Raymond James Financial (RJF) 24 Jul 242024 Q3 Earnings call transcript

Good evening, and welcome to Raymond James Financial's Fiscal 2024 Third Quarter Earnings Call. This call is being recorded and will be available for replay on the company's Investor Relations website. I'm Kristie Waugh, Senior Vice President of Investor Relations. Thank you for joining us. With me on the call today are Paul Reilly, Chair and Chief Executive Officer; and Paul Shoukry, President and Chief Financial Officer.

today on reviewed Relations James' being website. presentation is Raymond available Investor The

remarks, open operator questions. the the Following prepared will the for line

Calling regulatory objectives; may X. made Slide not limited statements your that concerning are attention statements future information certain strategic include, Please but in results; developments; during prospects; of and our forward-looking constitute note call acquisitions industry of benefits our results conditions. economic or to, financial general statements. anticipated of and market integrating business These this success and litigation businesses; conditions; and anticipated to timing acquired level

In other or to in such actual not results believes, conditional statement that plans, as statements. could, intends, future can statements. are on note as addition, Please events such would expressed there will that words will, necessarily may, expects, projects, anticipates, verbs depends those be should these and any as future as forecasts assurance and from estimates, identify forward-looking no materially intended differ well that

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

firsthand for Kristie, in Paul advisers who grow I Conference attended the embody a our day firm joining Thank Thank and out. tools makes time advisers advisers effectively of product appreciate so culture. and dedication day advisers serve can many importantly, James so what and advisers. their the hear their who spend Raymond place with our our and who for they their serve today. passion evening. clients the and and It's of Paul clients you, and continue provides technology employee our businesses. platform breadth need to thousands Last of week, the to good for a that they us Development you value I Summer exciting great We to client-first

once again the delivered We quarterly our to quarter. in strong results. Turning results

diverse the for generate combined complementary record months X of year. and fiscal business results Our to the first

We to across in of businesses, continue people our growth our drive our businesses. technology to all our invest and help

on record year higher billion, primarily fiscal $XXX $X.XX revenues XX% reported administrative increase $X.XX over net common quarter, and of an to share. Beginning prior income related was asset net of or due shareholders the X, third the fees. management Slide firm quarter per diluted million available to Quarterly

available $XXX expenses Excluding per income diluted to acquisitions, or was million adjusted related to shareholders share. $X.XX net common

We of common annualized generated strong tangible adjusted and our common annualized particularly great base. on given returns for strong equity on the quarter capital of return return XX.X% equity with XX.X%. A result,

our quarter, million million. X for million we of year-to-date $XXX total for X.X common fiscal During repurchased million, $XXX stock the shares shares bringing to

$XX.X driven to billion, to record Private rising new billion. were PCG. a annualized on client assets. during and and assets grew and representing administration financial grew the $XXX X. beginning under billion fee-based equity $XXX the Slide trillion. period to to rate assets during $X.XX assets Domestic domestic of this assets recruiting Moving X.X% growth and adviser net assets the solid markets Client increased management PCG quarter accounts by Total quarter, sequentially levels to X% retention client under and

advisers capabilities, long-established attract technology to continue the robust to and options high-quality Our client-first retain values platform. and multiaffiliation

of approximately assets production recruited $XX.X recruited independent at month Including their client of domestic and in contractor $XX advisers trailing and our channels, client we assets. we quarter, This recruited with previous RCS, $XX.X of XXXX assets billion of million making since employee this best billion, firms. financial to quarter our terms

business, administration. include up with assets of client RCS, our the which prior results under over XX% Custody continues recruited These X-month billion production XX-month assets are trailing advisers not have quarter year-to-date, Services client the recruiting period. XX% finished success of and is also up $XXX do related and RIA to Fiscal &

in We growth from joins continue from internal to transfers. experience external as RCS as well

we advisers, XX primarily internal of transfers does include and of that This one quarter, to RCS record X,XXX not advisers all reported firm. financial nearly from

While adviser the with RCS to remain the assets client transfers typically lower firm. firm's the count,

clients' fiscal and domestic strong the the quarter domestic annualized Savings at Looking year-to-date at $XX.X Program assets. Enhanced a Client group. the X% balances net billion, rate March new a result period of were XXXX. to assets representing peer growth from Private on of Group results, X.X% domestic Total suite billion, $XX.X down ended compared beginning

the cash balances to pleased April. in fee We billings remain flat following relatively see quarter are paid in

grew based loans X% due securities preceding loans C&I to record higher a loans over primarily as quarter to the muted. billion, Bank for remains demand $XX.X

to of were into and bolstered the by results on firm. net billion brought Client Slide net Group assets Moving to of assets generated record X. markets $XXX new administration under strong $X.XX quarterly equity Private due income pretax and million. Year-over-year revenues PCG higher

reflects Markets of in $XX $XX primarily M&A the approximately loss revenues. Capital deferred which The impact $XXX and of of quarter, XX% driven to equity quarter. increased revenues Sequentially, year and X%, preceding this amortization housing Net grew by granted million a Pretax a loss quarterly quarters, pretax investment primarily generated revenues compensation million totaled compared ago the $XX to affordable due in results Capital higher segment underwriting segment million of Markets revenues debt weak net of revenues. million. and higher

about remain pipeline timing optimistic difficult business the predict, and new healthy still to and While we are closings activity of M&A. our

$XXX generated to higher compared to Asset industry-wide gradual record We were continue PCG accounts. The along net Management revenues management banking year largely market attributable appreciation due prior net expect investment million. inflows fee-based financial assets million quarter to improve of revenues Results of on under to segment and the into to $XXX pretax income with recovery.

X Bank basis The quarter. just and declined points income pretax Bank of preceding million segment $XXX of to net generated revenues margin interest the compared segment The X.XX%, of net $XXX million.

generated Slide record previous income Looking set at net $X.XX results $X.XX billion X. We revenues billion, in and XX%, the of respectively, net record X% shareholders and to year. common prior up the the fiscal over of year-to-date available record on

remarks. annualized Additionally, equity we for the X, and XX.X% for common to segment X-month of over of the primarily in and reflects the first Shoukry X of months return Management equity return On generated along adjusted the growth robust the for annualized the I'll strength the organic XX.X% Asset common turn And strong on with PCG now year Slide of equity call PCG his period. Paul? Paul on strong tangible markets.

Thank you, Paul.

a last Summer group echo branches every in on Elevate advisers earlier We to as comments day. past want great to Development put it as our fantastic earlier week clients and quarter well and the associates over just and Conference I financial visiting truly how first their was the Conference Paul's months. of who attend First, our each few have several

to billion net record XX% a $X.XX revenues prior up the the Now X% over XX. turning Consolidated sequentially. quarter, were third on in up Slide year and

related and billion, fees over over to and growth management XX% grew year X% the $X.XX representing the prior Asset administrative quarter. preceding

PCG domestic administrative and will assets related quarter, management quarter. the a for fourth in tailwind asset be This which fees X%, fiscal fee-based increased

quarter, interest I'll year-over-year, prior Brokerage benefited in sequentially. higher Banking due discuss debt and X% net revenues income mostly revenues revenues. $XXX quarter to stronger fees shortly. primarily revenues grew third and increased Compared equity $XXX and of to account year Investment XX% from of PCG. the million, results XX% and service million, underwriting year-over-year brokerage

advisory M&A and remain However, revenues subdued.

X.X% and Moving Savings to representing X% down Clients' the domestic Enhanced client the XX. quarter compared ended cash to and at preceding Slide PCG assets. quarter of sweep balances Program $XX.X billion, domestic

declined have the sweep billion. far cash $X.XX So quarterly as fiscal partially of in offset fourth domestic balances have billings about approximately $X.X quarter, inflows fee billion cash

and from balances The RJBDP the banks offerings. million, Turning X.XX%. Bank points average primarily quarter, for down XX third-party due X% sweep $XXX decline the to preceding mix X.XX% banks higher-yielding a margin relatively was Slide decreased basis the shift segment flat RJBDP XX. The to from interest while Combined towards net quarter. was with third-party yield interest net yield at third-party in was fees to on income

has down the we quarter of current rates to quarter. the But spot and or always fees balances, fourth perhaps and third-party in fiscal course, on we third RJBDP be nominally flat expect would Based at are NII of end the environment, few notably been sweep does the factors. based on rates any competitive competitive factor weeks. other incremental not dynamic in which past This changes the these make or to space over dynamics guidance the monitoring may we

Moving ratio XX.X%. expense total to Compensation was quarter consolidated on was XX. $X.XX expenses the Slide for and billion, the compensation

in of compensation legal in $XX was ratio did reserve not adjusted expenses largely the Noncompensation sequentially, million, the regulatory XX.X%. a expenses, quarter. favorable due increased million acquisition-related that of recur release to net X% $XXX current Excluding quarter and preceding compensation the

across growth support noncompensation grew expenses expected to this as quarter businesses. Generally, the

losses, the regulatory For with adjustments expect guidance. for noncompensation or items our year, consistent unexpected excluding and billion, we fiscal provisions be legal to expenses, non-GAAP previous still around $X.X credit

XX pretax Slide over the margin past shows quarters. the X trend

quarter, margin This margin May. challenging provided with meeting given line Day conditions market impacting and of results strong XX% XX.X%, are and a markets. pretax the generated capital the of adjusted at in Investor in pretax we result, Analyst especially a targets our These recent

assets $X.X RJF Tier billion, continued at our strong. Bank securities declines in we growth in total With very Liquidity above the loan On runoff end, ratio as balances the the parent corporate at and XX.X%, a of leverage and at well well $XX.X remained capital our $X.X offset total of XX, sequential was of the the were capitalized. X decrease quarter cash target. billion, quarter ended ratio capital by XX.X% and Slide portfolio X% billion segment. cash remain

Our invest continue opportunistic capital in levels flexibility being provide growth. significant continue to and to

summary provides over capital past XX the X a actions Slide of quarters. our

$XXX shares repurchased the $XXX average per of the stock an During for X share. at quarter, firm common of price million million

As Board's XXXX, remained approximately under XX, million stock of the approved repurchase $XXX July authorization. common

continue dilution to Going compensation incremental share-based offset to we to with repurchases. expect forward, opportunistic be and

line buyback we and liquidity as maintaining activity the capital to stated targets. of are Given our our present to in currently increase committed we pace levels expect levels, with capital

investment account for the Raymond total loan held Capital losses The we securities-based and down lower, loans portfolio, X.XX%, Bank. and portfolio shift quarter ended X.XX% key mortgages, The as our which more for credit quarter. in of total for allowance and preceding a has X%. loan on Criticized credit bank is at solid. of XX% of towards a at the respectively. segment, from residential includes The investment for percentage loan quarter to percentage loan XX% largely as metrics ended due the provide Slide loans James held percentage Bank Bank the loans for a mix Lastly, loans quality trended total allowance of credit XX, the which TriState

We end. credit allowance corporate loan this continue appropriate corporate at quarter loans closely we a on portfolios. as represents held X% an bank for our economic losses but loan of was loans impact may to factors for believe reserve, The investment monitor the percentage that

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

Thank we long quarter's are over positively of X% term fourth strong quarter. fee-based to be while the of you, in across looking I next economic all are with by I sequential impacted with well this position is Group, Private our accounts. the growth increase the bank results off loan a fiscal in quarter. am forward, the believe record in starting assets Paul. of we pleased In strength drive results levels will assets still businesses. uncertainty, of positioned And there Client And our

large teams I of activity encouraged record in robust, Our am and remains recruiting by adviser pipeline. number the a

levels, gradual the destination a influenced and being heavily on are In quarters. continue pipeline advisers, believe for long we few growth. and continue recovery and expect good engagement M&A which term to focused should the to have conditions, drive and healthy we are the by a choice up Markets but over we industry-leading are segment, activity to prospective of our for a pick over current market We next expectations Capital

We available balances And and although stabilize fixed improvement have levels. to an to putting clients grow, we've cash business, and in once continue depository, historical hope start declining seen still income in pressure investing less on for will begin balances activity. in and the to to cash see rate brokerage deposit Depository improvement. results the securities, lagging flat are we some experience

capital that growth the Client growth Overall, long-term near-term become us of assets In rate Asset in fee-based business positioned segment, the well financial despite will for the in conducive. Private headwinds, confident and made have remain under management. growth segment the we environment the Management some we believe accounts strong in of assets we've investments once market Group markets drive

with remain In we segment, we prudently diverse on focused growth balance funding expect growing drive In Raymond management addition, to fortifying to the James investment sources help assets sheet client over further the Bank time. demand. support and

activity securities-based current of loans for rates. more loan and at decelerate has low. the market Corporate seen been these payoffs comfortable as increase growth demand get muted remains have clients We level as

capital, ample increases once within However, positioned we lend our activity with client cash risk balances conservative well parameters. and are to

remain addition In driving we businesses, our corporate focused to organic on also development growth efforts. across

prefer for our changes parameters. deploy as capital weeks. meet have opportunities past plan M&A, pace industry the increase the to regarding few look of While to related we to the M&A cash we buybacks questions to disciplined several we over I continue may to expect that sweep through that occurred news

probably of same have and been have We emerging developments these have some frankly, closely monitoring like you the questions.

questions may any have. are to to We attempt you prepared answer

our and concludes service for excellent and positioning in growth. will to continued capital liquidity of dedication closing, want I remarks. are In thank entering in clients. associates for future please our for businesses well prepared That to advisers you you solid fourth the their do. to Thanks the line base competitive all positioned questions? strong providing to invest and Operator, all our with their our we of all quarter open

[Operator of the from JPMorgan. Instructions] Michael with Your Cho question comes line first

ahead -- to kind income go of changes I mean with interest start RJBDP include considerations piece. maybe regulatory talked the competition. -- I potential mean, mentioned you through mentioned and the you will on I doesn't in cash. and sweep Paul, in you

is environment there in how frame -- from front? way [indiscernible] the even So type it's your a whether magnitude And the would regulatory the characterize or or the from to guess, seat? current I of either response view competition your you competitive changes on

Yes.

Let me start.

first, program. by Pauls well, the saying, talking start what's The other, about, Paul, that are X program, here. me But difference of people the let this

different. programs Our are very, sweep very

that. So a first stage I want set to

points. we have points, from point XX you If that to XX programs sweep about programs, the basis our look offer talking basis XXX at basis to X been people offer

So we start value off proposition. with a whole different

We individual sweep. have FDIC per or the $X million joint $X of in million

also funds see And market We have size very irrespective grown class the or have of competitive you money investments. in institutional can our how dramatically. to everyone programs those of available

higher insurance, and up Enhanced FDIC again, $XX have Savings grown. rates Program, also We you've offering to which million seen of

money. And our if shift, clients, have appropriate at and invest you taken the look advisers to actions the

we the well are not look maybe don't what's can in we happening compliant. we've I changes, announcements you think, that So we such ourselves from And other we've tell very prided to understand. group, times are rates. what it's know of at the as because I for programs. very the sweep regulatorily right? even compliant subject So and ours some thought through, it they're to it's believe specific both was having yet, right high with do this we thing criticism But and at done

have what to. been look So know we're apply going the movements even different. We don't to totally have And to of a at they each movements. little

that's we weekly. anything to going see don't rates, change that meet we And forcing know competitive. be to we're So but us we of today

competitive to the landscape and we be of both if for advisers our change, clients. our have So competitive rates

happen, an of So at If comment that but with was adjust. of stuff, But we're going today, we're as more unknown looking no to current plans. things

Paul. record happening the some there's broader the Thanks and out clearly, talked as to real you question, for bank just Great. thoughts you And some as ahead. just you've company. time want have broader aspects for James kind continue and I of margin through, zoom out targets loans. there. I Raymond to and revenue, mean you just business ask through, nuances clarification there the second record hit for Okay. assets, for I record talked trajectory and my guess realize I the And question

continues But operating levels I'm ahead? just despite some in frame curious, maybe reach leverage for James, how the would business rate backdrop you trajectory the this for record as Raymond to normalization

Yes.

the down businesses, focus it. Paul's number to the our had in over of Net technology gave office, accomplish double the one also we we the believe know leverage as our cash I believe XX% year and whole on on a that's industry that. support certainly still a and this strong think Promoter last we can -- we to Score assets, us that of rate, key's were I we very transition X. grow factors. have and believe use almost maybe back of able keep be spreads to But levels our have equity as we we continued latest grow satisfaction operating as of next high market, We but the leverage, We until operating especially can has or survey week our There to And service. that get advisers. support XX%

we for a more But service that So also hallmark. believe better continue spend that's make and to much and believe easier the we reason, in can as it we better better leverage. but them technology, service, we with of money the part

question of comes with line Citizens Ryan Devin JMP. the next from Your

on what's one to like industry I'll as rates. of news as on It guys is cash you advisory along. ask well you're following the the some another sounds in going

you thinking? that made which their could And drive And Because accounts moved, kind also at then. evaluate probably percentage then you so the changes rates? [indiscernible] I'd just frequently if lowest probably in to of that can, just understand your guys I trying what competitive that's a assuming the know guess kind you of obviously, love as the April, one in firms I'm reasons you cash to fee-based of is change in what like of you --

is if majority, alternatives not for to advisers to done? now just been competitively all, the your as could the change what already have about customers think else on higher-yielding So cash should yield-seeking moved vast that already trying those especially view,

Yes.

just sweeps, look those. of to frictional It's on our that's at we'll focus cash. those advisory in So if cash. And assets are about X.X% us, you

You cash you can't for have for at an institutional it find those in doesn't levels or trading, anyone fees in them. do that portfolio whatever or some paying

So we as spending cash. view or frictional that

know you of amount accounts on $X,XXX. cash go and average mean, that don't I where The sweep cash. of a at are amount kind so I rates our those to bank get

XX,XXX at thing, treasuries CDs accounts can because markets, you -- those So in just cash account. shift you are look those money started if and other combined in the rates CDs, tell are market Total those accounts. before the accounts XX,XXX moving, the sorry, it treasuries was for money the and

So certainly much instruments. see it's you can more higher-yield invested on

So That's X.X%. we $X,XXX, to believe cash have that it's at sitting for transactions. of very a rate low

So we with think clients those that's -- money numbers. work we're putting to

Right. Exactly.

my small So I I you question amount programs other very playing of root mentioned -- rate guess, than higher are seen the some you've It's of move. already a guess a that's the already. as kind that that you that

happened, So make just don't but in, you exactly competitively we meaningful from position every catalyst and here, you Paul? change that's are already in as described, the action after know the you're actually just that

forces cash if would treasuries money you where happening, think get would and be whatever. was the cash, in the squeeze industry, rates you market that there the a it could to and get I of on funds offer out higher

where have who starting has much I think to pretty that seemed knows cash everywhere, stabilized to that goes. anyway,

plenty fall. clear you following But that of I if that for start or up, operating have pressure rates go as and what cash, rates really We if demand very rates would still see to cash But see of the don't our go there's business. I down think market it. outside buffer squeezes a for a

thing the So barring see I in else unusual industry. some anything don't

Yes.

in and the that, follow-up expect Okay. of you'd people's rates I a you're question? see Can continue are. you with And would that kind And something shift growth, maybe continue? the growth. is loan that where that's that fuel seeing a appetite of loan Really securities-based as Is just then that if comfort just quick guess, I the curious guess, guys to that something to just referenced. Very helpful. on nice demand loan

think pay loan rates The a here. see. downs to growth portfolio. you the due loan SBL securities-based was started was nice Devin, rising. during as And out, since That to, the Paul one, really it I big and really on was decelerating payoffs pointed drag quarter, growth Shoukry in

And used and new also borrowers that rates. to So of subsided. getting levels clients in has the

lines So and that's tapping their SBL. They're borrowing also more their been. into from

risen long knew We the you for optimistic term, could forward, portfolio. as to that cautiously know, very be bullish that we're rapidly as going rates. think headwinds growth product we as securities-based that growing be we'll of level there'd higher we're on we're going So optimistic used trend have loans. rates growth some continue But clients. the very more there'd clients for headwinds that in some forward. attractive prospects it's And get a as continue And seeing in that

Steven line with the question Wolfe next Your of Research. comes from Chubak

that a So One, of nitty-gritty X wirehouse advisory wanted the the just cash disclosure. been It's received -- question disclosed scrutiny this topic least have of filings. same on there's is of sweeps. at speculation regulatory bit may a some some peer in

disclosures much and others some these cash are we scrutinizing So closely. of more admirably

Your the note of options from a adviser. Raymond James with that portion sweep disclosures the revenue shares

admittedly some are your a in forward? should compensated more conflict? does the about go is for advisers long-standing terms there approach as think create concern how closely, inherent that reputation And scrutinized conflicts with firm a that, clients But that we putting first. So are of

the No, me that's question, disclosure explain great let first. a and

accounts, has advisory the on So asset different other adviser than no in of terms any payment cash class.

what's in and $XX,XXX account indirect points do in getting your X of in fees. million anything, there So and they're best if they're X or or There's no the interest account, in in is have or they're incentives awards they're cash trips there's advisory $XX,XXX X%, in getting client. they incentive $XX,XXX If is There to $X getting there, but X%, charging anything. fees. If fees. a

course, doing have really supervision But the limited in sure in right the by those and explain for some and nothing making be advisers a home be it compensated asked doesn't We're side. there's types go it. even group way. programs, movements are known they're The what high-rate things them continue And programs from ESP we they office other you, of we've program doing had they clients. about great one. we've compensated we been we've the advisers that be the have where things money should for And assure -- to that of some I And their rates That $X.XX market that not like allowed fundraising of let disclosure talks the me brokerage on about doing. advisers the the should sweeps.

incentive only compensation they have to put compensation have the for that So is accounts. to X go -- accounts. the clients rate higher-rate on They low is into

be into ticket clients put for So of right as more accounts. doing a some brokerages investment like rate dropping those the us thing that into They're high money. their it costs they

we it's you that that paying, But fact circumstance. very we in that And you believe regulatory-wise, you pay any rate said done that whatsoever. programs. disclosure that the they nuanced the again, we've but in cases, to don't there's that are all conflict cover of high it But a it's that. been types very could limited put So clear very like for

helpful, Paul. really No, response, fulsome that's very

you on if adviser, point and could focus but specifically unrelated which directly It's those is to I the financial but around don't activities the we But gets transactions credited that part just provide the adviser as comp what be, comp aggregate it's cash one this with what overall you amount the context share because of that vague. saw don't wanted it other consistent receive well, your payout just could to activities. higher issue? Just on to you the with can given know rate also notes and I program, cause some mentioned FA of clarify too. not

at -- thing I we but indirectly. there's It's with only new mean, vehicles the all centered those where has if on imagine. net have on just into net it for it's Yes. that When growth looking that's benefit I no net mean, -- cash it. compensation small other in assets, that's cash, but of nothing can -- program that opportunities I thing you're asset brokerage. have like only or directly And do put very ESP investment is a nothing asset the they can not advisers there advisers, we've to the new That's bring focus it's it's that new are cash. on assets, cash. -- at

right. All could very That's in squeeze more just If I Understood. quickly. one helpful color.

flat revenue had guide the than spread Paul was bit better a anticipated. we Just Shoukry,

So of to certainly the upward pressure impact revenue you hear. modest. been some funding flat hoping some tail nice to quarter-on-quarter given but incremental support there's some of could still the Was factors however, sorting, costs, just sorting, end spread on

what some was context are the So hoping I you could provide on some of that? key assumptions underpinning

Yes.

hope we So our asset and is forward. kind that throughout are loan you we to offsetting a pressures experienced the that funding going some cost the is would growth of of experience describing there -- quarter the continued growth that

maybe that but driving or that's guidance flat . we nominally, that's So what's down -- said

line Jefferies. comes Dan of Your from question with next Fannon the

question this. one I guess more on

recent what for does Just exactly does additional you more in to get and see you react? need evaluation Or terms of changes you the digesting your moves need color they around most this to across these industry competitive period, imply are backdrop, that potentially still to were? the

and changes watching. But have this learn to you talk but in make are our we're you here just think I we to or We going don't things, digesting? we're again, we I I anticipate mean, don't there. But might make Sure, -- -- tweaks we'll anything. mean but we see today, what doesn't no we in it know going won't. to plans plays at next we out point, about that have cash meeting, as but what as

you you've comment several a I quarters. backlog the in large mentioned terms just of think That's record around then And making Understood. recruiting, backlog teams. for of been

versus thinking seeing assets So of the there's that just in context net replenishment additional curious -- you're any bring onboarding backlog, the if -- be given that the if color quarter, the there's that funding kind other of strong additional new would helpful?

surprised continuing, Yes. that it of surprised $XX new We've strong. $X large we're the million very, the and we to last actually few -- ones, been we competing said in we're been backlog up. quarters, were It's recruiting continue extremely -- the anymore, committed It's by picking has million, not is I number get the pipeline $XX teams. joining, both for. even think well very million, and I but

And recruiting pace. on think down the -- that's remains don't strong, we're very now see and So the anything we optimistic slowing we're activity it. I right still

So that's really us. good been news for

line the from comes question Brennan next Hawken UBS. with Your of

advisory I'm Ray Is I it say, to assets question should related to J where with for of fiduciary? somewhat the assets, platform Ray on what identify J considered the to start portion going another possible your sweep. you is a or advisory

Well, so the are There's have in right? and words. and fiduciary, responsibilities many so There's everything they -- all interest. fiduciary, there's else. many and rules there's terms There different

So we know best number the don't could give. I

what all say Paul's that but the types -- I Yes. that, excludes within of accounts. there's accounts, Custody we it's fee-based all of we fee-based $XX that other fiduciary, programs is have and point, within that's business. about fee-based could to And billion within -- some there's then cash balances that mean sweep some very

Yes.

have And advisers are some them discretion of those with to advisers are without are with some of where discretion, with they some firm the clear client. everything managed, there and

that's but looked -- so -- it. at number, you if the they So total

all of it. is of the $XX sum the in accounts? The Got sweep billion those

Yes, again, on almost yes. is X.X%. and accounts those And the average $X,XXX

-- in -- those the really cash it's it's residual residing accounts. sweeps those on not in So average

was on quarter. this OSJ to missed as that was But size whether net decent you asset then as if actually I at I you this the I and that Day flagged And the come And headwind. impact? guys pending new a as a was assets event what touched pass? you of apologize Investor net far curious -- that it. the flagged And Okay. pretty did new

It's one No, in anticipate quarter. next probably coming. we the

So that's hasn't but fly, when we've yet. the happened we talking been it not happen. still it didn't. one That's anticipate about, will we it happened wanted to if But has it but

it. Got

Okay.

So coming that's in likely quarter? coming the

Yes. quarter. The calendar fourth

the line Kyle comes of Your from next question KBW. with Voigt

bank the yields XX points the on basis XX sequentially question about by over a points Maybe basis X sweep last and third-party quarters. falling

higher that tiers made Is of there towards there changes what's of negative and are wondering tiers? sweep mix is shift drove driving towards in you shift? to Or could mix also partially terms that or else higher-balance the something shift Just a that clarify if if simply driving yield any offerings? cash the this rates clarify

of the and lot we that to higher clients market cash money a kind the into we comparable rate FDIC program on new comes treasuries from the cash things of but over in for those to initiatives functionality that where the and a funds, a yes, that and/or Kyle, maturities the the availability firm run sweep sweep sweep of the is offer rate from type benefit and insurance want of of move program. program the where

cost over So increases average from it those able the it as of bring have -- of sources the those kind net while through of and initiatives, to effectively implemented cash we we've quarter, been still we've also it's funding, net amount the the which funding increases attractive. that

programs. place into win-win-win it's we've the sweep initiative in really So that a put

percentage program the in yield that quantify to fund or... equivalent way this yield any of kind the money there newer are of the Is those third-party Okay. or market -- high sweeps

somewhere XX% it's in those the to programs. balances of the are roughly XX% range that total now, Right in type of sweep

And just a on Understood. just follow-up, as repurchases. then

the desire of your You increase to mentioned here. repurchases from pace

Any about about increase or we XXX? in quantify You prior pace executed the $XXX to million in the can you of ramping moving way repurchases that quarter. on Should that forward? XXX think

We're not programmatic.

terms on people uses a quarter. expected definitely we're of in many the factors I So during -- which of we But don't from higher was going know it sources to past lot this play yes, X pace and hard not increasing A XX, number. and of intend than the capital. we you give cash into

to we but lots of lots have remain capital, and we committed cash, targets that -- a of our reasonable keeping period of time. So within over

As we've we looking them we're -- the preferred. it, haven't find at But couldn't return we activity. our to find couldn't yet. It's find we'd said, able And if it. we M&A still been

on aggressive the more think So keep ratios back be. should we're start to they capital we where returning to being going

TD Your Cowen. of Katz next Bill the question comes from with line

I on question. up do last that want pick to

Pauls you either So both.

of terms to pipeline strategic fulsome? it Just it's harder make less Is the buyback, bit just level? Is of the little it forgo a out of at you economics is work? come that And the then deal in just commentary anything maybe reallocate, Is the the more if pushes buyback? that sort deal backdrop back, were or here relatedly, truncate underlying would to shifting in opportunity? to a

reasonable active, very the think opportunities. there's I

are But pricey. are very Some for can last integration. and you And very, us, right it's see quarter this the and culture -- fit strong. the few frankly, we're by earnings as

to range. get ratio up, we So back a the tweaks it proper want in capital

happens. on and So we capital can more still a lot we buybacks have still ample something if aggressive think be the

we So returning be aggressive reason that don't a size there's anything saying of no not it to to it's shareholders. just expect more on

Okay.

the still of is think leverage ratios? normal sort you back sort getting capital ratio about Just guidepost Tier to of X clarify, to appropriate as XX%

is XX% target right still our now. Yes,

For Tier X leverage.

sort here mix to sweep is then on about say, And maybe what dynamics, and would bringing and other here the net and net I'd downward can't should necessarily But there money a some sort at kind think not but your NII sorry yield?" little get shift pressure sweep? the I the now of put of cash residual the into that of the look more Terrific. stable just existing to here Great. how way And products? second leakage any the new getting are we that outlook is that cash higher-fee so going rate adverse And of for back in like question, on rate "Hey, question ultimately customers ask -- much. that these why a is client any is

Yes.

basis there sweep It -- X%. Paul up the the cash and actually grid some initiatives our from as And programs are shift said, which offered, on migration the XX to to program. goes higher-yielding offer way starts, been to closer has mix points. So X% we we've all that

all our earnings industry actually been growth, growth our very have because happening, been the loan what as really well for hasn't impacted us loan muted. is is there industry ratios what has so the and capital that's or of And across been this the strong, but

by that's drive higher bottom overall. will driven and So driver and both loan NIM growth, interest of will line importantly, impacts which earnings actually which yields higher income, be net more ultimately the the

with that's seeing SBL that well. seeing started for. side what so eventually and as start we're, We of the side an kind more as more waiting we're on corporate we'll optimistic And activity, activity corporate some industry improvement on the

next Mitchell Your the comes of from with Seaport Global. question Jim line

Just talk asset in your do How of you Can almost betas? face look Or a least maybe, think in how Paul, would first rate the you points? one-for-one you basis of sensitivity XXX get cuts? you about deposit the are betas about at can kind offset? thinking

money that the we the through competitive a largely because generous both of on to funding programs these But clients depend have the should passing in near fund et we Savings and asset Program, Enhanced have like rates environment. on It will to on well and rates have as been of other the cetera, lot downside sensitivity side market that things.

cash the the do So go across environment down. and of competitive have But ample the feel it rates we for again, an on demand as cushion. amount industry like depend will we

you If have points. X it's you're a to sweep basis XX sweep program, if a in --

point hard it's basis XX X over respond. a of get drop to kind cycles, you If

today. and market very plenty ours the of have We and still in be competitive room

Right.

and yields bps. So right, forward especially if you some like a seems funds, loan little next we portfolio, you you think of Paul, still growth -- when so because the on gradual, think guys still up year the there. about repricing Fed in curve a pretty kind hold low are the and It about say, might better, picks have bit up securities XXX

competitive on you can you I know put in pretty You do -- that I there year pricing, hold but NII? you do feel mean all there's together, like guys well next

record believe forward and not, different very aside or generated those curve interest I the the were whether years we've last now for And results rate environments. X in quarters. Putting X Yes.

And kind so to our interest ability we of complementary have diversified any very perform are and we confident in in rate businesses. because well environment

at certainly least lower example, business for interest and business supported fixed our last cycle, So supported income our M&A loan and rates, growth. the in

growth COVID to because the due rates. loan the -- period lower We had record securities-based during partly

your to different relative well. So our so in passing a the because there's front But on different generous other in rate environments. as things to on benefit these on we're feel that programs, like have well we that relatively point, and offering we us basis, clients positioned rates been

Stanley. with Your Cyprys next comes line from question the Morgan of Michael

capture sweep? how scope see circling way customers in to you the industry you evolution take curious services? one ways potential an what just other and could from hypothetical how on And other be over customers scenario in Just the might the for XX over might movement time for differently services still Just future, conversation time some where provide? envision some economics you the sweeps, years back maybe broadly able XX, cash What in pay away more for ways services curious for the in capture to they value? potentially

one fees. so a of less many big asset-based be right? When over And to used can hard become factor source income It's be of in time. fees ways. Yes, growth they've guess a Certainly, tell, and to I there's other things.

at price they you look broker-dealers. If how the versus

of common. becoming pricing all on and depends There's more that regulatory. sorts ways, is of Asset-based part

You could have fees. performance

tell -- it's to evolves. where have could hard think I You it

-- hourly out I they don't the spell people don't anyone about I a or or rates. consulting I likes business, when accountants lawyer think in fees hours. think talked bill

don't part always of very think lot advice it, lives and is -- the -- the will I the go value part, the the relationship really of an investment is family with adviser, So a they of a clients. that but especially there, advisers, they've everyone thinks it part about it the big where become of given -- of and it's

it's of fees sorts in it's maybe base. time, get stuff to We clear. certainly they where just have so more it'll direct charges change there's asset So that anyway Australia, very that be U.K., have to over all the countries clients

had could we've It mature industry, we've ways, and competitive through to it's rates gone evolve a interest things, that and I all all find very a as adjusted kind adjust. along. and of think adjust to rates and sorts interest of high X of people but way We've will sorts

maybe it's I about however, like, seems industry because our in out story it. years XX So

follow-up just sorting, question, And more rebalances. on cash broadly Great. a cash

competitive to there? how see might you do curious close given get and industry heightened Just catalyst evolving see on are on cash just horizon backdrop think that sweep here that the focus getting? to how discussions and bottom might grow recent us balances attention How debates And that and rate? that the it's impact starting again? and the we What you might eventually sweep

the closer Yes. that sorting Paul the end of sweeps funds, we I accounts having the to money some $X,XXX market metrics of to the and mean the of in we than higher-yielding fee-based have we're beginning balances that per cash of lot believe the to investable had whereas of continue cycle treasuries. A just account the been extent invested and in they clients, CDs these XX,XXX discussed cash have alternatives.

growth, to the we growth ultimately, -- and as client the phenomenal one look the several of not growth it, we've very back beginning not of on come end growth had have -- and we're the of and cash until since migration quarters of And going we've the of in the of balances. declare say which first, the stabilization We're we're and history trend first, that said always to to assets. growth the if start the seeing from the continued runoff the will not

there assets, the And client growth drive ultimately that, will balances. more and those and in as we on retain, with recruit that will the cash advisers associated advisers be bring

Your the line of with Goldman Sachs. from come Blostein final Alex question will

detail. the So all obviously, I appreciate backdrop. And dynamic it's a

learning all and we're So it. kind from of navigating

it's basis? relationship would we're Reg I trying out receive But what there. it's us small understand that small, And largely to I heart So you unknowns still cash are of operational the the albeit sweep think yields and fiduciary still a is, guess, transactional higher question that cash, that of again, available a kind you small, treated number of there's the $XX some differently that figure that think of But that of of billion balance, fairly advisory the guess why per BI. part wouldn't be is standard albeit most out still at about of I or ton there? on it is and the all provided, operational. as why of sort I account appreciate But under

it. standard would interest do servicing it's to first. guess, is to don't operate think uneconomic that's And I I under mean And that and on Well, BI. means. to a points, cost. take I a that it it transactional, think you you're don't a get checking the to on a know There's of at transactions, your a XX cash, answer lot that is and going pay be standard quick the basis account. more business, very on heart so get I It's having be their It's clients checking your what account the rate put first fair cost than transactional so reasonable. cost my have has There's I there's BI if you a what more platform. for way is

be may there disagreements. mean, I So

with standard I that a I you up can think come that. like understand how is wouldn't

So it's...

like what a I not checking one. and the guess fiduciary in versus account guess outcome disconnect where be has is this to And is seems difference could the be that's I relationship the the

There fiduciary I agree of accounts, a are lot that.

fiduciary relationship, have they a but their look don't they X cash portfolios. managers, You institutional have asset in at

order because we'd be -- sort say we -- want reasonable have while to standard. or XXX% cash this to in -- other would be that other so to fund me, mean not it's to fiduciary that to I That we to so the reality think I investments, of So would not cost, say, transactions if account or of work. things. so these that's a relationships you mean only real sell transactions just I securities the I I type benchmark of accounts it has outlier have to fund cash because not a out in to invested

guess larger little Understood. balances you be be of your migration shift around there bank right. there, All follow-up, cash the seen versus in rate the All other some that and you. And the could of that to Got some all, discussion largely to done? this extent, that Paul. sweep if -- account do quarter? quarter for still yield push is and Back the changes flattish to trajectory next quick the sort third-party expect you've a incorporated the lower? mix right. where I at Paul bit Or will what kind of revenue that, My

big have levers billion the that cash outside big that our we're the outside on the itself, brings to I of with largely a want over in have and rate Yes. over rate, in continue we bring high-yield mean, because the Well, from the can portion that the buffers we new we initiative cash we swept bringing the on around have fund on the just now is reducing that cash announced to to from extent pretty lever. $XX third-party some of rate We we time. reposition actually program -- bank So right? to own banks

So continue of that we're X%. it depends of want reducing But have we very trend higher we to, not really just the quarters still going We just of history. until that attractive, again, it's just speculation. initiatives several type how any to we're on much to again, of Otherwise, the rate. It's declare than pull announced in. actually, completion

you. got I

was Sorry the -- the the that -- sits Or within that program ESP? sweep? reduction it that bank and was third-party the on

Yes, that's a sweep initiative. That's right.

to time. I'll remarks. closing the further for Reilly questions no Paul are this at turn There call

to I sweep. good remind but questions questions we Well, very the want I the and all everybody, on appreciate the the a I all call. cash quarter, you're on understand the had --

helpful for I thank hope were appreciate, responses, our all us. we and you joining in So of

This for concludes thank joining. you We call. conference today's

your disconnect lines. now may You