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Press Release
July 21, 2010
Printable version (PDF)
RAYMOND JAMES FINANCIAL, INC.
ANNOUNCES THIRD QUARTER RESULTS
ST. PETERSBURG, Fla. – Raymond James Financial, Inc. today reported net income of $60,687,000, or $0.48 per diluted share, for the third quarter ended June 30, 2010. In comparison, the firm earned $42,595,000, or $0.35 per diluted share, for the third quarter of fiscal 2009, and $55,628,000, or $0.45 per diluted share, for the immediately preceding quarter. Net revenues were $747,373,000, 19 percent higher than 2009’s third quarter. Net income for the first nine months of fiscal 2010 was $159,218,000, or $1.28 per diluted share, 45 percent higher than 2009’s $109,781,000, or $0.90 per diluted share.
“While we’re pleased that third-quarter results compare favorably to the prior year, the positive comparison is not surprising given the financial crisis that persisted in 2009. Nonetheless, it’s rewarding to have the trend continue in relation to the most recent quarter, even as the markets retracted midway,” said CEO Paul Reilly. “The firm’s diversified business strategy and commitment to conservative decision making continues to deliver solid results even in uncertain times.”
“The Private Client Group largely drove the increase in our results over the second quarter. Despite a slight decrease from the preceding quarter in the overall number of financial advisors, improved productivity fueled the rise in commission revenues. Stimulated by increased market activity, Equity Capital Markets had a strong quarter, although a decline in Fixed Income trading profits dragged that segment’s results down in comparison to the preceding quarter. Notably, though Raymond James Bank had lower net interest income, the bank incurred the lowest loan loss provision expense in two years and anticipates being able to resume growth in overall loan balances. Finally, firm-wide expense control resulted in improved margins.
“Although the equity markets have improved considerably from last year and substantial attention is being paid to economic sustainability, we’re prepared for a gradual, albeit bumpy, recovery,” Reilly said. “Despite the uncertainty of short-term market conditions, we’ll continue to stay the course – a strategy that has earned the firm 90 consecutive quarters of profitability with this report.”
The company will conduct its quarterly conference call Thursday, July 22, 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 $231 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 and quarterly reports on Form 10-Q for the quarters ended December 31, 2009 and March 31, 2010, which are available on raymondjames.com and sec.gov.
Raymond James Financial, Inc.
Unaudited Report
(in thousands, except per share amounts)
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| |
Three Months Ended |
| |
June 30,
2010 |
June 30,
2009 |
%
Change |
Mar 31,
2010 |
%
Change |
Total Revenues |
$763,612 |
$636,923 |
20% |
$749,987 |
2% |
Net Revenues |
747,373 |
629,470 |
19% |
734,439 |
2% |
Pre-Tax Income |
97,511 |
72,309 |
35% |
89,656 |
9% |
Net Income |
60,687 |
42,595 |
42% |
55,628 |
9% |
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Income for basic earnings per common share*: |
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Net income applicable to RJF, Inc. common shareholders |
$58,133 |
$40,797 |
42% |
$53,241 |
9% |
Income for diluted earnings per common share*: |
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Net income applicable to RJF, Inc. common shareholders |
$58,139 |
$40,797 |
43% |
$53,245 |
9% |
Earnings per common share*: |
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Basic |
$0.49 |
$0.35 |
40% |
$0.45 |
9% |
Diluted |
$0.48 |
$0.35 |
37% |
$0.45 |
7% |
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Nine Months Ended |
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| |
June 30,
2010 |
June 30,
2009 |
%
Change |
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Income for basic earnings per common share*: |
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Net income applicable to RJF, Inc. common shareholders |
$152,492 |
$105,284 |
45% |
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Income for diluted earnings per common share*: |
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Net income applicable to RJF, Inc. common shareholders |
$152,503 |
$105,286 |
45% |
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Earnings per common share*: |
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Basic |
$1.28 |
$0.90 |
42% |
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Diluted |
$1.28 |
$0.90 |
42% |
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Balance Sheet Data |
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June
2010 |
September
2009 |
Total assets |
$14.9 bil. |
$18.2 bil.** |
Shareholders' equity |
$2,220 mil. |
$2,032 mil. |
Book value per share |
$18.49 |
$17.11 |
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Management Data
Quarter Ended |
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June
2010 |
June
2009 |
March
2010 |
December
2009 |
Total financial advisors: |
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United States |
4,739 |
4,749 |
4,750 |
4,755 |
Canada |
454 |
469 |
462 |
458 |
United Kingdom |
144 |
115 |
133 |
116 |
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# Lead managed/co-managed: |
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Corporate public offerings in U.S. |
20 |
32 |
28 |
24 |
Corporate public offerings in Canada |
9 |
6 |
6 |
6 |
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Financial Assets Under Management: |
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Managed Accounts (excluding Money Market Funds) |
$27.5 bil. |
$22.6 bil. |
$29.3 bil. |
$27.6 bil. |
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Client Assets under Administration |
$231 bil. |
$196 bil. |
$242 bil. |
$232 bil. |
Client Margin Balances |
$1,385 mil. |
$1,187 mil. |
$1,401 mil. |
$1,347 mil. |
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Three Months Ended |
| |
June 30,
2010 |
June 30,
2009 |
%
Change |
March 31,
2010 |
%
Change |
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(in 000’s) |
Revenues: |
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Private Client Group |
$484,780 |
$370,719 |
31% |
$470,157 |
3% |
Capital Markets |
154,077 |
138,524 |
11% |
149,770 |
3% |
Asset Management |
49,296 |
40,069 |
23% |
48,616 |
1% |
RJ Bank |
69,647 |
80,747 |
(14%) |
71,530 |
(3%) |
Emerging Markets |
4,391 |
3,208 |
37% |
3,884 |
13% |
Stock Loan/Borrow |
2,573 |
2,361 |
9% |
2,218 |
16% |
Proprietary Capital |
4,445 |
9,881 |
(55%) |
12,683 |
(65%) |
Other |
2,217 |
3,203 |
(31%) |
2,038 |
9% |
Intersegment Eliminations |
(7,814) |
(11,789) |
34% |
(10,909) |
28% |
Total Revenues |
$ 763,612 |
$ 636,923 |
20% |
$ 749,987 |
2% |
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Pre-Tax Income: |
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Private Client Group |
$44,792 |
$18,321 |
144% |
$36,543 |
23% |
Capital Markets |
19,623 |
20,224 |
(3%) |
21,999 |
(11%) |
Asset Management |
12,152 |
6,691 |
82% |
11,235 |
8% |
RJ Bank |
29,185 |
27,406 |
6% |
30,822 |
(5%) |
Emerging Markets |
(1,109) |
(1,311) |
15% |
(1,570) |
29% |
Stock Loan/Borrow |
720 |
885 |
(19%) |
646 |
11% |
Proprietary Capital |
3,090 |
(308) |
NM |
(42) |
NM |
Other |
(10,942) |
401 |
NM |
(9,977) |
(10%) |
Pre-Tax Income |
$ 97,511 |
$ 72,309 |
35% |
$ 89,656 |
9% |
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Nine Months Ended |
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| |
June 30,
2010 |
June 30,
2009 |
%
Change |
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(in 000’s) |
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Revenues: |
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Private Client Group |
$1,409,761 |
$1,136,305 |
24% |
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Capital Markets |
437,620 |
391,243 |
12% |
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Asset Management |
147,910 |
132,870 |
11% |
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RJBank |
210,099 |
273,322 |
(23%) |
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Emerging Markets |
11,993 |
10,628 |
13% |
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Stock Loan/Borrow |
6,666 |
8,258 |
(19%) |
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Proprietary Capital |
17,093 |
9,780 |
75% |
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Other |
6,013 |
4,587 |
31% |
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Intersegment Eliminations |
(30,887) |
(42,497) |
27% |
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Total Revenues |
$2,216,268 |
$1,924,496 |
15% |
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Pre-Tax Income: |
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|
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Private Client Group |
$113,047 |
$62,587 |
81% |
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Capital Markets |
53,016 |
50,495 |
5% |
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Asset Management |
35,453 |
20,669 |
72% |
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RJBank |
84,644 |
69,616 |
22% |
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Emerging Markets |
(4,091) |
(4,065) |
(1%) |
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Stock Loan/Borrow |
2,053 |
2,955 |
(31%) |
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Proprietary Capital |
2,236 |
(1,354) |
NM |
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Other |
(29,803) |
(14,012) |
(113%) |
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Pre-Tax Income |
$256,555 |
$186,891 |
37% |
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Quarter-to-Date
(in thousands, except per share amounts) |
| |
Three Months Ended |
| |
June 30,
2010 |
June 30,
2009 |
%
Change |
March 31,
2010 |
%
Change |
Revenues: |
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|
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Securities commissions and fees |
$505,246 |
$405,925 |
24% |
$479,302 |
5% |
Investment banking |
41,914 |
20,586 |
104% |
44,839 |
(7%) |
Investment advisory fees |
44,318 |
32,229 |
38% |
42,218 |
5% |
Interest |
92,780 |
98,037 |
(5%) |
93,275 |
(1%) |
Net trading profits |
3,047 |
13,272 |
(77%) |
10,170 |
(70%) |
Financial service fees |
41,718 |
30,909 |
35% |
39,286 |
6% |
Other |
34,589 |
35,965 |
(4%) |
40,897 |
(15%) |
Total revenues |
763,612 |
636,923 |
20% |
749,987 |
2% |
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Interest expense |
16,239 |
7,453 |
118% |
15,548 |
4% |
Net revenues |
747,373 |
629,470 |
19% |
734,439 |
2% |
Non-interest expenses: |
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Compensation, commissions and benefits |
513,676 |
406,809 |
26% |
497,419 |
3% |
Communications and information processing |
29,995 |
26,690 |
12% |
32,445 |
(8%) |
Occupancy and equipment costs |
26,679 |
26,299 |
1% |
25,892 |
3% |
Clearance and floor brokerage |
9,480 |
8,377 |
13% |
8,828 |
7% |
Business development |
18,878 |
18,652 |
1% |
20,614 |
(8%) |
Investment advisory fees |
6,988 |
5,049 |
38% |
6,827 |
2% |
Bank loan loss provision |
17,098 |
29,790 |
(43%) |
19,937 |
(14%) |
Other |
29,232 |
31,114 |
(6%) |
28,269 |
3% |
Total non-interest expenses |
652,026 |
552,780 |
18% |
640,231 |
2% |
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Income including noncontrolling interests and before provision for income taxes |
95,347 |
76,690 |
24% |
94,208 |
1% |
Provision for income taxes |
36,824 |
29,714 |
24% |
34,028 |
8% |
Net income (loss) including noncontrolling interests |
58,523 |
46,976 |
25% |
60,180 |
(3%) |
Net income (loss) attributable to noncontrolling interests |
(2,164) |
4,381 |
NM |
4,552 |
NM |
Net income attributable to Raymond James Financial, Inc. |
$60,687 |
$42,595 |
42% |
$55,628 |
9% |
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Net Income per common share basic |
$0.49 |
$0.35 |
40% |
$0.45 |
9% |
Net Income per common share diluted |
$ 0.48 |
$ 0.35 |
37% |
$ 0.45 |
7% |
Weighted average common shares outstanding-basic |
119,622 |
117,930 |
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119,288 |
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Weighted average common and common equivalent shares outstanding-diluted |
120,019 |
117,951 |
|
119,580 |
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Year-to-Date
(in thousands, except per share amounts) |
| |
Nine Months Ended |
| |
June 30,
2010 |
June 30,
2009 |
%
Change |
Revenues: |
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Securities commissions and fees |
$1,453,699 |
$1,193,855 |
22% |
Investment banking |
112,471 |
59,320 |
90% |
Investment advisory fees |
130,511 |
110,954 |
18% |
Interest |
277,427 |
349,722 |
(21%) |
Net trading profits |
24,854 |
35,213 |
(29%) |
Financial service fees |
117,786 |
94,849 |
24% |
Other |
99,520 |
80,583 |
23% |
Total revenues |
2,216,268 |
1,924,496 |
15% |
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Interest expense |
47,489 |
46,088 |
3% |
Net revenues |
2,168,779 |
1,878,408 |
15% |
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Non-interest expenses: |
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Compensation, commissions and benefits |
1,482,174 |
1,217,965 |
22% |
Communications and information processing |
90,514 |
91,869 |
(1%) |
Occupancy and equipment costs |
79,286 |
77,679 |
2% |
Clearance and floor brokerage |
26,810 |
24,429 |
10% |
Business development |
59,373 |
62,193 |
(5%) |
Investment advisory fees |
20,373 |
17,888 |
14% |
Bank loan loss provision |
59,870 |
129,639 |
(54%) |
Other |
93,711 |
77,173 |
21% |
Total non-interest expenses |
1,912,111 |
1,698,835 |
13% |
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Income including noncontrolling interests and before provision for income taxes |
256,668 |
179,573 |
43% |
Provision for income taxes |
97,337 |
77,110 |
26% |
Net income (loss) including noncontrolling interests |
159,331 |
102,463 |
56% |
Net income (loss) attributable to noncontrolling interests |
113 |
(7,318) |
NM |
Net income applicable to Raymond James Financial, Inc. |
$ 159,218 |
$ 109,781 |
45% |
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Net income per common share-basic |
$1.28 |
$0.90 |
42% |
Net income per common share-diluted |
$ 1.28 |
$ 0.90 |
42% |
Weighted average common share outstanding-basic |
119,180 |
116,995 |
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Weighted average common and common equivalent shares outstanding-diluted |
119,456 |
117,064 |
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–30–
For additional information, please contact Anthea Penrose at 727-567-2824.
Please visit the Raymond James Press Center at raymondjames.com/media.
* During the three months ended December 31, 2009, we changed the methodology used to calculate basic and diluted earnings per share in accordance with new accounting guidance (Financial Accounting Standard Board ASC 260-10-45). The new guidance requires unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) to be considered participating securities and, therefore, included in the earnings allocation in computing earnings per share. Our unvested restricted shares and restricted stock units granted as part of our share-based compensation are considered participating securities. Prior period earnings per basic and diluted shares have been restated. Earnings per basic and diluted shares have been reduced by $0.01 for the quarter ended June 30, 2009 and have been reduced by $0.04 and $0.03 for the year ended June 30, 2009, respectively.
** 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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