Raymond James Financial Reports Fiscal First Quarter of 2025 Results
- Record quarterly net revenues of $3.54 billion, up 17% over the prior year's fiscal first quarter and 2% over the preceding quarter
- Quarterly net income available to common shareholders of $599 million, or $2.86 per diluted share; quarterly adjusted net income available to common shareholders of $614 million(1), or $2.93 per diluted share(1)
- Client assets under administration of $1.56 trillion and record quarter-end Private Client Group assets in fee-based accounts of $876.6 billion, up 14% and 17%, respectively, over December 2023
- Domestic Private Client Group net new assets(2) of $14.0 billion for the fiscal first quarter, annualized growth from beginning of period assets of 4.0%
- Total clients' domestic cash sweep and Enhanced Savings Program ("ESP") balances of $59.7 billion, up 3% compared to both December 2023 and September 2024
- Increased quarterly cash dividend on common shares 11% to $0.50 per share and authorized common stock repurchases of up to $1.5 billion
Raymond James Financial, Inc. (NYSE:RJF) today reported net revenues of $3.54 billion and net income available to common shareholders of $599 million, or $2.86 per diluted share, for the fiscal first quarter ended December 31, 2024. Excluding $20 million of expenses related to acquisitions, quarterly adjusted net income available to common shareholders was $614 million(1), or $2.93 per diluted share(1).
Compared to the prior-year quarter, record quarterly net revenues increased 17% and net income available to common shareholders increased 21% primarily driven by higher asset management and related administrative fees and investment banking revenues. Sequentially, quarterly net revenues increased 2% primarily driven by higher asset management and related administrative fees partially offset by lower affordable housing investments business revenues. Quarterly net income available to common shareholders nearly matched the record level from the preceding quarter. For the fiscal first quarter, annualized return on common equity and annualized adjusted return on tangible common equity were 20.4% and 24.6%(1), respectively.
"Fiscal 2025 started strong with year-over-year revenue growth of 17% and net income growth of 21% in the fiscal first quarter, driven by record asset management and related administrative fees and robust investment banking revenues," said Chair and CEO Paul Reilly. "Despite some seasonal headwinds, we are optimistic entering the fiscal second quarter with strong client asset levels, solid loan growth and healthy activity levels for both financial advisor recruiting and investment banking."
Segment Results
Private Client Group
- Record quarterly net revenues of $2.55 billion, up 14% over the prior year's fiscal first quarter and 3% over the preceding quarter
- Quarterly pre-tax income of $462 million, up 5% over the prior year's fiscal first quarter and slightly higher than the preceding quarter
- Private Client Group assets under administration of $1.49 trillion, up 14% over December 2023 and down 1% compared to September 2024
- Record quarter-end Private Client Group assets in fee-based accounts of $876.6 billion, up 17% over December 2023 and up slightly over September 2024
- Domestic Private Client Group net new assets(2) of $14.0 billion for the fiscal first quarter, or annualized growth from beginning of period assets of 4.0%
- Total clients' domestic cash sweep and ESP balances of $59.7 billion, up 3% over both the prior year's fiscal first quarter and the preceding quarter
Record quarterly net revenues grew 14% year-over-year and 3% sequentially primarily driven by higher asset management and related administrative fees.
"The Private Client Group achieved record revenues in the fiscal first quarter largely driven by client asset growth over the prior-year quarter," said Reilly. "Our client-first values, multiple affiliation model, and robust technology capabilities continue to support strong retention and fuel the strength and quality of the recruiting pipeline. In the fiscal quarter, we generated domestic net new assets of $14.0 billion(2), an annualized growth rate of 4.0%, a solid result despite the impact of the previously-announced departure of one large independent branch on the end-of-period asset levels."
Capital Markets
- Quarterly net revenues of $480 million, up 42% over the prior year's fiscal first quarter and down 1% compared to the preceding quarter
- Quarterly investment banking revenues of $317 million, up 86% over the prior year's fiscal first quarter and 4% over the preceding quarter
- Quarterly pre-tax income of $74 million, up $71 million over the prior year's fiscal first quarter and down $21 million compared to the preceding quarter
Quarterly net revenues grew 42% year-over-year primarily driven by robust investment banking growth. Sequentially, quarterly net revenues declined 1% mostly due to seasonally lower affordable housing investments business revenues. M&A and advisory revenues of $226 million grew 92% over the prior year's fiscal first quarter and 10% over the preceding quarter.
"The robust M&A results this quarter reflect a second consecutive quarter of realization of the pipeline and the investments we've made in our platform and people over the years," said Reilly. "We remain optimistic for the rest of the fiscal year as the market environment is more conducive to transaction closings and our platform and capabilities are well positioned."
Asset Management
- Record quarterly net revenues of $294 million, up 25% over the prior year's fiscal first quarter and 7% over the preceding quarter
- Record quarterly pre-tax income of $125 million, up 34% over the prior year's fiscal first quarter and 8% over the preceding quarter
- Financial assets under management of $243.9 billion, up 13% over December 2023 and just under the September 2024 levels
The increase in quarterly net revenues and pre-tax income over the prior year's fiscal first quarter is largely attributable to higher financial assets under management due to higher equity markets and net inflows into fee-based accounts in the Private Client Group.
Bank
- Quarterly net revenues of $425 million, down 4% compared to the prior year's fiscal first quarter and 2% compared to the preceding quarter
- Quarterly pre-tax income of $118 million, up 28% over the prior year's fiscal first quarter and 20% over the preceding quarter
- Record net loans of $47.2 billion, up 7% over December 2023 and 3% over September 2024
- Bank segment net interest margin ("NIM") of 2.60% for the quarter, down 14 basis points compared to the prior year's fiscal first quarter and 2 basis points compared to the preceding quarter
- Bank loan provision for credit losses was nominal in the fiscal first quarter, $12 million lower than the prior year's fiscal first quarter and $22 million lower than the preceding quarter
Quarterly pre-tax income increased 20% over the preceding quarter predominantly driven by a lower bank loan provision for credit losses, which offset a decline in net revenues. Net loans grew over the prior year's fiscal first quarter and preceding quarter largely driven by continued growth of securities-based loans and residential mortgages.
The credit quality of the loan portfolio remains solid. Criticized loans as a percent of total loans held for investment ended the quarter at 1.26%, down from 1.47% in the preceding quarter. Bank loan allowance for credit losses as a percent of total loans held for investment was 0.95%, and bank loan allowance for credit losses on corporate loans as a percent of corporate loans held for investment was 1.93%.
Other
The effective tax rate was 19.9% for the quarter, reflecting a tax benefit recognized for share-based compensation that vested during the quarter.
In December, the Board of Directors increased the quarterly cash dividend on common shares 11% to $0.50 per share and authorized common stock repurchases of up to $1.5 billion, replacing the previous authorization. During the fiscal first quarter, the firm repurchased 310 thousand shares of common stock for $50 million at an average price of $161 per share. As of January 24, 2025, approximately $1.45 billion remained available under the Board's approved common stock repurchase authorization. At the end of the quarter, the total capital ratio was 25.0%(3) and the tier 1 leverage ratio was 13.0%(3), both well above regulatory requirements.
A conference call to discuss the results will take place today, Wednesday, January 29, at 5:00 p.m. ET. The live audio webcast, and the presentation which management will review on the call, will be available at www.raymondjames.com/investor-relations/financial-information/quarterly-earnings. An audio replay of the call will be available at the same location until April 29, 2025. For a listen-only connection to the conference call, please dial: 888-596-4144 (conference code: 3778589).
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About Raymond James Financial, Inc.
Raymond James Financial, Inc. (NYSE:RJF) is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. Total client assets are $1.56 trillion. Public since 1983, the firm is listed on the New York Stock Exchange under the symbol RJF. Additional information is available at www.raymondjames.com.
Forward-Looking Statements
Certain statements made in this press release may constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions (including changes in interest rates and inflation), demand for and pricing of our products (including cash sweep and deposit offerings), anticipated timing and benefits of our acquisitions, and our level of success integrating acquired businesses, anticipated results of litigation, regulatory developments, and general economic conditions. In addition, future or conditional verbs such as "will," "may," "could," "should," and "would," as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the "SEC") from time to time, including our most recent Annual Report on Form 10-K, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are available at www.raymondjames.com and the SEC's website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.
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