Good morning, ladies and gentlemen and welcome to the INTL FCStone Incorporated Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host Mr. Bill Dunaway, Chief Financial Officer. Please go ahead.

Good morning. My name is Bill Dunaway. Welcome to our earnings conference call for our fiscal second quarter ended March 31, 2019. After the market closed yesterday, we issued a press release reporting our earnings for the second fiscal quarter of 2019. This release is available on our website at www.intlfcstone.com as well as a slide presentation which we will refer to on this call in our discussions of our quarterly and year-to-date results. You will need to sign on to the live webcast in order to view the presentation. The presentation and an archive of the webcast will also be available on our website after the call's conclusion. Before getting underway, we are required to advise you and all participants should note that the following discussion should be taken in conjunction with the most recent financial statements and notes thereto as well as the Form 10-Q filed with the SEC. This discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks and uncertainties which are detailed in our filings with the SEC. Although, the company believes that its forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions there can be no assurances that the company's actual results will not differ materially from any results expressed or implied by the company's forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statement whether as a result of new information future events or otherwise. Participants are cautioned that any forward-looking statements are not guarantees of future performance. With that, I will now turn the call over to Sean O'Connor, the company's CEO.

Thanks, Bill. Good morning, everyone and thanks for joining our fiscal 2019 second quarter earnings call. Market conditions were less favorable during this quarter than they were in the immediately prior quarter, with reduced volatility across the board; trade and political concerns; significant changes in future interest rate expectations, including a yield curve that briefly inverted all weighing on the market. These tougher conditions were reflected in many of the earnings you have seen recently from banks and broker dealers. That said, it seemed as if we're heading into a more positive tone in the market of late with threats of economic slowdown waning and more positive economic news here and abroad and the equity markets hitting new highs. Our reported Q2 earnings were very strong and almost a record for us. While this appears to be counter to the market conditions just mentioned we did have a reversal of some mark-to-market items from Q1, which we had previously highlighted and discussed. And our core operating earnings excluding these one-off items did show a decline versus the immediately prior quarter, due to the difficult market conditions mentioned above. For the second quarter, we reported operating revenue of $271 million, up 4% from a year ago and up slightly sequentially from Q1. Net income was $23.4 million, or $1.21 per diluted share both up around 3% from a year ago. This represented an ROE of 17.4%. And sequentially, from Q1 both net earnings and EPS were up 29%. There has been some noise in our earnings for each of the first two quarters, which I would like to highlight. As mentioned last time, our Q1 earnings were negatively affected by approximately $11 million of unrealized mark-to-market losses, due to year-end lack of liquidity which caused some longer-dated options, which were all…

Thank you, Sean. I'll be referring to slides in the information we have made available as part of the webcast. Specifically starting with slide number 3, which shows our performance over the last five fiscal quarters. The chart depicts our net income, earnings per share and ROE over the last five quarters. As shown, net income in the second quarter of 2019 was $23.4 million, which represents a $5.2 million improvement over the immediately preceding quarter and a $700,000 improvement over the prior year. It is of note, each of the last five quarters have represented double-digit returns on equity with three of the five quarters exceeding our internal target of 15%. Moving on to slide number four, which represents a bridge between operating revenues for the second quarter of last year to the current period. Operating revenues were a record $271.1 million in the current period, up $10.9 million or 4% over the prior year. As shown, all operating segments showed revenue growth over the prior year with the exception of Clearing & Execution Services. This growth was led by our Securities segment, which added $17.1 million or 31% in operating revenues versus last year. Within this segment, Equity Capital Markets added $8.4 million in operating revenue versus the prior year, primarily as a result of increase in securities lending activities as well as a 16% increase in the dollar volume traded versus last year. In addition, our Debt Capital Markets business added $9.4 million in operating revenue versus the prior year, primarily driven by an increase in interest income in our domestic business driven by higher short-term interest rates as well as the acquisition of GMP Securities. These gains were partially offset by weaker revenues in our Argentine business due to difficult market conditions. Physical Commodities added $4.3…

Thanks, Bill. We continue to deliver good results from our business model with a record fiscal 2018 and now two solid quarters, which improved upon that result for 2019. Our franchise is starting to gain traction and we see opportunity to grow organically as clients and talented individuals see the benefit of our unique global platform and capability. In addition, we continue to see larger players exit markets and smaller players consolidate, which provides opportunities to accelerate growth through disciplined acquisition. Our model allows us to offer a wide range of products and capabilities to our clients, making us more relevant to each client and in turn each client more valuable to us with more diversified and predictable revenues. Furthermore, unlike more narrowly focused firms, we are leveraging our central infrastructure and capital across many different business lines, creating operational leverage and producing better returns on capital. With that, I'd like to hand back to the operator and open the Q&A session. Operator?

[Operator Instructions] We have our first question from Erick Sönne with Private Capital Management. Your line is now open. Erick Sönne: Good morning, guys. A quick question on the UOB…

Hey, Erick. Erick Sönne: How are you? I had a question on UOB acquisition. Just wanted to see if you can provide any additional color in terms of what capabilities that should bring to the table and in terms of size of the opportunity for us. And more or less if there is a way to talk about the valuation of the business if it is material to us.

Okay. Erick so a lot of this is under NDA which haven't been completed. So, unfortunately I'm unable to give you the specifics you desire. But what I can say is this is a business that looks very similar to what we do in the U.S. in terms of offering derivative, exchange execution, and clearing to clients both commercial clients and institutional clients. They do this out of Asia. They really have a good client footprint in Asia. So, from our perspective, it's kind of the same business we do everywhere else but what we're acquiring is a good client footprint in Asia. And as I said in my opening remarks, we've always thought that we are underrepresented in Asia given our capability set and the market opportunity there. And I think this will definitely put us on the map in terms of giving us critical mass. In terms of the acquisition price, this was a good deal for us. The premium we're going to have to pay is very small amount of money. I mean single-digits of millions of dollars. We will have to take on a lot of the infrastructure because we are now moving our Singapore business from being effectively a sales office to being a fully regulated business. We believe that the incremental revenue from various clients will more than offset the pretty significant incremental costs we're going to have to put in place to upgrade our presence. So, we think this will be a net positive for us with a very small purchase price. But more importantly, I think it just gives us critical mass and scale that we can build upon. So, in overall scheme of things, I don't think it's going to be material to our numbers in any respect, but I do think it's a pretty big step for us from a critical mass point of view. Erick Sönne: Okay. Thank you. And then jumping onto Global Payments. The revenue per million kind of inflected upwards in the last two quarters. Is there any specific in the mix that can explain that dynamic?

Well, as you know we did a while ago exit some of change how we interacted with some of these online platforms where we had thousands of small payments. So, that's still working its way through. It's largely out of our numbers now, but there's a little bit of that. But I think the two other factors that probably were more material with that was the fact that we now have a fully-fledged presence in Brazil and a lot of the payments that we are now facilitating in Brazil have gone up materially in size because prior to that we're capped at $100,000 payment size. Just the local regulations required that. We can now do payments of any size. And so those payments have gone up materially in size and that's a pretty big payments corridor for us. And then additionally I think we've just found over the last six months for whatever reason we seem to be just getting larger payments from some of our banks. And I don't know why that is to be honest with you because typically the very big payments in the multiples of millions generally went through their own FX desks. But we're starting to find that some of those payments are just being sent through to us now. So, it's a welcome development because obviously we make kind of more money on those payments. So, I think it's all three of those factors combined. Erick Sönne: Thank you very much. Congrats on this kind of numbers.

Thanks Erick.

[Operator Instructions]

Okay. Operator if there are no -- are there any questions queued up?

We have no further question at this time sir.

Okay. So, thanks everyone. Thanks for joining the call and we will be speaking to you in three months. Thanks. Bye, bye.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You have a wonderful day and you may disconnect.