Q4 2024 Stifel Financial Corp Earnings Call
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Speaker Change: Good day and welcome to the Stiefel Financial 4th Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Joel Jeffrey, Head of Investor Relations. Please go ahead.
Speaker Change: Before I get into our results and our outlook I do want to take a minute to send our thoughts and prayers to the people of loss and loss who had been dealing with the ongoing tragedy.
Along with our colleagues and clients, we join everyone and thanking the first responders for their efforts for many of the devastated communities.
Speaker Change: Now on to our call and you can see from our results on slide one 2024 was an exceptionally strong year at Stifel. As we generated record net revenue driven by another record year in global wealth management and within our institutional segment, we generated our second highest annual revenue as this business continues to rebound from that Barry.
Speaker Change: Difficult operating environment, we experienced in 2023.
Speaker Change: The increase in institutional revenue of more than $360 million was an important factor in our ability to realize the operating leverage in our business model as it more than offset the decline of $110 million and net interest income, which was due in large part to the federal reserve's rate cuts overall, we generated pre tax.
Speaker Change: Margin of more than 20% a return on tangible common equity of nearly 23% and a 46% increase in our earnings per share.
Speaker Change: I am pleased with our 2024 results given the fact that we are still not back to what we believe is a normalized operating environment, particularly in our institutional equities business I stated on our call last year that we view 2024 as a transition year to 2025, and we were not expecting or institutional group to return to normal.
Speaker Change: <unk> productivity levels, well it was pretty much how the year played out yet I would like to highlight a few noteworthy achievements first global wealth management recorded another record year as record client assets and growth in transactional activity more than offset declines in net interest income second 2024 was our second strongest here.
Speaker Change: As we had substantial improvement in capital raising.
Speaker Change: I agree and transactional revenue second strongest year for institutional group third our 2024 results highlight the strengths of our long term approach to how we manage our bank. The early implementation of our smart rate product as well as the growth in commercial deposits enabled us to maintain deposit levels.
Speaker Change: The impact of cash sorting that play many in our industry.
Speaker Change: And finally, but keeping most of our assets and floating rate instruments. We saw our net interest margin stabilized in 2024, and we remain well insulated against further rate changes, which we believe will help us increase NII through balance sheet growth.
The bottom line is that we exited 2024 and a much stronger position than we entered the year looking forward our global wealth franchise is well positioned to capitalize on the continued optimism in the market and recruiting pipelines are very strong.
Speaker Change: Our investment bank, our investment banking pipelines have increased due to improving market conditions and pent up demand for M&A and capital raising we believe that there are a tailwind for this business, particularly as the new administration is focused on growth and deregulation unleashing the strength of the U S economy will drive increased business investment and the resultant does.
Speaker Change: Nancy requirements, whether debt or equity. Additionally, from a regulatory standpoint, it shouldnt be lost that the new administration of all eight new regulators within the FDIC SEC OCC and other agencies that should benefit the capital markets and in particular, the M&A environment, especially for banks.
Speaker Change: With increased levels of wealth management client cash in commercial deposits, we will look to grow our bank assets, which comprise the majority of our consolidated interest earning assets.
Speaker Change: Frankly, the combination of a favorable regulatory framework the normalization of the interest rate curve and our outlook for both increased NII and institutional revenue should be a very strong operating environment for Stifel as we enter 2025.
Speaker Change: We will continue to deploy our excess capital with a focus on generating the best risk adjusted returns as we always do on that note I want to mention that our board recently authorized a 10% increase in our common stock dividend to $1 84 per share.
Speaker Change: Moving on to slide to Stifel has been and always will be a growth company and a growth stock in this chart. We look at our business performance since the beginning of 2005, which is when we became the diversified financial services company that we are today with the acquisition of Legg Mason capital markets. However from a share price perspective.
Speaker Change: Stifel has been a growth company going back to the time when I joined the firm as you can see from our performance compared to the S&P 500 and Microsoft.
Speaker Change: No.
Speaker Change: Since January of 1997 Stifel share price has increased nearly 7%.
Speaker Change: Which has well outpaced the growth in the share price, but Microsoft at less than 3300% in the S&P 500 at around 660% and that represents 27 years of growth, but what about the last five years, while the shares of Steve who have increased 163%. This again compares favorably to Microsoft.
Speaker Change: <unk>, which is my tech proxy here, which was up 152% and the S&P, 586% increase during this timeframe.
Speaker Change: Look our strategy of reinvesting in our business and increasing our capabilities through acquisitions have resulted in substantial top and bottom line growth over the past 20 plus years, it's important to understand our history of successfully executing on our growth strategy to understand our confidence in achieving the longer term goal we've targeted.
Speaker Change: Over the past year I've stated our objective to essentially double booked revenue on client assets to $10 billion and one trillion respectfully. So it should come as no surprise that I've received more than a few questions about how we expect to achieve these targets well I'll go back to a comment you probably heard me say quite a few times when I'm asked about our business and our.
Speaker Change: Where are we going to achieve these targets I would say past is prologue and as you can see from the charts on slide two we have an impressive history of growing our business our revenue over the past 20 years has increased at a compound annual rate of 17% as both our global wealth management and institutional group segment have grown significantly.
Speaker Change: To minimize the impact of year to year volatility.
Speaker Change: We illustrated our revenue and five year periods, which better demonstrates the consistency of our growth over the most recent five years, our average net revenue increased five and a half.
Speaker Change: Five times from the 20.
Speaker Change: $5 nine timeframe and is up nearly 60% from the five years 2015 to 2019.
Speaker Change: While we've experienced meaningful growth in both of our operating segments. Our global wealth segment has been the largest consistent.
Speaker Change: Consistent historical driver of our business in fact, the average revenue in global wealth management. The five years in the past five years was roughly equal to the average firm wide revenue in the prior period and this trend is consistent with each of the time periods. We.
Speaker Change: Highlighted.
Speaker Change: This is a function or was a function of successful recruiting as well as operating or financial advisers. The highest level of service available a great culture and combined results in compound annual growth in client assets of 17%, which is equal to our overall revenue growth over the same time period.
Speaker Change: Our average institutional revenues increased more than 550% over the 20 year period, we've invested heavily in the growth of our investment banking franchise as well as our transactional transactional businesses.
Speaker Change: Investment banking managing directors has increased more than 13, 100% to 212, and we've made several acquisitions to improve our relevance to clients in both our fixed income and equities franchises.
Speaker Change: While the reinvestment to the franchise has been a key factor in our revenue growth. It is equally if not more important to highlight our ability to generate increased operating leverage as revenues have grown the increased depth and breadth of our business is driven efficiencies within our operations that are illustrated by the average pre tax margin and return.
Speaker Change: On tangible common equity of 25% and 23, 4% respectively over the past five years. This is an increase of nearly 700 basis points and pre tax margin of 400 basis points and return on tangible common equity from the period 2005 to 2009.
Speaker Change: Given our track record I'm confident in our ability to achieve our growth targets as such we will continue to hire or acquire world class talent, we will deploy our substantial excess capital with a focus on risk adjusted returns and we will continue to seek efficiencies within our businesses last.
Speaker Change: Lastly to preempt a question I'm sure will come up in Q&A I'm not going to put a specific timeframe on our longer term revenue and client asset target. However, I think it's clear from our history of growth and our ability to successfully manage our businesses that we believe these targets are within our reach in a reasonable timeframe.
Speaker Change: And with that I'll turn the call over to our CFO, Jim Harrison go over our quarterly numbers.
Speaker Change: Ron.
Speaker Change: Looking at our fourth quarter results, we generated record net revenue of $1 $36 billion.
Speaker Change: Which surpassed our prior record set in the fourth quarter of 2021 by 5%.
Speaker Change: The strength of our performance was widespread.
Speaker Change: As each of our revenue line items generated meaningful growth from the prior year.
Speaker Change: Commissions and principal transactions increased 15%.
Speaker Change: As both wealth management and our institutional group once again generated double digit increases.
Speaker Change: Investment banking increased by nearly 50%.
Speaker Change: Driven by strong increases in both capital raising and advisory revenue.
Speaker Change: Record asset management revenue was up 23%.
Speaker Change: Reflecting organic growth and market appreciation.
Speaker Change: Net interest income was essentially flat with the same period, a year ago, but increased 5% from the third quarter and came in above our quarterly guidance.
Speaker Change: I'd also note that our cash sweep balances increased by $1 3 billion during the quarter, which is the second consecutive quarter. We have seen these balances grow.
Speaker Change: Fourth quarter earnings per share totaled $2, 23, SaaS, which increased nearly 50% from the same period last year.
Speaker Change: On slide four you can see our results changed from the fourth quarter of 2023, and how they compare to consensus estimates.
Speaker Change: In terms of net revenue we beat on every line item as revenue came in nearly $80 million or 6% above the street forecast.
Speaker Change: Investment banking revenue was the largest contributor.
Speaker Change: Counting for more than half the total revenue.
Speaker Change: While higher advisory revenue was the primary driver, we also surpassed expectations for both equity and fixed income underwriting revenue.
Speaker Change: Transactional revenue was 10% ahead of the street due to a significant b and fixed income.
Speaker Change: Asset management revenue was 1% higher than the street, primarily due to a higher fee capture rate as well as increased third party sweep deposits.
Net interest income was 3% above the street estimate and above the high end of our guidance is net interest margin came in above expectations.
Speaker Change: On the expense side, our compensation ratio was 58%.
Speaker Change: Which was slightly above the street and in line with our prior guidance.
Speaker Change: Non comp expenses came at 9% higher admin street due to higher provision and legal expenses, which I will touch on later.
Speaker Change: The provision for income taxes came in below the consensus number as well as our initial guidance on last quarter's call, which provided a positive variance for our results.
Speaker Change: Turning to slide five.
Speaker Change: Wealth management revenue was a record $865 million and pre tax margins totaled 37% on record asset management revenue and was our second highest quarterly transactional revenue.
Speaker Change: We continue to see investors engaged in the market, which has led to increased transactional cash.
Speaker Change: During the quarter. We added eight total advisors. This included four experienced advisors with trailing 12 month production of $8 million.
Speaker Change: As we've noted in the past the fourth quarter is typically seasonally slow for recruiting however.
Speaker Change: However, we entered 2025 with strong pipelines and anticipate continued success recruiting highly productive advisors to our platform.
Speaker Change: We ended the quarter with record fee based assets of 193 billion and total client assets of 501 billion.
Speaker Change: The sequential increases were due to higher equity markets and organic growth as our net new assets grew in the low single digits.
Speaker Change: Moving on to slide six.
Speaker Change: Our wealth management platform generated its 20 <unk> consecutive year of record net revenue.
Speaker Change: Our long term success has been the result of our ability to attract and retain highly productive advisors and give them the support they need to most effectively manage their business to best serve their clients.
Speaker Change: Over the past five years, we've added more than 450 experienced advisors with cumulative trailing 12 month production of more than $350 million.
Speaker Change: This was driven our steady revenue growth and has been a significant factor in the shift in our revenues to more recurring sources, such as asset management fees and net interest income, which now account for more than 75% of segment revenues.
Speaker Change: On slide seven I'll discuss our bank results.
Speaker Change: Cash levels increased during the quarter led by a $1 $3 billion increase in client sweep deposits and an $800 million increase in smart rate balances.
Speaker Change: I would also note that total third party deposits available to <unk> Bancorp increased to total of $5 billion.
Speaker Change: From $3 1 billion as we continue to see increases in both wealth management and commercial deposits.
Speaker Change: Net interest income of $272 million came in above our guidance as firm wide average interest, earning asset levels increased by $1 3 billion.
Speaker Change: And our net interest margin increased by three basis points to three 1% 2%.
Speaker Change: The increase in NIM was primarily due to lower funding costs.
Speaker Change: As I noted on last quarter's call our bank balance sheet is relatively rate neutral. However, we could see some modest pressure on our bank NIM in the first quarter of 2025 due to the timing of assets repricing following the last rate cut.
Speaker Change: We anticipate NII in the first quarter to be in the range of $260 million to $270 million as we expect to continue to grow our balance sheet.
Speaker Change: Our credit metrics and reserve profile remains strong.
Speaker Change: The non performing asset ratio stands at 51 basis points.
Speaker Change: Our credit loss provision totaled $12 million for the quarter and was negatively impacted by the macroeconomic forecast and increased reserves on C&I loans and unfunded commitments.
Speaker Change: Our consolidated allowance to total loans ratio was 85 basis points.
Speaker Change: Moving on to the institutional group total revenue for the segment was $478 million in the quarter, which is up 33% year on year.
Speaker Change: Full year revenue of $1 6 billion was up 30% led by strong increases in each of our revenue lines.
Speaker Change: Firm wide investment banking revenue totaled $304 million as we again experienced sequential and year on year increases in advisory and capital raising revenue.
Speaker Change: Advisory revenue was $190 million, an increase of 47% from last year and 39% sequentially.
Speaker Change: We had a strong quarter in our financials healthcare and consumer verticals.
Speaker Change: We are continuing to see activity levels build and our advisory channel, particularly within financials as a backlog at <unk> continues to improve given the pent up demand for transactions and the market's expectation for more M&A friendly administration.
Speaker Change: I note that <unk> ranked number one in M&A market share in 2024 based on deal value and they are announced pipelines are up significantly compared to the same time last year.
Speaker Change: Fixed income underwriting revenue increased 24% sequentially and 53% from the fourth quarter of 2023, driven by strong public finance revenue that increased 40% year on year.
Speaker Change: Stifel is public finance team ranked number one by the number of negotiated issues led as sole or senior manager for the 11th consecutive year.
Speaker Change: And had more than a 15% market share.
Speaker Change: Equity underwriting of $48 million was up 50% over the same period in 2023 as financials healthcare and technology were our strongest contributors.
Speaker Change: Equity transactional revenue totaled $59 million, which is up 20% sequentially driven by increased market activity and seasonality.
Speaker Change: Fixed income transactional revenue of $119 million was up 50% sequentially as we continue to benefit from the rebound in our rates business due to the shift in fed policy.
Speaker Change: Which is increased customer activity within our depository and credit Union clients.
Speaker Change: I'd also note that we had a roughly $20 million trading gain during the quarter.
Speaker Change: On the next slide we go through expenses are.
Speaker Change: Our comp to revenue ratio in the fourth quarter was 58%, which was in line with our quarterly guidance that we gave on our third quarter call.
Speaker Change: Our full year comp ratio was also at 58%, which was at the high end of our full year guidance due to the mix of revenue.
Speaker Change: As I mentioned earlier in the call non comp expenses came in above street expectations at $291 million.
Speaker Change: The higher number was the result of higher revenues, leading to increased variable costs as well as higher credit provisions and legal costs.
Speaker Change: Despite the increase our non comp operating expense ratio was 19, 8% for the quarter.
Speaker Change: It was 26% for the full year, which was down from 21, 2% in 2023.
Speaker Change: Our tax rate for the quarter was eight 3%.
As I noted on last quarter's call, we anticipated a lower tax rate in the quarter, given the excess tax benefit associated with stock based compensation.
Speaker Change: This came in better than our original guidance due to the additional share price increase we experienced after the election in November.
Speaker Change: On Slide 10, I will review our capital position.
Speaker Change: Our balance sheet continues to be well capitalized tier one leverage capital increased 10 basis points sequentially to 11, 4% and our tier one risk based capital ratio increased by 30 basis points to 18, 2%.
Speaker Change: Based on that 10% tier one leverage ratio target, we have approximately $525 million of excess capital.
Speaker Change: We also continue to generate significant levels of additional excess capital as illustrated by the $235 million of GAAP net income that we generated in the fourth quarter.
Speaker Change: In terms of capital deployment during the quarter I'd note that we increased bank assets by $1 billion to $31 4 billion.
Speaker Change: We repurchased roughly 410000 shares at an average price of approximately $111 with roughly 10 million shares remaining on our current authorization.
Speaker Change: As Ron mentioned earlier, our board also authorized a 10% increase in our common stock dividend.
Speaker Change: Absent any assumption for additional share repurchases and assuming a stable stock price we.
Speaker Change: We would expect the first quarter fully diluted share count to be 111 million shares and with that let me turn the call back over to Rod.
Rod: Thanks, Jim.
Rod: I conclude by going over our guidance for 2025 as I said earlier, we entered 2025 well positioned to capitalize on what appears to be a stronger operating environment than we've had in the past few years in terms of revenue. We are guiding to total net revenue of five to five to $5 75 billion as we.
Rod: <unk> growth in both operating revenue and net interest income in terms of operating revenue were targeting a range of $4 one 5% to $4 55 billion, we expect wealth management revenues to grow as investors continue to redeploy cash into the market and client asset growth and recruiting and market appreciation Institute.
Rod: Revenues are expected to benefit from increased investment banking activity as well as continued growth in transactional revenues, particularly in our fixed income business.
Rod: As I stated before we believe that we are relatively agnostic to further rate changes due to the mix of our assets and deposits as such we anticipate net interest income growth to be driven by balance sheet growth. Our NII guidance for the year is one 1% to $1 2 billion. We estimate that every $1 billion of balance sheet growth results in approximately 20% to 25.
Rod: <unk> <unk> of earnings per share currently we are forecasting balance sheet growth of $3 billion to $4 billion in 2025 in terms of expenses. We are keeping the same guidance. We had for 2024, we estimate that the compensation ratio to be 56% to 58% and our non compensation operating revenue 2019 to 20.
Rod: 1%.
Rod: In 2024, our improved pre tax margin was the result of a lower non comp operating ratio is the compensation ratio remained flat given our assumption that our revenue line items will increase in 2025, we would anticipate some leverage on the compensation ratio.
Rod: If you do the math you can see how we can generate $8 of earnings per share, which is a target that we gave all of you a few years ago now the interesting thing about giving guidance. Once you appear to be in rates of your target everyone wants to know what your next target will be this is pretty much is what happened to us since we started talking about $8 of earnings per share.
Rod: Once we appear to be within reach of our target I started getting questions from all of our investors on this call about how we get to $10 of EPS.
I don't want this to be perceived as incremental guidance. Let me just say that we view $10 of EPS as a milestone on our way to generating $10 billion of net revenue much like how we got to $8 of EPS. The math behind it is relatively straightforward essentially we should generate earnings per share of $10 $10 per share with a revenue range of 6%.
Rod: $6 5 billion pre tax margins of around 22% and some assumption for incremental share repurchases. Now there are clearly a lot of variables that can impact our performance, but given the track record and our track record as a growth company and our commitment to reinvest in our business, we feel confident in our ability to execute on our long term goals.
Rod: In reaching these types of milestones and not too distant future.
Rod: So as we start 2025, we believe we are well positioned to capitalize on the improving market environment as we continue to drive growth by reinvesting in our business and with that operator, let's open the line for questions.
Rod: Thank you.
Speaker Change: I'd like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
Rod: That is star one to ask a question.
Speaker Change: For just a moment to allow everyone an opportunity to signal.
Speaker Change: Okay.
Speaker Change: We can take our first question from Mike Brown with Wells Fargo Securities.
Speaker Change: Good morning, Mike Good morning.
Speaker Change: Thanks for taking my questions.
Speaker Change: Ron I wanted to start on the wealth side, I guess organic growth has been a little bit soft in 2024 for the industry and you guys mentioned that the pipeline is strong.
Speaker Change: You expect the organic growth year to increase from 25% versus 24, and I guess, what's the catalyst that's going to really get some of these advisors too.
Speaker Change: To kind of make them, what's going to get them off the sidelines.
Speaker Change: Yes.
Speaker Change: Great question, I think that as I've said many times.
Speaker Change: Recruiting the long term game, we have been doing it a long time and it has ebbs and flows dealing with.
Speaker Change: Lots of factors some of which include.
Speaker Change: Compensation transition packages client engagement and frankly good markets.
Speaker Change: In times like this and we've seen two years of 20% increases in the markets and fee based assets increasing bottom line is is that.
Speaker Change: Recruiting and my experience generally slows during those times because.
Speaker Change: Transition packages are based on trailing 12 trailing 12 is going up pretty consistently so that's where it has the look as I look forward I think 25, I would say today 25 will be a better recruiting year in terms of numbers when I look at our pipeline and the people we're talking to.
Speaker Change: And so I'm optimistic but.
Speaker Change: If you look long term.
Speaker Change: The success of the long term and the foundational aspects that we've done to support our recruiting growth are stronger today, so I'm confident but yes.
Speaker Change: If theres ebbs and flows that's why we don't give any specific guidance one thing I'd add to that as you think about 2025, we will also be closing the b Riley transaction, probably in the first half of the year and that could add somewhere between 30% and 35 advisors somewhere around 18% to $20 million of T. 12, So something consider in your forecast as well.
Speaker Change: Sure.
Speaker Change: Okay, great thanks for that color.
Speaker Change: Switch gears to the 2025 guidance one of the things that stood out to me at the bottom end of the comp brings to 56% when I look back 58% is kind of been the historical spot for Stifel and just given the momentum across the franchise. It does makes sense that you could certainly get to that level I guess curious what would drive you towards the <unk>.
Speaker Change: Bottom end of that range in 'twenty five and then if you. If you play this forward in the capital markets recovery continues into 'twenty six and markets remain supportive is there enough comp leverage to eventually go below 56%.
Speaker Change: Yes, that's a great question.
Speaker Change: Again.
Speaker Change: I wish it was as simple as just putting a couple of numbers on a calculator right and giving you the answer it's not.
Speaker Change: Because of various factors that we've discussed numerous times in this call primarily the need to be competitive in the marketplace and.
Speaker Change: In times like this.
Speaker Change: Recruiting and that the need to protect our franchise is acute alright. It is and it has been.
Speaker Change: The one factor that I would say.
Speaker Change: That that happened last year as an illustration, we stayed consistent with our 58% comp to revenue and I feel that thats really managing it because NII, which is a positive contributor to our leverage in the comp ratio actually declined as we go forward, we expect NII to grow and as that grows that provides the ability.
Speaker Change: <unk> have a little more flexibility and our comp ratio also productivity well.
It will it accrue that also helps we also run our lot of our investment.
Speaker Change: <unk> threw that number alright, so we've made some significant investments and that's running through so net net I'm comfortable at 56% to 58 on top of it is as.
Speaker Change: As we increase NII, we can see leverage.
Speaker Change: The comp ratio, but we're always going to be cognizant of our competitive position relative.
Speaker Change: To everything else.
Speaker Change: Okay.
Speaker Change: Okay, great. Thanks for taking my questions.
Speaker Change: Yes.
Speaker Change: Thank you. Our next question comes from Devin Ryan with citizens JMP.
Devin Ryan: Hey, good morning, Roger.
Roger: Good good.
Roger: Good morning, a question on operating leverage in the institutional segment as the business continues to recover and I guess tying back to the 2025 guide range.
Roger: Revenues and margins does that in that business reflect kind of that more normalize environment, Ron where we're recovering toward.
Roger: Something quite a bit better than we've been in and.
Roger: We think about.
Roger: Margins, particularly in that business, you're zero percent in 2023, 14%.
Roger: This year, 20% in 2000 22026, 26% in 2021, so just want to think about kind of are we 25 that normalized number of revenues and then what does the margin get back to when the business does normalize or it's not in 2025.
Roger: Not quite sure.
Roger: But what do you want me to sell 2025 <unk> five can answer your question.
Roger: Yes, I'm just getting at is the 25.
Roger: Guidance, reflecting kind of a normalized.
Roger: Investment our institutional segment revenue and margin or are we still normalizing towards out which would imply that there's still quite a bit of upside even beyond the 2025 number is really what I'm getting at yes look what Devin I'll say and I'll, let Jim he can he can.
Jim Harrison: Add color to what I'm about to say, but we've been pretty conservative.
Jim Harrison: Even getting to talking about $8 and talking about rebounding on what's the earnings power and we talked about a reiteration retracement from say $2 2 billion in institutional revenue it dropped to $1 two.
Jim Harrison: No margins as you've said to about $1 billion, six which is pretty much what we said.
Jim Harrison: What we thought would happen and we talked about that getting to $1 billion eight.
Jim Harrison: That would begin to normalize okay 2021.
Jim Harrison: It wasn't extraordinary time pull forward a lot of business under that timeframe I didn't view that as a normalized operating environment I viewed it as it is having a lot of factors that doesn't mean, it's our ceiling. It just means that that's not necessarily normalized so look.
Jim Harrison: What I would say would be that.
Jim Harrison: We're looking toward those margins.
Jim Harrison: Institutional which by the way institutional business does not get any credit for NII for the most part we keep that in the bank and wealth and there are some benefits, but look I I target in my mind as we normalize is that margin should get around 20% and in good markets. It can be higher the real question is going to.
Jim Harrison: How does 2025 play out.
Jim Harrison: Half an economy, we have a set of factors, including a normalization of the rate curve of Deregulatory environment.
Jim Harrison: And administration that appears to encourage M&A versus discourage M&A.
Jim Harrison: A huge pent up amount of supply if you will of companies in private equity that need to return money to limited partners Thats going to drive capital raising that's going to drive M&A. So this if this plays out absent some geopolitical or some.
Jim Harrison: <unk> extraneous events that that certainly can happen. Then then 2025 will be a pretty good year and we can exceed.
Jim Harrison: What I, what I'm laying out now, but as we as we forecast we're having the same conservative nets that we always have.
Jim Harrison: As you think about the normalized environment in 2025 in essence, we would be guiding to call. It $200 million of additional revenues and so we'd be able to theoretically get to that 20% margin any enhancement from there is really going to be a function of some of the efficiencies. We're trying to obtain with our international operations both across Europe.
Jim Harrison: In Canada, obviously, we recently announced the acquisition of Brian.
Jim Harrison: Bryan Garnier, which will close at some point in 2025, there is various steps, we're taking there to improve profitability and it really take achieving the efficiencies we're talking about there internationally to see any upside to that 20%.
Speaker Change: Yeah, Okay. That's great color guys. Thank you for that I appreciate it and then you've got on the <unk>.
Speaker Change: Yeah, and then just net interest income obviously very good outlook there as well.
Speaker Change: Relatively resilient NIM outlook healthy loan demand, let us dig into kind of where youre seeing the loan demand come from and then more broadly how you would frame just loan demand today, you've obviously widened the funnel within kind of your channels and then just what current capacity looks like.
Speaker Change: For lending as well thanks.
Jim Harrison: Jim Yes.
Jim Harrison: So you look back to 2024, we grew loans in a somewhat defensive posture more than $1 billion and I think as we look to 2025. It would be more of the same I think youre going to see a focus on both fund banking and venture lending as.
Jim Harrison: As well as the retail lending the retail lending is a little harder to predict.
Jim Harrison: We grew several hundred million dollars in our mortgage portfolio.
Jim Harrison: In the past year. So I think you can see continued growth there.
Jim Harrison: And from an SPL perspective or securities based lending.
Jim Harrison: Saw some some tick up recently.
Jim Harrison: Loan growth there, but again that that was a little bit harder to determine but those are the areas, where we're going to see most most of the.
Jim Harrison: Capital allocated to in terms of loan growth as we look forward to 2025.
Jim Harrison: Yeah.
Jim Harrison: Alright. Thanks.
Jim Harrison: Thanks Ross.
Jim Harrison: Loan demand is strong.
Jim Harrison: Yes.
Jim Harrison: Thanks, Ron.
Jim Harrison: Thank you.
Speaker Change: And we will take our next question from Bill Katz with TD Cowen.
Bill Katz: Great. Thank you very much good morning, Sheryl good morning, everybody and thank you so much for your guidance and color.
Bill Katz: Just some of the items that you didn't explicitly forecast that's just sort of curious given I think you mentioned in your press release that there was a little bit of erosion in the credit book.
Bill Katz: I Wonder if you could talk to how you sort of think about the normalized provision for.
Bill Katz: 2025, and then Jim I was sort of curious just how do we think about the tax rate for the year and underneath that.
Bill Katz: Seems like you're assuming flat share count, but how do we think about capital deployment is it all sort of bank lending at this point or are there other opportunities. Thank you.
Bill Katz: Let's before before Jim answered you asking us to expand our guidance.
Speaker Change: Thanks, guys.
Speaker Change: But other than that Jim and I will touch on we talked about the provision expense during the quarter and that's kind of a guide as you think forward, but in the quarter. The provision was slightly elevated we referenced the macroeconomic forecast and so basically what youre seeing there is a higher interest rate environment for longer Youre also seeing crew.
Speaker Change: Spreads widen in later 2025, those things drive additional provision expense within the seasonal model now where that forecast is going to go as we think forward into 2025 is very hard to predict.
Speaker Change: The seesaw calculation is somewhat dependent upon that so we're not going to try to.
Speaker Change: Predict where that forecast is growing but that's really what had the impact on the fourth quarter.
Speaker Change: In terms of the tax rate.
Speaker Change: Obviously.
Speaker Change: A little over 8% in the quarter it came in well below where we originally thinking.
Speaker Change: We essentially holds the stock price, where it's at today, which again, it's very hard to determine or make an estimate.
Speaker Change: We'd have a pretty big benefit next year. So historically, we've talked about 25% to 26% in terms of a full year effective tax rate, our quarterly effective tax rate, but again this year were more around 21% and absent a material change in the stock price.
Speaker Change: I would expect around maybe a 2021% effective tax rate.
Speaker Change: Again that will be back loaded into the fourth quarter.
Speaker Change: Just given how the accounting works for that specific discrete item, but 2021% with a stable stock prices good way to think about it.
Speaker Change: And you can just think about it we don't really disclose but I will say that the way our our stock based compensation works. We have we generally just have a little bit longer we are five to seven year type deferrals.
Sure.
Speaker Change: We're distributing stock for tax purposes that we issued a number of years ago and so this is as long as you have a rising stock prices is pretty consistent.
Speaker Change: With our performance in the last year.
Speaker Change: It was even more significant so even if we just held here we have a number of historical stock grants that were issued at lower prices that we will deduct for tax purposes at higher prices and Thats why I think what Jim said at these levels. We would look next year and say Oh. This is nice.
Speaker Change: Okay. Just wondering if you might comment on sort of how you think about capital allocation seems like maybe bank growth is the primary focus for 25 or maybe I'm incorrect on that and then relatedly as a follow up just sort of curious.
Speaker Change: You mentioned the client cash has improved a little bit I think I'm wondering if you could unpack the seasonal dynamic to that and to the end of the year and how things are trending in the early part of 'twenty five in terms of cash client cash trends. Thanks.
Yes, I'll give Jim hit the trends and maybe a little more.
Speaker Change: Detail.
Speaker Change: The first part of that question.
Speaker Change: I think if you do the numbers.
Speaker Change: And you talk about balance sheet growth and put capital to that and then you look at our increase in our dividend.
Speaker Change: 10%.
Speaker Change: And then you have put in some stock repurchases you will conclude that we're building capital, meaning that we have some excess capital that we will.
Speaker Change: We will be thinking about how best to deploy that based upon the opportunities that present themselves to us as it relates to the capital build yes, I've been pleased with really I can go back a few years and Jim.
Jim Harrison: Tell me when but I'll save them for five years ago, We really had no commercial deposits are very few.
Jim Harrison: And now today because of the investments we've made in venture lending we've seen significant growth and I think we're just getting started in our commercial deposits relating to our venture business.
Jim Harrison: That trend and if you want to pick up from here, Ken, but it's I wouldn't say it was anything really seasonal it's more that that were getting that business going.
Jim Harrison: Yes.
Jim Harrison: You think about the growth in the fourth quarter, obviously, we talked about the increase in the Sweet program that was in.
Jim Harrison: Nice to see for a second consecutive quarter, we have seen that pull back a little bit in the last week or two.
Jim Harrison: That kind of moves around from a day to day basis, you can see $100 million swings in and out on a day to day basis, there, but it has pulled back some.
Jim Harrison: Have seen continued strong growth as Ron mentioned within the venture deposits.
Jim Harrison: If you go back to the fourth quarter, we had over $700 million of additional venture deposits, we brought onto the platform during the quarter.
Jim Harrison: Been more in the lines of a call it three or $400 million a quarter.
Jim Harrison: I think as we look forward, if you're trying to run rate that that three to 400, it might be a slightly better number but we just had a strong end of the year in terms of bringing deposits on so.
Jim Harrison: That kind of gives you an update kind of through.
Jim Harrison: Released yesterday of where we stand in terms of cash balances.
Jim Harrison: Thank you.
Jim Harrison: Okay.
Jim Harrison: Thank you.
Speaker Change: Our next question comes from Alex Blaustein with Goldman Sachs.
Alex Blaustein: Hey, good morning, guys. Thanks for the question.
Speaker Change: I mean, I think it's pretty widely expected for the capital markets dynamics to improve in 2025 and enter 2006, we've talked about for a little while I guess, if you look at your investment banking business and definitely not asking you to put an explicit number on this but if you look at where that peak back in 2021.
With the forces in play.
Speaker Change: How do you think about the peak revenues for this business in this current cycle.
Speaker Change: Any kpis you can provide us to think about either in terms of senior <unk> in the banking division or anything else to kind of help us frame the opportunity set in this business for the next couple of years.
Speaker Change: Yes, yes, yes. It start it start at maybe the product level and then and then the segment level.
Speaker Change: And what were expecting and as we look at it today. So first of all I think the environment is going to be a lot better you've got to remember I said you had this for a lot of the banks our size of the of this back phenomenon that that drove a lot of business that was sort of a.
Speaker Change: Backwards IPO as we all know.
Speaker Change: So I'd like to one of the things I'd like to do is see the administration.
Speaker Change: Make capital raising the jobs Act, if you will which I think has a good chance of re.
Reenergizing the markets.
Speaker Change: So what I would say I'm, not really going to try and Jim can talk about what he thinks about our numbers or not.
Speaker Change: Kind of put a cap on any of our numbers, it's going to be driven though by what are we really.
Speaker Change: We have seen a growth in that is in financials health care consumer and attack.
Speaker Change: If you ask me today I would say.
Speaker Change: Certainly the financial markets look strong consumer and industrials look strong healthcare has taken a little bit of a breath here trying to understand what's going to happen with the new secretary and et cetera, but all together as you said, Alex it's going to be a good environment. We feel that we have more capability than we had in 2021.
Speaker Change: But.
Speaker Change: I'm reluctant to two.
Speaker Change: Put some numbers on that albeit to say I think it's going to be a better year than 2004.
Speaker Change: So specifically to some of your questions related to Mds, we did disclose the number at 212 in terms of Mds as at the end of the year and with the Bryan Garnier transaction, we'll be bringing on an additional 33.
Speaker Change: But I would just say Ron talked about ECM, and Spacs and whatnot, leading to some of the pretty substantial level of revenues.
Speaker Change: For banking in 2021, but we've made a lot of investments and M&A bankers and I think as we sit here today, we do see the M&A levels, reaching similar to what we saw in 2021, given all of those investments we've made across our platform across various different industries.
Speaker Change: We sit here today and think about the financial vertical our announced pipeline is three times, what it was a year ago. So it gives you some idea of what we're looking at today announced announced and I think Thats a fair point that the.
Speaker Change: I focus on the ECM the capital raising of 2021, but I think what Jim just said I want to just underlying which is that.
Speaker Change: That was a little bit more market driven capability driven when you look at our team were putting on the field you can look at M&A and M&A is reaching those levels of peak market.
Speaker Change: That's just underscoring what Jim just said look Alex I do think it can be a good environment for ECM.
Yes, that's really helpful color. Thank you.
Speaker Change: Second question just around non comp expense growth when you normalize for investment banking gross ups in and loan reserves. It looks like you guys had been pretty consistently in sort of 10 ish percent year over year growth for the last couple of years in non comp expense your guidance implies I think something similar to that for 2025.
Speaker Change: Any framework to think about how you can sort of bend the cost curve a little.
Speaker Change: What's driving sort of this pace of expense growth.
Speaker Change: Anything else you guys could provide to <unk>.
Speaker Change: Help us think through sort of the longer term expectations for that expense.
Speaker Change: Because in many ways non comp there is some leverage and the fact that the fixed components of non comp brand.
Speaker Change: Communications and quotes and some of that is is there but.
Speaker Change: The big Big items also are the variable components, which which we believe drives revenue and drive future revenue. So were always pretty consistent we'd look at it hard and that but if we really saw the curve was during the pandemic when no one was traveling in Nolan was.
Speaker Change: Doing conferences and doing all that in.
Speaker Change: And we're not.
Speaker Change: We could do that and you'd really see have been for a year, but you might see some bend and revenues going the wrong way as well so.
Speaker Change: I think we've been pretty consistent I think we've done a really good job over years of managing margins and non comp relative to the balance between investing.
Speaker Change: And client acquisition revenues, its an important mix and something that we look at it.
Speaker Change: And if you drill down into the <unk> numbers and what we reported we had call it $12 million of legal expenses. Those are very episodic, they're very hard to predict if you exclude that from that number and you look at that from an operational perspective, you'd be right at 19.0 per se.
Speaker Change: And so again, it's hard to predict when those types of costs are going to hit our P&L.
Speaker Change: And over time, they periodically show up but if you look at the core kind of operating expenses.
Speaker Change: Essentially was at the bottom of our range in the fourth quarter and that shows some of the potential op leverage absent some of those episodic costs.
Speaker Change: Awesome, great. Thank you guys.
Speaker Change: Thank you. Our next question comes it comes from Steven <unk> with Wolfe Research.
Steven: Hey, good morning, Ron and good morning, Jim Hope, you're both well.
Ron: Thank you Steven.
Ron: Wanted to ask on the fixed business. The performance has really started to improve that full year revenue number of $390 million, it's approaching a previous record and as we look at an environment with the recent steepening in the curve potentially sparking some increased engagement from the depository in particular.
Ron: Just how youre thinking about the revenue potential for the FIC business, especially since we haven't seen a normal environment with the contribution from Vining Sparks and just why they can generate in the absence of further trading gains.
Speaker Change: I'll, let Jim give some color, but I think he said in his remarks that he saw growth in that business I think your words were especially good.
Ron: Fixed income, what you said either putting numbers to it.
Speaker Change: So look we've made some investments we've made some investments in.
Speaker Change: <unk>.
Speaker Change: <unk> structured business, our securitization business. We've made we've made hires in the SBA business and then Jenny Jenny type business all of which are on the origination side of products that go into the so called pilot spark and our depository business.
Speaker Change: You are seeing in the environment with the normalization of the yield curve and some of the credit spread in a number of things coming together that I think bodes well for fixed income.
Speaker Change: The way it or our timing on bindings arps.
Speaker Change: A little challenged relative to what happened.
Speaker Change: With rates and bank balance sheet, but the good news is we had a great integration we kept all of the talent and now we're reaping the benefits of that so look I think part of it is it's a good environment and part of it is that we we've put some capability in place then the market didn't allow us to show you.
Speaker Change: What those capabilities would be able to do.
Speaker Change: Better environment, and I think youll see that.
Speaker Change: I would just supplement that by saying, obviously it raises our biggest business right and if you see banks start to engage in trading activity.
Speaker Change: I think that bodes well for an environment for us.
The other thing I would say just generally speaking is we did have some trading gains throughout this past year and so as you think about the growth potential I think we're talking about the core business, but the <unk>.
Speaker Change: Some of those Lumpier trading gains are little episodic in nature.
Wouldn't necessarily run rate those.
Speaker Change: And importantly, when you get to when you look at our businesses and how we manage business importantly, how we manage risk.
Speaker Change: Want to just reiterate that we are seeing a lot of that but you don't see us taking on risk on our balance sheet, you don't see us getting transactions done because we're taking a slight softening in putting it on our balance sheet. So the principal risks and our risk adjusted returns in our fixed income business are.
Speaker Change: Quite high and then I would be remiss if I didn't also mention that within fixed income, we just had a phenomenal year in public <unk> alright and.
Speaker Change: Our public finance team deserves a call out on this call as to being number one in market share and number of transactions, we become really relevant maybe.
Speaker Change: Maybe not in the biggest deal but across America, when Youre talking about financing schools and housing and all of those things. Our team has done a phenomenal job in and at our look forward in that segment is also very positive.
Speaker Change: So that's really great color and for my follow up.
Speaker Change: I have to ask on sweep cash Jim and I'm really trying to help you here. Since you noted that sweep cash balances. So far in January are down just given the magnitude of the growth that we saw in <unk> I was hoping you can explicitly quantify the reduction that you've seen in January and what level of <unk>.
Speaker Change: Deposit growth is actually underpinning the NII guidance for the coming year.
Speaker Change: So in terms of I won't give you an exact number but the number the sweep balances are down probably a couple of hundred million dollars in January again.
Speaker Change: Two weeks ago. They were up a couple of hundred million dollars of that number moves around a lot I am not going to sit here and try to predict where they will be reported at the end of January.
Speaker Change: But generally speaking we feel good about a linear step up in some of those balances over 2025, Jim January and my experience is for Investor dynamics, a number of things that happened reallocation people.
Speaker Change: Getting into the market if they did tax loss selling in January generally sees.
Speaker Change: See a declining balances as investors start engaging in the new year.
Speaker Change: I wouldn't I wouldn't put too much into that.
Speaker Change: Okay.
Speaker Change: Other question you talked about is kind of the underpinning for the 25% forecast and I will just say we are including in our forecast that all of the loan growth that we're talking about a $3 billion to $4 billion is fully funded by smart rate and venture deposits. If we were to see more of a build across the sweep balance.
Speaker Change: <unk> that would be incremental performance in terms of NII that we could.
Speaker Change: Produce.
Speaker Change: Okay.
Speaker Change: That's great color, Jim and Ron Thanks, So much for taking my questions.
Speaker Change: Yep.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Brennan Hawken with UBS.
Speaker Change: Good morning, Ron and Jim Thanks for taking my question.
Speaker Change: Ron you referenced the expectation of comp leverage.
Speaker Change: Moving forward, which makes a lot of sense given your outlook for revenue growth.
Speaker Change: I'm, hoping you could maybe help me unpack what happened in the fourth quarter because.
Speaker Change: Both segments actually sort of beat us on the comp ratio with a firm wide missed by a bit so could.
Speaker Change: Could you maybe unpack what caused that disconnect.
Speaker Change: I can jump in there Ron jump in as you want to supplement that but generally speaking you see more of the feel of the admin accrual late in the year right. So youre feeling the buckets across the models.
Speaker Change: For the Commission base.
Speaker Change: Formulaic more based institutional folks and a good portion of that kind of whats leftover fills admin in that pool and that just historically is back end loaded in the year and that's what's reflected in that segment.
Jim Harrison: So Jim saying it.
Our senior bonuses frankly got pocket.
Jim Harrison: I asked that same question myself okay.
Jim Harrison: I think I think that we had forecast I thought we signaled that we'd be at 58%.
Jim Harrison: And so it's hard to look at that linear I. Appreciate the question I think I think you pointed something out.
Jim Harrison: Kind of.
Jim Harrison: Normal historically, though we have seen a little more comp leverage in the four quarters. That's a fair question.
Jim Harrison: I wouldn't I wouldn't trade it.
Discern any future trend into that.
Jim Harrison: Fair enough.
Jim Harrison: Cheers on that accrual.
Jim Harrison: Okay.
Speaker Change: I would say to Jim what did we had a bad December need kind of proud that means I don't not sure what he was saying, okay, but fair enough.
Jim Harrison: Yes.
Jim Harrison: <unk>.
Jim Harrison: Great.
Jim Harrison: To ask a little about institutional.
So.
Jim Harrison: One of the things number one.
Jim Harrison: Fourth quarter Advisory was just a lot stronger than the public data normally.
Jim Harrison: Suggests.
Jim Harrison: So was there.
Jim Harrison: A lot more private.
Jim Harrison: Smaller deals represented in the advisory this quarter and do you think thats going to continue based upon the pipeline that you have today and we've also heard some concerns from investors about recent poor performance of Ipos a couple of them are broken price.
Jim Harrison: What do you think the implications of that could be.
Jim Harrison: That it might be I think well first of all first of all I think I've always tried to not only track are.
Jim Harrison: See the correlation between our reported results or what I see coming in and what gets reported as activity and in time for US. We do we're more middle market and I just don't feel that those.
Jim Harrison: Those services that you are relying on to try to generate will tend to undershoot. Our actual performance in good times and we're just doing a lot of transaction somewhat I'll get picked up I'm not sure I know the answer to that.
Jim Harrison: But that's that doesn't surprise me because I did the same thing I'm trying to understand and I'm trying to understand the market and I look at reported results and I would say where do these numbers come from.
Jim Harrison: Yes.
Jim Harrison: Not sure if that answered your question, but I don't see a lot of correlation.
Jim Harrison: Again, it tends to Ontario.
Jim Harrison: Under the radar right.
Jim Harrison: Got it fair enough.
Jim Harrison: We also we also do more private deals.
Jim Harrison: Which tend to just not to get picked up.
Jim Harrison: Correct, yes.
Jim Harrison: I meant by that so that makes a lot of sense and then any thoughts on implications of the broken I guess.
Jim Harrison: And the what.
Jim Harrison: The ipos that are broken price recently, and whether or not have an impact.
Jim Harrison: Wow.
Jim Harrison: On balance it's not it's not relatively positive.
Jim Harrison: I think it's the.
Jim Harrison: There's a lot of things.
Jim Harrison: That some errors, maybe being taken out of some of the valuations here and I think it's a natural progression. It can be it can be healthy it's price discovery.
Jim Harrison: You'd rather you would rather see positive performance, but the fact remains that there is a tremendous amount.
Jim Harrison: Our business has to be done on the private equity side and a lot of capital it needs to be raised into an environment, that's encouraging capital raising and M&A. So I.
Jim Harrison: I view it as.
Jim Harrison: Something that we need to keep an eye on but I do not sit here with you.
Jim Harrison: Any particular concern about a few deals that are broken price I don't maybe I should but I don't.
Jim Harrison: And I mean could could make M&A more viable option if its sponsor looking to sell versus the public yes, I hope not.
Jim Harrison: I want for <unk>.
Jim Harrison: The overall process the entire process of being able to raise capital and for young companies to grow into big companies and investors to participate in the IPO market I think at.
Jim Harrison: The highest level for the United States in our government and our capital markets that issue has to be to outlook amounts soapbox now, but I want to see that.
Speaker Change: Fair enough. Thanks, Ron.
Thank you.
Speaker Change: Thank you. Our next question comes from Michael Cho with JP Morgan.
Speaker Change: Hey, good morning, guys. Thanks for thanks for taking my question and squeezing me in sure Michael.
Speaker Change: Yes, I just wanted to touch on.
Speaker Change: Advisory productivity, just a follow up I think I think you referenced MD count up to 12, excluding Brian Glenn and I think Thats, just a little bit down from what you disclosed prior so I think anything to call out in terms of what areas might have saw some change there and then when we think about improvement in the productivity into 'twenty five.
Speaker Change: I think you called out 21, M&A levels RBC levels, reaching 21.
Speaker Change: Is that benchmark at this point, when we think about R&D productivity and to 'twenty five.
Speaker Change: I think it's fair I think part of part of the accounts is us managing productivity levels, and frankly without getting too specific but I think the second part.
Speaker Change: Part of your question contained the answer in it okay.
Speaker Change: Fair enough that makes sense.
Speaker Change: Yes.
Speaker Change: And then just in terms of recruiting.
Speaker Change: Strong pipeline again.
Speaker Change: You gave us kind of a relative.
Speaker Change: Comparison, when we think about the banking pipeline, but is there some more relevant metric that you can help us with when we think about recruiting pipeline that youre seeing today, maybe versus where you are starting to 'twenty four and how would you envision the recruiting packages to involve with markets continuing to retire level then and then.
Speaker Change: Potentially higher for longer rate environment as well.
Speaker Change: Yeah.
Speaker Change: Yes look I think I think I would characterize over over time, okay I feel that the.
Speaker Change: The competitive.
Speaker Change: Landscape right now is very competitive meaning.
Speaker Change: Things are very high we look at.
Speaker Change: February recruiting situation as what is our return on investment how does it impact our return on invested capital. So that we're very disciplined on that and in times, where people get really competitive we may lose the marginal deal because ultimately we don't want to dilute our return on tangible.
Speaker Change: Bye bye yet the altar of just having revenue growth. These are like Capex is that youre, putting fixed costs down and I don't like.
Speaker Change: Putting into some excel spreadsheet perennial 20% increases in the market that just isn't going to happen. So we look at it over time and I would say today. If there is sort of a governor it's a very competitive environment right now and we turned.
Speaker Change: To not adjust.
R R.
Speaker Change: Our base, if you will transition deals.
Speaker Change: <unk>.
Speaker Change: Much with markets.
Speaker Change: So if markets.
Speaker Change: Moderate or maybe have a little bit of a pullback we tend to.
Speaker Change: Over perform.
Speaker Change: In terms of recruiting.
Speaker Change: Yes that makes sense appreciate all the color. Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: This concludes our question and answer session. Mr. Kruszewski, I will turn the conference back to you for any closing remarks.
Speaker Change: So I want to complement all of the analysts and all of the questions were very thorough and long than we might have but no I mean, the good okay.
Speaker Change: Don't think we've ever exceeded an hour on this call. We just did.
Speaker Change: I appreciate and I appreciate the interest I feel that I am looking forward to the next few calls and into 2025 and maybe even 2026.
Speaker Change: We have a good environment.
Speaker Change: We have the we.
Speaker Change: We as as do all my competitive peers, we sit at the fulcrum between people that have savings and people that need capital and.
The investment environment and the <unk>.
Speaker Change: Corporate activity in M&A and capital raising environment are all going to improve and we intend to get not only our fair market share, but we intend to increase our market share and with that I look forward to reporting to you next quarter. Thank you everyone for your time and attention.
Speaker Change: This concludes today's call. Thank you for your participation you may now disconnect.
Speaker Change: Okay.
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Speaker Change: Sure.
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