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Net Revenues: Record fiscal fourth quarter net revenues of $3.46 billion.
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Net Income: Net income available to common shareholders of $601 million.
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Earnings Per Share (EPS): Earnings per diluted share of $2.86.
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Adjusted Net Income: Adjusted net income of $621 million or $2.95 per diluted share, excluding acquisition-related expenses.
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Return on Common Equity: Annualized return on common equity of 21.2%.
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Adjusted Return on Tangible Common Equity: Annualized adjusted return of 25.8%.
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Share Repurchases: Repurchased 2.6 million shares for $300 million during the quarter.
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Client Assets: Total assets under administration increased to $1.57 trillion.
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Private Client Group Assets: Grew to $875 billion in fee-based accounts.
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Financial Assets Under Management: Increased to $245 billion.
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Domestic Net New Assets: $13 billion for the quarter, representing a 4% annualized growth rate.
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Recruiting Results: Recruited financial advisers with $100 million in trailing 12-month production and $17.5 billion in client assets.
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Private Client Group Revenue: Record quarterly net revenues of $2.48 billion.
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Capital Markets Revenue: Quarterly net revenues of $483 million, up 42% year over year.
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Asset Management Revenue: Record net revenues of $275 million.
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Bank Segment Revenue: Net revenues of $433 million.
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Net Interest Margin: Bank segment net interest margin of 2.62%.
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Compensation Expense: $2.16 billion with a total compensation ratio of 62.4%.
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Pre-Tax Margin: Pre-tax margin of 22% and adjusted pre-tax margin of 22.7%.
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Total Assets: $83 billion, a 3% sequential increase.
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Effective Tax Rate: 20.8% for the quarter.
Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Raymond James Financial Inc (NYSE:RJF) reported record fiscal fourth quarter net revenues of $3.46 billion and net income available to common shareholders of $601 million.
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The company achieved strong returns with an annualized return on common equity of 21.2% and an annualized adjusted return on tangible common equity of 25.8%.
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Client assets grew to record levels, with total assets under administration increasing 6% sequentially to $1.57 trillion.
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The private client group generated record quarterly net revenues of $2.48 billion and pre-tax income of $461 million.
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Raymond James Financial Inc (NYSE:RJF) returned nearly $1.3 billion of capital to shareholders through share repurchases and dividends in the fiscal year.
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The company faced challenges due to Hurricanes Helene and Milton, impacting communities in the southeast, including their headquarters in St. Petersburg.
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Approximately $5 billion of assets are expected to transfer off the platform in early fiscal 2025 due to OSJ relationships leaving the independent contractor division.
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The bank segment’s net interest margin declined by 2 basis points to 2.62% compared to the preceding quarter.
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Non-compensation expenses increased 10% sequentially, largely due to the bank loan provision for credit losses.
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The fixed income business continues to face challenges, although there are signs of improvement in the depository sector.
Q: Can you provide more details on the capital market segment’s performance and future outlook, particularly regarding M&A activity? A: Paul Reilly, CEO, noted an improving M&A environment driven by rate expectations and capital availability. The firm saw a significant pickup in activity, with larger transactions closing. The market is more conducive, and there is room for growth, though specific numbers were not provided. Paul Shoukry, President, added that the margin for the year was 20.6%, a healthy level given the business mix, and the goal is to grow revenues faster than expenses over time.
Q: What factors are influencing corporate loan demand, and how might this change? A: Paul Shoukry, President, explained that lower rates could help as companies seek more attractive debt options. M&A activity is a significant driver of financing needs, so an increase in M&A could indicate rising corporate loan demand.
Q: Could you discuss the outlook for non-compensation expenses and areas of investment for the next fiscal year? A: Paul Shoukry, President, stated that non-compensation expenses are largely growth-related, with investments in technology being a significant focus. The firm aims to remain competitive by providing top-tier technology to advisors, which is expected to continue growing in both percentage and absolute terms.
Q: How is the advisor recruiting pipeline looking, and what trends are you seeing in advisor retention and recruitment? A: Paul Reilly, CEO, noted that both advisor retention and recruitment are strong, with larger books of business being recruited. The firm has become a destination for large teams due to its technology platform and high-net-worth offerings. The pipeline remains robust, and the firm is comfortable with its backlog.
Q: What is the strategy for managing the balance sheet and lending capacity as demand picks up? A: Paul Reilly, CEO, highlighted that the firm has ample cash and capital, with a consistent risk appetite. The focus is on maintaining low risk on the C&I side and waiting for favorable spreads and risk tolerances. On the client side, there is a readiness to lend, with plenty of cash available, and the firm is not limiting bank growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
