Good afternoon. My name is Kelly and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter Earnings Call 2015. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I will now turn the call over to Jim Zemlyak, CFO of Stifel. Sir, you may begin.

Thank you, Kelly. Good afternoon. This is Jim Zemlyak, CFO of Stifel. I'd like to welcome everyone to our conference call today to discuss our third quarter 2015 financial results. Please note that this conference call is being recorded. If you would like a copy of today's presentation, you may download slides from our website at www.stifel.com. Before we begin today's call, I would like to remind listeners that this presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not statements of facts or guarantees of performance. They may include statements regarding, among other things, our ability to successfully integrate acquired companies or branch offices and financial advisors, general economic, political, regulatory and market conditions, the investment banking and brokerage industries, our objectives and results, and also may include our belief regarding the effect of various regulatory matters, legal proceedings, management's expectations, our liquidity and funding sources, counter-party credit risk or other similar matters. As such, they are subject to risk, uncertainties and other factors that may cause actual future results to differ materially from those discussed in the statements. To supplement our financial statements presented in accordance with GAAP, we may use certain non-GAAP measures of financial performance and liquidity. These non-GAAP measures should only be considered together with the company's GAAP results. To the extent we discuss non-GAAP measures; the reconciliation to GAAP is available on our website at www.stifel.com. And finally, for a discussion of risks and uncertainties in our business, please see the business factors affecting the company and the financial services industry in the company's Annual Report on Form 10-K and the MD&A of results in the company's Quarterly Reports on Form 10-Q. I will now turn the call over to Stifel's Chairman and CEO, Ron Kruszewski.

Thanks, Jim. A challenging market environment contributed to a generally slow quarter for investment banking services and fixed income trading, which frankly, negatively impacted our results. Our recent acquisitions mitigated the revenue decline in our legacy businesses, but also added to our operating expenses. As a result, compared to the second quarter of 2015, revenues declined by $6.1 million while non-compensation operating expenses increased $13 million, resulting in a decline in pre-tax operating margin from 15.5% to 12.2%. In the quarter, Stifel continued to build a premier balanced wealth management and institutional services company. Our operating model provides us tremendous leverage to invest in the future while at the same time providing shareholders a strong return. We are well-positioned to take advantage of opportunities as they arise and offer clients excellent advice and services. We expect the Barclays transaction announced on June 8, 2015 to close on December 4, 2015. We are excited to welcome these highly talented associates to Stifel. I'd like to start this with looking at the operating environment during the third quarter, which, as I've said, was challenging. The S&P and Dow were down 7% and 8% respectively. The decline in the S&P 500 and increased volatility negatively impacted the equity capital markets, which you can see in our investment banking results. Equity average daily volumes increased 15% in the quarter to 7.3 billion shares while the VIX increased 34%. Corporate bond volumes declined 9% sequentially, pressuring fixed income, both on the Street and at Stifel. The 10-year yield dropped by 32 basis points to close the quarter at 2.04%. Today the yield is 2.22%. Equity capital raising was challenging down 50% from both comparable periods, and debt capital raising declined 24% from June. And here, again, I'm talking about industry numbers. U.S. M&A announcements were…

Your first question comes from the line of Christian Bolu of Credit Suisse. Your line is open.

Good morning, Ron.

Hey.

Good afternoon, Ron, not morning.

Yeah.

So a question for you, just a big picture question. I guess the 15% ROE target on a $36 book value implies over $5.50 EPS, or materially lower book value? Even if I account for the $1.55 you lay out on slide 30, there is still a meaningful gap between your run rate today and that number. So it would be great maybe if you can just lay out the pathway to this 15% from where you are today? Maybe three or four high level blocks.

Well, I'm trying to lay it out in a high level block. First of all, as we grow to $18 billion in assets, we're retaining earnings. The book value is growing, okay. And so this is a projected number. And so, if you wanted to do it yourself, I've given you the numbers and a conservative basis is that we can grow the Bank's balance sheet at a 1% ROA. I mean just as a back of the envelope type analysis and add to that the interest rate sensitivity and what we showed for our fourth quarter growth in Barclays, and you'll get to the number. But book value is growing at the same time.

I guess, hence the question, because again, it's - that 15% does imply a meaningful EPS number, well ahead of where you are today. Again, even adjusted for what you laid out on slide 30. But I'd be happy to come back at another point. Maybe moving on to fixed income, I guess, what is - it's tough for us from where we sit just given the number of acquisitions you've done to get a sense of what the business should look like. So maybe in what you think is a normal operation environment, I guess what is the revenue - what does revenues look like for that business?

I think you're pushing a little bit towards future guesstimates and guidance which I try to avoid. I think there's a lot of people that are questioning the market environment and fixed income, and as you well know, it was difficult to cross the Street. In fact, I think our fixed income business did relatively better than certainly what I've been reading about. I just try to show it by talking about legacy versus what we've added. And those numbers if you go back to them, I would like to think that our business can get at least back to the levels that we experienced last summer. It was a difficult quarter, and so if you take that and add Sterne to it, you get a nice increase in fixed income from that basis. But I don't want to predict the fixed income markets in the next 6 to 12 months. What I do know, it's the largest market in the world, and we believe that we can gain market share, and we're going to prudently invest in our capabilities and our people to gain market share and not be as concerned about the short term dislocations, which is what I think they are. So, that's a long-winded non-answer to your request for a revenue projection, but sorry.

Okay. I hear you. And then maybe just lastly on Barclays, the $210 million to $230 million of revenues, how should we think about the pace of that hitting the P&L? Does that occur relatively quickly, or does it take time for the advisors to transfer their books over to Stifel, and there might be a bit of a lag to see all that come through the actual income statement?

Yeah. Well, look, I think like, first of all, we've been working on this for a while, so the way we've done this transaction unlike some of the other transactions that are being done where people are trying to sort of bring in accounts on an A-cap basis. On December 4, all of the business and accounts will reside in Stifel's possession and control and custody. My experience tells me that all the clients are here, all their assets are here, the advisors are here that have signed up. That said, there's always a transition period as you learn new systems, and you learn your way around. So, you never hit at full speed. But a lot of their businesses is advisory based, and that that will come fairly quickly. It builds immediately. But there is also a portion of business that is related to the capital markets, primarily the syndicate and the syndicate distribution agreement that we have with Barclays. And that is more cyclical and dependent on market activities. So I expect this business to be able to get to its run rate quickly. The run rate in all businesses is somewhat dependent on market conditions.

Okay. Thank you very much, and really appreciate the slide deck and all the detail in there. That's very, very helpful. Thank you.

Thank you. Yeah.

Your next question comes from the line of Chris Allen of Evercore. Your line is open.

Evening, guys.

Yeah.

I wonder if we could just start off on the non-comp line. I know, as a percentage of revenue [indiscernible] because it's a tougher operating environment, but do you see room for areas to cut back on that at some point moving forward? I realize the infrastructure costs, I mean, that's going to be maybe embedded in the run rate, just wondering maybe from some of the deal integrations that are now complete, are there opportunities to reduce some of those costs moving forward?

There are and there always are. So we get around to - it takes time primarily on things like occupancy, and all the things that go with occupancy, phone lines and connectivity and a number of things. So while we make progress, we turn around and we do the Barclays transaction, and now we have real estate that we need to deal with in New York and in San Francisco and other places. So the answer is, is that yes. I think, as I've said, the market was difficult. But our non-comp operating expenses and our institutional business is elevated. And we've got teams that are looking at that and I do believe that there's room to do that. Some of that apparent percentage of revenues is truly diluted revenues. It is. But I would like to think that we can always be more efficient in non-comp OpEx.

Got it. And then just trying to reconcile the Barclays numbers. When you guys announced the deal, trailing 12-month production was about $330 million. Now the revenue range implies $220 million of trailing production. I think that's what it's based off of. It's about a 34% decline, but the number of FAs coming over is down over 40% and the AUM is down somewhere around 55%. So just wondering how that works that the production wouldn't be as impacted by the number of FAs and AUM declining?

Well, first of all, a lot of the - we also had modeled net interest income and what we thought it would be. So that's closer to what we thought. There's not as much of a decline in NII that we had thought. But I think our original number, I think we said was $200 million to $325 million, I don't remember $330 million. It's close enough though. But, I mean, the numbers are what they are. So I would think that the production is probably down more consistent with the advisors, but the advisors that had left were maybe more heavily weighted towards Advisory business and not as weighted to taking balance sheet loans with them. I think the people stayed had more balance sheet loan with us. The numbers will tell you that by looking at them. So that's what I believe also.

Got it. And then just last from me. On slide 28, you kind of have the walk up to the growth of about $1 billion of organic growth there coming from the asset growth in the fourth quarter. Just wondering like what do you see the best potential for growth right now? Is it still securities-based loans or is it C&I or more retention of mortgage?

Well, I think we definitely see it in securities-based loans, we see it in C&I. We also see it in - we have been peeling back our investment portfolio and we see opportunities and we've been adding at attractive risk-adjusted spread back to our investment portfolio. We at one point - our loan staff, it's now our 60%, where at one point they used to be 20%. And so we're going to grow the balance sheet as a combination of C&I, securities-based loans, mortgages and investments will constitute a lot of that. I think that we really have spent a lot of time and, as I've said on the one chart, we paused our growth for nearly two years to be able to be DFAST compliant. We felt that was a more prudent way to go. But now that we've said that we would start growing in the fourth quarter and we will. And in fact, the environment is pretty attractive now. I feel that our timing is pretty good in terms of when we're going to grow the balance sheet. So I think you'll see it across the board, and you'll see a nice increase in our consolidated assets when we report next quarter.

Got it. Thanks.

Your next question comes from the line of Devin Ryan of JMP Securities. Your line is open.

Hey, Ron. Good afternoon. How are you?

Good.

Good. Thanks for the disclosure as well, very helpful. Maybe just picking up where that last question ended. Just on the bankrupt, $1 billion in one quarter seems like a pretty high level at least to us and I get it that the backdrop is conducive. But is that a level that we could think about as a level that could sustain quarterly if the environment remains good? I'm trying to have some context around the walk up from the year-end level to the $18 billion over time?

Well, I think that, look, that's hard to predict because we're not just going to grow for growth sake. I'm just not going to add assets that don't have risk-adjusted returns that we think are accretive to our return on equity, and so it's market dependent. But I believe that we've already added probably $750 million in the investment portfolio. The Barclays transaction that we're looking at now is going to add about $2 billion in interest-earning assets. And so right there just by finishing what we - which isn't much, you've got $3 billion right there. And I would say that on December 4, we're $2.8 billion already there. So the pace will depend on market conditions and we're going to do our growth as we always have in the bank, i.e. we haven't gotten to the level of asset quality and performance in the bank by just willy-nilly adding assets, we're not going to do that. But we have been stemming our growth. We have been doing everything we can to stay below $10 billion. There's a lot of growth potential for our bank and I actually think it was just as hard to stay below $10 billion as it's going to be to grow the bank under the projections I've been talking about. That's my general belief.

Okay. Got it. That's helpful. So, I guess, to summarize, I mean, not looking for placeholders, I'm assuming you could probably grow the securities portfolio pretty quickly if you wanted to, but it sounds like that's just a portion of the default process around the group?

Correct. I mean, I think to the extent the securities portfolio provides an appropriate level of NII to the capital required without taking a lot of interest rate, we'll do it. But we're not going to just lever the bank at, call it, a 5% ROE risk-adjusted return, we don't want to do that. We just don't think that's smart and we've never done that. So there's a lot of asset classes. As we've grown this company, our ability to have quality asset generation keeps getting better. And we've grown the company a lot, including - Barclays is going to add a lot of asset generation capabilities. We've grown the company's asset generation capabilities significantly while we've been throttling our bank growth, so I'm looking forward to resuming our historical bank growth.

Absolutely. No, that's helpful. With respect to the buyback announcement, it seems to send a signal about what you guys think about the stock here. Can you just share a little more of your thought process around the buyback? Do you think there's maybe an opportunity to be more consistently active in the market with your excess capital position? Or should we just really think about this as an opportunistic move just given the selloff in the stock more recently?

Well, look, we viewed it as opportunistic as always. The stock did sell off and we took the opportunity, as I said, to buy - it was 1,800,000 shares at an average price of $44. We had issued 1.4 million shares in the Sterne Agee transaction. So in many ways you can view it as buying those back. And so that's how we've done it. I've never been a believer in systematic stock repurchase, but regardless of price, and I'm not going to start now. So we'll continue to be opportunistic. In terms of what you want to read into what we thought when we buy the stock, that's your prerogative.

Yeah. Okay. Great. And then just last for me, the GWM commissions. What percentage are trailing commissions? I'm assuming those took a big hit in the quarter, just given the kind of the mark on daily balances. But I'm assuming those have also been rebounding quarter-to-date, so you could see an uptick on the base trailing commission level. Just curious if you have any numbers there?

You know, I don't have the numbers, but your comments which are true throughout the industry, okay, are true here. I don't as I sit here, that's a very astute question and it requires me digging for some numbers which I don't have at my fingertips. I apologize.

No problem. I'll circle back. Thanks for taking the questions, Ron.

All right.

And your next question comes from the line of Daniel Paris of Goldman Sachs. Your line is open.

Hey, Ron. How are you? I appreciate the color around some - splitting out kind of legacy versus the new business on page 6. And I know there's a bunch of businesses rolling up into that new business line. But overall the revenue number annualized is something around $350 million which is nicely above the $300 million or so that you painted for Sterne. So I guess two questions. Is the Sterne business overall kind of tracking in line with expectations? And if so, why is the margin number maybe a little bit lower than we would have expected?

I think that the Sterne business is tracking nicely, but was also impacted. There's a number of businesses that roll into that $350 million number that you're talking about. But I've been pleased with the transition. And frankly, considering the factors that impact any acquisition about how long it takes to get going, so the Sterne revenue contribution has been nice. Their fixed income though was down as well and then of course our legacy business was down. When we track some of these numbers, we try to build in some of these expectations of - and it takes a while to get revenue up ourselves. So the part of it was the number we told you to start with, not part of, it's just that that's part of the way we think about this because we don't just assume when we tell you $300 million that that's 100% of the run rate. But all said we're pleased with the revenue contribution. I point this legacy versus new business, because if we had not made any acquisitions, you're going to - you can get a sense that our non-comp OpEx wouldn't have been up as much, but our revenues would have been down significantly more than what they appear. I'm optimistic, because I don't expect the environment that occurs in the third quarter to be the new normal in our business. And the capabilities that we've added are things that I am very optimistic about in terms of the revenue potential and hence the earnings potential of this company when we get to maybe a better environment, which by the way, just so to speak, October was better than what we thought all summer, just saying.

Got it. That's helpful. Appreciate it. And then maybe just jumping back quickly into how you're juggling kind of on your capital deployment priorities. And you talked a lot about having room to grow the balance sheet, but now you also have the buyback plan in place. So how do you juggle those two? If the stock stays at current levels, is one investment better than the other? And are acquisitions kind of still in that mix or are they on hold for a while as you integrate and grow the balance sheet?

Well, to answer to your last question first, I don't think as long as we can continue to do acquisitions that are accretive on - on what we define accretive to our new partners, accretive to our shareholders and accretive to the business, we're trying to build, we'll always do those, of course prudently. We're well into the process of integrating Sterne and we have a December 4 date on Barclays which will represent in one fell swoop, all the integration efforts we've been putting into Barclays. That button gets pushed on December 4. So I think we're in a position to do the last part of your question. The first part of your question [indiscernible] $1 of capital levered at a certain level return more EPS and ROE than buying it back in the marketplace. And it's a function of price and math and the current environment. I've said in previous calls and I'll continue to say that I believe the most accretive aspect for us, for various reasons, not just math is to lever our balance sheet, because our bank is undersized relative to our market potential and just our footprint, our AUM by client. So that to the extent that we're leveraging our balance sheet to appropriate client opportunities, that has ancillary accretive effects to other businesses and that's the way we would like to go. And frankly, at most levels of our stock price that is a higher accretion factor to shareholders than buying back stock. That all said, our stock got - we had a pretty big change and we took the opportunity to buy back, what $70 million worth of stock.

Got it. Thanks a lot for taking my questions.

Yeah.

Your next question comes from the line of Chris Harris of Wells Fargo. Your line is open.

Thanks. Hey, Ron.

Hey, Chris.

Hey, so first question on the institutional backlog, I know you'd mentioned it looked pretty good. Just wondering if you can give us a little bit more context around that? How maybe it compares to where we were a few quarters back? Whether you've seen a decent pickup in revenue maybe so far in October? Or whether there's still a little bit of lull going on given what happened in Q3?

Well, I think there's - you've got sector considerations, right? And while we're not big players in energy, we are big - we do play more in the yield equities. And those have been challenged, both MLPs obviously and even some of the BDCs. And so both the energy in that sector have been challenged. Healthcare has certainly saw a correction in September and that sector, I think comparing to what we've seen as a normal run rate continues to be muted. But what tends to happen, it's hard to handicap, Chris, is that your backlog gets better as you go into a deal, so it's almost like one of those, because it never gets off your backlog. And so, the market conditions is important, so our backlog is robust, a part of its robust is because the activity was pretty muted in the third quarter. We hope to get these deals done on various fronts, but it is market-driven. So I believe that for a variety of factors, uncertainty over interest rates what was going on in China, the impact on the dollar and a number of things. The environment was very difficult particularly an invest in fixed income and the volatility and some of the corrections didn't help, particularly equity capital markets. So I don't know that I - the answer is, our backlog looks very good, but it's still dependent on markets and I think healthcare is certainly has been challenged and we all know what's going on in energy.

Yeah. Right. Okay. That definitely makes some sense. Wondering about higher rates, if the Fed raises in December and I know we've got the slide here showing other impacts on your business, but trying to get a sense of how that might impact your fixed income trading business? I know it also probably depends on the shape of the curve, but is 25 basis points something you get excited about when we think about that? Or does there need to be a little bit more action to potentially get a larger revenue flow through?

Yeah. Look, I think that - I don't think 25 basis points matters one way or another. Okay? I really don't. I think that the messaging - and as soon as whenever they do raise and whenever they do raise, everyone is going to think, okay, well that was great. And then the next question is when is the next 25 basis points going to be? And then, we'll be talking about that, like every day. And so I think it's the pace of change. I do think that getting some clarity around maybe what the new normal equilibrium rate is. I think there's some debate if the Fed funds rate - many people think it's 3% to 4%. I personally think it's 1% to 2%. And as that becomes a little bit more crystallized, at least beliefs get crystallized. I think there's a lot of fixed income portfolio restructuring that's going to occur depending on how the yield curve does. It's just been a lot of people that have been sitting on a lot of cash. There's a lot of concerns about redemption and a number of things that I think get answered potentially and I am speculating like you are when there's a rate increase. I do not remain convinced there'll be a rate increase in December, and I don't really think the 25 basis points is really going to matter as much as the dialogue about the pace of change going forward. I think that's going to have a lot more impact as to overall market condition.

Got it. Coming back to slide six really quickly, looking at your legacy businesses again, the non-comp expenses being up 7% year-on-year, is that related to DFAST compliance? Or are there other expense increases that are impacting that growth.

There were two things that I pointed out. One was we did have the delta in provision for loan losses because we did have some nice growth in the Bank. That was $2 million of it. That provision flows through non-comp OpEx. And as you know, following other banks, if you are a growing bank and you're adding loans, there's a mismatch between when you put the provisional loan loss on and when you start even getting NII. So that was $2 million of it. And $6 million to $7 million of it is the increase that we've had in ERM, and in compliance and in internal audit, where we've been talking about this for a while now. We've taken the approach that for various business reasons and our commitments to regulators and whatnot that we were going to feel that we were very compliant with the bank and financial services holding requirements of being a DFAST company. That did require some significant investments in infrastructure. When I look at just those three departments that accounts for the majority of the $6 million or $7 million in core increase quarter over quarter.

Okay. Thank you.

And your next question comes from the line of Hugh Miller from Macquarie. Your line is open.

Good afternoon, Ron.

Hey, Hugh.

So I guess sticking with slide six here, as we take a look at kind of the margins of the business, and I appreciate the breakout between the legacy and the new, it looks like kind of the legacy business quarter over quarter saw a close to 300 basis point contraction. When we take a look at the new businesses, it's probably closer to about 600 basis points. I know that you mentioned the Sterne business obviously a little bit lower margin profile relative to the Stifel PCG. How do we think about the relative returns in those two business segments on a pre-tax basis? And is there anything else that's kind of creating some of that compression on a relative basis?

Well, I'm not sure I followed all your question but I will - as it relates to the independent business, I think overall and I think in the industry, independent business tends to operate at lower margins, maybe not in a declining margin but generally lower margins. And so we've been looking at and will continue to evaluate how the Sterne businesses fit into our overall margin analysis. But the business that we got clearly operates at a lower margin than even their Private Client that they brought over. And so it's a good business. It just operates at lower margins. It also has lower fixed costs expense. So you begin to see what looks like a lower non comp OpEx and a little bit higher comp to revenue because those businesses pay their own expenses. I'm not sure I understood first part of your question. The margin compression that's occurring in legacy Stifel, if that was your question, is because we don't allocate. We've not allocated investments in infrastructure, the $6 million quarter-over-quarter, we don't allocate that to new business. We just don't do it. So that is all sitting in the difference of going from $119 million to $127 million, $6 million of that is this infrastructure investment, all in new...

Okay...

I would argue we can't do - we can't. It's all in legacy but we wouldn't be able to do new without making those investments.

Sure, sure. I appreciate the color there. I guess the question was just looking at - if you look at the delta difference between 2Q margins and 3Q margins between the legacy business and the new business, there was about, call it about a 300 basis point greater compression in the margins in the new business. So I'm just trying to get a sense of is that primarily just because of Sterne and the profile there or was there other factors that kind of led to kind of those margins kind of coming in a bit more than the legacy business?

Yeah, look, it's a good question. I'm not sure that I know the Sterne business. The Sterne business came on in a stub period in Q2. And so it's hard for me to just look at this and understand that that was a partial period in Q2 as compared to Q3. I don't know. I think Q3, if we do this again will be more consistent with Q4. But I didn't really look at it that way. So I hear what you're saying, I'm not sure I know the answer.

Okay. That's not a problem at all. And then the other question I had was, on the recruiting side I know Q4 doesn't tend to be a strong season as historically brokers are a little bit more reluctant to kind of make a change just ahead of year end. But we were hearing a little bit of noise about one of your larger competitors was considering the implementation of garden leave in their comp package. Are you hearing any discussions about large wire-house brokers that are maybe more inclined than normal to make a change and explore other options? Or has that not really been much of a factor?

Well I hear what you hear. I think that we've been obviously focused on the recruiting of our new Sterne partners and the recruiting of our new Barclays partners, and feel pretty good about that. I don't know, I mean the concept of garden leave in advice-driven business which is prohibitive by protocol. It's not in the clients' best interest, and not in the advice business. I hear things like that, I think that the recruiting pipeline is going to go up because I don't think anyone wants to feel that they are going to be forcibly tied to their desk anywhere. And garden leave is a - look it's been written about, it's been talked about. I am going to see who has the guts to actually do that.

Appreciate the color. Thank you very much.

And your next question comes from the line of Andrew Del Medico of Autonomous Research. Your line is open.

Hey, guys. Can you hear me?

Mm-hmm.

Yes. So, Ron, I'm trying to reconcile the balance sheet growth that you're showing to get to your target, and then the EPS you're stating for the fully leveraged growth. It seems like roughly $5.6 billion of balance sheet growth above where you're 4Q target is at $0.60 at the midpoint. I mean, that gets me to roughly 80 basis point ROA. When I look at the slide deck from 1Q 2014, you guys implied roughly 100 basis point ROA on all of your balance sheet growth. I guess, what's changed now and what's the best way to think about really the earnings benefit that you can get from this leverage going forward.

Yeah. Look I think when we're trying to be conservative and balanced, and I don't think that taking balance sheet growth and assuming that 100% of net interest margin is going to fall to the bottom line would not - some of it is that we assume that we will be funding some compensation, some investments, some non-comp OpEx. So the numbers are a lot more powerful if you do what you're doing right now, which is just take a 1% ROA on $6 billion. You're going to get a larger number than the number that I showed here, which is what I think you're saying. You already did it.

Mm-hmm.

And the answer is yes, you would. But when we modeled it, we're modeling some additional expenses whether it could be underwriting staff, potentially loan loss provision. And just generally increased compensation because we're earning a lot more that might be used across the board. I very rarely in my 30 years in this business get a dollar of margin that equals a dollar of pre-tax.

Okay. Are those all assumptions, again, that I guess that changed then from the 1Q 2014 presentation? Because, I guess, when you laid out that accretion model there it did assume a 1% ROA. And so, I mean, [indiscernible]...

Yeah. And I think - right. Look, our ROA is higher than 1% in the Bank, all right? And the point is that we're under-levered and I've been talking about this under-lever and I'm trying to provide a picture of what it means to do this even with some assumptions that might be fairly conservative.

Okay. All right. Thank you.

And this concludes the question-and-answer portion of the program. I'll now turn the call back over to Ron Kruszewski for closing remarks.

You need to come introduce me at any event because you're the first person who's ever pronounced my name correctly on these calls. So that was impressive. I would thank everyone for joining us on the call. I am very, very optimistic about where we stand today, albeit coming through a difficult industry quarter. They happen from time to time. It won't be the last one that we'll go through. But the capabilities at what we have achieved with our pending Barclays transaction, the Sterne transaction and our ability now to take off the governor on our Bank growth, which we've had for two years, I think paints a very nice picture for the growth in the earnings potential of this company, and we look forward to reporting to you next quarter on the successful integration of Barclays and the progress that we've made in these target numbers that we've laid out today. So with that, I will thank everyone for their continued interest in Stifel and look forward to talking to you in the near future. Thank you.

This concludes today's conference call. You may now disconnect.