- Domestic Private Client Group net new assets(1)(2) of $14.4
billion for the fiscal third quarter, 5.4% annualized growth rate
from beginning of period assets
- Record quarterly net revenues of $2.91 billion, up 7% over
the prior year’s fiscal third quarter and 1% over the preceding
quarter
- Quarterly net income available to common shareholders of
$369 million, or $1.71 per diluted share, and quarterly adjusted
net income available to common shareholders of $399 million(3), or
$1.85 per diluted share(3)
- Record client assets under administration of $1.28 trillion
and financial assets under management of $200.7 billion
- Net interest income and Raymond James Bank Deposit Program
(“RJBDP”) fees from third-party banks of $708 million during the
quarter, up 91% over the prior year’s fiscal third quarter and down
3% compared to the preceding quarter
- Record net revenues of $8.57 billion and record net income
available to common shareholders of $1.30 billion for the first
nine months of fiscal 2023, up 5% and 22%, respectively, over the
first nine months of fiscal 2022
- Annualized return on common equity of 17.9% and annualized
adjusted return on tangible common equity of 22.7%(3) for the first
nine months of fiscal 2023
ST. PETERSBURG, Fla – Raymond James Financial, Inc. (NYSE: RJF)
today reported record net revenues of $2.91 billion and net income
available to common shareholders of $369 million, or $1.71 per
diluted share, for the fiscal third quarter ended June 30, 2023.
Excluding $40 million of expenses related to acquisitions,
quarterly adjusted net income available to common shareholders was
$399 million(3), or $1.85 per diluted share(3).
Record quarterly net revenues increased 7% over the prior year’s
fiscal third quarter. The benefit of higher short-term interest
rates on net interest income and RJBDP fees from third-party banks
more than offset declines in investment banking revenues, brokerage
revenues, and asset management and related administrative fees. The
1% sequential increase in quarterly net revenues was primarily due
to higher asset management and related administrative fees.
Quarterly net income available to common shareholders increased
23% over the prior year’s fiscal third quarter, driven primarily by
higher net interest income and RJBDP fees from third-party banks
which were partially offset by elevated provisions for legal and
regulatory matters. Sequentially, net income available to common
shareholders decreased 13%. Quarterly results were negatively
impacted by elevated provisions for legal and regulatory matters of
approximately $65 million and bank loan provision for credit losses
of $54 million.
For the first nine months of the fiscal year, record net
revenues of $8.57 billion increased 5%, record earnings per diluted
common share of $5.95 increased 19%, and adjusted earnings per
diluted common share of $6.17(3) increased 14% over the
first nine months of fiscal 2022. The Private Client Group segment
generated record net revenues and record pre-tax income during the
first nine months of the fiscal year. Annualized return on common
equity was 17.9% and annualized adjusted return on tangible common
equity was 22.7%(3).
“Through the strength of our businesses and perseverance of our
advisors and associates, we generated record net revenues and
record net income to common shareholders during the first nine
months of the fiscal year, up 5% and 22%, respectively, over fiscal
2022 despite challenging macroeconomic conditions,” said Chair and
CEO Paul Reilly. “Importantly, our strong capital ratios and
flexible balance sheet keep us well-positioned as we look
forward.”
Segment ResultsPrivate Client
Group
- Domestic Private Client Group net new assets(1)(2) of $14.4
billion for the fiscal third quarter, 5.4% annualized growth rate
from beginning of period assets
- Record quarterly net revenues of $2.18 billion, up 11% over
the prior year’s fiscal third quarter and 2% over the preceding
quarter
- Quarterly pre-tax income of $411 million, up 64% over the
prior year’s fiscal third quarter and down 7% compared to the
preceding quarter
- Record Private Client Group assets under administration of
$1.23 trillion, up 15% compared to June 2022 and 5% over March
2023
- Record Private Client Group assets in fee-based accounts of
$697.0 billion, up 15% compared to June 2022 and 5% over March
2023
- Total clients’ domestic cash sweep and Enhanced Savings
Program (“ESP”) balances of $58.0 billion, down 24% compared to
June 2022 and up 11% over March 2023
The year-over-year growth in quarterly net revenues and pre-tax
income was driven primarily by increases in RJBDP fees and net
interest income, which more than offset market-driven declines in
asset management and related administrative fees and brokerage
revenues. Sequentially, quarterly net revenues grew 2% driven by
higher asset management and related administrative fees, which were
offset by a decline in RJBDP fees due to lower cash sweep balances,
and lower brokerage revenues. However, quarterly pre-tax income
declined 7% compared to the preceding quarter driven by higher
provisions for legal and regulatory matters and seasonally higher
advisor recognition events and conference expenses.
Total clients’ domestic cash sweep and ESP balances grew 11%
over March 2023. The increase reflects strong growth in ESP
balances which more than offset a modest decline in cash sweep
balances largely due to quarterly fee billings and income tax
payments. Reflecting higher short-term interest rates, the average
yield on RJBDP third-party bank balances increased 12 basis points
to 3.37% in the fiscal third quarter.
“Financial advisor retention and recruiting are strong across
our multiple affiliation options driven by our advisor and
client-focused culture and leading technology and product
solutions,” said Reilly. “For example, our recently-launched
Enhanced Savings Program ended the quarter at $11.2 billion, as
advisors and their clients continue to value this attractive
offering.”
Capital Markets
- Quarterly net revenues of $276 million, down 28% compared to
the prior year’s fiscal third quarter and 9% compared to the
preceding quarter
- Quarterly pre-tax loss of $34 million
- Quarterly investment banking revenues of $141 million, down
35% compared to the prior year’s fiscal third quarter and 3%
compared to the preceding quarter
The year-over-year decline in quarterly net revenues and pre-tax
income was largely attributable to lower investment banking and
fixed income brokerage revenues. Compensation expense declined 9%
driven by lower variable compensation, partially offset by
amortization of deferred compensation and additional compensation
related to growth investments.
“Investment banking activity across the industry remains muted,”
said Reilly. “While the investment banking pipeline remains healthy
and new business activity is solid, the timing of closings is
largely dependent on improving market conditions.”
Asset Management
- Quarterly net revenues of $226 million, down 1% compared to
the prior year’s fiscal third quarter and up 5% over the preceding
quarter
- Quarterly pre-tax income of $89 million, down 4% compared to
the prior year’s fiscal third quarter and up 9% over the preceding
quarter
- Financial assets under management of $200.7 billion, up 10%
over June 2022 and 3% over March 2023
Financial assets under management of $200.7 billion grew 10%
over the prior-year quarter and 3% over the preceding quarter. The
increase in financial assets under management was primarily the
result of higher equity markets, along with net inflows into
fee-based accounts in the Private Client Group.
Bank
- Quarterly net revenues of $514 million, up 86% over the
prior year’s fiscal third quarter and down 5% compared to the
preceding quarter
- Quarterly pre-tax income of $66 million, down 11% compared
to the prior year’s fiscal third quarter and 27% compared to the
preceding quarter
- Bank segment net interest margin (“NIM”) of 3.26% for the
quarter, up 85 basis points over the prior year’s fiscal third
quarter and down 37 basis points compared to the preceding
quarter
- Net loans of $43.3 billion, up 4% over June 2022 and down 1%
compared to March 2023
Quarterly net revenues increased over the prior-year quarter
driven by higher asset balances and the favorable impact from
higher short-term interest rates. Sequentially, quarterly net
revenues declined 5% due to lower net interest income. The Bank
segment’s NIM decreased 37 basis points during the quarter to
3.26%, primarily due to increased interest expense from higher-cost
funding as ESP balances replaced a portion of lower-cost RJBDP
client cash sweep balances. Net loans increased 4% over the
prior-year quarter and declined 1% compared to the preceding
quarter primarily driven by lower corporate loans. Quarterly bank
loan provision for credit losses of $54 million increased over the
preceding quarter primarily due to weaker macroeconomic assumptions
for the Moody’s CRE Price Index in the Current Expected Credit Loss
(“CECL”) model. Despite a higher provision, 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 0.94%, down
from 1.63% at June 2022 and up slightly from 0.92% at March 2023.
Bank loan allowance for credit losses as a percent of total loans
held for investment was 1.04%, and bank loan allowance for credit
losses on corporate loans as a percent of corporate loans held for
investment was 1.90%.
Other
During the fiscal third quarter, the firm repurchased 3.31
million shares of common stock for $300 million at an average price
of $91 per share. As of July 26, 2023, approximately $750 million
remained available under the Board’s approved common stock
repurchase authorization. At the end of the quarter, the total
capital ratio was 22.0%(4) and the tier 1 leverage ratio was
11.4%(4), both well above regulatory requirements.
A conference call to discuss the results will take place today,
Wednesday, July 26, 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.
For a listen-only connection to the conference call, please dial:
877-252-3031 (conference code: 22027631). An audio
replay of the call will be available at the same location until
October 26, 2023.
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 $1.28 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, divestitures, 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, 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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