How did Raymond James perform in its fiscal first quarter of 2024?

Net revenues were $3.01 billion, up 8% from the prior-year quarter, and net income available to common shareholders was $497 million, or $2.32 per diluted share. Adjusted diluted EPS, which excludes $23 million of acquisition-related expenses, was a record $2.40.

What drove revenue growth?

The filing attributes the year-over-year increase in net revenues primarily to higher asset management and related administrative fees, which reflect growth in fee-based accounts, along with higher investment banking revenues, which rose 28%.

Why did the Bank segment weaken?

Bank segment net revenues fell 13% year over year, largely due to lower net interest margin. The filing says the margin decline reflected higher interest expense as Enhanced Savings Program balances replaced part of lower-cost cash sweep balances that were swept to third-party banks. The quarter also included a $9 million FDIC special assessment.

What is the capital return policy?

In November 2023, the Board raised the quarterly common dividend 7% to $0.45 per share and authorized up to $1.5 billion in common stock repurchases, replacing the prior authorization. About $1.39 billion remained available as of January 24, 2024.

How did client asset levels change?

Client assets under administration reached a record $1.37 trillion, up 17% from December 2022, and Private Client Group assets in fee-based accounts reached a record $746.6 billion, up 18%. Total domestic cash sweep and Enhanced Savings Program balances were $58.0 billion, down 4% year over year.

RJF 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed January 24, 2024. Cited figures are marked; the original filing is the authoritative source.

Raymond James Financial, Inc. (NYSE: RJF) reported results for its fiscal first quarter ended December 31, 2023, with net revenues of $3.01 billion^a, up 8% year over year and down 1% sequentially.

Net income available to common shareholders was $497 million^b, or $2.32 per diluted share, a record for the quarter, while adjusted net income available to common shareholders was a record $514 million, or $2.40 per diluted share. Net income available to common shareholders declined 2% from the prior-year quarter, which included a $32 million insurance settlement, but rose 15% sequentially. Annualized return on common equity was 19.1%, and adjusted return on tangible common equity was 23.8%.

Growth in fee-based assets drove the quarter. Client assets under administration reached a record $1.37 trillion^c, up 17% year over year, and financial assets under management reached a record $215 billion, up 16%. Domestic Private Client Group net new assets were $21.6 billion, an annualized growth rate of 7.8% from beginning-of-period assets.

Asset management and related administrative fees rose 13% year over year to $1.41 billion^d. Investment banking revenue rose 28% to $181 million. Bank segment results were weaker.

Bank segment net revenues fell 13% year over year to $441 million, and net interest margin declined to 2.74% from 3.36% in the prior-year quarter, as higher-cost funding replaced lower-cost cash sweep balances. Total clients' domestic cash sweep and Enhanced Savings Program balances were $58.0 billion, down 4% year over year. The Board increased the quarterly dividend 7% to $0.45 per share and authorized up to $1.5 billion in share repurchases, with about $1.39 billion remaining as of January 24, 2024.

02—Key points

Key Highlights

Net income available to common shareholders of $497 million, or $2.32 per diluted share, a record quarterly EPS; adjusted diluted EPS was a record $2.40 on adjusted net income of $514 million.
Net revenues of $3.01 billion, up 8% year over year and down 1% sequentially.
Record client assets under administration of $1.37 trillion (up 17% year over year) and record financial assets under management of $215 billion (up 16%).
Domestic Private Client Group net new assets of $21.6 billion, annualized growth of 7.8%.
Bank segment net interest margin fell to 2.74% from 3.36% a year earlier; Bank segment net revenues declined 13% to $441 million.
Quarterly cash dividend raised 7% to $0.45 per share; $150 million of shares repurchased at an average price of $107 during the quarter.
Total capital ratio of 23.0% and tier 1 leverage ratio of 12.1%, both described as well above regulatory requirements.

03—Questions

Frequently Asked Questions

How did Raymond James perform in its fiscal first quarter of 2024?
Net revenues were $3.01 billion, up 8% from the prior-year quarter, and net income available to common shareholders was $497 million, or $2.32 per diluted share. Adjusted diluted EPS, which excludes $23 million of acquisition-related expenses, was a record $2.40.
What drove revenue growth?
The filing attributes the year-over-year increase in net revenues primarily to higher asset management and related administrative fees, which reflect growth in fee-based accounts, along with higher investment banking revenues, which rose 28%.
Why did the Bank segment weaken?
Bank segment net revenues fell 13% year over year, largely due to lower net interest margin. The filing says the margin decline reflected higher interest expense as Enhanced Savings Program balances replaced part of lower-cost cash sweep balances that were swept to third-party banks. The quarter also included a $9 million FDIC special assessment.
What is the capital return policy?
In November 2023, the Board raised the quarterly common dividend 7% to $0.45 per share and authorized up to $1.5 billion in common stock repurchases, replacing the prior authorization. About $1.39 billion remained available as of January 24, 2024.
How did client asset levels change?
Client assets under administration reached a record $1.37 trillion, up 17% from December 2022, and Private Client Group assets in fee-based accounts reached a record $746.6 billion, up 18%. Total domestic cash sweep and Enhanced Savings Program balances were $58.0 billion, down 4% year over year.

04—Continue

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