Chief Financial Officer at Raymond James
Thanks, Paul. Starting with consolidated revenues on slide 10. Quarterly net revenues of $2.67 billion grew 13% year-over-year and declined 4% sequentially. Record Asset Management fees grew 25% over the prior year's fiscal second quarter and 6% over the preceding quarter. Private Client Group assets and fee-based accounts ended the quarter relatively unchanged compared to December 2021. However, adjusting for the acquired assets of Charles Stanley, PCG assets and fee-based accounts declined approximately 3%, creating a headwind for Asset Management revenues in the fiscal third quarter. So I would expect somewhere around a 3% sequential decline in this line item in the upcoming fiscal third quarter. I'll discuss account and service fees and net interest income shortly.
Skipping ahead to Investment Banking revenues. As Paul described, this line item declined significantly compared to the preceding quarter. But at $235 million, it was still a very strong quarter compared to our results prior to fiscal 2021. Given the heightened market volatility, we would not be surprised to match this quarter's results for the next two quarters, which will result in the investment banking revenues ending fiscal 2022, close to the record set in fiscal 2021. While our pipelines are strong, there's a lot of uncertainty over the next two quarters that could impact Investment Banking revenues positively or negatively for the rest of the fiscal year. Other revenues of $27 million were down 47% compared to the preceding quarter, primarily due to lower revenues from affordable housing investments previously known as Tax Credit Funds.
The pipeline for the business is very strong, but the timing of closings is more uncertain given the rapid cost increases impacting affordable housing developers. Moving to slide 11. Clients' domestic cash sweep balances ended the quarter at a record $76.5 billion, up $3 billion or 4% over the preceding quarter and representing 7% of domestic PCG client assets. Notably, $17 billion or 22% of total cash suite balances are held in the Client Interest Program, the vast majority of which are invested in very short-term treasuries and could be redeployed to generate much higher yields over time, either at our own bank or with third-party banks as interest rates increase and demand for cash balances recover. Turning to slide 12. Combined net interest income and BDP fees from third-party banks was $224 million, up a robust 9% from the preceding quarter.
This growth is largely a result of strong asset growth in a higher net interest margin at Raymond James Bank, which increased nine basis points to 2.01% for the quarter. The increase of the bank's NIM during the quarter was attributable to a higher-yielding asset mix given the strong loan growth as the March interest rate increase really won't start benefiting the bank's NIM until the fiscal third quarter. For example, following the March rate increase, the bank's current spot NIM is around 2.15%. The average yield on RJBDP balances with third-party banks increased to 32 basis points in the quarter, and the spot rate is just over 50 basis points, reflecting the March rate increase. Both the NIM and the average yield from third-party banks are expected to increase further with additional rate increases as less than 25% of the firm's interest-earning assets have fixed rates, and those assets have an average effective duration of less than four years.
In all of the deposit sweep relationships with third-party banks are floating rate contracts. So we should have significant upside from rising short-term interest rates. To that point, let me walk through how we are positioned to rising short-term interest rates. Based on current clients' domestic cash sweep balances, which decreased by over $2 billion to $74 billion thus far in April, largely due to the quarterly fee billings and income tax payments, using static balances and an instantaneous 100 basis point increase in short-term interest rates, which includes the 25 basis point rate increase in March, we would expect incremental pretax income of nearly $600 million per year, with approximately 65% of that reflected as net interest income and 35% reflected as account and service fees.
This estimate assumes a blended deposit beta of around 15% for the first 100 basis point increase, commensurate with what we experienced in the less rate cycle. Importantly, this analysis does not incorporate the TriState Capital acquisition, which should provide incremental upside to higher short-term interest rates as the vast majority of their $13 billion of balance sheet assets are also floating rate assets as they have always shared a similar approach to limiting duration risk. Moving to consolidated expenses on slide 13. Starting with our largest expense compensation, the compensation ratio for the quarter was 69.3%, which increased from 67.7% in the preceding quarter, but remain below the year ago period compensation ratio of 69.5% and below our 70% target in a low interest rate environment.
The sequential increase was mainly the result of lower capital markets revenues, which led to the revenue mix shift towards higher compensable revenues in the PCG segment as adviser payouts particularly to independent advisers who cover their own overhead expenses, are typically higher than the associated compensation of our other businesses. On a sequential basis, the compensation ratio was also impacted by the reset of payroll taxes that occurs in the first calendar quarter of each year as well as annual salary increases and continued hiring to support our growth. Non-compensation expenses of $388 million increased 14% sequentially, predominantly driven by the bank loan provision for credit losses compared to a loan loss release in the preceding quarter as well as higher communication and information processing expenses.
Excluding the bank loan provision and acquisition-related expenses, which creates some noise in the comparison, non-compensation expenses of $356 million grew 3% over the preceding quarter. Also keep in mind, expenses included just over two months of results for Charles Stanley, which closed on January 21. So overall, we have remained focused on the disciplined management of all compensation and noncompensation-related expenses while still investing in growth and ensuring high service levels for advisers and their clients. Slide 14 shows the pretax margin trend over the past five quarters. In the fiscal second quarter, we generated a pretax margin of 16.2% and an adjusted pretax margin of 16.6%, in line with our 16% target in this low interest rate environment.
Based on the expectation for the additional increases in short-term interest rates, we will revisit our pretax margin and compensation ratio targets at our upcoming Analyst and Investor Day scheduled for May 25. Hopefully, by then, we will have more clarity on other important variables such as the outlook for Investment Banking revenues, the level of business development expenses as conferences and travel continue to ramp up and the impact of recently closed and pending acquisitions. On slide 15, at the end of the quarter, total assets were $73.1 billion a 7% sequential increase, reflecting the addition of approximately $3 billion in assets, mostly segregated client cash balances from Charles Stanley as well as solid growth of loans at Raymond James Bank. Liquidity and capital remained very strong. RJF corporate cash at the parent ended the quarter at $2.2 billion, increasing 59% during the quarter, primarily due to significant special dividends from our well-capitalized subsidiaries during the quarter.
The total capital ratio of 25% and a Tier one leverage ratio of 11.1% are both more than double the regulatory requirements to be well capitalized, providing significant flexibility to continue being opportunistic and invest in growth. The effective tax rate for the quarter did increase to 25.4%, up from 20.1% in the preceding quarter. The primary drivers of the sequential increase are the favorable impact from share-based compensation that vested in the preceding quarter and nondeductible losses on our corporate-owned life insurance portfolio due to equity markets that are used to fund our nonqualified benefit plans compared to a nontaxable gains on these portfolios in the preceding quarter. Slide 16 provides a summary of our capital actions over the past five quarters. As of April 27, 2022, $1 billion remains available under the Board approved share repurchase authorization.
Due to regulatory restrictions, we do not expect to repurchase common shares until after closing the TriState Capital Holdings acquisition, currently expected to occur by the end of the fiscal third quarter. As we explained on prior calls, our current plan is to offset the share issuances associated with the transaction after closing. But given the heightened market volatility, we'll obviously keep a watchful eye on market conditions between now and then. Lastly, on slide 17, we provide key credit metrics for Raymond James Bank. The credit quality of the bank's loan portfolio remains healthy, with most trends continuing to improve. The bank loan loss provision of $21 million was primarily driven by strong loan growth during the quarter. The bank loan allowance for credit losses as a percentage of loans held for investment ended the quarter at 1.17%, down from 1.5% at March 2021 and essentially unchanged from 1.18% at December 2021.
Now I'll turn the call back over to Paul Reilly to discuss our outlook. Paul?