Raymond James Financial, Inc. (RJF) Earnings Call Transcript & Summary

Hello, everyone. Thanks for joining. Brennan Hawken, UBS' Capital Market Analysts, pleased today joined by Paul Shoukry, CFO of Raymond James. Paul, thanks so much for joining.

Thanks. It's good to see everyone here in sunny Florida.

Not too far for you, very short trip yes. So we'd love to start out talking about capital. So you guys have a leverage ratio that's north of 12%, but a target that's 10%, which is also pretty high above your minimum, so already pretty conservative. So given how conservative your target is, why not stay closer to that 10% range? Why is it drifted a little higher?

Great. Maybe first, just stepping back and explaining how we think about capital, I think it's worth doing from time to time. Really for us, our capital and our balance sheet is there to serve as a source of strength for our advisors, their clients and our associates, and not just a source of strength in good times, but also a source of strength in bad times, which seem to come every few years, oftentimes unexpected. I remember at this conference last year, different name of a conference, but at the same location, we're getting criticized for not buying longer-dated securities because at that time, everyone "knew" that rates were only going to rise to 1.5% to 2% and that taking duration would make a lot of sense. It was only 3 weeks later that everything changed in the banking sector. So it was a good reminder that having a strong capital position in our business just with the volatility and uncertainty is -- usually serves the shareholders and all the stakeholders well over a long period of time. Now with that being said, we do have a 10% target, which is conservative. It's 2x the regulatory requirements to be well capitalized. We are 12.1% now. We were at 10%, maybe a little over a year ago. So it's not like we haven't gotten to the 10% range. But capital is hard to manage real time in our business, and our capital growth prioritization framework, the very first thing that we want to prioritize is organic growth. We think organic growth historically has produced the best risk-adjusted returns to shareholders. And then our second preference would be acquisitions. And we've grown more organically than through acquisitions over history, but we have done and have a track record of doing successful acquisitions over time. We did 6 in 2 years just a couple of years ago, and that's how we got the ratio down to 10%. And so -- but those acquisitions have to be good cultural fits, good strategic fits and at a price that makes sense for shareholders. And then third, we have an ongoing dividend of 20% to 30% of earnings. And then our fourth preference is buybacks. If we can't use the capital within a reasonable amount of time using those other 3 levers, then we would do buybacks. And we've been more steady with doing buybacks to offset dilution related to compensation. And also, we did an issuance related to TriState Capital acquisition a couple of years ago, 1.5 years ago, and we're offsetting that issuance as well. But that's something that we -- while it's our last preference on the capital prioritization framework, it is something that we look at from time to time.

And given some of that history of M&A, a lot of investors are wondering whether or not that's something you might be working on today. So understanding you're going to be limited in exactly what you tell us, is M&A something that you think could be attractive in the current environment? And what types of capabilities might you be interested in that?

As Paul Reilly said, our CEO and Chair said on the last earnings call, we are very active in looking at opportunities in the M&A space. We hired a new Head of Corporate Development. He started with us about 6 or 7 months ago, and he has really increased the conversations that we have with both strategics and sponsors and just the connectivity and being in the flow of information with bankers. So we are having lots of conversations, some with firms that we've been wanting to have conversations with for years. So we are optimistic, but you can never time these things. We -- especially our approach is going after a good cultural and strategic fits on a more proactive basis versus kind of a reactive basis. the Charles Stanley acquisition, for example, that we closed a couple of years -- 1.5 years ago, we first had conversations with them in 2014. So that was a very long process as an example. So you can't time them perfectly to align with your capital ratios, but we take a long-term approach. We're looking really over the next 3 to 5 years and how we think we can deploy capital, and we're optimistic that acquisitions will be a part of that formula.

Some of the M&A that you've done recently has been when people think of RayJay, they think it's a wealth business, the private client, right? It's like your core business. Some of the recent M&A, though, has been in either on the banking side. Now you could argue that TriState is private client adjacent, right, because of the SBLs or maybe like SumRidge in some of the institutional businesses. Is the -- how is your view of some of the -- it's wrong to call them tertiary, but sort of the non-private client businesses, do you feel like those are relatively built up now? Or there's still more work to be done on the M&A front in some of those other businesses?

Yes. We are, first and foremost, a Private Client Group firm. Last year, over 70% of our revenues were attributable to the Private Client Group business, the 8,700 financial advisors across the country in Canada and the U.K. But we do have diverse and complementary businesses in capital markets, asset management in our Bank segment. And while those segments are all at critical mass, there's still significant opportunity and significant headroom for growth across all of our businesses, including the wealth business. We just have been less active on the wealth side in the last few years, because frankly, a lot of the deals that have transacted on the wealth side are firms that have had franchises with advisors that have less -- lower average assets and average productivity than we target in our core Private Client Group business. So we're a quality over quantity strategy at Raymond James, and we always are trying to improve the average production and assets and profitability of the franchise and trying to preserve the culture that we've built over -- since our founding. And so we're not going to just do a deal to do a deal or to get our ratio down from 12% to 10%. We're not going to force the deal. We're still going to be very deliberate and make sure that, first and foremost, any company we purchased in any of our segments are a good cultural fit.

Yes, makes sense. And then thinking about that core PCG business years, net new assets, which is a key metric in any wealth management firm. We had been a little slower last year, but fourth quarter really rebounded nicely. You spoke to some of the trends in recruiting and retirement. Does that suggest that maybe in the near term, we should think about NNA being a little slower than what we're used to seeing out of RayJay?

Yes. NNA was a little slower for us last year, but it was still a leading metric in the industry. So our NNA growth has been really consistent year in and year out, and that starts with a base of very strong retention. We typically lose less than 1% of regrettable attrition a year in terms of advisors. There's firms that average multiples of that. And that's because we treat our advisors like clients. We have the breadth and depth of services that they've been accustomed to at the big firms. 80% of the advisors we recruit come from the wirehouses. But we have the culture that treats them like clients and respect the relationship that the advisors have with their clients, and we're very intentional on calling them their clients, not our clients. And we're the only firm that says that you own your book of business across all affiliation options. And if you leave on good standing, we'll actually help you move your clients to your new firm, whereas all of our peers would, particularly on the employee side, obviously, call their clients and try to retain them and provide discounts and other things. So we have a very unique value proposition, which helps with our retention, which is what we focused on, first and foremost. And then on that base of retention, we can grow through recruiting across all of our affiliation options. And we have our employee, independent contractor, a financial institutions division, and RIA & Custody Division. And while other firms talk about having a large addressable market in these various affiliation options, we're really the only firm that has all of those affiliation options at scale, and we've been in those businesses for decades. And so our addressable market is large and the pipeline for recruiting remains very consistent and strong going forward. And not only that, but the quality of the advisors we see in the pipeline continues to just increase and improve over time. We're seeing a lot of $10 million, $20 million, even $30 million teams that are interested in joining and affiliating with Raymond James. So we're really excited about our growth prospects, which really drives NNA going forward.

Yes. Fair enough. When you think about the pipelines and the recruiting pipeline, is there any particular affiliation model that is looking particularly stronger now, whether it be employee or independent or whatnot?

No. I think all the channels are seeing a lot of success and having a lot of traction. So there's nothing thematically I could tell you. There's just certain advisors that prefer to have the firm deal with the real estate and the employee benefit cost and all those types of things, and there's certain advisors that want to be -- that are more entrepreneurial and willing to deal with the real estate and the overhead and running of the business, not just -- in addition to serving the clients. And so our history is that those are very different types of advisors, and for the most part, we don't see a lot of crossover between the different affiliation options over time. Not to say that there isn't any crossover. Certainly, there is. But it's just a difference in preference with most advisors between one channel or the other. There's no difference in product support between our independent contractor and employee channel, the product support, technology support, the concept of independence, that exists in both channels.

Got it. Okay. And then one of the things, I think your retention ratios do not include retirements and retirements are always something to deal with in a wealth business. So do you all have a financing program in order to help the transition a book from a retiring advisor to another advisor on the RayJay platform?

Yes, absolutely. And we've had these programs for quite some time. So it's not new to us. We call it retirement choice. There's a couple of different paths that advisors can take, either kind of continuing on and sharing with the business or receiving sort of a payment upfront and Raymond James will help finance that. But beyond financing, we have an area that is dedicated to helping advisors who are thinking about this, either being buyers or sellers of practices that are going through retirement transition, structure the deal, value the deal, figure out the best financing options, play matchmaker within the Raymond James ecosystem. And so this is something that we have been very focused on for quite some time. We have a dedicated group that focuses on this. And that's why when we say that there's elevated retirements, which typically is in the fourth calendar quarter as people retire at the end of the calendar year, we retain the majority of the assets because we have plans in place for those retiring advisors to help them transition their business to their teams.

Got it. Okay. We'd love to talk about the enterprise channel. This is something that's gotten a lot more attention in the last couple of years, and you're definitely one of the few scale players in that space. So I would love to see like what you're seeing as far as competition, is it just investor perception that the competition is ramping? Or are you seeing that as well? And you haven't been as active in that channel. So is some of that competition may be not hitting your return thresholds and therefore, you've just pulled back? Or what's your view on that market today?

Yes. And we've been in the -- what we call, the Financial Institutions Division supporting banks and credit unions across the country. And we've been in that business for over 20 years. I would kind of bifurcate the business. There's 2 types of programs. There's one where the advisors are full-time financial planning advisors, not too dissimilar on average assets or business focus as the advisors and the rest of our Independent Contractor Division or even in our traditional employee channel. They just happen to be based in working in a bank branch setting. And then there's other, what we call, platform or program banks that are much larger, some of the advisors may not be full-time advisors, but they might maintain a license too -- in addition, to selling banking products, they want to sell brokerage products from time to time. We're in that first category of serving advisors. If you look at our average production in our Financial Institutions Division, it's multiples of many of our competitors. And so we don't really -- a lot of the transactions you've seen recently, they really wouldn't have hit our radar because it falls into that second category of bank program where there's a very large number of advisors with a relatively low average production or level of assets per advisor. Not to say that that's a bad strategy, that can actually be a very effective strategy if you have the systems and platform to support it, but it's just not our strategy. Our strategy is to focus on advisors that are full-time financial planners with relatively high level of productions, particularly for that channel.

Got it. And how big is that business for RayJay today? And you mentioned where you focus on the market, but like competitively, how is RayJay differentiated in the marketplace?

Yes. I mean, we don't break out the assets in that business. But it's a meaningful business for us. Again, we've been in it for over 20 years, and we're a meaningful player. We're probably the second largest player in that space. And so it's a meaningful business for us and something that we have dedicated a lot of resources to. But I think your question is stemming from the fact that there's been a lot of these big program announcements that really don't fit our strategy that we haven't partook in.

Yes, got it. Okay. On the -- and here we go, we've almost gone 15 minutes without talking about deposits, but I'll end that streak now. So we've had really strong inflows seen in ESP product that you offered. It's clearly resonating a great deal with investors, but it started to slow down here more recently. And so when we think about some of the recent flows into that product, how much is coming from net new money? And is it still a compelling proposition on that front?

Yes, absolutely. So this is something we're really pleased with. We rolled it out last March in the midst of all the turmoil in the banking sector. And since then, we raised north of $14 billion of deposits. Again, a testament to being a source of strength and stability for clients and advisors during challenging times. And so it's been a very compelling product and the majority of the flows in this product have come from outside. So net new flows to the system. So it's been a win-win-win for clients, advisors and the firm. And so the growth of that product has slowed down as we expected because -- just as the cash-sorting dynamic has slowed down over time. Essentially, if you've had cash over the last year to invest, that's -- you're price sensitive too, that's not just working capital cash awaiting investment then. By now, you place most of it for the most part. And so that has contributed to the deceleration of the cash sorting activity that we've seen, which is also very much related to the deceleration of the growth and the enhanced savings program balances that we've seen. So -- but we're continuing to look at ways to fulfill client and advisor demand with various cash products. So we take feedback from our advisors all the time. And we want to be a source of strength for advisors and their clients, but also provide products that help them gain wallet share, because a lot of these advisors as they grew the $15 billion -- over $14 billion of balances, they were calling us saying, "This is great. I've been trying to get that cash from that bank for so long from this client, and now you gave me something, a tool to be able to do that. Now that I have it here, the client is probably going to keep it here." And so that has been a great asset acquisition tool for advisors to use with their clients.

Yes. And is that really -- basically the gist of the strategy is to use it as a way to drive net new money and capture better wallet share?

Absolutely.

Yes. Got it. So you touched on sorting. And so we've seen slowing in the trend of sorting, incredibly hard trend to try to predict given all of the things happening across the industry. But it is the right idea to be thinking about largely stable sweep cash from here. We saw that play out in January, as you sort of suggested on the call. We got that in the monthly. How is February trending in a similar way of general stability? Is that how we should think about it? And when do you think -- what do you think we need to get to before we can see actual sweep balances start to grow?

Yes, January and so far in February, I mean the sweep balances have performed better than we expected. Now we tend to be conservative when there's uncertainty. So -- but one month doesn't make a trend. We're not going to declare victory on the cash sorting dynamic until we see several months of stabilization. So we're monitoring it closely. But again, as I said, even 2 earnings calls ago, I think we're much closer to the end of that dynamic than the beginning just because there's been so much time now for advisors to help their clients reinvest the price-sensitive cash into higher-yielding alternatives. So -- but we'll continue to monitor it going forward.

Sure, sure. When you -- taking a step back and when you think about the experience that you had in the sorting dynamic. Obviously, you had ESP launched, Enhanced Savings Program launched during the middle of it. So that was maybe something that would be different in the next cycle. But was there anything that you learned that might feed into how you would approach at a rate hiking cycle and maybe approach it a little differently? Or were you pretty pleased with how it all went?

No. We're pleased with how it went. I mean, we always look back and wish that we've done -- we did things a little bit sooner, had a little bit more technology around something or like we could have fully incorporated or included the Enhanced Saving Program balances into the asset allocation models and reporting that the advisors use. We're working on that now, but we didn't have time to fully roll that out last -- by last March. So you always look back when you see these trends and say, gosh, I wish we were a few months earlier, but the challenge is you never know when you need to be that early. When we were working on the program, we thought that we would be -- it'd be months and months, if not -- maybe a couple of years before we really needed a program like that, because remember, we had tens of billions of dollars of cash sitting on the sidelines off balance sheet. And so we -- so those kind of things we look back on and reflect on. But overall, we're very pleased with how that performed and the deposit gathering efforts overall.

Great. Excellent. So staying on the balance sheet but transitioning to some different topics. You talked before about how you have such a robust excess capital position. How are we thinking about loan growth in the current environment? Clearly, that excess capital could be used to fund some growth. But I know the environment hasn't been as conducive to that. So what are you seeing here? What do you think maybe needs to happen in order to get the parts of the market that you're really interested in providing lending to get growing again?

Yes. So we have plenty of capital and funding, as you point out, Brennan. But remember, our balance sheet and our loan growth is really there to support client demand. And ultimately, SBLs, for example, which is our largest loan category between Raymond James Bank and TriState Capital Bank, and these are over collateralized loans with liquid securities are repriced daily. So we love that loan category. That's been flattish year-over-year in a rising rate environment, because they're floating rate loans after growing 40-ish percent a year during COVID in a near 0-rate environment. And so we want to -- we're optimistic that clients will reengage with that product as they get use to the higher rate environment. It just moved so rapidly at an unprecedented rate that a lot of the clients, who had outstanding funding, if they didn't need it, they paid it down. But we actually had a lot of new originations in that product over the last year. And so we have a lot of capacity in that product. And we certainly would love to see growth in that product. But we don't know when that growth is going to come. And one thing we don't do at Raymond James, which a lot of our bigger competitors do is we're not going to have quotas. We're not going to change deferred comp formulas. We're not going to force the product. We're going to make it available to advisors to provide to their clients, if their clients want it, but we're not -- we don't aggressively push product at Raymond James. That's one of the things that makes us unique going back to our culture. So it will grow when client demand comes back, and I'm confident that it will come back at some point. But -- and that's true on the corporate loan side, too. The demand has been tepid on the corporate loan side. And so we're not going to stretch outside of our areas of focus to grow loans beyond what we can naturally grow it at given the demand.

Do you have any insights on the corporate side if it's the same thing, just adjustment to the higher rate environment, need a little bit of time before that demand comes back?

Yes. I think it's -- the higher-rate environment and a lot of corporations came into the higher-rate environment flush with cash on the balance sheet because it was a conducive financing environment leading up to it. And then another reason corporates typically need cash is for M&A activity and M&A activity has been nearly nonexistent over the last year. So I think it's just a variety of factors. But to your point, loan demand will come back, both on the Private Client Group side and on the corporate side. So it's just a matter of being patient in the meantime. And where a lot of banks, not most banks, but where some banks go wrong is when loan demand is tepid, they get outside of their areas of focus to grow loans, and that oftentimes doesn't turn out well.

Sure. And you touched base on how there's been some new originations on the SBL side over the past year. Do you -- is that a typical leading indicator? Like are you guys confident that we're going to begin to -- maybe certainly not going to be as robust as it had been. But do you believe that we're going to be starting to see actual decent growth pick up here on the SBL front?

Yes. I think now that -- it seems like the payoffs or paydowns have really leveled out. It seems like this is a good foundation to grow off of. I can't tell you what the growth rate is going to be, but I am optimistic about the loan growth over the next couple of years.

Got it. And then last one on loan growth. You had indicated in -- I believe, in November that we could see a mid-teens SBL growth in the coming years. Was that meant as a CAGR? Or did you -- and what would be -- how long will it take and what would be driving that acceleration?

Yes. I think -- if I recall correctly, I think the -- what I said was 5 years from now, I wouldn't be surprised if you look back at the last 5 years and see kind of double-digit SBL growth. And that was more a mark on where that product is in its life cycle, it's still relatively new compared to other major lending products available to Private Client Group clients, certainly a mortgage or a home equity loan or something, not that we provide home equity loans at Raymond James Bank, but at other banks. So it's still a relatively new product when you compare it to other lending products, and it's a very attractive product. So I think that there's a lot of upside over time. And that's one of the reasons we did the TriState Capital acquisitions is because they are a leading provider of that product to independent advisors across the country.

Got it. Okay. I'm sure there might be some questions around the room. [Operator Instructions] All right, I can dive back in. I'll keep an eye out for now, but I'll keep on rolling. So when we think about the -- and we circle back to the PCG Group and we think about the asset management business, what level of penetration of your asset management product is within and comes out of the Private Client business? And how much is relying to third party? I believe, it's really a pretty tight relationship. But any color you could give on that would be great.

Yes. Our traditional asset manager, it's called Raymond James Investment Management. We just rebranded it from Carillon Tower Advisers to Raymond James Investment Management, give or take, $70 billion to $75 billion of assets under management for that third-party asset manager. So that's something that -- we don't think it's at scale. But frankly, I'm not sure what scale is anymore in asset management when you hear these multitrillion-dollar players saying they're not at scale. So -- but of that, maybe 20% or so, I don't know the number right off the top of my head, but a number like that, that is distributed internally to our Private Client Group business, and it's mostly fixed income-related products, the short-term bond funds and those type of products are distributed internally. So we've always made it almost more difficult, frankly, to sell our own asset management products internally through the Private Client Group. And remember, we have $1.3 trillion of client assets in the Private Client Group business. So it's a very small fraction of those assets that are internally managed by Raymond James Investment Management. So we always -- actually, we are a pioneer in open architecture. The firm was founded by Bob James in 1962 as a financial planning firm when all of our competitors were firms that were selling internal insurance and asset management products. And we were saying, no, we want to really help clients with financial planning and have an open architecture system. I mean, it wasn't called open architecture at that time, but that really is sort of core to our DNA.

Excellent. Capital markets has been an area where there's been some focus recently. So obviously, 2023 was a tough year for capital markets on the activity side. But it does look like things are starting to pick up. So curious about whether or not you're seeing that pick up in some of the leading indicators in that business and how you're thinking about managing the expense base given the challenging revenue environment?

I was wondering if that's why you had all these green shoots and these potted plants behind me here. That's the buzzword in our industry and capital markets. We are optimistic -- I mean, 2023 was a challenging year across the entire investment banking landscape across the industry, both for M&A and underwriting. I mean, it basically froze and it's still not robust. I mean, things are starting to slowly get better. But I would emphasize slowly there's still pretty significant gaps between what buyers are willing to pay and what sellers are willing to sell for. And so I think until that converges or gets a little bit closer, I think we're still going to have to be patient and wait for activity to come back. In the meantime, we're optimistic about the leading indicators. So our pipelines continue to build. We are continuing to pitch activity. Remember, 60% to 65% of our M&A activity historically has been private equity sponsors. And so we pitch sell-side mandates, and we have won a lot of those mandates and were signed up. But at the end of the day, those ingredients, I talked about earlier, need to come together in order for there to be realization. So we're being patient. I think the entire market is being patient. We're all cautiously optimistic using the words green shoots quite a bit. But -- and it could turn any day, but it's certainly still slow out there today.

Yes. And we've seen M&A announcements pick up, but it's really been big strategic deals.

That's right.

The sponsor markets still stay quiet. So nice to see the FIC activity improved in the fourth quarter after several quarters of muted volumes. So what caused that shift in engaged behavior last quarter, and was there any seasonal component? Or was it more like the rate environment just getting a little more conducive?

Yes. I wouldn't necessarily call it seasonal, but there's sort of a catalyst that we could point to with the 10-year coming in and almost 100 basis points in a very short period of time. That did create repositioning opportunities for a lot of the banks that we serve on the fixed income side. We primarily serve small and midsized depositories. And so when rates came in, the values of their portfolios improved and that the opportunities to reposition out of the portfolio, maybe take some losses and reinvest in higher-yielding securities going forward. So there was a catalyst that helped activity last quarter. But SumRidge was an acquisition we completed a couple of years ago. They have performed very well. They're in the corporate trading -- technology-enabled corporate trading business, and they have performed well now since we closed the acquisition. So that helps diversify our business outside of the depositories, gets us into a new client segment, a new product type and also gives us a technology that over time, we can apply to our more -- our legacy fixed income business serving depositories.

And so rates is a nice catalyst in the fourth quarter, while the forward curve and the expectations for the number of cuts has moderated, and it's a little less dovish. I don't think the long end has really moved all that much. So has that better activity sustained, at least based on what you've seen quarter to date?

No. I mean, I would say last quarter was a pretty good quarter given the macro factors that I described. At the end of the day, our legacy business serving depositories really thrives when our bank clients have excess deposits, and they get paid to take duration in the portfolio, because there's a yield curve that pays you more in the long end and the short end. And right now, we're not in a situation where there's excess deposits out there and you actually get paid less the longer out you go. So it's not the most conducive factors for our fixed income business right now.

Got it. Okay. So more of a moment than the beginning of something sustaining, fair. On the expense front, so you expect adjusted noncomp to be around $1.9 billion in the coming year. It certainly suggests continued growth. Can you maybe give us an idea of how much inflation is still driving that expense growth versus investments that you're making in the business?

I would say, it's mostly growth-oriented expense, and some of it is directly correlated. So FDIC insurance expense grows as we grow deposits on the balance sheet, sub-advisory fees grow as we grow fee-based assets, occupancy expense grows as we bring on new advisors and they take on new branches or bigger branches. And then technology is an area where we have consistently been focused on investing in technology to remain competitive and also to comply with regulatory requirements. And that's, frankly, a moat in our industry that's going to make it challenging for small players to get into our industry or continue growing in our industry because the technology requirements are pretty significant. So mostly growth oriented, I would say, the inflation we saw around compensation in the last couple of years, that's sort of subsided. And so our turnover for Raymond James is really low after kind of a couple of years of it being elevated, and I think that was true for most corporates during that COVID period. So I think we're going to continue to share in our success with our associates, but most of the growth you're seeing in the noncomp expense is really growth-focused.

Got it. And how do you strike a balance in between continuing to invest for that growth versus discipline just as a sort of general philosophical framework?

We look at -- we've always looked at next 5, 10 years and kind of what is sustainable growth rate for the firm. So unlike a lot of other firms, we don't really try to time our growth investments to where interest rates are, to where the market is. It's too hard for us. We don't think we're smart enough to time those cycles. And so we just try to focus on what's a sustainable healthy level of growth that the organization can digest. I mean, our Head of Technology and Operations, Bella Allaire, she'll tell Paul Reilly, and me, hey, we can't take any more funding, because we won't be able to develop that technology as good as it needs to be developed if we try to stretch ourselves out more. So it really is having that long-term mindset and focusing on sustainable growth over time and healthy growth over time.

Got it. All right. Well, that sounds like a really nice note to end on.

Yes. No, thank you all for your interest and time and learning more about Raymond James. I think one of the things that we look back on in the last 3 years, because we're all concerned about the market environment, it's very volatile and uncertain with rates and other issues. But in the last 3 years, we just finished our fiscal year September 30. We had record revenues and record earnings in all 3 of those years in very different market environments. With rates in equity markets and capital markets doing very different things in all 3 of those years. And that's really a testament to us being focused on the Private Client Group business, which is a relatively stable business and having diverse and complementary businesses to augment that. And also to having a rock-solid balance sheet where we don't take outsized bets on our own behalf. Our balance sheet is really there for clients. And over time, that's led to a lot of consistent success for Raymond James. And that's what we're looking to do going forward. So we're really excited about the future with our strong balance sheet and our opportunity for growth in all of our businesses. Thanks for your time.

Thank you.