- Domestic Private Client Group net new asset(1) growth of 11% over the prior 12 months and 14% annualized for the fiscal first quarter
- Record quarterly net revenues of $2.78 billion, up 25% over the prior year’s fiscal first quarter and 3% over the preceding quarter
- Record quarterly net income of $446 million, or $2.10 per diluted share, and quarterly adjusted net income of $451 million(2), or $2.12 per diluted share(2)
- Records for client assets under administration of $1.26 trillion, financial assets under management of $203.2 billion, clients’ domestic cash sweep balances of $73.5 billion, and net loans at Raymond James Bank of $26.1 billion
- Record quarterly investment banking revenues of $425 million, driven by record merger & acquisition and advisory (M&A) and record equity underwriting results
- Annualized return on equity for the quarter of 21.2% and annualized adjusted return on tangible common equity for the quarter of 23.7%(2)
Raymond James Financial, Inc. (NYSE: RJF) today reported net revenues of $2.78 billion and net income of $446 million, or $2.10 per diluted share, for the fiscal first quarter ended December 31, 2021. Excluding $6 million of acquisition-related expenses, quarterly adjusted net income was $451 million(2), or $2.12 per diluted share(2).
“Fiscal 2022 started off strong with record results this quarter, including net income growth of 43% over the fiscal first quarter of 2021, driven by record asset management and related administrative fees and record investment banking revenues,” said Chairman and CEO Paul Reilly. “Furthermore, we are well positioned entering the fiscal second quarter, with record client assets under administration of $1.26 trillion, record financial assets under management of $203.2 billion, record net loans at Raymond James Bank of $26.1 billion, and strong activity levels for both financial advisor recruiting and investment banking. We also ended the quarter with record clients’ domestic cash sweep balances which should bode well with the anticipated rise in short-term interest rates.”
Segment Results
Private Client Group
- Record quarterly net revenues of $1.84 billion, up 25% over the prior year’s fiscal first quarter and 2% over the preceding quarter
- Quarterly pre-tax income of $195 million, up 39% over the prior year’s fiscal first quarter and down 12% compared to the preceding quarter
- Record Private Client Group assets under administration of $1.20 trillion, up 23% over December 2020 and 8% over September 2021
- Record Private Client Group assets in fee-based accounts of $677.8 billion, up 27% over December 2020 and 8% over September 2021
- Private Client Group financial advisors of 8,464, a net increase of 231 over December 2020 and a net decrease of 18 compared to September 2021
- Record clients’ domestic cash sweep balances of $73.5 billion, up 19% over December 2020 and 10% over September 2021
Record quarterly revenues grew 25% over the prior-year period and 2% over the preceding quarter, predominantly driven by higher asset management and related administrative fees, reflecting record assets in fee-based accounts. While financial advisor retention and recruiting remain strong across all of our affiliation options, the total number of Private Client Group financial advisors declined modestly compared to September 2021, largely due to elevated retirements typical at calendar year-end.
“Our consistent success retaining and recruiting financial advisors across all of our affiliation options is a testament to our client-focused culture and award-winning technology platform,” said Reilly. “On January 21, we closed the acquisition of U.K.-based Charles Stanley Group. Adding approximately $36 billion in client assets, together, Raymond James Investment Services and Charles Stanley serve clients in the U.K. with approximately $57 billion in client assets. We are pleased to welcome Charles Stanley to the Raymond James family.”
Capital Markets
- Record quarterly net revenues of $614 million, up 36% over the prior year’s fiscal first quarter and 11% over the preceding quarter
- Record quarterly pre-tax income of $201 million, up 56% over the prior year’s fiscal first quarter and 10% over the preceding quarter
- Record quarterly investment banking revenues of $412 million, up 62% over the prior year’s fiscal first quarter and 18% over the preceding quarter
- Record M&A revenues of $271 million, up 82% over the prior year’s fiscal first quarter and 26% over the preceding quarter
Record investment banking revenues were driven by record M&A and record equity underwriting revenues. Fixed income brokerage revenues remained solid during the quarter.
“The Capital Markets segment generated another quarter of record results driven by record M&A and record equity underwriting revenues,” said Reilly. “Investment banking pipelines remain strong and conditions are conducive for continued strength in fixed income brokerage activity.”
Asset Management
- Quarterly net revenues of $236 million, up 21% over the prior year’s fiscal first quarter and down 1% compared to the preceding quarter
- Quarterly pre-tax income of $107 million, up 29% over the prior year’s fiscal first quarter and down 6% compared to the preceding quarter
- Record financial assets under management of $203.2 billion, up 20% over December 2020 and 6% over September 2021
The growth of revenues and pre-tax income over the prior year’s fiscal first quarter was primarily attributable to higher financial assets under management, driven by equity market appreciation and net inflows into fee-based accounts in the Private Client Group.
Raymond James Bank
- Quarterly net revenues of $183 million, up 10% over the prior year’s fiscal first quarter and 4% over the preceding quarter
- Quarterly pre-tax income of $102 million, up 44% over the prior year’s fiscal first quarter and 26% over the preceding quarter
- Record net loans of $26.1 billion, up 19% over December 2020 and 5% over September 2021
- Net interest margin (NIM) of 1.92% for the quarter, down 10 basis points compared to the prior year’s fiscal first quarter and flat compared to the preceding quarter
Net revenue growth was largely due to higher asset balances. Net loans grew 19% year-over-year and 5% sequentially, driven by higher securities-based loans to Private Client Group clients and growth in corporate loans. Pre-tax income growth was due to the aforementioned revenue growth and a bank loan loss release in the current quarter compared to the provision for credit losses in the comparative periods. The bank loan allowance for credit losses as a percent of loans held for investment ended the quarter at 1.18%, down from 1.71% at December 2020 and 1.27% at September 2021.
Other
The Other segment included $5 million of valuation gains on private equity investments during the quarter, of which $1 million is attributable to noncontrolling interests. The effective tax rate decreased during the quarter, primarily due to a large tax benefit recognized for share-based compensation that vested during the period.
In December, the Board of Directors increased the quarterly dividend 31% to $0.34 per share and authorized share repurchases of up to $1 billion, which replaced the previous authorization. As of January 25, 2022, $1 billion remained available under the authorization. At the end of the quarter, the total capital ratio was 26.9%(3) and the tier 1 leverage ratio was 12.1%(3), both well above the regulatory requirements.
A conference call to discuss the results will take place tomorrow morning, Thursday, January 27, at 8:15 a.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. For a listen-only connection to the conference call, please dial: 800-732-5617 (conference code: 22015077). An audio replay of the call will be available at the same location until April 29, 2022.
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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 8,500 financial advisors. Total client assets are $1.26 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, demand for and pricing of our products, acquisitions (including our acquisition of Charles Stanley Group PLC completed on January 21, 2022 as well as our proposed acquisition of TriState Capital Holdings, Inc.), anticipated results of litigation, regulatory developments, and general economic conditions. In addition, any other statement that necessarily depends on future events, is 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.
