派珀·桑德勒 (PIPR) 2026财年第三季度业绩电话会：咨询业务增长引领业绩

核心要点

• Piper Sandler公布2026年第三季度调整后净收益为4.56亿美元，调整后营业利润为9000万美元，营业利润率为19.8%，稀释后每股收益（EPS）为0.87美元。
• 企业投资银行业务实现收益3.07亿美元，占调整后净收益的67%，创下该公司有记录以来最强劲的第三季度表现。顾问咨询收益同比增长18%，达到2.50亿美元。
• 公司完成了81笔顾问咨询交易。金融服务以及能源、电力和基础设施部门领跑业绩，同时医疗保健部门也作出了稳健贡献。
• 由于利率上升导致交易推迟或缩减，市政融资收益环比下降50%、同比下降36%至2500万美元。相反，固定收益业务收益环比增长23%、同比增长5%至6000万美元。
• 管理层预计第四季度顾问咨询收益将是2026年单季最强表现，但将低于2025年第四季度的历史最高水平。随着投资者变得更加挑剔，企业融资活动预计将放缓。
• Piper Sandler在第三季度回购了3900万美元的股票。董事会批准了一项截至2028年底的额外2亿美元股票回购计划，并批准了每股0.20美元的季度股息。

核心财务数据

2026年前九个月，净收益达到创纪录的14亿美元，同比增长14%。营业利润为2.91亿美元，营业利润率为20.6%，净利润总计2.08亿美元，稀释后每股收益为2.91美元。

业务与运营表现

顾问咨询与投资银行

顾问咨询是主要的增长驱动力。在第三季度公布的前十大银行并购交易中，Piper Sandler参与了其中的六笔，并且在今年迄今的存款机构排行榜中，按交易笔数和交易价值计算均保持第一。

多元化能源部门录得创纪录的季度收益，并完成了19笔交易，是上年同期总数的两倍多。管理层将这一势头部分归因于与人工智能数据中心增长相关的发电和电网基础设施需求。

来自私募股权客户的顾问咨询收益同比增长17%。私有资本顾问咨询团队创下了加入该平台以来的最佳季度表现，且在2026年前九个月就已经超过了其2025全年的收益。

企业融资收益达到5700万美元。Piper Sandler完成了25笔融资，为企业客户筹集了110亿美元，主要集中在医疗保健和金融服务领域。

公共融资与经纪业务

由于利率快速上升导致交易推迟或缩减，市政融资业务有所放缓。公司承销了104笔协商发行的市政债券交易，面值达36亿美元。

固定收益业务受益于更高的收益率。客户在应税和市政产品方面增加了税收损失卖出、套期保值和资产负债表重组。管理层还强调了Piper Sandler相对轻资产、以咨询为主导的交易模式。

继第二季度交易量创新高后，股票经纪业务收益环比有所下降。公司于9月通过Piper Sandler Europe启动了欧洲股票交易。管理层表示，程序化交易和电子交易占比上升降低了每股平均费用，但也创造了赢得市场份额的机会。

费用与资本配置

第三季度薪酬费用率为61.5%，同比有所改善。非薪酬费用增加，主要是由于与纽约办公室搬迁、法律费用和技术咨询相关的成本。

Piper Sandler在第三季度以3900万美元回购了约52.8万股股票，并支付了1400万美元的季度股息。在前九个月里，公司向股东回报了2.68亿美元，其中包括1.40亿美元的回购和1.28亿美元的现金股息。

管理层业绩指引

• 管理层预计第四季度顾问咨询收益将是2026年单季最强，但低于2025年第四季度的创纪录水平。
• 由于投资者变得越来越挑剔，预计第四季度企业融资活动将放缓。管理层表示，在10月份费用池表现疲软之后，该业务预计也将低于上年同期水平。
• 随着发行人适应更高的利率，市政融资收益预计将较第三季度有所改善，不过具体时间取决于市场状况。
• 股票经纪业务收益预计将在第四季度实现环比改善。
• 固定收益业务收益预计将与第三季度保持一致。
• 由于与诉讼相关的费用和其他法律成本，管理层预计全年非薪酬费用率将高于2025年。

风险与关注事项

• 通胀和市场波动给交易完成的时间带来了不确定性。
• 更高的绝对利率减少了市政再融资活动，并影响了新项目的经济效益。
• 利率上升也给偏好风险的股票发行带来压力，包括生物技术和医疗保健领域的融资。
• 赞助商并购（Sponsor M&A）改善缓慢，而高利率仍对收购融资构成边际阻力。
• 投资者在股票资本市场变得更加挑剔，且企业融资费用池环比下降。
• 职场占用、法律及技术咨询成本的上升正在对非薪酬费用造成压力。

分析师问答亮点

管理层表示，赞助商并购的项目储备有所改善，可对2027年上半年的业务活动形成支撑，但将这一复苏描述为缓慢。只要利率不急剧上升，收购交易的债务融资依然可行。

在存款机构并购方面，管理层预计尽管Piper Sandler拥有强大的市场地位，但2026年的总交易笔数可能会略低于2025年。公司拥有一批已公布但预计将在2027年上半年完成的积压交易，但管理层尚未看到先前预期的广泛加速。

Piper Sandler继续评估符合业务和文化契合度的收购标的。管理层还指出了大型项目上的内生性进展，包括更多价值在20亿至30亿美元之间的赞助商交易。

管理层表示，如果利率下降，被推迟的市政交易可以相对较快地恢复，尽管第四季度的具体时机仍不确定。第三季度的一些推迟也反映了涉及律师、同意书和其他行政因素的交易流程问题。

在医疗技术并购、生物技术融资以及医疗服务领域私募股权活动增加的支撑下，医疗保健部门迎来了表现最强劲的年份之一。在专注于董事总经理的生产力和契合度之后，Piper Sandler还计划在选定行业和细分产品领域增加招聘。

业绩电话会议完整文字记录

完整财报电话会议逐字稿

管理层陈述

Operator

Thank you. Good morning and welcome to the Piper Sandler Companies' third quarter 2026 earnings conference call. Today's call is being recorded and will include remarks by Piper Sandler Management, followed by a question and answer session. I'll begin by turning the call over to Kate Clune. Please go ahead.

Kate Clune

Thank you, operator. Good morning and thank you for joining the Piper Sandler Companies third quarter 2026 earnings conference call. Hosting the call today are Chairman and CEO Chad Abraham, our President Deb Schoneman, and CFO Kate Clune. Earlier this morning, we issued a press release announcing Piper Sandler's third quarter 2026 financial results, which is available on our website at PiperSandler.com/earnings. Today's discussion of the results is complementary to the press release. A replay of this call will also be available at that same website later today. Before we begin, let me remind you that remarks made on today's call may contain forward-looking statements that are not historical or current facts, including statements about beliefs and expectations and involve inherent risks and uncertainties. Factors that could cause actual results to differ materially from those anticipated are identified in the company's reports on file with the SEC, which are available on our website at PiperSandler.com and on the SEC website at SEC.gov. Today's discussion also includes statements regarding certain non-GAAP financial measures that management believes are meaningful when evaluating the company's performance. Non-GAAP measures should be considered in addition to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in our earnings release issued today. I will now turn the call over to Chad.

Chad Abraham

Thank you, Kate. Good morning, everyone. Thank you for joining us. Our business produced strong results against market conditions that were increasingly selective during the third quarter. M&A faced headwinds as overall activity and sponsor activity declined year over year. Equity issuance remained open for attractive opportunities, but investors were more selective and the fee pool declined sequentially. The sharp rise in yields created a challenging execution environment in public finance. It led to increased trading activity and fixed income.

Across our businesses, the quarter reinforced the importance of sector expertise, strong client relationships, and disciplined execution in a market where activity varied meaningfully by transaction and issuer. We generated third quarter adjusted net revenues of $456 million, a 19.8% operating margin and adjusted EPS of $0.87. Corporate investment banking accounted for 67% of adjusted net revenues or $307 million, our strongest third quarter on record. Advisory revenues were $250 million, up 18% over last year. We completed 81 advisory transactions and average fees increased.

Performance was led by our financial services group and our energy, power, and infrastructure team with a solid contribution from our healthcare franchise. Within financial services, depositories led our performance as we continued to advise on some of the most significant transactions in this sector. We advised on 6 of the 10 largest bank M&A deals announced during the third quarter and remained at the top of the year-to-date league tables for both deal count and deal value, underscoring the ongoing strength of this franchise.

Increased demand for energy to power the growth in AI data centers helped drive record quarterly revenues for our diversified energy group. The team completed 19 transactions, more than double the year-ago quarter, with energy and power services and equipment leading. We ranked as the top advisor in that sector based on the number of completed M&A deals. As investments in power generation and grid infrastructure continue to accelerate, we are well positioned to advise clients and capture share within this space.

Our third quarter advisory revenues from private equity clients grew 17% year over year, outperforming the broader U.S. private equity market, where both deal value and deal counts declined. This resilience underscores the breadth of our coverage model and our ability to deliver a full suite of solutions to our sponsor clients. More specifically, we continue to experience positive momentum within our private capital advisory group, which recorded its best quarter on our platform. The group has already exceeded its full year 2025 revenues through the first 9 months of this year. Drawing on our sector experience, the team has collaborated with our industry groups to advise clients on raising capital through fund formation as well as returning capital through continuation vehicles.

Looking to the fourth quarter, our advisory pipeline is healthy, positioning us for what we expect will be our strongest quarter of the year, although below last year's record fourth quarter. Turning to corporate financing, third quarter revenues were $57 million, up 50% from the second quarter, but down from the strong third quarter of 2025. We completed 25 financings, raising $11 billion for corporate clients, primarily in healthcare and financial services. Client engagement remains active. However, we expect corporate financing activity to slow in the fourth quarter as investors become increasingly selective.

Shifting to talent, we remain focused on increasing productivity by selectively adding top producers to strengthen our product and sector teams and ended the quarter with 191 investment banking managing directors. We added an MD in London focused on advising infrastructure companies on debt financing and capital raising transactions. We further strengthened our private capital advisory group with the addition of an MD focused on secondary capital advisory.

Overall, our quarterly and year-to-date results reflect continued progress against our strategic priorities, despite uneven market conditions. While our pipelines remain active across our industry groups, inflation and market volatility continue to create uncertainty around the timing of deal closings as we approach year-end. That said, we continue to be excited about our platform, including growth within our private capital advisory and debt capital markets product groups, as well as continued productivity gains across investment banking. With that, I will turn the call over to Deb to discuss our public finance and brokerage businesses.

Debbra Schoneman

Thanks Chad. I'll begin with an update on our public finance business. Third quarter municipal financing revenues were $25 million, down 50% from a strong second quarter and 36% from the year-ago period. Market conditions were challenging as a rapid rise in interest rates resulted in deals being delayed or downsized. In this environment, we underwrote 104 municipal negotiated transactions raising $3.6 billion of par value for our clients. Looking ahead, we expect fourth quarter revenues to improve modestly from the third quarter. Municipal issuers are adjusting to higher rates while their funding needs persist, but it will take time for market participants to adapt to the new rate environment.

Our equity brokerage business generated third quarter revenues of $54 million, down 13% sequentially, but up slightly year over year. Following record second quarter volumes, our results tracked with lower market volumes and volatility in the third quarter. Year to date, our revenues are up 7% compared to 2025. Broad product capabilities combined with the scale we have built over the last few years provide resiliency and upside to our performance. In September, we launched equities trading in Europe through Piper Sandler Europe, beginning to monetize investments made in recent years. This launch expands our reach and brings our leading U.S. equities franchise to European clients. Looking ahead, we expect that fourth quarter equity brokerage revenues will improve compared to the third quarter.

Lastly, turning to fixed income. We recorded third quarter revenues of $60 million, up 23% sequentially and 5% year-over-year. Client activity strengthened as rising interest rates prompted investors to adjust their holdings. We saw increased activity across taxable and municipal products as investors took advantage of higher rates, increased hedging activity, or engaged in tax-loss selling. Looking ahead, we expect fourth quarter fixed income revenues to be consistent with the third quarter. Now, I will turn the call over to Kate to review our financial results and provide an update on capital use.

Kate Clune

Thanks, Deb. My comments will address our adjusted non-GAAP financial results, which should be considered in addition to and not a substitute for the corresponding GAAP financial measures. During the third quarter of 2026, we generated net revenues of $456 million, operating income of $90 million, and an operating margin of 19.8%. Net income totaled $62 million and diluted EPS was $0.87. For the first 9 months of 2026, net revenues totaled $1.4 billion, operating income was $291 million, and our operating margin was 20.6%. We generated $208 million of net income and $2.91 of diluted EPS.

Third quarter net revenues were up modestly year over year as growth in advisory and fixed income offset lower financing revenues. Net revenues through the first 9 months reached a record, growing 14% over the prior year period. Corporate investment banking led this growth with advisory revenues up 22% year over year and corporate financing revenues up 14%.

Turning to expenses. Our compensation ratio was 61.5% for both the third quarter and first 9 months of 2026, improving year over year. This reflects our continued focus on operating discipline while balancing employee retention with strategic investment opportunities. Non-compensation expenses for the third quarter were $85 million, or 18.7% of net revenues, up from the sequential and year-ago quarters. The increase was due primarily to higher occupancy costs in connection with our New York City office move. Outside services expenses also rose, driven by legal fees and higher fees associated with technology consulting services. For the first 9 months of this year, non-compensation expenses totaled $254 million, representing 17.9% of net revenues, an improvement of 90 basis points from last year. The litigation expense recorded in the first quarter, as well as an ongoing legal matter, continue to drive increased costs over last year. Given this pressure, we expect our full-year non-compensation expense ratio to be higher than last year. Our effective tax rate was 31.7% for the quarter and 28.6% for the first 9 months of the year. Year-to-date tax expense was reduced by $7 million of benefits related to the vesting of restricted stock awards. Excluding these benefits, our effective tax rate for the first 9 months was 31%.

Now, finishing with capital. During the third quarter, we repurchased approximately 528,000 shares of our common stock for $39 million and paid an aggregate of $14 million to our shareholders through our quarterly cash dividend. For the first 9 months of this year, we returned an aggregate of $268 million to shareholders. This included repurchases of approximately 1.8 million shares of our common stock for $140 million. It also included $128 million in cash dividends paid, or $1.825 per share. Our cash position remains strong, and at our current valuation, we intend to deploy excess capital through share repurchases. As our existing authorization nears completion, effective today, the Board approved a new authorization to repurchase up to $200 million of our outstanding common stock through the end of 2028. In addition, I'm pleased to announce that effective today, the Board approved a quarterly cash dividend of $0.20 per share to be paid on December 11th to shareholders of record as of the close of business on November 24th. With that, we can open up the call for questions.

Operator

[Operator Instructions] We will take our first question from James Yaro with Goldman Sachs.

分析师问答

James Yaro

Good morning, and thanks for taking the question. Chad, I was hoping that you might be able to talk about the sponsor M&A backdrop, the degree to which this is improving, the impact of higher interest rates, and the outlook for this part of your client base from here.

Chad Abraham

Yeah, I would say it's been a little like it was the last couple quarters. I do think it's improving pretty darn slowly. You know, our pitch calendar the last few months has been pretty good. So we just did a review of kind of this time last year versus today. So, you know, I think that bodes well for sponsor activity in the first half. But I would say I think it's pretty slow. I think, you know, interest rates higher on the margin are not helpful. But I think as long as it's higher slowly and not, you know, some big shock step up, we should be okay. We're still getting plenty of debt financing done around our acquisition financing.

James Yaro

Great. On a similar topic, rates, it does seem to have had an impact, at least on the muni financing business, as Deb alluded to. But I guess just across 3 businesses, muni financing, fixed income trading, and corporate financing, could you just talk about how interest rates are having an impact or in some cases not having an impact? And is it really the direction of rates or the level of rates?

Chad Abraham

Yes.

Debbra Schoneman

Yeah, I'll maybe start here and I'll do public finance and the fixed income and then we can move to the equity financing side of things. Within the public finance environment, it is, I would say it's more, I mean, this whole year has been impacted by volatility of rates, but in the third quarter, I would say it was more around absolute level of rates. Rates in particular related to municipal financing so you have refundings which really aren't working in this environment. You know that muni rates need to go back down looking more like they were this summer, I would say for that to pick back up. And then you have new money projects which can get delayed obviously for a few reasons. That overall level of rates can impact whether or not the projects work. So, issuers have to step back and say, okay, can I raise some more, you know, can I do this with a little less capital raised and make it work? Should I go to the private placement market where maybe I can issue something that has a quicker refinancing ability, and maybe I just need to wait and see if rates come back down. And so that has delayed decisions as we need to help those clients weigh those factors. So the pipeline is there and strong, and we have seen the MMD rates move down from what had moved up to actually highs that we hadn't seen in the last 20 years. So I would say it's just impacting the timing of when those deals can come to market. As it relates to fixed income, I would say the opposite thing is happening there, which I guess is part of the benefit of having a diversified business. You see a couple things happening related to rates. And I would say, again, more related to our absolute the absolute yields for our first year First of all, strong muni revenues. We saw muni rates, as I just mentioned, move sharply higher, which drove many asset managers to look into tax loss swaps. We saw a lot of that activity in the quarter, see that continuing. Not only did we see balance sheet restructurings happening because of M&A closings, which would be a normal activity for us as those closings come to bear, but also we saw some balance sheet optimization that was happening outside of M&A because of where the absolute yields were. And lastly, I would say it's helped our hedging business. That may be both level of rates and also volatility of rates as we help depositories hedge their balance sheets. So maybe I'll stop there. And Chad, do you want to make a few comments on equities.

Chad Abraham

Yeah, I think obviously the fee pool for ECM in Q3 was a lot lower in total than it was in Q2. You know, it's tough to tie that just to rates, but, you know, I've watched interest rates, you know, just relative to biotech and healthcare financing for a long time, you know, as rates are moving up, you know, that's always tougher on sort of risk-on, you know, biotech trading so I do think it's had some impact.

Operator

Thanks so much, Chad and Deb. Really helpful. We will take our next question from Devin Ryan with Citizens Bank.

Devin Ryan

Thanks. Good morning, Chad, Deb, and Kate Howers, everyone.

Chad Abraham

Good.

Kate Clune

Thank you.

Debbra Schoneman

Good.

Devin Ryan

I want to drill down a little bit more into the advisory, but specifically depositories and appreciate this isn't a fourth quarter comment. But as you think about 2027, I know you're still having a good year there this year. We still really haven't seen the dam break for consolidation. I think a lot of people were calling for, but your bankers are obviously very close to that market. So we'd love to hear about what they're seeing and thinking as we get into 2027 and, you know, how we should think about that part of the business. Could it accelerate materially, I guess, is really the ultimate question. Thanks.

Chad Abraham

Yes, I think yeah we are having a good year in depositories. You know we said in the release number 1 in terms of number of deals and volume, but total number of deals, you're absolutely right, hasn't increased and you know, I think just based on the pace we're on, it's actually likely the total number will be down a little bit from 2025. So I don't think it's anything regulatorily. I think you know deals are getting approved. I will reiterate what I've said before. I think more than just to worry about sort of the administration. And obviously, that timeline will get closer as we get to '28. But I think a lot of it has just been starting point of the stock prices. The bank stocks had a rougher summer. Now, the last couple of weeks has been a little better. But the starting point hasn't been great and frankly the performance of the banks has been pretty good so just to have to sell off of a just because when performance is pretty good, I don't think there's a lot of urgency. I would say we've announced a fair number of deals, so we've got a good backlog of closings for the first half of next year and I do think, you know, we feel like we'll see some increase, but certainly acknowledge we haven't seen the rush us and others expected.

Devin Ryan

Got it. Thanks, Chad. Appreciate that. And then as a follow up, I want to hit on, obviously, press reports recently about interest in another advisory firm. That firm had more of a focus on larger deals versus middle markets where you guys are stronger. I'm not sure how much you can share specifically, but would love to just get a sense of like how Piper Sandler's thinking about moving upstream in deal size. And I know you're doing some of that in depositories and other verticals, but is that something that's important as you think about kind of the 5-year plan here? Will you do that organically or is M&A just a better strategy there? And then, you know, just the other if if it makes sense, kind of the other potential firm-wide benefits I can imagine could help with underwriting and roles and underwriting deals and and there's kind of that halo effect. So, just would love to get some thoughts there. Thank you.

Chad Abraham

Yes, thanks, Devin. Yes, obviously we've seen the same media reports. I think you know corporate development's a big part of our growth strategy, something we've done well. We absolutely intend to continue pursuing acquisitions. You know, where there's business and sort of cultural fit, you know, obviously I'm not going to speculate. Particular press comments, but I would say we're very focused on growth opportunities and deal of all sizes and good partnerships sort of up and down the size continuum. And I think to your point on larger deals, I mean, we've really seen that evolution the last few years in our practice. Obviously, in healthcare and parts of MedTech, we've been doing that for decades. Obviously, our depository business has that kind of franchise. Parts of our energy franchise do larger and larger deals. But I would also say just relative to our sponsor deals, I mean, I remember a couple years ago here when it was a big deal when we were doing deals north of $1 billion. Now, you know, we're pitching so many more deals, $2 billion and $3 billion. And so I do think in that world, relationships in the boardroom, strategic acquirers, sort of the round trips of the sponsor sales. I think all of that to be important and frankly we're doing that organically but would continue to look at that from a corporate development standpoint.

Devin Ryan

Got it. Thanks, Chad. Yes, no doubt you guys have been good at consolidating. If I can just squeeze one more just to come back to some of Deb's comments and prior question on the municipal business. That was a little bit softer than we thought. Did that just kind of shut down as rates moved down? Aggressively we know on the long end. And so did it essentially shut down and then is there potential for and I know you're not calling for it in the fourth quarter, but if rates um come off um materially um in some scenario, is there a lot of pent up activity or is it just like with volatility uh and how quickly municipalities move, that they just can't move that quickly is like the point. So that it's going to take time even if rates come back down to restart that engine.

Debbra Schoneman

Yes, so starting with like what happened, I would say, you know, obviously that sharp move in rates and everyone having to adjust as I was speaking to previously. I'd also say sometimes as you have quarters that are, and I will admit, you know, that is a weaker quarter than we would have liked as well. And some of it actually just happened to be certain deals that were delayed almost due to administrative inefficiency.

Devin Ryan

Yes, so starting with like what happened, I would say, you know, obviously that sharp moving rates and everyone having to adjust as I was speaking to previously. I'd also say sometimes if you have quarters that are, and I will admit, you know, that is a weaker quarter than we would have liked as well. And some of it actually just happened to be certain deals that were delayed almost due to administrative interference.

Debbra Schoneman

Whether it's just deal process, lawyers, consents. And we had some of that just happen to happen this quarter as well. So rates impacted, some of it was just where deals moved. And then get to your question around what does that look like? In many cases where deals are ready to go, they can move quite quickly when we do see And again, they've been moving in the right direction, not maybe far enough to have that all kick in. But I would say for the most part, as we're working with these clients that have had deals ready to go, they can come back pretty quickly. The question for us around Q4 is just where do rates go? How quickly does that happen? We have the election, so it's a little bit uncertain of what happens Q4 versus moving into next year.

Devin Ryan

Okay. Yeah, I completely appreciate that, but thanks for the additional color, Doug. Thank you.

Operator

We will take our next question from Steven Chubak with Wolfe Research.

Steven Chubak

Hi, good morning and thanks for taking my question.

Chad Abraham

Absolutely.

Steven Chubak

So maybe to start just on some of the corporate finance outlook commentary you guys provided, you noted you expected to see a modest pickup in activity versus Q3 and a weaker result year on year. Admittedly that provides a very wide range of outcomes. Hoping just to get a better sense as to whether the decline year on year is going to be modest or pronounced and how to think about the sequential pickup given historically Q3 to Q4 seasonality reflects a 50% increase. Just trying to gauge how we should think about what's a reasonable expectation for that seasonal.

Chad Abraham

Build? Yes, I think for corporate finance, I mean, what we said is that I do think we expected to be lower than last year. And a lot of that, obviously, Steven, has to do with the fact that October, you know, that fee pool hasn't been great. And so usually in the fourth quarter October and November quite a bit better than December, you know that market slows down so as we already can see a deep recently slow October, you know, we have pretty good visibility and obviously things happen fast there, so it's hard to tighten that range, but I think that's why we can pretty much see it's going to be slower than last year.

Steven Chubak

No, that's helpful context. I appreciate that, Chad. And wanted to ask also like a community-related question to an extent, just but more focused on the fixed income brokerage side. I was actually quite surprised. We expected the slowdown in muni issuance activity, but fixed income brokerage seemed to be a real bright spot in the quarter, especially surprising, just given negative muni marks that some of your peers had incurred and frankly, a move index that was subdued for most of the quarter outside of like the last couple couple of weeks in September. Was something you could just speak to what drove the resiliency in the quarter, what you're hearing from some of your bank depositories in particular, especially given some of the decline in rate volatility that we saw in Q3 and the implications for Q4.

Debbra Schoneman

Yeah, so maybe starting with the municipal side and and as you alluded to some of our peers, I just remind you that we do have a different strategy relative to our use of capital and balance sheet. Having a much lighter approach and much more advisory approach, I think that's what you're seeing play out relative to where some of the peers came in. I'm proud of our team for how they manage risk, but also reminding you, we take much less risk on the desk. As we saw the client flow, as I was mentioning a little earlier, the relationships we have with the top tier funds are very, very strong because of our overall municipal franchise. And so as they looked to make Benefit from the yields and where they are and yields got to a point where tax loss swaps did make sense economically. That cost of execution was small relative to the pickup and yield. So that drove a lot of it. Your questions on depositories. Again, we saw an increase in what call either restructuring related to M&A or balance sheet optimization. And the strength of that is coming from where we provide advice, our financial strategies group, you know, we can combine that with hedging. So I think it was that we were able to have the market play into where we have a lot of strengths around both municipals and our depository franchise.

Steven Chubak

Thanks so much for the color. If I could just squeeze in one more just on the impact of the midterms on bank M&A activity. What you're hearing from corporates, do you expect to see an acceleration if there is in fact a blue wave as corporates potentially re-evaluate the window for getting bank mergers completed?

Chad Abraham

Yeah, I mean, I haven't been in a lot of those particular client, you know, conversations about the midterm specifically for depositories. I think in the past when we've looked at that, you know, I understand the question. It just hasn't had a huge impact. I take your point that, you know, if the if there's a big wave. Do you know do people read into that, relative to the presidential election, but yes, I guess we we sort of continue see the pace here continuing and it more just bumping up against that natural deadline in 2028 and you know running out of time that way.

Steven Chubak

That's great, Collar. Thanks for taking my questions.

Operator

As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. We will take our next question from Gabriel Angelini with Bank of America.

Gabriel Angelini

Hi, good morning. Looking at equity brokerage, I think shares traded about 22% year over year and understand your commentary on lower volatility and volumes just in the third quarter generally. But I think relatively flat revenue year over year, which implies maybe some fee compression despite the growth in shares traded. So is that a product? Mixed issue in this quarter, or is that a trend we should think about continuing going forward?

Debbra Schoneman

Yes, that's a great question and good observation, and it is around product mix. A couple of things. 1, as we look at the year, we've seen our program trading pick up, and some of that has to do with the large rebalance activity that has happened this year. And then as we build up our electronic trading platform, and we've done work on that, you're also obviously that's going to mix to a lower overall average fee. But also importantly, that is a product where we have an ability to see market share gains to level that up with other products that we we have and so that's primarily what you're seeing when you look at that volume versus revenue.

Gabriel Angelini

Perfect. That's helpful. And then looking at investment income, I think there was a nice swing in the quarter to a Was that a one-time issue or should we expect that line to be more muted going forward?

Kate Clune

So, that is the impact of our investment in our internal private equity funds. It is a little bit noisy quarter to quarter. We had some of that volatility last year as well. I don't think about it as 1 time, but it does tend to be quite muted over time. It's fairly small in terms of aggregate non-GAAP impact. It's fairly noisy on a GAAP impact because of the consolidation requirements. Overall, fairly limited impact, positive or negative, to the bottom line for Piper.

Operator

Perfect. Thank you for taking the questions. We will take our next question from Mike Grondahl with Northland Securities.

Mike Grondahl

Hey, thank you. Chad, I'd love your outlook on the healthcare franchise, kind of, you know, what's working there, what's a little more challenged?

Chad Abraham

Yeah, I would say this has been one of the best years we've had in healthcare. Tougher so we have an easier comp, but healthcare should be our biggest. I would say it's pretty broad-based. We've had a good year in MedTech M&A. We've had a good year in biotech financings. And maybe the biggest pickup is just in sort of our private equity business, sort of in and around healthcare services and just the broader market. I think there's just more more interest after a couple of years of significant declines there from private equity to look at, and more platforms. So, frankly, we've seen pretty broad-based success with our healthcare business this year.

Mike Grondahl

Got it. And then secondly, just kind of what's your appetite for adding MDs to you know, the next 2 to 5 quarters.

Chad Abraham

Yeah, I would say, and we've talked about this in the last couple calls, obviously we went through years of significant growth. So we were, you know, we, we've had a pause where we, you know, been focused on productivity and fit, but I would also say, uh, we started an exercise just to evaluate sort of all the pockets and niches and places of interest, recently and there's just there's a lot of white space opportunity. So, you know, we're very much focused on doubling down there. And I think when I think about some of the sponsor areas, you know, there's parts of the services market that are what would seem pretty narrow, but pretty significant from a fee pool standpoint. So I think we're pretty optimistic and, frankly, going to double down on that heading into the start of the year. Obviously, we're heavily in recruiting season now.

Operator

Got it. Well, good luck. Thank you. And there are no further questions at this time. I will turn the conference back over to Mr. Abraham for any additional or closing remarks.

Chad Abraham

All right. Thank you, Operator. Thanks to everyone that joined us this morning. We look forward to updating you on our fourth quarter and full year '26 results early next year. Have a great day.

Operator

This concludes today's conference. Thank you for your participation. You may now disconnect. This live transcript is auto-generated without human intervention or review.

This live transcript is auto-generated without human intervention or review.