01—Abstract
Summary
Summary of the 10-K filed December 23, 1996. Cited figures are marked; the original filing is the authoritative source.
Raymond James Financial, Inc. (RJF) reported record fiscal 1996 results for the year ended September 27, 1996, with total revenues of $721,752 thousanda (up from $554,070 thousand in fiscal 1995) and net income of $65,978 thousand (up from $46,141 thousand).
Net income per primary share was $3.14b, compared with $2.23 in fiscal 1995. Management described it as the company's twelfth consecutive year of record revenues and attributed the earnings record to a very favorable equity market that spurred investor and capital markets activity. Securities commissions ($422,487 thousand) and interest revenue ($126,453 thousand) were the largest revenue sources, and investment banking revenue rose to $72,596 thousand, a record, driven by equity underwritings and merger and acquisition activity.
Total assets grew to $2,566,381 thousandc from $2,012,715 thousand, and shareholders' equity rose to $326,632 thousand from $266,193 thousand. Net interest income, a growing earnings source, reached $42,982 thousand. Total financial assets under management were $11,762,192 thousand at year-end, up from $9,821,389 thousand.
The company's Liberty Investment Management arrangement is being wound down: Liberty agreed to sell substantially all of its assets to Goldman Sachs Asset Management, and the company expects to receive a lump-sum settlement of up to $30 milliond pretax income at a closing scheduled for January 1997. The filing notes that the company is a defendant in various securities-related lawsuits, which management believes will not have a material adverse effect on its financial position or results of operations. Dividends were $.38 per share for fiscal 1996, and the quarterly rate was raised to $.11 for the first quarter of fiscal 1997.
02—Key points
Key Highlights
- Total revenues reached a record $721,752 thousand in fiscal 1996, up from $554,070 thousand in fiscal 1995, the company's twelfth consecutive year of record revenues.
- Net income rose to $65,978 thousand from $46,141 thousand, with primary earnings per share of $3.14 versus $2.23 in fiscal 1995.
- Investment banking revenues increased to a record $72,596 thousand, from $43,004 thousand, on 38 managed or co-managed offerings totaling $2.7 billion.
- Total financial assets under management were $11,762,192 thousand at September 27, 1996, up from $9,821,389 thousand a year earlier.
- Total assets grew to $2,566,381 thousand and shareholders' equity to $326,632 thousand, with equity per share of $15.63 at year-end.
- Liberty Investment Management's pending sale to Goldman Sachs Asset Management is expected to yield the company a lump-sum settlement of up to $30 million pretax income at a January 1997 closing.
- Quarterly dividend rate was raised to $.11 for the first quarter of fiscal 1997 from $.095 in fiscal 1996.
03—Questions
Frequently Asked Questions
What drove Raymond James's record fiscal 1996 earnings?
Management attributed the record results to a very favorable equity market that spurred investor and capital markets activity. Securities commissions rose to $422,487 thousand from $327,547 thousand, with the largest increases in mutual funds, over-the-counter stocks and annuities, and investment banking revenue hit a record $72,596 thousand.
How much did interest revenue contribute, and why did it grow?
Interest revenue was $126,453 thousand, up from $97,211 thousand. The filing states that a large majority of the increase in net interest income came from growth in retail brokerage account balances, and net interest income rose to $42,982 thousand from $32,453 thousand.
What is the status of the Liberty Investment Management arrangement?
Liberty agreed after fiscal year-end to sell substantially all of its assets to Goldman Sachs Asset Management. The company expects a lump-sum settlement of up to $30 million pretax income for its remaining three years' interest in Liberty's revenue stream, plus its option to purchase 20% of Liberty, with closing scheduled for January 1997.
Are there material legal risks disclosed?
The company is a defendant or co-defendant in various lawsuits incidental to its securities business. Management, based on discussions with counsel, believes the outcome will not result in a material adverse effect on the company's financial position or results of operations.
What are the dividend and share data for shareholders?
Cash dividends declared were $.38 per share for fiscal 1996, up from $.36 in fiscal 1995. The quarterly rate was $.095 in fiscal 1996 and was raised to $.11 for the first quarter of fiscal 1997. There were approximately 7,800 holders of common stock at December 13, 1996.
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