Jason Tyler: Yeah. Let me — I can go through the chunks that we talked about really quickly. So the implication would be that compensation would be down $35 million to $40 million and equipment, software and outside services each up $10 million to $15 million.
Brian Bedell: Yep. Okay, great. Thank you very much.
Jason Tyler: You bet.
Operator: We will take the next question from David Smith with Autonomous Research.
Jason Tyler: Hey, David.
David Smith: Good morning. Just speaking a bit more about balance sheet positioning, setting aside the somewhat artificial nature of the 10-K asset sensitivity disclosures everyone has, can you give us your best real-world guess right now for the incremental NII impact of more versus fewer Fed cuts, putting both pricing and balance sheet volume dynamics together?
Jason Tyler: Yeah. It’s assuming — you’re right to point to the supplemental disclosures have the sensitivities to it. But if you’re thinking more about — those are more stressed, up 100 basis points, 200 basis points and more. If you’re thinking more about single or double rate cuts, then it’s difficult to — it’s actually difficult to tell. And you can see just assuming what’s more likely of a 25 basis points or 50 basis point decline. We’re going to be following the market and what happens there. And there are scenarios in which you could see banks trying to hold on to deposits and others saying that they want to hold on to margin. And so even on the way up, it was not a linear exercise for us. The betas were very low at the beginning of the increase.
And then at the end of the increasing cycle, the betas were very, very high, in some instances, over 100%. And so it’s just difficult to predict right now. There’s no science. We debate internally even what the most likely impact is for these first couple of cuts on the way down.
David Smith: Okay. And then one other NII follow-up. Do you think you’re done with securities repositions at this point? Or could we see another one later in the year?
Jason Tyler: Unlikely we’ll see another one. We got a lot of the — a lot of what we did, a lot of the very low-yielding securities. And remember, there’s real benefit from a capital perspective as well and being able to take some of the securities that had negative RWA treatment and reinvest those in cash at a point in the yield curve where we felt that’s where we wanted to be incrementally from a strategic perspective, from an investment perspective and also have improvement from the capital perspective. That trade, each time we’ve done it, that component of the repositioning has lessened an impact. And so it is much less likely, but that’s just given the current state of the yield curve and how we feel about the economic environment.
David Smith: And lastly, anything you can do to help us think about using the Visa proceeds for organic versus inorganic investment opportunities?
Jason Tyler: Yeah. It’s — we’re obviously looking really hard at ways internally to make sure we’re investing anywhere we can to grow at attractive capital levels. Our return on capital is — targets are 10% to 15%, and we’re putting that same type of framework in place as this capital comes in. And to the extent, the best thing we can do is grow with our existing types of businesses and with our existing clients. That said, we have not been short capital before. And so it’s not like there are things we could do, but we couldn’t afford it from a capital perspective. And so it’s — it’s not like there’s a laundry list of things we can say, now we can go get this done. And so we’re going to be prudent and patient, but at the same time, not hesitate to reflect our capital framework, which at this point would indicate, all other things equal, a little bit bias heavier on share repurchase.
David Smith: That’s helpful. Thank you.
Jason Tyler: Sure.
Operator: We will take our next question from Steven Chubak with Wolfe Research.
Sharon Leung: Hey, good morning. This is actually Sharon Leung filling in for Steven this morning. Just a quick follow-up on non-interest bearing deposits. They seem to have stabilized this quarter and are now about 15% of the total. Do you think that this is kind of like a good trough level, even if you see continued deposit pressures related to QT, et cetera?
Jason Tyler: They — it’s definitely flattened out in terms of even the percentage decline despite the fact that we had an overall increase in deposits. And so non-interest bearing deposits performed well relative to what we would have expected and definitely seemed to have flattened out. Didn’t grow as much as the rest of the base, but performed well in the period. So not predicting a significant movement down at this point.
Sharon Leung: Okay, great. And then just to follow up on AUM and AUC growth, saw healthy expansion, but can you talk about what maybe drove some of the pressure on fee rates across your business this quarter?
Jason Tyler: Yeah, the fee rates, I think, is — I always caution to focus on that when we apply it to our asset levels, whether it’s on assets under management or assets under custody, because only a portion of the business, roughly half is even tied to asset levels and then a lot of the contracts that we have get to transaction volumes and then there’s significant mix shift. Areas like our family office business are going to have a lower overall yield on assets relative to the regions in wealth management, for example. And then there’s other components in asset servicing that are very similar. And so we actually don’t do a lot of analysis on — as we’re unpacking the quarter or the year, we’re not looking at those rate changes as the biggest indicators of what’s happening in the business. We’re looking more granularly at what’s happening with our clients, the mix within different products and what’s happening in the regions and family office, et cetera.
Sharon Leung: Great. Thank you.
Jason Tyler: Sure.
Operator: We do not have any further questions. I would like to turn the call back over to Jennifer Childe for closing remarks.
Jennifer Childe: Thanks, operator, and thanks everyone for joining us today. We look forward to speaking with you again in the future.
Operator: This concludes today’s call. Thank you for your participation. You may now disconnect.
