And with that, operator, please open the line for questions.
Operator: Thank you. [Operator Instructions] And we do go to our first line from Steven Chubak with Wolfe Research. Please go ahead.
Steven Chubak: Hi. Good morning, Ron. Good morning, Jim.
Ron Kruszewski: Good morning.
James Marischen: Good morning.
Steven Chubak: So I wanted to ask you a question on NII and some of the sweep deposit commentary. The NII resiliency in the fourth quarter, certainly encouraging, but you noted you’re contemplating some sorting activity in that guidance in the fourth quarter. And I was hoping you could speak to what you’re seeing so far in October in terms of sweep deposit trends and whether your NII guide contemplates any seasonal benefit in terms of cash uplift from tax loss harvesting.
Ron Kruszewski: We haven’t really thought about the seasonal benefit of increasing cash through tax loss harvesting. I just haven’t really thought about that. I think that’s a good point. Overall, as we’ve said in other calls, Steve, we started our Smart Rate program a long — three years ago. And what we’re seeing is slower, in fact, a lot slower in cash sorting because a lot of it has occurred. The reason that we project — excuse me, lower NII and I’ll let Jim jump in on this. But we don’t know what the future holds and the yield curve is significantly inverted and we see a preferred investment for clients to be short-term duration fixed income, and that will impact cash sorting. So as we look forward, while we think things have slowed, we want to be conservative when we talk about it.
James Marischen: Yes. And to add to that a little bit, the slowing in the third quarter is about the same pace we’ve seen thus far in the decline in sweep in terms of what we see in the fourth quarter. And so we’ve seen that kind of come to right around 3% of PCG AUM. And at some point, that level of operational cash can fight against some of the impacts of the inverted yield curve, but that’s part of our guidance. The other thing I’d kind of dive into a little bit, if you look at the other deposit line in the supplement, that was down about $85 million sequentially. But we did see some very positive trends in the venture and fund banking deposit base. Those groups saw inflows of about $300 million in 3Q. And that book of deposits now stands at about $1.8 billion or about 75% of that balance.
That was offset by a decline mainly of additional ICS deposits, now at zero. And so I would also say we’ve seen a similar pace of deposit growth within the funded venture banking space so far in the fourth quarter as well.
Steven Chubak: That’s great. And just for my follow-up on capital management, you were pretty clear that buyback is at least the preferred avenue for capital deployment relative to M&A and other potential considerations. How should we think about the buyback cadence from here, given the strength of your excess capital position, should we assume the $120 million that you did this quarter is a reasonable run rate in terms of the go forward?
James Marischen: I would say it’s definitely price dependent, but I think you’ve seen us step up the buyback cadence over the last few quarters. And at the current prices, I would expect it to be higher.
Steven Chubak: Very helpful. Thanks for taking my questions.
Operator: [Operator Instructions] And next, we go to Devin Ryan with JMP Securities. Please go ahead.
Devin Ryan: Thanks. Good morning, Ron, Jim. How are you?
Ron Kruszewski: Good morning.
