- Record client assets under administration of $1.37 trillion
and record financial assets under management of $215 billion, up
17% and 16%, respectively, over December 2022
- Domestic Private Client Group net new assets(1) of $21.6
billion for the fiscal first quarter, annualized growth from
beginning of period assets of 7.8%
- Quarterly net revenues of $3.01 billion, up 8% over the
prior year’s fiscal first quarter and down 1% compared to the
preceding quarter
- Quarterly net income available to common shareholders of
$497 million, or record $2.32 per diluted share; record quarterly
adjusted net income available to common shareholders of $514
million(2), or record $2.40 per diluted share(2)
- Annualized return on common equity of 19.1% and annualized
adjusted return on tangible common equity of 23.8%(2) for fiscal
first quarter
- Total clients’ domestic cash sweep and Enhanced Savings
Program (“ESP”) balances of $58.0 billion, down 4% compared to
December 2022 and up 3% over September 2023
Raymond James Financial, Inc. (NYSE: RJF) today reported net
revenues of $3.01 billion and net income available to common
shareholders of $497 million, or $2.32 per diluted share, for the
fiscal first quarter ended December 31, 2023. Excluding $23 million
of expenses related to acquisitions, quarterly adjusted net income
available to common shareholders was record $514 million(2), or
$2.40 per diluted share(2).
Quarterly net revenues increased 8% over the prior year’s fiscal
first quarter primarily driven by higher asset management and
related administrative fees. Despite higher revenues, quarterly net
income available to common shareholders declined 2% compared to the
prior-year quarter largely due to the receipt of a $32 million
insurance settlement in the year-ago period. Sequentially,
quarterly net revenues decreased 1% primarily due to lower asset
management and related administrative fees and investment banking
revenues which were partially offset by higher brokerage revenues.
Quarterly net income available to common shareholders increased 15%
over the preceding quarter mainly resulting from lower legal and
regulatory reserves and a lower bank loan loss provision for credit
losses. Annualized return on common equity was 19.1% and annualized
adjusted return on tangible common equity was 23.8%(2).
“High satisfaction between clients and advisors, along with
solid financial advisor retention and recruiting in the Private
Client Group segment drove record quarterly earnings per share and
strong net new asset(1) annualized growth of 7.8% in the quarter,”
said Chair and CEO Paul Reilly. “We are well positioned entering
the fiscal second quarter with record client assets and robust
financial advisor recruiting activity.”
Segment ResultsPrivate Client
Group
- Domestic Private Client Group net new assets(1) of $21.6
billion for the fiscal first quarter, annualized growth from
beginning of period assets of 7.8%
- Quarterly net revenues of $2.23 billion, up 8% over the
prior year’s fiscal first quarter and down 2% compared to the
preceding quarter
- Quarterly pre-tax income of $439 million, up 1% over the
prior year’s fiscal first quarter and down 8% compared to the
preceding quarter
- Record Private Client Group assets under administration of
$1.31 trillion and record Private Client Group assets in fee-based
accounts of $746.6 billion, both up 18% over December 2022 and 9%
over September 2023
- Total clients’ domestic cash sweep and ESP balances of $58.0
billion, down 4% compared to December 2022 and up 3% over September
2023
Year-over-year, quarterly net revenues and pre-tax income grew
8% and 1%, respectively, predominantly driven by higher asset
management and related administrative fees, reflecting growth of
assets in fee-based accounts during the year. Sequentially,
quarterly net revenues declined 2% primarily resulting from lower
asset management and related administrative fees due to lower
balances at the beginning of the current quarter compared to the
preceding quarter.
Total clients’ domestic cash sweep and ESP balances of $58
billion increased 3% over September 2023, driven by higher ESP and
cash sweep balances. The average yield on Raymond James Bank
Deposit Program third-party bank balances increased 6 basis points
over the preceding quarter to 3.66% in the fiscal first
quarter.
“Advisor recruiting and retention started the fiscal year off
strong with domestic Private Client Group net new asset(1)
annualized growth of 7.8% in the quarter,” said Reilly. “Our robust
technology capabilities, client-first values and our
long-established multiple affiliation model continue to fuel the
strength and quality of the recruiting pipeline.”
Capital Markets
- Quarterly net revenues of $338 million, up 15% over the
prior year’s fiscal first quarter and down 1% compared to the
preceding quarter
- Quarterly pre-tax income of $3 million
- Quarterly investment banking revenues of $170 million, up
28% over the prior year’s fiscal first quarter and down 12%
compared to the preceding quarter
Quarterly net revenues grew 15% over the prior-year quarter
primarily the result of higher investment banking revenues.
Sequentially, quarterly net revenues declined 1% driven by lower
M&A and advisory revenues and affordable housing investments
business revenues, largely offset by higher fixed income brokerage
revenues.
“Fixed income brokerage revenues experienced strong quarterly
growth due to higher client activity as well as a more favorable
trading environment,” said Reilly. “Investment banking activity
industry-wide appears to be on a gradual recovery and our pipeline
and new business activity remain healthy.”
Asset Management
- Quarterly net revenues of $235 million, up 14% over the
prior year’s fiscal first quarter and flat compared to the
preceding quarter
- Quarterly pre-tax income of $93 million, up 16% over the
prior year’s fiscal first quarter and down 7% compared to the
preceding quarter
- Record financial assets under management of $215 billion, up
16% over December 2022 and 9% over September 2023
The increase in quarterly net revenues and pre-tax income over
the prior year’s fiscal first quarter was largely attributable to
higher financial assets under management due to higher equity
markets and net inflows into fee-based accounts in the Private
Client Group.
Bank
- Quarterly net revenues of $441 million, down 13% compared to
the prior year’s fiscal first quarter and 2% compared to the
preceding quarter
- Quarterly pre-tax income of $92 million, down 32% compared
to the prior year’s fiscal first quarter and up 18% over the
preceding quarter
- Bank segment net interest margin (“NIM”) of 2.74% for the
quarter, down 62 basis points compared to the prior year’s fiscal
first quarter and 13 basis points compared to the preceding
quarter
- Record net loans of $44.2 billion, up slightly over December
2022 and 1% over September 2023
Quarterly net revenues declined 13% year-over-year and 2%
sequentially due to lower NIM. The Bank segment’s NIM decreased 13
basis points during the quarter to 2.74%, largely the result of
increased interest expense from higher-cost funding as ESP balances
replaced a portion of lower-cost Raymond James Bank Deposit Program
client cash sweep balances, which were swept to third-party banks.
Quarterly results include an FDIC special assessment of $9
million.
The credit quality of the loan portfolio is solid, with
criticized loans as a percent of total loans held for investment
ending the quarter at 1.09%. Bank loan allowance for credit losses
as a percent of total loans held for investment was 1.08%, and bank
loan allowance for credit losses on corporate loans as a percent of
corporate loans held for investment was 2.06%.
Other
Other segment pre-tax income increased sequentially primarily
due to a large provision for litigation and regulatory matters in
the preceding quarter. The effective tax rate for the quarter was
21.0%, reflecting a tax benefit recognized for share-based
compensation that vested during the period.
In November, the Board of Directors increased the quarterly cash
dividend on common shares 7% to $0.45 per share and authorized
common stock repurchases of up to $1.5 billion, replacing the
previous authorization. During the fiscal first quarter, the firm
repurchased 1.41 million shares of common stock for $150 million at
an average price of $107 per share. As of January 24, 2024,
approximately $1.39 billion remained available under the Board’s
approved common stock repurchase authorization. At the end of the
quarter, the total capital ratio was 23.0%(3) and the tier 1
leverage ratio was 12.1%(3), both well above regulatory
requirements.
A conference call to discuss the results will take place today,
Wednesday, January 24, at 5 p.m. ET. The live audio webcast, and
the presentation which management will review on the call, will be
available at
www.raymondjames.com/investor-relations/financial-information/quarterly-earnings.
A replay of the call will be available at the same location until
April 24, 2024. For a connection to the conference call, please
dial: 877-400-4013 (conference code: 3778589).
Click here to view full earnings results, earnings
supplement, and earnings presentation.
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 8,700 financial advisors. Total client
assets are $1.37 trillion. Public since 1983, the firm is listed on
the New York Stock Exchange under the symbol RJF. Additional
information is available at www.raymondjames.com.
Forward-Looking Statements
Certain statements made in this press release 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 (including changes in interest
rates), demand for and pricing of our products (including cash
sweep and deposit offerings), acquisitions, anticipated results of
litigation, regulatory developments, and general economic
conditions. In addition, future or conditional verbs such as “may,”
“will,” “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 and Current Reports on Form 8-K, 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.
Media Contact: Steve Hollister
Raymond James
727.567.2824
Investor Contact: Kristina Waugh
Raymond James
727.567.7654
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