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Financial Data and Key Metrics Changes - Federated Hermes reported record assets under management (AUM) of $715 billion, with money market assets reaching $525 billion, indicating solid asset growth in Q3 2023 [4][18] - Total revenue for Q3 decreased by $30.6 million from the prior quarter, primarily due to lower carried interest and performance fees, which were $14.9 million compared to $39.4 million in Q2 [20] - Operating expenses decreased by $33.6 million from the prior quarter, attributed to lower compensation related to carried interest and performance fees [21] Business Line Data and Key Metrics Changes - Equity assets decreased by $5.7 billion to $77.3 billion due to market losses and net redemptions, with Q3 net redemptions of $2.4 billion [5] - Fixed income separate accounts reached a record high of $47.2 billion, with net sales of $3.8 billion driven by institutional mandates [14] - Money market mutual fund assets were at $385 billion, contributing to the overall money market assets of $525 billion [18] Market Data and Key Metrics Changes - The money market mutual fund market share increased to approximately 7.3% at the end of Q3, up from 7.2% at the end of Q2 [12] - Fixed income funds had net redemptions of about $684 million, while fixed income SMAs had record gross and net sales of $572 million and $320 million, respectively [8][9] Company Strategy and Development Direction - The company is focused on expanding its fixed income and private market strategies, with expected additions totaling about $3.1 billion in fixed income and $1.5 billion in private market strategies [11] - Federated Hermes is actively pursuing inorganic growth opportunities, with a strong appetite for acquisitions, particularly in the alternative markets and private equity sectors [42][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for money market funds as interest rates peak, anticipating increased institutional flows [27][30] - The company remains cautious about predicting future performance due to uncertainties in the market and the economic environment [84] Other Important Information - The company has initiated a new $5 million share buyback program, marking its 16th buyback initiative [43] - Cash and investments at the end of Q3 totaled $554 million, with $486 million available [22] Q&A Session Summary Question: Outlook for money market assets in the context of rates - Management expects institutional flows to increase as rates peak, with retail side performing well due to attractive yields [27][30] Question: Why not do more stock repurchases given available cash? - Management indicated a willingness to repurchase shares but emphasized the need for strategic timing [41][43] Question: Are investors over-indexed to cash? - Management noted uncertainty among retail clients, suggesting they may hold more cash than expected, but lacked specific statistics [49] Question: Timing of unfunded pipeline and investor profile - Management indicated that discussions with investors are challenging, but core shareholders remain optimistic due to solid yields [78] Question: Forward thoughts on G&A expenses - Management expects G&A expenses to remain stable, with potential increases tied to asset growth [81]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________________________ FORM 10-Q _______________________________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________________________ FORM 10-Q _______________________________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________________________ FORM 10-Q _______________________________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF ...

Federated Hermes, Inc. (NYSE:FHI) Q1 2023 Earnings Conference Call April 28, 2023 9:00 AM ET Company Participants Ray Hanley - President, Federated Investors Management Company Chris Donahue - President and CEO Tom Donahue - VP, CFO and Treasurer Debbie Cunningham - CIO of Money Markets Saker Nusseibeh - CEO, Federated Hermes Limited Conference Call Participants Ken Worthington - JPMorgan Patrick Davitt - Autonomous Research Daniel Fannon - Jefferies Kenneth Lee - RBC Capital Markets John Dunn - Evercore IS ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-14818 FEDERATED HERMES, INC. (Exact name of registrant as specified in its charter) Pennsylvania 25-1111467 (State or other jurisdiction of inco ...

Financial Data and Key Metrics Changes - The company ended 2022 with record total assets under management of $669 billion, driven by a growth of $35.6 billion in money market assets in Q4, reaching a record high of $477 billion at year-end [27] - Total revenue for Q4 decreased by $7.2 million or about 2% from the prior quarter, primarily due to lower average long-term assets and lower performance fees, partially offset by higher average money market assets [32] - The effective tax rate was lower in Q4, primarily related to a one-time recognition of a capital loss for tax purposes [15] Business Line Data and Key Metrics Changes - In equities, assets increased by about $7 billion to $81.5 billion due to market gains, FX impact, and net positive sales in separate accounts, despite net fund redemptions [8] - Fixed income assets increased by about $1.3 billion in Q4 to $86.7 billion, with net redemptions from funds of $2.6 billion and separate accounts of $1.3 billion [4] - The company reported Q4 net sales of about $652 million in its flagship Core Plus strategy total return bond, benefiting from a long-term performance record [4] Market Data and Key Metrics Changes - The money market mutual fund market share, including sub-advised funds, was about 7.7% at the end of 2022, up from about 7.4% at the end of Q3 2022 [12] - For the first three weeks of Q1, combined equity and SMAs had net positive sales of $328 million, with 23 equity funds showing positive net sales [9] - Fixed income funds and SMAs had net positive sales of $466 million led by total return bond and SDG engagement high yield credit [10] Company Strategy and Development Direction - The company continues to market its private equity structures, with PEC 5 raising about $400 million and Horizon Private Equity Fund having commitments of over $1 billion [5] - The focus for equity strategies in 2023 is on those that have performed well in inflationary times, including dividend income, international, emerging markets, and value [28] - The company is investing in a dedicated sales force to enhance distribution capabilities in private markets [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future growth potential, particularly in private equity and direct lending, despite recent challenges in public markets [61] - The company anticipates that higher short-term rates will benefit money market funds over time, especially compared to deposit rates [12] - Management noted that the impairment charge was due to changes in projected cash flows and a higher discount rate, reflecting a cautious outlook on certain assets [14][59] Other Important Information - The impairment charge represented about 6% of the total acquisition price from the 2018 Hermes Fund Managers Limited acquisition [14] - The company expects compensation and related expenses could be $13 million higher than Q4, primarily due to seasonally higher expenses for stock compensation and payroll taxes [15] - Cash and investments at the end of 2022 were $522 million, with about $466 million available for use [34] Q&A Session Summary Question: What is the trajectory for non-comp expenses? - Management expects non-comp expenses to increase due to inflation and price increases across various categories [36] Question: Can you provide details on the Hermes impairment? - The impairment was due to cash flow downgrades and changes in market conditions, with a focus on future growth opportunities [40][41] Question: How is the company thinking about cash levels and capital allocation? - The company has seen cash grow significantly and is considering various options for capital allocation, including potential buybacks and investments in growth [44][66] Question: What drove the outflows in ultrashort fixed income? - Outflows were attributed to rising interest rates and a broad-based exit from various investor segments [47] Question: Is there an expectation of a surge into money fund flows from deposits? - Management believes that significant flows into money market funds will occur when interest rates plateau and begin to decline [74]

Financial Performance - Federated Hermes reported a net income attributable to the company of $69.5 million for the three months ended September 30, 2022, compared to $71.4 million for the same period in 2021, representing a decrease of 2.5%[95]. - The total net income attributable to Federated Hermes common stock on a diluted basis was $65.8 million for the three months ended September 30, 2022, compared to $67.9 million for the same period in 2021[95]. - Net income (loss) was $(1,266) thousand for the period ending March 31, 2022[98]. - For the quarter ending June 30, 2022, net income (loss) was $(1,905) thousand, reflecting a decrease from the previous quarter[98]. - Net income attributable to Federated Hermes decreased by $18.7 million for the nine-month period ended September 30, 2022, compared to the same period in 2021[267]. - Diluted earnings per share for the nine-month period ended September 30, 2022 decreased by $0.02, primarily due to decreased net income[267]. Shareholder Returns - The company declared a dividend of $0.27 per share to shareholders, payable on November 15, 2022[106]. - During the nine months ended September 30, 2022, Federated Hermes repurchased approximately 6.1 million shares of its Class B common stock for $199 million[90]. - The company awarded 509,043 shares of restricted Class B common stock during the nine months ended September 30, 2022, primarily as part of a bonus program for key employees[88]. Debt and Liquidity - As of September 30, 2022, the outstanding amount under the revolving credit facility was $50 million, down from $223.4 million as of December 31, 2021, indicating a significant reduction in debt[84]. - The company has $300 million available for borrowings under the revolving credit facility and an additional $200 million via an optional accordion feature as of September 30, 2022[84]. - The interest rate on borrowings from the revolving credit facility was 1.354% as of September 30, 2022, compared to 1.161% as of December 31, 2021[84]. - Liquid assets totaled $508.2 million as of September 30, 2022, an increase from $492.7 million at December 31, 2021[268]. - Net cash provided by operating activities was $191.5 million for the nine months ended September 30, 2022, compared to $101.0 million for the same period in 2021[270]. - Cash used by financing activities was $90.0 million during the nine-month period ended September 30, 2022, primarily due to $311.7 million of debt payments and $211.2 million of treasury stock purchases[273]. - Federated Hermes issued unsecured senior Notes totaling $350.0 million at a fixed interest rate of 3.29% per annum, with the entire principal amount due on March 17, 2032[274]. - As of September 30, 2022, Federated Hermes' interest coverage ratio was 57 to 1, significantly above the required minimum of 4 to 1[276]. Asset Management - As of September 30, 2022, Federated Hermes managed assets totaling $624.4 billion[109]. - Total managed assets decreased by 2% to $624,427 million from $634,120 million year-over-year[233]. - Long-term assets declined by 17% to $183,133 million compared to $220,407 million in the previous year[233]. - Equity fund assets fell by 30% to $40,633 million from $58,218 million year-over-year[237]. - Fixed-income fund assets decreased by 25% to $44,896 million compared to $60,262 million in the previous year[237]. - Money market assets increased by 7% to $441,294 million from $413,713 million year-over-year[233]. - Total fund assets decreased by 4% to $410,852 million compared to $428,608 million in the previous year[235]. - Separate account assets increased by 4% to $213,575 million from $205,512 million year-over-year[233]. - Fixed-Income Funds experienced a net outflow of $2,102 million in the three months ended September 30, 2022, compared to a net inflow of $1,686 million in the same period of 2021[241]. - Alternative/Private Markets Funds reported a net outflow of $298 million for the three months ended September 30, 2022, compared to a net inflow of $646 million in the same period of 2021[245]. Regulatory Environment - The SEC plans to issue final rules on 16 proposed rules by October 2022, impacting the regulatory environment for Federated Hermes[122]. - The SEC's proposed money market fund reforms aim to enhance liquidity requirements and improve resilience against rapid redemptions[123]. - Federated Hermes submitted comment letters opposing several SEC proposals regarding money market fund reforms, emphasizing the importance of these funds for over 50 million retail investors[129]. - The ongoing regulatory developments are expected to continue impacting Federated Hermes' business and financial condition[121]. - The SEC adopted a final rule requiring open-end management investment companies to transmit concise annual and semi-annual reports directly to shareholders, effective from October 26, 2022[151]. - The SEC's "pay versus performance" requirement mandates registrants to disclose how executive compensation relates to financial performance for fiscal years ending on or after December 16, 2022[157]. - The DOL's new fiduciary rule will clarify the evaluation of ESG factors in investment decisions, focusing on material risk-return factors[148]. - The SEC has begun enforcement actions based on ESG disclosures not aligning with actual investment processes, highlighting increased scrutiny on compliance in this area[165]. - The FCA confirmed new rules to enhance oversight of authorized representatives, requiring improved risk assessment and monitoring[201]. - The FCA's new "Consumer Duty" aims to set higher standards for consumer protection, with implementation deadlines extending to July 31, 2024[208]. Market Conditions - The Dow Jones Industrial Average returned -6.7% for the third quarter, while the S&P returned -5.3% and the Nasdaq Composite returned -4.1%[255]. - The impact of the Pandemic and geopolitical events, such as Russia's invasion of Ukraine, is being closely monitored for their effects on asset flows and financial conditions[226]. - The federal funds target rate was raised to a range of 3.00% - 3.25% as of September 2022, eliminating the net negative pre-tax impact of the Voluntary Yield-related Fee Waivers[117]. - The Pandemic has not materially affected Federated Hermes' Financial Condition, except for the impact of near-zero interest rates leading to fee waivers[116]. - Federated Hermes believes money market funds have demonstrated resiliency during the Pandemic, indicating their robustness as investment products[192].

Federated Hermes, Inc. (NYSE:FHI) Q3 2022 Earnings Conference Call October 28, 2022 9:00 AM ET Company Participants Ray Hanley - President Chris Donahue - President & Chief Executive Officer Tom Donahue - Vice President, Chief Financial Officer & Treasurer Debbie Cunningham - Executive Vice President & Chief Investment Officer of Money Markets Saker Nusseibeh - Chief Executive Officer & Executive Board Director Conference Call Participants Patrick Davitt - Autonomous Research Dan Fannon - Jefferies Ken Wort ...