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Piper Sandler Companies (PIPR) CEO Chad Abraham on Q1 2020 Results - Earnings Call Transcript

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Piper Sandler Companies (NYSE:PIPR) Q1 2020 Earnings Conference Call May 1, 2020 9:00 AM ET

Company Participants

Chad Abraham - President and Chief Executive Officer

Deb Schoneman - President

Tim Carter - Chief Financial Officer

Conference Call Participants

Devin Ryan - JMP Securities

Mike Grondahl - Northland Securities

Michael Brown - KBW


Good morning and welcome to the Piper Sandler Companies Conference Call to discuss the financial results for the First Quarter of 2020. [Operator Instructions] The company has asked that I remind you that statements on this call that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements that 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 comparable GAAP measure. The earnings release is available on the Investor Relations page of the company’s website or 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.

Chad Abraham

Good morning, everyone. Deb Schoneman, our President and Tim Carter, our CFO and I would like to thank you for joining our first quarter 2020 call. We hope you and your families are staying healthy and safe. We will go through our prepared remarks and then open up the call for questions.

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Comments (2)

Bhughes7918 profile picture
Bond traders posted revenue of $7.3 billion, a 120% increase from a year earlier, crushing the $5.84 billion estimate by almost $1.5 billion. Equities traders posted revenue of $2.4 billion, beating the $2.07 billion estimate.

Investment banking revenue climbed 91% to $3.4 billion on record advisory fees as big corporate clients tapped debt and equity markets at a furious pace to build cash positions amid the uncertainty of the pandemic.

“We’ve raised record amounts of capital for our clients, advised them on strategic opportunities and helped them navigate the markets, all while facing personal challenges caused by the pandemic,” Daniel Pinto, co-President of JPMorgan and head of the corporate and investment bank, said Tuesday in a staff memo. “It’s difficult to predict what the rest of 2020 will look like, but we do expect to return to more normal activity levels.”

Meanwhile, JPMorgan’s retail banking division posted a $176 million loss, compared with a $4.2 billion profit a year earlier, driven by the addition of reserves in credit cards and other products. It was a similar story at the firm’s commercial bank, which posted a $691 million loss, compared with a $1 billion profit a year earlier.

The firm’s asset management division was less impacted by the pandemic, posting an 8% profit decrease to $658 million as it built loan-loss reserves.

As for the path forward, it’s not entirely clear, JPMorgan executives conceded on Tuesday. Federal stimulus programs have supported individuals and small businesses in the second quarter, masking the true impact of the pandemic, Chief Financial Officer Jennifer Piepszak said Tuesday in a conference call.

If a relatively benign scenario emerges, JPMorgan will have too much capital saved and could resume stock buybacks as early as the fourth quarter, Dimon told analysts. If a more severe recession happens, caused by a second wave of infections in the fall, the bank could be forced to cut its dividend, he said.

“We’re really hitting the moment of truth in the months ahead,” Piepszak said.

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Bhughes7918 profile picture
Bershire stock hit 50% of book in 2009 --

he will wait for that level again to get more of it but I bet at 60% of book they will buy heavy if nothing better comes up the next 4-5 months that my 2 cents, But anything that makes 10% or more a year fairly consistently and you can get it at 50% -75% of tangible in today's modern world with these low rates is a buy for sure, not many but i see some good ones. As long as they have a solid business, strong management are prudent and buy back shares only when they are at that level firms that buy back stock at book or even just under by 10% don't understand it is always better to wait or grow if you cant grow same the funds for a rainy day or the 30% -40 % off sale they seem to always come and at that level that adds serious value to the book for shareholders.

Net-net CEO and CFO and top management salaries still need to come way down and fast or there will be an issue in the world. Mark those words.
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