Press Release

FOR IMMEDIATE RELEASE

July 20, 2011
Printable version

RAYMOND JAMES FINANCIAL
REPORTS THIRD QUARTER RESULTS

ST. PETERSBURG, Fla. –Raymond James Financial, Inc. today reported net income of $46,786,000 or $0.37 per diluted share for the third quarter of fiscal 2011, compared with net income of $60,687,000 or $0.48 per diluted share for the third quarter of fiscal 2010. Excluding the $45 million pretax charge for the repurchase of auction rate securities, net income would have been $74,884,000(1) or $0.59(1) per diluted share for the third quarter of fiscal 2011, an increase of 23 percent over the prior year’s quarter, although a slight decrease from the strong second quarter.

Net revenues were $850,387,000 for the current quarter, up 14 percent over the prior year’s quarterly net revenues of $747,373,000 and essentially flat with the prior quarter. The firm reported quarterly records for assets under management ($36.6 billion) and assets under administration ($278 billion) as of June 30, 2011.

“Most of our businesses performed well this quarter,” said CEO Paul Reilly. The Private Client Group and Raymond James Bank had particularly good quarters notwithstanding the choppy markets. Asset Management and Emerging Markets also had solid results.

“The difficult market conditions negatively impacted overall results in the Capital Markets segment. Although M&A and underwriting fees continued at a robust pace, institutional securities commissions were off 10 percent and trading profits were down compared to last quarter.

“We believe the resolution of the auction rate securities issue was in the best interests of our clients and the firm as the uncertainty has been resolved, even though the one-time earnings impact was significant. Although there can be no assurances, we anticipate that ultimate losses will be lower than the provision as additional refinancing by issuers occurs.

“The markets are unsettled due to issues related to the U.S. debt ceiling, budget deficits, solvency problems in several European countries and the slowdown of the U.S. economic recovery. As we have forecast, we expect the economic recovery to be irregular and sluggish as a result of the damage to our economic system.  However, our business is well positioned for continued growth as the economic recovery regains momentum.”

The company will conduct its quarterly conference call Thursday, July 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.

(1) Excluding the provision for loss on the purchase of Auction Rate Securities is a non-GAAP measure; see unaudited financial report below for further discussion.

About Raymond James Financial, Inc.

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 principal wholly owned broker/dealers, Raymond James & Associates, Raymond James Financial Services and Raymond James Ltd. have more than 5,400 financial advisors serving 1.9 million accounts in 2,400 locations throughout the United States, Canada and overseas. In addition, total client assets are approximately $278 billion, of which approximately $37 billion are managed by the firm’s asset management subsidiaries.

To the extent that Raymond James makes or publishes forward-looking statements (regarding management expectations, strategic objectives, business prospects, anticipated expense savings, 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’ 2010 annual report on Form 10-K and the quarterly report on Form 10-Q for the quarters ended December 31, 2010 and March 31, 2011, which are available on RAYMONDJAMES.COM and SEC.GOV.

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

Raymond James Financial, Inc.
Unaudited Report
(in thousands, except per share amounts)
  Three Months Ended
  June 30,
2011
June 30,
2010
%
Change
March 31,
2011
%
Change
Total Revenues $868,212 $763,612 14% $866,744 -
Net Revenues 850,387 747,373 14% 852,057 -
Pre-Tax Income 78,667 97,511 (19)% 126,237 (38)%
Net Income 46,786 60,687 (23)% 80,917 (42)%
           
Income for basic earnings per common share:          
Net income attributable to RJF, Inc. common shareholders

$45,394

$58,133

(22)%

$78,293

(42)%

Income for diluted earnings per common share:          
Net income attributable to RJF, Inc. common shareholders $45,399 $58,139 (22)% $78,308 (42)%
Earnings per common share:          
Basic $0.37 $0.49 (24)% $0.64 (42)%
Diluted $0.37 $0.48 (23)% $0.64 (42)%
           
Non-GAAP results excluding the $45 million pre-tax charge resulting from auction rate securities(1):          
Non-GAAP Pre-Tax Income $123,667 $97,511 27% $126,237 (2)%
Non-GAAP Net Income $  74,884 $  60,687 23% $   80,917 (7)%
Non-GAAP Earnings per common share:          
Non-GAAP Basic $0.59 $0.49 20% $0.64 (8)%
Non-GAAP Diluted $0.59 $0.48 23% $0.64 (8)%


  Nine Months Ended
  June 30,
2011
June 30,
2010
%
Change
Total Revenues $2,565,289 $2,216,268 16%
Net Revenues 2,516,273 2,168,779 16%
Pre-Tax Income 335,418 256,555 31%
Net Income 209,426 159,218 32%
       
Income for basic earnings per common share:      
Net income attributable to RJF, Inc. common shareholders $202,615 $152,492 33%
Income for diluted earnings per common share:      
Net income attributable to RJF, Inc. common shareholders $202,635 $152,503 33%
Earnings per common share:      
Basic $1.66 $1.28 30%
Diluted $1.65 $1.28 29%
       
Non-GAAP results excluding the $45 million pre-tax charge resulting from auction rate securities(1):      
Non-GAAP Pre-Tax Income $380,418 $256,555 48%
Non-GAAP Net Income $237,524 $159,218 49%
Non-GAAP Earnings per common share:      
Non-GAAP Basic $1.88 $1.28 47%
Non-GAAP Diluted $1.87 $1.28 46%


(1) The non-GAAP calculations exclude the impact of the loss provision for auction rate securities from pre-tax income for the three and nine months ended June 30, 2011. Non-GAAP net income and earnings per common share computations also reflect adjustments to income tax expenses for the tax effect of this loss provision. The company believes that the non-GAAP measures provide useful information by excluding these items which may not be indicative of the company’s core operating results and business outlook. The company believes that GAAP measures and non-GAAP measures of the company’s financial performance should be considered together.


Balance Sheet Data
  June 30,
2011
September 30,
2010
Total Assets $16.1 bil. $17.9 bil.
Shareholders’ Equity $2,559 mil. $2,303 mil.
Book value per share $20.74 $19.03


Management Data
  Quarter Ended
  June 30,
2011
June 30,
2010
March 31,
2011
December 31,
2010
PCG Financial Advisors:  
     United States 4,492 4,515 4,472 4,489
     Canada 445 436 443 442
     United Kingdom 156 144 151 149
          Total 5,093 5,095 5,066 5,080
# Lead managed:        
     Corporate public offerings in U.S. 7 5 12 12
     Corporate public offerings in Canada 8 9 16 14
         
Financial Assets Under Management:        
Managed Accounts (excluding Money Market funds) $36.6 billion $27.5 billion $35.6 billion $33.4 billion
         
Client Assets Under Administration $278 billion $231 billion $275 billion $262 billion
Client Margin Balances $1,551 million $1,385 million $1,537 million $1,511 million


  Three Months Ended
  June 30,
2011
June 30,
2010
%
Change
March 31,
2011
%
Change
  (in thousands)
Revenues:          
Private Client Group $557,017 $486,566 14% $556,632 -
     Capital Markets 162,695 154,077 6% 177,409 (8)%
     Asset Management 58,458 49,296 19% 55,341 6%
     RJ Bank 67,836 69,647 (3)% 69,099 (2)%
     Emerging Markets 14,449 4,391 229% 11,962 21%
     Securities Lending 1,502 2,573 (42)% 1,479 2%
     Proprietary Capital 13,716 4,445 209% (275) NM
     Other 1,286 2,217 (42)% 3,574 (64)%
     Intersegment Eliminations (8,747) (9,600) 9% (8,477) (3)%
          Total Revenues $868,212 $763,612 14% $866,744 -
           
Pre-Tax Income:          
     Private Client Group $53,317 $44,792 19% $45,990 16%
     Capital Markets 14,191 19,623 (28)% 33,689 (58)%
     Asset Management 17,593 12,152 45% 15,227 16%
     RJ Bank 42,093 29,185 44% 42,256 -
     Emerging Markets 2,710 (1,109) NM 1,192 127%
     Securities Lending 323 720 (55)% 330 (2)%
     Proprietary Capital 6,616 3,090 114% (4,032) 264%
     Other (58,176)(1) (10,942) NM (8,415) NM
          Pre-Tax Income $ 78,667 $97,511 (19)% $126,237 (38)%


  Nine Months Ended
  June 30,
2011
June 30,
2010
$
Change
  (in thousands)
Revenues:      
     Private Client Group $1,633,080 $1,409,761 16%
     Capital Markets 513,130 437,620 17%
     Asset Management 169,386 147,910 15%
     RJ Bank 214,376 210,099 2%
     Emerging Markets 35,000 11,993 192%
     Securities Lending 4,731 6,666 (29)%
     Proprietary Capital 14,111 17,093 (17)%
     Other 8,263 6,013 37%
     Intersegment Eliminations (26,788) (30,887) 13%
          Total Revenues $2,565,289 $2,216,268 16%
       
Pre-Tax Income:      
     Private Client Group $155,047 $113,047 37%
     Capital Markets 72,526 53,016 37%
     Asset Management 48,414 35,453 37%
     RJ Bank 130,813 84,644 55%
     Emerging Markets 4,223 (4,091) 203%
     Securities Lending 1,177 2,053 (43)%
     Proprietary Capital 2,442 2,236 9%
     Other (79,224)(1) (29,803) (166)%
          Pre-Tax Income $ 335,418 $256,555 31%


(1) The Other segment for the period ended June 30, 2011 includes a $45 million pre-tax loss provision for auction rate securities.


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,
2011
June 30,
2010
%
Change
March 31,
2011
%
Change
Revenues:          
     Securities commissions and fees $551,337 $505,246 9% $563,710 (2)%
     Investment banking 64,518 41,914 54% 63,131 2%
     Investment advisory fees 55,016 44,512 24% 52,643 5%
     Interest 95,832 92,780 3% 96,811 (1)%
     Net trading profits 7,529 3,047 147% 15,246 (51)%
     Financial service fees 38,954 41,524 (6)% 41,089 (5)%
     Other 55,026 34,589 59% 34,114 61%
          Total Revenues 868,212 763,612 14% 866,744 -
           
     Interest expense 17,825 16,239 10% 14,687 21%
          Net Revenues 850,387 747,373 14% 852,057 -
           
Non-interest expenses:          
     Compensation, commissions and benefits 575,726 513,676 12% 579,587 (1)%
     Communications and information processing 36,156 29,995 21% 36,380 (1)%
     Occupancy and equipment costs 27,140 26,679 2% 26,773 1%
     Clearance and floor brokerage 10,277 9,480 8% 9,447 9%
     Business development 24,800 18,878 31% 22,820 9%
     Investment sub-advisory fees 7,703 6,988 10% 7,867 (2)%
     Bank loan loss provision 8,363 17,098 (51)% 8,637 (3)%
     Loss provision for auction rate securities 45,000 - NM - NM
     Other 34,143 29,232 17% 36,308 (6)%
          Total Non-interest Expenses 769,308 652,026 18% 727,819 6%
           
Income including noncontrolling interests and before provision for income taxes 81,079 95,347 (15)% 124,238 (35)%
Provision for income taxes 31,881 36,824 (13)% 45,320 (30)%
Net income including noncontrolling interests 49,198 58,523 (16)% 78,918 (38)%
Net income (loss) attributable to noncontrolling interests 2,412 (2,164) 211% (1,999) 221%
Net Income Attributable to Raymond James Financial, Inc. $46,786 $60,687 (23)% $80,917 (42)%
           
Net Income per Common Share-Basic $0.37 $0.49 (24)% $0.64 (42)%
Net Income per Common Share-Diluted $0.37 $0.48 (23)% $0.64 (42)%
Weighted-Average Common Shares Outstanding-Basic 123,238 119,622   122,396  
Weighted-Average Common and Common Equivalent Shares Outstanding-Diluted 123,958 120,019   123,265  


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,
2011
June 30,
2010
%
Change
Revenues:      
     Securities commissions and fees $1,649,186 $1,453,699 13%
     Investment banking 186,618 112,471 66%
     Investment advisory fees 160,069 131,066 22%
     Interest 297,029 277,427 7%
     Net trading profits 29,097 24,854 17%
     Financial service fees 121,637 117,231 4%
     Other 121,653 99,520 22%
          Total Revenues 2,565,289 2,216,268 16%
       
     Interest expense 49,016 47,489 3%
          Net Revenues 2,516,273 2,168,779 16%
       
Non-interest expenses:      
     Compensation, commissions and benefits 1,707,197 1,482,174 15%
     Communications and information processing 103,681 90,514 15%
     Occupancy and equipment costs 80,142 79,286 1%
     Clearance and floor brokerage 29,641 26,810 11%
     Business development 71,565 59,373 21%
     Investment sub-advisory fees 22,474 20,373 10%
     Bank loan loss provision 28,232 59,870 (53)%
     Loss provision for auction rate securities 45,000 - NM
     Other 96,278 93,711 3%
Total Non-interest Expenses 2,184,210 1,912,111 14%
       
Income including noncontrolling interests and before provision for income taxes 332,063 256,668 29%
Provision for income taxes 125,992 97,337 29%
Net income including noncontrolling interests 206,071 159,331 29%
Net (loss) income attributable to noncontrolling interests (3,355) 113 NM
Net Income Applicable to Raymond James Financial, Inc. $209,426 $159,218 32%
       
Net Income per Common Share-Basic $1.66 $1.28 30%
Net income per Common Share-Diluted $1.65 $1.28 29%
Weighted-Average Common Shares Outstanding-Basic 122,200 119,180  
Weighted-Average Common and Common Equivalent Shares Outstanding-Diluted 122,689 119,456  

 

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