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.

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.

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