Welcome to the third quarter 2014 earnings call. My name is Lorraine, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Ms. Alicia Charity. Ms. Alicia Charity, you may begin.
Thank you, and good morning. Welcome to Ameriprise Financial's third quarter earnings call. On the call with me today are Jim Cracchiolo, Chairman and CEO, and Walter Berman, Chief Financial Officer. Following their remarks, we will be pleased to take your questions. During the call, you will hear references to various non-GAAP financial measures which we believe provide insight into the company's operations. Reconciliation of the non-GAAP numbers to their respective GAAP numbers can be found in today's materials available on our website. Some statements that we make on the call may be forward-looking, reflecting management's expectations about future events and operating plans and performance. These forward-looking statements speak only as of today's date and involve a number of risks and uncertainties. A sample list of factors and risks that could cause actual results to be materially different from forward-looking statements can be found in today's earnings release.
Our 2013 annual report to shareholders and our 2013 10-K report. We take no obligation to update publicly or revise these forward-looking statements. With that, I will turn it over to Jim.
Good morning, everyone, and thank you for joining our third quarter earnings call. I will start with my thoughts on the business. Walter will review the numbers in detail. Then we will be happy to take your questions. It was another strong quarter for Ameriprise, continuing the trend we set in the first half of the year. Our operating results were very strong, with net revenue growth at 8%, excluding unlocking. Operating earnings and EPS growth were each over 20%. Assets under management and administration increased 8% to $797 billion, reflecting strong advisor-client flows as well as market appreciation. Our capital and financial position is excellent, and we continue to generate significant free cash flow to return to shareholders. During the quarter, we returned $442 million to shareholders through share repurchases and dividends.
Year to date through the quarter end, we've returned $1.4 billion to shareholders, which is 112% of year-to-date operating earnings. We're on our way to four consecutive years of returning over 100% of our operating earnings to shareholders. With our earnings growth and capital return, we again delivered record operating return on equity, excluding AOCI, of 22.1%, up 270 basis points from a year ago. Let's move to the business and Advice and Wealth Management, where we had another excellent quarter. Operating net revenues grew 13% to $1.2 billion, driven by strong growth in assets from client flows and equity market appreciation. As I mentioned, we're seeing good levels of activity. Total client assets increased 11% to $434 billion, with continued strong inflows of $3.8 billion into our investment advisory programs.
The combination of strong flows, asset growth, and productivity, as well as ongoing expense management, led to a 35% increase in operating PTI, and pre-tax operating margin up significantly to 16.9%. Our priority is to bring in new clients and assets to Ameriprise and to deepen relationships so we can continue to increase retail client flows. In September, we were back on the air with a new commercial from our Real Questions, Real Answers advertising campaign featuring our Confident Retirement approach. A recent study showed that more than two-thirds of affluent consumers do not have a formal financial plan to reach their long-term goals. We know that Confident Retirement not only tests well with the mass affluent, but also with affluent consumers, those with over a million dollars in investable assets. In fact, we think there's a greater opportunity for us to serve more of the affluent consumer base.
I recently attended a conference with our private wealth advisors. They're motivated to grow further in the affluent market using the capabilities we offer that resonate well with these consumers. Overall, our advisor force is strong, and our retention as well as satisfaction rates remain very high. In terms of recruiting experienced advisors, we brought in another 81 in the quarter. The productivity of the advisors we're attracting continues to grow. Our recruiting pipeline so far in the fourth quarter looks quite good. In terms of bringing in new clients and assets in AWM, we're pleased with how our Confident Retirement approach is engaging our existing clients as well as prospects. Our advisors are finding it really helps to simplify the conversation so people better understand what they need to do to plan for a secure retirement and how Ameriprise can help.
Our advisors who are using it with their clients in the target age range have had meaningful increase in net flows. We're also investing in and helping our advisors take advantage of our technology, marketing, and social media capabilities to increase their productivity, gain new clients, and deepen current relationships. We're helping advisor offices operate more efficiently. Our paperless office tools like eForms and electronic check scanning reduce expenses for advisors and the company, as well as the complexity and time needed to manage client documents. We also have a new online tool for document creation and management, making it easier for advisors and their teams to work and collaborate wherever they may be. In terms of engaging clients, we're also seeing success with our Total View, our account aggregation tool, as a way to help deepen relationships.
Our advisors are also increasingly using our award-winning social media to expand their digital presence and acquire clients. Our social media capabilities can help advisors build a credible, robust online presence to encourage shared connections with prospective clients. During the quarter, we received results from a client relationship study, and satisfaction with both our advisors and with Ameriprise has increased three points to 92%, an all-time high. In addition, 93% of our clients said they're likely to continue working with Ameriprise, also up 3%. As a result, our efforts and the actions we've focused on to drive growth, advisor productivity, a metric we've consistently grown continues to increase. Compared to a year ago, it's up double digits to $483,000 on a trailing 12-month basis. Overall, it was another terrific quarter for Advice & Wealth Management.
Let's move to Asset Management, where we're delivering good financial performance, but we have more work to do from a flows perspective. Our assets under management grew to $505 billion, up 5% from a year ago, mainly driven by positive equity markets, as well as growth in our international business. We had a strong quarter from an earnings perspective. Operating net revenues were up 8%. We're managing expenses as we invest in the business. Pre-tax operating earnings were up 21% to $208 million, and our adjusted pre-tax operating margin was a competitive 41.3%. In terms of the business and our flows in the quarter, overall, we experienced net outflows of about $4 billion. Nearly half of that came from ex-parent affiliated distribution, including Zurich and Balboa. The remainder was due to domestic outflows in DCIO, RIA, and sub-advisory. We're seeing some stabilization in these flows.
We've also experienced net outflows from weaker European retail flows. We were affected by PM moves earlier in the year. We believe that the impact of the PM change is largely behind us, and there is good performance coming from the team. This was somewhat offset by strong third-party institutional flows of about $1 billion. We're winning key mandates from clients in North America, Europe, and Asia. The institutional business is on track, and I feel very good about our capabilities and global growth opportunity. We've also added Joe Creenan, an industry veteran, as head of U.S. Intermediary reporting to Ted. We're refocusing our efforts on key client relationships where we can drive flows in the future and expect to gain traction over time.
In addition to our focus on gaining share in traditional products, we're building our capabilities in global products and in multi-asset solutions for both our retail and institutional channels. We're investing in expanding in areas like adaptive risk parity, liquid alternatives, Asian equity and bonds, and global products. We think that over time, we can gain good traction that would further add to our flows and complement our core business as we build our track record and awareness of these products and our capabilities. Overall, we have good talent, a growing product line, and expanding distribution footprint. We're executing our plan and beginning to gain traction in key growth areas, but there is more to do. Let's move to annuities and protection, which help us deepen relationships with our clients across life stages and are important to our Confident Retirement approach.
Adjusting for unlocking, we're generating good returns in our annuities business with lower risk and volatility as we continue to grow at the moderate pace we want. In variable annuities, client account balances grew 5% due to market appreciation, and we had good sales in our channel at about $1.2 billion. As we work with clients to help ensure their retirement lifestyle through tax management and protection, we're selling more variable annuities without living benefits. This complements sales with living benefits as a way for clients to cover essential living expenses. In fact, sales of the variable annuities without living benefits increased to nearly 30% of total variable annuity sales in the quarter. In fixed annuities, underlying results are up from our repricing of the book and improved spread income. As we stated, our focus remains on the overall profitability of the book, as we're not currently adding to it.
We're focused on making it easier for clients and advisors to understand the benefits that annuities can provide in terms of reliable retirement income. With regard to protection, excluding unlocking, pre-tax operating earnings were up 10%. In life insurance, earnings were impacted by higher health claims, although it was within our expected ranges. VUL/UL sales picked up a bit year-over-year with our RiverSource TrioSource product. VUL/UL ending account balances were up 6%, largely from the markets. TrioSource is an interesting UL product that combines a tax-qualified long-term care rider that fits well with our financial planning approach. In auto and home, earnings improved, and we're seeing steady growth in policies, up 11% from a year ago. We're seeing improved levels of loss ratios.
We have initiatives underway to enhance our modeling and pricing capabilities that we believe will get us back to a stronger position over the next number of quarters. Ameriprise Auto & Home is rated one of the best firms for client satisfaction in the second quarter. To complement that, we were recently ranked number 2 in California by a leading consumer publication that measured consumer satisfaction based on price, distribution, and policy offerings. We consistently earn high accolades for our offering. To summarize, we had a strong third quarter with solid revenue growth, strong operating earnings growth, and operating ROE north of 22%. I feel good about our current position. Our diversified business provides great benefits to clients, advisors, and our shareholders. We continue to grow the business consistent with our plan, expanding our fee-based earnings, complemented by the stability and diversification of our spread business.
At quarter end, about 64% of our pre-tax operating earnings, excluding unlocking, were driven by our low capital advice in wealth management and Asset Management businesses. Like everyone, we're paying close attention to global markets, providing our advisors with resources and thoughtful insights to use with clients, understanding that while they're focused on planning for the long-term goals, the current markets are top of mind. Our strong business results, excellent financial foundation, and ability to generate significant free cash flow provide us the ability to continue to return to shareholders as we have in the past. With that, I'll pass the call to Walter for review of the numbers.
Thank you, Jim. Ameriprise delivered another quarter of excellent financial results. Let's start with operating net revenue growth on page three. In total, operating net revenues grew 8% due to strong market appreciation and wrap flows, partially offset by net outflows in Asset Management. It should be noted that net investment income has been challenged by the low interest rate environment, but the other revenue lines are up almost 10% from last year. Total assets under management and administration increased 8% to nearly $800 billion at the end of the quarter. Solid revenue growth, combined with continued expense discipline, resulted in a record AWM and Asset Management margin of 16.9% and 41.3%, respectively. Together, advice in wealth management and Asset Management operating earnings grew 27% and accounted for 68% of earnings.
Excluding DAC unlocking, those segments account for 64% of the earnings, up from 59% last year, demonstrating our continued business mix shift. Let's turn to EPS and return on equity on slide four. Operating return on equity continues to increase, reaching another all-time high of 22.1% and in the upper end of our targeted range of 19%-23%. Operating earnings per share also reached a new record level of $2.10. Excluding unlocking in both periods, EPS was up 28% to $2.24. This is a result of solid business growth and fundamentals across all segments, as well as continued capital redeployment. I'll turn to slide five to take you through the details on advice and wealth management. We continued to deliver excellent business metrics and financial results in advice and wealth management, with 13% top-line growth.
Pre-tax operating earnings were up 35% to $205 million due to strong client flows, asset levels, and market appreciation. As we have discussed previously, we are seeing continued improvement in the earnings and margins in both the employee and franchise channels. In total, margins reach a new record high of 16.9% up 270 basis points. The spread earned on the $19 billion of brokerage cash was 19 basis points for this quarter. There remains substantial upside potential for an increase in short-term rates going forward. Overall, the business continues to deliver consistent good results, demonstrating the strength of our business model. We continue to invest for future growth, building on our brand and adding capabilities to support our clients and advisors. Turning to Asset Management on slide six, revenues increased 8% to $839 million, primarily from growth in assets under management from strong markets and performance fees at Threadneedle.
We remain focused on tightly managing expenses. We continue to deliver solid financial performance with earnings growth of 21% and our margin exceeding 40%. Investment performance remained solid with 121 four and five-star rated funds, and we saw improvement across many styles at Columbia. Let's turn to flows on slide seven. In the quarter, we experienced $4.1 billion of net outflows. We had net outflows of $3.5 billion in retail across Columbia and Threadneedle. We had outflows in several areas we had discussed in the past, namely former parent-affiliated distribution. In addition, we continue to face some challenges in retail at Columbia, particularly in the DCIO channel. We had retail net outflows of $1 billion at Threadneedle due to industry weakness in Europe and from a portfolio manager change on the U.S. equities team from earlier this year.
U.S. equity performance remains solid and the level of outflows has declined. Institutional net outflows of $500 million were driven by strong $1.1 billion of third-party net inflows at Columbia, which were more than offset by several former parent-related areas at both Columbia and Threadneedle. The third-party institutional pipeline remains solid looking over the next couple of quarters. Turning to annuities on slide eight, pre-tax operating earnings were $128 million, down from $205 million last year due to unlocking and mean reversion. Excluding those items in both periods, pre-tax operating earnings were up 18%. Variable annuity pre-tax operating earnings grew 12% from a year ago to $119 million, excluding unlocking and mean reversion. This was driven by higher fees from improved equity markets. The in-force block is solid, with account values up 5% to $76 billion.
Our net amount at risk as a percent of account value is less than 1% in total for living benefits and death benefits. We continue to write new business with a very attractive risk profile, offering products with living benefit guarantees using our managed volatility funds and products without living benefits that provide tax advantage accumulation for our clients. In fact, 28% of our new sales in the quarter were without living benefits. Fixed annuity pre-tax operating earnings increased 42% to $37 million, excluding unlocking. This reflects the repricing of the majority of our five-year guarantee block. Fixed annuity account values declined 8% to $12.4 billion, with lapse rates in line with our expectations. Turning to protection on slide nine. Pre-tax operating earnings were up 10% to $87 million, excluding unlocking. Our life and health businesses were impacted by the continued low interest rate environment.
Health claims were in line with expectations, but at the higher end of the range. Auto and home earnings continued to improve this quarter. Our prior accident years are performing well, and we have had no additional adverse loss development. Let's turn to capital on slide 10. Our balance sheet remains strong with approximately $2.5 billion of excess capital. Based upon our risk management assessment, we reduced our contingent capital for market dislocation from $500 million to $250 million, which contributed to the increase in excess capital. We continue to return over 100% of operating earnings to shareholders, with $442 million distributed through dividends and share repurchase in the quarter. Our significant return on capital is an important driver of our ROE expansion, reaching 22.1%. With that, we will take your questions.
Thank you. We will now begin the question-and-answer session. If you have a question, please press star then one on your touch-tone phone. If you wish to be removed from the queue, please press the pound sign or the hash key. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then one on your touch-tone phone. Our first question comes from Suneet Kamath from UBS. Please go ahead.
Thanks. Good morning. Just wanted to start with the Asset Management earnings for the quarter, I guess $208 million. If I look back over the past four quarters, and take out the disclosed items that you typically give us, it seems like the range has been $178 million-$194 million. 3Q 2014 was quite a bit above that range. My first question is, was there anything either seasonal or unusual that drove the upside in 3Q versus what we've seen over the past couple of quarters?
Suneet, it's Walter. The two things, we had performance fees, and also the market gave us a lift. Those are the two items that drove both the earnings up and the margin going over 40.
Can you quantify the performance fees?
It's around $9 million.
$9 million. Okay. That's not a quarterly thing that happens, is that just a third quarter event?
No, that actually happens throughout the quarters. That does happen throughout the quarters.
Okay. We could see that again in 4Q performance.
Yes.
Okay, fine.
Absolutely.
Moving to advice and wealth management. At your Investor Day, you gave us some good information about sort of the margins by channel. Could you give us an update in terms of where you sit today?
As we indicated on the employee channel, that is certainly heading to the high single digits, and that is improving as we talked about. Certainly our franchise channel is performing in the high teens.
Okay. On the recruited advisors of 81, has there been any change? My understanding is over the past several quarters, it's been about 50/50 between which channel the RIAs go into. Is that about where you continue to be?
That's approximately right, yes.
My last question, and then I'll re-queue, is just on the earnings mix. 64% from advice and wealth management and Asset Management, if you exclude the unlocks. That seems to be coming in higher than at least where I thought it would be at this stage in the story. Where do you see that going over the next couple years in terms of the earnings contribution from AWM and Asset Management?
As Jim has indicated, we indicated, certainly we see that it could hit 70%. We see it going up, and we talked about 70%, certainly getting into that range. It is tracking. We're doing well in the two areas.
Okay. Yeah, it just seems to me that we could push above 70%, particularly if short-term interest rates start to give you some help.
One could.
Yes.
All right, I'll re-queue. Thanks.
Thank you. Our next question comes from William Katz from Citi. Please go ahead.
Okay. Thank you very much. Good morning, appreciate taking the questions. Just staying on the Asset Management business for a moment. Your adjusted margin was over 40%. I think it was a bit higher. You sort of called out some performance fees, but I assume there's some comp against that. When you look on a go-forward basis, just given some of the new product development that you have coming down the pipe, how are you thinking about margin opportunity from here?
The margin opportunity, as we said, we were in the ranges of the upper 30s. I think that, again, market driven, other things, certainly as the products take on, and you get mix shifts also coming between fixed and equity. There's a lot of moving parts to it, but certainly staying in the upper 30s and 40s range is certainly something that is possible. Again, it's subject to markets, subject to mix shifts as it relates to whether it's fixed or it's equity.
Okay. Just in terms of the flow dynamics, I'm sort of curious, there's been a lot of volatility at the end of the third quarter and into October. Any sort of update on real-time trends of what's happening? The broader question would be, you listed off a series of sort of five or six initiatives, maybe even more than that. When do you think that you could start to see some unit growth filtering into net flows from those initiatives?
Well, what we see, this is Jim. What we see right now is we still have a good, strong pipeline in institutional business. We've been expanding some of our mandates on a more global basis, and winning business there. We are building new products and capabilities, both our global as well as our asset allocation, risk parity, et cetera. We see flows starting to come in in that type of area. Probably as we go into the 2015 and the quarters in 2015, that would hopefully start to add to our flow picture as those products come more online, and we build up the sales channel for it. The retail, we see some improvements. Retail sales slowed a bit in the third quarter because of Europe. I think you'll find that across the industry.
It's more of a slowing on the sales, but that has bounced back in the past as things settled. We're expecting hopefully that over the next number of months to continue to turn around again. If we look at the U.S. side of it, we think there is a large opportunity for us to get really focused. We have new leadership. We are really looking at our various channels and our products right now. Hopefully we'll gain some traction. We see some traction being gained. Unfortunately, we had some additional outflows that we experienced in the third quarter from some of the DCIO, et cetera, that we think is starting to stem.
Okay. Thank you. Thank you for taking my questions.
Thank you. Our next question comes from Alex Blostein from Goldman Sachs. Please go ahead.
Great. Hey, Jim, Walter. Good morning, guys. First question that I have is around the AWM business. One of the larger independent players in the space has been facing some challenges more recently with respect to compliance and regulation-related issues. I was just wondering whether or not when you look at your financial advisor pipeline, you're starting to potentially gain more traction partially due to these sort of dislocations in the industry, seeing how you guys have been somehow more immune from some of these compliance issues.
Yeah. We have a very good compliance model in place, good technology, good supervision. We have very good expertise, particularly in some of these alternative products that we offer. We feel very comfortable about that from a compliance and regulatory perspective. We are seeing a good pipeline of people, both coming from independents as well as from the warehouses into our channel. One of the things that we sort of focus on is making sure that we do a very good compliant business, but we also are very focused from a client perspective. One of the keys that we really look for is high client satisfaction. As we mentioned, we just completed our annual study there, and our client satisfaction is quite strong, both for the advisor and the firm.
That's some of the things that we really focus on, and when we put the tools, the capabilities, the programs we have in place, and the advice type of model. That's what we're looking to continue to attract here for new people joining us.
Got it. Since you mentioned, just curious if you guys would be willing to tell when you look at the AWM revenues, how much your non-traded REITs have been contributing so far this year?
I don't have that off the top of my head, I think it's actually a bit lower than it has been in the past, based on just the market situation for some of those products. Less on the compliant end for us. That hasn't been an issue. It's just more on the type of product in this market environment.
Got it. Thanks. Second question for Walter. Clearly, G&A has been really well controlled both in AWM and in Asset Management. Maybe taking a step back, kind of bigger picture, if you could talk a little bit about how should we think about the growth in the G&A expense in both of these segments from here into 2015?
Again, it's one of the focuses, Alex, of the way we manage the business, both to invest in the business and re-engineer, that continually is being done. We do look at that as something that we manage and contain relative to the opportunity and relative to our revenue growth. You should see it being controlled going forward as we look into 2015.
Got it. That's good to know. The last one for me. I noticed the amount of excess capital increased due to some of the reasons you guys discussed in the press release, to sort of additional $500 million relative to where you were last quarter. At the same time, not that anybody's complaining, but the amount in dollar terms of your total buybacks and dividends has gone down a little bit over the last few quarters relative to what you were doing in 2013. I guess when you put these two things together, how should we think about deployment of that extra $500 million that showed up in your excess capital?
Okay. Obviously, we continue to evaluate the situation, but we certainly are committed to returning to our shareholders, and that right now we're close to 110%. It is lower than it has been. As Jim said, and we've said, we will certainly manage it as we see the stock price, as we see the situation, being opportunistic about it. You see the trend line increasing as we indicated going forward as it relates to that. It will be something that, again, we will continue to evaluate, but certainly it should be on a good trend line.
Got it. Okay. Thanks very much.
Thank you. Our next question comes from a follow-up from Suneet Kamath from UBS. Please go ahead.
Thanks for the second question. Just to clarify on the performance fees at Threadneedle, the $9 million, Walter, that you cited, was that a revenue number or a pre-tax earnings number?
That was pre-tax.
Pre-tax earnings. Okay. Then I guess on the annuity business, particularly the variable annuity business, I guess if I look at your capital allocation, it's only about $564 million, or about 0.7% of account value. That just seems like a very low capital allocation versus what I'm used to seeing from other companies. I know your mix of business might be different from other companies, but I guess I'm just trying to understand how you get comfortable with only allocating that much capital to a business that certainly has tail risk as we've seen in recent periods.
All right, Suneet, this has been consistent as we've evaluated and our strategy of offering product, and certainly the way we hedge the product, and certainly as we've gone into a more macro hedging. It has been something that has been, I would say, the cornerstone of how we approach this business, which does distinguish us, I believe, from others. We have evaluated the situation using the approach that I told you, multiple stress looking at. You have to take a look at the product construct that we have, both the historic, and then the switching to RAVA 5, now more on non-living benefits and certainly the stability of the network and solution set-driving, and the hedging that we've deployed against.
We actually do feel very comfortable in evaluating, even taking down from $500 to $250, looking at the situations, and we've been very consistent about it, I do feel very comfortable with it.
Okay. Got it. Then I guess of the improvement in excess capital from, I guess, roughly $2 billion to $2.5 billion. Clearly, $250 million of the $500 million is your decision to take down the contingent. The remaining $250, whatever the number is that really just market movements between hedges and variable annuity liabilities that could reverse, particularly if interest rates rise over the next couple of quarters?
Yeah, that's part of it. I will say the other part is a small portion of the debt that we just issued went into that too. Again, as we talked about, we are planning on certainly taking advantage of the rate situation and to use that for future maturity. It is that, and a small piece of it is the debt.
Right. If rates move up by the time we get to 4Q, that would have a negative impact on the $2.5 billion of excess?
It will have somewhat of a negative, again, looking at our hedging strategy, looking at the other elements within it's manageable within that. When we look at it, and I'll be candid, taking down from 500 to 250, nobody can predict everything, but we looked over multiple periods to ensure that we'd be able to feel comfortable about that.
Okay. Understood. Thanks very much.
You're quite welcome.
Thank you. Our next question comes from Mike Zaremski from BofA. Please go ahead.
Hi, thanks. It's Mike Zarembski from BofA. Two quick questions. In Auto and Home, you mentioned catastrophe levels were similar to last year's levels. On an absolute basis, are those levels above or below plan for a Q3? Also just curious, the equity volatility that we've seen in October, does that have any kind of meaningful impact on activity levels or anything in AWM or Asset Management outside of obvious equity market sensitivity to earnings?
Yeah. On the Auto and Home, it was within ranges, a couple million dollars, it was pretty close to where we thought it would be.
Just on the impact from the equity markets. We have not seen any material change in regard to the retail business at AWM or in regard to Asset Management in general. What we did see and did talk about was a little more of the European slowdown from the volatility or the concerns that were in Europe. So that we have seen as a little bit of an effect, particularly on the retail flows in Europe.
Thank you.
Thank you. Our next question comes from a follow-up from Alex Blostein from Goldman Sachs. Please go ahead.
Great. Thanks for the follow-up, guys. Just a quick one for you. When you look at the short-term funds or the balances you disclosed on the AWM slide, $23 billion of which the $19 is in the brokered sweep. I guess my question is, where is the remaining four, and as we think about the sensitivity to high interest rates for this business, do you guys usually talk about the $19 billion or the whole $23? Maybe just kind of help square that away. I don't know if it's in money market funds where you get the fee orders back or something of that nature.
It's Walter. It's in certificates, short-term certificates. Obviously, it will have an impact as the markets go up in giving us better spreads. Again, it's in the calculation. It will not be as rapid as certainly the sweep accounts , but certainly we'll get benefit from it.
How does the sensitivity work on that $4 billion?
You're saying mean sensitivity. Obviously, they're in three months, six months, and nine months maturity, depending on where they are in the cycle and depending on where the rates go, that's where we will pick it up. It's less reactive than the sweep.
Got it. The magnitude overall you would say is somewhat similar?
Most of it's in the sweep, really.
Yeah. Okay.
It's not just it.
All righty. Thank you.
You're welcome.
Thank you. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.