雷蒙詹姆斯金融 (RJF) 2005 Q3 法說會逐字稿

At this time I would like to welcome everyone to the Raymond James quarterly conference call. [OPERATOR INSTRUCTIONS] Thank you.

Mr. Tom James, Chairman and CEO, you may begin your conference.

Thank you.

Welcome, everyone to our third quarters', fiscal quarters' analyst call.

Glad to have you with us this afternoon.

Let me give the brief run through, try to relate some of the facts of the issues that we discuss each quarter and then, of course, we'll open it up for questions.

For the quarter, we actually had a good revenue quarter and total revenues $526.3 million, that was up almost 17% over last year.

Some of that related to increased interest expense, so it's useful to look at net revenues which increased from 440 million to 494 million for about a 12% increase.

We also had during the quarter somewhat higher increases on the expense lines than we have in some of our prior comparisons, and it's not all employee-related to increased commissions.

In fact, there's some increased cost and data com in occupancy and equipment where we expense a lot of small purchase items and we -- our spending is still spending a good deal on our new pit project to convert, so that essentially you see between data communications and equipment that we can have some fairly sizeable expenses.

Clearing and floor brokerage was up more than revenues which I can't directly explain yet.

And then we had about a 10% increase in business development.

All in all, we had almost a 13% increase in total expenses which is a little more than I would like to see, even though certainly in line with total revenue increases we normally get a little better operating leverage than that, and we'll be having some conversations with department heads on the expense levels.

That generated a 9.3% increase in net income, and -- which causes me to reflect a little bit on the comment that we added with respect to legal and settlement costs, et cetera, where we increased our reserves during the period, based on not only a settlement that we had in one of our major cases, but also just related to the normal business activities and one other fairly large case that you might describe as extraordinary in the sense of it not being a normal business-side sized liability.

And the total of those expenses, I think I explained in our press release was about $8 million in increase in reserves which made up a lot of the difference of 13 million that we had, but not the whole amount.

And part of the reason for that is actually the other expense line was lower than normal during the comparable quarter last year.

We had a couple of reversals that impacted financial results.

So it's probably more appropriate while you're looking at this, to look back to prior quarters to see the expense levels and they are not that much different.

They are in the 20, $23 million range.

I mean you -- so the 8 million really makes up from what I would say is kind of the average level of expenses now, makes up the difference for the quarter.

So you could run through adjustments and see where you thought operating earnings were.

I would tell you also for the three months that it was pretty much spread across the board, in the private client group, we were up about 10%.

In capital markets, we were up pretty dramatically, about a 16, $17 million increase over last year's numbers.

We had good increase in asset management revenues, as we've continued to have good net sales, and now, at least, increased asset valuations, so that assets under management are growing.

And then we had good results in the other category on the revenue side.

Some of which relates to venture capital income where we had about a $3.5 million addition to revenues from those activities.

As you know, we have been involved in investments with outside venture capital firms, as well as in our internal venture capital and merchant banking efforts.

Some of them are pretty mature now, so we are actually having distributions and while we use a very conservative methodology for profit recognition, the fact is we are receiving some profits during this period.

So when you looked at the pretax line, the private client group was actually down about $10 million and that reflects mainly the increase in legal liability and settlements and a little bit of some margin erosion, but it's mainly that, as I said, there were some favorable reversals so it isn't just the 8 million it's more.

Capital markets increased profits by approximately 50% for the quarter.

Asset management up about a third.

Raymond James Bank, again, they've been doing better than the 20% increase rate in here too, so a good increase and then other because of some of these venture capital-type numbers we've actually gone from a negative number to 4.7 million for this quarter.

So everything is operating reasonably well and when you try to relate that to the economic environment during the quarter and our industry, the fact is results were kind of lackluster for the first couple of months into June.

The market didn't really have much direction, a very narrow trading range and then somebody reminded the market that it was missing its summer rally and in mid-June we experienced the beginning of a rally which has continued to date.

We've seen one of our favorite sectors, energy where, we are very involved in capital markets, have a spurt here as prices have expanded beyond $60 a barrel for oil and related kinds of prices for gas.

With a seeming secular trend on top of maybe some cyclical factors but certainly with the increasing demand for energy in the developing countries, we're going to continue to see that kind of activity.

Which arbors well for our underwriting and M&A businesses in that particular segment of capital markets.

When you look at the nine month period year-to-date, we were at 1.56 million, versus 1.3 -- billion, excuse me, up 14% year-to-date.

We were up 11% to 1.475 billion for net revenues, and we had a 10% increase in total expenses.

So a little bit lower average rate is what I was pointing out earlier on the quarter numbers.

And for net income, we had $106.3 million which was a 7% margin, up 10% year-to-date over the preceding year which if you recall was a pretty good year, where we had a spurt after the decline in earlier periods.

That meant that we had a rate of return on equity of 12.5%, which was down slightly from 13.4%, but represented $1.41, up over $1.30.

We increased share count by about 1 million to 75.49 million during the period.

So we're getting a little dilution.

So I -- I would describe the results as good, as consistent across lines, investment banking activity as you could tell from this revenue description I gave you, was good, because certainly the fixed income capital markets activity in the taxable side has continued to be anemic.

The municipal side is actually up over last year, Results are good.

We've had some good public finance transactions but still it's an area of major opportunity for improvement here at our firm, and we're working on that.

We had 20 underwritings in the quarter, which was consistent to the 20 we had prior quarter domestically, and down slightly from the 22 the preceding year, the total dollar raised was 6.7 billion, up from 6.6 billion a year ago and 5.8 billion in the preceding quarter.

And we've continued to grow total customer accounts, and, of course, we had good activity, and equity capital markets in Canada too, which raised the total to 23 underwritings and they recorded good results during the quarter, actually beat their budget in last year considerably, as retail has become profitable in Canada, as we have continued to add salespeople and net assets under management.

So the businesses, as I said are generally still in good shape.

Been there for the nine months.

I still see a fairly active pipeline on the investment banking front.

I don't see any change in the fixed income business until long-term rates move up.

You are not really going to encourage institutional investors to get on board this and more importantly, from the overall view point of the firm, the retail investor is being counseled to have patience in terms of committing to longer term securities and they are being very careful with respect to their investments.

That has a negative impact on our commission income, but it's the right thing to do for the customer these days.

So, I don't think that condition is going to change much during the picture either -- during the rest of the year either.

With respect to our count of FAs, we were up about 50 over the preceding quarter.

We have adjusted our numbers somewhat.

We're trying to normalize -- it seems this happens about every three years, the financial advisor accounts.

For example, how long the person has been with the firm, what their production is for us to qualify them as a full-time producer, et cetera.

And our total financial advisory count was 4819.

We adjusted down, but about 125 or 150 are accounts overall.

We have a lot more registered people than this and you got to be careful when you listen to counts in the brokerage industry because a lot of them just give you a registered people count but when they calculate their average productivity, they then take people who have seniority and who are above a certain level to even include in accounts to get average productivity.

So this is a fairly confusing area.

But we are having good activity continuing to hire large producers in our Raymond James & Associates employee based model.

Probably more activity than I've ever seen, as a matter of fact.

Part of that is reflective of the number of firms like ours that are left in the industry.

The fact that Legg Mason is moving to -- out of the retail brokerage business, and concentrating on asset management, which should be annuit to our benefit over the coming years, I would think.

Because a lot of people look for the alternative to the national firm, and we think there aren't very many of us left with longevity, size, and scale, and all the product offerings and service that are necessary to compete today, that aren't really covered with the -- or painted with the national warehouse brush.

So this is -- this is, we think, very favorable.

Our independent contractor recruiting, as I reported in prior periods, has still been reasonably good.

It has been down somewhat in the recent couple of quarters but activity has picked up there too and the pipeline is increasing, and I see the beginning of the slowdown of cleansing of lower producers and those that don't meet our standards in the independent contractor network.

So we have, I think done an excellent job of maintaining what looks like a stable sales force over the last year.

But really, substantially increasing assets under management and gross production and I think we're -- we're really back on track after being derailed in 2000 through 2002, to see major net growth in the sales force as we proceed through the year.

We also increased our assets under management at all of our firms from 108 billion a year ago, 109 billion a year ago to 142 billion, which is a major increase for the year.

We had a $6 million increase just for the quarter.

So we're experiencing good growth in customer counts, net, and in assets that those customers bring to the firm.

So I would tell you that we certainly didn't knock the cover off the ball in the quarter but we shouldn't have expected that we would have because of the retail conditions that existed for most of the quarter.

Actually this quarter to date there's more activity going on than there was during those prior months.

So hopefully we're going to have a good year-end quarter, very difficult to forecast that because we've had a fairly substantial rally in the market in the last month, and we may not be able to keep the momentum as -- we are still basically in a -- somewhat of a trading range with limited upside probably on average.

On the other hand, I continue to be reasonably sanguine about the downside risk while there's not a tremendous amount of upside potential here near term, I think there's opportunity for good steady growth as earnings continue to surprise on the upside, corporate earnings.

So the condition of the firm is good the fundamentals of the business adding financial advisors, building new offices, et cetera, are in good shape.

Asset management results continue to be good.

Our reputation for research continues as we are consistently still outperforming the index averages with our focus list and number one recommendations.

So I think we should have a reasonably good fourth quarter.

It's impossible, as I said to really forecast given some of these vagaries as the market moves up and down based on things like terrorist attacks.

With that I think I will hope open it up to comments, questions.

And I have got Jeff Julien, our CFO and Jennifer Ackart here with me who can help respond to some of the financial questions.

Thank you.

[OPERATOR INSTRUCTIONS] And I'm showing your first question is coming from the line of Jonathan Casteleyn.

Your FA head count grew 1% sequentially.

Do you have a secular growth target either on an absolute or a percentage basis that you are managing towards here?

Yes, we actually try to recruit 8 to 10% new financial advisors a year net.

And the reason, as I've said that we've been below that has really been, we've been moving people out the bottom end of the list.

Its not that we are not adding large numbers of people at the top end.

So we probably recruited more producers over $0.5 million this year than we ever have in our history.

So it's -- the numbers are a little misleading and have been for almost two years now.

So 8 to 10% on Q4 of last year, basically is one of the targets?

Well, it would be if we weren't removing the people at the bottom end.

That's our goal for adding net people on a normal basis.

And what I'm saying is that we're just at the end of the process, of encouraging our managements and the broker dealers to not have a lot of financial advisor just for count sake but to have them focused very much on the quality, so that we eliminated a lot of people, and this is not turnover in the sense of it being at the intentional behest of the financial advisors.

Above 300,000 in production, our losses -- our attrition is less than 1% in the firm.

Does that put upward pressure on your compensation rate as you hire?

How do you sort of manage that?

Well, the answer to that is yes.

In the employee side broker/dealer, we have been somewhat more aggressive in front money payments than we have been in the past.

We have always been consistently below the -- probably been consistently below the average but we are certainly always below the national firm that happens to be the most aggressive at the moment, which seems to be UBS and Morgan Stanley.

So the -- there's no doubt that that's cost a little more.

We have raised a little bit of our payouts.

It also -- our front money payments have always been directly related to the amount of gross, because any study you -- I've ever seen in the securities industry relating retention of business to some other factors points out that those with higher production actually retain a much higher percentage of their production, when they move.

So we pay a little more for those.

So by -- I guess by definition, we have -- or by formula, we are having a little higher front money cost.

We continue to make the adjustments in payouts each year relating to bracket free.

So some of that is out of the system.

And again in the independent contractor front, while we've had some transition assistance fees generally this is a minor factor.

We don't really pay front money on that side of the business.

Okay.

On the infrastructure side aside from the other expense line what can you run this complex on?

How much more infrastructure are you going to need to add here as you enter a more sustainable growth period?

Oh, I have seen for the first -- there's not a whole lot of infrastructure, except in the sense of people that where you -- where you always have some latent growth after you've gone through a period when you begin to turn around and business picks up.

And I have begun to see in the last couple of quarters additions to our employee count.

And that reflects the pressure that exists from keeping costs down and continuing to do that until you are sure that those volume levels are sustainable.

And that you are going to continue to recruit people and the market is going to support business activity.

So I think there's more assurance on the part of our people today than there has been in the past about that.

So we're seeing some more aggressive hiring.

We have space to accommodate those people, et cetera, here.

We have had some BCP costs, which have been higher than what you might guess, as we have moved our backup site from downtown Detroit, to a new building we purchased in -- it's not new in the sense that it was recently constructed.

It's just new to us.

In Southfield, Michigan.

And we have had to outfit that with new furniture and equipment and we're going to substantially increase the size of our operations force in that location.

Probably from the 80 to 85 range, to the 200 range and within the next 12 or 15 months.

And the reason for that is when we have a hurricane come through here, as we did with Ivan coming close last year, the magnitude, or to put it in more current terms, if our recent hurricane Emily had decided to turn upwards into the Gulf of Mexico earlier, we would have had to move 100 people to our Southfield, Michigan office to be able to open up the next day and be able to continue operations.

So it's important that we have a large enough force there -- and it is a live force.

They do serve clients every day.

This is not a cold site.

This is a hot site.

So that necessarily -- as you ramp up and rebalance your work, between two locations, you have a little inefficiency, and over time you hopefully work through that and make it a better operation.

So we are going to have some costs associated with that, and we're -- I think that the current level of expenditure is a reasonable level of expenditure for us to be able to maintain this or 10 to 20% higher revenues.

So I mean X the legal reserve of 8 million you are running about 86 million non-comp.

You are saying that that should be consistent, around about a range?

Yes.

That's right.

Okay.

With inflation adjustments going on in there for the 3 to 4% kind of range.

Actually paradoxically, your comp rate, pegging it to my first question has actually been down year-over-year for the past three quarters, what exactly is driving that?

Is that capital markets business, as far as contribution to the overall complex or--?

Yes, the -- normally, it shifts the other way, and the reason for that is we increased our percentage of independent contractor revenues.

And because of what we have done in the independent contractor field force, we have actually probably reduced there proportional percentages and that reduces the comp line.

But at the same time, that ought to reduce -- or ought to increase some of the other lines.

As you support your employees versus the independent contractors supporting themselves.

Okay so it's a broker mix shift then?

Yes.

Okay.

Okay.

And then can you just decompose the other line for the quarter.

The 8 million.

You said it's 6.5 million for Premier 72 and there was another mention of another--?

No, no it was 6.5 million for Premier 72 and one other case.

Right.

That's a fairly large case and they were reasonably equal.

Right.

And that's the other headline case.

Is that safe to assume?

No.

It's not the other headline case?

No.

Fair enough.

It might be a headline where it is happening, it's not a headline in the sense that we have talked a lot about the case.

It's a newer one.

It's a newer one.

Okay.

And then the $1.5 million balance, basically -- you reserved 8 you are counting for a 6.5?

I would call that increase one that is more related to just average increase and volume.

It's your more normal addition.

Obviously these things are not straight lined.

They are very erratic additions.

Sometimes we actually reduce the reserves in a quarter because we have to assess all the outstanding cases at the end of every quarter.

And it's a little bit erratic but that 1.5 million is more in the erratic category than it is -- and just average growth than it is in what I would call unusual.

Fair enough.

And then lastly, you alluded in the press release to being able to quantify your legal exposure getting slightly better.

Is there a way to elaborate on that?

Yes, the thing we measure is new complaints.

And the activity level has slowed down as one might guess.

Because almost all of it was related to losses that occurred as a result of the market declines in 2000, through 2002.

Needless to say the complaints don't state that as the cause.

But that's the cause, because if there were no damages no one would be bringing suits.

So the vast majority of it is related to that and we see a reduction in that activity.

I would tell you over the last few years, we've experienced a drag of a 0.5 to 1% on margins, as a result of -- above what those kinds of costs had been in the preceding 15 years and we were in a big up market during that period.

So I'm not going to comment on what's normal and what's not normal.

I can't really tell you.

I can tell you that we have made substantial investments in compliance and internal audit.

We have increased staffs at all of our firms.

We have made good strides in developing software to identify problems and we have worked very hard on best practices, where best practices are the way to avoid this problem, as we all know, in the business.

Almost everyone got caught up in the bubble mania that existed in 2000 through 2002, whereas your disciplined financial planner, who followed the dictates of asset allocation actually experienced far less problems and complaints from clients than did the person who decided all of a sudden they were an expert in tech stocks.

Okay.

Thanks very much for your time.

Thank you, Jon.

I'm showing that your next question comes from the line of Aaron Addell.

Hi, good morning, can you hear me okay.

Yes, Aaron.

I just wanted to follow up on the questions of the legal stuff.

I guess, more on your overall philosophy.

There are some companies who when their SEC rulings against them or things like that, just try to get them out of the way and pay the fine and move on.

And you've, I guess, at least challenged some of the SEC rulings against you in the past.

I just sort of wanted to get your thinking on the philosophy behind that.

There's some companies who would just say we'll get what we need to get out of the way and then we'll move on whereas you are kind of taking a different tact and I wanted to get your thoughts on that.

I would not conclude that there's some general philosophy here to be combative.

What I would -- what I would encourage you to think is that when we do this, we do it with great reluctance.

We do it when we think we were right, and that the fine was inappropriate, or we might do it for tactical reasons related to other cases or something of that nature.

Our general philosophy is that we settle these things.

As you well know, the size of fines, the kinds of actions that have been taken by the regulators have escalated for the same kinds of actions and that's a little hard to stomach for some of our broker/dealer managers.

They are uncomfortable with somebody thinking they did something wrong on a firm basis when, in fact, it was a financial advisor that went off the reservation, unfortunately if you have 5,000 financial advisors, you are always going to have a few of them involved in activities that you would not be proud.

And I would like to say we could have it zero but I think our percentage is better than the Florida Bar Association and the Florida Medical Association.

So I think we do a pretty good job of supervising these people, but I will tell you, the ones that are con men, the ones who have a dishonest bone in their body, or the ones who simply got behind the eight ball and were trying to cover it up for some period of time and it kept getting worse and worse are the hardest to detect because many of them are the best salesmen and by the very nature of how they've operated otherwise nobody would have bought this junk that they have sold to clients.

And we do a lot of things from a prophylactic perspective to try to make our clients aware that they don't do business outside of the normal scope.

And they -- if they don't get confirms and they don't get investments they have made with us on their statements we want to hear immediately about it.

If it is some kind of an unusual request on the part of a financial advisor, we want to hear about it.

And we do a lot to educate our clients in this area, but the fact is, we're always going to have a few every year.

And I wish it were different.

It's not going to be different.

And the regulators need to understand that we are doing the best job we can to supervise them.

I think what's unfortunate about the other case that was mentioned here which is the Harula case in New England, is that the Harula case, it wasn't so bad what they decided to fine us, but probably inappropriately, in retrospect, we decided to fight.

I will be the first one to admit that mistakes were made, that they then changed the charges after no discussion whatever with us that we were ever being considered for anything other than a lack of supervision.

They changed the charges.

So rather than go back and settle at some higher level than we could have settled for the first time, we really thought that that was a violation of due process.

At least I believed that.

And I am a lawyer.

And I don't think that's appropriate.

I don't think that's the way regulators in our industry should act and so we chose to continue the fight once that original decision was made.

So I'm sorry that it happened.

We don't have a resolution of that case.

We had expected a resolution in July, but there's been a request for deferral of that for a couple of months because of special problems related to the judge's own docket.

So this is -- I don't know what's going to happen in the case.

I wish I knew.

I have a better time calling the market and I'm not good at that.

But in the meantime you have basically a reserve that's less than the fine that's been levied against you?

No fine has been levied against us.

Okay, well, I will catch up with you.

There has been no decision.

What happened is the SEC asked the judge for a series of punitive actions, okay?

Yes.

Assuming that, the judge agreed that there was some sort of intent and that this amounted to fraud which was never the original claim.

I still believe that probably a reasonable solution in this is more in the lack of supervision area.

There certainly was no intent on our part.

I mean, we -- it's always easy to go back and say you should have done this a month sooner or two months sooner than you did it, but I have to tell you, the world doesn't work that way, and we acted pretty quickly as we do every time we find one of these situations might exist.

And it was done totally without our knowledge, without our involvement, and when it occurred, we penalized everybody involved, including the supervising management.

So I don't know what else we could have done.

I think the damages that were asked for effectively or the fines that were asked for here were inappropriate.

Got you.

Okay.

All right, that's helpful.

Thanks a lot.

Thank you.

Your next question comes from the line of Tom (INAUDIBLE).

Hi, guys.

Can you hear me?

Hi.

Can we just go over the tax rate a little bit?

We talked last quarter about there being an IRS audit.

Is there any update on that?

I will be glad to let Jeff Julien respond to that.

Only that we feel like we've adequately taken care of any possible adjustment that they might make for some of the disallowable interest related to municipal bond financing, indirect municipal bond financing.

We have some disagreements in the calculations, et cetera, but this quarter represents a much more normalized tax rate for us going forward.

Okay.

That's helpful.

Yes.

Okay.

Thank you.

On the FAs, back to the FAs a little bit, with the traction that you've seen this quarter, is this due to more, like traction that you've been able to get in your recruiting process or does it have more to do with the issues you discussed at Legg Mason and maybe some unrest at a bigger competitor, some of the brokers coming from there?

You know, one never knows the confluence of factors that are causing the numbers to change.

Certainly the activity that we are going through now with the visitations from prospective recruits is high, as it relates to the factors you have just mentioned.

I would say the actual results to date are more a result of the increased advertising we did with Advisors Select and Choice -- Advisors Choice here over the last 18 months.

So it takes a long time for people to acclimate, when they first become familiar with the idea of movement and make their first call and talk about it.

They think about it and it normally takes a catalytic event for them to finally make a decision to leave.

And I think what's happened has been that the advertising, which led to a tremendous flow of initial contacts and got in the pipeline is now beginning to bear fruits out the end of people joining us at the other end of the pipeline.

So I actually think this is more consistent with the money that we have invested in this process a year or two ago, and not a function of the Legg Mason decision yet.

You'll see the results of that over the next two years.

Okay.

Great.

That's helpful.

Thank you.

Can you talk, still in that phase, a little about average production for broker and also just about the levels that you have changed for considering a producing broker.

Can you give us some ideas, just because they declined, I assume that they are more respective, but just quantitatively about where the 10-year production the broker has to achieve in order to be counted in your numbers?

Oh, boy.

That actually varies by broker/dealer.

Okay.

And one of the problems is the count number, the number in our independent contractor, RJFS had too low a number associated with it.

I think it still has too low a number associated with it, to describe people as full-time producers.

Because some of those independent contractors do their securities business through us but do their insurance business through agencies associated with that independent contractor office and some of them do their business through us but some don't.

And some of them do a pretty large fixed income annuity business, for example that they don't have to do through us.

Or traditional insurance, which they don't have to do through us.

Right.

So that number -- I think the count is now -- and it's related to an E&O count.

I think the count at RJA is something like 100,000 gross and it's got also some requirements about how long the people have been here.

They have got to have been here a year after they are recruited before they count, they've got to -- they count in a trainee count for average production, and then we have two numbers for every production, those that have been here and are out of the training class after three years and -- everyone, including trainees.

So that affects the numbers at RJA.

Whereas the RJFS number, the count that they are using is related to where they qualify for E&O as producers here, which is a very low number.

It's like $20,000.

Now we don't have a lot of those, but that brings the average production down and I would tell you, it's more reflective of the fact that some of our independent contractors split part of the commission that's earned overall, with a team, and when they do that, you get some people in the counts that you might not say are really productive as contrasted to what you might have had at a national firm, where the national firm might have had one or two support people for that financial advisor, that they paid for and didn't have in the investment -- the advisor count.

So you will see typically in our independent contractors a number like 180 or 190,000 gross, but that number has been, as I said, dragged down in terms of that average, by that factor of having some people count as productive personnel where we wouyldn't do that in the employee based firm, we'd want to see a much higher number in the employee based firm of at least $100,000 to count them.

And we're in the process still, while we've made some revisions during the last quarter.

We're in the process still of this normalization, among -- or between the two brokers.

It doesn't make sense to us, at least those of us sitting in senior management around the table having to remember different definitions for different subsidiaries and I would like to have everybody on the same basis.

So we're moving towards that, but we're not fully there yet.

Okay.

And do you have a blended number just for firm wide average for FA?

I think -- well, the employee firm, it's -- I think it's about 360 to 370.

Again, I can't exactly tell you who is in the denominator.

A lot of the big new brokers, for example, wouldn't be in that number, because they have not been here a year yet.

And it's probably right around $200,000 I would think in for the independent contractor side.

Okay.

That's good.

The independent contractors are more focused on revenues per office than they are per individual producer because other than the branch manager, typically the other financial advisors in the office work for them, for the branch manager and they determine their own revenue splits et cetera.

So it's really more important to us to see revenues per location.

Right.

Okay.

And just finally, you guys had a fairly large M&A advisory mandate that closed right in and around the end of the quarter.

Can you give us any color as to whether that would fall -- would have fallen in last quarter's numbers or this quarter's or sort of flipped between the two?

Are you talking about United Health?

No.

There was another--.

Actually the biggest -- the biggest fees that I would tell you we earned -- we have this rule that says, you have to have -- it's either cash or a signed engagement letter where people have agreed the work is completed before we recognize any income.

So we've actually had some that have been reported where we have been the agent but we haven't been paid yet.

Okay.

We haven't recognized the income.

But we had -- we had one fairly large fee in that quarter, but it -- it's not -- it's not dramatically larger than some of those M&A fees, whereas the one that I just mentioned is.

Okay.

And that's not in there yet.

Yes, it's not there yet.

Okay.

Thank you very much.

[OPERATOR INSTRUCTIONS] And Mr. James, I'm showing there are no further questions at this time.

Well, then let me thank all of you for participating.

We look forward to our year-end report with all of you, and I look forward to talking to you next time we see you either here or at our presentation.

Thank you very much.

This concludes today's Raymond James quarterly conference call.

You may now disconnect.