Press Release

FOR IMMEDIATE RELEASE

January 20, 2010
Printable version (PDF)

RAYMOND JAMES FINANCIAL, INC.
ANNOUNCES FIRST QUARTER RESULTS

ST. PETERSBURG, Fla. – Raymond James Financial, Inc. today reported a 20 percent decrease from the prior year’s quarterly net income to $49,036,000, or $0.39 per diluted share, for the first quarter ended December 31, 2009. In comparison, the firm earned $61,093,000, or $0.50 per diluted share, for the first quarter of fiscal 2009. Net revenues increased 3 percent to $686,967,000, while total revenues increased 1 percent to $702,669,000. Comparisons with the immediately preceding quarter were more favorable as net income was up 14 percent on a 3 percent increase in net revenues.

“While progress is slower than we would like, financial market, economic and Raymond James’ results continue to improve since last year’s March quarter,” said Chairman and CEO Thomas A. James.

“To understand the first quarter’s trends, it’s instructive to study the underlying segments. The Private Client Group exhibited continued improvement in the quarter as commissions and fees in the segment increased over 15 percent, generating an increased contribution to pre-tax profits of 28 percent in the segment over last year and an 88 percent improvement over the September 2009 quarter. In spite of flat revenues, the Asset Management Group (AMG) increased its contribution by 33 percent over last year’s comparable quarter and 24 percent over the preceding quarter as a result of expense control. If the market continues to improve, AMG will benefit from growing operating leverage,” James continued.

“On the other side of the ledger, Capital Markets’ contribution declined by $3 million from last year, as Fixed Income revenues were down somewhat, albeit still robust and profitable. The pre-tax contribution decline from the preceding quarter was an even more dramatic 51 percent, reflecting the surge in investment banking revenues that often occurs in the final quarter of the fiscal year. By far the largest impact on the quarter was a $30 million decline in the profit contribution of Raymond James Bank compared to last year. Last year’s record quarterly pre-tax profit emanated from higher loan balances, slower loan growth (necessitating lower loan loss provisions) and a benign quarter for loan losses. In contrast, the bank increased its profit contribution over the immediately preceding quarter by $14 million, reflecting a lower level of loan loss provisions as the status of some of its existing problem loans improved, offsetting a lower level of new loan loss provisions.

“In summary, conditions in the securities business are improving, albeit slowly, as unemployment levels and memories of recent losses are still fresh in investors’ minds. Moreover, the bank appears to be on the road to higher profits. Consequently, I anticipate improvement in operating results, although the risk of quarterly aberrations related to market or economic volatility is still present.”   

The company will conduct its quarterly conference call Thursday, January 21, at 8:15 a.m. ET. For a listen-only connection, visit raymondjames.com/analystcall for a live audio webcast. The subjects to be covered may include forward-looking information. Questions may be posed to management by participants on the analyst call-in line, and in response the company may disclose additional material information.

Raymond James Financial (NYSE-RJF) is a Florida-based diversified holding company providing financial services to individuals, corporations and municipalities through its subsidiary companies. Its three wholly owned broker/dealers (Raymond James & Associates, Raymond James Financial Services and Raymond James Ltd.) and Raymond James Investment Services Limited, a majority-owned independent contractor subsidiary in the United Kingdom, have a total of more than 5,300 financial advisors serving approximately 1.9 million accounts in more than 2,300 locations throughout the United States, Canada and overseas. In addition, total client assets are approximately $232 billion, of which $30 billion are managed by the firm’s asset management subsidiaries.

To the extent that Raymond James makes or publishes forward-looking statements (regarding economic conditions, management expectations, strategic objectives, business prospects, anticipated expense savings, loan reserves/losses, financial results, anticipated results of litigation and regulatory proceedings, and other similar matters), a variety of factors, many of which are beyond Raymond James’ control, could cause actual results and experiences to differ materially from the expectations and objectives expressed in these statements. These factors are described in Raymond James’ 2009 annual report on Form 10-K which is available on raymondjames.com and sec.gov.

Raymond James Financial, Inc.
Unaudited Report

For the three months ended
(all data in thousands, except per share earnings)

 

Dec 31,
2009

Dec 31,
2008

%
Change

Sept 30,
2009

%
Change

Total Revenues

$702,669

$695,833

1%

$678,023

4%

Net Revenues

686,967

663,942

3%

667,158

3%

Pre-Tax Income

79,309

101,664

(22%)

61,883

28%

Net Income

49,036

61,093

(20%)

42,969

14%


 

Dec 31,
2009

Dec 31,
2008

%
Change

Sept 30,
2009

%
Change

Income for basic earnings per common share*:

         

Net Income applicable to Raymond James Financial, Inc.

$49,036

$61,093

(20%)

$42,969

14%

Less allocation of earnings and dividends to participating securities

2,049

2,403

(15%)

1,847

11%

Net income applicable to Raymond James Financial, Inc. common shareholders

$46,987

$58,690

(20%)

$41,122

14%

           

Income for diluted earnings per common share*:

         

Net Income applicable to Raymond James Financial, Inc.

$49,036

$61,093

(20%)

$42,969

14%

Less allocation of earnings and dividends to participating securities

2,046

2,399

(15%)

1,845

11%

Net income applicable to Raymond James Financial, Inc. common shareholders

$46,990

$58,694

(20%)

$41,124

14%

           

Common shares*:

         

Average common shares in basic computation:

118,763

116,307

 

118,147

 

Dilutive effect of outstanding stock options

220

252

 

157

 

Average common shares used in diluted computation

118,983

116,559

 

118,304

 
           

Earnings per common share*:

         

Basic

$0.40

$0.50

(20%)

$0.35

14%

Diluted

$0.39

$0.50

(22%)

$0.35

11%


 

Balance Sheet Data

December
2009

September
2009

Total assets

$14.7 bil.

$18.2 bil.**

Shareholders' equity

$2,099 mil.

$2,032 mil.

Book value per share

$17.58

$17.11


 

Management Data
Quarter Ended

 

December
2009

December
2008

September
2009

June
2009

Total financial advisors:

       

     United States

4,755

4,559

4,781

4,749

     Canada

458

436

478

469

     United Kingdom

116

101

116

115

         

# Lead managed/co-managed:

       

     Corporate public offerings in U.S.

24

3

25

32

     Corporate public offerings in Canada

6

3

6

6

         

Financial Assets Under Management:

       

     Managed Accounts (excluding Money Market Funds)

$27.6 bil.

$21.7 bil.

$25.9 bil.

$22.6 bil.

         

Client Assets under administration

$232 bil.

$170 bil.

$223 bil.

$196 bil.

Client Margin Balances

$1,347 mil.

$1,168 mil.

$1,239 mil.

$1,187 mil.


 

December 31,
2009

December 31,
2008

%
Change

September 30,
2009

%
Change

Revenues:

         

     Private Client Group

$454,824

$414,544

10%

$421,157

8%

     Capital Markets

133,773

128,706

4%

142,011

(6%)

     Asset Management

49,998

51,291

(3%)

44,489

12%

     RJ Bank

68,922

109,239

(37%)

70,044

(2%)

     Emerging Markets

3,718

4,323

(14%)

4,263

(13%)

     Stock Loan/Borrow

1,875

3,290

(43%)

2,011

(7%)

     Proprietary Capital

(35)

538

(107%)

2,962

(101%)

     Other

1,758

1,086

62%

2,566

(31%)

     Intersegment Eliminations

(12,164)

(17,184)

29%

(11,480)

(6%)

          Total Revenues

$702,669

$695,833

1%

$678,023

4%

           

Pre-Tax Income:

         

     Private Client Group

$41,823

$32,585

28%

$22,286

88%

     Capital Markets

11,255

14,289

(21%)

22,986

(51%)

     Asset Management

12,043

9,074

33%

9,742

24%

     RJ Bank

24,637

54,626

(55%)

10,395

137%

     Emerging Markets

(1,412)

(465)

(204%)

(821)

(72%)

     Stock Loan/Borrow

687

1,223

(44%)

696

(1%)

     Proprietary Capital

(812)

(544)

(49%)

2,389

(134%)

     Other

(8,912)

(9,124)

2%

(5,790)

(54%)

Pre-Tax Income

$79,309

$101,664

(22%)

$61,883

28%


RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Quarter-to-Date

(in thousands, except per share amounts)

 

Three Months Ended

 

Dec 31,
2009

Dec 31,
2008

%
Change

Sept 30,
2009

%
Change

Revenues:

         

     Securities commissions and fees

$469,151

$418,225

12%

$440,430

7%

     Investment banking

25,718

20,733

24%

35,804

(28%)

     Investment advisory fees

43,975

44,435

(1%)

36,844

19%

     Interest

91,372

143,612

(36%)

93,862

(3%)

     Net trading profits

11,637

9,175

27%

12,791

(9%)

     Financial service fees

36,782

33,135

11%

31,631

16%

     Other

24,034

26,518

(9%)

26,661

(10%)

           

     Total Revenues

702,669

695,833

1%

678,023

4%

     Interest Expense

15,702

31,891

(51%)

10,865

45%

     Net Revenues

686,967

663,942

3%

667,158

3%

           

Non-Interest Expenses:

         

     Compensation, commissions and benefits

471,909

419,254

13%

455,149

4%

     Communications and information processing

28,074

35,223

(20%)

29,777

(6%)

     Occupancy and equipment costs

26,715

26,435

1%

26,506

1%

     Clearance and floor brokerage

8,502

8,588

(1%)

8,829

(4%)

     Business development

19,881

24,724

(20%)

16,434

21%

     Investment advisory fees

9,103

9,722

(6%)

8,082

13%

     Bank loan loss provision

22,835

24,870

(8%)

39,702

(42%)

     Other

22,914

18,469

24%

25,851

(11%)

Total Non-Interest Expenses

609,933

567,285

8%

610,330

-

           

Income before provision for income taxes and noncontrolling interests

77,034

96,657

(20%)

56,828

36%

Provision for income taxes

30,273

40,571

(25%)

18,914

60%

Net Income before noncontrolling interests

46,761

56,086

(17%)

37,914

23%

Net loss applicable to noncontrolling interests

(2,275)

(5,007)

55%

(5,055)

55%

Net Income applicable to Raymond James Financial, Inc.

$49,036

$61,093

(20%)

$42,969

14%

           

Net Income per common share basic

$0.40

$0.50

(20%)

$0.35

14%

Net Income per common share diluted

$0.39

$0.50

(22%)

$0.35

11%

Weighted average common shares outstanding-basic

118,763

116,307

 

118,147

 

Weighted average common and common equivalent shares outstanding-diluted

118,983

116,559

 

118,304

 


Click here for a printable PDF with additional information including the consolidated statement of income and financials for Raymond James Bank.


For more information, contact Anthea Penrose at 727-567-2824.
Please visit the Raymond James Press Center at raymondjames.com/media.


* During the quarter ended December 31, 2009, we changed the methodology used to calculate basic and diluted earnings per share in accordance with new accounting guidance. Prior period earnings per basic and diluted shares have been restated. Earnings per basic and diluted shares have been reduced by $0.02 and $0.01 for the quarters ended December 31, 2008 and September 30, 2009, respectively. The relevant accounting guidance is Financial Accounting Standards Board ASC 260-10-45.

** Total assets include $3.2 billion invested in qualifying assets comprised of $2.0 billion in reverse repurchase agreements (collateralized by GNMA and U.S. Treasury securities) and $1.2 billion in U.S. Treasury securities, offset by $900 million in overnight borrowing and $2.3 billion in customer deposits, the majority of which were redirected during October 2009 to third party banks participating in the Raymond James Bank Deposit Program, to meet point-in-time regulatory balance sheet composition requirements related to RJ Bank’s qualifying as a thrift institution.