Raymond James Financial, Inc.

Good morning and welcome to the earnings call for Raymond James Financial fiscal third quarter of 2019. My name is Jessa and I will be your conference facilitator today. This call is being recorded and will be available on the company's website. Now I will turn it over to Paul Shukri, Treasurer and Head of Investor Relations at Raymond James Financial.

Thank you, Jessa. Good morning and thank you all for joining us on the call. We appreciate your time and interest in Raymond James Financial. With us on the call today are Paul Riley, Chairman and Chief Executive Officer, and Jeff Julian, Chief Financial Officer. Following the prepared remarks, the operator will open the line for questions. Please note certain statements made during this call may constitute forward-looking statements. Forward-looking statements include, but are not limited to, information concerning future strategic objectives, business prospects, financial results, anticipated results of litigation, regulatory developments, or general economic conditions. In addition, words such as believe, expect, could, and would, as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Please note there can be no assurance that actual results will not differ materially from those expressed in those forward-looking statements. We urge you to consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, which are available on our website. During today's call, we'll also use certain non-GAAP financial measures to provide information pertinent to our management's view of ongoing business performance. Paul Riley, Chairman and CEO of Raymond James Financial. Paul? Thanks, Paul.

Good morning, everyone. Thanks for joining us. As usual, I'm going to give a brief summary of our results for the third quarter 2019, and then I'll turn the call over to Jeff. We'll give more detail, and then I'll come back to discuss our outlook and open up for questions. Overall, I am pleased with our results for the third quarter. Despite some elevated expenses and decline quarter. Quarterly net revenues of $1.93 billion increased 5% over the prior year's fiscal third quarter and increased 4% over the preceding quarter. We generated quarterly earnings per diluted share of $1.80, lifted by higher private client group fee-based assets and higher net interest income, primarily at Raymond James Bank, compared to a year ago period. We ended the period with record results at 16.1%. And while it isn't a metric that we use, the world does seem to be moving towards measuring and reporting on return on tangible common equity. And if you looked at our discussion in our last analyst and investor day in June, our adjusted return on tangible equity on annualized basis for the preceding quarter would have been approximately generated record net revenue during the first nine months compared to last fiscal year. Now turning to the segment results, in the private client group we generated net revenue of $1.35 billion and pre-tax income of $140 million during the quarter. Revenue growth of 6% over both the prior year's third quarter and the preceding quarter was largely driven over March of 2019. of 2019 even in the increasingly competitive recruiting environment our We believe the decline in cash balances was slightly elevated this quarter as the conversion of the money market sweep option in June caused advisors and clients to increase their allocation to other investments, such as positional money market funds. Cash sweep balances have decreased in July recognition events for advisors, and increased advertising expenses reflected in the other segment. This resulted in similar sequential increase in business development expenses that we experienced in the year-ago period, which Jeff will touch on. The capital market segment. and M&A revenues. As you recall, the M&A had a record first half of the year, and even after this quarter has a record all time. We believe that the M&A pipeline remains very strong, and the timing of closing is inherently lucky, but we're optimistic about this business. 3% over March of 2019. Overall, the growth of financial assets under management continues to be largely driven by equity market appreciation and positive inflows associated with the increased utilization of fee-based accounts in the private client group segment, which is more than offset the net outflows experienced by Caroline Towers' advisors given the extremely challenging market for actively managed products. In the bank, base loans to our private client group. RJ Bank's net interest margin modestly expanded to 337 basis points in the fiscal third quarter, up seven basis points over a year ago third quarter, and two basis points over the preceding quarter. Jeff will get into more detail on what affected the NIM. Importantly, the credit quality of the bank's loan portfolio remains strong, including the growth during the quarter. So overall, a strong quarter, a record first nine months for the fiscal year. Now I'll turn it over to Jeff who will provide more color on the financial results. Jeff?