Capital Allocation and Share Buybacks
Q: Will there be increased share buybacks given excess capital?
A: Management has nearly $1.5 billion of excess capital above their 10% target. " They prioritize investing in growth but are committed to offsetting dilution, about $200 million a year. " Since they didn't repurchase any shares last quarter, they plan to catch up and may buy back more shares if the price is attractive. "

Loan Growth and Net Interest Income Outlook
Q: How is loan growth expected to impact NII guidance?
A: They expect modest loan growth as demand is muted, especially on the corporate side. " They're optimistic about growth in securities-based loans, with repayments stabilizing and new originations starting. " The near-term net interest income guidance factors in this modest growth. "

Interest Rate Sensitivity and Deposit Costs
Q: How are deposit costs and cash sorting impacting margins?
A: The shift to higher-cost deposits, like the enhanced savings program balances costing around 5%, has increased deposit costs. " This mix shift has contracted the net interest margin sequentially. " They believe they're closer to the end of cash sorting dynamics but say stabilization depends on interest rates stabilizing. "

Expenses and Cost Management
Q: How should we think about expense growth if revenues remain depressed?
A: Non-compensation expenses will continue to grow due to growth investments and costs like FDIC insurance as they put more deposits at the bank. " They're focused on managing controllable expenses while ensuring high support levels for advisors and clients. " Admin compensation grew 16% due to growth investments and higher raises but is expected to have a reduced growth rate going forward. "

Credit Provisions and Loan Losses
Q: What's driving the increase in credit provisions, and how are you managing credit risk?
A: Management is proactive in adding to reserves to ensure they're well-reserved. " Additions this quarter were due to specific loans, trying to get ahead with additional reserves. " Charge-offs were flat sequentially, and they feel good about the portfolio but acknowledge that macroeconomic models can impact provisions. "

Advisor Recruitment and Attrition
Q: How is advisor attrition and recruitment impacting net new assets?
A: Advisor attrition remained low at about 1%, slightly up from last year. " They've added significant advisor teams, including a recent addition of a bank platform with $3 billion in assets and 27 advisors. " Net new asset growth was impacted by exiting one program, costing $4.6 billion in assets and 60 advisors, but they expect growth to revert back as recruiting picks up. "

Capital Markets and M&A Activity
Q: How is the higher cost of capital affecting M&A activity?
A: The higher cost of capital is impacting deals, as pricing is slow to adjust, creating gaps between buyers and sellers. " Management is still seeking acquisitions that are a good cultural fit but acknowledges that pricing is challenging currently " " .

Regulatory Impacts and Basel III Rules
Q: How will the new bank capital rules affect your business?
A: Management believes it will take a long time to reach the $100 billion asset threshold. " They have no plans to acquire another bank, and most growth comes from organic growth. " They're internally studying the impact of new capital rules to prepare when they eventually cross the threshold. "