Press Release
FOR IMMEDIATE RELEASE |
February 3, 2010
Printable version (PDF)
RAYMOND JAMES FINANCIAL, INC.
UPDATES FIRST QUARTER RESULTS
FOR UNANTICIPATED LEGAL DECISION
ST. PETERSBURG, Fla. – Raymond James Financial, Inc. (RJF: NYSE) announced today that an award in the amount of $12,115,000 was entered in a FINRA arbitration against the company’s subsidiary, Raymond James & Associates, Inc. (RJA). The unanticipated judgment was based on the arbitrators’ decision that found RJA liable for the raiding of four A.G. Edwards & Sons, Inc. (“A.G. Edwards”) branches shortly after it was announced that A.G. Edwards had been acquired by Wachovia Securities, which was subsequently sold to Wells Fargo Advisors. The panel did not provide any explanation for their conclusion. Raymond James does not agree with the panel’s decision and believes that the financial advisors concerned were evaluating other affiliation alternatives at that time, in response to the takeover of A.G. Edwards by Wachovia. Although the company is currently reviewing the matter to determine its next course of action, it is difficult to appeal arbitration panel decisions.
Raymond James Financial’s financial information previously included in its Form 8-K dated January 21, 2010, was therefore updated for the three months ending December 31, 2009, to reflect this decision. This resulted in an increase in other expense of $10.75 million, related adjustments to profit-based accruals, a decrease in Private Client Group pre-tax results of $10.1 million, a decrease in net income of $6 million and a decrease in diluted earnings per share of $0.04. The updated financial information will be reflected in the company’s financial statements in its first quarter report and on Form 10-Q when filed.
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. |
|||||
Dec 31, |
Dec 31, |
% |
Sept 30, |
% |
|
Total Revenues |
$702,669 |
$695,833 |
1% |
$678,023 |
4% |
Net Revenues |
686,967 |
663,942 |
3% |
667,158 |
3% |
Pre-Tax Income |
69,388 |
101,664 |
(32%) |
61,883 |
12% |
Net Income |
42,903 |
61,093 |
(30%) |
42,969 |
|
Dec 31, |
Dec 31, |
% |
Sept 30, |
% |
|
Income for basic earnings per common share*: |
|||||
Net Income applicable to Raymond James Financial, Inc. |
$42,903 |
$61,093 |
(30%) |
$42,969 |
|
Less allocation of earnings and dividends to participating securities |
1,789 |
2,403 |
(26%) |
1,847 |
(3%) |
Net income applicable to Raymond James Financial, Inc. common shareholders |
$41,114 |
$58,690 |
(30%) |
$ 41,122 |
|
Income for diluted earnings per common share*: |
|||||
Net Income applicable to Raymond James Financial, Inc. |
$42,903 |
$61,093 |
(30%) |
$42,969 |
|
Less allocation of earnings and dividends to participating securities |
1,787 |
2,399 |
(26%) |
1,845 |
(3%) |
Net income applicable to Raymond James Financial, Inc. common shareholders |
$41,116 |
$58,694 |
(30%) |
$ 41,124 |
|
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 |
$0.35 |
$0.50 |
(30%) |
$0.35 |
|
Diluted |
$0.35 |
$0.50 |
(30%) |
$0.35 |
Balance Sheet Data |
||
December |
September |
|
Total assets |
$14.7 bil. |
$18.2 bil. |
Shareholders’ equity |
$2,093 mil. |
$2,032 mil. |
Book value per share |
$17.53 |
$17.11 |
December 31, |
December 31, |
% |
September 30, |
% |
|
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 |
$31,712 |
$32,585 |
(3%) |
$22,286 |
42% |
Capital Markets |
11,394 |
14,289 |
(20%) |
22,986 |
(50%) |
Asset Management |
12,066 |
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 |
(8,884) |
(9,124) |
3% |
(5,790) |
(53%) |
Pre-Tax Income |
$ 69,388 |
$ 101,664 |
(32%) |
$ 61,883 |
12% |
|
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES |
|||||
Three Months Ended |
|||||
December 31, |
December 31, |
% |
September 30, |
% |
|
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 |
471,079 |
419,254 |
12% |
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 |
33,665 |
18,469 |
82% |
25,851 |
30% |
Total Non-Interest Expenses |
619,854 |
567,285 |
9% |
610,330 |
2% |
Income before provision for income taxes and noncontrolling interests |
67,113 |
96,657 |
(31%) |
56,828 |
18% |
Provision for income taxes |
26,485 |
40,571 |
(35%) |
18,914 |
40% |
Net Income before noncontrolling Interests |
40,628 |
56,086 |
(28%) |
37,914 |
7% |
Net loss applicable to noncontrolling interests |
(2,275) |
(5,007) |
55% |
(5,055) |
55% |
Net Income applicable to Raymond James Financial, Inc. |
$42,903 |
$61,093 |
(30%) |
$42,969 |
|
Net Income per common share basic |
$0.35 |
$0.50 |
(30%) |
$0.35 |
|
Net Income per common share diluted |
$0.35 |
$0.50 |
(30%) |
$0.35 |
|
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 |
||
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.