RJF - Earnings call transcript Q4 2024 | Raymond James Financial, Inc.

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Kristina Waugh

Good evening, and welcome to Raymond James Financial's Fiscal 2024 Fourth 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, and thank you for joining us.

With me on the call today are Chair and Chief Executive Officer, Paul Reilly; President, Paul Shoukry; and Chief Financial Officer, Butch Oorlog. The presentation being reviewed today is available on our Investor Relations website.

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

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

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

Paul Reilly

us Kristie. and you you, today. thank Thank for evening, joining Good

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earnings year generated Now per growth record businesses. Beginning complementary again, quarter our year of In net strength business once the $X.XX businesses. The revenues assets, continue to results in record fiscal well positioned and We remain fiscal growth and We available with of billion, to firm client share income, of moving quarterly X. on all record net our another across shareholders the fourth XXXX, people sheet. drive record diluted business, to balance outstanding for funding of reported common the to achieved with to our showcasing our technology our We our income and to healthy support concluding ample fiscal pipelines invest help and ended performance. achievements. across and we strong net net $XXX of $X.XX. revenues million Slide diverse

was income capital expenses to strong or our $XXX for result, million We Excluding to shareholders annualized XX.X% of adjusted share. and common annualized return the on generated on particularly a $X.XX adjusted common equity related per diluted acquisitions, returns net return base. quarter equity available with of tangible great given common XX.X%, strong

X.X for a quarter, fiscal million share an for $XXX common million of to nearly dividends capital million, stock $X.X of year. year repurchased billion total we the In During our per $XXX $XXX of price fiscal and at the in through shareholders combination X.X returned average of to shares fiscal million bringing share. total, we shares repurchases

contractor our recruited during billion surpassing to A approximately period XXXX across XX-month into assets & occurred driven total domestic independent Moving of assets. new $X.XX as asset firms. trillion. $XXX $XXX Private to previous Group in new assets client the $XX.X the the Client solid quarter, billion, the quarter of by grew and client financial contributor trailing sequentially the a channels, we $XX.X with RCS, division, recruited representing X.X% a billion, fiscal to refer this assets RIA recruited which on million domestic the strong rising all we key and our Private representing growth on is $XX.X assets growing net assets. the assets growth we Client billion, recruiting for Group. our record under quarter, X% of to X% recruiting the Total of results, new were And domestic and of adviser and during really best assets continued Slide equity of $XX at domestic to administration employee platforms management recruited production period were year, in net Domestic to assets PCG under advisers quarter. To assets. Private assets beginning Services to which a grew Custody terms which were their previous assets $XXX Including billion in markets billion. X. retention growth rate annualized rate beginning quarter fee-based the Client net financial this increased accounts levels and in Client Group

fiscal good with the recruited XX-month firms. Recruiting and that approximately $XX.X assets prior we the firm. billion to year advisers and administration, of client sized year, over internal million under RCS of billion asset pretty assets from of well growth by in with client previous bolstered equal ] production joins the a level. is as finished of financial external your $XXX XX% trailing production at assets and up [ the $XXX year as For RCS both transfers quarter

continuous the entire reported James advisers of a firm these we advisers. Overall, quarter, reflect ensure destination Raymond fantastic to X,XXX. financial of This the choice remains for recruiting of results focus

AUA. options. been We As growth had OSJ the there we platform. anticipate are these a to independent the assets, fiscal remain have their assets platform our in across multiple had in XXXX. assets would division the we totaling affiliation approximately the time who of billion with new mentioned X%. fiscal serving couple of net to takes of those roughly It Adjusting off to in the portion advisers $X these of left leave fourth $X contractor decided early in quarter assets movements, associated firm effect a on firms quarter transfers previous approximately quarters, for focused Overall, but in billion our relationships complete these transferred

retain loans, growth. sweep of and technology capabilities client over securities-based enable us residential primarily values well grew over quarter which cash advisers. Total mortgage enhanced the loans high-quality domestic and ended the a the billion, due savings billion to continue to and in to program record at up higher attract robust client-first $XX.X X% XXXX. grew $XX Our balances quarter as continued at Bank X% to preceding quarter X% as June

generated XX% new primarily and of by seem $X.XX million. PCG a revenues results $XXX X. Slide a revenues and and quarter. Client positive to million. income of course sequentially, were M&A supportive higher by of higher about to and the pretax revenues $XXX are conditions and to revenues of be $XX million pipeline of patience of segment market XX% quarterly net results driven Private segment bank in net PCG activity of improving, accounts Asset our firm, quarterly increased and M&A. The Raymond year our million $XXX on under pretax the under generated in quarter. reflecting healthy the in to interest assets became as of prior pretax X% Investment Moving quarter optimistic compared businesses strong markets hold assets more loan due of as closings equity assets we $XXX revenues brought long-term for environment the as to into income points business the income declined the record net bolstered to our million. margin the and from higher year-over-year and Group James management market The inflows revenues net grew transaction income into basis financial net $XXX market focus balances. Management net administration $XX higher Year-over-year, to Bank Market new of fee-based and inflows in Net The net were modest billion well due part and segment due attributable appreciation compared X.XX% generated to preceding pretax largely income million X record net segment net Management. interest million. Results to capital record generated

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

common common reflected the generated X, we segments XX.X% in adjusted of strong equity on primarily fiscal return along of Additionally, results in equity robust Asset strong returns for year. On with the XX.X% PCG equity organic PCG growth and for the Slide year record markets. and tangible a Management on

call our to the financial in our turn Butch? review CFO, I'll new Now to detail. Butch results over Oorlog,

Jonathan Oorlog

Paul. you, Thank

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

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

will increased quarter increase fixed account This of of revenues fee-based $XXX Brokerage for shortly. year-over-year, be PCG first quarter, million management million which fees brokerage XX% significant revenues approximate primarily and Fourth in higher grew benefited net due to income tailwind $XXX Investment and sequentially. XX% XX% from in capital assets revenues. asset revenues an related income discuss a and the fees fiscal X% in Banking markets. interest PCG and domestic and M&A I'll quarter. year-over-year results X%, increased administrative service

balances to representing billion, Moving enhanced sweep assets. domestic ended to compared and and XX. program at $XX.X of client quarter preceding X.X% cash quarter PCG domestic the the Client X% savings Slide up

balances quarterly billings. So $X.X billion attributable domestic far, fee fiscal have record declined about sweep quarter, first the cash in to

and we segment mind, there bank rate net basis from income would Based The impact RJBDP fees to rates rate down down a are Combined on points cut lot fiscal of estimate, up third-party million, banks assumed. over for and points expect balances, be net interest RJBDP balances impact variables $XXX NII margin the reflects X.XX%, of billings, XX. Slide in was primarily and current not could interest that first on are to further quarter, in including preceding quarter. basis RJBDP the third-party the fee was to the approximately the X rate of yield to average which which cut. decreased Fed X.XX% actions, due in quarterly X% while that September aggregate Keep fees the Turning X banks third-party the X% to with quarter. the

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

adjusted acquisition-related quarter. benefit loan expenses a provision for XX% in due Non-compensation expenses, compensation ratio largely compensation which was credit preceding increased the to $XXX of losses, was the and million bank the XX.X%. Excluding sequentially,

in For regulatory our fiscal the credit measures loan legal expenses, expectation the financial items non-compensation just and our adjustments year, $X.X unexpected non-GAAP presented billion. of came provision under and for non-GAAP bank excluding losses, in

maintain we five XX we continue the discipline controlling across over While past support expenses, quarters. invest shows trend in our business. Slide the to the growth to margin pretax

parent capital and part quarter our in held XX.X% of XX% at growth the At corporate sequential well cash largely were bank we capital total and XX.X%, our pretax end, XX.X%, This the $XX over margin our an results. On above improved of quarter, increase Liquidity target RJF XX. at with the X% loan Slide markets $X.X and total leverage prior billion, of quarter a increase, quarter, billion primarily Tier ratio generated assets well each X the margin ratio billion, from remain remained capitalized. a strong. higher segment. balances a pretax arising due in cash $X.X very adjusted we ended capital of and to

significant effective primarily life impact our tax the with past associated reflecting flexibility the provides capital quarters. quarter, gains XX.X% provide insurance levels nontaxable of over the to continue was actions growth. The Our being XX capital in valuation favorable invest a of opportunistic for and portfolio. Slide rate five the summary corporate-owned

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

the for For shares million $XXX fiscal we million. year, repurchased X.X

As year Paul total, through capital repurchases. approximately in fiscal $X.X shareholders we the noted share to during billion earlier, returned dividends and of

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

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

stated committed targets. and during we of a this capital or quarter keep to maintaining levels, buyback line we liquidity more expect Given we our to did similar currently in present as pace levels as possibly our remain capital with activity

under segment, loans Raymond and portfolio remains for downgrades. of remained quarter quarter, a basis quarter unchanged the The preceding respectively. quarter of the The investment key assets. mix lower, has account low small a and XX allowance the for corporate an allowance total for XX, but we shift was lower solid. primarily the on assets factors prior quarter X%. loans bank relatively represents investment credit Criticized economic loan and residential investment a preceding mortgages due more level largely percent for bank at X% from end. We as percentage loan The percentage which trended that Nonperforming toward to unchanged Lastly, loans the X.XX% number quarter balances, Capital XX% allowance the levels to bank impact loan due on may this at from ended at loan roughly TriState total credit credit the held Bank. idiosyncratic loans just largely includes loans X.XX%, appropriate our carry unchanged credit quality which metrics Bank and of from portfolios. points securities-based a allowance approximately and for of up quarter held as a prior at James monitor for level we as the Slide loans continue for at now in from provide believe The of loan percentage loan ended losses our total losses of portfolio closely to reserve, held of XX% bank corporate

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

Paul Shoukry

Butch. Thank you,

I job. the financials covered definitely You than I when was a Great a lot CFO. better did

to our on outlook. Now

We are our quarter this record the year. pleased with results and for fiscal

expect and healthy More importantly, we are for the well next positioned benefit be results which entering fiscal by XXXX with and of impacted assets approximately funding accounts, positively management record sheet growth client pipelines by business related asset balance fee-based Client Private to fees Group, sequential capital the and levels, ample support the across and growth. In will X%. we will quarter's increase asset

teams joining and Our adviser recruiting of large pipeline. remaining in the robust, remains by activity number us we're the encouraged and

advisers, which pleased Markets current constructive destination should to drive focused more we and industry-leading the significantly Capital this to M&A. prospective continue as particularly on results we growth. In improved for quarter segment, the long of term environment investment and a for the market were became banking believe are choice results being see We over

growth conducive business. for Asset is growth XXXX. securities of along the Our but still accounts environment the segment. In the M&A Group growth our be long-term two management. should with challenging more believe and drive positioned in consistent fee-based over we strong fiscal engaged continue short-term in well investments and are have yield our the and optimistic we healthy, business, some the in to steepening, remain despite their we've see decreasing fixed are the Private years, that opportunistic rate to market of growth remains under begun segment, we platform made the drive income the and starting in Capital pipeline depository financial Management of Markets Client the assets in people more and assets headwinds the With sector portfolio. for us approach And market investments the we've in improvement our confident depository that will as to managing clients past curve patient long-term rates Overall, become

our time. Management drive expect high portfolio industry redemption entire activity, assets help testament the Bank client demand. we further a while are Raymond James to prudently XXXX diversified on levels balance to levels strong sources sheet teams. In record and management and in has focused the sales of we growing And addition, remain fiscal In by support fortifying segment, the over been Investment to of challenged growth with funding the sales

of rebound as by with growth level credits that balances new and demand supported are low, We patient been further ample activity increases muted loan to very current we remain Corporate increase in as have demand remain this segments and rate conservative loan origination lend as category our we target loan seen within has With the Fed clients risk cash are but rates, as confident activity the will loan the across we well. will get client guidelines. securities-based well we positioned the comfortable recent cut. in capital,

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

when excellent roles also more of past part closely to the the dedication hurricanes thank took XXX-year succession here challenging clients. fantastic thank two-week that to most a have with want short-term remarks. as on of is just is parameters. I as would want often CEO I of this to our X to lot plan that solid a While we years. and over as in may years special larger low including Two in potential team, to questions? fiscal and leaders in take job XX look who advisers because come. and continue something you capital businesses and deploy everything well. in banking growth. possibly future we that fiercely invest to as outcomes which of strong are Raymond and process. thank we all invest positioning times, our their the to having our long-term over for complementary meet diversified prepared quarter's to a negative interest to team the increase many even as businesses. In for for the lower to that business. on value October better or across culture And Operator, our of to concludes continued years. What of for capital really to our I loan growth leadership James. have want want I course, are viewed hit to rates I protect all their starting are this CEO rates it in quickly of for reinforces #X opportunities prefer maintain results on do line we we the providing reinforced buybacks our really And touch well the positive disciplined both with say open please examples past past Paul our of is Reilly positioned look competitive too for pace investment values. That period our really are will forward higher closing, I with M&A potentially and my us all liquidity and XXXX Again, of growth, to the many potential partnering there over couple our been to industry, strong can I entering associates we developing at service associates

Operator

comes JPMorgan. We first Cho will the question line with the now [Operator session. of Michael Instructions] begin question-and-answer Your from

Y. Cho

segment anything pickup, a [indiscernible] you number in more and of you then in in last saw the kind Can what give I you anything there's in segment. the to anything this or in you in in platform incremental that nice if -- color invested people over drove the business of well? And just here. quarterly through, advisory? on any you've Markets of terms on or if pipeline two-parter you Paul, advisory particular the noted, Capital clearly, the maybe as quarter, but results as years. And ahead maybe talk and as look what the touch wanted secondly,

And I maybe markets frame mean, relative environments better achieved incremental so you've ahead, in about is we prior when to operating of leverage what a think way capital margins ahead the to there maybe activity?

Paul Reilly

market M&A I first, of is rate shown much the think pretty and improving environment, lot the Well, and think it's on an capital frankly, sidelines. whole expectation, I a

pickup So in we're but activity big this both seeing we a quarter, coming this up. that in current had quarter

have deals a of a reached So sidelines the been bigger it's lot sort transactions, lot close who people them. of to of on

exceptional a of couple that's of I think what the in activity, have of it to We'd we've wouldn't with a grow a benchmark -- from really was it lot a because room put So by And we've speculate year we've we rate ago, beat an MDs. go the productive terms number to is. years yet, hard year. of I got number but a capacity. But could here. to Certainly, got on had

Paul Shoukry

of as of the year given in. businesses mix your for far margin healthy And we're margin As question, the pretty that's that is portion the the XX.X%. margin goes,

really capital on fiscal have past quarter hitting until in all cylinders Now final quarter's But the puts takes this businesses. year. our markets and of we wasn't

goal one takes any revenues year, of one beyond businesses. there our grow So that. therefore, in margins in But has a quarter, and various our say, over lot I'd expenses always any earnings puts could faster than been and to time, grow be and

Y. Cho

if called And what you've hearing more then that has you've tepid. and or what just you're rates else lower drives of anything hearing know it's I'm in simply on demand quick just somewhat just really if a that sheet, terms sheet. area ultimately particularly you're curious [indiscernible]. corporate had from clients the loan the out willingness ultimately balance [indiscernible] and I balance growth, follow-up grow been to

Paul Shoukry

would to a But they driver has at financing your could side, that been more help question big also the historically take as On back rates corporate companies needs. of going rates. lower attractive get advantage last certainly of M&A the Paul, debt to activity

that will for be indicator up, time. start loan seeing we so demand And corporate a activity hopefully, M&A leading over pick as

Operator

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

Daniel Fannon

with slightly talk [ fiscal investment the for for outlook next noncomp you that you think quantify of the expense, Curious about areas ] XX next your came growth on months? year noncomp in the maybe below X.X about the in and 'XX. as Could

Paul Shoukry

related items, of adviser as as in we've said technology. lot that other in which A nicely, example. with sub-advisory past, growing example, we're investment grows X% growth fee-based for our And going fees, expenses, the continue invest an heavily to the to noncomp really have is really sequentially, been then assets,

If you look at provide it on we a out remain basis, clients percentage serve basis, more and can effectively. year dollar that's And find and and really been for that help their that efficiently industry our and biggest competitive in and the matter. grower them the consistently time competitive that's very year in technology absolute an very to advisers to best on

will other in focus. and space And And the going you to and you're grow to of of of so grow area branch course, continue grow invest then as office need technology as to the and an be aspects to businesses, the business. organization noncomp an

Daniel Fannon

coming that say, ago? year average the in then comments hoping pretty get sounded you're little maybe then the heard board, around previous today versus, on what for books larger numbers we've the was I advisers And think of for the about to talk a maybe retention And a I quarters. similar period. from to more around context size business the recruiting size backlog

Paul Reilly

fewer much, in change the books. few but that biggest I is both up are much bigger a years total, over think last probably that the advisers those is of

largest was same the books ever have, only year this also onboarding not probably So an of pipeline. the in the but we

destination we've teams. for large very So a become

I off a years destination. we've the of us worth over couple think both technology have and net of really made developed taken offerings high because that our last our and platform

So year, we're comfortable, in very that's not there only very we backlog good recruiting the too. have comfortable a very do we're but with

Operator

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

Devin Ryan

question on just balance up lending coming as First back sheet, capacity -- just here. the demand picks to

have, obviously, plenty you of So capital.

sheet. the you excess billion at a of liquidity to balance $XX of at You holding billion seem on dollars banks. think Then third-party be I couple of least have cash

sheet? starting And cash here? amount sheet of could the and balance would are going to that you're current are deposits that just on come to the third-party you to from moving then assumption much balance how but So time grow frame guys the comfortable I growth to appreciate you how a over maybe this overnight, lending, going with stabilizing the that isn't the happen to bit loan force not of remixing

Paul Reilly

at M&A been haven't the unwilling more we're there. a risk answered Devin, consistent in just as and have when capital. And and very the we portfolio C&I ton spreads haven't the on to They're activity. just we of think and tolerances -- side I opportunities we've been in that cash of the giving been our risk and returns of invest think limited there. like about just you to Well, on and low by the question But lend the lot -- demand spreads lack of is, ], Paul the growth [ what's talked a earlier, that this is path I that appetite them. Certainly, having our of risk the because just

it there. holding back that's So

On as as up just cooled loans went the way side, the appetite. went rates rates the and mortgages SBL it other up,

Now point we've seen just that seen after drop, the pickup away. even right basis XX we've in a SBLs

and I figured they're used gotten think to stay, are to they going be the floating. to rates aroundish people have and

rates they they So -- if more the will be to the clients go down, and down SBLs, seem active. go when

cash. their and of and it's and client of with. And part risk on a to here risk ready waiting and in like really side side We're plenty see appetite. on and we're we spreads the terms mortgages, have the reward are comfortable So the we commercial for SBLs

growth quarters is. appetite we just what have sizable quarters risk on not we're had whether So growth trying the then that over think limit to market we've where we'll had and bank really seen years, we've the fairly none based

Devin Ryan

where $XX guess was purposes. that more billion parameters there, some management for have have I cash, going risk sure, you I third-party was I'm of want liquidity to you

the what's of that $XX comfortable like be over moving threshold $X thresholds been should So billion know you time. looking billion that I at? Like or that? are of there's we

that guys how just think where So you're about and curious comfortable. you

Paul Shoukry

the clients mean to I Well, million $X major we that the offer drives program. through thing multi-suite FDIC is insurance up that

we want avail to so that firms firms especially anymore, lot FDIC those with banks. other And do to maximize that affiliated Not make their banks sure to of our we third-party a insurance. clients

give so think we it's important protection. of to protect, And that type client to that

that, range so would probably our to to could bank And $XX being they bank, billion, give limit program. the multi-suite would to deployed our from for in deployed to of being the that I all limit clients the get that in half insurance example, FDIC that something would own own say,

Devin Ryan

And then fixed love income a ask brokerage. to I'd follow-up, about

I in challenged. an reasonably think performing that's been environment

you think the at some of end clients. starting highlighted, the with depository to I see tunnel light guys

trying like about levels a it's we could Like just that business that where to banks Or the could the active? builds maybe currently how So of where are think of kind go of part relative how historical where are? in to and if of more we If here. is its revenue? there's just go a from liquidity think about framing to potential punching system we should relative under whether much

Paul Shoukry

and is zero, rates. string benefit close low for brokerage, period system, taking that Those lots short-term very of a for cash there I income rates excess There's to on would say and kind [ ] of levels the was were environment some fixed duration. record the for with business. in were COVID it perfect

opportunities would probably of between in where reasonable a couple then, last we've of of been running And the the as years grow course, of further has great diversifies time. beyond place in take addition market And kind we spaces we the kind is of strengthens Sunridge our depository we and be think to that like COVID over been and tangential a level healthy grow share as a so and somewhere business well. business

is So add our bigger. to we'll to balance and our continue also look to capabilities getting sheet

also supporting way continue over a use that So business our sheet we'll very balance time, well. to prudent as in

aligned. COVID business us business was the of of just sort a still it's from components So of that growth a the depository time. perfectly pure space, were But for the period over sort

Operator

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

Brennan Hawken

I to about So ask wanted advisory.

So been been But your to themes been slow certainly lot it's a of has reengage. there business sponsors to has of see that sort we've and know leverage been noticing encouraging has that one of the strength. nagging adviser sort I and have of

a hoping revenues there that could you're lumpy you this to seeing. some beginning a the space? sign [ in the Is maybe little were ]? that benefited color what Or good mid-market get around more So are results sponsors reengage

Paul Reilly

of I reengagement across a sectors. a general and lot think there's

talked, about for So people sign, about discussions and up things it's outlook backlog, that we the guess, engagement been, We're I I sold, engage. being a conducive. mean, mandates. but inventory, talked time when conservative not there new And were new any on wasn't but always pretty seeing we're market only we existing a we've seeing our it's on

I'm -- not overnight, conducive think much both we So much, we're in on more sellers. it's going going a market boom and say to buyers interest to seeing but

recovering if and you we paint near market a we the we give see So for at good backlog good can you for looks the because term, fairly know can doesn't I color but tell market. don't one trend, the long-term anyway. a But always quarter more term least near pretty

Brennan Hawken

down ESP, a yields would cut, we that XXX high just given roughly assume change around a as that beta product engagement then you were offering? any very beta. see that, expect had come Should since in I have on recent where have behavior And or yields started cuts? that's that And in noticed that the Fed we product, to the

Paul Shoukry

balances ESP are as at sort higher range funds. of balances market same say would the money I yielding rate

So In look when a others, segment as ] balances have at And bank at higher total, product. suite balances -- we certain opportunities the total roughly deposits, and the well. in type bank we that bank [ deposit our segment and XXX% have higher you the balances deposit is beta type highest rate, the balances. half segment and of those beta of are balances balances, typically

offsets of decrease as rate protection rates, are assets other rates because So the our us some downside we assets. will have a to what lot And was question? the mostly floating part which give of

Brennan Hawken

in down? with we've rates as changes yield those higher engagement products Any seen come

Paul Shoukry

really. Not

well I down the decrease. reinvestment slowing activity, think of and we the before a are rate lot cash decelerating

following that's decrease. sort an seen the deceleration, of frankly, haven't or we acceleration so And notable

Operator

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

Steven Chubak

start fee the encouraging, spread deposits to with on the growth inclusive a of I sweep for wanted was in even the next billings. question just revenue quarter guide

Just inputs typically wanted contemplate lower year-end? we it Maybe around see spread favorable guide. of guide? deposit the seasonality, pricing revenue that what cash just the And any some which to to underpinning drill embedded down are that more specifically, changes does are in

Paul Shoukry

of with accused Yes. particularly guidance. being conservative guidance the we've I in our on been mean this past,

more what this to not So We're balances to fees type of is ] grow. would ongoing be continuing rate and be balance. the [ because terms proves loan loan to rate a run full hopefully, the in case that changes BDP view This time both factoring NII. are of really the around snapshot in of

that. your rate whether balances And of point, and more balances, higher could breakout around some the it deposit hopefully, higher and beta. deposits lower balances yielding deposit reduction are so the beta lower that but throughout I to that versus that can the offset are And and sensitivity be of loan the yielding, in cash just quarter, the increase the gave you ones

kind went that's what our into so of math. And

Steven Chubak

pipeline. comments And to wanted the some of for new earlier made in I down you drill follow-up, the net to asset growth on a

are And of For advisers, given comments in you did terms seeing we the in both positive on the platform the industry we new slowdown acceleration the across that pipeline growth, gauge in the peers of which a this what as whether channels flow industry flow struck the supportive just pipeline understand drove the growth fastest industry of you to year, interpret should omnichannel the past see in trying offering? rate? moderation trends. I an but and tone

Paul Reilly

on They been it it's in growth with RCS, want quickly. look consistent percentage is how it growing by part trends, at highest -- RAA and and industry you to depends that's the far our [ ]

anymore. and year, was this it of it's independent If couple years down slow and like trend ago, an back the We -- -- grow And you have way. led to used markets, It's and we that option. really can employees forth independents see don't where the look total teams a goes this affiliation we at mean, dollars, the employee just really than I up channel that and in meet markets markets. faster

I to actually the think that the some RCS. contractor we'll And the in cyclical. a as employee seems led independent so good have ] And employee does just backlog, very get improvement way, [ size model because it's

door. commit get then both in But to process get a to and people the encouraged. we're So it's people

timing, So could but the we great we the with predict encouraged can we're even never results do better. that

Operator

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

Alexander Blostein

I sort follow to quarter possible Is to cash starting sorting? cash stack abating the the wanted third growth of in quarter, fourth saw fiscal assets sidelines of really it see to you up on around to it new unpack as sources coming is across in? whether of more trends. curious question are your to of kind and the Steve's the Or cash you coming net

Paul Shoukry

has going activity. their years advisers, continue I to the cash bring of balance. on been masked And lot they we there's lot happening by fact a a of just mean the been that's bring couple and clients to throughout reinvestment they're last that we grow as new And clients, been their as business. on grow on bring a

their that as the activity growth the pure and reinvestment from decelerates then coming to addition of start seeing so in the And going you're clients. subsides, advisers and

Alexander Blostein

your of like we've to this net new point and the seen more past? is trend like kind balances point like, from cash grow line are in assets your in likely look, So with on

Paul Shoukry

comments my that to of four to dynamic couple cash six it, call a but has took seen I'm you've you total further, not decelerated. the the willing reinvestment, that's dynamic the steps but end to as declare that Well, sure a we're last over quarters

Alexander Blostein

I'm on And correctly. to follow-up I quick want just sure comments interpreting make buyback. a your then the

that? likely understand $XXX just to So that be or do for kind are obviously trajectory buybacks nice as we do this assume of like pace M&A rate there share step-up. as the that And here well? here trying share to anything what to of of million I'm from opportunities criteria or if are repurchases. like quarterly you're ] well more, a run to quarter, repurchases Should [ from absent

Paul Shoukry

whether point, to But the we're we those make I mean, want we're little sure our other we fronts on balance generating your that up the we or further and of that's as pace capital it's maybe through sort use bit And it a given to and of the show XX%. and limiting limit we'd that we've growth, growth. rather or been to that with pretty for not ratio. our using all depending we the capital quarter to organic come capital acquisitions growth to expansion want target loan that good the are is here out extent things further And well. factors even the then earnings, we is now grow where much growth on last optimistic more with of ratio the to capital price sheet and how strong commitment it those over business,

Operator

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

William Katz

Just coming back discussion. to the margin

segment bit Just maybe of leverage little to the could view the driving unpack operating from wondering top-down a lines. if you

Markets in and private there business margins I improved the look particularly the capital markets. if So client business, at reasonably the strongly, Capital maybe particular, in

in at fulsome comments, marginal how do of your margin segments? And coming to comments this Shoukry, So back, your Paul those ] point. about margin think we XX% is [ Paul, the then pretty

how that level about sort translating for then So incremental outlook into [ overall we do holdco at ]? the segment the margin the think of margin and

Paul Shoukry

Yes, segments, I segments. of expansion should our one result extent mean, think, listen, our in for the that I then each grow to that in margin revenues

segment. Group reduction. big spreads in And a play and role XX the both segment point basis that, had Private we and Bank a Client at rates just the interest So

over think as I impact back. by growing loan demand balance the comes bank can, Now at that we offset time, sheet the

capital do fiscal we past this margin can I three first the think been exactly the time, it markets extent, but over great So And then year. improved the of that. quarter, quarters to hasn't

significant especially margin So significant loss the you're the quarter. is with a this operating the had at incremental in revenue when segment increase we pretty

because this every everything from margin that the gets and the we is saying segment just then margin in that substantially [ better right I'm year. over Street than generates doing So in just the ] goes I generated assuming a direction, higher time, what caution

think that and not puts the takes and are diverse and in natural I that's factoring maybe complementary businesses. are

William Katz

cash coming to just back client one just for a then moment. And follow-up,

given up this of seen and the coming pickup from of client just some couple Fed the of pointed moves cash in the your some now. Sort coming rate by peers, as election a some you've in weeks the big to around end obviously, uncertainty and liquidity, maturities expectations have into some in, of a interest income seen some quarter, fixed of just

So NII client of element equal, of is a seeing much of cash? is that all AUM up being pumping of type side? Or on into more could sort somewhat asset a structural and the levels move cash, not client on shift timing allocation you this else and the are in sort back so more

Paul Shoukry

aligned rate cycles, I investment would keeping job different through have Advisers has market say long-term consistent. remarkably with good objectives. asset client's cycles, mix been their our cycles and relatively been mix a doing very both asset

points within years like, various And several in consistent the that's example, of last equities or XX% on and been three basis now for so for right environments. for x-rate percentage an two assets is us roughly

And the investable shift cash environment, the you've the really that transactional mix category has higher five in low there's seen there. cash. years over when a more within cash you're environment, last been there's when it's so rate a in And rate more

coming of activity. on they growth in existing the new on bring the term. on couple think that's is the just over as shift And I their you're only now more starting of deceleration long bring clients in and about we've I seen the quarters one And just that to -- advisers the And from so sorting of clients. quarter last advisers difference, I bringing think, the talked see

Operator

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

Kyle Voigt

a you noted efforts continued Paul, disciplined remaining corporate focus development there. on and

in Are compared on bid-ask an any you're are Is be thinking M&A the certainty seeing other in we or inorganic more growth? focus you really narrow opportunities Or Just less update areas environment. should curious considering segment? XXXX? terms for of of wealth And about spreads for the areas there rate to if can targets? us the potential you give to earlier helping today

Paul Reilly

we're We a for So done development right? great a look really the And at job We look bringing team has to across for opportunities our believe say of I'd lot we corporate deals. us, our to all growth. businesses right opportunities of grow. positioned of

Some, we deals, in fit just environment, they way the some are not don't like the there. our culturally

get we price. like, some we think we can't is what and the terms on just And the long-term

will So we're be as you to out know, an constantly competitive, looking, that a stretch very conservative seriously. asset. we take we buyer them and We're, but way buy won't

"Well, click, really the a anything. buy just say, and it that's they when depends few to hard you years people ago, on aren't so And guys thing timing. going Like

closed while hit You're hoarding we deals happened time. same they in the just all just took four this capital" next and to all I and a it the around few months. mean

just a fits in So mode. and do that we're to But makes that It shareholders. deal to sense do firm something for the going not has and be still a to deal. we're

Kyle Voigt

And for follow-up, the a question balance sheet. maybe just my on

the quarter. of in guess, On still the run in there Fed letting run portfolio. with growing portfolio capital. the that of know the that more some off? that and to to to direction AFS that ] rate with I change fiscal terms [ those excess holding begin anticipate and environment balances in off the on clarity Is XXXX? significant on travel steady I Or with any desire or your stance continuing do you continued

Paul Shoukry

just really those to that accommodate let modestly the COVID balances. didn't balances the want period banks really portfolio when grow cash during client We Yes.

getting a normalized accommodating those Bank, to both where sort liquidity James at and And is of at balances. banks Raymond all primarily doing we're back level so we were now

the XX% normal then the run So and securities cash at get between liquidity they balance maintain to maybe to to once for typically need Banks portfolio. that the ratio securities. state, we'll around XX%

still well is that. And so Bank Raymond above James

point clients bets may so where balance that and we'll on flexible the keeping we're interest a That not of or peers is so not range, got that sheet we get the us. then maintain run trouble stay the possible bring bets may rates. for And just they duration. once on serving focused off. those the take may market we'll let on environment or to But the anything lot in securities not then to taking We're our type balances. of and And as as want taking the rate Fed

Operator

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

Michael Cyprys

know today? years. and some ask performing I how about I PCG there Canada you've over done business acquisitions wanted [indiscernible] that's the the and the on across to contributing elaborate U.K.

'XX. And contribution organic seeing and bit the past over talk could to the you curious some in then what you're a Maybe organic the of profitability. about little and growth and improve initiatives scale accelerate say, fiscal of U.K. growth year versus, there Canada Just terms

Paul Reilly

to the have Private the -- growth. recruit U.S. was little together up get a that They much and but great advisers in done Private with two good everything that has business, we're of smaller we And very profit in they that U.S. When still to small kind to quite Client the is parent business, very, feel in Canadian it similar Canada, grow tale and growth well as be U.K., but recent there. process, through to is integration the acquisition you recruiting. unusual hooked the a and flat. a It's get it's very the operate like do business have today, just banks, getting different which to very cities Group the been is margins, really and able really similar bit doing in expect We really very, that big we are and really able largest Canada a [ too. we acquired The strong smallest we ] integration. because the once we've PCG we continuing but base well. The are but systems going a of we executed anticipate of it's But here a growth capital firm. integration, reasons. the people size U.S., slower Group there, where capital in and like and of choice have growth to to that where same of platforms for markets they've we're to business Client a kind a

So we big won't have as an impact of consolidated.

Michael Cyprys

And terms just channel, say, just for could assets. of remind how to that business, you $X of help traditional on the your the billion us maybe in economics there, RCS compares

Just P&L impact maybe you the [indiscernible]? walk can across us revenue through

Paul Reilly

disclosed disclosed or something Yes. so at really haven't something in far, we we so What covered there. detail, Day fee we've an asset Analyst maybe but we really it's get

the looked at higher way if measure margins. you pure RIA, So they margins they're

If points on you assets look at our net lower. basis on are

different So part of too. service the model is

that requirements clients have or they're and certain supervision of do. don't are not has clients, responsibilities an the our RIA are their ours, that clients They goes clients. process. You things their all AML sure it, make [ those they that responsibilities model. have they And lot of cost higher outside a and just less we're ] some a service oversight There's compliance a to into although

in show maybe we detail more Day. quick So can Analyst a it's give at be might next that answer, but to easy the not it something

Michael Cyprys

Just ballpark versus margin, any ] sense revenue think that directionally [indiscernible]? how PBT [ or firm to [ about ], the just Roka versus

Paul Shoukry

varies talk that business higher actually Again, as complicated. on about whereas dramatically as the depending structures a be to Day our much pre It's the P&L would Yes. mix lower the pricing just the the depending RIA on there's we revenues Analyst at structure basis good Investor And the Roka margin that the a attachment on as RIA Paul time is and because asset book pricing the up other has well. revenue you said, then because is different and gross payout.

forum than is can we So that. now more have Day and Investor discuss, the get Analyst we to probably right probably time but for

Paul Reilly

attendance, already a the proud on working of quarter we're Butch next we because the over we'll done next has do what had do a and just appreciate Great. Well, quarter, we and great continue And the but that great job transition very to we're everybody's that's and we've year. here.

call. talk us, joining and next you appreciate to you we'll So

Operator

Thank call. this for today's conference participating. all Thank you. concludes And you

disconnect. now may You

Raymond James Financial (RJF) 23 Oct 242024 Q4 Earnings call transcript