Nathan Stein

Nathan Stein asked for clarification on the revenue trends in the Private Capital Advisory (PCA) business relative to the fourth quarter of last year, given the reported increases in M&A and Capital Markets and a decrease in Capital Structure Advisory. He also inquired about the timing for the recently announced $300 million share buyback authorization.

Answer

CEO Navid Mahmoodzadegan clarified that PCA is still ramping up, with the team coming together in the latter half of 2025, primarily focused on winning new mandates. He stated that significant revenues from PCA are expected in 2026, not 2025. Regarding capital allocation, Mr. Mahmoodzadegan outlined the prioritization: maintaining the dividend, then share repurchases to mitigate dilution from equity issuances, all while preserving a strong balance sheet for strategic advantage and market resilience.

Nathan Stein asked about the revenue trends in the Private Capital Advisory (PCA) business relative to Q4 of last year and for insights into the timing of the $300 million buyback authorization.

Answer

CEO Navid Mahmoodzadegan clarified that PCA is still ramping, with significant revenue growth expected in 2026 rather than 2025 Q4, as the team focuses on new mandate generation. He outlined Moelis's capital allocation priorities: maintaining the dividend, mitigating share dilution through buybacks, and preserving a strong balance sheet for strategic advantage.

Nathan Stein followed up on Evercore's capital allocation strategy for 2026, specifically asking if the Q4 repurchase level is a good run rate for buybacks and for overall thoughts on capital allocation.

Answer

CFO Tim LaLonde advised against annualizing any single quarter's buyback level. He highlighted that Evercore returned $812 million in capital in 2025 (its second-highest ever) and aims to repurchase shares equivalent to RSU grants plus an excess amount, maintaining a strong cash position while considering regulatory and strategic needs.

Nathan Stein followed up to ask for additional color on Evercore's capital allocation strategy for 2026, specifically if the Q4 repurchase level is a good run rate for buybacks and the overall approach to capital allocation.

Answer

CFO Tim LaLonde advised against annualizing any single quarter's buyback level. He highlighted that $812 million returned in 2025 was the second-highest ever. LaLonde reiterated the commitment to repurchase shares at least equivalent to RSU grants and noted that for the past five years, Evercore has repurchased shares in excess of that, aiming to do so again in 2026, while maintaining a strong cash position.

Nathan Stein asked for Houlihan Lokey's perspective on a peer's comment about being in the 'third inning' of the broader capital market cycle, specifically for M&A advisory. He also inquired about the firm's agreement with the stability of middle market M&A data and its preparedness to capitalize on a strong cyclical rebound, including strategies for continued market share gains.

Answer

Scott Adelson, CEO, agreed that the M&A cycle is in very early innings, possibly the third or fourth, noting an enormous amount of pent-up demand. Lindsey Alley, Managing Director, emphasized that while large-cap M&A has accelerated, Houlihan Lokey's focus is on taking market share in the middle market through its business model, platform size, subsectorization, Capital Solutions growth, and expanding global reach.

Nathan Stein asked for Houlihan Lokey's perspective on the current M&A advisory cycle, specifically what 'inning' they believe the market is in, referencing a peer's 'third inning' comment. He also inquired about the firm's preparedness to capitalize on a strong rebound in the middle market and below, given consistent M&A data in that segment.

Answer

CEO Scott Adelson agreed that the M&A cycle is in 'very early innings,' likely the third or fourth, due to enormous pent-up demand. He affirmed that Houlihan Lokey is well-positioned to capitalize on the rebound through continuous subsectorization, growth in Capital Solutions, and expanding global reach, which helps them take market share. Managing Director Lindsey Alley emphasized their focus on taking market share in the middle market regardless of overall market conditions, noting that large-cap M&A is only 1% of volume.

Nathan Stein asked about the impact of recent macro-negative headlines (e.g., bank losses, private credit issues, government shutdown) on client deal-making and future acquisitions. He also questioned how strong business and stock performance influence open market share repurchases.

Answer

Scott Adelson, CEO, stated that macro-negative headlines have no material impact, falling under 'noise' that clients are comfortable with, and are not affecting acquisitions. Lindsey Alley, CFO, explained that stock performance on the margin does not affect repurchases; the strategy is to offset compensation-related share issuance and use excess cash after supporting acquisitions, noting some repurchases occurred last quarter.

Nathan Stein asked if recent macro-negative headlines, such as unexpected losses at banks and private credit funds or a government shutdown, are impacting client deal-making or Houlihan Lokey's thinking on future acquisitions. He also inquired about how strong business and stock performance influence the firm's open market share repurchase strategy.

Answer

Scott Adelson, CEO, stated that these macro-negative headlines have not had any material impact, falling under a general level of 'noise' that people are comfortable with, and are not affecting acquisitions. Lindsey Alley, CFO, explained that stock performance on the margin does not affect share repurchases, which are primarily aimed at maintaining share count, minimizing dilution, and utilizing excess cash after supporting the acquisition strategy. She noted they started repurchasing last quarter and will continue to evaluate.

Nate Stein asked about the operating assumptions for Net Interest Income (NII) growth next year on a standalone basis, relative to the 10%-11% growth expected this year. He also inquired about how Huntington Bancshares continues to achieve organic growth in competitive expansion markets like the Carolinas and Texas.

Answer

CFO Zach Wasserman indicated that the 2026 NII model would be similar to 2025, driven by mid to high single-digit loan growth and at least 10 basis points of NIM expansion. CEO Steve Steinour explained that growth in competitive expansion markets is fueled by rapidly growing local economies, early entry in the Carolinas, attracting seasoned colleagues, and leveraging the Veritechs acquisition for immediate scale in Texas, allowing for a full franchise rollout and strong local relationships.

On behalf of Matt O'Connor, Nathan Stein asked for an elaboration on the 2025 NIM outlook and details regarding the recent $1 billion securities portfolio repositioning.

Answer

CFO Zachary Wasserman projected a relatively flat NIM around 3% for 2025, with benefits from fixed asset repricing and lower deposit costs being offset by lower variable-rate loan yields. He explained the securities sale was a tactical move to sell higher risk-weighted corporate securities, unlocking capital with a sub-two-year earn back. He added that significant further repositioning is unlikely due to the portfolio's effective hedging.

Nate Stein asked about specific actions Citizens Financial Group took to manage costs in Q3 2025 despite strong fee income, and the company's confidence in achieving the $400 million+ run-rate benefit from the 'Reimagine the Bank' program.

Answer

CEO Bruce Van Saun affirmed Citizens' disciplined approach to expenses, noting that the Top 10 program continues to generate benefits that offset increased compensation from strong productivity. He expressed high confidence in achieving the $400 million+ run-rate benefit from 'Reimagine the Bank,' stating the leadership team only sets achievable targets.

Nathan Stein from Deutsche Bank requested elaboration on how KeyCorp gains market share during market dislocations, particularly when clients are delaying new projects. He also asked for the specific drivers behind the elevated gross charge-offs in the commercial real estate (CRE) portfolio during the quarter.

Answer

Chairman and CEO Christopher Gorman provided an example of using Key's balance sheet to provide bridge financing for real estate clients when the CMBS market is volatile or unavailable. CFO Clark Khayat addressed the CRE charge-offs, explaining they were not broad-based but were driven by the resolution of just two specific loans, and that the overall health of the CRE portfolio is improving.

On behalf of Matt O'Connor, Nathan Stein asked about the net interest margin (NIM) trajectory into 2025, given its outperformance, and sought clarification on the components of the 'other revenue' line item.

Answer

CFO Daryl Bible confirmed a low 3.60s NIM is expected for Q4 and expressed positivity about the momentum heading into 2025, driven by structural repricing benefits, but deferred specific 2025 guidance to January. He explained that the 'other revenue' category is primarily driven by two strong-performing line items: loan syndications and merchant/card fees.