We think it’s the product mix and other factors leading to the way we’ve calculated organic growth as being negative. In asset servicing, different story – we talked at the early part of the year that we felt the pipeline was good. That pipeline has started to on-board in fourth quarter, and we feel good about the growth in that business. The proxy there should be more custody and fun servicing fees, just as I talked about account management fees in wealth management, the proxy–the same corollary there is custody and fund servicing. That was a positive in fourth quarter, it was actually really attractive. We had new business that Mike talked about early coming online in the business to the tune of kind of mid single digits, and we feel like that business is back to its historical organic growth rate.
That’s evidenced by what we on-boarded. The one not on-boarded business we have right now is higher than our three-year average, and the pipeline of business they have, that they’re still bidding on in late stages, is higher than the three-year average for the business, so a lot of positive signs in the asset servicing business from an organic perspective.
Rob Wildhack: That’s helpful. Just on that starting to on-board business in asset servicing, I think in the past you had talked about that not really coming online until the second half of ’23, so is that a pull forward there?
Jason Tyler: Actually, there is–go ahead, Mark?
Mark Bette: It was ’22.
Jason Tyler: Yes, I’m sorry – it was early ’22 that we talked about there being business in the back half of the year that was on-boarding, so that did come into play. We do have right now–there is a chunk of business that we know is on-boarding in the short run. The pipeline is good, and then you go out farther to the end of ’23 and there’s another chunk of large business that we’re anticipating to come on in a couple different areas fourth quarter, and even into first quarter of ’24. The pipeline for that business at various stages is looking good.
Rob Wildhack: Got it, thank you.
Operator: Thank you. Our next question comes from Mike Mayo from Wells Fargo Securities. Please go ahead.
Mike Mayo: Hi. On the expenses, oh my – I get it. You guys are dealing with the first decline in both stock and bond markets in over 50 years. You said you’re preserving growth by investing in people and tech. There’s inflation, but wow, this is the worst quarterly operating leverage that I can recall for you guys. For the year, it was negative operating leverage of 500 basis points, and even cost has grown twice the pace of revenue growth. I guess what I’m looking for is more assurance that expenses haven’t gotten away from you. I get it – at the high level, you said–you know, it looks like you’re right-sizing headcount with severance, you took out hundreds of tech-related contracts, you have some kind of mainframe strategy.
I have to tell you, I just don’t understand what that means from a bottom line standpoint. I guess the question is, you’ve said your expenses to trust fee ratio of 120% is unacceptable, but what is acceptable and when should you get there – like, 2024, 2025? What kind of sense of urgency do you have, because this is not the Northern we’ve gotten to know over the past long while, aside from your resiliency through tough times. Thanks
