Good morning, and welcome to the Piper Jaffray Companies’ Conference Call to discuss the Financial Results for the Fourth Quarter and Full-Year of 2018. During the question-and-answer session, securities industry professionals may ask questions of management. 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.piperjaffray.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 measured of – 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. Mr. Abraham, you may begin your call.

Good morning, everyone. I’m here with Deb Schoneman, our President; and Tim Carter, our CFO. And we would like to thank you for joining the call to discuss Piper Jaffray’s results for the fourth quarter and full-year of 2018. Reflecting on 2018, I’m honored to have been entrusted with leading Piper Jaffray, after Andrew Duff retired at the end of 2017. I could not be more proud to lead the talented passionate partners, who work hard assisting our clients. Our strategies to drive shareholder value remain consistent. We are focused on driving revenues higher through market share gains, continued sector and geographic expansion and new products. Revenue growth, combined with enhanced scale and operating discipline, will power increased margins and enhanced profitability. I’ll provide some overall commentary on 2018 and an update on our Advisory and Equity Capital Markets businesses before handing the call over to Deb to discuss the rest of our business lines. Tim will follow with a review of the financials and an update on capital use. I will make some closing remarks, and then we will open up the call for questions. We finished the year strong with $223 million of adjusted net revenues, our highest quarterly revenues of the year and $1.99 of adjusted EPS. For the year, adjusted revenues were $781 million and adjusted EPS was $6.13. Revenues and earnings declined from the record results in 2017 due to fewer large M&A fees and challenging municipal markets. However, 2018 produced a number of positives. In 2018, investment banking had another strong year led by healthcare. We sustained our strong performance in advisory services, with revenues approaching $400 million. We recorded one of our best equity financing years. We launched a new debt-financing capability through Piper Jaffray Finance, which earns six fee events. We grew…

Thanks, Chad. Both equity and fixed income sales and trading experienced a very volatile market environment in Q4, which was helpful to our equity brokerage business, but hurt our fixed income results. Our equity brokerage business generated revenues of $23 million for the quarter, which was up almost 27% sequentially and flat year-over-year. For the year, we generated $77 million of revenues, down 5% from 2017. As we’ve discussed in prior quarters, how market participants paid for trade execution and research services is in transition at a time when the overall fee pool is shrinking. The new payment dynamics for equity research have added additional seasonality to our equity sales and trading business. Our strong Q4 results were due to a large influx of research checks, as clients paid us for the quality of our research services and corporate access offering. We expect to see this dynamic continue in 2019. Our discussions with long-only mutual funds indicate that 2019 could see more stability in research budgets than the industry experienced in 2018. We believe there will be opportunities in a consolidating market to gain market share for strong franchises, such as our own. Turning to our public finance and fixed income brokerage businesses, we generated $28 million of debt financing revenue in the quarter, up 33% sequentially, as activity picked up after a slow start to the year following the federal tax law changes enacted at the end of 2017. For the year, we recorded $73 million of debt financing revenue, down 22% and consistent with the decline in overall municipal issuance. We retained our market leadership in 2018, underwriting the second most municipal issuances in the country and ranking in the top 10 based on par values. The strength of our market position and capabilities within specialty sectors, such…

Thanks, Deb. My comments will be focused on our adjusted non-GAAP financial results. We finished the year strong with quarterly revenues of $223 million, up 3% compared to the sequential period, but down compared to the year-ago period, which benefited from outsized municipal results fueled by tax reform. For the year, we generated revenues of $781 million, down 10% compared to last year’s record revenues. Despite the decline, several of our businesses, including advisory services, public finance and equity brokerage, experienced strong momentum and recorded their best quarterly results of the year. As Chad and Deb highlighted, there is increased macroeconomic uncertainty heading into 2019, but we’re confident in the strength of our diversified platform providing results across market cycles. Our diluted EPS for the quarter was $1.99, higher on both the sequential and year-over-year basis. The sequential change was driven by an increase in revenues, slight declines in our comp and non-comp ratios and a lower share count due to our share repurchase activity in the fourth quarter. EPS was higher compared to the year-ago period, primarily due to a lower federal income tax rate, lower comp ratio and reduced share count. For the year, diluted EPS was $6.13, down from 2017 due to lower revenues and offset in part from a lower federal tax rate. Our adjusted ROE for the year was 13.6%, down from 14.2% in 2017. We remain focused on generating an ROE in excess of our cost of capital, while investing for growth and returning excess capital to shareholders. Turning to our operating performance, the comp ratio was 61.5% for the quarter and 61.9% for the year, both below our target range of 62% to 63%. The compensation ratio declined compared to prior-year periods, reflecting the impact of the new revenue recognition rules adopted in…

Thanks, Tim. In December, the financial markets reminded everyone how quickly calm waters can turn choppy. Increasing uncertainty driven by geopolitical and macroeconomic risks have created more volatile markets. Our clients need our trusted guidance more than ever. I’d like to thank all of our employee partners, whose experience and dedication helped guide clients to superior financial results in 2018. Deb, Tim and I and our employee partners look forward to the challenges and opportunities that 2019 will inevitably bring. We can now open up the call for questions.

[Operator Instructions] Our first question or comment comes from the line of Devin Ryan from JMP Securities. Your line is open.

Hey, good morning, everyone. How are you guys?

Good, Devin.

Hi, Devin.

I guess, first question here just on the advisory business. So you guys clearly have a robust kind of platform with financial sponsors. And just thinking about that part of the business, I mean, their model is based on transaction – transacting and they have record levels of dry powder, so there are some nice secular tailwinds there. So I’m just curious kind of your views around, if we get volatility kind of that continues something similar to the 4Q. Does that you truly shut things down or based on kind of the business model and the amount of dry powder that’s out in the market could you actually potentially have a scenario where there’s still kind of a reasonably healthy level of activity? I’m just trying to think about kind of some different scenarios here, particularly for that segment of the market?

Yes, Devin, I guess, I would say, we really didn’t notice much of a slowdown in transactions. I think with a couple of months of volatility, you can certainly point to a few transactions. But I think that volatility and angst would need to last for a good four, five, six months before you’d really start to see it impact deals. And certainly with the start of the year and the stability of the markets, we don’t really see much change to the pace we saw last year.

All right, great. Great, thanks. A follow-up here, just you had another nice year of organic senior bank recruiting and there are some of the comments around continuing to kind of fill out FIG and tech and some of the other sectors. I guess, just kind of tied to that, I know you’ve spoken about and you guys have done a number of kind of tuck-in acquisitions. So are you still – are you looking at anything, or having conversations, what sectors? And then I guess that’s kind of the point, is there anything inorganic that could really induce kind of the headcount expansion over the next New Year?

Yes. I think, Devin, obviously, if you go back four or five years, we’ve done a number of things. We didn’t get any of those transactions done last year. I think our MD headcount growth will really be continued – a combination of organic growth. We added the six net MDs. Last year, I think that’s a pretty good target on a net basis. Again for us, this year – and yes, we’re having a number of conversations, I would say, the boutiques certainly notice the progress we’ve made in M&A and there’s obviously no guarantees, we get transactions done. But we’d like to keep growing that MD headcount organically and then augment it with being able to add teams or larger transactions. And I think, you’ll certainly see more organic growth in our areas of strength, where we have full built out platforms. But certainly on some of our industry teams, there’s the opportunity to do something larger.

Got it. Okay, great. Maybe pivoting a bit just to asset management, the decline in AUM, I apologize if I missed it. But was that primarily or all driven by just the mark-to-market or were there any kind of flow to one direction or another? And then if there were outflows, any expectation for continuation there? Just trying to think about the direction of AUM there?

Yes, Devin. So the total decline in AUM versus the third quarter was about $1.5 billion, about $1.2 billion of that was market depreciation. So the vast majority, but there were some net outflows. And the way I think about that going forward is, this business has natural attrition in assets over time. And for us, it’s really about targeting some investment in sales and distribution to really offset that with net inflows, and that’s what we haven’t had enough of as we look back over the last year.

Got it. Okay, I appreciate it. And then maybe a question for Tim, just on kind of expenses and operating margins. I mean, if we’re going to extrapolate a more negative environment or anything kind of recovered here quarter to date, so hopefully that’s not the case for 2019. But in that 62% to 63% comp ratio, I know there’s some cushion, because you’re growing. So I’m just trying to think about kind of the flex there. And then on non-comp expenses, I heard kind of the commentary on the guidance and you have revenue recognition that kind of also think about in the mix based on investment banking. But I’m just trying to think about kind of in the scenario, where at some point in the future, we do face kind of stronger economic pressures, kind of the amount of flex on whether it be comp or non-comp expenses that would then kind of think about kind of the margin flex?

Yes, Devin, we obviously have been focused on growth and wanting to continue to invest in the business. But you’re right, we’ve got some ability to leverage that and look at reducing it. I’d say, even in some ways the fourth quarter gives you an example of some ability to bring that down based on where we’re at from an investment standpoint. So, we were able to come in below the range from that standpoint. There’s probably even a little bit more availability or room from there. But again, trying to grow the business, but do have the ability to make some changes there if we face some more significant headwinds. Similarly, on the non-comp side, I mean, there are components of that, if business activity slows, there is some ability to adjust down on some of those more variable non-comps around P&E, some of those pieces. And I think, you would have some reduction in the deal-related expenses potentially as well. So you may be able to move a little bit on that as well, but I’d say, the comp side is the easier piece to control.

Okay, great. And then just last one here on capital. I appreciate that you guys are clearly returning more capital to investors and the special dividend is a big way. To do that, I’m just curious as you think about stock, and it’s not a Piper issue, you have an entire kind of financial sectors come in, in fair amounts from the highs. And so is there a point where you think about potentially getting more aggressive on share repurchases or taking some capital out of the business to buyback stock just given that there seems to be value here? And just trying to think about the kind of balancing repurchases versus the dividends and special dividends, and then I also appreciate that there’s float dynamic to think about as well. So just love an update there and how you guys are thinking about potentially you buying stock as part of the capital plan?

Yes, Devin, so you did – you saw what we did here in the fourth quarter and we felt like there were opportunities. I think, we’ll continue to be opportunistic, I think, as we go forward as well. There are – you point out, we are focused on as well the liquidity and float in the stock. So, there’s some level of balance there. But we’ll continue to look at ways to return capital to shareholders through buybacks and we could be opportunistic. Again, there’s this bias of having capital as well to deploy for growth. So we’ll continue to keep all of those things in consideration in terms of the levels that we do on each of those areas.

Yes, Devin, I would just add, I mean, obviously, we don’t really look at it as, hey, how much do you have to buy every quarter. We look at it relative to the stock price and what the opportunity is. And clearly with the share price in the entire financial services market, like you mentioned in Q4, there were a lot more opportunities. So I think we really look at the buyback opportunistically and we’ll balance that with our quarterly dividends and special dividends.

All right, terrific. I’ll leave it there, and congratulations on the nice end of the year.

Thank you.

Thanks, Devin.

Thanks, Devin.

Thank you. [Operator Instructions] I’m showing no additional audio questions in the queue at this time. I’d like to turn it back over to management for any closing remarks.

Okay. Thanks, everybody. Have a great day. We’re certainly looking forward to 2019.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.