Piper Sandler Companies

NYSE:PIPR

Earnings Call Transcript 2022-Q1

[Operator]

Good morning and welcome to the Piper Sandler Companies' Conference Call to discuss the financial results for the First Quarter of 2022. 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 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 the 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 substitute for measures of financial performance prepared in accordance with GAAP. Please refer to the company's earnings release issued today for reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure.

The earnings release is available on the Investor Relations page on the company's website and at the SEC website. As a reminder, this call is being recorded.

And now I would like to turn the call over to Mr. Chad Abraham. Mr. Abraham, you may begin your call.

[Chad Abraham, Chairman and Chief Executive Officer]

Good morning, and thank you for joining us. I am here with Deb Schoneman, our President and Tim Carter, our CFO. We will go through our prepared remarks and then open up the call for questions.

Financial markets experienced increased uncertainty during the quarter, including the war in Ukraine, persistent inflation, and expectations for continued tightening of monetary policy. Despite this quickly changing and a challenging backdrop, our diversified and resilient business model continues to generate strong results. While equity underwriting activity was soft across the industry, market conditions remained constructive across many of our industry and product verticals and our advisory business was a highlight during the quarter.

During the first quarter of 2022, we generated adjusted net revenues of $362 million, a 20.8%, operating margin and adjusted EPS of $3.12. I am pleased to report that we delivered strong performances across our advisory, debt financing, and brokerage businesses.

Turning to corporate investment banking, we generated total corporate investment banking revenues of $230 million during the first quarter of 2022. Our results were driven by our M&A advisory business, which generated 74% of our investment banking revenues. Our corporate debt business, which includes financing and debt advisory, had a successful quarter, generating $55 million of revenues, or 23% of total corporate investment banking revenues. Clients were quick to execute debt capital raises in anticipation of rising rates. We completed 33 debt advisory and financing deals during the quarter, raising over $5 billion of capital for our clients.

Turning to advisory services, advisory revenues of $211 million during the quarter increased 38% year-over-year, and reflects strong, absolute and relative performance. The trend of advising on larger transactions and generating larger average fees continues to be a key driver to our advisory growth.

We completed 81 advisory transactions during the quarter with an aggregate transaction value of more than $26 billion. Performance was led by our Financial Services Group, which advised on four of the five largest U.S. bank M&A transactions that closed during the quarter. In addition, our healthcare, diversified industrial and services, energy and power, and chemicals, industry verticals all recorded year-over-year growth.

Our advisory pipelines with private equity clients continued to be robust. We expect our sponsor activity to remain strong as PE firms and portfolio companies continue to engage in high levels of deal activity and maintain record amounts of capital to deploy. An additional catalyst for growth is our market leading energy and power franchise. Oil and gas sectors are experiencing renewed interest and increased activity levels. The team has persevered through the most recent down cycle, and we believe they are well positioned to benefit from increasing activity in both traditional and new energy sectors.

Looking ahead, M&A activity remains strong, and pipelines are good across all of our industry verticals. With this backdrop, we expect advisory revenues for the first half of this year to be similar to the first half of 2021, and if market conditions remain supportive, and we maintain a high close rate, we anticipate our pipelines could lead to increased revenues for the second half, compared to the first half of this year.

Turning to corporate financing, market volatility, a drop in valuations and a more cautious investor outlook, driven by economic concerns, and geopolitical risks have largely shut down the equity capital markets. After two years of unprecedented activity, the pause was not unexpected. During the first quarter of 2022, we generated $19 million of financing revenues, primarily debt financing for corporate clients.

Turning to investment banking, Managing Director headcount, we finished the quarter at 149 Managing Directors representing our 10th consecutive quarter of MD headcount growth on a net basis. Our success and momentum continued to resonate in the marketplace. Both our recruiting efforts and the development of our own talent continue to be priorities. We continue to invest for long-term growth and to strengthen our platform.

During the quarter, we closed on the acquisition of Cornerstone and I'd like to welcome all of our new partners. We are excited to have you as part of the Piper Sandler team. In addition, we expect the pending acquisition of Stamford to close in the second quarter of 2022. We recognize that markets can ebb and flow, but we remain focused on elevating the earnings capacity of our platform across market environments and we see numerous opportunities to continue to grow market share and expand our platform capabilities.

With that, I will turn the call over to Deb to discuss our public finance and brokerage businesses.

[Deb Schoneman, Managing Director and President]

Thanks, Chad. I'll begin with an update on our public finance business. We started the year with $27 million of municipal financing revenues flat compared to the first quarter of last year. Market issuance during the quarter was $99 billion, down approximately 12% from a year ago, driven by fewer refinancing. Higher nominal interest rates and increased interest rate volatility contributed to the year-over-year decline in issuance.

The diversification of our public finance business, both in the governmental space as well as specialty sectors, continues to drive benefit. We were able to outperform the market by executing on specialty sector offerings during the quarter. As an example of our expertise, we raised $400 million for a Texas hotel issuer, partnering with a local governmental entity. Our expertise in the hospitality sector, combined with our distribution capabilities, allowed us to underwrite a complex transaction in a more challenging market.

Highlighting our exceptional distribution capabilities for 2021, we ranked as the number one underwriter in the nation for non-rated tax exempt debt. Looking ahead, we expect governmental issuance to continue to moderate from 2021 levels. While our backlog of specialty sector financing is very strong, our execution of this backlog in 2022, will be dependent on market conditions.

Turning to equity brokerage, equity markets in the first quarter saw elevated volatility and volumes. Our equity brokerage business generated record quarterly revenues of $50 million benefiting from the increased volumes and the addition of Cornerstone Macro to our platform. The acquisition of Cornerstone Macro closed on February 4. Cornerstone adds over 50 professionals including 21 publishing research analysts specializing in producing high quality thought-leading macro thematic and quantitative research.

In addition, Cornerstone Macro's Options Strategy Team provides derivative strategy advice and trading capabilities to institutional investors. Integration of the team has gotten well and feedback from clients has been fantastic. With approximately 1700 combined clients on the platform, we see opportunities to cross sell across our franchise. We traded 2.8 billion shares during the quarter on behalf of our clients as they repositioned portfolios and sought our premier trade execution capabilities.

In periods of heightened volatility, clients consistently trust our high touch trading expertise to execute quickly and efficiently. We continue to increase the number of clients transacting with us on a monthly basis and reached an all time high in March. The breadth of our client base allows us to cross a significant portion of executed cash trades, resulting in no market impact for our clients a valuable differentiator.

Lastly, turning to our fixed income business, for the first quarter of 2022, we generated fixed income revenues of $55 million, up 9% compared to the fourth quarter of 2021. The market experienced rising interest rates in the first quarter, which drove client activity. The 10-year treasury rate increased 55% from December 31 to March 31. This increase in risk free treasury yields reflects market expectations of future inflation and further Federal Reserve tightening.

The work we have done over the last few years to significantly reduce our inventories and lead with advice versus capital has served us well through this period of interest rate volatility. Client activity was strong as higher yields across products enticed investors off the sidelines. Clients invested in shorter dated securities and began the work of repositioning their portfolios in an effort to shorten duration. In addition, our bank clients increased their bond purchases, as investments began to offer attractive yields relative to lending opportunities on a risk adjusted basis.

Our municipal central clients took advantage of higher municipal rates and executed tech swap transactions. Our near-term outlook continues to remain constructive. Inflation and higher yields are driving increased client engagement and our capabilities position us to assist clients as they navigate a volatile environment.

Now I will turn the call over to Tim to review our financial results and provide an update on capital use.

[Tim Carter, Managing Director and Chief Financial Officer]

Thanks, Deb. As a reminder, my comments will be focused on our adjusted non-GAAP financial results. We generated net revenues of $362 million for the first quarter of 2022, driven by strong results from our advisory and brokerage businesses. Net revenues decreased 43% from the record fourth quarter of 2021 and decreased 13% from the first quarter of last year, primarily due to historically low equity capital markets activity. Despite the challenging equity capital raising environment, we delivered the second strongest first quarter in firm's history and we believe these results reflect a level of operating success, which highlights our diversified model.

Turning to operating expenses and margin. Our compensation ratio was 62.5% for the first quarter of 2022, compared to 60% for the full year of 2021, resulting from lower revenues and a shift in business mix. We continue to expect our compensation ratio to be near 62% on a full year basis as we remain focused on investing for growth. Non-compensation expenses, excluding reimbursed deal expenses for the first quarter of 2022 were $55 million at the low end of our guided range.

Non-compensation costs excluding deal expenses decreased 5%, compared to the fourth quarter of 2021, which had included increased professional fees associated with business expansion, as well as variable costs related to higher revenues and profitability. Compared to the year ago, quarter non-compensation expenses, excluding reimbursed deal costs increased 24%, resulting from increased travel expense, as well as the addition of Cornerstone Macro to our platform.

During first quarter of 2022, we generated operating income of $75 million and an operating margin of 20.8%. This represents the seventh consecutive quarter with an operating margin in excess of 20%. Our adjusted tax rate was 23.1% for the first quarter of 2022, which included a $4.6 million tax benefit related to restricted stock vesting the prices higher than the grant date price. We continue to expect our full year adjusted tax rate will be within our targeted range of 26% to 28%, excluding the impact from stock vestings. During the first quarter of 2022, we generated net income of $57 million and diluted EPS was $3.12.

Let me finish with an update on capital. We remain committed to returning capital to our shareholders to drive total returns. During the first quarter of 2022, we returned an aggregate of $195 million to shareholders through buybacks and dividends paid. We repurchased approximately 789,000 shares for $114 million of common stock, which more than offset the dilution from our annual stock grants, and the acquisition of Cornerstone. This includes 93 million of common stock repurchased pursuant to our share repurchase authorization. We will continue to be active repurchasing shares on an opportunistic basis.

We also paid an aggregate of $81 million or $5.10 per share to our shareholders through our quarterly and special dividends. In addition, today, the Board approved a quarterly cash dividend of $0.60 per share to be paid on June 10 to shareholders of record as of the close of business on May 27.

Overall, we are pleased with our first quarter results. Our diversified business continues to be resilient and durable. We continue to make progress on our long-term growth strategy and remain confident in our ability to grow and deliver shareholder value over the long-term.

Thanks, and we can now open up the call for questions.

[Operator]

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

[Devin Ryan, JMP Securities]

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

[Chad Abraham, Chairman and Chief Executive Officer]

Devin, hi.

[Devin Ryan, JMP Securities]

First question, just want to dig in a little bit on the M&A advisory business. You appreciate the outlook doesn't sound like expectations have really changed much, which is great despite some of the market volatility. So just talk a little bit about that? Our sponsors are kind of slowing the activity at all or kind of delaying making decisions, or are you seeing kind of things continue kind of on pace? Does that guide or just the expectation imply that things kind of normalize or are you just not seeing kind of any pullback?

And then the last piece is, from a sector perspective, you guys have nice diversification and so I'm just curious, are there any areas that have kind of maybe come on stronger as certain areas have kind of maybe slowed, assuming maybe tech or others have slowed with valuations on the other hand, maybe commodities or energy, you're doing better? So just curious, kind of any flavor for those items?

[Chad Abraham, Chairman and Chief Executive Officer]

Yes, I would say, thanks, Devon. I would say just to your first question on advisory, while we certainly have a handful of deals, especially the ones that are impacted by public stock price that that have gone away, for the most part our sponsor business is quite strong and relative to signing up new deals sort of in the first four months of this year, we feel really good about that pace. I think we certainly acknowledge if this market volatility continues for a long time into this year, it could ultimately affect those transactions. But right now, we're just not, we're just not seeing much of that. And, frankly, in our sponsor business across some of our sectors, we're winning larger and larger mandates, which might even offset a slightly lower deal count.

When it comes to industry sectors, yes we sort of talked in the script, obviously our energy business was quite strong in Q1, that has been a tougher couple of years, but both traditional and new energy was great. We had a very, very strong start to the year with financials. I do think that's one area specifically, with banks. Some of the larger transactions might get tougher towards the end of the year, but certainly, just the pace of smaller transaction is still good for us.

And then, like last year areas in asset management insurance as we've really broadened our financials practice continues to be quite strong, and same with healthcare and consumer. And I think you've probably highlighted the other area that's a little softer in advisory to start the year, which is technology and software. And yes, some of that's just valuations in trickling over into the private markets as well.

[Devin Ryan, JMP Securities]

Okay, great. Thanks, Chad. Just one followup here on capital for Tim. The stocks are down over 30% year-to-date. That's a market dynamic and more than Piper dynamic. But as you balance capital return through buybacks versus dividends and specials at the end of the year, I guess and how should we think about kind of capacity for buybacks and kind of where we are on the calculation of kind of the float in the stock relative to maybe the attractiveness of now that the new stock price from a longer-term perspective, because I appreciate that there's not a ton of liquidity, but at the same time down 30 some percent when the long-term business prospects haven't changed that much, it seems like maybe an interesting opportunity?

[Tim Carter, Managing Director and Chief Financial Officer]

Yes, Devin. I think we were, we've always talked about right, offsetting our dilution, which we did here in the first quarter. So that was probably a little bit more aggressive maybe than that we've typically been, as we've done that more over the course of the year. But I, think our view is, what, we still think we want to be opportunistic on the buyback. I mean, we've always recognized sort of the float and liquidity piece, but that has improved over time. So, I think it does give us more of an opportunity to continue to buy back.

So, I think we're going to continue to be active on that front as we go forward. You know, based on capital generation, I mean, obviously, we will continue to follow the dividend policy as we've set out 30% to 50%. And it still gives us capacity to be active on corporate development. But generally yes, I think our view is at these levels it does give us more of an opportunity to buy back.

[Devin Ryan, JMP Securities]

Okay, great. That's helpful. I'll leave it there. Thanks so much, guys.

[Chad Abraham, Chairman and Chief Executive Officer]

Thank you.

[Operator]

Your next question comes from the line of James Yaro from Goldman Sachs. Your line is open.

[James Yaro, Goldman Sachs]

Good morning, and thank you so much for taking my questions. Maybe I can just start with the equity capital markets business. It's obviously down a lot across the industry, but maybe you could just touch on whether you're seeing any sort of green shoots in terms of willingness to try to get some deals done so far in the second quarter or is the level of market volatility still too high? And then when you think of some of the companies that need equity financing, such as perhaps biotech is a good example, how long is it until you really think that they will need to come out and raise capital?

[Chad Abraham, Chairman and Chief Executive Officer]

Yes, thanks, James. Yes, I would say relative to the overall ECM market through the first month here in April, we really haven't seen any pickup. I would say the first few weeks of April you were starting to see volatility sort of down, and the VIX down at a level and obviously the last 10 days of April, that's sort of spiked up again. So I would say we're not anticipating some big pickup in Q2. But I would say we've got a list of companies that when the market is willing and ready, that want to finance.

And I would also say just relative to your second comment, we would agree relative to capital markets, I mean, it's pretty rare when we've seen periods last three, four or five quarters of lowest -- low ECM. I'm not saying that's impossible or that couldn't happen, but in general, when we see these pauses they don't really last more than a couple of quarters. And who knows if that's the case this time, but we've got the backlog of companies that want to raise capital, but certainly we haven't seen a lot of renewed interest from investors yet. So I think it's too early to make that call that in the next couple of weeks that spec it's going to turn on.

[James Yaro, Goldman Sachs]

Okay, that's very clear. Maybe, for my follow up, I could just asked about the fixed income trading business, which then leads me to the recent past has been an area of counter cyclicality when we have entered more economically troubled periods. So how do you think about the ability for fixed income to pick up even more if we did perhaps enter a recessionary period? And then I'd actually be really interested to hear your thoughts on whether we entered a true recession with low interest rates, versus more of a stagflationary environment with high interest rates?

[Deb Schoneman, Managing Director and President]

Yes, so one thing I would say is, we do definitely see that our activity in our fixed income businesses, quite highly correlated to the level of interest rates, obviously, higher rates creating higher activity, we saw some of that in the quarter as we picked up from where we were at the end of last year. Part of it though, is also just the shape of the yield curve and interest rate volatility.

So how those factors are impacting the markets is going to drive the level. Meaning, if we can have a more slope to the curve, and lower interest rate volatility, that combined with higher interest rates is going to drive better fixed income business. So to your second point around it sort of answers your second question, I think about what happens if we actually enter into a situation where we end up with low interest rates again.

So one other thing I would say though, about our fixed income business, is we have definitely moved it into more of a client advisory centric with a lot of financial strategy, work with our clients around it. So we are able to see some, I would say more robust transactions with clients as they rebalance portfolios. So I guess that's the other aspect I would add for color on our fixed income business.

[James Yaro, Goldman Sachs]

Okay, that's very clear. Thank you so much.

[Deb Schoneman, Managing Director and President]

Yes, thank you.

[Operator]

Your next question comes from the line of Steven Chubak from Wolfe Research. Your line is open.

[Steven Chubak, Wolfe Research]

Hi, good morning.

[Chad Abraham, Chairman and Chief Executive Officer]

Good morning.

[Deb Schoneman, Managing Director and President]

Good morning.

[Steven Chubak, Wolfe Research]

So I wanted to start off with a question on the operating margin. Certainly nice to see the Op margin above 20% in the challenging IV quarter. I was hoping you can give some context as to what you see as an achievable goal for this year, given the visibility you have on the pipeline today and just the constructive outlook that you offered in terms of the advisory backdrop?

[Chad Abraham, Chairman and Chief Executive Officer]

Yes, hi. I'll take the first shot on that and then Tim can add anything. You know obviously, I think on the Q1 call, we certainly said the 27% margin we obtained in Q4 wasn't sustainable. But I also think we feel like with the scale diversification, all the industry groups, all the products, we even at somewhat depressed revenue levels felt like we could be north of 20%. And I still think we feel like we can be in the low 20s here. You know, so somewhere between where our peak was, and where we were in Q1 makes sense, certainly if revenues also scale into the back half of the year.

[Tim Carter, Managing Director and Chief Financial Officer]

Yes, Steve, maybe the only thing I would add to that, I mean we've talked about in my comments the comp ratio at sort of 62 for the full year. We were a little bit above that in Q1 given overall revenue levels and business mix, but I think, we do feel like there's some opportunities here to continue to invest in the business, make some hires, and so that to have a comp rate at 62, or what could be even a little bit above that is not a bad spot for us, which obviously has some impact on the margin. But being north of 20 and close to 21 at these revenue levels we feel good about.

[Steven Chubak, Wolfe Research]

Okay, that's really helpful color. And maybe just speaking about the recruiting environment, I know you guys had provided some long-term targets or five-year goals. A big driver, underpinning some of that growth is strong MD adds and I just want to get a sense as to what the recruiting pipeline is like, just in terms of new MD talent, your confidence levels, still granted it's early days in terms of your ability to sustain some of that revenue momentum, at least given some of the hiring trends or the current hiring backdrop?

[Chad Abraham, Chairman and Chief Executive Officer]

Yes, I think maybe two fold. Obviously, to hit our five, six year targets of where we want to go, we sort of said we have to do half of that through acquisitions, big team lifts, and then organic hiring. You know, obviously on the acquisition front, we've got a smaller deal in Stamford that we're going to close in Q2, but I would also say obviously, we've been quite active with boutiques and advisory and maybe not as active the last 18 months, and some of that was just prices and the things we look at, looked at and couldn't get done. I would say those conversations have picked up, and I feel quite good about that in this environment. And like we've shown in the past, we're not, we're sort of not afraid to do those transactions for the long term in this environment. So we feel good about that aspect.

But then on the recruiting side, I would say we have seen some momentum there and some of the tougher spaces that we've been trying to add, we've gotten a few of those hires done and we'll get some of those announcements out in Q2. So I think even in this difficult environment, we're going to stay committed to growing that. And you're right for us to hit our long-term targets, we've got to add the teams, do the acquisitions and continue to add the six to seven net MDs a year through external hiring, so we're staying on those targets.

[Steven Chubak, Wolfe Research]

That's great. If I can just squeeze in one more, relating to the James' earlier question on fixed income brokerage, completely understand that higher rates is going to be beneficial to that business. At the same time, what we've seen is the firms that have really strong bank depository franchises, in a period where the Fed has significantly inflated the balance sheet, there's been this need to manage a lot of that excess liquidity, that's driven really strong activity. With the Fed now expected to drain significant amounts of liquidity from the system, I'm just curious how you expect that to impact the fixed income brokerage outlook?

[Deb Schoneman, Managing Director and President]

Yes, I think you have that spot on and we could see the depository side of ours, which obviously is a meaningful part of our overall client base decline as those funds go, you have loan deposits pick up and we see less liquidity on those balance sheets. One of the things that we are very focused on is expanding the other client verticals. So I would say in our strategy to get at that trend, which can definitely happen is to find ways to further leverage some of our, again I was mentioning earlier, financial strategies group work and help those other business lines. But I do think you have a fair assessment.

[Steven Chubak, Wolfe Research]

All right, that's really helpful color. Thanks so much for taking my questions.

[Deb Schoneman, Managing Director and President]

Thank you.

[Operator]

Your next question comes from the line of Mike Grondahl from Northland Securities. Your line is open.

[Mike Grondahl, Northland Securities]

Hey, good morning, guys. Two questions, one just related to the fixed income trading environment and the pickup there, can you talk a little bit about how you're managing that on the balance sheet, just kind of remind us there? And then secondly, just how many MDs you are picking up with Stamford, if you could note that?

[Deb Schoneman, Managing Director and President]

Yes, I'll take the first one there on our balance sheet and this is something we have been very focused on boy for a number of years now significant, really significantly reducing the amount of risks that we take on our balance sheet. And as we saw the scale of the business grow as we combined with Sandler, well a couple years ago now, we saw a lot more flow within that business helping us to reduce the need to focus on balance sheet use. So thankfully, net-net we're having to worry much less about that risk in our fixed income business, which historically may have drove more volatility than definitely it does today.

[Chad Abraham, Chairman and Chief Executive Officer]

Yes, and Mike on the Stamford business, just a reminder, that was a smaller acquisition in our consumer team in Europe, adding to our great sort of food and beverage practice, which for us is also a little bit counter cyclical, but we're adding three net MDs in Q2 from that.

[Mike Grondahl, Northland Securities]

Got it. Thanks a lot.

[Deb Schoneman, Managing Director and President]

Thanks Mike.

[Operator]

[Operator Instructions] Your next question comes from the line of Michael Brown from KBW. Your line is open.

[Michael Brown, KBW]

Great. Hey, good morning, everyone.

[Chad Abraham, Chairman and Chief Executive Officer]

Hi Mike.

[Deb Schoneman, Managing Director and President]

Good morning.

[Michael Brown, KBW]

So Chad, I just wanted to start with advisory, obviously positive commentary on the health of the advisory business and the pipeline given the current backdrop here. As you think about the strength of that pipeline, how does that compare to prior periods to help frame the strength of that pipeline versus historical periods?

[Chad Abraham, Chairman and Chief Executive Officer]

Yes, I would say frankly we looked at that, and it looks a lot like last year, pretty balanced across industry teams. I would say, if anything in the sponsor business, in certain of our sectors, there's more larger deals. The bigger we get, the more round trips we get the more billion dollar sponsor deals. We get, if anything it might be a little more back half waited. I mean, just as a reminder, we had an incredible Q2 with some very large transactions closing. So that's going to be a very difficult comp in Q2. But just in general, that's kind of why I made the comments like, we acknowledge the backdrop, we acknowledge things could get tougher the longer this volatility is sustained. But I also just think it's very hard to see across most of our sponsor businesses, and see much sort of slow down, a lot of those industry teams are running at the same pace with the sponsors.

[Michael Brown, KBW]

Okay, great. And if we dive in a little bit deeper there within advisory had a really strong contribution from financials this quarter, could you just give us a quick pulse check on the banks M&A environment? How is that expected to perform in this rising rate environment that we are in and certainly accelerating through? And how and then how has the regulatory scrutiny that continues to seemingly kind of tighten on bank mergers? How has that been impacting your business? Is that really still more of a large cap headwind for bank M&A?

[Chad Abraham, Chairman and Chief Executive Officer]

Yes. So I sort of touched on those comments. You know, financials was by far the strongest advisory business in Q1. So I do think we feel like that will slow a little bit in the second half and some of that is related to the -- I think we were around four of the five largest bank deals that closed in Q1. And we're definitely seeing some slowdown on the larger transactions. But in general, we also have very, very high market share in the smaller transactions. And so we're still seeing those transactions at a pretty good clip. And then, frankly, have really augmented like I said, in insurance and asset management and fintech and some of those sectors, and are still going at a good pace there.

So relative to your last question, I definitely think the regulatory environment all the transactions are taking quite a bit longer. Certainly, management teams are noticing that. I think on the larger transactions, we'll see a slowdown. But in general, the pace in total is pretty good.

[Michael Brown, KBW]

Okay, great. Thanks, Chad and if I could just squeeze quickly one in for Tim, the guidance for the non-comps excluding the deal related costs for 2022 is $55 million to $57 million per quarter. Obviously, T&E is on the rise here. I just wanted to confirm that's still the right way to think about the quarterly cadence for the year?

[Tim Carter, Managing Director and Chief Financial Officer]

Yes, Mike. I mean based on what we see that's still the right level. I think we're close to maybe back to where those normal travel levels would be. So, sort of at the low end, in Q1, but yeah, I think that's the right range going forward for this year.

[Michael Brown, KBW]

Okay, great. Thanks for taking my questions.

[Deb Schoneman, Managing Director and President]

Thank you.

[Operator]

Thank you. At this time, there are no more phone questions. Mr. Abraham, you may continue.

[Chad Abraham, Chairman and Chief Executive Officer]

Okay, thank you, operator. I'd like to close by saying that I'm very proud of how our team managed through difficult operating environment during the quarter. Thank you, everyone, and we look forward to updating you on our second quarter results. Have a great day.

[Operator]

This concludes today's conference call. You may now disconnect.