Chief Financial Officer/Treasurer at Raymond James
Thank you, Paul. Starting with consolidated revenues on slide 10. Quarterly net revenues of $2.72 billion grew 10% year-over-year and 2% sequentially. Asset Management fees grew 13% over the prior year's fiscal third quarter and declined 3% compared to the preceding quarter, in line with the guidance we provided on last quarter's call.
As a result of the steep declines in the equity markets during the quarter, Private Client Group assets and fee-based accounts ended the fiscal third quarter down 11% compared to March 2022, creating a significant headwind for Asset Management revenues in the fiscal fourth quarter. Brokerage revenues of $513 million declined 7% compared to the prior year's fiscal third quarter and 9% compared to the preceding quarter.
The decline in brokerage revenues was largely due to lower asset-based trail revenues in the Private Client Group as well as decreased brokerage revenues in the Capital Markets segment. I know some other financial services firms posted year-over-year increases in institutional fixed income brokerage revenues. But remember, we intentionally do not have a meaningful presence in the much more volatile interest rate commodities and currency trading businesses, which benefited many of those larger firms this quarter.
I'll discuss account and service fees and net interest income shortly. Investment Banking revenues of $223 million declined 5% compared to the preceding quarter. While our pipelines are strong, there's a lot of uncertainty given the heightened market volatility. Given the market environment, we are really pleased with the Investment Banking results this quarter, and our best guess right now is that we could achieve a similar result in the fiscal fourth quarter if the markets remain relatively resilient over the next couple of months.
Moving to slide 11. Clients' domestic cash sweep balances ended the quarter at $75.8 billion, down 1% compared to the preceding quarter and representing 7.8% of domestic PCG client assets. As of this week, these balances have declined to approximately $73 billion reflecting the quarterly fee payments, which were paid in July and comprised of roughly half the decline this month as well as some continued cash sorting activity during the month.
Turning to slide 12. Combined net interest income and RJBDP fees from third-party banks was $370 million of an astounding 102% over the prior year's fiscal third quarter and 65% from the preceding quarter. This revenue growth is largely a result of higher loan balances in the Bank segment as well as higher short-term interest rates which really reinforces our long-standing approach of taking limited duration risk with a high concentration of floating rate assets.
You can see on the bottom left portion of the slide, the Bank segment's net interest margin increased a substantial 40 basis points sequentially to 2.41% for the quarter. The average yield on RJBDP balances with third-party banks increased to 88 basis points in the quarter. Both the NIM and the average yield from third-party banks are expected to increase further from the recent and anticipated rate increases.
For the fiscal fourth quarter, factoring in the rate increase this week and some assumptions around deposit beta and other variables we would expect the average yield on RJBDP from third-party banks for the fiscal fourth quarter to average around 1.7%. As for the Bank segments NIM, we expect it to average around 2.7% for the fiscal fourth quarter, which would reflect around two months of this week's interest rate increase and a full quarter of TriState Capital's contribution.
But these projections will obviously be impacted by the actual deposit beta we experienced. We will continue to put clients first and focus on staying on the more generous end of the spectrum for our clients. So far, our cumulative deposit beta since the Fed start increasing rates in March has been around 20%, but that has accelerated with each subsequent increase to about 30% with the June increase. We would expect the deposit beta to continue increasing with each incremental rate increase.
Moving to consolidated expenses on slide 13. Let me point out a significant change we made this quarter to our presentation of expenses. Namely, we eliminated the acquisition-related expense line item and now are including all the expenses in their respective line items.
At the same time, we are now capturing more acquisition-related expenses in our non-GAAP adjustments including items such as amortization of acquired identifiable intangible assets, acquisition-related retention and a bank loan provision item I will discuss in more detail shortly. For example, this quarter, $65 million of expenses related to acquisitions are included in the non-GAAP adjustments.
As detailed on the reconciliation table on slide 21, which provides the amount of associated expense per line item as well as a five-quarter history. We hope these refinements, which I know have been very common across many of our peers are responsive to many of your requests and help you gain a better understanding of our operating results. And as always, we will emphasize our GAAP results alongside any adjusted results we disclose.
So turning to our largest expense, compensation. The total compensation ratio for the quarter was 67.5%, which decreased from 69.3% in the preceding quarter. We also introduced an adjusted total compensation ratio this quarter, which adjusts for acquisition-related retention and compensation as outlined on slide 23. The adjusted compensation ratio was 66.8% during the quarter.
The sequential decline in the compensation ratio largely reflects the benefit from higher net interest income and RJBDP fees from third-party banks. Non-compensation expenses of $469 million, which includes $47 million of acquisition-related expenses included in our non-GAAP earnings adjustments, increased 21% sequentially. Business development expenses increased to $58 million, reflecting the adviser recognition events and conferences as well as increased pent-up travel during the quarter.
To put this in perspective, prior to COVID, the fiscal third quarter was typically the high watermark for this line item. And in the fiscal third quarter of both 2018 and 2019, this line item totaled $57 million. And since then, our business and revenues have grown substantially, including through several acquisitions. The bank loan provision for credit losses increased considerably to $56 million.
A big portion of this increase was a $26 million initial provision associated with TriState Capital acquisition where purchase accounting requires us to establish an initial allowance for loan losses associated with the acquired loans as the pre-closing allowance does not transfer over. To help you with comparability to prior periods, we did adjust for this portion of the bank loan provision in our non-GAAP results.
The remaining portion of the bank loan provision during the quarter, around $30 million, was primarily associated with the 8% sequential loan growth at Raymond James Bank and a weaker macroeconomic outlook. Other expenses increased to $85 million for the quarter. The majority of the sequential increase was attributable to increased expenses associated with acquisitions during the quarter, which are included in the non-GAAP adjustments.
So I know there's been a lot of noise over the past couple of quarters with the Charles Stanley and TriState Capital acquisitions, but the main takeaway on expenses is we remain focused on the disciplined manage of all compensation and non-compensation-related expenses while still investing heavily 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 third quarter, we generated a pretax margin of 15.3% and an adjusted pretax margin of 17.7%. While the market environment has certainly become more challenging since our Analyst and Investor Day in May, we still believe the 19% to 20% pretax margin target we laid out is appropriate given the significant benefits of higher short-term interest rates, assuming the market stays relatively resilient at current level.
On slide 15, at the end of the quarter, total assets were $86.1 billion, an 18% sequential increase, reflecting the addition of TriState Capital 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 billion, well above the $1.2 billion target.
The Tier one leverage ratio of 10.8% and the total capital ratio of 21.4% are both more than double the regulatory requirements to be well capitalized, providing significant flexibility to continue being opportunistic and invest in growth. Also, I would note that the Tier one leverage ratio includes just one month of TriState Capital assets and doesn't yet reflect the assets from SumRidge, which closed on July 1. So the spot Tier one leverage ratio following the SumRidge acquisition is below 10%, still well above the 5% regulatory requirement.
And as I said on the last quarter's call, we don't view the client cash we are accommodating on the balance sheet at the broker-dealer and the client interest program which ended the quarter at $13.7 billion, the same as our other balance sheet assets. So we still have ample balance sheet flexibility after adjusting for those excess cash balances on the balance sheet. I am very pleased with the progress we have made deploying capital over the past two years since we first disclosed our capital targets.
Really reinforcing our priority to utilize capital to invest in long-term growth across all of our businesses and deliver attractive returns to our shareholders. The effective tax rate for the quarter increased to 27.5%, up from 25.4% in the preceding quarter, primarily due to higher nondeductible losses on the corporate-owned life insurance portfolio. slide 16 provides a summary of our capital actions over the past five quarters.
Following the closing of the TriState acquisition on June 1, we began repurchasing common shares under our Board authorization. We repurchased approximately 1.14 million common shares for $100 million or approximately $88 per share. As of July 27, 2022, approximately $900 million remained available under the Board approved share repurchase authorization.
As we explained on prior calls and at Analyst Investor Day in May, our current plan is to offset the share issuance associated with the acquisition of TriState over the next few quarters. And I believe our action in June demonstrates this commitment, but we will continue to closely monitor market conditions and other capital needs as we evaluate further repurchases over the coming quarters.
Lastly, on slide 17, we provide key credit metrics for our bank segment. And remember, these metrics reflect our newly formed bank segments, which includes Raymond James Bank and TriState Capital Bank. The credit quality of the loan portfolio remains strong and most trends continue to improve. Criticized loans as a percent of total loans held for investment ended the quarter at 1.63% down from 4.07% at June 2021 and 2.63% at March 2022.
So now I'll turn the call back over to Paul Reilly to discuss our outlook. Paul?