Why did net income decline even though net revenues hit a record?

Net income available to common shareholders fell 6% to $562 million, while pre-tax income declined 3% to $728 million. The company attributed the larger drop mainly to an effective tax rate of 22.7%, up from 19.9% a year earlier, which it described as partly offset by a seasonal tax benefit from share-based compensation. Non-compensation expenses also rose, and the total compensation ratio increased to 65.6% from 64.2%.

What drove growth in the Private Client Group?

Segment net revenues rose 9% to a record $2.77 billion, primarily from higher asset management and related administrative fees, which increased 15% to $1.69 billion on market appreciation and net inflows into fee-based accounts. Fee-based assets reached a record $1.04 trillion. Lower short-term interest rates partly offset these gains.

Why did Capital Markets results weaken?

Capital Markets net revenues fell 21% year over year, largely because of lower M&A and advisory revenues, with investment banking revenues down 37% to $200 million. Management said the decline was largely due to the timing of closings and that the pipeline remains strong.

What is the significance of the Clark Capital acquisition?

The company said Clark Capital Management Group, Inc., an independent asset manager specializing in wealth-focused solutions, has a track record of strong inflows and high growth. It will join the multi-boutique offering within Raymond James Investment Management. The filing reports over $46 billion in combined assets under management and non-discretionary assets as of December 31, 2025.

How is the company returning capital to shareholders?

The Board increased the quarterly cash dividend 8% to $0.54 per common share and authorized repurchases of up to $2 billion, replacing the prior authorization. During the quarter, the firm repurchased $400 million of common stock at an average price of $162 per share, leaving $1.9 billion available under the authorization.

RJF 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed January 28, 2026. Cited figures are marked; the original filing is the authoritative source.

Raymond James Financial, Inc. reported fiscal first quarter 2026 results for the period ended December 31, 2025, with record quarterly net revenues of $3.74 billion^a, up 6% from the prior year's fiscal first quarter and essentially flat with the preceding quarter.

Net income available to common shareholders was $562 million^b, or $2.79 per diluted share, versus $599 million in the prior-year quarter; excluding $15 million of after-tax acquisition-related expenses, adjusted net income was $577 million, or $2.86 per diluted share. Pre-tax income was $728 million, down 3% year over year, and the effective tax rate rose to 22.7% from 19.9%, which the company said reflected a seasonal tax benefit from share-based compensation settling during the quarter. Growth was driven by the Private Client Group and Bank segments.

Client assets under administration reached a record $1.77 trillion^c, and Domestic Private Client Group net new assets were $30.8 billion, an annualized growth rate of 8.0%. Asset management and related administrative fees rose 15% to $2.0 billion. Bank segment pre-tax income increased 47% year over year to $173 million, and net bank loans reached a record $53.4 billion.

Capital Markets was weaker, with net revenues down 21% year over year, driven by lower M&A and advisory revenues, and pre-tax income falling to $9 million^d. The company also increased its quarterly dividend 8% to $0.54 per share, repurchased $400 million of common stock at an average price of $162 per share, and announced the acquisition of Clark Capital Management Group, Inc., an asset manager with over $46 billion in combined assets under management and non-discretionary assets as of December 31, 2025. Capital remained strong, with a total capital ratio of 24.3% and a Tier 1 leverage ratio of 12.7%, both estimated.

02—Key points

Key Highlights

Record quarterly net revenues of $3.74 billion, up 6% year over year; record client assets under administration of $1.77 trillion, up 14%.
Net income available to common shareholders of $562 million, or $2.79 per diluted share, down 6% from $599 million a year earlier; adjusted diluted EPS was $2.86.
Domestic Private Client Group net new assets of $30.8 billion, an annualized growth rate of 8.0%, up from 4.0% a year earlier.
Bank segment pre-tax income rose 47% to $173 million, with record net bank loans of $53.4 billion and a segment net interest margin of 2.81%.
Capital Markets net revenues fell 21% to $380 million and pre-tax income dropped to $9 million, driven mainly by lower M&A and advisory revenues.
Quarterly dividend increased 8% to $0.54 per share; $400 million of common shares repurchased; $1.9 billion remains under the Board's authorization.
Announced acquisition of Clark Capital Management Group, Inc., with over $46 billion in combined assets under management and non-discretionary assets.

03—Questions

Frequently Asked Questions

Why did net income decline even though net revenues hit a record?
Net income available to common shareholders fell 6% to $562 million, while pre-tax income declined 3% to $728 million. The company attributed the larger drop mainly to an effective tax rate of 22.7%, up from 19.9% a year earlier, which it described as partly offset by a seasonal tax benefit from share-based compensation. Non-compensation expenses also rose, and the total compensation ratio increased to 65.6% from 64.2%.
What drove growth in the Private Client Group?
Segment net revenues rose 9% to a record $2.77 billion, primarily from higher asset management and related administrative fees, which increased 15% to $1.69 billion on market appreciation and net inflows into fee-based accounts. Fee-based assets reached a record $1.04 trillion. Lower short-term interest rates partly offset these gains.
Why did Capital Markets results weaken?
Capital Markets net revenues fell 21% year over year, largely because of lower M&A and advisory revenues, with investment banking revenues down 37% to $200 million. Management said the decline was largely due to the timing of closings and that the pipeline remains strong.
What is the significance of the Clark Capital acquisition?
The company said Clark Capital Management Group, Inc., an independent asset manager specializing in wealth-focused solutions, has a track record of strong inflows and high growth. It will join the multi-boutique offering within Raymond James Investment Management. The filing reports over $46 billion in combined assets under management and non-discretionary assets as of December 31, 2025.
How is the company returning capital to shareholders?
The Board increased the quarterly cash dividend 8% to $0.54 per common share and authorized repurchases of up to $2 billion, replacing the prior authorization. During the quarter, the firm repurchased $400 million of common stock at an average price of $162 per share, leaving $1.9 billion available under the authorization.

04—Continue

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