- Record client assets under administration of $1.45 trillion and record Private Client Group assets in fee-based accounts of $798.8 billion, up 18% and 20%, respectively, over March 2023
- Record quarterly net revenues of $3.12 billion, up 9% over the prior year’s fiscal second quarter and 3% over the preceding quarter
- Quarterly net income available to common shareholders of $474 million, or $2.22 per diluted share; quarterly adjusted net income available to common shareholders of $494 million(1), or $2.31 per diluted share(1)
- Total clients’ domestic cash sweep and Enhanced Savings Program (“ESP”) balances of $58.2 billion, up 11% over March 2023 and slightly above December 2023
- Record net revenues of $6.13 billion and record net income available to common shareholders of $971 million for the first half of fiscal 2024, up 8% and 4%, respectively, over the first half of fiscal 2023
- Annualized return on common equity of 18.3% and annualized adjusted return on tangible common equity of 22.8%(1) for the first half of fiscal 2024
Raymond James Financial, Inc. (NYSE: RJF) today reported net revenues of $3.12 billion and net income available to common shareholders of $474 million, or $2.22 per diluted share, for the fiscal second quarter ended March 31, 2024. Excluding $26 million of expenses related to acquisitions, quarterly adjusted net income available to common shareholders was $494 million(1), or $2.31 per diluted share(1).
Record quarterly net revenues increased 9% over the prior year’s fiscal second quarter and 3% over the preceding quarter, primarily driven by higher asset management and related administrative fees which grew to $1.52 billion. Quarterly net income available to common shareholders increased 12% over the prior year’s fiscal second quarter, largely due to higher net revenues along with a legal and regulatory net reserve release of $32 million in the quarter. Compared to the preceding quarter, net income available to common shareholders decreased 5%, largely due to a reset of payroll taxes and salary increases in the fiscal second quarter.
For the first six months of the fiscal year, record net revenues of $6.13 billion increased 8%, record earnings per diluted share of $4.54 increased 7%, and record adjusted earnings per diluted share of $4.71(1) increased 9% over the first half of fiscal 2023. The Private Client Group segment generated record net revenues and pre-tax income, and the Asset Management segment produced record net revenues, during the first six months of the fiscal year. For this period, annualized return on common equity was 18.3% and annualized adjusted return on tangible common equity was 22.8%(1).
“We generated record quarterly net revenues of $3.12 billion in the fiscal second quarter fueled by robust year-over-year growth in client assets under administration of 18%, reflecting market growth and solid financial advisor retention and recruiting in the Private Client Group,” said Chair and CEO Paul Reilly. “Entering the back half of the fiscal year, we are well positioned with record client assets and ample capital to support business growth.”
Segment Results
Private Client Group
- Record quarterly net revenues of $2.34 billion, up 9% over the prior year’s fiscal second quarter and 5% over the preceding quarter
- Quarterly pre-tax income of $444 million, up 1% over both the prior year’s fiscal second quarter and the preceding quarter
- Record Private Client Group assets under administration of $1.39 trillion, up 19% over March 2023 and 6% over December 2023
- Record Private Client Group assets in fee-based accounts of $798.8 billion, up 20% over March 2023 and 7% over December 2023
- Domestic Private Client Group net new assets(2) of $9.6 billion for the fiscal second quarter; Domestic PCG net new assets(2) of $31.2 billion, or annualized growth from beginning of period assets of 5.7%, for the first half of the fiscal year
- Total clients’ domestic cash sweep and ESP balances of $58.2 billion, up 11% over March 2023 and up slightly over December 2023
Record quarterly net revenues grew 9% year-over-year and 5% sequentially predominantly driven by higher asset management and related administrative fees, reflecting growth of assets in fee-based accounts during the year, along with higher brokerage revenues.
“Our advisor and client-focused culture and robust technology capabilities continue to drive strong advisor recruiting activity,” said Reilly. “Record PCG net revenues reflected 19% annual growth of client assets, driven by rising equity markets and net new assets(2).”
Capital Markets
- Quarterly net revenues of $321 million, up 6% over the prior year’s fiscal second quarter and down 5% compared to the preceding quarter
- Quarterly pre-tax loss of $17 million
- Quarterly investment banking revenues of $171 million, up 18% over the prior year’s fiscal second quarter and 1% over the preceding quarter
Quarterly net revenues grew 6% over the prior-year quarter primarily the result of higher investment banking revenues. Sequentially, quarterly net revenues declined 5%, primarily driven by lower fixed income brokerage revenues and M&A and advisory revenues, partially offset by higher debt underwriting revenues.
“Investment banking revenues increased slightly from the preceding quarter driven primarily by higher debt underwriting revenues,” said Reilly. “Our M&A pipeline and new business activity remain healthy; however, the timing of closings remains difficult to predict.”
Asset Management
- Record quarterly net revenues of $252 million, up 17% over the prior year’s fiscal second quarter and 7% over the preceding quarter
- Quarterly pre-tax income of $100 million, up 22% over the prior year’s fiscal second quarter and 8% over the preceding quarter
- Record financial assets under management of $227 billion, up 17% over March 2023 and 5% over December 2023
Record quarterly net revenues grew 17% year-over-year and 7% sequentially 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 $424 million, down 21% compared to the prior year’s fiscal second quarter and 4% compared to the preceding quarter
- Quarterly pre-tax income of $75 million, down 18% compared to both the prior year’s fiscal second quarter and the preceding quarter
- Bank segment net interest margin (“NIM”) of 2.66% for the quarter, down 97 basis points compared to the prior year’s fiscal second quarter and 8 basis points compared to the preceding quarter
- Net loans of $44.1 billion, up 1% over March 2023 and down slightly compared to December 2023
Quarterly net revenues declined 21% year-over-year and 4% sequentially due to lower NIM. The Bank segment’s NIM decreased 8 basis points during the quarter to 2.66%, 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.
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 1.21%, up from 1.06% in the preceding quarter. Bank loan allowance for credit losses as a percent of total loans held for investment was 1.06%, and bank loan allowance for credit losses on corporate loans as a percent of corporate loans held for investment was 2.05%.
Other
The effective tax rate for the quarter was 21.8%, reflecting the favorable impact of nontaxable corporate owned life insurance gains in the quarter.
During the fiscal second quarter, the firm repurchased 1.70 million shares of common stock for $207 million at an average price of $122 per share. In April, the firm repurchased an additional $43 million of shares for a total of $400 million to date this fiscal year leaving approximately $1.14 billion available under the Board’s approved common stock repurchase authorization. At the end of the quarter, the total capital ratio was 23.3%(3) and the tier 1 leverage ratio was 12.3%(3), both well above regulatory requirements.
A conference call to discuss the results will take place today, Wednesday, April 24, at 5:00 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 July 24, 2024. For a connection to the conference call, please dial: 800-715-9871 (conference code: 3778589).
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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 8,800 financial advisors. Total client assets are $1.45 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 and inflation), 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 “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 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.
