“And similar to past years, we expect this activity to impact both transactional sweep cash as well as other liquid cash alternatives, such as purchase money market funds.”

In context

“r dealer finished at $83.6 billion or essentially flat with year end 2024 levels. Bank loans grew with CAL balances increasing 9% versus 4Q '24. As expected, we saw the seasonal outflow in client transactional sweep cash to begin the year and then cash building slightly during February and March. This activity represents normal behavior in this type of environment as client redeployment of the 4Q cash build was offset by net equity selling as investors to exposure to risk assets. With another quarter of encouraging cash performance, we use the cash flows coming off of the securities portfolio plus some cash on hand to further reduce high cost supplemental funding at the banks. In terms of Q2, we still expect to see typical drawdown in client cash due to tax disbursement payments in April. And similar to past years, we expect this activity to impact both transactional sweep cash as well as other liquid cash alternatives, such as purchase money market funds. However, it is possible that a continuation of market volatility in this quarter could influence client cash allocations. Given the increasing uncertainty in today's environment, we're focusing on flexibility in managing the balance sheet to remain well positioned to navigate a wide range of potential outcomes. Some additional thoughts on bank supplemental funding. Following the $15 billion paydown during the fourth quarter, we reduced the balances by another $11.8 billion during the first quarter of '25, bringing the outstanding balance as of March 31st to $38.1 billion or down approximately 60% from the peak. As previously mentioned, we would not necessarily expect to reduce funding levels by the same magnitude every quarter. For example, sizable tax related outflows in 2Q will likely m”