Good afternoon, and welcome to Raymond James Financial's third quarter fiscal 2023 earnings call. This call is being recorded and will be available for replay on the company's investor relations website. I will turn it over to Kristie Waugh, Senior Vice President of Investor Relations at Raymond James Financial. Good evening, everyone, and thank you for joining us. We appreciate your time and interest in Raymond James Financial. With us on the call today are Paul Reilly, Chair and Chief Executive Officer, and Paul Shoukry, Chief Financial Officer. The presentation being reviewed today is available on Raymond James Investor Relations website. Following the prepared remarks, the operator will open the line for questions. Calling your attention to slide two. Please note certain statements made during this call may constitute forward-looking statements. These statements include, but are not limited to information concerning future strategic objectives, business prospects, financial results, anticipated timing and benefits of our acquisitions, and our level of success integrating acquired businesses, divestitures, anticipated results of litigation and regulatory developments, or general economic conditions. In addition, words such as may, will, could, anticipates, expects, believes, or continue, or negative of such terms, or other comparable terminology, as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Please note that there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We urge you to consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q and Forms 8-K, which are available on our investor relations website. During today's call, we will also use certain non-GAAP financial measures to provide information pertinent to our management's view of ongoing business performance. A reconciliation of these non-GAAP measures to the most comparable GAAP measures may be found in the schedules accompanying our press release and presentation. Now, I'm happy to turn the call over to Chair and CEO, Paul Reilly. Paul? Good evening. Thank you for joining us today. Since our last earnings call, we hosted our two major advisor conferences for both the independent and employee affiliation channels, and also had our Chairman's Council recognition trip for our top employee advisors. I'm so proud of our advisors' unwavering dedication to serving their clients and helping them to navigate these volatile and uncertain times. Our advisors have also expressed their appreciation of our commitment to managing the firm for the long term and always striving to be a source of strength and stability for them and their clients. It's these shared values that have resulted in our success through multiple cycles since our founding, and what makes me confident about our continued success in the future. Now, turning to our results. Despite the challenging environment and elevated market volatility since the Federal Reserve started raising interest rates, we generated record net revenues and earnings for the first nine months of the fiscal year. Reviewing third quarter results starting on slide four, the firm reported record quarterly net revenues of $2.9 billion, and net income available to common shareholders of $369 million, or $1.71 per diluted share. Excluding expenses related to acquisitions, adjusted net income available to common shareholders was $399 million, or $1.85 per diluted share. The increase in interest-related revenues, driven by higher short-term interest rates, drove significant earnings growth over the prior year. Net revenues increased 7%, and net income available to common shareholders grew 23%. Quarterly results were negatively impacted by elevated provisions for legal and regulatory matters of approximately $65 million, and bank loan provisions for credit losses of $54 million, which was predominantly driven by significantly weakened macroeconomic assumptions for the Moody's CRE Price Index utilized in our CECL models. Notwithstanding these items, we had a solid quarter in a tough market environment. We generated strong returns with annualized returns on common equity of 14.9% and annualized adjusted returns on tangible common equity of 19.7%. We believe this is a leading result, especially considering our strong capital base. Moving to slide 5. The strength of our PCG business really shined, driving record assets this quarter. We ended the quarter with record total client assets under administration of $1.28 trillion, record PCG assets and fee-based accounts of $697 billion, and financial assets under management of $201 billion. With our continued focus on retaining, supporting, and attracting high quality financial advisors, PCG consistently generates strong organic growth, which was evident again this quarter, with domestic net new assets of $14.4 Billion, representing a 5.4% annualized growth rate on the beginning of the period domestic PCG assets. I'll note net new assets in our advisor accounts were negatively impacted by an independent contractor relationship whose affiliation with the firm ended in the fiscal third quarter. This was a planned and mutual separation. More than 60% of the assets and advisors stayed with Raymond James. The impact of the portion that moved off the platform this quarter was $4.6 billion in assets and 60 financial advisors. Our net new asset metric would have been even stronger after adjusting for this separation, which we do not believe will negatively impact our profitability. During the prior 12 months, we recruited to our domestic independent contractor and employee channels, financial advisors with approximately $282 million of trailing 12-month production and nearly $38 billion of client assets at their previous firms. Total clients, domestic sweep and Enhanced Savings Program balances ended the quarter at $58 billion, up 11% from March of 2023. The Enhanced Savings Program, with its competitive rate and robust FDIC insurance, continued to attract significant cash this quarter, offsetting a decline in client sweep balances, largely due to quarterly fee billings and tax payments in April. Total bank loans decreased 1% from the preceding quarter to $43 billion, primarily reflecting a modest decline in corporate loans as new origination demand continues to be tepid in the market. Moving to Slide 6. Private Client Group generated record results with quarterly net revenues of $2.18 billion and pretax income of $411 million. Year-over-year, asset-based revenues declined due to market decline. However, PCG results were lifted by the benefit of higher interest rates on interest-related revenues and fees. The capital markets segment generated quarterly net revenues of $276 million and a pretax loss of $34 million. Revenues declined 28% compared to the prior year quarter, mostly driven by lower investment banking revenues as well as lower fixed income brokerage revenues. The extremely challenging market environment, particularly for investment banking, has strained the near-term profitability of the segment's results. As we explained at Analyst and Investor Day, the segment's results are negatively impacted by amortization, share-based compensation for prior years as well as growth investments. We are focused on managing controllable expenses as near term revenues are depressed. The asset management segment generated pretax income of $89 million on net revenues of $226 million. The increase in net revenues and pretax income over the preceding quarter were largely the result of higher assets in fee-based accounts. The bank segment generated net revenues of $514 million and pretax income of $66 million. Third quarter NIM for the bank segment of 3.26% rose 85 basis points over the year ago quarter. As expected, decreased 37 basis points from the preceding quarter, primarily due to higher funding costs. We continue to add diverse, higher cost funding sources and shifted more of the lower-cost sweep funding to third-party banks. While this negatively impacted the bank segment's NIM, Paul Shoukry will walk us through how this benefits both clients and the firm overall. Looking at the fiscal year-to-date results on Slide 7, we generated record net revenues of $8.6 billion and record net income available to common shareholders of $1.3 billion, up 5% and 22% respectively over the prior year's records. We aren't seeing many other firms in our industry generate records so far this year. Additionally, we generated strong annualized return on common equity of 17.9% and annualized adjusted return on tangible common equity of 22.7% for the nine-month period. On Slide 8, the strength of the PCG and bank segments for the first nine months of the year primarily reflects the benefit of strong organic growth in the Private Client Group, the successful integration of TriState Capital, and higher interest-related revenues. When compared to the record activity levels in the year ago period, weaker capital markets results reflect the challenging environment for investment banking and fixed income brokerage revenue, despite incremental revenues from the SumRidge acquisition. Now I'll turn it over to Paul Shoukry for a more detailed review of our third quarter financial results. Paul? Thank you, Paul. Starting on Slide 10, consolidated net revenues were a record $2.91 billion in the third quarter, up 7% over the prior year and 1% sequentially. Being able to generate record quarterly revenues during a period when capital market revenues were so challenged across the industry, reinforces the value of having diverse and complementary businesses anchored by the Private Client Group business, which reached record client assets this quarter. Asset management and related administrative fees declined 4% compared to the prior year quarter, and increased 5% sequentially due to the higher assets and fee-based accounts at the end of the preceding quarter, along with one additional billable day in the fiscal third quarter. This quarter, fee-based assets grew 5% to a new record, providing a tailwind for asset management and related administrative fees in the fiscal fourth quarter. Brokerage revenues of $461 million declined 10% year-over-year and 7% sequentially. This year-over-year decline was largely due to lower fixed income brokerage revenues in the capital markets segment, as well as lower asset-based trail revenues in PCG. I'll discuss account and service fees and net interest income shortly. Investment banking revenues of $151 million declined 32% year-over-year and 2% sequentially. As experienced across the industry, both underwriting and M&A revenues continued to be challenged this quarter. We are optimistic that the environment is improving, and we continue to see a healthy investment banking pipeline and solid new business activity. However, there remains a lot of uncertainty in the pace and timings of deals launching and closing, given the heightened market volatility. While we may not see significant improvement in the fiscal fourth quarter, we expect better results over the next 6 months-12 months. Moving to slide 11. Clients' domestic cash sweep and Enhanced Savings Program balances ended the quarter at $58 billion, up 11% over the preceding quarter, and representing 5.2% of domestic PCG client assets. Advisors continue to serve their clients effectively, leveraging our competitive cash offerings. The Enhanced Savings Program attracted approximately $8.5 billion in new deposits this quarter. A large portion of the total cash coming in to ESP has been new cash brought to the firm by advisors, highlighting the attractiveness of this product and Raymond James being viewed as a source of strength and stability. The Enhanced Savings Program balances exceeded $11.9 billion this week, continuing to grow modestly and partially offsetting the decline in sweep balances, largely due to the approximately $1.3 billion of quarterly fee billings in July. As I said on last quarter's call, it feels like we are closer to the end of the cash sorting dynamic than we are to the beginning. We have certainly seen a deceleration of the activity over the past several months. We are not ready to declare the end of that dynamic. We will need more time with stable balances and interest rates. This quarter's sweep balances with third-party banks increased $7.5 billion - $16.9 billion, giving us a large funding cushion when attractive growth opportunities surface. These third-party balances grew faster than we expected last quarter, as a strong growth of Enhanced Savings Program balances at Raymond James Bank allowed for more balances to be deployed off balance sheet. While this dynamic has negatively impacted the bank segment's NIM because of the geography of the lower-cost sweep balances being swept off balance sheet, it ultimately provides clients with an attractive deposit solution while also optimizing the firm's funding flexibility. Looking forward, we have ample funding and capital to support attractive loan growth. Turning to slide 12. Combined net interest income and RJBDP fees from third-party banks was $708 million, up 91% over the prior year quarter and down 3% compared to the preceding quarter. The sequential decrease in firm wide net interest income was partially offset by higher RJBDP fees from third-party banks. If you recall, on our last earnings call, we anticipated a 10% decline in these interest-related revenues, we are pleased with a better than expected decline of just 3%, which was partly a function of higher-than-anticipated growth of Enhanced Savings Program balances. The bank segment's net interest margin decreased 37 basis points sequentially to 3.26% for the quarter, the average yield of RJBDP balances with third-party banks increased 12 basis points to 3.37%. While there are many variables that will impact the actual results, we currently expect combined net interest income in RJBDP fees from third-party banks to be around 5% lower in the fiscal fourth quarter compared to the fiscal third quarter, as we expect some further contraction of the bank segment net interest income to be partially offset by an increase in RJBDP fees from third-party banks. As we have always said, instead of concentrating on maximizing NIM over the near term, we are more focused on preserving flexibility and growing net interest income in RJBDP fees over the long term, which we believe we are well positioned to do. Moving to consolidated expenses on slide 13. Compensation expense was $1.85 billion, and the total compensation ratio for the quarter was 63.7%. The adjusted compensation ratio was 62.7% during the quarter, which we are very pleased with, especially given the challenging environment for capital markets. Non-compensation expenses of $570 million increased 15% sequentially. As Paul mentioned earlier, the quarter included elevated provisions for legal and regulatory matters of approximately $65 million and a bank loan provision for credit losses of $54 million. The $65 million of provisions for legal and regulatory matters was made up of several items that all hit this quarter. Some of those items were closed out and publicly disclosed, and some of the other items are still in process, and we therefore will not be able to provide much more detail on those in this call. Additionally, this quarter included seasonally higher conference and event-related expenses. The bank loan provision for credit losses for the quarter of $54 million increased $26 million over the preceding quarter, largely reflecting weaker assumptions for commercial real estate valuations in the Moody's CRE Price Index, and in particular, the Office Price Index, which resulted in higher allowances. I'll discuss more related to the credit quality in the bank segment shortly. In summary, while there has been some noise with elevated legal and regulatory matters over the past two quarters, none of the other non-compensation expenses are coming in too much differently than we expected when we last provided guidance for the fiscal year. As you all know, legal and regulatory expenses and provisions for loan losses using the CECL methodology are inherently difficult to predict. Importantly, we remain focused on managing expenses while continuing to invest in growth and ensuring high service levels for advisors and their clients. Slide 14 shows a pre-tax margin trend over the past five quarters. In the current quarter, we generated a pre-tax margin of 16.7% and an adjusted pre-tax margin of 18.1%. A strong result given the industry-wide challenges impacting capital markets and the aforementioned provisions. On slide 15, at quarter end, total assets were $78 billion, a 2% sequential decrease, largely reflecting lower client cash balances in CIP during the quarter. Liquidity and capital remained very strong. RJF corporate cash at the parent ended the quarter at $1.7 billion, well above our $1.2 billion target. The Tier 1 leverage ratio of 11.4% and total capital ratio of 22% are both more than double the regulatory requirements to be well capitalized. The 11.4% Tier 1 leverage ratio reflects over $1 billion of excess capital above our conservative 10% target, which would still be two times the regulatory requirement to be well capitalized. Our capital levels continue to provide significant flexibility to continue being opportunistic and invest in growth. We also have significant sources of contingent funding. We have a $750 million revolving credit facility, which was recently renewed and upsized in April, and nearly $10 billion of FHLB capacity in the bank segment. Slide 16 provides a summary of our capital actions over the past five quarters. During the fiscal third quarter, the firm repurchased 3.31 million shares of common stock for $300 million at an average price of nearly $91 per share. As of July 26, 2023, approximately $750 million remained available under the board's approved common stock repurchase authorization. We currently intend on continuing our planned repurchases, as we have discussed previously. Lastly, on slide 17, we provide key credit metrics for our bank segment, which includes Raymond James Bank and TriState Capital Bank. The credit quality of the loan portfolio is solid. Criticized loans as a percentage of total loans held for investment ended the quarter at just 0.94%. The bank loan allowance for credit losses as a percentage of total loans held for investment ended the quarter at just 1.04%. The bank loan allowance for credit losses on corporate loans as a percentage of corporate loans held for investment was 1.9% at the quarter end. We believe this represents an appropriate reserve. We are continuing to closely monitor any impacts of inflation, supply chain constraints, higher interest rates, and a potential recession on the corporate loan portfolio. As we have done from time to time when we believe there's an attractive risk reward, during the quarter, we proactively sold approximately $450 million of corporate loans at an average price of around 98% of par value. There continues to be a lot of attention on the commercial real estate across the industry, given the challenge with property values and interest rates. Let me briefly cover our portfolio. Across the bank segment, we have CRE and REIT loans of approximately $8.8 billion, which represents 20% of total loans. Our office portfolio is $1.4 billion, only representing approximately 3% of the bank segment's total loans. Overall, we have deliberately limited the exposure to office real estate, and we underwrote office loans with what we believed were conservative criteria. We will continue to monitor each loan closely given the industry-wide challenges. Now, I will turn the call back over to Paul Reilly to discuss our outlook. Paul? Thank you, Paul. As I said at the start of the call, I'm pleased with our results for the first nine months of fiscal 2023, our ability to generate record earnings during what continues to be a challenging environment. While there is still a near-term economic uncertainty, I believe we are in a position of strength and are well-positioned to drive growth over the long term across all of our businesses. In the Private Client Group, next quarter results will be favorably impacted by the 5% sequential increase of assets in fee-based accounts. I'm optimistic over the long term, we will continue delivering industry-leading growth as current and prospective advisors are attracted to our client-focused values and leading technology and product solutions. In the Capital Markets segment, there are some signs of improvement in investment banking, and we continue to have a healthy M&A pipeline and good engagement levels. While there is reason for optimism, we expect the pace and timing of transactions to be heavily influenced by market conditions and would more likely pick up over the next six to twelve months. In the fixed income space, depository clients are experiencing declining deposit balances and have less cash available for investing in securities, putting pressure on our brokerage activity. We hope that once rates and cash balances stabilize, we could start to see an improvement. While there are some near-term challenges over the long term, we believe the capital markets business is well positioned for growth given the investments we've made over the last five years, which have significantly increased our productive capacity and market share. We will continue to prudently manage expenses in these businesses as near-term revenues continue to come under pressure. Obviously, we'll have to take more significant action if the industry headwinds prove to be more long term. In the Asset Management segment, financial assets under management are starting the fiscal fourth quarter up 3% compared to the preceding quarter, which should provide a tailwind to revenues if markets remain conducive throughout the quarter. We remain confident that strong growth of assets in fee-based accounts and the Private Client Group segment will drive long-term growth of financial assets under management. In addition, we expect Raymond James Investment Management to help drive further growth through increased scale, distribution, and operational and marketing synergies. In the bank segment, our focus over the next several months will continue to be fortifying the balance sheet with diversified funding sources and prudently growing assets to support client demand. We have seen securities-based loan payoffs decelerate and expect demand for those loans to eventually recover as clients get comfortable with the current level of rates. With little activity in the market, corporate loan growth has been tepid. We believe the yield environment has improved. With ample cash sitting with third-party banks and lots of capital, we are well positioned to lend once activity picks up. In closing, we have strong prospects for future growth given our strong competitive positioning in all of our businesses and our ample capital and liquidity. I want to take this time to thank our advisors and associates for their continued perseverance and dedication to providing excellent service to their clients each and every day, especially in these uncertain times when clients need trusted advice the most. Thank you all for what you do. With that, operator, will you please open the line for questions. Thank you very much. If you'd like to register a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. To make sure we address as many questions as possible, please limit yourself to one question and one follow-up. Our first question comes from the line of Steven Chubak with Wolfe Research. Please go ahead. on for Steven here. I guess just starting one off on maybe the balance sheet reinvestment strategy here. You highlighted potentially capitalizing on some of the yield opportunities in loans down the road, but given the improving sorting picture, the funding capacity you have on the off-balance sheet cash, and the fact that we're near peak rates, is adding duration to lock in some higher yield here, something that you're considering more actively? I think you've known us long enough that we don't play the betting on interest rate game. We, you know, we like a floating rate balance sheet. It's served us well, even though maybe for a couple of years we got criticized. It made it kind of easy to get through this last year. You know, we certainly have some duration in our balance sheet and bank in terms of mortgages and other things. Again, we're not looking at trying to make an interest rate bet overall. Okay, that's helpful. Yeah, for my follow-up, maybe switching to the capital market side. We're hearing a lot of your peers highlight green shoots, as well as a potential recovery in DCM and ECM. Capital raising activity at RayJay was relatively weaker during the quarter. Is that just a function of the mix, or were there other factors at play? I know you said you expect better results in 2024, but how should we be thinking about the outlook for that business relative to what your peers have been highlighting? Thank you. Yeah. I think we've all been in the same boat. I mean, we've had, you know, the mix of our businesses are different, so the timing of quarters. We've already had a number of transactions closed for this quarter. You know, we see green shoots in that both activity level, backlog, new deals, you know, are all positive factors. You know, we just don't see a big rush to get everything done. Although we expect the business to improve, our history and our cycles just tell us that they take a little longer than we would all like or a lot of what bankers expected. You know, I think we're going to all track along in the industry on this. Hopefully, it improves. We'll play along. We're positioned. We have a lot of clients interested, a lot of mandates. You know, we've had those for the last year. The question is: When are people really, you know, able to transact in the market? I did want to add something to your first question on banking. Although we don't make duration plays, we are seeing spreads widen in loans. We think there's an opportunity, again, by keeping our capital and cash, that at the right time and the right loans, we'll be able to grow more on spread than making interest rate bets as a strategy. All right. Thanks, Steve. Our next question comes from the line of Kyle Voigt with KBW. Please proceed with your question. Hi, good evening. maybe first question on cash and ESP balances. With now having built back to over $16 billion of third-party deposits and noting in your prepared remarks that you have adequate liquidity for growing the balance sheet, do you anticipate taking any steps near term, or have you already taken any steps yet to reduce some of the incentives in place to grow those ESP balances much further from current levels? Hey, Kyle. No. You know, we really, again, the ESP program is a product that we created to serve clients and to help advisors bring in assets from their clients. Really, what's driving our growth strategy with ESP is first and foremost, client demand. Advisors are asking us to, you know, keep this product available for their clients. Of course, there's some capacity constraints, given, you know, we offer up to $50 million of FDIC insurance, so there's a network of banks and there's capacity constraints associated with that. You know, we're not looking to sort of manage those balances down based on our near-term needs. Long term, we know you know, we're confident we'll need the funding, this gives us ample opportunity to grow the balance sheet when client demand for loans, resurfaces. It's an easy adjustment for us. It's an easy adjustment for us, too, because you can adjust rate, which gives you some attrition. You can, you know, stop the program if you had to or slow it down. As is of right now, you know, cash sorting has slowed, but it hasn't stopped. If you look at everyone's reports, we will continue to leave the program open to our advisors as long as we have capacity. Understood. Then for my follow-up, I was hoping we could dig into SBL demand a little bit. During the Investor Day, it seemed like you were hopeful that we were nearing a point where SBL demand was starting to come back, and it looks like balances remained flat quarter-on-quarter after a few quarters of declining. First, just wondering if you believe those balances have finally troughed. Then, given the recent equity market resurgence here, is that having any incremental impact on kind of client willingness to borrow against securities? Just if you could talk about SBL demand overall, and then any leading indicators I guess you might be seeing on the SBL demand side. Thank you. I think we have certainly seen a deceleration of pay downs, you know, which is what really picked up as rates increased and borrowing costs increased. You know, we saw the expected pay downs over the last, you know, 6-12 months. Kind of particularly in June and even in July, those pay downs have really slowed down. We think this is a good baseline. We're not, you know, smart enough to call a trough or a floor, but we are optimistic that over the next 6 months-12 months, you know, if the markets stay relatively resilient, that we'll see kind of a pickup of demand off this level, off these sort of levels going forward. Great, thank you. The next question comes from the line of Alex Blostein with Goldman Sachs. Please proceed with your question. Hey, good afternoon. Thanks. Hey, Paul, I want to go back to your guidance on cash revenues. Down 5% from this quarter. At the same time, cash balances seem to be stabilizing. As you pointed out, the sorting has been slowing down. We got another rate hike here today. I'm just trying to understand the assumptions behind this guidance. As part of that, can you give us an update on RJBDP balances at the bank as well as at third-party banks? Yeah, a lot of pieces to that question, Alex. You know, hopefully, 5% is a conservative guide. You know, last quarter, we guided down 10%, and it actually ended up being down 3%. We were very pleased to outperform our guide from last quarter. Just given the uncertainty, we think it's always prudent to give conservative guidance around these type of things. You're right, there are a lot of puts and takes. You know, we would expect the BDP fee portion to be up just because balances are up so significantly, quarter-over-quarter. As long as that stays, you know, somewhat resilient over the course of the quarter, we would expect those BDP fees to be up. Conversely, with the interest income at the bank, we would expect pressure there just because we'll have a full quarter impact of all of the ESP balances that we raised during the third quarter. As we raised those balances, we moved to lower cost balances from the bank to the third-party banks. There's some geography involved in that from one to the other. When we put those things together and our best guess that balance is going forward, which can change dramatically over the next couple of months, that's where we come up with the down 5% between both BDP fees and NII. Again, we're hoping that we can exceed that guidance, you know, if things hold. In terms of what we're seeing so far, you know, in the month of July, really, the balances have stabilized. I mean, we did see a decrease in the sweep balances due to the quarterly fee billings in July, which is, you know, what you would expect. You know, outside of that, we really have seen absolutely a deceleration of cash sorting activity. I mean, outside of those declines from the quarterly fee billings, cash, the sweep balances were fairly stable outside of those quarterly fee billings, and the ESP balances continued to grow. Okay, that makes more sense. Second question to Paul Senior on investment banking, I guess. I hear your comments around the, you know, the pipeline is getting better, and it sounds like, you know, you guys are hopeful that in six to twelve months revenue will sort of come back up here. Are you effectively implying that investment banking revenues will be in this kind of $150-ish million range for the next couple of quarters? If that's the scenario, is there room to more aggressively manage the expense base to bring that business to profitability or breakeven even in that sort of scenario? Or you really need to see a much better revenue picture to become profitable in capital markets? Well, actually, you got us both pretty well there. You're calling me old and Paul, you know, young. Sort of, I think that, you know, it's really hard to tell. I, if you look at backlog and things, you could say it'll start improving, I, you know, I think until the market really goes, you'll see it with everybody. I don't, I don't know what our position would be that would make it a lot different in the market when it returns. We do have a lot more capacity. We invested. A lot of those investments are with people that we, you know, recruited and did acquisitions, and they kind of, they're part of us now. yeah, we've already looked, you know, we've trimmed some costs, and if we think it'll continue longer term, we would do more, but we're really trying to keep the team in place that we spent five years in building. I think they'll be very productive. Hopefully that everyone's green shoots turns into trees. you know, it's what we're hoping for. I think, you know, Paul gave 6 months- 12 months before we think industry-wide, not just us, it'll really start hitting. That's the unknown. It really just is the unknown. I, we certainly have the capacity, Once the market picks up, I think we're well positioned. Clients are engaged, you know, that's the million dollar question we can't answer. If we ever got to the point we thought it was more of a permanent or longer-term kind of hiatus, we would manage costs, you know, as tightly as we could. I got you. All right. Thank you both. The next question comes from the line of Brennan Hawken with UBS. Please proceed with your question. Thanks for taking my question. I know, Paul, that I won't go into junior or senior. Paul, CFO Paul, you commented that you were limited in what you could say on the legal charges, was totally understandable, not all resolved. You know, now this is the second quarter in a row we've had some legal charges, and is it right to assume we're probably going to see a third quarter because you said they're not all resolved? Therefore, should we expect some bleed into next quarter? How should we think about that? I mean, there could be certainly additional reserves, and there probably will be additional reserves in future quarters. We're hoping that there'll be, you know, a pretty big drop off from the $66 million or so that we saw this quarter. You know, that was obviously unusual for us, if you look back at our history. You know, time will tell, but you know, this quarter was obviously elevated relative to sort of what you look at for an average reserve for a quarter for us. Okay, fair enough. Then, wondering if you could give a little bit of color around the ending of the relationship with the independent contractor that you spoke about that impacted the NNA this quarter. You know, what kind of counterparty was that and what led to the decision by either them or you, to go in a different direction? Yeah, I think, you know, we're not going to talk about firms or stuff, but I think that just based on our strategy, it was an independent contractor firm, a normal independent contractor firm. Based on their strategy and what they wanted to do and ours and, you know, and us looking at our profitability and I think what they thought they could do in other things, we just thought it'd be better to have another home. They went ahead, and we supported their move. We again, as we said, we kept a lot of the advisors, and the advisors had a choice, so, you know, we call it just strategic differences in both of our businesses and profitability. As we've said, we don't think that the that there's a negative impact to our profitability on that change. You know, we're both making our bets and both going in the directions we think we're right. Okay, thank you for the color. The next question comes from the line of Jim Mitchell with Seaport Global Securities. Please proceed with your question. All right, thanks. Good afternoon. Paul, just maybe can you talk a little bit about, can you speak to the maturity profile of the AFS book? It's still yielding around two, a little over 2%. Just great to get your thoughts on how quickly that portfolio runs off and, you know, and you get a chance to reinvest that at higher rates. Yeah, I mean, the average maturity on that portfolio is somewhere in the four year range. You know, it takes some time for it to run off. We're probably going to see it maybe $1.5 billion or so of a run off a year at current levels. It'll take some time. Frankly, you know, we grew that securities portfolio over during that COVID period because we had a pretty significant increase in client cash balances, as you recall. You know, there really wasn't demand from third-party banks, we took it onto our own balance sheet to accommodate those cash balances. Fortunately, we kept the vast majority of those, as Paul indicated, in very, very short-term treasuries, didn't take too much duration risk. Now as we look forward, we're really going to grow that, or let that securities portfolio run off. The liquidity, in the balance sheet should be somewhere around 10% of the bank's balance sheets, combined, which will let us reinvest a lot of those, repayments to, bank loans, which again, as Paul said, have higher spreads and higher yields on them. That'll be a nice kind of tailwind for us over the next, several years, hopefully. Right. When you just think about NII after this coming quarter down, you know, I guess combined down five, maybe NII down a little more. How do you feel like once you kind of catch up in ESP balances are not growing as rapidly that that NIM in the bank starts to stabilize, and NII can be flat to up or still think that further declines? Yeah, just to be clear, when we raise those ESP balances, you know, cash is fungible. The cash that we move off balance sheet to third-party banks is still making a higher spread than the cost of. Sure. ESP balances while we sort of await investment in higher yield, higher yielding assets and loans. you know, it's still a net, not a huge net positive, but it's still a net positive for us. We offer the clients a product that's attractive, allows advisors to, you know, gain more wallet share from their clients. and, you know, we essentially place that cash with third-party banks until we have better investment opportunities. There's a lot of geography involved in terms of what shows up in NII and BDPs, but we obviously look at it from a consolidated basis. It's really a win for the clients, a win for the advisors, and a win for the firm. It gives us a lot of capacity to grow the balance sheet over time. That's kind of how we're thinking about it. You know, to the extent that, you know, we can when demand returns for loans, both corporate loans and then loans to the Private Client Group clients, then, you know, it'll certainly be a nice tailwind to our net interest income. Right. I think you got great- If you look industry-wide, there's still a competition for cash. As long as there is and an upward in the Feds raising rates, you know, it's going to impact, I think, rates, you know, on both ends. You know, until that dynamic stabilizes, if it ever does go the other way, which some people predict, we haven't believed the forward curve for over a year now. Once that does happen, you know, spreads should improve. That's, you know, we don't know. We're operating, we know on the ESP balances. They're not cheap, but we still make a spread off of them. It's, you know, positive to NII, and so there's no harm in raising them for clients, and we make a little money, too, so. just to be clear. Oh. Just to be clear, one last comment on this is, because I've got some questions over the email, is, we, our guide, the 5% guide that I provided on NII and BDP fees is really based on today's rate action. We're not trying to factor in the forward curve or anything like that. As Paul said, I'm not sure we totally buy the forward curve. I'm not sure if we're certainly not going to give guidance based on the Fed cutting rates anytime soon. Perfectly fair. Thanks. Thanks, Paul. Mm-hmm. As a reminder, to register for a question, please press one, four. The next question comes from the line of Michael Cyprys with Morgan Stanley. Please proceed with your question. Hey, good afternoon. Thanks for taking the question. I was hoping you might be able to provide some color on the marketplace for recruiting advisors today, how you see that evolving and how you might characterize the pipeline. Thank you. I think, you know, I've gotten this question almost every quarter now for 13 years since I've been CEO. It's, it's competitive. I mean, it's, I think all firms are kind of in the market. The costs have gone up somewhat, certainly over the years. We have maintained our position, not being, you know, the highest bidder in these cases and using it as positive selection, but it's certainly competitive. You have the broker-dealer employee channels, you have the independent firms and the RIA aggregators competing, especially at the high end for all big clients. The good news for us is we continue to compete very well. You know, we continue, the pipeline is strong. The biggest change probably over the last two years is the number of just very large teams, that we talk to versus, you know, years ago. The pipeline's great. It's been picking up every quarter. We had a slow start, and it's continued to pick up each quarter, and so we're optimistic, but it is competitive. Great, thanks. Just a follow-up question on the ESP balances. Just curious how you think about the duration of those ESP deposits versus your sweep deposits and other funding sources, and how do you take that into consideration when you think about ultimately reinvesting and putting some of those deposits to work? Well, you know, it's a relatively new product for us. We launched it in March. You know, we'll learn more as we have more experience with it and as rates stabilize and those sorts of things. You know, we always try to have cushions around kind of how we think about funding deployment, and maybe even more so, a bigger cushion when you're dealing with a new deposit product in a volatile and uncertain rate environment. You know, you look at where we are today, and we've had a target of third-party balances of around $10 billion that we talked about, just six months ago, and now we're up to, you know, $16 billion or north of $16 billion of third-party balances. The banks are still holding very high cash balances, you know, more than they need in a normal environment. We have a significant funding cushion, and, you know, opportunity over the next several months to really kind of have better history and understanding of the sort of the reinvestment of the Enhanced Saving product balances. I think you can also look at, you know, most of the ESP balances came from cash balances elsewhere, money markets, treasuries. I mean, it was really, I think, if you look at the assets, a cash yield play, it just happened to be secured with FDIC and, you know, more people viewed it as more secure with FDIC insurance. It's not like it came out of, you know, everybody ran from equities into the product. As Paul says, we are always more cautious with a new product and understand it can move and also are used to competing. We will see in the quarter, but again, we have a big cushion right now. That's why we haven't slowed down deposits, just understanding that, you know, it could have a little more volatility, but we'll see. Great. Thank you. Our last question comes from the line of Devin Ryan with JMP Securities. Please proceed with your question. Great. Thanks so much. Good evening, Paul and Paul. I'll just keep it at one there. Most was covered here, but I do want to ask about corporate M&A for the firm. You know, we obviously saw recent press around a reasonably sized public independent broker that could be mulling a sale, and so I thought that that was interesting. Without getting into details around where it specifically, it'd be great just to hear about kind of what you guys are seeing in the marketplace, because it would seem that conditions could be getting better for you guys as well, just with valuations recovering, your stocks up as well. Confidence is improving in the marketplace to some degree. You know, just assume that's a little bit of a better environment for M&A. Just love to talk about what you guys are seeing in the marketplace today, and if you can, you know, what that pipeline of opportunities is looking like right now relative to, I don't know, a year ago. Well, thanks, Devin. As you know, we just hired a new head of our corporate development practice, so we certainly didn't do that to slow down. I didn't see the article you're alluding to, but, you know, we've always have had a course of firms that we believe would fit us well, especially in the Private Client Group space, where we really know them all, and our focus hasn't changed. you know, as we said, the problem, most of they're private or not for sale, so it doesn't help. we, you know, we stay close, and if whatever changes, we want to be their only or first call. we continue to keep that strategy. on the M&A, with Suraj, who's joined us, is really focused on also other opportunities. We've looked at M&A firms that we talked to pre market adjustment. Because we thought valuations are way off, and we continue dialogue with those that we think fill holes in the practice. Again, pricing has gotten much better there. We've had a few asset in the asset management space, and some we've talked to and couldn't come up with pricing versus the market, but it's not unusual for us. Looking at other ancillary technology fit in plays like SumRidge, which has really been a huge positive. Our eye is not off the ball at all for M&A. In fact, we always assume the tougher the market, the better opportunity to really add people to the family. Again, it has to be a culture fit, strategic, be able to integrate it, and then it's price. We're pretty price disciplined, too. We're working away, and we always have. But, you know, we went where we didn't close any for a while, and we closed three quickly, so you know, who knows. All right. good stuff. Thanks so much, guys. Thanks, Devin. There are no further questions. Mr. Reilly, I'll turn the call back to you. Yeah, thank you for joining. I know it's always a busy time with everyone with earnings, but I really feel like we're in great shape. You can see our asset growth, you know, our recruiting growth, and the capital markets is a tough market, but that will return too. We have a great franchise in that business. When the market returns, they'll return, and we believe we can continue growing the other businesses. Thanks for joining, and we'll talk to you next quarter. That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.