01—Abstract
Summary
Summary of the 10-K filed November 26, 2024. Cited figures are marked; the original filing is the authoritative source.
Raymond James Financial, Inc. (RJF) reported fiscal 2024 (year ended September 30, 2024) net revenues of $12.82 billiona, up 10% from $11.62 billion, and pre-tax income of $2.64 billion, up 16%.
Net income available to common shareholders was $2.06 billionb, up 19%, and diluted earnings per share were $9.70, up 22%. Return on common equity was 18.9% and return on tangible common equity was 22.6%. The increase in net revenues was driven mainly by higher asset management and related administrative fees, with brokerage revenues and investment banking revenues also rising.
Offsetting this, combined net interest income and RJBDP fees from third-party banks declined 5% to $2.74 billionc, as deposit mix shifted toward higher-cost ESP and certificate of deposit balances. Total client assets under administration reached $1.51 trillion, of which $875.2 billion was in fee-based accounts, and the firm had 8,787 financial advisors. Total assets were $82.99 billion, and the Bank segment had $62.37 billion of total assets.
Tier 1 leverage ratio was 12.8% and total capital ratio was 24.1%, and both Raymond James Bank and TriState Capital Bank were categorized as well-capitalized. The firm repurchased 7.7 million shares for $900 milliond and returned $1.3 billion to shareholders through repurchases and dividends. Management expects net interest income and RJBDP fees to decrease in fiscal 2025 following Fed rate cuts, and notes an SEC settlement involving a $50 million civil penalty and two putative class actions related to cash sweep programs.
02—Key points
Key Highlights
- Net revenues rose 10% to $12.82 billion and pre-tax income rose 16% to $2.64 billion for fiscal 2024.
- Diluted earnings per share increased 22% to $9.70; adjusted diluted earnings per share were $10.05 (non-GAAP).
- Return on common equity was 18.9% and return on tangible common equity was 22.6%.
- Client assets under administration reached $1.51 trillion, with $875.2 billion in fee-based accounts.
- Combined net interest income and RJBDP fees from third-party banks fell 5% to $2.74 billion, and management expects further declines in fiscal 2025 after Fed rate cuts.
- In August 2024 the firm agreed to a $50 million SEC civil penalty over records preservation, and faces two putative class actions over cash sweep rates.
- Capital remained strong: tier 1 leverage ratio of 12.8%, total capital ratio of 24.1%, and $1.3 billion returned to shareholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2024filed November 26, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $14.92B$12.99B | +14.9% |
| Net Income | $2.07B$1.74B | +18.9% |
| EPS (Basic) | $9.94$8.16 | +21.8% |
| EPS (Diluted) | $9.70$7.97 | +21.7% |
| Shares Outstanding (Basic) | 207.10M211.80M | −2.2% |
| Shares Outstanding (Diluted) | 212.30M216.90M | −2.1% |
05—Questions
Frequently Asked Questions
What drove the growth in RJF's revenue in fiscal 2024?
The increase in net revenues was primarily due to higher asset management and related administrative fees, which rose $701 million or 15% in the PCG segment, driven by higher fee-based assets from market appreciation and net new assets. Brokerage revenues and investment banking revenues also increased.
Why did net interest income and cash sweep-related fees decline?
Combined net interest income and RJBDP fees from third-party banks declined 5% to $2.74 billion. Net interest income fell because RJBDP balances swept to the Bank segment declined and were replaced with higher-cost ESP and certificate of deposit balances, which increased interest expense.
How is RJF's capital position?
As of September 30, 2024, the tier 1 leverage ratio was 12.8% and the total capital ratio was 24.1%. RJF, Raymond James Bank, and TriState Capital Bank were all categorized as well-capitalized.
What legal and regulatory matters does the filing disclose?
In August 2024 the firm settled with the SEC's Division of Enforcement over records preservation for business communications on unapproved electronic channels, agreeing to pay a $50 million civil penalty. The SEC is also reviewing cash sweep practices, and two putative class actions alleging breaches related to cash sweep rates were filed in August 2024, which the firm intends to vigorously defend.
What does management expect for fiscal 2025?
Management expects higher asset management fees in the first quarter of fiscal 2025 and a healthier investment banking pipeline. It anticipates that combined net interest income and RJBDP fees will decrease in fiscal 2025 due to the 50-basis-point and 25-basis-point Fed rate cuts in September and November 2024, although the magnitude depends on future rate decisions.
06—Continue