Raymond James Financial (RJF) 27 Oct 222022 Q4 Earnings call transcript

Good morning. And welcome to Raymond James Financials Fourth Quarter Fiscal 2022 Earnings Call. This call is being recorded and will be available for replay on the company’s Investor Relations website.

Now I will turn it over to Kristie Waugh, Senior Vice President of Investor Relations at Raymond James Financial.

Good morning, everyone, and thank you for joining us. and Raymond time Financial. your appreciate interest James in We Paul call and Shoukry, With the are Chief Reilly, Officer. Paul us on and today Chair Officer; Chief Financial Executive James’ this available being morning presentation website. reviewed on The Raymond Investor Relations is

are open constitute benefits the litigation of business questions. line success the objectives, statements prospects, forward-looking developments, economic anticipated two, note, general level statements. Calling Following during businesses, made financial but slide for strategic conditions. certain to These the statements Operator not attention impacts this or remarks, information acquisitions, future of our results, in divestitures, the concerning our please prepared anticipated and of limited will acquired to, integrating pandemic results your call COVID-XX of include, may regulatory

should, well as terms statements words any intends, note or could, In or expects, statements. forward-looking as believes, such that there negative intended depends of future will, Please terminology, addition, as plans, comparable such events may, continue are on to estimates identify necessarily other or other anticipates, subsequent most Forms from Relations Form assurance on website. the can materially not risks differ to forward-looking expressed in Investor urge in results X-K, the described which our will are no that statements. and consider and actual XX-K We be Forms our those XX-Q you recent available

of presentation. accompanying performance. reconciliation to the pertinent to GAAP in press information A provide our our comparable may non-GAAP call, today’s measures the be of certain will found release we ongoing view financial During and measures measures schedules most business non-GAAP use management’s to these

Reilly. over Now the to I Paul? am CEO, call turn Paul to Chair happy and

today. for joining Good morning and us you thank

XXX acknowledging our fiscal our start associates fourth month on I Gulf heartbreaking experienced Hurricane Central over as a quarter ago friends devastation Before the earnings, Coast Ian. well to year as from neighbors, I Florida discuss and want and by

by been I the associates, advisers and to it and witness While resilience pain there. have the has to our bear also their community humbled loss, been difficult of

safe. Raymond James our is the storm Fortunately, family impacted by

notable, Category first express despite diligently as service X Tampa path delivering can’t continue adequately our Bay from to gratitude a associates who, my I locations our promise. for Just Hurricane, worked facing remote from an uncertain Area

at Denver corporate to to weekends the our locations in coworkers, they Southfield working up. their Memphis and Additionally, covering pitching and for our in associates rose and occasion and could catch where

uplifting. power office the clean the office associates associates, check and and When a without those health was manage to go. to camaraderie place or For open We situations. help and reopened, them personal to relief other provided home emotional hardships, provide to a to obvious and $XXX the home was counties, delivered provided resources time their mental all in additional impacted comfortable off

system Fort branch to two to which distributed semi-trucks their associates were advisers sent supplies, collected our Myers and Associates be in by areas. of

team response for not, Raymond from the the corporate, We in and through reflected in James also most. supplies, culture, long emergency the essential am have Charity, a how perseverance to difference the and made represent those executive those today. it several heard heartwarming more collective I support recovery recovery. to and responded which am these who than history The needed directly I $X in and raising itself stories Cross surprised, storm James repairs friends sound associates need truly Raymond of of efforts from of million our needed the I with especially our Red the by proud and If funds to firm preparation, help donations for and service and generosity who recipients assist associate leadership shows

results on quarter markets and record Despite year, I with quarter to given and during in challenging fourth fourth for Throughout and fiscal we our year, market the the and help Record client market businesses. the banking offset results the the were XXXX. results, our very group, management. assets conditions. wealth equity In strong Charles the attractive industry-leading earlier year, very in focused generated financial acquisition the remained the the only record to across presence we net income and growth helped to especially annual X% than the fiscal revenues retention markets, year. very significant the our net year for people recruiting expanded pleased results advisers of challenging achieved our moving record capital In very a Now the drive our M&A domestic investment am fiscal for continue Stanley Furthermore, revenues still over is decline of year. long-term in growth completed businesses, environment. new lower U.K., to the contributed private technology strong, X% our in the fiscal which with underwriting and pre-tax invest significantly in fiscal the

as capabilities July. our with thrives volatility, so niche rate business with fantastic which a enhanced both fixed M&A, closed through have expertise and Xst, of since on see we generated results We SumRidge added technology-driven has has team the the well. to extremely the acquisition continue been acquisitions We This with and Partners fantastic completed we organically pipelines corporates. July on income platform on really of for performing dealing extensive acquisition strong SumRidge experience

been our monetary that grew during loans year while X% legacy focusing after all on reflecting the long-term. in our serving XX% year-over-year as fixed loan In third-party conditions securities-based the The challenged categories. capability, such nearly attractive bank It operations intensifies initiatives. uncertain record for tightening depositories as Bank of importance this has remind Capital segment, making and the quarter, of last Fed acquisition is and income across year, a these the us TriState diversifying decisions growth the However, funding its sources. added year also best-in-class a lending

interest a rates rate regulatory floating balance we growth, requirements. sources, short-term quarter, concentration in with income capital and interest assets are net flexibility, funding excess which evidenced well ratios, loan RJBDP high continued and ample well are in sharp this the sheet for ample of diverse given solid As of increase rise in in positioned with strong fees,

utilize be underappreciated of COVID-XX these an value in record net the million record long-term pre-tax negatively of tax on resonated income billion, of diluted income approach $X.XX. $XXX and rates of impacted earnings to In the market corporate-owned experienced due available volatile $X.XX plans. this was some the to the we our attributes has per fund losses non-qualified benefit insurance life by While of onset cycles, common really the of $XXX environment marketed primarily Net fourth since quarter, million net income of the reported non-deductible uncertain firm we and in shareholders certain share or more pandemic. to may have elevated fiscal quarter, revenues that

return for was non-compensation offset acquisitions, driven reflecting income expenses benefit net along the income expenses from increased tangible grew related loans the XX.X%, common with losses on the more TriState administrative higher prior arising XX.X% and was banks short-term short-term impressive of offset bank rates primarily for annualized Sequentially, an equity and Capital interest related loan was quarterly interest revenue, fees than available $XXX on million market adjusted year’s the net of RJBDP for from sequential shareholders common interest fourth by the net Excluding net quarter, revenue decline from the the the largely adjusted as losses common X% due driven credit income XX%, result, and lower quarter to markets. income, asset initial was or income declines from primarily management Quarterly to quarterly equity the by which both shareholders prior especially rate. Annualized $X.XX million growth provision compared included common position. partially by and capital to equity in third-party given to available to and return which the our Year-over-year tax $XX revenue interest fees, in growth, higher provision fiscal rates aforementioned brokerage million total quarter of the share. was environment strong Holdings. third-party per credit and to benefit higher $XX on diluted acquisition fees, higher RJBDP challenging net the and and on banks,

Index PCG, which the including include XXX remember, X% the in we preceding decline of advisers Custody our under Service the S&P the over XX for RCS, Moving financial assets, the negatively accounts $XXX asset billion. move quarter, a assets transition impacted XXX Equity year trillion, client XXX count result. accounts. came and levels. firm. year-over-year from net advisers by of financial really prior $X.XX client the market we where of these $XXX adviser increase, to a the year-over-year, and our of quarter with in Adjusting declines in in of management We ended one slide retain numbers impacted typically RIA we of quarter year, assets advisers over fiscal XXX financial under to of strong the but was five, assets fee-based In don’t advisers division, to transfers, quarter. a And sequential X,XXX increased had period we the ended the adviser financial increase with and total and billion, PCG the administration the XXX

multiple advisers as Raymond terms through experienced us led to and strong the their our during adviser well to of Our on supporting options. retention, recruiting affiliation especially platform in focus markets as and clients, volatile our results of advisers uncertain James

XXXX, more not we nearly domestic sweep the savings over net as X% channels our previous attractive record administration. approximately growth the assets X.X% client we trailing X% firms. growth, assets domestic quarter to of recruited these billion at Shoukry will XX the of Capital employee billion, period and yet this ending to cash preserve XX% domestic and new industry-leading PCG Raymond deposits, of like under I’d balances utilized Bank Bank. assets Total advisers to PCG at or accounts client period. production domestic our the beginning grew of Over broad-based XXXX, highlighting to bank billion high-yield reflecting highlight and XX, domestic assets domestic And James trailing billion declined XX, to annualized. PCG nearly financial new balances. ending later, September cost have loans at fiscal growth Paul both $XX Fourth sequentially lower contractor of but with of X% $XXX TriState that net a client $XX.X assets are year generated million XX-month discuss was $XX.X Total their representing September independent we $XX

client $X.XX of the of six, private group slide with generated net quarterly results income to record billion pre-tax million. and revenues Moving $XXX

net revenues due by income asset-based were basis income to both includes the of The Capital TriState million. Raymond James into $XX largely market of growth benefit income $XXX market Group banking XX declined, net revenues points and Private revenues higher sheet. our driven margin largely interest The result markets floating the short-term uncertain management $XX quarter. million from asset which expansion the the quarterly record million markets. to attributable compared revenues Once revenues mainly and equity to $XXX segment income of accounts fixed by investment nature bank declined brokerage generated generated a and net the the in as and lower The due income declines. reflecting lifted in lower balance flexibility $XXX revenues Bank Client is and generated the higher X.XX% offset pretax interest preceding of assets income pre-tax Net and under bank’s Bank year fixed capital which by of and revenue and the of fee-based quarterly rates. to financial was loan from segment’s for revenues, quarter, pretax While The rate results Capital period, net and inflows pre-tax and $XXX the revenue million, management, segment balances significant million. prior mostly volatile were net were to segment, of declines up again, million. of XX%

which This quarter Capital of continued a have quarter full also to TriState included solid. results, be

XX% up the Record revenues X% seven, billion income on to of of of fiscal record billion, earnings generated fiscal record full slide we net increased $XX year and $X.XX at results fiscal over $X XXXX share XXXX. per XXXX. diluted compared Looking both pretax

common Additionally, return annualized equity tangible on we on and XX% generated equity of common of annualized XX.X%. strong adjusted return

record and the slide And group during private the the to record businesses. fiscal again, of produced of detailed year, and reinforcing results, more fourth value the our income revenues review quarter results management fiscal complementary Paul year pretax diverse client I call going net to Shoukry. segments client asset am now to for over Paul? the turn segment the Moving and generated on fiscal private group, bank eight,

Paul. and you, record sequentially. consolidated of quarterly on $X.XX with Starting grew X% Thank year-over-year net revenues revenues billion slide X% XX,

the to I which compared of and markets activity fee-based expect to XX% which decline as close will sequentially a income fiscal X% call declined revenues quarter, preceding further asset and quarter, as resulting compared prior decreased fees as in create last XX% on revenues strong quarter. declined year’s fourth quarter, This than with quarter in year’s fixed revenues headwind based fee-based the first the the we private quarter, fiscal SumRidge, sequential declined first related accounts. the in more fiscal be of fourth quarter’s for addition of group X% compared management preceding trail in and Equity management assets administrative well the during compared line XXXX. provided the to to fees client in prior guidance the X% Asset in lower on brokerage assets. decline quarter the and to to quarter the PCG, asset-based in fiscal down generated revenues X% offset and $XXX Brokerage million a

there touched Obviously, investment in impact that a and similar negatively variables would fixed That transitioned income of market I deposits the remains level last challenging have Investment decline much having probably of over will average $XXX as experiencing in service legacy XXXX. Paul to and a coming actions. can still estimate, of or business, and of two environment securities pipelines investment compared we that revenues account clients fiscal in a a uncertainty market on, could and our XXXX fiscal as result shortly. Therefore, level achieve preceding now of banking from that but run-off higher represent revenues could to revenues quarters. for quarterly experienced strong, we would heightened quarter, banking that result that is net banking volatility impact to XX% revenues a right to lot positively and in and made X% the discuss generated interest to fees of higher expect significant lot be the million which share. market prior pandemic, investment are has excess million to past a investment declined uncertain we Other this best the investment result investment the we a increased in achieved banking the record sequentially, solid deposit capacity given income a primarily our revenues will banking As guess housing while years, than of the given investments the quarters. environment results in productive have revenues, few revenues grew Fed’s tough our platform quickly $XX the XXXX. which affordable as we significantly to over business our XXX% due fiscal depository

and down domestic cash Moving assets. representing quarter to the XX. Clients’ to XX% sweep slide X% at domestic the preceding client PCG $XX.X ended balances billion, quarter of compared

When $XX the fee cash payments, were reflecting to week, billion, activity these is nor additional month. saving have the As that balances just these well in comparing it cash important sorting sweeps October, which do as money market trends have paid high do sweep under as a the not industry, during to declined note this option. of yield we include balances balances, quarterly across

which in experienced make at balances it industry. really first-out couple in destination So over decline was of past broker the across to deposits difficult the the apples-to-apples last-in, the Most were the of our program interest years. the is of sweep comparisons excess sometimes the client dealer,

a rates. increasing Fed been cash explaining interest short-term decline for these now, started significant a year have anticipated as balances least we we As the in at

Raymond deposit cost short-term be relatively franchise, how treasuries. not having addition now Program the The to think, base. invested we the valuable appreciates And source independent we balances a stable Suite funding may several in additional have So Bank more just are now everyone of Capital a of the Deposit of seemed while TriState continues multiple low deposit sources. funding I funding and diversified deposits source accounts funding have CIP importance this ago, months precious James and as kept and with Bank’s

net from given higher up year’s from was growth slide on to the limited Turning fees third-party over fiscal reflects XXX% quarter RJBDP and and the the quarter. sheet. preceding immediate and prior Combined XX. the banks million, XX% strong duration short-term This $XXX of income from fourth assets balance our interest concentration impact rate high rates floating

While our concentration rising rate floating rates, maintain appropriate it to tailwind approach can seem take environment. high in a duration on and bet more a sometimes to assets rate is of this to be significant proving longstanding

net nearly on of the XX X.XX% quarter. slide, the yield substantial preceding to rate on You increase further are to the from on The the with balances third-party segment’s with bank NIM that’s sequentially RJBDP margin portion expected sequential XXX banks the for point basis can average increases. XX the see points Both average in the quarter yield anticipated increase top bottom and increases NIM in points interest to basis of basis increased X.XX%. third-party banks and the

be fiscal experienced. first to and For around in average impacted banks expect would point basis on these the beta XX the the to first somewhere deposit factoring rate segment’s we around the by bank RJBDP quarter quarter, November increase NIM average in other yield for actual some from projections be X.XX%. assumptions and and third-party around beta the X.X% XXXX But variables, will, of expected obviously, an we fiscal deposit

continue put end of the focus for have spectrum clients. we done first clients generous and we the our will As on to more cycle, this staying on

having the with than most the about expected, cumulative more has far, the deposit to started recent around rates than clients we Fed increase increasing vast since much still our beta XX% competitors. deposit majority the generous of less of So September but in beta XX%, been a the XX%, March in

in Moving decreased was ratio consolidated decline XX.X% interest the ratio of on the The which our which $XX included significant beginning decreased in slide preceding reflects compensation compensation compensation million, from net adjustments XX.X% X% compensation. largely quarter in third-party Non-compensation expenses income RJBDP related a total our from ratio earnings sequential expenses with expense, acquisition the banks. The was includes to XX, sequentially. the higher quarter. million $XXX in adjusted of from non-GAAP largest XX.X%, for The benefit quarter. expenses during fees

credit from SumRidge excluding expenses bank expenses, non-compensation $XX for of quarter and to in loss just losses $XX losses. The million associated to bank full over loan provision provision the a added $XX decreased provision loss the the of the reflected quarter. quarter both fiscal credit which incremental primarily million, TriState for million Capital initial due Capital TriState third with sequentially This loan Partners, acquisition

primarily loan reflects sequential a the along quarter’s This in growth macroeconomic CECL with bank outlook used models. provision weaker loan

expenses So, adjusted you that since margin quarter, margin is ask Investor we focused of to that our Day margin pre-tax get it will In and past pre-tax quarter, as ask. this heavily just can XX% on certainly all growth of still the ahead while you trend margin laid target five a of over many and see, Slide fiscal really Analyst will shows in pre-tax reasonable we of May exceeded XX.X%, XX we a me, the disciplined if an the and know high I investing our fourth XX% generated excellent we to compensation at results. related service we And out while pre-tax levels for management it, update clients. quarters. in non-compensation and advisers ensuring the remain XX.X% their and of

requirements dynamic, being least quarter wait RJF sorting the few to decline I remain expenses. capital our $X.X the model, on were months mentioned The at our cash $X.X our the client billion, and consistent the balances highlight primarily upside our higher quarter reflecting a very of above the at program results strong. billion, on parent target. short-term On at capital targets. quarter all being focus corporate this of preserve The slide diversified well think interest X benefit XX, interest and said, I billion Liquidity leverage our more at Given with the of cash But assets ended uncertainty we Tier than cash the and earlier. be think ratio that it’s more sequential of X% closer rates well update ratio end and spot actually market total decrease, business ratio XX.X% double end, $XX total the and the disciplined to solid quarter a appropriate XX.X% to of we at are the leverage Tier to capitalized. is X to regulatory XX.X%. both ongoing

So the tax due preceding levels opportunistic rate continue effective increased significant for The provide on being quarter, to to growth. continue our the life in XX.X% invest to XX.X%, insurance losses and the to quarter primarily non-deductible flexibility from up in capital portfolio. corporate-owned

appropriate acquisition of closing have provides approximately five the authorization. the our is we of this and to through we models, XX% increases tax when rapidly $XXX still June equity the on XX or approximately last markets Since but effective markets, our under equity we forward, declining in actions a quarters. Going quarter million Board versa increase. XX% Slide shares believe an million X.X common per around your rate TriState experienced repurchased to XXth, as summary in share for estimate vice use capital $XX October and over quarter past Xst the

repurchase in upcoming $XXX associated available billion As fiscal $XXX average million with or fiscal meeting. per Board Therefore, the repurchase to authorization, remained the to acquisition We we in typically $X of of revisit total the approximately which issuance XXXX, expect the under share dilution. annually TriState, October offset on compensation year. as approved remain quarter XX, we as share-based committed million well Board share XXXX the for

as needs these over objective quarters, plan XXXX. Of closely conditions and want do fiscal to the repurchases will this course, for for billion I but emphasize to coming we other $X monitor capital market we cash and continue

losses at credit loans down Raymond with a for improve. continuing a provide for our segment, just investment at total investment Lastly, quarter remains now the quarter to The allowance investment in on percentage of for loans quality loan Capital sequentially. ended September for security flat portfolio allowance losses boosted of of which XXXX based credit loans the loans and as Bank losses. metrics Bank. by the the loans Capital year-over-year ended credit the reflects loan Bank. by The total held most credit includes at account loans, The healthy, X.XX% bank acquisition XX, percentage and we as Securities for for the key largely loans slide do higher trends bank TriState held a proportion bank James from decline therefore, an X.XX%. for Criticized nearly total XX% based generally net as of of loan held marketable typically percent X.XX%, and TriState not require approximately of securities, are which of collateralized credit allowance for

recession you loans losses credit to as held inflation, it look closely banks, was the percentage corporate of constraints corporate loan X.XX% to of our chain on the are loan investment continuing for this we total reserve, a at impacts bank a other potential corporate any quarter believe allowance monitor loans, healthy we for but supply end. a represents If Compared on at and most portfolio.

Paul the I discuss call to outlook. turn Now Paul? over our will back to Reilly

Thank you, Paul.

all management pleased earlier. asset group, related drive positioned administrative businesses. the I our X% we Paul uncertainties, negatively decline results quarter our I described of that fees call, fees will expected impacted be and there private while by In next of sequential to the and many are across client growth I start results, with our well at As are the am of stated believe

optimistic more continue industry-leading to client production and current solutions. long-term, we Focusing advisers values prospective leading and on growth am delivering technology the our attracted as focused are I will and

sorting interest higher although but also rates, the heavily Fed segment, as market of from capital and interest pace the pipeline strong, timing will M&A continue short-term will to benefit expect by markets increases segment cash influenced this In Additionally, conditions. closings be the continue short-term we remains rates. the will

fixed have investing and space, once I growth are In in are clients long-term, Over lead significant for challenging This in years. and income experienced have for confident securities. have am well the we environment made the investments positioned five to cash opportunity of deposits favorable will available over loan environment fiscal past growth years now the Depository the over past shifted. facing we the the given for couple has flush with in experiencing cash declines limited a XXXX. less dynamic we

in technology year elevated exists, the we income trading the in financial expect rapidly fixed marketplace, and evolving under headwind to typically enhance in due position rate decline and this income from management the are management SumRidge In assets Partners fixed equity fiscal SumRidge segment, the to volatility. current benefits lower While the our starting asset markets.

growth management. confident fee-based of the are growth of However, group long-term we that in strong segment assets financial accounts under in drive will client private assets

short-term bank to to interest In have James well we and funding for drive segment Tower ample Associates balance positioned Investment addition, grow capital Carillon The synergies. the Management and prudently. through further distribution, rising we expect rates sheet Raymond formerly help growth increased scale, operational is marketing and

Capital credit We quality strong ongoing Most portfolio the its loan separately will its clients, bank’s relationships importantly, with should which of respect as continue and our remains strong. funding, to foster the Bank its growth. chartered operate a bank TriState with and coupled capital

thank and to perseverance dedication our want providing I to all to always, associates for of As their and and their excellent advisers every clients service each day.

we will continue just for you balance strong past stay through a uncertainty of will flexible which Operator, With We that, as making sheet. should able we environments two have filled observed our the approach, and our in challenges, for strong advisers care please and clients, open to this take have questions? advisers tremendous the maintain we different past with to and as results long-term believe market and for have line decisions and and be shareholders, delivering the rooted drive years, XX over years. associates, results with been for Just the you commitment

question much. Thank Go first with Instructions] Manan Gosalia [Operator proceed Morgan on with the our line from you very will I Stanley. ahead.

Hi. Good morning.

Good morning, Manan.

looks was for NIM I funds quarter like XX even basis what because for deposit Hey. wondering, so. assumptions in XX can higher NIM you I it rate betas talk about morning. point are average guidance quarter, increase next good versus was -- basis or the November you your funds I your with wondering Fed only rate the in points rising in significantly a the next your guided prior and Fed think, quarter,

guess, you there in betas in conservatism some is, and is of are So, there? the question baking embedded deposit I for element what

know, obviously lead is we increase guidance As only tends like in market Manan, we admittedly quarter. X.XX% type saw as expecting conservative increase well factoring of December you increases those and to that November provide SOFR a is It’s somewhat the so do last to conservative. in and the as

So points two ago we but are increase beta XX this be XX XX rates to sequential could as NIM, were kind to increase basis get to had that basis guiding XX%. forward. we continue deposit points, of We closer quarters -- the points going than and higher quarter in expecting to basis certainly

we last with for increased. sharing as it incremental of being the clients was really rates been increase have and was and and XX% us, clients generous industry, and on cumulatively, the have On most XX%, focusing it leading the

the of going competitors you look conservative certainly so forward, just -- well, as sweep were XX%, our And too well because at ahead be frankly, competitors most on of might when rates. of

relying third-party deposits, bank that then are through many And season funding. on saw banks on wholesale we earnings this it. Got more

the points next as what expect go, is you spread to bank than plus of deposits demand typically those should earn to fee think, funds a So higher earn? you on you able stabilizes I that And the renegotiate a are I contracts are or Fed third-party typical, from terms And your so Fed seeing there basis where XX.X in year third-party we possibility that is, that if at rate banks? the X.X%? question guess you

Yeah.

I at almost supplement And you you cash out, pointed money if the is ballpark. think to same gone of all as look competitors, really demand cash The of way high are in if you their at absolutely. other up. the It’s yield we to or have looked into all sweeps. firms the what’s there, most just our market just sweeps happened savings

that. done haven’t we So

going demand sweeps. the up, So have we Paul, And you to-date, which will we like with dynamic. let see rates, will we do impact may. rate But and I low-cost the address funding feel our ample we

the in trough basis points and banks or the that the in down which obviously, was, the prior. years demand Yeah. of spreads very pricing At was Fed a year or from effective was so of kind from funds third-party peak couple last the XX so, weak range,

base quickly seeing That’s the the we So are again, are that’s improvement, first that if rate XX-basis-point that get two prices in we and demand to and get on the to years to starting those potential on to kind economics the spread. spread of last But, resume. see peak ago, Reserve improvement the of back balances. the sort Federal from improve pales comparison now the step spread we

those balances. a tailwind So, though net-net, on significant

above that fee like the fee a compare points could should X that you prior the so percentage of at of, if we above sounds at end X the cycle, rate cycle or So in points if it the you we rate hike percentage peaked last terms expect well saw rate, the -- you cycle? be the this so during

I Yeah. upcoming as already just for are an to we quarter X.X% example. this guiding mean

Correct. Okay.

Yeah.

you. Thank right. Perfect. All

much. Thank you very

next on ahead. will Jefferies. with our the question line is Go O'Hara We from proceed with Gerry

Great. market. know the Thanks. Perhaps I recruiting a of just another of adviser quarter bit context kind on color challenging volatility from standpoint. it’s or a been obviously little

you get those of So in bit would to of industry-wide just as terms love are what little dynamics? seeing to a color

Yeah. Yeah.

competitive my have is more been I good and asks we that competitive, so now, of market on seems XX -- been think everybody me response roll. and have this a dozen always years in and it’s to getting always been I kind what, recruiting job be

active. see best we of dislocation, has in very still best actually the we but recent great it We XXXX, it would resulted year off So few because in go our our years. couple even until thought -- years recruiting as of the

our it’s adviser But to see the you and count. such. can continues adjust channel, of So It’s this moved kind you competitive very RIA with people advisers XXX still added the if as active. that year, very be our for

so our advisers throughout high well net another very up also, strong had as market, the to that of ultra-high going teams platform our in -- the for have the really, attraction ever not worth recruited average just history. we net advisers, but is for and year. very, come worth have have And recruited as we the We just largest and continue

strong, strong, to So we will won’t short- be backlog good strategy, a probably, part think forever, in big it looks pretty still mid-term. is and are we last of the but still our it

of perhaps enough. increase can rate an the that of a one that then the And couple XQ comment you little just of expenses saw about bit Fair for in kind going quarters? XQ. can XQ to Paul on came maybe you us maybe obviously Shoukry, actually off how bit bit, non-comp perhaps a look little from might side think next But little help run a we into

really Yeah, increase Gerry, which a full the for Capital added quarter to SumRidge, TriState results sequentially and was of million expenses. of having non-compensation most $XX both about sequential attributable of

the we So primary expected. driver that sequential was of increase, which the

adjust acquisition a investments. look think would baseline $XXX growth that when base And provision which XXXX coming somewhere billion our that forward, is our now XXXX. of around guess million Looking expenses in in schedule. you million best be this would out really number looking the sequentially and say, of that loan XXXX, $X.X loss X.X% forward, I I represents our quarter quarter right most fiscal the for and expenses around some I fiscal $XXX from around be out if non-GAAP think, break each growth in of related potentially totaling technology will there’s of you at as And for that non-compensation we for the

technology still advisers, heavily in across businesses investing really to are firm. functions their and We all the the support and clients

going in year-over-year And a pandemic. focus to are on a travel by us expenses and to continue going growth XXXX, suppressed first for still were of as of be see half basis, then fiscal to going that’s development COVID the business the forward. significant kind So obviously, you conferences,

see the will in year for XXXX. full you that So fiscal normalize

Thanks for Great. taking the Okay. questions.

much. very you Thank

next will Go Sachs. our ahead. on Blostein question line Alex go Goldman the with from We to

for morning. the question. Thanks guys. Good Hey,

focusing just on first any if maybe little and I up conservative betas, bit your it bank doesn’t like cycle, you specific peaked a So not but the some last guess they on around and when them we to XX%. sound posture use taking of guess, at quarter, above I NIM X.X% the to look bank at pinpoint dynamics. but deposit are out the going you

that’s If you of heavy, rates in level higher. now and so is mix, the think about loan absolute more TriState the obviously, higher yielding

So run you of to rate about should other end on that thinking are sort X% closer cycle? how that we Fed bank or NIM once be of the thinking is done the

Yeah. now that I There’s differences moving are lot would our of one securities a higher. the last of say parts. of loans versus in is the concentration cycle based

-- NIM a has Now with they liquid because associated marketable it, has lower fully that a are collateralized securities. with typically

adjusted typically lot and parts NIM attractive. very to cycles risk of returns there’s loans there. But the relative corporate lower through So are moving a a so

to we either. that don’t necessarily I BDP variables. think loan around, X% think are we on I given it the a than just but I be a mix, I achieve don’t But higher and X.X% base I also I expected could call of were think the like think, ready say can different just higher Manan shared are this so, lot rates, the rates, ceiling, to time last with mean, rates fees, they cycle,

see cash we out. play deposit think sorting where and of to I trends kind need cost of

right. it. enough. Got Fair All

a duration on keeping today, going a duration two of looks just fairly security little the a more rates year what and or extending good on the you there’s attractive had a what are the today. portfolio return guys, little sheet are bit, here, staying floating. attractive rates theme and are the upside. What fairly a Just in at quite pretty thoughts what’s But from of capital maybe if lock like minute, yields to securities you building balance invested not sheet But for that’s look obviously, on market balance on as kind you look call a bit right your at return? ago about extending maybe

Yeah.

growth we and part securities fund So portfolio, thing securities of it. becomes is our first the are our not but to loans against the in next

rates now sheet. the having So attractive number a over locking for being we they are are balance after not beat years, waiting agree of up not and after out we it in

that We we are call peak ready not rates and reached to locking in. have start

the least a flexible are down, be things and So in in then it right, and hikes and now. look of right to at I near-term, good spread certainly Fed we for we the think you we we because are balance in is any excess may couple will settle rate if probably at has securities, have a then going little more. But a very funding, our growth which put first funding to they are happy as

Yeah.

up of third-party there’s there’s -- I the really built looking bank think years, very couple the as in last kind portfolio we no little demand. forward, securities of

it sequentially kind the and that would sheet it I So sorting growth we brought obviously, in with been we But same buildup the the cash during growth as gives an with duration portfolio of type loan duration, associated protection. with duration, we you mortgage extent of that balance has we to dynamics talked growth we to portfolio really year There’s relationships. of take to loan loan mean, that loan that the take cash Paul the invest being next of fund that the nicely. beyond run-off our as to onto a it support some accommodation. would to quarter the preference expect over excess client the kind now good And about grew has that that have some that is of return. pretty But and well. solid, saw growth because us in certainly securities to that so securities extent

banks the third-party cash as sweep well. to is off we As

flexibility just now we flexibility that the we have frankly of cash through couple of the options right that’s with power years. the we the preserve different balances and a So that the of have and lot last

pre-tax won’t question. it. the right. ask margin Thanks. I All Got

to there. guidance next it that you wanted sure make remind guys XX to plus the a when to just Just I at gave there still it’s was that time. last

Yes. It was XX. over

Yeah. told you so. I

Okay.

Thank you very much.

the with line will ahead. Chubak next from question our Steven proceed Wolfe on Research. Go We of

Good Hi. morning.

Steve. Hi,

Hi, Steve.

I So question FIC. on to start wanted a with

most included million. been to at recent last You well. It’s $XXX as alluded, the Partners’ run Paul, rate noted This of quarter, couple that about you contribution quarters SumRidge some of in the headwinds the business.

further underwrite to out pressure that is year? or As the we remove do continues next that baseline the a run liquidity rate on Fed system, from this can looking to $XXX fair excess million anticipate you

Yeah.

dynamic. You can see the

have Our -- on strong banking they that’s whole industry dynamics very, space are income we franchise, a in but that the and same very great fixed really the focused is.

So as security going cash fund and they second just tightens first loans to us. like are

pressure. So, yeah, could that have

everything gets of the tighter. of maybe -- business, kind if certainly that They but again, everything parts is are at. is so but it market And good SumRidge that this right are other is on -- we their but have there’s that are but of perfect hand, on the everything, to timing just rate, it franchise it Now banking perform. run really other now, is will killing pressure a favor, is them in the they for for headwind part the

So it could pressure come under more also.

understand sense Paul surprise, positive higher the get philosophy given to stay maybe for to your much the come And to can reasonable of the growth especially follow-up, What’s But wanted for from my compensable where running areas. a certainly around less comp a as margin going XX% to a reluctance Great. is so the should plus revenue relative think guidance. on for we how be nice rates expectation ratio, to longer? to rate appreciate comp your just about comp if update target. should I XX% the or

have associates, production on on we we with advisers paid we even and their been where think we fairly Well, what our and paid them haven’t interest. is

comp. away, obviously, change it management’s their didn’t affects payouts Now interest when and went we comp,

on goes based spread, normalizes so So go But and But will or we extent more go will the up. the non-compensable way, fundamentally other in bank comp. be margin will extent change comp impacts are to that no paying it. rates to our that generally, interest the ratio plan of right down there’s some the the to is continue now interest there’s certainly how

spreads interest it down drive again, So, of time. a period will for

will if but spreads like two stays I don’t year probably but it cycle, for return that or outsized years, long they think is any are philosophy same. how where comp are know I quarter, the in a now out right our

you see spreads interest spreads improve. So should -- improvement as

Yeah.

of are thing we the we success as I And are is, in and associates of in are the compensation force with Paul of from one our inflation firm talking entering a associates. environment sharing and in we with to do. to being success was I add philosophy would our our the think share to about leading was the sort kind of adviser the that high year-end, outside help, to associates whereas so always generous we just the

the XX% the spreads reset, have that’s those so said, Paul and first payroll kind in reflected really the taxes course. ratio down range. be been compensation of quarter, of fiscal won’t until And this the when as calendar second benefit year-end quarter increases fiscal the our a interest But of year to significant

the admin we math be to some to we or I out think comp based suggest cost that on of Okay. revenue? need portions had do the on And of at least the anticipated higher what back napkin when some was you little mindful bit of than of, running try non-compensable anything the admin would a side

Capital both from that Again, results of TriState SumRidge. reflects Yeah. and full a quarter

the inflationary into start that we the labor with leading think competitive pressures the the as going to increase firm. baseline So forward are are a a good baseline I But, will this salaries being across generous success given with. is Board we off having we and environment, again, and that

to associates have support businesses -- had want we would growth our and in the and made also to all success that throughout continue great be fiscal we reflected continuing and and So so have that who that of with really hire all to the across we it share that XXXX. are possible really our businesses again

Helpful for questions. my Thanks color. taking

you much. Thank very

your Jim from next is Mitchell, on proceed Jim, Global. Mitchell open Go you line our will question question. ahead. We with the line from for there. are Seaport Mr.

you hear me? Can Hello.

I can now. you hear

Okay.

Sorry.

through client of cash the the and historical down a bottom think just say. where cash for us range, to to October, assets of on high about to you average of low deposits I should client remind trying So sort starts out? Can for are guidance maybe based X% that levels,

range. wide pretty a It’s

course, that XXXX. think XXXX. X% decreased trough of the than because increase little that and in X% would But maybe in lower But the I was that’s of markets somewhere peak end in the substantially. a was cash range, range in mid-teens I say,

So X%. to at we your point are

I XX-year probably historical average X% think the is in to X% the range.

wide pretty a it’s range. So

sheet? the And deposits Right. point to more a defend aggressively there balances have balance and is you to cash fund where

the getting you managed others. get right Absolutely. talked to cash now you the felt and we we rate sheet. you we mean if have flexible it, see haven’t as just business, us, know like operate if so haven’t well, Yeah. fortunate I we need they have balance focused on been that we been But runs, cash We -- and levels do even concern have if to But we to. about high that. implemented see will offering savings need it

a We have one also was have think you a the which I is who strong net for understood. which now TriState the very source funding don’t very of of acquisition, They good operation, funding. got reasons

about it about were the You would in a talking and said, ago, have we year think so much why you it concern our cash cash, future. was I

system. client balances. need service into cash point, the But we cash have to So you at alternatives look cash business you our run our and this haven’t it’s fixed at income have left more be now. -- to on money we markets your They absolutely, to gotten want platform. so some They or got able

system. in them haven’t still cash just form. the are they kept pure the We into So

Thanks. Great.

you Thank much. very

Ryan go Devin question Securities. is on JMP Go to from with will the our We line next ahead.

are How guys. you? morning, Good Hey.

Devin. Good,

Devin.

I sheet Alex’s and about here maybe come following have balance Most just mix think on asked. to the Good. your a bit been want questions back to and up question.

mix deposits, here equal? in from maybe loan drive thinking other areas higher adjusted there’s -- risk you maybe just so more here, moving about think there to and scarce Just room securities the book when beyond optimization forward, else becoming are areas there and all for are about or obviously, the where more the the book, NIM maybe broadly

There always is. probably

Yeah.

through going doing of our capital. are do budgeting we to say where we exercises what to is want are part we deploy So

to is not Bank, Raymond bank allow got service freedom, do business, with James TriState a its the for customers. independent you allocate example, optimize, standpoint, question banking the TriState with to really our from balance have sheet business. platforms. but third-party and in really portfolio their broader the that to partly And business between where We capital an the is, for

going and through make capital that us. for that businesses allocations both sense those sure So for we to are the make

discussion there on are always it. transition lot in So is to periods a it, bit right of in but rapid now, it’s little a harder do we of

at I We is don’t And that and the the to do James best risk reinforce Raymond own adjusted just Bank and believe returns independent to would adjusted return. Capital clients our we NIM. sheet necessarily manage We to loans allocation maximize clients TriState both it really to balance securities-based say maximize risk at that. their

and to that time the that we continue the the for demand the So over with that XX% loans securities that and that our loan is priority think should a is good the which kind extent to like now then there, categories. of of loans. we be right at other based mix we look We us have tailwind

it. that’s are of thinking we about So how kind

Yeah.

there you talk just But and market. understand I going to just I Paul. And about sure given there’s about thinking little Okay. follow-up want guys always the a Appreciate are make banking the bit are conservatism bit ball Thanks, just outlook. I investment you a in then think, to here to, in a the crystal want uncertainty of how little it.

be market then M&A improve going would market stabilize and business structurally larger. your You is is have equity but to centric, issuance that probably

is that if pressure equal, remain it all remain So higher under over like feels a bit trajectory income, maybe time else higher. could than it business the rates fixed

are the to just some trying the last muted structural changed. there outlook just other because be is maybe how year every two, snap business think are rates doesn’t dynamic or where the purely side just would versus higher, flip much it back or So about more there’s in centric to market was of markets maybe over maybe near-term

anything continued So of bit parse little both kind I period? that versus want for cyclical impaired a more maybe through to a just the

traditional in and at kind you if look a mean rates the will is order for that business. reverse as of income the business will I rising income fixed think happen long-term up. invest fixed I challenge come go rate when do in I the -- market in in people

have that well. that term. business think will I do People shorter been buying

people term, rates As there doing in buying got just will get really it’s profitable think but are you until help, start for a pause where to us point they to at a and that, the we rates certainly, really rates to more longer start too, but are that increase happens.

I harder. we investors at grow it’s still could to little we think industry. in cash, be? timing. for and there’s Backlog continuing even our if dynamics good. it. who still to and it’s been how now, are right M&A you stronger. So is in that that’s is But I European believe there’s for have inflation good. I And we up up and and go, us, and now, platform So well, a rates you more everything, that it’s Europe Clients and are on It’s mean one look with the mean strategic our is predict. harder growth added

have close I that predicted. it’s when that’s think most when But -- just or one. backlog stops, people is still people or not a that tough The strong.

years for while. of very, triggers are we is it forever, But, the to probably stop M&A, it high a off two come to what slow say baseline continue what almost to that still very isn’t. a is last one or But a over it or hard again, when triggers that business. unprecedented on peak is which So that kind you down or with that

Okay. right. much. Thanks very All

Thank you.

KBW. will Go We line ahead. next from the with Kyle our on with proceed question Voigt

Good morning. Hi.

completely in just around the So the put the sorting size as and maybe letting couple cautiousness funding understand pressure the out of runoff look years, that on of AFS level a to of you the and total growth. loan and given that now some order available of tone the right may book just support

the off to that much of portfolio two follow-ups all are you that, So didn’t AFS just at was what the is and sorting continues duration per would of hold that run you the how CIP reinvest the just in year of process you can if we bank portfolio also on as in portfolio? there and remind here? need the And the terms have third-party us, minimums that so specific sweep current

years duration with is the portfolio, now say the Yeah. the around somewhere in securities four portfolio. I average would securities

kind think current you to XX% are you distribution, a if But a growth cash year, going bit. normal there. use a and end about for There somewhere baseline loan fund might So is balances a a to probably, we plans. CIP the of of lot little that run-off again, have loaded XX% around as of back to

billion their about kind of possibly back much of can constraints providing think those look cash maximize insurance, floor FDIC and there function there’s all for with probably $X.X that’s trying so maybe kind XXXX, there BDP, of as demand I third-party and the clients you think, a FDIC a or at we variety way really, of coverage as for of the that’s to banks. And If billion balances. $X reasons to from the a good given

is guess, insurance FDIC client’s given so of it And that I number -- can is then allocation have with yourself. charters -- your there and certain provide you a you

So is needs to billion few smaller there a bank some on side, there than of that’s a that? the that is dollars is I or number held third-party certain it it amount guess, be minimum there,

some thinking we on BDP the Not essentially funding, have of in it’s to things banks want want one way of industry, own providing level funding seen your the is, as think the that is minimum what don’t there. overextend The are that’s funding challenging really. overextend to And you the the a we the buffer. don’t do We when buffer you we to be. about buffer that and through we balances have

of Now than you XX% that our years more much are the buffer used balance of. ago sheet to it we aware liquid established some be is XX when

But we that understanding sheet. their of have we are -- we currently think the kind Capital, acquisition that’s completed much TriState too now balance So conservative. of

currently as well. in the here are midst of the we but the we conservatism to, We there of what buffer as just side is, are determining do on going appropriate always

I have And Understood. one That’s really helpful. just administrative comp. follow-up related to

quarter’s fourth paid third But elevated. fiscal I caused the bonus call, there was PCG off-cycle comp think quarter, the in increase comp another mentioned segment $XX which quarter. admin that admin line last on fiscal PCG the in in be million you sequential an to we saw

what how all? wondering So much just if drove nature, one-time of is at in and that that

not Yeah. I am sure.

at sequential and X% I increase based are other benefits the around we year on again for, the we things. accrued funded that fiscal adjust and end particularly think it and fully was benefit that and for accruals a of bounces sure on making

describe could growth specifically just natural point So changes sort there’s that et to nothing of other and the cetera. to that than that would accruals, I

Thank you. Understood. Okay.

Thank much. you very

Go proceed our Katz will for Credit We with question final today of ahead. the from Bill line with Suisse. is

and outlook is Most resi But Kelly balance higher in resilient. near-term? taking we sheet? interest about environment on quite been it seeing you asked, did I that dipped my they seeing long-term little understand your you for for follow-up the you rate one should This be Thank demand Paul. have the basis like mix, demand was pretty Bill. questions a I with looks morning. have shift Are end-of-period positive Paul shift but is are question. Good loan for for on any SBLs, bit. the worried any an in The on Michael

I think that yeah. --

was really GAAP Some as of that use pay that -- SBL lot of funding. people that a

part things. of went people where off demand those as the mortgage So homes paid SBL mortgaged and and other from

TriState new think is it share is for their has only I is market we clients, and demand growing a there relationships too, so there with not huge our the think So opportunity.

a continue to be that and really doing May term, up are less likely are over positive. go still funding? SBLs So longer not. but People cheap even business is, to I still The time think rates was well. is very short-term source think of so becomes question that very, when borrow,

-- blip a that. So really you see this blip on a quarter I we think saw

AUA, just your a AUA still that are Great. over see then percentage as time? closing you a more And -- as I if one of the of of behind peers, you had do follow-up, gap SBLs some Thanks. percentage wirehouse

our mean in is organization. that to We SBL have pushing even competitors. debt our new for as aggressive compared product relatively -- just our I us never a so products been through

certainly them for present even it and quotas managers So present branch we anyone have with or don’t to require or to quotas.

has to it our out that more and historically our and of the do certainly advisers. pushing but wirehouse through gain been competitors. versus debt means going share, selling because has So to adviser really concentration that or natural us to And initiate than continue it we we it lower

So, just going time. we progressive but it’s our it’s -- but for a and that the part haven’t culture content not been, long are just up, of

Make sense. you. Thank Great.

you Thank will much. very question, I turn it back to the Reilly, was final Mr. you closing any that for remarks.

markets of call and end Well, it’s of everybody although call. strong and environment great. cash interest the that’s sorting year, an being I hard appreciate to everything on the and else, equity and outside the very a rates

We when to really -- balance the to the else we that’s appreciate have and capital be still able are and flexibility navigate. our base everything in sheet we

can as and couple GDP clients don’t a XX% going them still that’s future, be they get quarters, with that ever. rates is a our pretty what’s but the people So more than get you still say our and optimistic you an interesting advisers it’s -- know to now you to about quarter, inflation, rate see advisers when going XX are high satisfied, raising and of happen need

So, soon. talk appreciate time to you will we that, with and your

day We today. Thank good your disconnect you, everyone. call you you lines. the that conclude Have participation That a Thank everyone. ask you and for does for your thank very much.