Piper Sandler Companies (NYSE:PIPR) Q1 2023 Earnings Conference Call May 2, 2023 9:00 AM ET

Company Participants

Chad Abraham - Chairman and Chief Executive Officer

Deb Schoneman - President

Tim Carter - Chief Financial Officer

Conference Call Participants

Devin Ryan - JMP Securities

James Yaro - Goldman Sachs

Brendan O'Brien - Wolfe Research

Mike Grondahl - Northland Securities

Operator

Good morning, and welcome to the Piper Sandler Companies' conference call to discuss the financial results for the first quarter of 2023. During the question-and-answer session, securities industry professionals may ask questions with management.

The company will make forward-looking statements on this call that are not historical or current facts, including statements about beliefs and expectations and involve inherent risks and uncertainties. Factors that could cause actual results to differ materially from those anticipated are identified in the Company's earnings release and reports on file with the SEC, which are available on the company's website at www.pipersandler.com and on the SEC website at www.sec.gov.

This call will also include statements regarding certain non-GAAP financial measures. The non-GAAP measures should be considered in addition to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. Please refer to the company's earnings release issued today for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure. The earnings release is available on the Investor Relations page of the company's website and at the SEC website.

As a reminder, this call is being recorded.

And now, I'd like to turn the call over to Mr. Chad Abraham. Mr. Abraham, you may begin your call.

Chad Abraham

Good morning, everyone. Thanks for joining us. It's great to be with you to talk about our first quarter results.

I am here with Deb Schoneman, our President; and Tim Carter, our CFO.

Despite volatility during the first quarter of 2023, our diversified platform generated adjusted net revenues of $289 million, a 14.1% operating margin and adjusted EPS of $2.35. Persistent inflation, rapid Central Bank rate increases and stress on the banking system led to a lack of confidence that continues to reduce overall market activity.

Although, volatility benefits our equity brokerage business, it adversely impacts our other businesses, which rely on constructive market conditions and a more stable outlook. The bank turmoil has further extended uncertainty and reduced confidence levels, delaying the inflection point to better market conditions.

Turning to corporate investment banking. We generated total corporate investment banking revenues of $167 million during the first quarter of 2023, down from the first quarter of last year, driven by lower advisory revenue. That said, we continue to diversify our platform across sectors, products and clients. Scaling our industry groups and adding new capabilities enhances our ability to deliver strong results against mixed economic conditions.