Jason Tyler: Sure. So you’re right in the tee-up of the numbers, there’s obviously room. We did a fair amount of buybacks in the quarter, a little bit more than we do on average, and we’re always looking at that relative to other opportunities we have to invest capital. And so, in the near term, we’re thinking about does it make more sense to invest in RWA effectively to say we could grow the loan book more, we could do more in FX, we could do more in sec lending or do we want to reposition the — take a different repositioning in the securities portfolio. The repositioning to be did this year were all helpful to capital, because in going shorter we — and out of non-HQLA into HQLA on that, those are all helpful to capital. But you also know how closely we look at peers and we take pride in the capital levels we have.
We think it’s part of our financial model and our business model and talking to clients and being able to evidence to them how strong the capital base is. And so, there’s definitely room, but we also got to have in mind that Basel Endgame, which you referenced briefly, it’s still unclear. We did do a comment letter, which you referenced, but it’s unclear what the impacts are going to be. We think we’re in good position relative to peers, but want to keep an eye on that. But we’ll also think about additional stock repurchases as we always do, given alternatives we have.
Ryan Kenny: Okay, great. And can you also update us on your expectations regarding ability and timing to dispose of the Class B visa shares and would that potentially have any impact on capital and buybacks outlook?
Jason Tyler: Yes, so just for people who don’t follow it as closely, we own just over 4 million Visa B shares, and the current exchange rate show that translates to about $1.7 billion. And there’s a proposal that it can be voted on next week I think that would enable the B shareholders to monetize half of the holdings. So what are we planning to do? One, at this point, there’s nothing to do. The proposal is still outstanding, and we’ve got to wait and see what the shareholder vote looks like. Even assuming it passes, there are timing restrictions to it. But that said, this is not a strategic asset for Northern Trust. And so, you should read into that. It’s not something that we’re saying we’re going to hold on to beyond what the restrictions would enable us to do. And we’re discussing all the options. There’s likely going to be a combination of a few tools that we’ll take, but early to give details on that at this point.
Operator: We’ll go next to Brian Bedell with Deutsche Bank.
Michael O’Grady: Hey, Brian.
Brian Bedell: Great. Thanks. Hey, good morning. If I could just clarify, Jason, a couple things you gave guidance on earlier, just to make sure I heard it right. The incremental NII from the two portfolio security sales is $30 million annualized, and that comparison period is 1Q versus 4Q. Is that correct?
Jason Tyler: Yes, so you broke up a tiny bit, but I think I’m following where you are, but don’t hesitate to tell me if I miss it. So the November repositioning helped in the quarter by, call it, $6 million, but that should be helpful going forward to the tune of — in the neighborhood of $15 million a quarter. The January repositioning, which we mentioned for the first time a little while ago, that should help in the quarter about 15 — round number is about $15 million a quarter.
Brian Bedell: $15 million per quarter, okay. And then on the expense side, maybe just I’m try to get some more clarity on the total expense growth. I think you said comp expense being up $50 million to $55 million in 1Q versus 4Q because of the retirement eligible option. And then employee benefits up $10 million versus 4Q. So correct me if I’m wrong on that. And then just translating that into expense growth through the year. Obviously, there’s lots of different levers. But is the idea to try to improve on the 3% expense contribution from that, from a total growth perspective, or should we be thinking of expense growth, say, better than 5%, lower than 5%, but potentially higher than 3%? Can you improve that trust — expense to trust fee ratio in 2024 from 2023?
Jason Tyler: Yeah. So a couple things. One, confirm your numbers are right on first quarter and the step up. Remember, both of those are fully seasonal, Brian, so the step up in first quarter just because that’s when — that’s the booking of our retirement eligible equity grants. And so that in and of itself is represents the vast majority of that step up and then similarly we’ve got a higher payroll tax in first quarter, just as we hit the caps on that level. But both of those numbers come back down for second, third, fourth quarter. That said, second quarter, got to build in the base pay adjustments that we referenced, which is that $65 million, that will be second, third, fourth quarter. So all that said, the goal is to do better than roughly 5% we did this year.
The 3% was not seen as the — again, back to, it’s not seen as a floor, but also that’s a big difference to go from 5% down to 3%. And so we’re using the productivity to do everything we can to get materially better than the 5%, but the fact that we’re walking in with 3% already in the base is just going to make it difficult. And so, I think it’s the — And the last thing I’ll mention is, for us, we’re anticipating organic growth. We target — we have organic growth targets for each of the three businesses. And we want to continue to be a growth company. That is important. And that drives some expenses in addition to expectation of what we’re doing from a revenue perspective. And so it’s hard to fine tune much to say is it between 3% and 5%.
