Jim Mitchell: Okay, that’s fair. And then maybe just maybe a bigger picture. We’ve talked a lot about on the fee side. You’ve had you had good flows at the end of the quarter and two money market funds, which is one of your higher fee rate products. You’re talking about perhaps increased flows in the wealth side. How do we think in you had a move in the markets? How do we think about total fee income any puts and takes to think about as we go forward into the next quarter and beyond?
Michael O’Grady: Yes. We’ve talked about the we get a good sense of where we are at the end of the quarter relative to the averages. And so it gives us the launch point, frankly, is positive relative to where we are. And you’re right that the money market funds in general, that’s an attractive fee business for us. And so all those things playing in our favor, but we also know markets have a really big impact and then also as much as we talk about organic growth in the business. What happens with markets in the short run is often the bigger driver. The last thing I’ll mention is that an asset servicing in particular, that pipeline in the short run of one not funded one not onboarded is still above historical levels. And so the short run, it looks positive. We have less visibility out late in the year, but the asset servicing side still is also attractive relative to history. And we gave you even more information, I think, on the wealth management side of the business.
Jim Mitchell: Okay, yes. Thanks.
Jason Tyler: Sure.
Operator: We will take our next question from Brennan Hawken with UBS. Please go ahead.
Jason Tyler: Good morning Brennan.
Brennan Hawken: Hey good morning Jason. Thanks for taking my questions. Just want to try and make sure I understand something on expenses. You had spoken to getting below 7% expense growth. And I believe that was on a number that was X one timers. Do I understand that right? And what is that based on 2022 if we back out the one time was just so I can kind of fully level set and understand how we’d be really thinking about that?
Jason Tyler: Yes. Think about it as 4893 to be very, very specific.
Brennan Hawken: That certainly is. Thank you. Sure. So one more just clarifying. You had chatted about how there’s some noise in that other financing line that we most usually think about as wholesale. So with deposits coming down, I would think that you’d be probably building out the wholesale, at least in the near term given the quarter date decline in the balances. Is that operating assumption fair, and then if we were to strip out some of that fixed financing line what is that core cost to your wholesale just so we can model it appropriately when we’re thinking about truing up for the sum of the quarter to date trends you flagged. Thanks.
Michael O’Grady: Yes. And in general, it’s going to depend on where we go in the market and how we in and what sources of wholesale funding that we use. And so it’s FHLB and sometimes we’re doing other sources. But in general, it’s been in the mid fours this past quarter. And going forward, I think it’s just, it’s obviously going to be impacted by rates and where and what happens with the Fed. And so but I think the fact that we’ve gotten two questions this time means we’ll probably in the future, try and give you guys a little bit more information on the impact of FICC repo, and how that’s impacting the borrowing costs. And there’s also impact on the asset side to be fair, as well. So we’ll provide some more information on it.
Brennan Hawken: Right, thanks. That’d be really helpful. I’d love to just do this. This is a little bit of a ticky tacky, but I’d love to just do one more on expenses, if you don’t mind. You spoke to $20 million pickup, quarter-to-quarter it seemed like on non comp, but five of that was just like one going from one bucket to another. So does that mean it’s like $15 million quarter-over-quarter or is that mean that $20 million is the total step up, we should think about for non-comp and then underneath the surface of that there’s $5 million moving from one bucket to another, just if you could clarify that that be helpful.
Michael O’Grady: Yes. I am going to, there’s a couple areas where I mentioned 5s and 10s. So let me I’m going to be a little bit repetitive forgive me, but it’ll make sure that I was 100% clear on them. Because there’s a couple of different areas that you might have been referencing. On comp no movements between buckets. We’re thinking take first quarter, reduce it by 40 million for the retirement eligible and some other and some other factors that play into the incentive line. And then add 20 for merit increase. That gives you a decent starting point to say, okay, what’s going to happen with the business going forward. Second dynamic that I mentioned does have movement between line items. It’s movement between outside services and equipment software.
And there’s about a $5 million move. That’s going to happen second quarter, from equipment and software into outside services. Outside services should be about $20 million higher than first quarter. That $20 million includes the $5 million from equipment and software. On equipment software, still think that line item is going to be up a few million dollars in second quarter.
Brennan Hawken: Thanks for walking through that.
Michael O’Grady: You bet.
Operator: We will take our next question from Gerard Cassidy with RBC. Please go ahead.
Michael O’Grady: Good morning, Gerard.
Unidentified Analyst: Good morning, everyone. This is Thomas Letty calling on behalf of Gerard. Circling back a bit on the fee side and following up a bit on Alex’s question earlier. Can you give us some color on the competitive landscape you saw this quarter and any organic growth opportunities you see, as we look further into 2023, on the institutional side. You guys give some good color on the wealth side, but just on the institutional side, any additional color there?
Michael O’Grady: Yes Tom. The additional color I give you there is that certainly highly competitive, but there are quite a few opportunities that are out there. So active market, and I would say a lot of what’s driving it is with the impact on the markets last year equity markets being down 19%, 20% that put a lot of pressure on asset managers. And as a result, having them look at their operating models, how they can become more efficient, and looking to either outsource activities and or consolidate providers. And so that has increased again the level of opportunities in the marketplace and can cut both ways. I mean situations where they were advantaged, but other situations where I’ll say we’re more on the defensive because it’s an existing client or one of two being an existing client. So very active at this point and obviously trying to win more than our share.
Unidentified Analyst: Thank you. That’s helpful. And then just lastly, high level can you detail for us what an ideal environment would look like for you guys in terms of an interest rate and global markets perspective?
Michael O’Grady: Yes. It’s interesting. I think Gerard actually might have asked that exact question a few weeks ago, which seems like quarters ago. And my thought on that is that first of all the trajectory, the slope of the curve matters a ton. And having a somewhat steeper yield curve matters a lot. And secondly, you want rates to be above very low. And so when rates are, if I call it 50 days, when Fed funds rates are below 50 basis points or below, it’s hard, it’s just hard for us to get good return on equity. And we start to play in the fee waiver land, which just is not, it’s not that we lose money in money market funds, but that whole business, the economics of it change a lot. But then, lastly, the pace with which you get to any environment matters a lot.
And that’s why a lot of banks who struggle this time. It’s not the yo curve, it’s the pace of change. And you’ll literally 12 months ago, today, and Fed moving this aggressively in a relatively short period of time, it just creates a, it’s very tough to deal with pace. So those would be, those are the three dynamics that are forefront of mind from our lens.
Unidentified Analyst: Great, thank you. That’s helpful. And thank you guys for taking the questions.
Michael O’Grady: You bet.
Operator: We will take our next question from Vivek Juneja with JP Morgan. Please go ahead.
Vivek Juneja: Thank you. Hi, Jason. Hi, Mike. A couple of questions. One is the headcount cuts the severance that you’ve took in the fourth quarter, have we seen that flow through yet, in terms of the numbers?
Michael O’Grady: So we have actually gotten a pretty good head start on those but very little impact already in the numbers. It happened later in the quarter and there’s the areas of the business where they happen. We just haven’t seen them play through very much yet. Some impact, but light.
Vivek Juneja: So in those numbers that you gave us should there be some benefit from that coming through Jason in Q2 or not or 3Q. Any color on that?
Jason Tyler: Yes. all along I think we said we think the meaningful impact should be visible by third quarter.
Vivek Juneja: Okay.
