RJF - Earnings call 1 2024 | Raymond James Financial, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Kristina Waugh

[ Welcome to ] our first quarter earnings call. This call is being recorded and will be available for replay on the company's Investor Relations website. I'm Kristi Waugh, Senior Vice President of Investor Relations. Thank you for joining us today. With me on the call today are Paul Reilly, Chair and Chief Executive Officer; and Paul Shoukry, Chief Financial Officer. today on reviewed Relations James' being website. presentation is Raymond available Investor The remarks, open operator questions. the the In prepared will the for line Calling X. Slide your attention to Please call during statements note forward-looking constitute statements. this that certain may made general anticipated include, regulatory our objectives, prospects, conditions. anticipated level integrating strategic economic timing of statements concerning market of developments benefits businesses, industry business but to, success financial limited These information results not our and future and or and results, of litigation conditions, are acquisitions acquired and

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

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

Paul Reilly

to maintained share year priorities invest years. have integrations. have today. Through fiscal adviser success evening. our with throughout and our many focused you Good changing market effective focus and these drive on relentless ended and remained on year, are record record executing past strategic long-term capabilities our M&A in Kristi. service a to technology focus organic the on and over assets you, consistent businesses, environments. and Thank testament and maintain uncertainty growth the client This strategic last rooted These our is on have for results Who record cultures. joining Thank we thought, us our would They priorities, are in focus across which over all [indiscernible] this have per to earnings given we priorities, the quarter. generated would

the first Quarterly $X.XX X. to share. an revenues. over reported million or diluted prior higher to common Slide shareholders asset-based income Now results, to of due X% increase available revenues the quarterly record primarily of net quarter year on billion, a starting $X.XX quarter, was firm review $XXX The net per

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

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

Client with strong assets Group and client-first continues assets. increased strong organic beginning-of-period business. $XXX through new X% billion. robust to attracted affiliation strong PCG levels accounts options, technology quarter assets assets assets $XXX multiple they fee-based this values, Advisers $XX.X Moving recruiting Slide financial with generate long-established on and representing are X. sequentially quarter, trillion under management grew the results, and retention Private along assets client under by Total to and billion to grew $X.XX market. and record Client administration to adviser driven reached to their domestic find capabilities to for billion, X.X% domestic the rate this a of annualized right growth PCG growth our fit evidenced can our net

also of businesses, of quarter, firm an flat, elevated typically quarter the adviser assets of higher assets. where majority advisers retirements, mostly trailing financial domestic count include do previously but in their to assets the billion previous RIA our finished was established approximately services, These recruiting first success results have the client recruiting production employee quarter our to activity, with During custody of due which succession recruited seasonally channels. vast $XX plans. which and we financial not and and through contractor at and with $XXX independent strong continued to of the firms. Despite XX number sequentially are retains million $XX billion the the

count this on every generated In Jodi Raymond am has adviser and FINRA channel held us. moving in since announced to continue no I Recruiting. James, license continues XX-year to in they adviser engine addition, transition her Jodi she has excluded National the to leadership career appointment of Perry, role a are that newly PCG for with firm. recruiting. outstanding highlight of importance This and longer to results advisers strengthen contractor role from with carry focus a will the key she We our growth our confident the of RIA President division, Advisor key nearly created the independent Head

the quarter XXXX. billion, transition, the at Total quarter X% the President has Balances $XX.X background and clients' becoming and over demand suite preceding Bank ended program this as about division our enhanced remains balances were Vice both September given balances. sweep market. domestic as to Shannon's a the record an we most increased Independent served $XX muted loans in loan the of growth and client from Shannon by as enhanced She firm's well boosted Northeast Reed program PCG savings up relatively been higher billion executive the rates. although X% Senior Contractor in are recently With stellar division. President leader important committee. a joining excited has

$X.XX million. X. revenues and due $X management of asset growth and Group fee-based higher Sequentially, robust of underwriting segment million. revenues. and revenues of Slide affordable reflecting fees, generated largely net offset were Markets to Banking weaker $XXX M&A Capital to XX% quarterly revenue fixed billion accounts. year by quarterly growth income results revenues generated Year-over-year, brokerage a Private grew M&A results. compared higher assets in investment to quarter of ago XX% million pretax Moving net and a of housing income driven The pretax income Investment Client $XXX

share-based to uncertain year gradual periods, pretax the in environment, million with under $XXX Bank points preceding income balances. net stronger $XX profitability of a banking of of near-term RJBDP lower a were segment of higher activity management the on deposits the expenses. segment X.XX% Management that market The the attributable of million. compensation focused the While balances basis bank to compared quarter, portion preceding net remain on of accounts. savings along cost enhanced revenues to quarter, granted industry-wide on of recovery. to Results of primarily were declined results be appreciation income impact of fixed replaced compared during mix PCG results. controllable interest investment We higher quarter, program the managing income The largely amortization appear margin has segment $XXX to million. to The Asset strained generated due assets the market net of XX pretax due cash suite inflows prior revenues as financial $XX added and segment fee-based into million and generated a

Paul? Now Shoukry detailed quarter I'll the results. Paul more over of a for review turn first it to

Paul Shoukry

Thank you, year Paul. on quarter. sequentially revenues down the compared Consolidated up to the were X% the in Starting over set in net the record Slide $X.XX prior billion quarter, and X. X% first preceding

XX% decline beginning to beginning quarter. the of at to Management declined fee-based Asset result over related quarter. largely of grew sequential was the of the and X% administrative compared the assets lower prior the The preceding the quarter preceding and the year compared fees

and increased account $XXX I'll Brokerage year-over-year million fiscal trading revenues higher discuss fees brokerage revenues XX% was by and higher of income second year-over-year. assets increased X%, and decline service income will revenues driven fee-based interest increased Banking in net million related activity lower X% the brokerage revenues institutional in more PCG. administrative Sequentially, which mostly Sequentially, environment grew shortly. fixed XX% quarter. as was strong asset to favorable. activity be the of result fees quarter, This $XXX and of revenues. client management X%, predominantly the for transactional a M&A Investment increased due tailwind the

see is are We the business and for a new M&A environment we optimistic and healthy banking solid that activity. improving, pipeline to investment cautiously continue

However, fiscal a months. quarter, next XX% will X were results X primarily to of remains revenues and hopeful to investment compared better high fourth of the quarter. $XX due over to lead gradual affordable to revenues there down seasonally lower uncertainty, Other preceding the the a compared recovery to we are lot housing million

and ended enhanced advantage preceding domestic high-yielding leveraging $XX PCG and their enhanced Many balances cash clients stability. the by flows client compared Raymond this large quarter has of strength cash into we of billion, up into total the to as as assets. approximately has attractive Advisers been $XXX X% effectively, attractiveness into program advisers, X. of viewed products. and our to of quarter quarter. the the A Moving this program sweep offerings. X% to X.X% Clients' at or ESP representing saving other taken Slide decelerated a serve brought source of product and coming firm cash this the now and domestic saving competitive pace million highlighting have expected, program of James the cash portion being continue new clients Thus, the growing

Raymond to of from modest James primarily by in of billion. are calendar tailwinds ESP strong approximately we sweep were of the September by we month by fourth at was the banks. billion enhanced quarter due week, off While balances banks of third-party $X.XX with further of to quarterly to this growth $X.X and sequential some billion $XX.X balances are Bank has encouraged balances activity January, sweep program The XX% allowed helped balances more seasonal Monday client fee down cash with be yield-seeking up savings expect sheet the balances balance quarter, which the quarter third-party growth deployed at billings RJBDP clients. during end for continue Through for XXXX.

while impacted the segment's because balances While also an solution lower-cost this it a swept large cushion funding deposit NIM balance being attractive ultimately when optimizing flexibility negatively for providing by clients dynamic provides the off sheet, sweep growth emerge. opportunities has the funding attractive when of firm's bank

funding support ample capital to have loan and we forward, Looking growth. attractive

fees stable net at X X.XX%. on balance margin third-party increased interest $XXX but call NIM bank Turning our basis banks interest for preceding the balances points decreased resulting sequentially with income expectations X.XX% RJBDP we was net banks from due interest earnings firm-wide net XX. to from million, lower and on expected average Combined to X% to yield income quarter the segment's and than compression, to cash client RJBDP the outperforming as down that The from the Slide XX last time. third-party points were basis more quarter.

err While fee after there expect we some billings X% results, quarter the term, on in activity. variables this continued side given quarter, this just income expectation again to fees RJBDP combined flexibility income remain RJBDP our this actual the we cash fiscal Hopefully, client interest trends. it's short-term are to in banks of cash growing to interest conservatism, compared third-party expectation the around outperform over which of and absent on uncertainty net client balance and the that second spot are balances from based net preserving to impact the sorting to any long we about well we prudent quarter continued many positioned changes fees be first fiscal rates, believe interest but on quarter do. we currently will lower believe the We and focused can

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

Excluding acquisition-related was XX.X%. expenses, compensation compensation adjusted the ratio

elevated the for and the in their Looking for to million. a ahead, in taxes $XXX this $XX to Non-compensation quarter. XX% relatively in quality on be the on bank January and the million reserves. the reflected decreased regulatory increases sequentially, remain expenses continuing will preceding bank second while matters at credit I'll shortly. of calendar quarter. was for discuss credit provision in reset legal legal of loan of year and fiscal the provisions the beginning quarter effective of quarter impact the growth expenses service regulatory quiet payroll Whereas ensuring largely salary We due for clients. levels high more quarter the losses to to invest The related declined and focused managing and segment for X advisers

clients $X.X around incremental ensure provision year, we businesses. credit for regulatory non-compensation throughout year continue invest legal This as excluding our fiscal non-compensation growth the unexpected non-GAAP and we adjustments or to expenses, items service billion. losses, the advisers for be high levels their implies in throughout growth For to and expect and

revenue that And of margin X fees, quarters. non-compensation over trend past Slide expenses, growth as sub-advisory the pretax growth. the such healthy the shows remember, XX corresponding investment the represent follows many

margin pretax This strong pretax XX.X% of quarter, challenges of capital adjusted a we generated an margin result impacting the industry-wide a XX.X%, and markets. given

than assets percent Analyst As for and appropriate, Slide pretax provide our these XX%. our a targets as of We reminder, X% of XX-plus parent an And at targets at Tier On Day cash current are needed Investor Day the billion, Analyst ratio RGF ratio a and XX%. well above quarter we a a Investor update at $XX.X last and sheet our with strong. the ratio well $X.X provided still leverage XX.X% next of billion, very Liquidity total and were less target. are XX, total of remained compensation end, ended for balance May sequential at and X XX. capital margin capital May, quarter corporate increase. capitalized and the $X.X remain we will a a think scheduled billion at

during rate a continue the levels being continue significant tax effective provide capital to was recognized share-based in The period. the opportunistic XX%, to benefit for Our growth. vested invest compensation reflecting tax flexibility and that for quarter

Slide an appropriate over the to provides summary a quarters. past use models. of X Going believe our is your that estimate forward, we in capital XX% to actions XX XX% still

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

January $X.XX of XX, As under the available common XXXX, stock Board's authorization. repurchase a billion remained approved approximately

from million complete the repurchase current Capital change, dilution at in least $XXX repurchases associated second is TriState to is plan, Our the of remaining subject fiscal with which acquisition. quarter shares to to the the

second be to and opportunistic dilution continue expect offset compensation to Following the share-based with to repurchases. incremental quarter, we

appropriate portfolio bank which of The our loan Bank. on total XX, X.XX%. for solid. a held and that for this investment provide for quarter we loans commercial as percentage loans of loans the held portfolio, The quarter losses investment for for Slide X.XX%. believe on Bank We total the loans closely represents the credit as allowance a at continue credit corporate at our credit Lastly, Raymond as bank at we may allowance losses loans real end. but X.XX% ended portfolio. credit including Criticized loan Capital monitor impact quarter reserve, metrics was James ended quality an percentage key of for loan bank segment, The corporate TriState loss investment estate the factors loan to percentage a held includes economic is corporate of

X% exposure prudently the to portfolio, Within which the of segment's have CRE total the bank loans, we limited just office loans. represent

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

Paul Reilly

Paul. you, Thank

record strength with ongoing first expect the quarter will given our start Client earnings businesses. uncertainty, positively of and the to impacted the accounts. uncertain share the In Group, term, of the in I generating I the the position cash increase bank fee-based pleased assets by environment. record with X% in there Private term the activity quarter, all is PCG economic results segment, are results across rate we client of ending in well positioned both Near headwinds be As for next we some long while at over sequential the sorting interest-sensitive call, said per at and to assets. am our drive of fiscal are still and And earnings quarter I believe a growth

already of competitor coming of this, on advisers I effort However, Despite higher-yield rates for some prospective our we being focus seeing choice current drive a industry-leading and to will the our continue growth. in. believe destination and are

Our activity teams adviser the number of robust, recruiting a remains including in pipeline. record large

and cash a for healthy influenced engagement and In positioned good business environment to that would X the likely is have next we to capital months. balances a Management market up this for But declining levels. a experiencing over the fee-based clients and putting the management continue by some our Capital the should activity business under will gradual past markets we brokerage Asset the an once Client financial we in to believe to pressure flat dynamics saw conducive. segment, growth improvement. segment pipeline well in once management. the starting activity. which the cash Markets hope market revenues. Private that stabilize, rate of heavily in are fiscal expectations to see with become rates And We near-term deposit X our the strong pick M&A and we are over to the assets but on financial balances quarter available income expect start of recovery growth activity, under and have investing securities, provide persists. In year accounts X% Despite challenges, conditions, in fixed segment, higher the of less for quarter, preceding remain Depository Group We assets confident of will drive long-term assets up quarter, second are growth tailwind we improvements the

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

growth. decelerate to experience have security-based We loans and are starting seen payoffs

We with expect little of as muted. corporate activity level clients comfortable growth these demand in recover loans for been to get the loan current the has rates. market, With

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

In up growth have we organic corporate efforts. development also addition our to across on businesses, our ramped focus

In positioned solid base our with to closing, we second invest and quarter are all positioning well of competitive in and fiscal in liquidity businesses growth. future strong capital the entering

excellent and I the Operator, their remarks. our for you would remiss their for not do. As service open Thank continued advisers you to our if did you prepared thank concludes be line to associates always, I clients. will That for all providing questions? please dedication

Operator

Instructions]. [Operator

JPMorgan. from of comes Cho line Michael the first Your from question

Y. Cho

recruiting robust M&A that For net And stable is much mean, outlook backdrop. how a M&A The macro for acceleration my there you touch do from out to think assets. you wanted a here? is more in pickup first now? what clearly, new seems could think a be contribute question and I acceleration do to to driving question, I on NNA call just you continue

Paul Reilly

M&A like historically, a it's pretty Well, this quarter, number. good

retention So count larger, but recruiting, most fewer number now teams, large the because driving number adviser what's very recruiting our is rate of still we're really teams. it and little recruiting more misleading larger more and is a

transition don't lot we them adviser so when have of them in end which the a assets RIA all we And But we keep which take number drive had they the retirements, out ] FINER year. This down. the division, quarter, so count quarter, a retirement, people the license. to [ but because transfer retirement, happens every have of almost the of the seasonally, do at plans we

So market at assets, of recruit higher. the go and over or it's look a And -- market. if growing great teams lot course, And and And new assets. really are you continue there's near market be larger I right? businesses it's the their new still just at bring top over -- robust the asset people significantly, you If assets of the we mean as we and recruiting. generating the net top those net the help, few larger of you net the market up, goes the last really are teams, of to years. the retention or

And channels, been a So, of them we announced, efforts, feel kind we to doing the store unified than brought which can spread more recruiting really pretty as but the more really out but have think We we bring between we effort. diversified together better we even do comfortable. robust or Perry add over Jodi to were

Y. Cho

gears or continue you've last you want to Investment side think months. invest switch I business markets a forward banker periods. per banker backdrop revenue of more going enough. think how a previous to normalized the I producing something starts backlog mean, like talent choppy if capital on there, out the And in to some should mean about Raymond environment, despite the over I Bank. now higher flow called we versus I just XX at Great in the through James point? Okay. a higher quality specifically MD

Paul Reilly

per peak in market, we -- of exceeded $XX Back the last the last the MD. million

very, high a productive mean, I generate very number. So we

And back go were really we that If difference. EMV. few dollars years, a is of million a for you couple the

us. high-quality the of of teams market. is the recruited that was a part certainly, and part MDs So the that that But joined

know don't that is in a good market. number I So what

we better. I or think number produce could still that

senior We people continue businesses we to didn't that wanted. felt people I still there. recruit the productivity And the subscale that or some of think and the is have we were

top much as moving a as had So is steadily. we up that up quickly think, couple digits, in as I we'd said, million, reasonable market, of in if we we the be $XX but years a high market. robust improvement, but again, we really see a that's did nothing but moving certainly market But we higher single slow ago, could the

Operator

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

Devin Ryan

Good evening, Paul Paul. and

guys I was question, liquidity interest early And first to have calendar XXXX, So if up the a fair term. spreads amount you built of that maybe back out. widen some think go gave lending could income we and short view

and capacity, to so to did to wanted dynamic headwinds reason that And you some conservative of it timing intentional. be of at that and obviously, maybe the there's spread have seem revenues also a more some like was a time. But

So to looking liquidity loans you still of returns. risk-adjusted at lot have see you if excess a attractive grow today,

of are for as about So that you that? calendar spreads well. curious accelerating of if still that you think they had lending better thought Are activity still into XXXX. you just kind that you are the through maybe then would? Or as waiting with view of the and interplay those most then to materializing that holds trying And I'm kind

Paul Reilly

Yes.

can from widen. The I is the see too, problem think that there's have two pieces both slowed just borrowers is spreads we banks we have to really are other of in market down. and robust new a we that industries, lend the seen that, area target fairly that Devin, has loans, as And been in pipeline like conservative. you hasn't to

waiting We're of at things now, We're there the think will seeing loans the some was ready growth -- lend. to too. some that's in really seen point. been and really that So we decreasing. resurgence happen deteriorating. we're that seeing We've which SBL for still we're which payoffs also But kind the activity,

isn't the rate certainly on of market us the beginning did we're we certainly, those or at XXXX opportunity portfolios. to growth But see that the same early in like So 'XX. giving loans to starting put in

Devin Ryan

And $XXX And a kind just you like fixed at million XXXX, to year the relative follow-up really you you the better a Obviously, XX% material ridge Okay. last then of just rating have looking run XXXX, in you're brokerage. even quarter improvement mid-XXXs. down some and today and on income institutional did over business. though arguably bigger, over

a saw that call $XXX because rate little to the jumping over is good bit of the, it I'd of this just a quarter? quarter So think the some -- this Is to of it start active million in to think point quarter kind what quarter. better? about the momentum a the again? And kind Or of love run looks that the off just that is becoming it something in about you in in normalization is more And saw like it, maybe depositories, we like. business from change kind how prior

Paul Reilly

Yes.

So ] a done market. a it's They whole first ridge well on Some pretty volatility. has created fickle [ time.

if look day well. business you has results. and done at you consistently So been X, have off. very They're focused hedged, corporate their good, could strategy at executed since not look really probably volatility, their training and It's very

maturities cash their were is for squeezed weren't as about looking bonds, lot of traditional A and had already depository part they our slowed Our liquidity. they franchise, worried fixed-rate two happening. things of they business, plenty a and were got it of down, which more big banks

more rates as come December looked some going like liquidity in happened were was much to what like think they look active. got I down, they and it easing

year, rates up, up. what confident with think the rate the ago well. are I that I least people they'll has too get and until and really a or they settled, just down or as So And continues go headwind tell are liquidity a feel peak pick very think today. stable. really guys, it's be very, it's don't market to rates. But it's active environment, of think lot lot active they've is the the see some going rates People early years been to I go will X or which return the if happens materializes beginning to to these but get okay of at But if the performed better going rates a gets down view be it more

Operator

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

Daniel Fannon

you on and Wanted just seasonal your cash cash that into curious to around some comments if expectation expect up coming to may follow that's up of market continue. that And sorting your the the that built that back trend that and other billing in are you continue to be ongoing and/or so you December January? mentioned factors things in beyond other what far an think going the be have to

Paul Shoukry

of the Yes, you harvesting, tax touched billion. that type also with have continue we then enter And see and in have then And we, income maturities on the things. them. as with taxes to quarterly seasonal year. the of And December typically alone those were as the we'll quarter throughout grow $X.X sort we of I mean throughout north this tailwinds headwind loss hopefully year, April fee billings quarter well.

for Paul out there expectation rates. high with as the bit, little there. still lower are in rates a They've just So said, come

So And are the money really the across But seen really declines biggest competitor yields we attractive. the industry. those some if have, market funds still we are have yields you there are will.

And attractive against funds. bring alternatives cash have money in compete market we the still to to to new so have

couple every said think out. prove not but I going I like to as quarter, much the history last dynamic sorting closer it of we're closer to we're and until closer, feel that than in of we the we So months get to it's that over declare end of cash I calls, several have

Paul Reilly

if that of is -- rates on they're think say, it more there money you kind And they look to people buying But I sweeps, we'll bonds, at them and X spread the normal look that if Well, Fed follow X down, increase market, funds. for at adjust. beta quickly. takes of really, will come they're kind to weeks

before -- there's it So few take to are start of it's more at for competition expensive going least of in the be the for higher-yielding the weeks, them types consider -- sort in certificates. moving rates moving saw. if they're But some you through investing a direction that of people who right if rate, rates at before to will

Daniel Fannon

then follow-up, a in within bigger and growing a products just And contributor. as have PCG, annuity insurance been

how that products proposal. that Just impacted DOL's think proposal, curious with or might be the these momentum be impacted the by might you

Paul Reilly

time, the always with them believe And So products industry to good first, comply those DOL, and we, been we out take beginning. we scrutiny defeated rule. in a had in And to then put the systems the manage on products and systems fairly the have have over to as as there's we law that. similar we

interpretation of the and questions out The the rule. came industry second defeated

have and see have at industry we to in the impact, court before with this look guess my we'll will is rule challenge we what again. So rule the finishes the to and see

guess, with today. twice. proposed substantial challenge a Well, So, won we've is my a things lot be think I what challenge of that there could will

And have so we'll to see.

challenge. So early withstand it of quarter see the I'm that, if can until kind third to it's we so finalized on really speculate

Operator

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

Kyle Voigt

securities you start portfolio to and a to curve, Or preference you're at some with grow with you do the combined you the on balance how off? next have quarters this just still lock have sitting much the that the at the currently point the beginning yield? forward would off shape run over So to balance allow given consider billion and of again sheet, first excess capital $XX sweep sheet cash in few running to

Paul Shoukry

through or which balance duration Yes, rate rate on keep has our well the balance positioned way very we be sheet the to do consistent not is last to mortgages and and and one sheet, taking cycles, this other. the exempt more position year, sheet we rates needs. to tax of certainly -- a time that on take loans, To us wanted balance time really which duration different client Kyle, really floating remained extent accommodate on to cetera. support the those et try

last other know time forward lot try wrong might to And to really than so in the and happen curve the a of not more what we're I to have misguided looking to right been X years X firms. has rates.

to getting flexible for versus own going focus and remain just we're And clients really making so best benefit. our on

Paul Reilly

the lot to top speculating, a speculating, per from well, people we of heard cuts get rate maybe won't we went one X speculate free, we've month. to but no rates, at over And people

I running So we we're to And one of making We're the really want keys that consistent bets. game. play just consistently performances, don't to just not our business. think the

So spread look on the the don't and in And compelling we now, that. really was rigs sweep very good at locking very, rates right anyways. like

Kyle Voigt

expense billion. question just Understood. of noncomp Maybe on Yes. a the guidance $X.X

remainder remaining expenses implies the versus three I rate. or think know so the that the noncomp average a first increase on out in you investments XX% I of quarters terms the the through ramping just some of investment other the wondering for expenses be there's areas could variable but if bit run fees, expand in quarter some that of year. you a the you advisory where laid may

Paul Shoukry

Yes.

because even -- and just during so pretty we and was a the people legal December conferences so to quarter board. and and quarter for vendors almost expenses, quarter for the regulatory. on little This slower IT, in. bit We for back relatively the typically external a those pull as -- across low, relatively favorable it's -- quiet a and technology support we it's well trips quarter bring

it's for And most progresses, a because excludes think those reminder, just get legal to -- guidance. should X bank so of which of us you that loan as quarters. try And provision, the as it's then items, and that some to forecast growth expect an the billion loss we as exclude of sort next to year see reserves the non-GAAP to impossible I the well $X.X unexpected as regulatory over to

Paul Reilly

of kind X.X%. the initial our was guidance was that And

that's it -- we good but still think lumpy, is a just number. we're So

Operator

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

Brennan Hawken

of to Curious retirement if accounts. And also typically, in and IRAs about maybe the disclose how recruiting, your you could of client of you accounts, what asset like. retirement the assets think tend in when those base is in, portion come much form

Paul Shoukry

metric, since provided at that breakout through Day When XXXX, May. were accounts, on then. the disclosed about we but our that and in last retirement Investor of Analyst X/X assets of any in time more disclosure haven't provide it real in we we this went this IRAs was we'll Yes,

the doing Day. So we'll Analyst Investor at that on plan

Brennan Hawken

in was from what's this caused quarter, might then a there when for quarter think generally, here coming the near And a some outlook channel And here that significant of Okay. within activity have NNA about jump the nice quarter-over-quarter you growth bank had the in bank changes. the your channel that term?

Paul Reilly

There advisers, many. be many, wasn't one channel. there's with We anything just -- because that -- a lumpy of lumpier in to the bank the tends

We our of I banks. anything very, platform growth average think be out with has the It's they and lumpy. part solid. don't very our continued to expect NNA So

trajectory. a don't keep and have given but at to of be our this a opportunity very is, number, quarter we think top strong the like And this we number, right both the believe we forecast and can -- environment I we I still So think, the competitors giving NNA.

Operator

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

William Katz

a topics could was mix I you return. circle wondering if capital to little back Maybe up the to bit.

that dynamics position, looking Just mentioned this what side sort inorganic to incremental loan that, thinking capital have up buyback? then of through your pick on return a a And what's pace or not of lending of at? you opportunities maybe capital subset you mix that at point? the given fact you the And be might subsector the side. very as strong Why

Paul Reilly

a an we So because were communications. our late for little had accrual given we we into the think, quarter [indiscernible] blackout first, off-platform

a get we little late jump. So

opportunistic, Head a down present rush balance, did in be lot to the quarter, of continue XX%. dilution us to months, to we a like spend our $XXX cash timing to trying got want Development. and commitment Tri-State up our And we're And we seeing and a try over committed we got up. remember go said, just I of are put [indiscernible] make We XX ratio forward, XX%. we to years on so the a weren't -- we've But period the ago, -- in on X to Corporate had We're we new so which will catch when next catch we that we're going right? as sure opportunities in we market. that X we in to acquisitions And market, as think didn't we've I good the million,

you and balance there is the capital are could we opportunities. do actionable. them on reason think the is never have The -- we they're problem So if know sheet. we And

talk a can certainly but and lot You we're out in market the looking.

accretive million we balance positioning just if We we $XXX But good if keep to good is we trying -- get just be adding not those we there them. firm, don't earnings. think target. two. so the of to of a the two we to so is And that we were balance base. The are try the understand get just would can we we'll the earnings, to think have strong capital acquisitions And news where point accretive

We stock. just least will and we're thing potential half at trying capital. just of are do, them not work capital so TSR it's buy hoard to the trying We the fun. looking RSUs for back at We're we not to base, to right think opportunities.

William Katz

Okay.

the we I for margins to moment. look a Maybe a about Investor in appreciate the Just spring. forward talk follow-up. Day

if incremental and this at the pickup in you bit were to to and the extent the the though, breakeven and NII maybe then up, in by will. in the trying might of point offset might more some company both just I'm that a Obviously, think segment to down translate how that conceptually, backdrop how countercyclical do investment the little to down profitability. we through how Just about about on puts fill you're takes think iBank to the holding running it pick margin that time? pressure banking

Paul Shoukry

when margin at over in record think, a margin the record around last I of they couple think I years Bill, Yes, Capital of levels Markets -- or operating ago, they XX%. maximum X were the segment, years, hit a

this would just business. for you it's side markets income across fixed was a nature a that Day that the that upside side this that out we potential the just given so atypical running to from some we diversified update overall Investor obviously margin May. the and lot And Analyst potential margin appropriate just firm. that that the of juncture, and at at cylinders, the both the firm plus for the But on segment. saying capital ago. businesses. somewhat And business of what of And we'll a still is a in we in the even is years of But all the target XX% as there's help couple of proved quarter We're equity of countercyclical upside -- shows the and which breaking industry, those have

you So potential just on margin And there's takes. don't without try that everything is do incremental we offsets. sell story the to in side always puts happening to what a adds and factoring of plus the

of think and where But margins all that guide which uncertainties, cash interest potential particularly all a a the The margins. is just from the balances be cash of overall for And upside that's to for now other around driver reluctant of if the we big firm. that being sorting rates we're firm, businesses markets the margins the more driver equal, as to huge dynamics, the given so a exact balanced we with obviously, approach. of but would else same capital sort had performance the accretive are

to until there conservative going we're things So be stabilize.

Operator

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

Steven Chubak

question with deposit start to amid on flex rate a off and cuts. pricing Wanted betas

is of one with that challenges collectively your than that the are grappling Just we mix peers. different quite deposits is of

a current same lower set. than At of have very higher should deposits your high carry betas sweep much deposit with You cuts. peer actually your savings beta your payout concentration more on that rate competitive deposits time, is the

the So pricing what channel? piece versus bank the expectation deposit is I separately flex on deposits for your frame the sweep was ESP could hoping within you

Paul Shoukry

not correlation I what well James, balances, advisers that's more as ESP aligned those only those mean Raymond be we products. rates industry, at expect effective. with we with the the would funds I think for -- to the And what across clients expect of higher-yielding but movement much Fed of and Yes. the happens

deposits too, different which beta and you in of a to it's the deposits in higher the downside have have on we both they say rates. also industry. $XX upside -- But than deposits cost Tri-State terms higher mix others billion and acquisition, of on the deposits are likely of now, remember You have with the of

deposits sort PCG-related much about. the good So way kind which then up, on than us the than just the And our deposits, of looking well of cushion the we more gives which out, generous way similar feel we the you on were deposits. those more as point it gives with BDP, more us of as sweep competitors sensitivity at most down

that position said, going So look feel rates as Paul about we in really be we're the as we'll good something a right competitive move, dynamic, it's at but to now.

Steven Chubak

to explicit That's offset to just but how The business. that of The what pin at down period had think you margins from to an great And side the because terms to But look in market about you from during is did I related Bill incremental cited with during to clearly concern margins not Paul. margins. of the were is that lower the if for actually was asked, incremental activity, number NII actually capital color, is XX%-plus the guys hoping close follow-up, type capital what we the you it's my period. markets rates of compensable. expected come robust XX%

a sense, to consistent capital a margin, meaningful do activity, XX% is we with ramp in incremental have get a markets a what assumption COVID more want So the reasonable if saw we I just during period?

Paul Shoukry

XX% of revenues of say would margin, revenues and during in of of now it's what the look margin I peak the the where base that capital capital as a pretty getting point I to grow revenues I guess is at now you markets I mean of we being lot were at versus There's a breakeven time. markets. the you incremental Yes. current linear. from if the versus mean, kind peak

comes mix All much incremental from depends frankly, income. in margins, too. markets, underwriting different businesses revenues have also fixed it of capital versus those how M&A on, So the versus

think precision. markets know also we other And for that or So be we may our would can a that make frankly, it I simplistic help false may impact the negatively may purposes, dynamics capital up business that number dynamics the positively but businesses. be modeling

common tangible quarter. that -- reinforces able our over this plus the of of to we're a capital markets very capital basis in is On XX% our adjusted record is something happy about. the business diversified generating generate years being something environments, So XX% -- earnings model returns last return margin without X support XX% different having the and in strong generating really with really equity market on and of value

Operator

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

James Mitchell

Maybe just a quick question on sweeps. the brokered

net yield your went again. yield up You've

How to can for power. the erode think long banks? pricing seemingly power. outlook power pricing sweep mean had do start the industry stabilized you What's on You've Does of last? the that have in I pricing? that deposits your some pricing

Paul Shoukry

lot of these a deal seeing with. across demand still We're Yes. we for deposits that the banks

power. that we in there's it with think meaningful, basis points power what's about base the to balances fairness, rates billion But pricing happening talking still nowadays. So we're in is is pales basis the to pricing which $XX X but of comparison the XX points, on

going happen what down might or up. and -- So

for the So and of for -- over there's we higher using these loan deposits. overall. next X, that a grow to these activity, or firm we're with support returns lot demand generates the which deposits and we're think more a of hopeful balance power. But sheet yield year clients There's still the pricing

James Mitchell

And maybe large Great. just sense. of a sort of sort follow-up record. Makes then on as the had a team pipeline

mandates you Do getting new quarter of among I feel as new as think is? in FAs? and And guess, and last pipeline is think you the that How it's I the door, the much in rate when you versus clients well. win how teams? about win What just highlighted I that your actually is much better? large like

Paul Reilly

don't those a will million have $XX I we didn't go. exact X know see year to teams I I numbers, say, if Yes. or

payer, we're $XX we I in not and who right good in Now a doing pretty the and We're the not -- see lot still it. come not and committed. and that at Yes, lot million of now, We're but when there right you we are really we're close pipeline, a have neck we will pretty think or is say there's stay good, teams really, a neck, of the or but are in who average door. in still million batting we highest middle they're read on But have competition. $XX we the the well. we

So, large number, but it's little a honestly surprised. actually and we're a

the to net and high us their feel worth initiatives net ethanol $XX a place you since our $XX frankly, firm it's at people our would think all our And a place expect very I teams, help Brown say we technology us the of worth had we've add really we it's couple have -- comfortable. time. that combined asked one for being systems Alex high years to both where, and built of we've in growth it's what joined the platform, multiple would teams and then ago, you'd and with if $XX culture, has ultra-high million a million, it told wouldn't million, our

in So get door, is So them to the our job the right? good ones.

hard on. that's work So we what

Operator

Your question next of line the from comes Mark from Bank America. McLaughlin of

Mark McLaughlin

of curious, first do some I my and transition competitors in your do competitivity view For know of advisers? was use you in to of assistance generating How how loans use you growth. your lot that space? one, terms your that I view financial a

Paul Reilly

Yes.

them. uses everyone First,

a in practices. might you feel So a bring but to return if system recruit And want those. X there's with on value in [ their want to ] advisers I people some much. you them not lock fair to transition mean

RA since all and the Not for but the before my of independent want So the in want the we not employee it's said in we recruiting channel. And that because highest part firms. the always highest been come We've self-selection certainly check. they believe that much part consistently of time and have for purpose. people the right is channel, on -- it's we've -- to not place, so

Now few systems transition gone last has years, having said as in that the up.

rarely adjustments, average. offer. the and rarely make to I batting highest we good I highest we're a but offer, very the had ever we have still mean, we've mean So match

So part but that's of the business.

Operator

line of from Blostein comes question Your Alex from next Goldman the Sachs.

Alexander Blostein

time capital Paul, over expand went the XX% significant did and of leverage number the Tier fact out point that bit a just if deals. you to X you could around last you building were I earlier Bill's excess was little guys the on and wondering position a comment

Raymond a So areas pipelines bit within what maybe most inorganic articulate And what the look more like for interesting little business M&A an today? from look James the perspective?

Paul Reilly

business been is look -- you in going just many of time opportunities I this opportunities. versus touch Yes. on in challenge you with and good up. with to teaming we competing are And there's us we with Well, The lot all for inorganic a market, of keep think us. segments. think with a say, last We've is on, the know, at somewhere during the there's honestly, year everything our discussions don't

slower when you -- from does, and actionable buyers in a or just suffer when can much the close market, the adjust sellers' they're we're expectations business frankly, our bit own or than Now that this what little those price M&A do.

sorting saying, are cash just well, people sorting the has should always the cash our on. and So over our industry is this we'd it sorting continue, value you to -- right? cash which year. We've be EBITDA this taking many over, with last us should conservatively, said be And expect

we So so. think don't just no, say we

happens this walk number And dialogue, over valuation, or interest, to in that at part I mean, up, sell, of so all the that part But and of from. that and the say, we're not people going timing well, the sometimes dialogues solves of segments. we some sustained are

just for of the came and a then no we and we ago were all different out of timing price-wise, all say, found than years for and dynamic a maybe some right closed. from almost, blue a while walk it's not hey, few we sudden, the that they was after Some the so to, we

concrete we execute. have you that nothing capital predict there's if enough when that even sure we timing. that can don't you But to make So to activity, want time because can't that want predict try it. And come enough there's to does

Operator

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

Michael Cyprys

XX to elaborate of I your to recruiting the might X competitive over for backdrop. next evolve bit if to rates months down today that the on you wanted recruiting? might hoping to year I a comments on be you environment the or versus, how come expect And back ago say, some was able come

Paul Reilly

their ever role. adviser They're my left. down, since bigger Recruiting, I've we XX's And teams more have books I been it's in the up. that no recruiting me slow and in everybody think, just mean, this advisers seen was be picked I year, going XXth we've there'd to told before. than see aging

is potential recruiting going to the stay think I So there.

a -- the in given our one have agencies, rating we capital. think our on I hand ratings size A unique value proposition across X with our

technology they independents allowing The is hand, books Freedom the to and leave to other can the would as platform well, On second so to we none, what say. and industry think own they advisers and that's want awards their leave.

competing. pay private So bet the a in public the able figure we it labscape to those slowed though even to quite down ] [ been has at that prices are being and go Probably you out than on to And keep some higher got market hasn't the change RA roll-ups much that yet. multiples biggest point, it's and aggregating can't competitive multiples.

lead new of Its competitor. that's kind So price. a

their businesses. kind selling versus owning firms people still are people having their Now of

do new practice, and a monetize And advisers want later. market they dynamic. a years. I place leading trying mean at want newest multiple a is competitor. for the great high the own I But option their that's support we're want to their that's there to all the certainly right, get that a in X a roll to of sell viable to that really area choice, so again, to up, then So aggregate an they in which and they wasn't pretty technology if business how call business

Operator

some time. There back to for Paul you remarks. Mr. further final closing this turn at over no Reilly, questions call I are the

Paul Reilly

thank just attending. I Great. all you for to want

surprise know, this as in us if when at it shape all the right robust. continue, be But markets look quarters. we're that great if If number curves some now, be few continue up cash will certainly, The just I said, happens. to we're about And shape X% [indiscernible] think being at dynamic you there. time. with in even the that right I great so may it's asset they in conservative, Board sort as the with will tailwinds a itself at we're good ultimately -- delayed, X%. last always all, we that we decline Paul, But

that hit yet. quite We haven't

it don't get You know. but again, we

rates So conservative to we for the get tailwinds come we'll be some and industry. try do or in, if moderate there

thanks to for and joining, talk So we'll again. you

Operator

This your concludes today's conference call. Thank you for participation.

may disconnect. You now

Raymond James Financial (RJF) 24 Jan 242024 Q1 Earnings call transcript