Evercore Partners Inc. (NYSE:EVR) Q3 2017 Earnings Conference Call Transcript

Oct 26, 2017 • 08:00 am ET


Evercore Partners Inc. (NYSE:EVR) Q3 2017 Earnings Conference Call Transcript


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Ralph Schlosstein

remain strong. In advisory, we continue to be the Number 1 ranked independent M&A advisor in the US league tables for announced transactions on a year-to-date and on a trailing 12-month basis and the Number 2 advisor among independent firms in the global league tables on a trailing 12-month basis. And our market share has grown materially in the past year. In equities, Evercore ISI was recognized by institutional investor as the top independent research firm in the US and we ranked Number 3 among all firms on an unweighted basis and Number 2 on a weighted basis.

We also had the second highest number of II Number 1 ranked analysts, a testament to our commitment to both differentiated research and excellent client service and a competitive imperative as this marketplace continues to involve. In Investment Management, we remained focused on building our wealth management businesses ending the quarter with $9 billion of assets under management. We also completed the previously announced sale of our Institutional Trust and Independent Fiduciary business in mid-October. Our strong results enable us to sustain our track record of significant capital return to our shareholders. Our Board of Directors increased our quarterly dividend by 18% to $0.40 a share per quarter. The 10th successive year of growth in our annual dividend. And our board approved an increase in the share repurchase authorization to a total of $750 million.

These authorizations will allow us to sustain our commitment to offsetting any potential dilution from annual bonus awards and investments in new hires while increasing the amount of earnings returned in the form of dividends. Let me now briefly recap our firm-wide financial results. The third quarter net revenues were $402.9 million, a record for the third quarter. Earnings per share was a $1.22, in line with the third quarter of last year as both adjusted net income and share count declined by 2% in comparison with the prior year. Year-to-date, we achieved record revenues and adjusted net income of $1.2 billion and $198.4 million, respectively. Year-to-date adjusted earnings per share were $3.90, an increase of 35% over the same period last year. These results principally reflect strong earnings from our Investment Banking business and a decrease in the reported effective tax rate.

Our compensation ratio remained at 59% for the quarter and the first nine months reflecting both the higher level of recruiting for the year, both in terms of seniority and numbers, and the elimination of the contractual compensation ratio in the equities business. Third quarter non-compensation costs were $61.7 million or 15.3% of revenues as we continue to maintain cost discipline. Operating margins for the third quarter and the first nine months were 25.7% and 25.2% respectively.

Let me now turn the call over to John to discuss the current advisory market environment and our Advisory business. John?

John Weinberg

Thank you, Ralph. And I will spend just a minute on the market environment, which remains broadly favorable. Clients continued to actively pursue M&A transactions in