Net Interest Income Outlook
Q: What is your NII outlook for Q3 and impact of rate cuts?
A: Jason Tyler stated that they expect third quarter NII to be relatively flat, as a slight seasonal decline in balances should be offset by positive impacts of reinvestment spread and day count improvements. He mentioned that even with potential Fed rate cuts of 25 to 50 basis points, they should be able to pass along those declines in lower deposit yields without material spread degradation.

Expense Management and Cost Savings
Q: How will the restructuring charge affect future expenses?
A: Jason Tyler explained that the $200 million restructuring charge, mainly due to severance, will lead to permanent salary reductions equal to about half the severance amount, resulting in approximately $40 million in annual salary savings. While they plan to reinvest about half of the savings, this action positions them for better expense trajectory management in the future.

Wealth Management Deposit Costs
Q: Are you increasing wealth deposit rates to match competitors?
A: Jason Tyler noted that their wealth clients already have the option to sweep into money market funds yielding in the 5% range. Their rates are already at market levels, and although they monitor competitive actions, they currently do not plan significant changes.

Asset Servicing Strategy
Q: How is your asset servicing business positioning today?
A: Michael O'Grady stated that they are focusing on more profitable growth by being selective and disciplined on pricing. They are prioritizing opportunities where they can offer differentiated services, like front office solutions, leading to higher margins.

Monetization of Visa Shares
Q: What are your plans for the remaining Visa shares?
A: Jason Tyler explained that after completing the final sale of the current tranche in August, they will still have half of the entire pool of Visa shares left to convert and monetize in the future. He mentioned that the proceeds provide several hundred million dollars, with about half of the after-tax proceeds available for share buybacks.

Full-Year Expense Growth
Q: Can you achieve less than 5% expense growth this year?
A: Jason Tyler indicated that achieving 5% expense growth is unlikely this year due to elevated markets and accelerated resiliency investments, placing first-half growth in the 6% range. However, he reaffirmed their long-term target of 5% or less expense growth.

Severance Charge Details
Q: When will the severance savings impact compensation expenses?
A: Jason Tyler mentioned that many actions have already been taken, and the program will unfold over 18 months, gradually reducing compensation expenses during this period.

Deposit Betas and Rate Cuts
Q: How will deposit betas behave with potential Fed rate cuts?
A: Jason Tyler stated that at current elevated rate levels, deposit betas are high, and they expect to pass on rate cuts to their clients, aligning deposit rates with central bank movements. He confirmed that they passed on the full 25 basis point ECB rate cut to deposit rates.

Impact of Client Exit on Fee Revenue
Q: How will client exits affect fee revenue?
A: Jason Tyler noted that a known client exit reduced trust fees by a few million dollars this quarter, with a similar impact expected next quarter, totaling approximately $10 million reduction on a quarterly trust fee base over $600 million.

Capital Return and Regulatory Outlook
Q: Will Visa proceeds fund increased share buybacks?
A: Jason Tyler explained that the Visa proceeds position them well to continue elevated share buybacks over time, but they will proceed deliberately, considering capital ratios and regulatory requirements, including upcoming Basel changes.