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raymondjames.com/news-and-media/press-releases
October 26, 2016

Raymond James Financial reports 4th quarter and fiscal 2016 results

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  • Record quarterly net revenues of $1.46 billion, up 9 percent over the prior year’s fiscal fourth quarter and 7 percent over the preceding quarter
  • Record quarterly net income of $171.7 million, or $1.19 per diluted share, and adjusted quarterly net income of $185.1 million (1), or $1.28 per diluted share (1)
  • Record annual net revenues of $5.40 billion, record annual net income of $529.4 million, or $3.65 per diluted share, and adjusted annual net income of $556.3 millio n(1), or $3.84 per diluted share (1)
  • Acquisitions of Deutsche Bank Wealth Management’s US Private Client Services Unit (rebranded as “Alex. Brown,” a division of Raymond James) and MacDougall, MacDougall & MacTier, Inc. (“3Macs”) completed during the quarter
  • Augmented by the aforementioned acquisitions, achieved new records for client assets under administration of $604.4 billion, financial assets under management of $77.0 billion, Private Client Group financial advisors of 7,146 and RJ Bank net loans of $15.2 billion

ST. PETERSBURG, Fla - Raymond James Financial, Inc. (NYSE: RJF) today reported record quarterly net revenues of $1.46 billion and record quarterly net income of $171.7 million, or $1.19 per diluted share, for the fiscal fourth quarter ended September 30, 2016. Quarterly net income of $171.7 million represents significant growth of 33 percent over last year’s fiscal fourth quarter and 37 percent over the preceding quarter. Excluding $19.4 million of acquisition-related expenses, adjusted net income for the quarter was $185.1 million (1), or $1.28 per diluted share (1), on a non-GAAP basis.

For fiscal year 2016, record net revenues of $5.40 billion increased 4 percent and record net income of $529.4 million, or $3.65 per diluted share, increased 5 percent over fiscal 2015. Adjusted net income for fiscal 2016 was $556.3 million(1), or $3.84 per diluted share (1).

“We are delighted that all four of our core operating segments generated record net revenues and the firm produced record net income for both the fiscal fourth quarter as well as fiscal 2016,” said CEO Paul Reilly. “Our dedication to always putting clients first allowed us to finish the fiscal year with our 115th consecutive quarter of profitability and records for nearly all of our key business metrics. The records we have reached for client assets under administration, financial assets under management, the number of Private Client Group financial advisors and RJ Bank net loans give us good reason to be optimistic about the future.”

Segment Results

Private Client Group

  • Record quarterly net revenues of $963.3 million, up 7 percent compared to both the prior year’s fiscal fourth quarter and the preceding quarter
  • Record quarterly pre-tax income of $106.3 million, significant increases of 21 percent over the prior year’s fiscal fourth quarter and 30 percent over the preceding quarter
  • Annual pre-tax income of $340.6 million on record annual net revenues of $3.62 billion
  • Record Private Client Group assets under administration of $574.1 billion, rising 27 percent over September 2015 and 13 percent over June 2016
  • Record Private Client Group financial advisors of 7,146, representing net increases of 550 over September 2015 and 312 over June 2016

For the quarter, revenue growth in the Private Client Group segment was primarily attributable to starting the period with higher assets in fee-based accounts. Assets in fee-based accounts ended the quarter at a record $231.0 billion, 29 percent over September 2015 and 12 percent over June 2016, lifted by solid organic growth, market appreciation and the acquisitions of Alex. Brown as well as 3Macs in Canada. Record quarterly pre-tax income in the segment was a result of higher revenues as well as disciplined management of discretionary expenses, which helped the segment generate a pre-tax margin on net revenues of 11.0 percent for the quarter.

For fiscal 2016, record net revenues in the segment were lifted by higher assets in fee-based accounts as well as increased fees earned on client cash balances in the Raymond James Bank Deposit Program, which helped offset declines in transactional revenues during the year. While pre-tax income benefited from higher client asset balances and the increase in short-term rates in December 2015, the segment’s profitability for the fiscal year was negatively impacted by elevated legal and regulatory expenses.

“Our steadfast commitment to serving our clients and advisors enabled us to realize our second best year for financial advisor recruiting as well as exceptionally high retention of our existing advisors,” Reilly said. “We are also excited to welcome the 265 advisors from Alex. Brown and 3Macs and their teams to the Raymond James family.”

Capital Markets

  • Record quarterly net revenues of $284.7 million, increases of 10 percent over last year’s fiscal fourth quarter and 13 percent over the preceding quarter
  • Record quarterly pre-tax income of $53.1 million, significant increases of 32 percent over last year’s fiscal fourth quarter and 62 percent over the preceding quarter
  • Record annual net revenues of $999.9 million fueled by record revenues for both the Fixed Income division and RJ Tax Credit Funds.
  • Record annual pre-tax income of $139.2 million, a substantial 30 percent improvement compared to fiscal 2015

Record revenues and pre-tax income in the quarter were lifted by a broad-based improvement in investment banking revenues as well as strong institutional commissions and net trading profits in the Fixed Income division.

For the fiscal year, record results in the Fixed Income division and RJ Tax Credit Funds helped the Capital Markets segment deliver record annual net revenues and pre-tax income, despite a 27 percent market-driven decline in revenues from equity underwritings.

“The record results achieved by our Capital Markets segment in fiscal 2016 reinforce the value of our diversified business model,” Reilly said. “During the fiscal year, we continued to strengthen our capital markets platform with key hires as well as the acquisition of Mummert & Company to enhance our cross-border M&A capabilities.”

Asset Management

  • Record quarterly net revenues of $106.4 million, up 7 percent compared to the prior year’s fiscal fourth quarter and 5 percent compared to the preceding quarter
  • Quarterly pre-tax income of $35.2 million, an increase of 8 percent compared to both last year’s fiscal fourth quarter as well as the preceding quarter
  • Annual pre-tax income of $132.2 million on record annual net revenues of $404.3 million
  • Record financial assets under management of $77.0 billion, up 18 percent compared to September 2015 and 7 percent compared to June 2016

Results in the Asset Management segment continue to benefit from growth of financial assets under management, which was mostly attributable to strong net inflows in managed fee-based accounts in the Private Client Group, market appreciation and the acquisition of the Alex. Brown division, which offset net institutional outflows in Eagle Asset Management during the year.

Raymond James Bank

  • Record quarterly net revenues of $133.7 million, a substantial increase of 25 percent over last year’s fiscal fourth quarter and 6 percent over the preceding quarter
  • Record quarterly pre-tax income of $97.4 million, vaulting 50 percent over the prior year’s fiscal fourth quarter and up 9 percent over the preceding quarter
  • Record annual net revenues of $494.0 million and record annual pre-tax income of $337.3 million, up 19 percent and 21 percent over fiscal 2015, respectively
  • Record net loans at Raymond James Bank of $15.2 billion, growth of 17 percent over September 2015 and 3 percent over the preceding quarter

The increase in the Bank’s earning assets during the quarter was driven by balanced loan growth as well as purchases of agency mortgage-backed securities. The bank loan loss provision for the quarter was low relative to the net loan growth, as repayments of criticized loans, particularly within the energy portfolio, offset a portion of the provisions associated with net loan growth and new downgrades during the quarter. The Bank’s net interest margin of 3.04 percent decreased 6 basis points compared to the preceding quarter, which was largely attributable to higher balances of excess cash on the Bank’s balance sheet for most of the quarter.

For the year, record results for the Bank were driven by robust loan growth, as diversification of the loan portfolio with a focus on lending to clients of the Private Client Group and Capital Markets segments, helped mitigate the deceleration of C&I growth. Despite diversification outside of the higher-yielding C&I portfolio, the increase in short-term interest rates in December 2015 helped the Bank’s net interest margin remain relatively stable on a year-over-year basis.

Other

For the quarter, total revenues in the Other segment were $14.8 million, rising 41 percent compared to last year’s fiscal fourth quarter due to higher interest earnings on firm cash balances, but down 14 percent compared to the preceding quarter, which included a large valuation gain attributable to private equity investments. The Other segment also includes $19.4 million of acquisition-related expenses for the quarter, resulting in a total of $40.7 million for the fiscal year.

The effective tax rate for the quarter declined significantly to 27.4 percent, which was mainly driven by tax adjustments associated with the planned divestitures of our remaining businesses in South America, large nontaxable gains on the firm’s corporate-owned life insurance portfolio and favorable resolution of certain state tax issues.

On July 12, we announced the closing of a registered underwritten public offering of $500 million in aggregate principal amount of 3.625 percent senior notes due in 2026 and $300 million in aggregate principal amount of 4.95 percent senior notes due in 2046. The aggregate net proceeds after underwriting discounts and commissions and estimated expenses were approximately $791.4 million, and are expected to be used for working capital and for general corporate purposes.

(1)“Adjusted net income” and “adjusted diluted earnings per share” are each non-GAAP financial measures. Please see the schedule on p.13 of this release for a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures, and for other important disclosures.

A conference call to discuss the results will take place tomorrow morning, Thursday, October 27th, at 8:15 a.m. ET.  For a listen only connection, please call: 877-666-1952 (conference code: 1402488), or visit raymondjames.com/about/earnings_conference_call for a live audio webcast.  An audio replay of the call will be available until 5:00 p.m. ET on April 28, 2017, on the Investor Relations page of our website at www.raymondjames.com.

About Raymond James Financial, Inc.
Raymond James Financial, Inc. (NYSE: RJF) is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. The company has approximately 7,100 financial advisors serving in excess of 2.9 million client accounts in more than 2,800 locations throughout the United States, Canada and overseas. Total client assets are approximately $604 billion. Public since 1983, the firm has been listed on the New York Stock Exchange since 1986 under the symbol RJF. Additional information is available at www.raymondjames.com.

Forward Looking Statements
Certain statements made in this press release and the associated conference call may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions, demand for and pricing of our products, acquisitions and divestitures, anticipated results of litigation and regulatory developments or general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the “SEC”) from time to time, including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.

Raymond James Financial, Inc.
Selected financial highlights
(Unaudited)
Summary results of operations          
  Three months ended
  September 30,
2016
September 30,
2015
%
Change
June 30,
2016
%
Change
  ($ in thousands, except per share amounts)
Total revenues $1,491,207 $1,366,983 9% $1,386,693 8%
Net revenues $1,458,774 $1,340,983 9% $1,358,482 7%
Pre-tax income $236,422 $206,816 14% $197,765 20%
Net income $171,670 $129,186 33% $125,504 37%
           
Earnings per common share:          
Basic $1.21 $0.90 34% $0.89 36%
Diluted $1.19 $0.88 35% $0.87 37%
           
Non-GAAP measures:(1)          
Adjusted pre-tax income $255,796   $211,210  
Adjusted net income $185,060   $134,030  
Non-GAAP earnings per common share:(1)          
Non-GAAP basic $1.31   $0.95  
Non-GAAP diluted $1.28   $0.93  

 

  Twelve months ended
  September 30,
2016
September 30,
2015
%
Change
  ($ in thousands, except per share amounts)
Total revenues $5,520,344 $5,308,164 4%
Net revenues $5,403,267 $5,200,210 4%
Pre-tax income $800,643 $798,174
Net income $529,350 $502,140 5%
       
Earnings per common share:      
Basic $3.72 $3.51 6%
Diluted $3.65 $3.43 6%
       
Non-GAAP measures:(1)      
Adjusted pre-tax income $841,349  
Adjusted net income $556,263  
Non-GAAP earnings per common share:(1)      
Non-GAAP basic $3.91  
Non-GAAP diluted $3.84  

 

(1) Refer to the reconciliation of net income to adjusted net income (GAAP to non-GAAP measures), on page 13.  This computation utilizes the adjusted net income attributable to RJF non-GAAP and the average equity non-GAAP, as presented in the referenced reconciliation.  There are no comparable non-GAAP measures for the three or twelve months ended September 30, 2015.

 

Raymond James Financial, Inc.
Consolidated Statements of Income
(Unaudited)
  Three months ended
  September 30,
2016
September 30,
2015
%
Change
June 30,
2016
%
Change
  ($ in thousands, except per share amounts)
Revenues:          
     Securities commissions and fees $923,859 $874,209 6% $871,764 6%
     Investment banking 105,184 94,894 11% 72,714 45%
     Investment advisory and related administrative fees 103,752 99,226 5% 96,156 8%
     Interest 172,477 139,538 24% 163,810 5%
     Account and service fees 137,641 120,923 14% 129,334 6%
     Net trading profit 25,212 16,355 54% 29,795 (15)%
     Other 23,082 21,838 6% 23,120
          Total revenues 1,491,207 1,366,983 9% 1,386,693 8%
     Interest expense (32,433) (26,000) 25% (28,211) 15%
          Net revenues 1,458,774 1,340,983 9% 1,358,482 7%
Non-interest expenses:          
     Compensation, commissions and benefits 961,493 903,548 6% 908,899 6%
     Communications and information processing 67,409 70,382 (4)% 71,717 (6)%
     Occupancy and equipment costs 43,950 42,129 4% 40,825 8%
     Clearance and floor brokerage 12,005 10,014 20% 10,214 18%
     Business development 35,884 39,359 (9)% 36,488 (2)%
     Investment sub-advisory fees 16,064 15,034 7% 15,030 7%
     Bank loan loss provision 1,176 13,277 (91)% 3,452 (66)%
     Acquisition-related expenses 19,374 NM 13,445 44%
     Other 67,877 46,105 47% 66,962 1%
          Total non-interest expenses 1,225,232 1,139,848 7% 1,167,032 5%
Income including noncontrolling interests and before provision for income taxes 233,542 201,135 16% 191,450 22%
     Provision for income taxes 64,752 77,630 (17)% 72,261 (10)%
          Net income including noncontrolling interests 168,790 123,505 37% 119,189 42%
          Net loss attributable to noncontrolling interests (2,880) (5,681) 49% (6,315) 54%
          Net income attributable to Raymond James Financial, Inc. $171,670 $129,186 33% $125,504 37%
           
Net income per common share – basic $1.21 $0.90 34% $0.89 36%
Net income per common share – diluted $1.19 $0.88 35% $0.87 37%
Weighted-average common shares outstanding – basic 141,381 143,172   141,165  
Weighted-average common and common equivalent shares outstanding – diluted 144,487 146,279   143,952  

 

Raymond James Financial, Inc.
Consolidated Statements of Income
(Unaudited)
  Twelve months ended
  September 30,
2016
September 30,
2015
%
Change
  ($ in thousands, except per share amounts)
Revenues:      
     Securities commissions and fees $3,498,615 $3,443,038 2%
     Investment banking 304,155 323,660 (6)%
     Investment advisory and related administrative fees 392,326 385,238 2%
     Interest 640,325 543,207 18%
     Account and service fees 511,326 457,913 12%
     Net trading profit 91,591 58,512 57%
     Other 82,006 96,596 (15)%
          Total revenues 5,520,344 5,308,164 4%
     Interest expense (117,077) (107,954) 8%
          Net revenues 5,403,267 5,200,210 4%
Non-interest expenses:      
     Compensation, commissions and benefits 3,624,747 3,525,378 3%
     Communications and information processing 279,746 266,396 5%
     Occupancy and equipment costs 167,455 163,229 3%
     Clearance and floor brokerage 42,732 42,748
     Business development 148,413 158,966 (7)%
     Investment sub-advisory fees 59,930 59,569 1%
     Bank loan loss provision 28,167 23,570 20%
     Acquisition-related expenses 40,706 NM
     Other 234,000 183,642 27%
          Total non-interest expenses 4,625,896 4,423,498 5%
Income including noncontrolling interests and before provision for income taxes 777,371 776,712
     Provision for income taxes 271,293 296,034 (8)%
          Net income including noncontrolling interests 506,078 480,678 5%
          Net loss attributable to noncontrolling interests (23,272) (21,462) (8)%
          Net income attributable to Raymond James Financial, Inc. $529,350 $502,140 5%
       
Net income per common share – basic $3.72 $3.51 6%
Net income per common share – diluted $3.65 $3.43 6%
Weighted-average common shares outstanding – basic 141,773 142,548  
Weighted-average common and common equivalent shares outstanding – diluted 144,513 145,939  

 

Raymond James Financial, Inc.
Segment Results
(Unaudited)
  Three months ended
  September 30,
2016
September 30,
2015
%
Change
June 30,
2016
%
Change
  ($ in thousands)
Total revenues:          
     Private Client Group $966,031 $901,954 7% $903,223 7%
     Capital Markets 288,867 263,289 10% 256,734 13%
     Asset Management 106,387 99,827 7% 100,954 5%
     RJ Bank 140,458 110,398 27% 132,747 6%
     Other (1) 14,849 10,505 41% 17,170 (14)%
     Intersegment eliminations (25,385) (18,990)   (24,135)  
          Total revenues $1,491,207 $1,366,983 9% $1,386,693 8%
           
Net revenues:          
     Private Client Group $963,349 $899,877 7% $900,527 7%
     Capital Markets 284,668 259,855 10% 251,572 13%
     Asset Management 106,371 99,813 7% 100,940 5%
     RJ Bank 133,726 106,994 25% 126,584 6%
     Other (1) (7,313) (8,545) (14)% 28 NM
     Intersegment eliminations (22,027) (17,011)   (21,169)  
          Total net revenues $1,458,774 $1,340,983 9% $1,358,482 7%
           
Pre-tax income (loss) (excluding noncontrolling interests):          
     Private Client Group $106,281 $87,716 21% $81,911 30%
     Capital Markets 53,149 40,221 32% 32,769 62%
     Asset Management 35,162 32,605 8% 32,507 8%
     RJ Bank 97,367 65,093 50% 88,930 9%
     Other (1) (55,537) (18,819) (195)% (38,352) (45)%
          Pre-tax income (excluding noncontrolling interests) $236,422 $206,816 14% $197,765 20%

 

Raymond James Financial, Inc.
Segment Results
(Unaudited)
  Twelve months ended
  September 30,
2016
September 30,
2015
%
Change
  ($ in thousands)
Total revenues:      
     Private Client Group $3,626,718 $3,519,558 3%
     Capital Markets 1,016,375 975,064 4%
     Asset Management 404,421 392,378 3%
     RJ Bank 517,243 425,988 21%
     Other (1) 46,291 66,967 (31)%
     Intersegment eliminations (90,704) (71,791)  
          Total revenues $5,520,344 $5,308,164 4%
       
Net revenues:      
     Private Client Group $3,616,479 $3,507,806 3%
     Capital Markets 999,919 960,035 4%
     Asset Management 404,349 392,301 3%
     RJ Bank 493,966 414,295 19%
     Other (1) (31,692) (10,198) (211)%
     Intersegment eliminations (79,754) (64,029)  
          Total net revenues $5,403,267 $5,200,210 4%
       
Pre-tax income (loss) (excluding noncontrolling interests):      
     Private Client Group $340,564 $342,243
     Capital Markets 139,173 107,009 30%
     Asset Management 132,158 135,050 (2)%
     RJ Bank 337,296 278,721 21%
     Other (1) (148,548) (64,849) (129)%
          Pre-tax income (excluding noncontrolling interests) $800,643 $798,174

 

(1) The Other segment includes the results of our principal capital and private equity activities as well as certain corporate overhead costs of RJF, including the interest costs on our public debt, and the acquisition and integration costs associated with certain acquisitions.

 

Raymond James Financial, Inc.
Selected key metrics
(Unaudited)
Details of certain key revenue and expense components:          
  Three months ended
  September 30,
2016
September 30,
2015
%
Change
June 30,
2016
%
Change
  ($ in thousands)
Securities commissions and fees:          
PCG segment securities commissions and fees $792,279 $748,452 6% $739,546 7%
Capital Markets segment institutional sales commissions:          
     Equity commissions 53,102 62,712 (15)% 58,916 (10)%
     Fixed Income commissions 84,997 69,261 23% 79,306 7%
All other segments 31 65 (52)% 32 (3)%
Intersegment eliminations (6,550) (6,281)   (6,036)  
          Total securities commissions and fees $923,859 $874,209 6% $871,764 6%
           
Investment banking revenues:          
Equity:          
     Underwritings $23,754 $17,947 32% $14,373 65%
     Mergers & acquisitions and advisory fees 46,427 42,637 9% 36,068 29%
Fixed Income investment banking revenues 10,779 13,742 (22)% 10,562 2%
Tax credit funds syndication fees 23,904 20,413 17% 11,567 107%
Other 320 155 106% 144 122%
          Total investment banking revenues $105,184 $94,894 11% $72,714 45%
           
Other revenues:          
Realized/unrealized gain attributable to private equity investments $5,851 $12,008 (51)% $12,740 (54)%
All other revenues 17,231 9,830 75% 10,380 66%
          Total other revenues $23,082 $21,838 6% $23,120
           
Other expenses:          
Losses of real estate partnerships held by consolidated variable interest entities (1) $9,945 $8,636 15% $14,000 (29)%
All other expenses 57,932 37,469 55% 52,962 9%
          Total other expenses $67,877 $46,105 47% $66,962 1%
           
Net (loss) income attributable to noncontrolling interests:          
Private equity investments $6,892 $3,021 128% $7,369 6%
Consolidation of low-income housing tax credit funds (11,263) (10,173) (11)% (14,527) 22%
Other 1,491 1,471 1% 843 77%
          Total net loss attributable to noncontrolling interests $(2,880) $(5,681) 49% $(6,315) 54%

 

Raymond James Financial, Inc.
Selected key metrics
(Unaudited)
Details of certain key revenue and expense components:      
  Twelve months ended
  September 30,
2016
September 30,
2015
%
Change
  ($ in thousands)
Securities commissions and fees:      
PCG segment securities commissions and fees $2,978,406 $2,936,502 1%
Capital Markets segment institutional sales commissions:      
     Equity commissions 228,346 247,414 (8)%
     Fixed Income commissions 316,144 283,828 11%
All other segments 128 285 (55)%
Intersegment eliminations (24,409) (24,991)  
          Total securities commissions and fees $3,498,615 $3,443,038 2%
       
Investment banking revenues:      
Equity:      
     Underwritings $54,492 $74,229 (27)%
     Mergers & acquisitions and advisory fees 148,503 162,270 (8)%
Fixed Income investment banking revenues 41,024 42,149 (3)%
Tax credit funds syndication fees 59,424 44,608 33%
Other 712 404 76%
          Total investment banking revenues $304,155 $323,660 (6)%
       
Other revenues:      
Realized/unrealized gain attributable to private equity investments $23,735 $47,654 (50)%
Realized gain on sale or redemptions of auction rate securities 269 11,067(2) (98)%
All other revenues 58,002 37,875 53%
          Total other revenues $82,006 $96,596 (15)%
       
Other expenses:      
Losses of real estate partnerships held by consolidated variable interest entities (1) $42,342 $38,319 10%
All other expenses 191,658 145,323 32%
          Total other expenses $234,000 $183,642 27%
       
Net (loss) income attributable to noncontrolling interests:      
Private equity investments $15,701 $14,100 11%
Consolidation of low-income housing tax credit funds (44,439) (41,681) (7)%
Other 5,466 6,119 (11)%
          Total net loss attributable to noncontrolling interests $(23,272) $(21,462) (8)%

 

(1) Nearly all of these losses are attributable to noncontrolling interests. After adjusting for the portion attributable to noncontrolling interests, RJF’s share of these losses is insignificant in all periods presented.

(2) The total for the twelve months ended September 30, 2015 includes an $11 million realized gain on the sale of Jefferson County, Alabama Limited Obligation School Warrants auction rate securities.

 

Raymond James Financial, Inc.
Selected key metrics
(Unaudited)
Selected key financial metrics:      
  As of
  September 30,
2016
September 30,
2015
June 30,
2016
Total assets $31.6 bil. (1) $26.5 bil. $28.8 bil.
Shareholders’ equity (attributable to RJF) $4,914 mil. $4,522 mil. $4,747 mil.
Book value per share $34.72 $31.68 $33.58
Return on equity - quarter (annualized) 14.2% 11.5% 10.7%
Return on equity - quarter computed based on non-GAAP measures (annualized) 15.3% (2) 11.4% (2)
Return on equity - year to date (annualized) 11.3% 11.5% 10.3%
Return on equity - year to date computed based on non-GAAP measures (annualized) 11.8% (2) 10.7% (2)
Common equity tier 1 capital ratio 20.5% (1) 22.1% 21.3%
Tier 1 capital ratio 20.5% (1) 22.1% 21.3%
Total capital ratio 21.5% (1) 23.1% 22.3%
Tier 1 leverage ratio 15.0% (1) 16.1% 15.6%
Pre-tax margin on net revenues - quarter 16.2% 15.4% 14.6%
Pre-tax margin on net revenues - quarter - non-GAAP 17.5% (3) 15.6% (3)
Pre-tax margin on net revenues - year to date 14.8% 15.3% 14.3%
Pre-tax margin on net revenues - year to date - non-GAAP 15.6% (3) 14.8% (3)
Effective tax rate - quarter 27.4% 37.5% 36.5%
Effective tax rate - year to date 33.9% 37.1% 36.6%
       
Private Client Group financial advisors:      
  As of
  September 30,
2016
September 30,
2015
June 30,
2016
Employees 3,098 (4) 2,738 2,821
Independent contractors 4,048 3,858 4,013
     Total advisors 7,146 6,596 6,834

 

Selected client asset metrics:          
  As of
  September 30,
2016
September 30,
2015
%
Change
June 30,
2016
%
Change
  ($ in billions)
Client assets under administration $604.4 (5) $480.0 26% $534.5 13%
Private Client Group assets under administration $574.1 $453.3 27% $506.0 13%
Private Client Group assets in fee-based accounts $231.0 $179.4 29% $206.7 12%
Financial assets under management $77.0 (6) $65.2 18% $71.7 7%
Secured client lending (7) $4.3 $3.4 26% $3.5 23%

 

(1) Estimated.

(2) Refer to the reconciliation of net income to adjusted net income (GAAP to non-GAAP measures), on page 13.  This computation utilizes the adjusted net income attributable to RJF non-GAAP and the average equity non-GAAP, as presented in the referenced reconciliation.

(3) Refer to the reconciliation of net income to adjusted net income (GAAP to non-GAAP measures), on page 13.  This computation utilizes the adjusted pre-tax income non-GAAP, as presented in the referenced reconciliation.

(4) Includes 265 financial advisors from Alex. Brown and 3Macs, as of their respective acquisition closing dates.

(5) Includes approximately $50 billion in client assets under administration from Alex. Brown and 3Macs, as of their respective acquisition closing dates.

(6) Includes approximately $2 billion in assets under management from Alex. Brown and 3Macs, as of their respective acquisition closing dates.

(7) Includes client margin balances held by our broker-dealer subsidiaries and securities based loans available through RJ Bank.  The September 2016 balance includes approximately $700 million in margin loans from Alex. Brown and 3Macs as of their respective acquisition closing dates.

Raymond James Financial, Inc.
Reconciliation of net income to adjusted net income (GAAP to non-GAAP measures)
(Unaudited)

We believe that the non-GAAP measures provide useful information by excluding material items that may not be indicative of our core operating results and that the GAAP and the non-GAAP measures should be considered together.  The non-GAAP adjustments include acquisition-related expenses (associated with our June 1st acquisition of Mummert & Company Corporate Finance GmbH, August 31st acquisition of MacDougall, MacDougall & MacTier, Inc., and September 6th acquisition of the US Private Client Services unit of Deutsche Bank Wealth Management) net of applicable taxes.  There are no non-GAAP adjustments to net income in the three months, or twelve months, ended September 30, 2015.  See the footnotes below for further explanation of each item.

The following table provides a reconciliation of the GAAP measures to the non-GAAP measures for the periods that include non-GAAP adjustments:

 

  Three months ended Twelve months ended
  September 30,
2016
June 30,
2016
September 30,
2016
  ($ in thousands, except per share amounts)
Net income attributable to RJF - GAAP $171,670 $125,504 $529,350
       
Non-GAAP adjustments:      
     Acquisition-related expenses (1) 19,374 13,445 40,706
     Tax effect of non-GAAP adjustments (2) (5,984) (4,919) (13,793)
Non-GAAP adjustments, net of tax 13,390 $8,526 26,913
Adjusted net income attributable to RJF - non-GAAP $185,060 $134,030 $556,263
       
Non-GAAP earnings per common share:      
     Non-GAAP basic $1.31 $0.95 $3.91
     Non-GAAP diluted $1.28 $0.93 $3.84
       
Average equity - GAAP (3) $4,830,777 $4,691,374 $4,693,138
Average equity - non-GAAP (3) (4) $4,850,995 $4,700,634 $4,702,461
       
Return on equity for the quarter (annualized) 14.2% 10.7% N/A
Return on equity for the quarter - non-GAAP (annualized) (5) 15.3% 11.4% N/A
       
Return on equity - year to date N/A N/A 11.3%
Return on equity year to date - non-GAAP (5) N/A N/A 11.8%
       
Pre-tax income attributable to RJF - GAAP $236,422 $197,765 $800,643
Total pre-tax non-GAAP adjustments (as detailed above) 19,374 13,445 40,706
Adjusted pre-tax income attributable to RJF non-GAAP $255,796 $211,210 $841,349
       
Pre-tax margin on net revenues - GAAP 16.2% 14.6% 14.8%
Pre-tax margin on net revenues non-GAAP (6) 17.5% 15.6% 15.6%

 

(1) The non-GAAP adjustment adds back to pre-tax income acquisition-related expenses incurred during each respective period associated with our acquisitions described above.

(2) The non-GAAP adjustment reduces net income for the income tax effect of all the pre-tax non-GAAP adjustments, utilizing the year-to-date effective tax rate in such period to determine the current tax expense.

(3) For the quarter, computed by adding the total equity attributable to RJF as of the date indicated plus the prior quarter-end total, divided by two. For the year-to-date period, computed by adding the total equity attributable to RJF as of each quarter-end date during the indicated year-to-date period, plus the beginning of the year total, divided by five.

(4) The calculation of non-GAAP average equity includes the impact on equity of the non-GAAP adjustments described in the table above, as applicable for each respective period.

(5) Computed by utilizing the adjusted net income attributable to RJF non-GAAP and the average equity non-GAAP, for each respective period. See footnotes (3) and (4) above for the calculation of average equity non-GAAP.

(6) Computed by dividing the adjusted pre-tax income attributable to RJF by net revenues (GAAP basis), for each respective period.

 

Raymond James Bank
Selected financial highlights
(Unaudited)
Selected operating data:          
  Three months ended
  September 30,
2016
September 30,
2015
%
Change
June 30,
2016
%
Change
  ($ in thousands)
Net interest income $127,518 $104,945 22% $123,687 3%
Net revenues $133,726 $106,994 25% $126,584 6%
Bank loan loss provision $1,176 $13,277 (91)% $3,452 (66)%
Pre-tax income $97,367 $65,093 50% $88,930 9%
Net charge-offs $488 $995 (51)% $682 (28)%
Net interest margin (% earning assets) 3.04% 3.03% 3.10% (2)%

 

  Twelve months ended
  September 30,
2016
September 30,
2015
%
Change
  ($ in thousands)
Net interest income $478,690 $403,578 19%
Net revenues $493,966 $414,295 19%
Bank loan loss provision $28,167 $23,570 20%
Pre-tax income $337,296 $278,721 21%
Net charge-offs (recoveries) $3,009 $(2,757) NM
Net interest margin (% earning assets) 3.04% 3.07% (1)%

 

RJ Bank Balance Sheet data:      
  As of
  September 30,
2016
September 30,
2015
June 30,
2016
  ($ in thousands)
Total assets (1) $17,012,686 $14,665,433 $16,610,235
Total equity $1,658,663 $1,519,263 $1,615,005
Total loans, net $15,210,735 $12,988,021 $14,799,516
Total deposits (1) $14,615,342 $12,377,599 $14,240,934
Available for Sale (AFS) securities, at fair value $734,233 $374,966 $418,745
Net unrealized loss on AFS securities, before tax $(1,110) $(3,288) $(1,592)
Common equity tier 1 capital ratio 12.7% (2) 13.0% 12.7%
Tier 1 capital ratio 12.7% (2) 13.0% 12.7%
Total capital ratio 14.0% (2) 14.3% 14.0%
Tier 1 leverage ratio 9.9% (2) 10.9% 10.1%
Commercial and industrial loans (3) $7,470,373 $6,928,018 $7,319,194
Commercial Real Estate (CRE) and CRE construction loans (3) $2,676,789 $2,216,510 $2,631,160
Residential mortgage loans (3) $2,441,569 $1,962,654 $2,351,431
Securities based loans (3) $1,904,827 $1,481,464 $1,827,446
Tax-exempt loans (3) $740,944 $484,537 $701,339
Loans held for sale (3) (4) $202,967 $108,872 $190,402

 

Raymond James Bank
Selected financial highlights
(Unaudited)
Credit metrics:      
  As of
  September 30,
2016
September 30,
2015
June 30,
2016
  ($ in thousands)
Allowance for loan losses $197,378 $172,257 $196,882
Allowance for loan losses (as % of loans) 1.30% 1.32% 1.33%
Nonperforming loans (5) $81,207 $52,619 $81,340
Other real estate owned $4,497 $4,631 $4,760
Total nonperforming assets $85,704 $57,250 $86,100
Nonperforming assets (as % of total assets) 0.50% 0.39% 0.52%
Total criticized loans (6) $299,480 $282,499 $275,345
1-4 family residential mortgage loans over 30 days past due (as a % 1-4 family residential loans) 1.21% 1.69% 1.23%

 

(1) Includes affiliate deposits.


(2) Estimated.


(3) Outstanding loan balances are shown gross of unearned income and deferred expenses.


(4) Primarily comprised of the guaranteed portions of Small Business Administration section 7(a) loans purchased from other financial institutions.


(5) Nonperforming loans includes 90+ days past due plus nonaccrual loans.


(6) Represents the loan balance for all loans in the Special Mention, Substandard, Doubtful and Loss classifications as utilized by the banking regulators. In accordance with its accounting policy, RJ Bank does not have any loan balances within the Loss classification as loans or any portion thereof, which are considered to be uncollectible, are charged-off prior to assignment to this classification.