about $9 million per basis point. And so I cringe giving you guys numbers that have such volatility in them, but just think about how much of a dynamic that is if that fund -- if that strategy comes down literally a single basis point it influences run rate by almost $10 million a year. And so the numbers you quoted are right, but I think it's important for everybody to track the overnight repo market, track 30-day treasuries, track 6-month, track 12-month to get a better sense intra-quarter of what that number might be looking like.

And on the other operating income -- this is Mark, it certainly has volatility so I can appreciate the difficulty modeling it. If you looked at averages over the last -- 1.5 years or so you're probably looking at something in the mid to upper 40 range. This quarter we did have some benefit from the supplemental compensation plans that sit within that line that we're a little bit outsized versus what they've normally been. So you're probably a little high this quarter. And if you looked at the average like I said mid to upper 40s.

Perfect. Thanks for clarifying that. Appreciate taking my questions.

Thanks.

Moving on we have Mike Mayo with Wells Fargo Securities.

Hi. So it looks like you have best-in-class fee growth led by best-in-class wealth and asset management growth. But I still need help on the disconnect between the growth in assets under custody which were up twice the pace of peer year-over-year up 16%. And the custody fee line which is up only half as much. And then you said timing is part of it. But if you look at the last 12 months your assets under custody is up twice as much and you're related fees are that in line. So it just seems like outside AUC growth relative to the fees. And I know you said some of the AUC is not tied to fees, that's fine. But it still doesn't seem to explain everything that's going on there. So either there's something else in there or you’re exciting based on price? Or I'm just missing something? Thanks.

So let me address it. The -- that business most of the vast, vast majority of AUC in wealth is GFO. And the reason for that is we're -- that's where the outsized portion of clients that might not manage here but that want to use us as a custodian. It's kind of a hybrid business between the wealth business and the institutional business. And so when you look at the AUC number there that's vast majority GFO. That client base is very, very -- it's very, very spiky. And so you get very high number of -- you get a small number of clients that can literally have billions or tens of billions of dollars of assets coming in from an AUC perspective. And that's not going to influence how we think about the pricing on the overall relationship. We think about the relationship very holistically. And if the client has a -- it could be mega, mega liquidity events from a small number of clients that will move that line item that AUC number dramatically without influencing fees.

And what's happening with those super high net worth customers then? What are they doing? And what have you seen recently?

Yes. So a lot of times they'll have a large sale. It could be life event. It could be business sale, single stock exposure that they're dealing with they'll ask us to custody those assets for a period of time until they decide where to put those funds to work. And so -- and our goal is to work -- first of all be that provider so that we can be a best-in-class custodian for them and then introduce the other advisers, managers to do what we can to also be a manager and a financial adviser. We might do manager selection for them. We might become an OCIO provider. They might put some of those assets into -- they might move those assets from where they are into our liquidity funds. They might ask us to do tax-advantaged equity investing where we're very tax conscious. They might do a more aggressive ESG mandate. But the custodying in that business especially if it's a mandate of that size is going to obviously significantly change the denominator, but in the short run it's not going to change the numerator which is the fees we're getting off of those assets.

Okay. And then just one follow-up. So gist -- the gist behind the question was pricing competition in the servicing business. Is it getting worse better? How do you think about competing? I mean sometimes it might make sense to take lower prices because of the scalability?

Yes. The -- in general, the conversations are -- have been hopefully starting to be more about what is your capability set, what does resiliency look like? How did you handle the crisis? What are you able to do to help us from either investment operations outsourcing? Mike hinted earlier at integrated trading solutions and so all those things in the long run should be helpful in moving away. And just like the asset management business moving away from just talking about investment performance, here moving away from just talking about pricing the more value added. In the short run there were concessions that we agreed to as we do every year. And those played through early in the year. And so but in the longer run we're hoping that these conversations are more about capabilities and about service quality you're going to reduce those -- the frequency and severity of pricing discussions. But we're always going to have...

Sorry. The word concessions kind of sticks out in my mind, so is there a magnitude of concessions? Do they come back? Or are they just -- how does that work for you?

I think it still comes back to the 1.5% to 2% a year of kind of price compression. So I don't -- the word concession maybe is a little different, but re-pricing that's just the kind of thing that we've seen pretty consistently. And I don't know, Jason, if the business he's talking about that picking up or accelerating at all.

And Mike, I would just add, so where you have large relationships that are good but those client relationships have grown meaning the assets have grown just like we talked about when their fees are tied to a bid on those assets that were either custodying, administrating whatever it maybe, they tend to then go up over time. And then the client looks at it and says, hey, you know what I'd like to take a look at the pricing on this, because your fees have gone up, because our assets have gone up, and yet from a work perspective you may be doing more but not as much as our asset growth. And so that's the exercise. If you're not able to come to an agreement then a client can say, we're going to take it out for rebid. And then that process then as a result they're likely to get more aggressive pricing on it. Now, again, we try to minimize when it has to go through that full process. But I think that the nature for very large institutions like that. I would also say, on new business just to be clear price is a factor of course, and we lose business on pricing at times. So it's not as though we price to win. We price to win at a profitable margin for us, and have models to be able to determine what are the resources required and therefore where can we price it? And if we can't get there with either where we think it is or you just find out through a process you lost. And the reason why you lost is your pricing was not aggressive enough relative to who they ultimately picked.

Thank you.

Sure.

And next we have Gerard Cassidy with RBC.

Good morning, everyone. I've got a big picture question -- to be able to answer, but we'll give it a try. Your balance sheet and the deposits and in fact Jason you mentioned that, I think earlier to a question. Everyone was surprised that [Technical Difficulty] obviously good. What do you think normal size of your cost base you mentioned customers have much more liquidity today, because [Technical Difficulty] we all know that balance sheet [Technical Difficulty] where do you think your normal size in being do you have any -- or maybe you're at and it will stay. And you may actually get there? Is it 2022, 2023 any thoughts on this? Mike O’Grady: Gerard, its Mike. Why don't I just first just clarify your question it's around as you started it bigger picture question, but with all these factors going on what is your expectation for a normal the normal size I'll call it for the balance sheet. Is that what you're getting at?

Yes. Yeah that's correct. Mike O’Grady: Okay. Okay. Let me make one comment. And then since you led in with big picture that allows me to answer it without all the details that Jason can provide. But I would say, as much as you might say, boy there's been a lot of monetary policy across the globe and that has elevated the size of your balance sheet. And so would you expect that to kind of come out of the system and see your balance sheet go back down. So do you have "excess deposits" right now? My perspective on it is we're into a very long-term period for this type of monetary policy. And so I don't know how to define normal. But as far as the liquidity that our clients have right now and what they're doing with it, be it on our balance sheet in the funds, I think there's going to be a lot of liquidity in the marketplace for some time period. Now, it ebbs and flows as far as our client and our balance sheet and funds. But just in general, I think the water level is higher, and I think it will remain higher for some time period. Jason, I don't know if you want to add?

I think the only thing just to maybe to bookend it is, if you go back a year ago deposits were kind of mid-80s build. And if you think about -- when you look at where deposits are today in the one-teens and so I would use those as the bookends, but I think Mike's comments reflect it's probably near the higher end of that bookends.

Very good. And then just to come back to the processing error that you have been very good at explaining what happened. You mentioned that processing errors occur all the time. And to you it means processing and processing is every year of course. Was the actual -- whatever the execution was it upsized execution rolled into your normal processing services caused an outsized cost? And then second was it [Technical Difficulty] once the execution have to [ph] take a couple of days to figure it out? Mike O’Grady: Yeah. So Gerald again I -- just because your line is cutting in and out a little bit, but I think I have the question. The first one, you're trying to get your arms around the size of the loss. And there are two things I would say, one, is that it was a large corporate action. So size wise in the marketplace it was a large corporate action and our clients were active in that particular corporate action. So that was one aspect of the size. It was large for the market. It wasn't necessarily any larger for us vis-à-vis anybody else. It just happened to be a large corporate action. And then second as far as a timing perspective, the air just to be clear was identified within minutes of having been made and so it's not -- and then it was ultimately remediated as soon as we could practically do it. So we did not carry a risk position I'll call it for an extended time period that just got worse because we thought markets were going to change or anything like that it's obviously unfortunate situation. We're very disappointed about it. But we looked to mitigate the potential costs as soon as practical and we were able to do that.

Very good, Mike. Thank you.

And moving on we have Rob Wildhack with Autonomous Research. Mike O’Grady: Rob?

Good morning guys. Mike you started to touch on it a little bit in the last one-third of the call here. And in the past you've emphasized scalability in your upfront remarks today you emphasize tech solutions. So I was hoping you could give us an update on the progress you've made here on these priorities and where you think are the best opportunities to increase scalability and up your tech solutions going forward? Mike O’Grady: So I think that Rob, the expectation would be that I would say it's all in our asset servicing business and the processes and operations around that, which is certainly from a dollar perspective that's the largest opportunity. And it's one as you mentioned we've been pursuing that and the point here is we'll only continue to do it. And if you did say within 2020 and everything that's happened has that affected the pace I would say it has. And some of it is I would say the fortunate circumstances of seeing the model operate differently and seeing new opportunities for scalability within the business model. So more remote work is definitely a part of that. And frankly managing the processes is different in a remote environment than it is in a facilities in person based model. And so we've had to adapt. And as we've acknowledged there have been changes and risks that come with that. But also I'm saying there's also some opportunity, where we see to get more scalability. But then, the other aspect of my response was going to be that in areas where it's already relatively scalable, so for example, in wealth management as that business becomes more digital, that becomes even more scalable as well. The point being that -- and again, we've seen an acceleration of that in this environment as well, because as much as we will always offer the highest level of service for our clients. And that's our market positioning. That's a differentiator for it. The nature of that has changed over time. And it's only accelerated. Being more specific, clients need to and want to be able to do more things on their own through, mobile or other digital devices. And that's great. So instead of necessarily calling someone here to get something done, they can just go to their phone and get it done. Well that changes the scalability of that activity, because they can -- we can have as much volume of that as you can imagine, but it doesn't increase the resources or certainly at the same rate. So, we see it as I say, kind of across the company. And it's just a matter of continuing to execute.

Yeah. That's great. Thanks a lot.

Sure.

Sure.

All right. Moving on, we'll take our final question from Brian Kleinhanzl with KBW.

Hi, Brian.

Hi, Brian.

Thanks guys. I just have one quick question, at this point. When you think about the pipeline, I know it's a mix of different clients that are in there and different services that you're onboarding, but when you think about the onboarding process underneath this operating environment that you have to work with today. How much longer is the onboarding process as we could think about how to lag these revenues in, in this current environment versus what it would have been previously? Thanks.

Sure. So as Jason mentioned, we did have a call it deferral in the transitions, particularly in the second quarter. And then, we picked back up -- transitions picked back up in the third quarter, particularly towards the end of the quarter. And yet, he's also said we have a high level of business that has been won, that needs to be transitioned. And you've identified one of the aspects of, how that has changed the cadence or sequencing of those transitions, because some of them are much easier to do in a virtual environment. So if you think about I'll call it custody type mandates, there's a lot of activity that's required. But that happens or can happen. A lot of it frankly it was already, I would call it very digital or could be done virtually whereas if you think about broader IOO Investment Office Outsourcing mandates, those are more difficult to do. They involve more people. And so, when those people are remote, whether they're the clients or ours or there's some requirement for us to be hiring people to be able to take on that business that does take longer to implement and to get transitioned. And then, there's all types of mandates I would say that are in between there. And we're moving on them. So you heard some of the fund administration wins that we've had, in the 40x space which has been great. But it does take a little bit longer, given the nature of that activity that you're taking on. Operator, any other questions?

Sure. So as Jason mentioned, we did have a call it deferral in the transitions, particularly in the second quarter. And then, we picked back up -- transitions picked back up in the third quarter, particularly towards the end of the quarter. And yet, he's also said we have a high level of business that has been won, that needs to be transitioned. And you've identified one of the aspects of, how that has changed the cadence or sequencing of those transitions, because some of them are much easier to do in a virtual environment. So if you think about I'll call it custody type mandates, there's a lot of activity that's required. But that happens or can happen. A lot of it frankly it was already, I would call it very digital or could be done virtually whereas if you think about broader IOO Investment Office Outsourcing mandates, those are more difficult to do. They involve more people. And so, when those people are remote, whether they're the clients or ours or there's some requirement for us to be hiring people to be able to take on that business that does take longer to implement and to get transitioned. And then, there's all types of mandates I would say that are in between there. And we're moving on them. So you heard some of the fund administration wins that we've had, in the 40x space which has been great. But it does take a little bit longer, given the nature of that activity that you're taking on. Operator, any other questions?

No sir that was the final question. That does conclude our Q&A session. So, I'll turn the floor back to you for any additional or closing remarks, sir.

Thanks everyone for joining us. We'll talk to you in 90 days.

All right. And everyone, that does conclude our call again for today. We do thank you for joining us. You may now disconnect.