SF - Earnings call transcript Q4 2018 | Stifel Financial Corp.

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Operator

I would like to welcome everyone to the Stifel Financial Fourth Quarter and Full Year 2018 Financial Results Conference Call. At this time, I’d like to remind everyone that today’s call may include forward-looking statements. These statements represent the firm’s beliefs regarding the future events that, by their nature, are uncertain and outside of the firm’s control. The firm’s actual results and financial condition may differ possibly materially from what is indicated in these forward-looking statements.

For a discussion of some of the risks and factors that could affect the firm’s future results, please see the description of risk factors in the current Annual Report on Form 10-K for the year ended December 2017. successfully to quarterly to it financial earnings the ability like disclaimers the relates advisors, also or legislation firm’s Stifel’s companies and interest in release, to changes changes would in direct offices rate read you forward-looking to the the I branch acquired environment, and in integrate particularly as regulation.

not Corp. and I duplicated, www.stifel.com. Financial information call the This non-GAAP financial and without firm’s rebroadcast the posted on Investor turn Officer, You material portion now of website of may is of should over measures Corp. be audiocast calculation at Financial Executive also a reproduced copyrighted on the read the Relations the Stifel’s Chairman of Kruszewski. Stifel Chief or Stifel to the consent Ron will that’s

Ron Kruszewski

press all Earlier Good Thank the year to on listen you, Operator. and a slide morning, our and this our XXXX and we with time deck website. morning full you taking quarter a our fourth results release to we results. posted for of thank issued

my Jim Joining Co-President, lines, thoughts. today will take with then and quarterly our through I’ll full through our and full and the and the our I’m call to as come is our year our Jim run segments. updated business me revenue you Jim concluding our and balance our XXXX highlights going expense CFO, year back as well sheet. And on talk Marischen. Zemlyak; on

more expected our fees business. and segment, growth in management Turning consecutive interest of brokerage wealth from income, to year Strong net our record we global than institutional particularly decline XXXX, revenues. management XXrd the achieved asset in offset net our

year XXXX, slightly second business from had Our our in the down the investment history. posted are in record best year nevertheless banking

our drive business. investment invest of XXXX expenses expense compensation banking growth. Total people leverage, to were up basis on In has down a million in year our year-over-year XX%; on operating from despite for focus discipline continuing adjusting ratio full only X resulted our XXX non-GAAP terms of points non-compensation after

non-GAAP $X.XX, share share of generated I’d full of As result, equity XXX our XX% that per of also earnings increased year tangible we last generated record note record a XXX%. non-GAAP return from earnings and GAAP pre-tax of margins XX.X%. years’ per Also up XX.X%. on we

the Our recent the our in highlights tax our if reform still helped tax results, was remove lower our from received rate of impacts investments you we’ve the EPS corporate XX%, quarter the up business. in XXXX, which benefits

confident nearly X.X through million For repurchase growing dividends This of sheet our conjunction approved of our shareholders X.X with more or balance quarterly capital XX% return for a ability have was than our year, reflecting per XXX billion. the increase in to returned remain Directors significant in our our to share. and we XX% or and Board nearly this flow to dividend $X.XX cash full We million annually by shares. generate on a $X.XX

basis combination quarter points revenue was our part Corporate continued through management and quarter. fourth our as came Net strongest had million, the the revenue partially improved top our volatility record was and our on our of second asset latter quarter offset up stronger quarter. revenue second XXX management Moving sequentially end investment strongest quarter net at by a the year. core the during in revenue, interest XXX a losses as pre-tax results, of margins X% banking driven of revenue to business by of revenue totaled over quarterly strong prior the record from fourth we trading experience income XX% resulting guidance. net non-GAAP Overall, expense

XX% on tangible respectively. non-GAAP over Quarterly equity XX.X% and XXXX. X% result, non-GAAP and equity up return $X.XX, on earnings per a return As totaled share totaled common

X.X quarter, average of shares the $XX.XX. an we During million repurchased price at

the next wealth for quarterly segments, global We from results starting On net two recorded primary the of I’ll with X% over million, management. XXXX. up our go revenue slides, couple of XXX

asset XXX also wealth from management net drove of benefit S&P interest revenue to year management an nearly record which third billion. X%. XX% full fourth income, to during and X% decline assets the record asset our and X% revenue quarter billion, quarter X The Fee in continue the the quarter We increase of billion. XXX from in assets levels client declined based client at XX declined impacted negatively levels. Total ended record the

remained fourth size up and year-over-year basis year-over-year. on and a lower strong ratio We expense points continue XX typical ratio growth revenue in in in we positive client see December. as low XXXX. of first a a on XX revenue expense less had a year a decline XX recruits year. positive the the encouraged ratio while of for XXXX. XXXX net we non-comp levels management management quarter the increased a the in recruitment of Wealth Baring management in the In (inaudible). XXX year recruiting in generate the by with start recruiting we asset during three changes points number advisor, ‘XX, quarter, basis continue the market, are the strong XX.X%, fourth expect significant client efforts focus the of of our also compensation and our additions the our to net weigh results. in quarter activity global will revenue as remained declined finished in addition addition However, points momentum financial to the of basis pre-tax Overall, on margin bank Improved asset of we the of resulted backlog

ongoing its we this expected next the these businesses improvement posted method, Despite pleased in including business weakness our on investment result. issues, headwind more the our of our and impact these fixed of extremely municipal revenues of underwriting of net issuance X our to the in and the I for institutional billion. as the the headwinds income XXXX number equity Moving am strongest aforementioned in environment slowdown advisory institutional revenue limited group than ongoing to implementation in which in reflected these of second the XXXX a market training. year with results the slide, of saved

the quarter, sequentially up as of segment showed For institutional in digit underwriting quarter improvement. third XX% advisory and result. our net income revenue brokerage strong XXX following generated more both million, a double fixed Equity as by equities revenue expected sequentially sequential strong fourth business revenue and and our XX% decline increased improved than offset revenue

from third lines business as showed fixed seasonally improvement. digit business Our income rebounded quarter, a slow all double

merger are improved for XXXX. noteworthy and banking to of and I work and we seeing strong noteworthy Bank pipeline, in capabilities In on the remained (inaudible) transaction terms the where transactions, Chemical (inaudible) transaction. our Advisory levels fourth we similar represented want quarter. sequentially that the are Corp. as again investment Financial revenue at we’ve our restructuring to they note more to do of all we our announce example, started grown

While the quarter. I million the teams length doing XXXA of the from Equity what deal a which Stifel are across due as to our timing closing, investments made in platform. quarter results can to be we underwriting particularly the strong like choppy XX at business, in benefited we had came the revenue

was XXXX. one equity Given underwriting level in from new in our our number flat about senior and are a sequentially, ranked of current year XX% outlook pipeline, record number we significantly while issues. underwriting sequentially for improved Debt Stifel municipal ago. managed business optimistic industry down the negotiated nationally issuance wide a

XXXX results the Our backlog in we year a far is expect ‘XX improved the in so would of than XXXX. stronger to first as and quarter period same compared

adopt we In results, business terms meet product this changing to of institutional our a as the our brokerage challenging offering remains market.

of to the did disclose to transaction, quarter happy that brokerage January be we versus first announce fourth terms of closed are revenue First fixed the on brokerage accretive result acquisition would institutional in We to modestly the expect Empire up but X, expect the modestly we’d in revenue the our we Overall, our be we not first quarter. of in income it quarter. the

slides, return the closing our with Jim our and few CFO, my line sheet as thought. review expense then Marischen On will balance I’ll as well next specific

Jim Marischen

Ron and everyone. morning good Thanks

by So starting million. revenue fees of management increased reached record increased fees driven wealth of Global XXX cash revenues, client and at and that total X result asset note million brokerage market X% asset volatility, XXX we despite and generated brokerage A just management with revenue. XXX a the record the management to sequentially, asset increased balances brokerage the management and billion a XX firm-wide sell-off brokerage quarter and revenue million million. of relatively by stable end over

However, an improvement been due majority the far of this in January, market equity has in cash reinvested. so to

quarter. trading seasonality revenue our as that was business, in brokerage Regarding partially losses from the institutional offset by benefitted

this income but in benefitted higher conditions sequential revenues. due increase offset sell-off. in as sequentially. volumes was trading to Commission in the Particularly were equity revenue increased market help million. institutional due drive market revenues brokerage trading Our the sequentially activity seasonality, improved quarter, X% XX seasonal XX% trade the These by up totaled quarter our fixed to late from losses partially

we revenue. to at banking slide, on next Moving investment the look a take our

down XXXX lower partially in year, offset was advisory underwriting full the For by revenue revenue. results X% our revenue from was record growth as

results, of quarter, quarter we our million, healthcare, an in and of sequentially. generated in XXX the fees We technology. investment up verticals industrials, revenue totaled million XX% as terms our In in revenue banking financials, saw fourth uptick XXX a multiple including advisory

underwriting XX million, and it volatility our down increase as quarter equity strong declined market activity income nearly as from XX% quarter X% This as focuses XX% next was offset a Our (inaudible) our fixed totaled sequential growth underwriting income represented third from XXXX. was capital public million. XXX on revenue in underlying A very our a showed equity The raising sequentially business interest net in nearly earnings finance in the fourth decline the of solid the increase improvement. which slide increased.

sequential XXX guidance, increase in-flow of which the our during increase the basis net impacted X margin term end bank’s will points, weeks an margin. interest net as few in to further X was basis month in as XXX reflected large we expect three negatively the was This bank sequentially the basis first Our quarter interest up client consolidated short XXXX. of as of a the points of majority increase reset interest CLO to do basis was net in and bank result portfolio points. momentum the our cash the the lower the margin LIBOR first due was points balances increase results the The of rate, quarterly in in be current the in

of During data I during next the our quarter, XX% discuss yield increased program by by our to to balances cash liability our and That quarter, will yield (inaudible) XX the slide. we that XX portfolio competitors. is rise basis due which primarily points. XX in approximately our loan assets (inaudible) further Average bank investment our average total yield grew Deposit portfolio points increased in with our to said we approximately and in by rate the points The line competition. basis deposit increased in continue expect sequentially. basis

third we assets bank during increased On year-over-year billion cash our attributable X.X closed part decreased balances slide, XXX assets cash in last the increased the increased Business the weeks Total more by investments in XX% to to sequentially XXX detail higher was the million roughly December. respectively, billion. to due Bancorp. as increased earning we next Overall, which growth client driven to X.X This deposits acquisition to Total Banc, in primarily XX.X loans interest saw commercial loan balances, in of billion XX.X Stifel the XX% average bank as and while and bank nearly billion quarter. by loans with million.

from The as remained in as the very our on conservative asset losses for XX loan asset million was The basis reflected the compares banks. X.X expense metrics metrics Our approach non-performing sequentially favorably million reflects of a market XXX our overall ratio to loan credit asset decreased Overall, growth. sequentially allowance as credit X.X to yield to which to loans provision points. our loan basis increased to for lower solid a in points. due percentage loss quality with

view we bank our our our assets other In me think a of assets, investment CLO security. loans, CLOs and and bit particularly three general, we little buckets; bank Let how talk in about portfolio.

and subordination to support. structural is first than are the The tied two similar risks I credit to future the of a commercial direct to our financial are even AAA C& what greater have in credit CLOs crisis that these though to for are in loan cap for loan a (inaudible) loans. give AA was With of cushion portfolio. at portfolio (inaudible), underlying of private the relatively primarily XX% distinguishing The X% credit to security loss as quality CLOs some events, our of and credit reporting the Rather don’t than charges there public credit large securities was provision companies. see We average losses the on we future and loan (inaudible) collateral are from structural XXXX, up times area any the experienced [loan]. X% lower five us to of stress least

in our generated see we impact financial terms of portfolio performance not solid fourth In our do our quarter, CLO a performance as for statements. overall the material

While maturity. there and held our to immaterial impact a rated, them the we widening was to of was spreads CLO sale highly and in the is liquidity available credit only hold as for us not quarter,

So very in general we portfolio. feel about our CLO good

backed decreased mortgage in roughly securities an X% securities. bank, the our year-on-year investment the holding increase quarter offset billion, declines than in of more the in as at we finished in In X% which quarter terms asset-backed X.X

we the slide, Moving review our expenses. onto next

full impact essentially We the banking expense expenses compensation is offset transaction the and the excluding a us, progress focus we’ve lot made year, a talked our non-comp few expenses past the discipline investment cost as in about in where flat, XXXX non-GAAP our years. this of and our lower For operating expense. the on slight for increase were

In XX%. above in non-GAAP our Non-GAAP compensation fourth slightly results, This ratio full we end quarter, expense a of additional high resulted data our the our the of roughly revenue processing operating is of and the expenses and related and and expenses travel range, was with ratio XXX was expenses with loss XX% investment terms our in excluding all achieved line transactions million expenses year targeted the quarterly expectations. compensation loan banking of provision expense. excess generated to one-time essentially

been to of Excluding the range. would our close we these factors, guidance middle have

the sequentially, share a on fourth shares impact issue our count of count, the that Banc diluted result shares the with down as repurchase acquisition. more offset roughly additional of was shares activity from terms that our fully our In share our XXX,XXX than associated was quarter Business

share of further shares, our XX.X million We to share fully quarter expect count diluted average be excluding the for approximately XXXX first repurchases.

We interest additional have during cost last the cash XXXX. to and strategy we deposits the margins bank in quarter. borrowings increase late balance higher assets quarter, they points which firm-wide and XXX XX.X part in XXX our increased these sheet, quarter reflect to the of the mature consolidated to began finished sheet; of on in the with by as net quarter funds to up interest charter. CDs the and was billion XX.X in to cash to our for results. million our the XXX bank of (inaudible) this of billion. will of that into Because quarter our additional generate better than the to and more sequential The of had that was replace of came would we use was assets bulk outlined basis additional prior Moving from balance bank result ability the This driven a sweep first earning the

ratio we We As million. of up (inaudible) ratio a interest to the approximately to earning X.X% expect decline assets XXX tier be X points. closing the liabilities of X based approximately first XXX XX.X%. new to between kind quarter, for tier $XXX a of finished supporting a to in $XXX and XQ to million standards adoption with quarter our risk increase assets ‘XX we’ll interest and average and the result, net and bank levels capital leverage basis margin Also, (inaudible) of of see

sheet activity in growth. our by share increased ratios repurchase quarter, share $XX.XX X the value continued by Book the of strong impacted per and earnings, $X.XX Our during quarter. growth retained tier in balance were

back the Now me on to XXXX. outlook turn let for for the call Ron his thoughts

Ron Kruszewski

Thanks Jim.

market I get minute I for in to Before our the talking we spend with the XXXX, valuation. into our and equity continue progress a disconnect to guidance make XXXX want about

XX%, we generated by prior operating from the were all XXrd revenue, of record. earnings as consecutive year see significantly As and I’d slide, and Margins stated, XX% on you year’s intangible XX% on and share nearly previously per year up our not by but XX%, income return we grew net can this our equity XX%. leverage record pretax nearly common again metrics increased our full from only

only are table the show Importantly, decline a in the that valuation numbers on share price and our multiples.

Now the I specifically and during understand the that multiples contracted market looking. forward financials meaningfully as is market year

let believe share with the our outlook, represents improvement strong represents that everyone in in we our deploy However, term get due a I specific this historically capital our our the With gave of me do move for stock we longer value continue risk-adjusted outlook. currently guidance to quarter, outlook more wanted than repurchases, the we our to same and last revenue we and return. best to will as our to page terms XXXX; business on as on

As at as year for all results and resulted expense of you banking, we see, in and quarter discipline the and investment for quarter the EPS net in our fourth full XXXX, and can year. the interest strong our guidance management asset of a the our high in posted full income came the record end

to our note going into our I going forward. to guidance don’t full Before that year intend update we guidance, XXXX want

on as continue quarterly to we have the a will give guidance past. We basis in

million. guidance revenue full X.XX to net for forecast million of XXXX, we’re XXX We our income of estimating XXX interest of terms In billion. billion the year X.XX to

revenues. of at we XX% operating net XX% expense to XX%; targeted to the expenses compensation ratio of side our On non-comp XX% forecast (inaudible), the are

our balances, XXXX, in decline Let These our clients strength, improvement by growth. revenue recruiting me the interest net guidance in results and as our both XXX to revenue, modest mid-single brokerage asset and of S&P revenue. variable our declines income said, in assumes brokerage underlying end revenue in range The biggest for banking growth. the specific on are is end That as our to incorporates a end digit the high revenue. well an digits. banking as lower volatility the increase impact expect revenue give episodic S&P and an assumes our well will cash assumptions; modest on the few as in the the declines the offset you the of investment can high XXX in this end banking high-single in continued digits being a guidance a range growth our of revenue, investment high as The low-double in of market investment and nature have the be

Given quarter our year first bank margin, basis we guidance of points. of guidance XXXX interest comfortable for XXX net XXX with our to the are full

For we guidance remain comp seasonality at range due the of our our expense expect and annual our end first to XXX in to our million high non-comp range. XXX be quarter guidance, ratio the to million to

of continue a and in we (inaudible) expect authorization, existing to than capital share of said earlier, capital generate remaining before million Lastly, very currently basis. repurchases. I continue a use XXX more we X to risk-adjusted million have as repurchase on XXXX, We good to shares our be dividends and on

So in conclusion, year XXXX was another Stifel. for record

As highly grow to forward, I to our and I’m and ability about continue our add clients our value shareholders. look to optimistic

to and are impact our well our short never ability Our term stronger. been conditions to market businesses has excess shareholders may capital grow they to return positioned, results; continue

dedication thank want at our the of as call partners open my in primary for work hard all I year just that the results questions, their Lastly to firm. Stifel record was and factor I another before to of it’s

with line for operator, the questions. open please So that

Operator

of line Devin, Devin open. from Your question your the Ryan line Instructions] [Operator comes Securities. is JMP with first

Devin Ryan

advisors look to what you’re think in you’re growth about to opportunistic about going know you’re But First upbeat to story that’s recruiting wealth the anything. going could important pretty question there, here. force kind I XXXX financial like just not and and be I Ron management, of

should in being sense is advisor or kind few So we you outcome to of growth? net or good about judge we’d around thinking digit what kind of be a in growth, in the percent single (inaudible) headcount wealth increase love increase to how it bit success just context new management assets get little would of more potentially there upper a as or

Ron Kruszewski

we and in put standard not never way that times we in number terms I past the is in overall just that optimistic we I time, cut am recruiting home our more with just in started as I and of explained our see our I’ve back business on that. our We’ll focused sense the Devin, say and stay numbers during numbers It in had out, as number the of it out DOL we like calls, of will because come as office but recruiting, something recruiting and said and I’ve reasons activity positive, that recruitment. IPOs pipelines for our long that is of approach I’ll that with recruiting fiduciary efforts. that just the to muted I and or being of off past, how a seen do. activity the

been effective recruiting We very firm. a have always

Devin Ryan

over you’re of not here, opportunity though within And CLOs maybe concern given still what yield mix, plan, the for I and with curve spend kind just just opportunities we’re loans what to credit, the and given And the is on time much that assume of more the in the of with last just still you even quarter piece, the NII? another terms seeing guidance are part some the clarify the on on spreads curious does I’m modeling and just in there, NIM maybe the happened increasing spreads? of question the of current just in volatility percentage kind guys to seeing even bank, know are increasing is XXXX interesting of the

Ron Kruszewski

a as swapped and the replace we’re liability more yield said I’ve curve. expansion as result existing the to of loan That’s on benefit points biggest deposits second NIM the to growth, the forecasting a also of our on more. bank be that to call investments last curve; as comfortable at project lot not based home on balance XXX but I of sheet lot an to we’re charter you. For we’ve impact. you see the a able will a us There replace as to we’re as your basis, so A allows and last is were we’re borrowings on ongoing federal sweep CDs fact changes with yield XXX in basis using just is first trying having loans questions side, the yes, not deposits our more as gave and

Devin Ryan

And kind in comment not I then just better capital share last of capital on with the on a there’s the here then agree and moment sentiment use one on your the price, of a stock at share and buy (inaudible) repurchases. really

kind curious versus the within there’s what’s one So the particularly share where obviously just threshold to about over don’t the out I’m repurchases M&A past market the quarter, deal how But wealth more know there’s opportunities, if of in there. think fit M&A I in right trading particularly management doing now? that, stocks

Ron Kruszewski

future own look cash and flows then the the hiring is Well that’s look is at I we’ll acquiring acquisitions The future look as of of we dividend, acquisitions (inaudible) cash say. at our the really and that (inaudible) rate I look - best always and as do, we’re when acquisitions I cash, simple, generating a said increased one of stock at at flows. our lot we we I as

terms do but acquisitions the our something, right hurdle that course attractive as aside hurdle to we stock. rate Strategic our considerations see reasons have you in to rate most have of of acquisition. future another if doing be are I some real own versus to cash as flows going now strategic So

Operator

Research. from Your line question line Steven, open. the of next Steven Chubak you’re with is comes Wolfe

Sharon Leung

This is morning. actually Sharon filling this in Stephen for

and IB the first was good fee is result is pretty some public year-on-year. headwinds of market actually this given quarter, encouraging backlog So which up significantly my question your

if revenue of and your wondering is hitting primary year? could target range of, kind hearing sort lower the speak from you’re confidence the to that you the in Just what end in driver the of corporates, of

Ron Kruszewski

at year different with year with the think but backlog looking way, we’re you encouraged nice some what the starting We’re backlog nice as and said, noted and of is of - a we’re I you’re starting a notability I’m as of I’ve type a and And that business. the just about the most doing. transactions that it the

we’ve that turn bank, are As larger, make are more can more lumpy. deals fees the in a little our the episodic, grown investment larger, it

not don’t in here and I answer we guidance data, I’m good, comfortable So but see question, I backlog we’ve today, your I with how I’m the XXXX, look a don’t outlook, is therefore view given. on recession. our based the to as and of really at certainly sure the and sit my

Sharon Leung

the $XXX noted the bank given And the in in by on just the client that that growth, of you you bank and noting the that then grew was in driven over million of quarter, But cash lot kind year, growth trying necessary should quarter. to a of increases some for just some the XXXX? and level, right growth capital bank (inaudible) in be capital across spread to the of the growth we the how think bank X still year dividend the that to close out about billion generation saw support buyback, strong

Ron Kruszewski

more options, playing point to on the can said, back balance deploy increased our at as can dividends, other We our stock we good little view we’ve That’s to these you question, credit muted, because other together. attractive that you and which said we targeting hurdle own return we look this I’ve we to clear buybacks, and uses sheet this At the acquisitions, do as is we cycles, can bank, dividends want I’ve are of a based indicated has that just buy option flow our of growth and where point. do the do. to that shareholders at are stock the the all if be to capital options buying market a cash capital, is how growing versus the factors capital of an to last because repurchases, think we

growth we at So I’m ways up of and various increase that $X at to change. today shareholder when conditions billion. comfortable value, billion, X change look with flat that that we’ve can can you the as targeted But market course

Sharon Leung

quarter then the And trading some better results the on the momentum. in outlook, just showed

you outlook from update flattening could of the on equities of year, hoping just on in pressures given munies? impact the on us fixed the and some yield the then (inaudible) just for terms Just given curve

Ron Kruszewski

almost next not I attempt. see, be think been we’re in we’ve spend a don’t in in it challenging growth to specifically that flip-flop has seasonality a few interesting to now, for relates and as it Trading trading. seen but will (inaudible) actually robust think we we’ve anyone a and the has, projecting certainly that’s years seen quarter, what

slower It might business picked the half first up the of be in in year. Our quarter. the latter

and that We just declines expect we’re use all think a in we are sort income hearing so nice significant nice I But not and I do term on trading, - own say, is trading seeing, from range to has nor a based for trading so these I and significant is guess see. don’t overall as see trading are XXXX. uptick of robustly. their view growing see word, had an uptick our I fixed phenomenon, think again what that We short

Sharon Leung

just the normal I continue And extent costs deposit increase [new] to the think which embedded you your rate that then wondering to one here. last for real even noted to assuming that’s quick for I hikes was guidance from one, in expectation the year? is

Ron Kruszewski

a above that statements, the occurs, cost there. I are we that what is affect fed the deposit projected last there’s we’re little in do, have of a seen recent that. was fed’s to with rate bit most in saying a I projecting expect on but think what based haven’t increase, After the and line we activity not that lag of lot

what the imply in to see guidance again and and our watch to competitors the So dynamic our has it no past, deposit we’ll it do increases higher and fed. in we the so mean increase, doing. But fed have evolves just will and competition by the what XXXX. than I competitive further what are deposit rates think both the would is with didn’t consistent how But that with is been

Operator

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

Alex Blostein

zone in and liability the hoping opportunity was see (inaudible). to I you on the guys First, remix

of balance terms off pace maybe where stand how the the a balance XXXX, course that sheet us that’s the going of are the in just walk you with rolling today deposits? rebalances, off can be to replaced be So reminder, will sheet And cash of CDs they through and helpful? of

Ron Kruszewski

let I’ll Jim answer that. Yes.

Jim Marischen

deposits. some points. chunk amortization kind look and balance billion, X.X will of as to be sheet But is say the A at that about year-end, the large Ron replacing first borrowings of what schedule basis cash CDs XXX big you’re you’ll X.X going of as XX-K XXX of so of guidance deposits. when terms really the to points XXX to in that NIM talked well the of our you driver with see as the full going mentioned, I in the In bank XQ see be to basis we quarter, of to and balances in on had billion the going that’s at of guidance as XXX of about year

Alex Blostein

get just But in of those? in sweep can bank we off the terms cash sheet balance

Jim Marischen

third-party see $X again as to going another obviously those we can good you in the billion. billion that’s to can press a to release banks, think to chunk that we But advisors, grow. recruit of balances continue and there’s you’re close continue see to up take maybe swept to I X.X

Alex Blostein

strong to in maybe about customer question, what currently about think means growth us my expand pipeline, sources get terms segue that that to your very of the And Ron talked and kind recruiting help pipeline assets represents? a obviously on can of you of the you next

Ron Kruszewski

as doing give bring numeric do Again it. why or just bring numbers, bring recruitment. any client revenue, we I time, they cash, advisors (inaudible) we add relates like that’s they when to they over But and AUM, it that goals but I don’t look deals on don’t

this. you period message major to own in be is growing our reviewed just that’s we’ve I trying the and I give to and I’m about case; organically. people not time growing that Alex the good as firm, strong conversations, slowed making, very the and don’t we a organically, our had recruiting, we’re that I visiting we that not our probably think pipeline going of and if the to think I look And I where are see very at for feel down it,

Alex Blostein

sounds really shutdown timing from a ramps pipeline then ECM up. of we a robust government and guess like talk about quick some When really a any impact of really the so to up degree you I banking, last in then the and And need bit half? both question investment later pretty to guys kind in clean consider, just QX DCM, a back

Ron Kruszewski

I think no the question that there’s government delayed shutdown deals.

merely going prospectuses wasn’t So for revenues the equity ECM see of shutdown, you less industry, the what the the the fact government all been, side. see that to I pipeline wasn’t underwriting SEC first the to across on would just otherwise that expect you’re getting will have

impacted As think don’t it it delayed, our we think we we look pipeline. it, at but

Operator

Chris Your open. the next Wells of is Chris with question from line Fargo. your Harris line comes

Chris Harris

paid outstanding, lot you take just being why And of bit bit really of I’m little that’s the about to hold a you probably these so the quite board maybe you bit, quality book? you your quality and and on of remains do attention days, But should though environment, I kind light credit the think a economic credit credit if even wondering guys little everywhere. lot across made earlier As could maybe you profile a little talk expand a in that, well there’s C&I where a can just it that your know of loan you about and case? think a where’s comment think up the minute

Ron Kruszewski

at we are might But are NPAs loans, in our we loans, be terms happen. be provision saying and Chris, these our on look late we just review bank, overall going we basis what’s solid we C&I as review outlook point of to think like quality. is loans, every cycle I versus we feels and our portfolio which it I’d in and to understand like very loan you’re credit should we today, look our and the what XX points categorize what our loans, credit loss of

Chris Harris

today topic discovery you a impact of and if the here business think of And do An and of XXXX is year characterizing the as (inaudible), much? XXXX what kind that managing of do, perhaps it how about agree not you of you if as to think you’d about lot unrelated are I people a question or change might with going think this as sit on think be you we for this statement, beyond? wondering, regulation, the so

Ron Kruszewski

first think the it lot how our depend it I’ll pressure. to be to approach comment, under don’t Well, A with was still SEC’s go of which knows the your it’ll see on anyone evolves. will payments. believe be yet it I some other the of year will of research interesting than discovery, and I characterization

So no all violates which European you but accounts, relating it for to it a action the as know, they you still (inaudible) act research. do that it says to have can do

I that add we across add all we’ve be in don’t does. not accounts and not something the to fee see know, the of that that players not. their I and of have the is be Chris. believe are that (inaudible) all think squeezing of will We implementation think ‘XX be impact that game. I in mean be sure how payments. I is intend seen, product in the whether maybe as believed could one will value, belief there, going here at look have you’re but as ‘XX that don’t of research strong which European a anyone you we or sit see. firms pool the we we SEC, a I’m the would an that it, we continue somewhat of today, weigh will for that research alpha I or really to My the let’s what we to that, full And on see, to number

Operator

remarks. concludes Ron now Kruszewski back question-and-answer to over our This the will session. I call turn for closing

Ron Kruszewski

and record update to all and are that, forward with on everyone. look we continuing and great shareholders year, pleased We day. again operator, upcoming And with calls. you to our very you thank a have Thank of another associates

Operator

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

disconnect. may You now

Stifel Financial (SF) 1 Feb 192018 Q4 Earnings call transcript