- Domestic Private Client Group net new asset(1) growth of 11%
over the prior 12 months and nearly 9% annualized for the fiscal
second quarter
- Quarterly net revenues of $2.67 billion, up 13% over the
prior year’s fiscal second quarter and down 4% compared to the
record set in the preceding quarter
- Quarterly net income of $323 million, or $1.52 per diluted
share, and quarterly adjusted net income of $331 million(2), or
$1.55 per diluted share(2)
- Client assets under administration of $1.26 trillion(3),
record Private Client Group (PCG) assets in fee-based accounts of
$678.0 billion(3), and financial assets under management of $193.7
billion
- Record PCG financial advisors of 8,730(3), net increases of
403 over March 2021 and 266 over December 2021
- Record clients’ domestic cash sweep balances of $76.5
billion and record net loans at Raymond James Bank of $27.9
billion
- Annualized return on equity for the first half of fiscal
2022 of 18.1% and annualized adjusted return on tangible common
equity for the first half of fiscal 2022 of 20.6%(2)
Raymond James Financial, Inc. (NYSE: RJF) today reported net
revenues of $2.67 billion and net income of $323 million, or $1.52
per diluted share, for the fiscal second quarter ended March 31,
2022. Excluding $11 million of acquisition-related expenses,
quarterly adjusted net income was $331 million(2), or $1.55 per
diluted share(2).
Quarterly net revenues grew 13% over the prior year’s fiscal
second quarter primarily driven by higher asset management and
related administrative fees, reflecting the strong year-over-year
growth in Private Client Group assets in fee-based accounts and net
interest income. The sequential decline in quarterly net revenues
was largely attributable to lower investment banking revenues,
while the quarterly decline in net income also reflected a bank
loan provision for credit losses during the current quarter
compared to a benefit in the preceding quarter, and a higher
effective tax rate. The bank loan provision for credit losses in
the current quarter was primarily associated with strong loan
growth during the quarter.
For the first six months of the fiscal year, record net revenues
of $5.45 billion increased 19%, record earnings per diluted share
of $3.61 increased 14%, and adjusted earnings per diluted share of
$3.67(2) increased 16% over the first half of fiscal 2021. The
Private Client Group, Capital Markets and Asset Management segments
generated record net revenues and pre-tax income during the first
six months of the fiscal year.
“I am pleased with our results for the fiscal second quarter and
the first half of the fiscal year, especially given the challenging
market conditions. Financial advisor retention and recruiting in
the Private Client Group segment remain strong, contributing to
solid domestic net new asset growth of 11% over the prior 12
months, and we successfully closed on the Charles Stanley
acquisition during the quarter,” said Chair and CEO Paul Reilly.
“While heightened geopolitical and macroeconomic uncertainties
negatively impacted investment banking revenues during the quarter,
the M&A pipeline remains robust. Looking forward, we are well
positioned for the expected increases in short-term interest rates
with healthy loan growth at Raymond James Bank, a high
concentration of floating-rate assets, record clients’ domestic
cash sweep balances and solid capital ratios providing us ample
balance sheet flexibility. The TriState Capital Holdings
acquisition, which is currently anticipated to close by the end of
the fiscal third quarter, is expected to further increase our
floating-rate, interest-earning assets and diversify our funding
sources.”
Segment Results
Private Client Group
- Record quarterly net revenues of $1.92 billion, up 17% over
the prior year’s fiscal second quarter and 5% over the preceding
quarter
- Quarterly pre-tax income of $213 million, up 11% over the
prior year’s fiscal second quarter and 9% over the preceding
quarter
- Private Client Group assets under administration of $1.20
trillion(3), up 17% over March 2021 and flat compared to December
2021
- Record Private Client Group assets in fee-based accounts of
$678.0 billion(3), up 19% over March 2021 and flat compared to
December 2021
- Record Private Client Group financial advisors of 8,730(3),
which includes 200 advisors with Charles Stanley, increased 403
over March 2021 and 266 over December 2021
- Record clients’ domestic cash sweep balances of $76.5
billion, up 22% over March 2021 and 4% over December 2021
Record quarterly net revenues grew 17% over the
prior-year quarter and 5% over the preceding quarter, predominantly
driven by the increase in asset management and related
administrative fees, reflecting higher assets in fee-based
accounts. Net revenues and expenses during the quarter included
just over two months of results for Charles Stanley, which closed
on January 21, 2022.
“With our continued focus on supporting, retaining and
attracting high-quality financial advisors, we generated solid
domestic net new asset growth of 11% over the prior 12 months and
nearly 9% annualized during the quarter,” said Reilly.
“Furthermore, financial advisor recruiting activity remains strong
as prospective advisors continue to be attracted to our
client-centric culture, multiple affiliation options and robust
support and solutions offerings.”
Capital Markets
- Quarterly net revenues of $413 million, down 5% compared to
the prior year’s fiscal second quarter and 33% compared to the
preceding quarter
- Quarterly pre-tax income of $87 million, down 17% compared
to the prior year’s fiscal second quarter and 57% compared to the
preceding quarter
- Quarterly investment banking revenues of $226 million, flat
compared to the prior year’s fiscal second quarter and down 45%
compared to the record set in the preceding quarter
Quarterly net revenues declined 5% compared to the prior-year
quarter predominantly driven by lower fixed income brokerage
revenues and equity underwriting revenues, partially offset by a
year-over-year increase in M&A revenues. Sequentially,
quarterly net revenues decreased 33% primarily due to lower
investment banking revenues.
“Following remarkable results in the preceding quarter, Capital
Markets revenues declined as investment banking revenues were
negatively impacted by increased geopolitical and macroeconomic
uncertainties,” said Reilly. “The M&A pipeline remains robust,
but market conditions throughout the remainder of the fiscal year
will heavily influence closings. In March, we announced the
acquisition of SumRidge Partners, a technology-driven fixed income
market maker specializing in investment-grade and high-yield
corporate bonds, municipal bonds and institutional preferred
securities. We currently expect to close the acquisition in the
fiscal fourth quarter of 2022.”
Asset Management
- Quarterly net revenues of $234 million, up 12% over the
prior year’s fiscal second quarter and down 1% compared to the
preceding quarter
- Quarterly pre-tax income of $103 million, up 18% over the
prior year’s fiscal second quarter and down 4% compared to the
preceding quarter
- Financial assets under management of $193.7 billion, up 9%
over March 2021 and down 5% compared to December 2021
The year-over-year growth of quarterly net revenues and pre-tax
income was largely attributable to higher financial assets under
management, driven by equity market appreciation and net inflows
into fee-based accounts in the Private Client Group. Financial
assets under management decreased 5% sequentially as net inflows
were more than offset by the declines in equity markets during the
quarter.
Raymond James Bank
- Quarterly net revenues of $197 million, up 23% over the
prior year’s fiscal second quarter and 8% over the preceding
quarter
- Quarterly pre-tax income of $83 million, down 25% compared
to the prior year’s fiscal second quarter and 19% compared to the
preceding quarter
- Record net loans of $27.9 billion, up 22% over March 2021
and 7% over December 2021
- Net interest margin (NIM) of 2.01% for the quarter, up 7
basis points over the prior year’s fiscal second quarter and 9
basis points over the preceding quarter
Net revenue growth was due to higher asset balances and NIM
expansion during the quarter. The asset growth was primarily
attributable to strong, broad-based loan growth, including 41%
year-over-year growth of securities-based loans to clients in the
Private Client Group. The Bank’s NIM increased 9 basis points
during the quarter to 2.01%, and further NIM expansion is expected
from the Federal Reserve’s interest rate increases. Despite revenue
growth, pre-tax income declined reflecting the bank loan loss
provision in the current quarter, resulting from strong loan growth
in contrast to the bank loan benefit 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 1.17%,
down from 1.50% at March 2021 and 1.18% at December 2021, as the
credit quality of the loan portfolio remains healthy.
Other
The effective tax rate during the quarter increased to 25.4%,
reflecting the unfavorable impact of nondeductible valuation losses
associated with the corporate-owned life insurance portfolio. As of
April 27, 2022, $1 billion remained available under the Board’s
approved share repurchase authorization. At the end of the quarter,
the total capital ratio was 25.0%(4) and the tier 1 leverage ratio
was 11.1%(4), both well above the regulatory requirements.
A conference call to discuss the results will take place
tomorrow morning, Thursday, April 28, 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:
800-899-6991 (conference code: 22018191). An audio replay of
the call will be available at the same location until July 27,
2022.
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 $1.26 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 announced acquisitions of
TriState Capital Holdings, Inc. and SumRidge Partners, LLC),
divestitures, anticipated results of litigation, regulatory
developments, and general economic conditions. In addition, words
such as “expects,” “anticipates,” and future or conditional verbs
such as “will”, as well as 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.
Media Contact: Steve Hollister
Raymond James
727.567.2824
Investor Contact: Kristina Waugh
Raymond James
727.567.7654
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