ENP Newswire - 29 July 2014
Release date- 25072014 - ST. PETERSBURG, Fla - Raymond James Financial, Inc. (NYSE: RJF) reported record net revenues of $1.2 billion and record net income of $122.7 million for the fiscal third quarter ended June 30, 2014.
Record earnings per diluted share of $0.85 increased 44 percent compared to the year-ago June quarter, which included $13 million of acquisition related expenses. Excluding those acquisition related expenses, earnings per diluted share increased 31 percent over the same period.
'We are very proud of our performance for the first three quarters of the fiscal year, as we generated a 15.0% pretax margin on net revenues and delivered an 11.9% annualized return on equity to our shareholders, essentially reaching our targets for the current market and interest rate environment sooner than expected.' said CEO Paul Reilly. 'While we exceeded those targets in the current quarter, results were lifted by certain favorable items including $8 million of private equity valuation adjustments, a strong quarter in Raymond James Tax Credit Funds, and a continuing beneficial tax rate.'
Private Client Group
Private Client Group assets under administration reached a record $454 billion, up 17 percent over the year-ago period and 5 percent over the preceding quarter Record quarterly net revenues of $816.9 million, up 10 percent over the prior year's fiscal third quarter and 1 percent over the preceding quarter Record quarterly pre-tax income of $81.5 million, a 39 percent increase on a year-over year basis and a 6 percent increase on a sequential basis Pre-tax margin of 10.0 percent on net revenues Record results in the Private Client Group segment were driven by record levels of client assets and a continued focus on enhancing margins.
The number of total financial advisors in the segment grew by 49 to 6,251, as the firm remains very effective in retaining existing advisors and recruiting new advisors in both the traditional and independent contractor channels. Compared to the prior year's June, assets in fee-based accounts jumped 27.5 percent to $168 billion, helping the segment's recurring revenues grow to over 70 percent of the segment's total revenues.
Quarterly net revenues of $237 million and quarterly pre-tax income of $28 million Investment banking revenues of $79 million increased 16 percent compared to the prior year's June quarter and 17 percent compared to the preceding quarter Institutional commissions in both the Equity Capital Markets and Fixed Income divisions remain depressed Equity underwriting revenues increased 24 percent over the prior year's June quarter and 17 percent over the preceding quarter.
Meanwhile, M&A revenues actually declined from a seasonally slow first calendar quarter, although activity levels and the pipeline remain robust.
Low interest rates coupled with low levels of rate volatility continue to depress commissions in the Fixed Income division, which are down 22 percent compared to last year's June quarter. However, trading profits remain satisfactory given the challenging market environment.
Following a very soft March quarter, the Tax Credit Funds business experienced a significant uplift in revenues and pre-tax income, as syndication fees increased $10 million sequentially.
Record financial assets under management of $65 billion, up 25 percent over the prior year and 5 percent over the preceding quarter Net revenues of $91.2 million increased 19 percent over last year's June quarter and 4 percent over the preceding quarter Pre-tax income of $31.3 million, representing a 34 percent pre-tax profit margin Market appreciation and positive net flows continue to boost results in the Asset Management segment.
Raymond James Bank
Total net loans grew to $10.4 billion, up 19 percent over the prior year and 3 percent over the preceding quarter Net revenues of $91.6 million, an increase of 13 percent over the year-ago June quarter and 7 percent over the preceding quarter Pre-tax income of $64.9 million, up 3 percent compared to last year's June quarter and up 14 percent compared to the preceding quarter Compared to the preceding quarter, growth in the Bank's net interest income was almost completely offset by higher loan loss provisions, which were mostly attributable to loan growth, as the Office of the Comptroller of the Currency's (OCC) annual shared national credit exam resulted in $1.6 million of provision expense, compared to $5.6 million in the prior year.
Meanwhile, pre-tax income still increased 14 percent over the preceding quarter, largely due to the Bank benefitting from a $4 million positive variance in foreign exchange gains associated with unhedged Canadian dollar denominated loans and a $3.8 million decline in other expenses related to unfunded loan commitments.
Total revenues in the Other segment increased $9 million compared to the preceding quarter, primarily driven by $8.0 million in positive valuation adjustments on private equity investments.
'While we have certainly been beneficiaries of a rising equity market, all of our businesses are well positioned for continued growth with record levels of client assets in the Private Client Group and Asset Management segments, a leading Capital Markets platform, and record loan balances in Raymond James Bank,' explained Reilly.
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.
Its three principal wholly owned broker-dealers, Raymond James & Associates, Raymond James Financial Services, and Raymond James Ltd., have approximately 6,200 financial advisors serving in excess of 2.5 million client accounts in more than 2,500 locations throughout the United States, Canada and overseas. Total client assets are approximately $479 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 from time to time, including our most recent Annual Report on Form 10-K and subsequent Forms 10-Q, which are available on 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.