Good morning, and welcome to the Evercore First Quarter 2023 Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Evercore management and the question-and-answer session. [Operator Instructions] I will now turn the call over to Katy Haber, Managing Director of Investor Relations and ESG at Evercore.

Please go ahead..

Thank you, Chelsey. Good morning, and thank you for joining us today for Evercore's first quarter 2023 financial results conference call. I'm Katy Haber, Evercore's Head of Investor Relations and ESG. Joining me on the call today is John Weinberg, our Chairman and CEO; and Tim LaLonde, our CFO.

After our prepared remarks, we will open up the call for questions. Earlier today, we issued a press release announcing Evercore's first quarter 2023 financial results. A discussion of our results today is complementary to the press release, which is available on our website at evercore.com.

This conference call is being webcast live in the For Investors section of our website and an archive of it will be available for 30 days beginning approximately one hour after the conclusion of this conference call. During the course of this call, we may make a number of forward-looking statements.

Any forward-looking statements that we make are subject to various risks and uncertainties and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements.

These factors include, but are not limited to, those discussed in Evercore's filings with the SEC, including our annual report on Form 10-K quarterly reports on Form 10-Q and current reports on Form 8-K. I want to remind you that the company assumes no duty to update any forward-looking statements.

In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance. For detailed disclosures on these measures and the GAAP data contained within our press release, which is posted on our website.

We continue to believe it is important to evaluate Evercore's performance on an annual basis. As we have noted previously, our results for any particular quarter are influenced by the timing of transaction closings. I will now turn the call over to John..

Thank you, Katy, and good morning, everyone. Before I review the quarter, I want to start off by addressing the environment. I've been in this business for many years, and it is clear, it will always be cyclical.

Historically, Evercore has embraced all cycles and use each part of the cycle to build and strengthen our firm by expanding our client connectivity and product and sector capabilities, and we will aspire to do so again in this environment.

In this current cycle, we also see great opportunity to add extraordinary talent to our firm, which will further enhance our franchise. We believe we are well positioned regardless of the macroeconomic landscape and have maintained an all-weather balance sheet.

We believe we will emerge from this downturn in a stronger position as we have done in every other cycle. Continued volatility and uncertainty in the market have resulted in a challenging first quarter for both the market and for Evercore.

That said, our bankers and teams are increasingly active as promising client dialogues continue to build momentum and CEO confidence levels have begun to rise off of recent lows. In the quarter, Evercore achieved $578 million in adjusted net revenues, $93 million in adjusted net income and $2.16 in adjusted earnings per share.

Our adjusted net revenues and EPS were down 21% and 43%, respectively, compared to last year's record first quarter. In the first part of the quarter, green shoots had begun to emerge. However, in early March with the banking system disruption, volatility return and confidence levels shift lower.

As challenging macro and geopolitical risks remain enforced coupled with diminished access to the M&A market, global announced M&A transactions greater than 100 in the first quarter were down 43% and 44% on a dollar in number of transaction basis, respectively, versus a year ago. Our backlogs remain strong.

We continue to note that execution risk remains as transaction processes and closing time lines continue to be elongated.

And while the outlook for global economies and market conditions will continue to influence the timing of deal activity, our teams continue to be fully engaged in consequential discussions with management teams and Boards as companies continue to prepare for a turn in the market.

A recovery in the market will be led by macroeconomic clarity, increasing confidence levels and an improvement in the financing markets. As I mentioned, we are seeing significant opportunities to recruit high-quality talent in many areas of our strategic focus.

So far, in 2023, we've welcomed 2 new SMBs, 1 in our private capital advisory business and another in our technology practice. Furthermore, another advisory SMB is joining the firm later this week and in our European equity capital markets business, and 1 other is committed to join our technology group later this year.

Additionally, our newly promoted SMBs are off to a strong start. Importantly, as we move forward, we will continue to focus on actively managing our expense base while executing on our future growth plans. Let me give a brief rundown of our businesses.

In Global Advisory, M&A activity levels were slower than a year ago and represented the weakest first quarter for industry-wide M&A volumes since 2014. That said, we continue to be involved in take private activity, particularly with the tech sector as sponsors are slowly starting to become more active.

We are making real progress with this client base as we have significantly increased our efforts in traditional sponsor coverage over the last year as well as continuing to invest in our private capital businesses. Our advisory team in Europe had another strong quarter, and we continue to build our pipeline in the region.

Our leading strategic defense and shareholder advisory business continues to be strong as activist campaigns remain at an elevated pace. In restructuring, where we have one of the most active groups in the industry, our activity levels are high and gaining momentum.

We are starting to see the implications of rising interest rates and default rates, which began a year ago. In addition, the tightening of credit markets has led to an uptick in traditional restructuring and liability management activity.

Significant near-term maturity walls in 2024 and 2026 may serve as catalysts for continued activity in the coming months. Our private capital advisory and fundraising businesses saw strong client dialogues and activity in the quarter, albeit at lower levels from peaks in 2021.

The fundraising environment across all fund sizes has started to see marginal improvements relative to 2022. The underwriting business continues to be impacted by broad market and macroeconomic uncertainty.

However, we acted as a footprint in 11 of our 12 equity and equity-related offerings in the quarter, highlighting our progress in equity capital markets. In fact, we were involved as a book runner in the 2 largest follow-on of the quarter.

In our equities business, we continue to be a thought leader across both macro and fundamental research, helping our clients navigate recent market uncertainty. Lastly, in Wealth Management, our long-term performance and client retention have remained strong.

Before I turn the call over to Tim to review our financial results and other financial matters, I want to briefly discuss our capital return strategy. We remain committed to our goal of returning excess cash not invested in the business to shareholders in the form of dividends and share repurchases over time.

Our Board declared a dividend of $0.76 a share, an increase of 6% and from the prior dividend declared. Looking ahead, our while uncertainty continues to be a constant and to have an impact on the business environment, we remain excited for the opportunities that lie ahead and we have a clear path to the firm going forward.

As I detailed in our fourth quarter earnings, our consistent road map for growth, including investing in talent and broadening and deepening our products and capabilities will allow us to continuously serve our clients and address their needs. With that, let me turn it over to Tim..

Thank you, John. I'm now about 7 weeks into the new role, and I'm pleased to be doing my first earnings call as CFO of Evercore. I've been in the industry since 1986 and though for the past year, we've been in a challenging environment, I know that eventually, the cycle will turn. It always does.

And I am encouraged about our medium and longer-term outlook and the way Evercore continues to implement its plan through the cycle. And lastly, I look forward to meeting all of you, our investors and sell-side research analysts over the coming months.

For the first quarter of 2023, net revenues, net income and EPS on a GAAP basis were $572 million, $83 million and $2.06 per share, respectively. My comments from here will focus on non-GAAP metrics, which we believe are useful when evaluating our results.

Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website. First quarter adjusted net revenues of $578 million declined 21% versus the first quarter of 2022, which was a record first quarter for our firm.

First quarter adjusted operating income and adjusted net income of $115 million and $93 million decreased in each case, 46% versus the first quarter of 2022. Adjusted earnings per share of $2.16 decreased 43% versus the first quarter of last year.

Our adjusted operating margin was 20% for the first quarter, lower than the first quarter 2022 adjusted operating margin of nearly 30%, but roughly in line with the first quarter adjusted operating margins in 2020 and 2019 and of 19% and 23%, respectively. Turning to the businesses.

First quarter adjusted advisory fees of $463 million declined 26% year-over-year compared to a record first quarter for advisory fees last year. As we all know, we continue to operate in a challenging environment that has affected the capital raising and M&A markets.

By comparison, the dollar value and number of M&A announcements globally for transactions greater than $100 million, which as John cited earlier, were down 43% and 44%, respectively.

In accordance with the relevant accounting principles, our revenue for the first quarter of 2023 includes $18 million from transactions which closed subsequent to March 31 and or otherwise had contingent elements at March 31.

To compare, we recognized $45 million in the first quarter of 2022 and $116 million in the fourth quarter of 2022 in accordance with the same accounting principles.

First quarter underwriting revenues of $23 million were down 37% compared to the first quarter of 2022 as our underwriting business continues to be impacted by the broader market conditions, which reflects substantially lower than normal issuance levels.

Commissions and related revenue of $48 million in the first quarter was down 6% year-over-year, reflecting weaker trading volumes as a result of lower volatility. We First quarter adjusted asset management and administration fees of $17 million decreased 10% year-over-year, primarily reflecting a decline in AUM, driven by market depreciation.

First quarter adjusted other revenue net was a gain of approximately $27 million, in part reflecting the increase in value of our investment funds portfolio, which is used as a hedge for our DCCP commitments. In addition, we generated interest income on our cash balance, which benefited from short-term rates that have been higher this year than last.

Also note that our cash balance was higher in January and February prior to bonus payments that occurred in March. Turning to expenses. The adjusted compensation ratio for the first quarter is 63.5%.

It is still early in the year, and our first quarter compensation ratio reflects the best estimate for the full year based on our visibility at this point in time, which is limited.

With that in mind, it is important to note that we remain disciplined about continuing to implement our strategic plan throughout the cycle and to build on the strength of our franchise. As John mentioned, we believe the current recruiting environment presents an attractive opportunity for us.

That said, we are judiciously managing our headcount and using a disciplined approach to hire additional senior bankers where we see hiring opportunities, which we believe can be especially impactful to our business.

As the year progresses, if we have greater-than-anticipated success in our hiring goals and/or a market recovery takes longer, we will adjust accordingly.

Our first quarter noncompensation expenses were $95 million, up 14% from a year ago, primarily driven by an increase in travel and related expenses including both a higher number of trips and travel cost per trip as well as other operating expenses, driven by an increase in bad debt expenses, which are episodic in nature.

As we mentioned last quarter, we continue to expect noncomps to increase in 2023, but at a lower rate than what we saw in 2022.

This will be driven by continued normalization of travel practices some inflationary pressures across both travel and tech as well as continued occupancy-related increases driven by the annualization of new space and contractual rent increases. We remain focused on scrutinizing our expenses and managing them tightly.

Our adjusted tax rate for the quarter was 15.2%, and compared to 17.1% in the first quarter of last year. The tax rate for this quarter reflects a tax benefit associated with the vesting of stock compensation awards similar to a year ago, but had larger impact this quarter as the net income was lower. Turning to our balance sheet.

As of March 31, our cash and investment securities totaled nearly $1.4 billion, our excess cash as a percentage of our total cash and investment securities was in the mid-20s percent range. We have a durable and liquid balance sheet and a strong cash position, which provides us with the ability to invest in our business throughout market cycles.

We regularly review our cash position with respect to the current business environment and we prudently manage our cash position to ensure we have significant liquidity to enable us to implement our strategy, including hiring plans, ability to capitalize on opportunities and ensuring all our stakeholders that we have financial stability.

In the first quarter, we returned a total of $327.8 million to shareholders through dividends and repurchases of 2.2 million shares at an average price of $132.20.

We bought back stock in the quarter through net settlements and in the open market offsetting the majority of the dilution from the RSU grants that were issued in the quarter, and we plan to continue this strategy going forward.

Our first quarter adjusted diluted share count decreased by 2.5 million shares to $43.2 million from $45.7 million a year ago, driven by the impact of share repurchases, partially offset by the vesting of awards.

While we are currently in a challenging environment, we remain optimistic and energized about the prospects of the firm, and I am excited in my new role as CFO to help along with John, our management team and our Board of Directors chart the course of this company as we continue to implement our medium- and long-term plan and create value for our shareholders.

With that, we'll now open the line for questions..

[Operator Instructions] Our first question will come from Devin Ryan with JMP Securities. Your line is open..

Terrific. John and Tim, welcome to the call. First question, I guess my only question, I want to start on just restructuring. And John, you noted the restructuring team has been increasingly active and we're tracking a pretty healthy acceleration in mandates at Evercore over the past 9 months.

So just maybe love to just parse through a little bit more the commentary and how you frame the current environment relative to maybe some other periods of stress? And then looking ahead, with this maturity wall coming, do you think the baseline of activity is going to be higher for the next few years, irrespective of what happened in the credit backdrop.

Just want to get some more flavor for kind of what you're seeing there and how impactful this acceleration is..

We definitely see increasing activity in the restructuring area. And as we've noted, we've invested more there and our team continues to see momentum in their business and it continues to build. As you mentioned, rising rates difficult refinancing markets really and also default rates, which are beginning to come up and predicted to be even higher.

We are seeing restructuring more liability management assignments we are seeing people begin really significant default preparation. And we are actually finding opportunities really across the board with companies, both at larger corporate situations where we really have to help them with their liability management as well as portfolio companies.

The wall that's coming of refinancing is going to actually really produce real activity levels. We think that your prediction or your question, which is, will there be continuing momentum in this business we think there will be -- we're planning for that.

We think it's -- we think that the restructuring business has real likes to it, comparing it to ‘08 in particular, I don't think it will actually be at the same level of '08 because I just believe it's going to be more consistent. But I also think that it's going to sustain longer. I think it's going to be a sustained activity level going forward..

Our next question will come from Brennan Hawken with UBS. Your line is open..

Tim, welcome to our quarterly dance. Good to have you. So curious about the comp ratio. So Tim, very clear current this quarter's level is what you expect.

But could you maybe help us frame a little bit some of the commentary around both recruiting, but also revenue expectation and environment last year we learned that when many firms were sort of anticipating a recovery in the back half of the year and that resulted in some movement in the expectations of comp ratio.

What kind of -- does that 63.5% assume that the environment remains the same? And then when you think about the recruiting pipeline, does it assume that you're able to continue to recruit in line with your expectations? Or if you -- does it not assume any recruiter? How can you help us calibrate that recruiting comment please?.

Yes, sure. And thank you, Brennan. Look, as you correctly hit in your question as a context of the key drivers, which is it does reflect our best outlook for this year. That's probably the single greatest factor that will determine where it actually ends up will be what happens to the revenue.

And so in response to the first aspect of your question, it assumes an environment that's similar to what we're in today. Now there's seasonality in the sense that, as we all know, fourth quarter tends to be the biggest quarter of the year for people in our business but it assumes a consistent environment.

With respect to the new partner hire, it reflects what we know today. And so what we're -- we don't do from an accounting standpoint is guess about how many might join us in the fourth quarter or something like that. But it reflects what we know today.

And then the last key variable is really where the market is for investment banking compensation and that remains to be seen. It's a long way away..

Our next question will come from Ryan Kenny with Morgan Stanley. Your line is open..

I heard that comment around the March taking industry events pushing out the pipeline? How should we think about the size and planning of that impact? Does it push out your completions by few weeks from March to April? Or do you think it's a longer push out from March to maybe year-end or sometime further?.

Really, it's very much on a deal-by-deal basis. I think there -- if you're asking whether it takes longer to do transactions, the answer is most likely yes, because it's just taking longer to get the transactions through the pipeline. And once we do get those, it's taking longer to get them finished and closed.

So if you're asking the question, will deals that are in the backlog take longer to get out of backlog and into the market I think the answer is also yes, I think it will take somewhat longer because I think what's happening now is there's a real thought process going on, which is when will the recovery happen and when will markets become more active and buoyant.

And I think that management teams as well as financial sponsors are really looking at that. And as we said, what people are really looking for with respect to deals is clarity, the confidence levels and really the financing markets being open. And so that will actually impact how deals come out and what they do.

So I would say that really, it's really across the board, but I think that you should think about that once deals get out, they'll take somewhat longer, but I don't think it's going to be material, but there are many deals in backlog right now which are very good deals, and there's a lot of activity really in the backlog that we have.

And I think what we're saying is that those may take a little longer to come out because the some of the decision-makers are really waiting for the -- to be a turn to the market..

Right.

And 1 thing I would add to that is that with respect to financing transactions, what you could see because there's some pent-up demand that we're seeing companies that would like to raise financing, but are sitting on the sidelines because of the challenging markets that when those financing windows open, it's possible you could see some attempt to rush through those windows.

And you could see a flurry, but we don't know exactly when that will be..

Our next question will come from Steven Chubak with Wolfe Research. Your line is open..

Welcome, Tim. So I wanted to ask a question on traditional M&A. I'm actually going to pivot and build down in expenses a little bit. Since both of you indicated that you're focused on managing expenses alluded to a slower pace of non-comp growth in the coming year.

I was hoping you can just offer some additional specificity on the planned expense actions you're taking.

I know those what's driving the slower pace of non-comp growth? Are there incremental opportunities on the comp side that you're seeing as well?.

Yes, sure. I'll take that. The -- let me just make a couple of observations. And so one is we are up year-over-year from $85 million to about $95 million. Although the $95 million that we booked this quarter is consistent with the prior 3 quarters. And bear in mind, that's in an environment, which is significantly inflationary.

And so we think we have demonstrated some cost containment there. The reason we're at 95%, though as opposed to the lower number like what you saw 4 quarters ago, is travel. And to me, that's a good thing. If we're going to spend money somewhere, I'd like to spend on travel because that means our bankers are out there seeing clients.

And so we've seen that ramp up, literally, the number of trips is virtually double what it was a year ago. And so I think what you've seen is really an increase in travel and then what I would call pretty good cost containment with respect to the other expense lines.

Now we're doing a little bit of an office move, which is just required due to some building complications where some of our employees currently are. So that will be there, and there's little we can do about that.

And then with respect to other types of contracts, whether it's information services or trying to reduce the cost per trip of our travel expenses, you can rest assured we're working hard on that..

[Operator Instructions] Our next question will come from James Yaro with Goldman Sachs. Your line is open..

So you've talked a little bit about the impact so far. But what do you see is the longer-term ramifications of the stress on the banking industry in terms of how it affects the broader M&A business.

And then how would you contrast the dialogues that you're having with large versus mid-cap clients and between strategic and sponsor clients at this point?.

The long-term impact of the bank disruption is really hard really to predict. I think we're all hoping that the stabilization will really allow the markets to really go back to being quite healthy again. We actually anticipate that. We think that the markets will return.

Right now, what we're looking at in the medium term is we feel like that things will begin to recover. We don't exactly know when -- in the near term, we think that there will continue to be less clarity and therefore, we think it will take some time.

But obviously, things like interest rate inflation and really what is happening in the banking system will impact the timing of when things turn.

The -- one of the things I think that I think everybody is watching right now is, how are the banks feeling about lending because as deposits sometime migrate out of banks, some of the banks will actually become a little bit more conservative about lending.

And so that will impact if -- if that does have an effect, it will impact exactly how aggressive there is in terms of the bank markets generally. But we really anticipate and see that banks are really returning to their normal levels of thinking about risk and taking risk and putting money out and doing leveraged loans.

And we do see a beginning of a recovery in leveraged loans and also in the general lending market. So I think what we're looking at is that it's going to recover. In terms of corporates versus sponsors, we think that sponsors are really looking really carefully at when they can go. I think that sponsors have a lot of capital build up.

I think there's over $3 trillion of dry powder on the equity side. And I think that sponsors really want to get to work. I think that, that will be different dependent somewhat on availability and interest late rate levels for financing because, obviously, that does impact their economics.

On the corporate side, we see the companies really have been doing their homework.

And I can just tell you firsthand that there are a number of companies that I deal with, where they really have done a tremendous amount of work getting ready for what they will perceive as a turn when they see that there is some confidence and that markets will be receptive and the bid asks are in a decent place.

I think you'll see the big corporates start to come out because pretty rapidly -- because they've done a lot of homework and they've had lots of discussions and Board level discussions have taken place. And so many companies know exactly what they want to do when they perceive a turn in the market and when they see receptivity..

Our next question will come from Matt Moon with KBW. Your line is open..

I just had one for Tim. Given that this is your first full quarter as CFO, just wondering if you could provide some insights into how you're thinking about the business now that you've had a full quarter under your belt. It sounded like in your prepared remarks that your thoughts on excess cash levels were pretty consistent with prior disclosures.

But kind of curious on your thoughts on capital preferences as it relates to buybacks and dividends is always your general thoughts on comp and your recruiting philosophy.

It would be great to hear your thoughts on these items, particularly if there's any kind of differences in the versus your predecessor?.

Yes. Great. And happy to touch on that. It's a bit of a wide-ranging question, and I have limited time, but I'll hit on the highlights. And so -- with respect to capital return, I think that's an area where the firm has done pretty well. Over the last 2 years, we returned $1.5 billion of capital this year, $328 million already in the first quarter.

and we've nearly repurchased shares equivalent to all of the RSUs we issued as part of our compensation process. So I'm pretty pleased with that. And I think my own personal philosophy is very consistent with what you've seen from the firm over the last several years. I think with respect to the compensation ratio, we care a lot about that.

We're managing headcount, as I said in my remarks judiciously. I think if you look at where the headcount stands today in terms of total employees relative to about 3 quarters ago or last summer, you would see it's been about perfectly flat over that period of time. And -- but what I don't want to do is be shortsighted.

And because we also care about implementing our medium- and long-term strategic plan and about the growth for the firm. And therefore, we're out there working hard to continue to build and upgrade the team we have in place.

And so I don't like to focus on maximizing margins for any single quarter, but instead try to build the firm over the medium and long term to create value for the shareholders..

Our next question will come from Jim Mitchell with Seaport Global. Your line is open..

Another hire in Europe this time on the ECM side.

So can you kind of update us where you are in the build-out process in Europe, how you view the current environment and the opportunity set long term?.

Sure, Jim. We continue to look at really strong growth opportunities in Europe. And as we've always said, we are taking opportunities to fill the white spaces and to fill out our product set as we see opportunities. And really, the mitigating factor or the limiting factor is the top talent. And right now, we're seeing some very good talent.

So I could see us doing more hiring in Europe because I believe that what really has happened is that there's some very high-level A plus talent available. And so we're focusing on that.

will we hire more in Europe than we do other places? No, but what we're doing is we're looking very carefully at the opportunities that we've identified not only in terms of white space, but also product needs, and we are actually hiring and so we're going to continue to invest in Europe.

And we are going to continue to do so in a way that really is leveraging our opportunities and also very much trying to take advantage of what we see available in the market. So the bottom line is we will continue to drive that. You can anticipate that we will do that consistently. The market that we see and the opportunities in Europe are extensive.

And I think for us, that build-out is important..

Our last question will come from Steven Chubak with Wolfe Research. Your line is open..

Thanks for accommodating the follow up. The other topic I wanted to just drill down on is the non M&A businesses. You've highlighted in the past that's composed at least thirds of revenues over the past 3 years.

Just given less activity today, I was hoping you can provide some perspective on how the mix compares to that one-third baseline, especially in light of some of the positive commentary that you offered, both on the restructuring side, as well as in the private capital advisory business, given you're more active on the secondary side, which appears to be more robust at the moment..

Yes. Thanks, and good question. Look, I think we've talked, as you mentioned in the past about our non-M&A business is comprising at least one-third of revenue.

And so what you would expect to see in a quarter like this is, of course, with M&A a little bit softer and restructuring gathering steam, you would expect to see that principal hold even more so than normal, and that's the case. And so restructuring is ramping up. We've got a fantastic PCA business.

And that's one, by the way, that we've continued to invest in along with the other business as you've seen. In fact, one of our partner hires, who's already joined us, Joy Savchenko is in that business, and we're pleased to have her here.

And so what you would see is in an environment where sell -- M&A sell size for private equity sponsors is more challenging that some of those sponsors might be looking at, for example, continuation funds as an alternative. And we are continuing to see activity in that area.

And so we're pleased that what we think we've built, which is what I would call an all-weather firm, is continuing to prove out in a market like this..

Yes. I would just add that on the private capital advisory businesses, they're seeing good activity levels. And I think that they continue to see real prospects as the year goes on.

They're less limited by the overall public market and really influenced by availability of capital and also the appetite for sponsors to do different things like raise money or to basically think about bringing some of their companies into a continuation process. So I'd just say that we are seeing really strong activity levels in those areas.

And I think that there is a strong possibility that they will continue to build momentum through the year..

If I could squeeze in one more, just on NII. Other fees surprised positively this quarter. The commentary in the release suggests that $17 million was driven by interest income.

I know you're never perceived to be a very rate-sensitive firm, but it appears that that's for the -- at least on that side of the ledger, rates are providing a nice windfall given 1Q tends to be the low point for cash on the balance sheet I was hoping you can provide some context as to how you see that contribution evolving as the year progresses, especially we're in a higher for longer interest rate environment..

I think with respect to the other revenue and just thank everyone on the phone, and that -- let's assume about one-third of that was due to the DCCP hedge and then roughly two-thirds to interest income. And of course, the S&P was up about 7% in the first quarter, so that's what would account for that DCCP gain.

And then with respect to the cash, there are really 2 components that resulted in a higher-than-normal number this quarter. And one of those was, of course, short-term interest rates, which are higher than they were a year ago up in the, let's call it, the 4% area.

And then -- but we also, during the first 2 months of the quarter had higher cash balances because that, of course, was prior to paying the bonuses, year-end bonuses. And so I'd be a little careful about annualizing for example, that number. But I think I've given you enough guidance where you can build your own framework..

Thank you. And ladies and gentlemen, this does conclude today's Evercore's first quarter 2023 financial results conference call. You may now disconnect..