Overview

Financial Performance

• Net revenues for the quarter ended March 31, 2024 were $3.12 billion, up 9% from the prior year quarter. Pre-tax income was $609 million, up 9%.
• Earnings per diluted share were $2.22, up 15% from the prior year quarter.
• Return on common equity (ROCE) was 17.5%, compared to 17.3% in the prior year quarter. Return on tangible common equity (ROTCE) was 21.0%, compared to 21.3% in the prior year quarter.

Revenue Trends

• The increase in net revenues was primarily driven by:
  • Higher asset management fees from higher client assets
  • Higher brokerage revenues due to increased client activity
  • Higher investment banking revenues
    
• These increases were partially offset by lower combined net interest income and RJBDP fees due to a shift in deposit mix increasing funding costs.

Expense Trends

• Compensation expenses increased 12% due to higher compensable revenues and increased staffing.
• Non-compensation expenses decreased 6% due to lower legal expenses which benefited from reserve releases.

Balance Sheet and Capital

• Remain well capitalized with a Tier 1 leverage ratio of 12.3% and total capital ratio of 23.3%.
• Have strong liquidity with $2.03 billion of parent company cash.
• Repurchased $207 million of common stock during the quarter.

Segment Analysis

Private Client Group

• Net revenues increased 9% to $2.34 billion.
• Pre-tax income increased 1% to $444 million.
• Higher asset management fees from increased fee-based assets.
• Higher brokerage revenues from increased client activity.

Capital Markets

• Net revenues increased 6% to $321 million.
• Pre-tax loss narrowed to $17 million.
• Investment banking revenues increased 18% on higher M&A activity.

Asset Management

• Net revenues increased 17% to $252 million.
  
• Pre-tax income increased 22% to $100 million.
• Higher beginning asset balances and market appreciation.

Bank

• Net revenues decreased 21% to $424 million.
• Pre-tax income decreased 18% to $75 million.
• Net interest income decreased 22% on higher funding costs.

Outlook

• Well positioned for continued growth given strong capital position and total client assets of $1.45 trillion
• Expect higher asset management fees from market appreciation and net new assets
• Robust financial advisor recruiting activity, though timing of closings remains difficult to predict
• Gradually improving investment banking revenues in line with industry recovery
• Net interest income dependent on interest rates, deposit stability and loan growth