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.
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

69,388

101,664

(32%)

61,883

12%

Net Income

42,903

61,093 

(30%)

42,969 

 


 

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.

$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
2009

September
2009

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,
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

$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
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Quarter-to-Date

(in thousands, except per share amounts)

 

Three Months Ended

 

December 31,
2009

December 31,
2008

%
Change

September 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

471,079

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.