Michael Anagnostakis: Right. That’s very helpful. And then just one on bank M&A. Following the close of the Lakeland merger that had lingered for quite a while, are dialogues among potential deal candidates in the bank space picking up? Or is the view that the current administration will continue to cause headwinds there? And then maybe just to round it out, can you give us a sense of how you expect the environment for bank M&A to evolve depending on the election outcome? Thanks.
Ronald Kruszewski: I don’t know, maybe you gave me some information. I wasn’t sure that Lakeland had closed. That deal has been sitting around for a while. I think we think it will close and if it…
Michael Anagnostakis: Maybe I misspoke. I’m sorry about that, but the…
Ronald Kruszewski: That’s all right. That’s all right. I think we do expect it to close. In general, look, I think the overall, the guidelines and what’s been put out and the FDIC and a number of guidelines and having different – this administration has clearly put a delay in transactions. That will continue. I don’t see why that’s not going to continue. And if it does anything as it relates to M&A, if I’m on a Board, I’m considering and putting a risk factor into my thought processes to how to manage a delay in closing. That’s part of assessing price and the ability to do transactions. So I’m hopeful that the administration, whichever it would – could be after November, we’ll recognize that a lot of midsized banks need to combine to meet enhanced – regulatory enhanced liquidity and everything else.
We don’t need over 4,000 banks, we need more than 10, but there is a lot of M&A activity that’s going to occur, and I’m hopeful that the administration will encourage bank mergers because it’s good not only for shareholders but also communities and for the fabric of the United States Capital Markets, which has at its foundation community and regional banks.
James Marischen: I think one thing to add there is, obviously, the timeline of the – from announcement to close has extended significantly. We are hearing from clients that we feel like they’ve gotten to the point where they don’t feel like that’s going to get any longer from here. And I think I would just say that if the environment switches to be more conducive for financial M&A, we’re very well positioned to take advantage of that.
Michael Anagnostakis: Got it. Thank you for taking my questions.
Operator: We will take our next question from Brennan Hawken with UBS.
Brennan Hawken: Good morning. Thanks for taking my questions.
Ronald Kruszewski: Good morning, Brennan.
Brennan Hawken: Hey, how are you Ron? So Jim, in your prepared remarks, you commented that you added, I believe, 22 advisers in the quarter, but the FA head count dropped by about 30 quarter-over-quarter. Can you speak to what drove that drop despite the healthy gross adds?
James Marischen: Yes. It was primarily driven by retirements. I think you see that early in the year often. I think, generally speaking, the pace of recruiting has slowed a little bit. And so some of the natural attrition from retirement was more of a similar number to what we added in terms of net new advisers. And that is really the trend we’re seeing there. I think when you see markets moving like they have moved, typically, advisers take a little time to make the decision to transition, and I think that’s something you’re seeing kind of across the industry today.
Brennan Hawken: When you have those FA retirements, do you have any stats around what portion of those retiring advisers books you are able to retain or maybe finance to move to a younger adviser or anything like that?
Ronald Kruszewski: We don’t have stats that we published. We obviously look at that. I would say, with retirements most advisers, we have programs for them to transition their books. We give them incentives to do so. And those assets are generally retained at the firm, if there’s a challenge, it’s that those assets like our advisers that are going through retirement, those assets are often going through intergenerational changes too. And so there’s sometimes the higher challenges you go from parents to kids, but we have programs to do that, too. So net-net, we believe that when someone retires at Stifel, that’s a good thing. When you want to look at what’s not necessarily a good thing, it’s our regrettable attrition, which has been low. When someone is leaving to retire somewhere else or something, that’s not good. But when they retire here, that’s a good thing.
Brennan Hawken: Got it. And if I could squeeze in one more, just somewhat maybe technical or nitty-gritty, but it seems as though the other deposits were net of $1.3 billion third-party banks. Are those balances that are third-party banks are reflected elsewhere in the supplement? And why – what drove the decision to move those off?
James Marischen: I will handle that one. So if you look at Page 9 of the supplement, you can see the roughly $2 billion of other bank deposits, so in essence, late in the quarter, we moved about $1.3 billion of primarily venture deposits over to third-party banks. Some of that was a function of just the cash on hand at the bank and the lack of growth that we saw in the first quarter. So we can move deposits off balance sheet either through the Sweep Program or through these venture deposits. This is the first time we did that. I would just say, if you think about that, you add the $1.3 billion back to the $2 billion, you – yes, sorry, $1.3 billion to the $2 billion, you in essence, you can see that we were up about $500 million.
Venture deposits drove about $300 million of that increase. And there were other corporate deposits drove about $200 million. That’s probably more unusual in nature, but the $300 million has been a fairly consistent pace over the last few quarters in terms of growth in venture deposits.
