Raymond James reports record net income, profit for fiscal year

On the back of its acquisition of Morgan Keegan & Co. Inc., Raymond James Financial Inc. on Wednesday reported record net revenue of $4.5 billion for its fiscal year ended in Sept. 30, up 18% from the prior year. The firm, home to 5,700 registered reps and advisers in the United States, also reported record annual net income of $367 million, an increase of 24% from the previous year.
After a slow start to the recruiting year, independent broker-dealer Raymond James Financial Services Inc. posted better net new adviser numbers in the second half of the fiscal year, finishing with 3,275 reps and advisers. That’s a net gain of 55 reps and advisers in the course of the year, a gain of almost 2%.
“Recruiting has picked up substantially in the last quarter,” Paul Reilly, the company’s chief executive officer, said on a conference call.
He pointed to two reasons. First, reps and advisers across the industry sat tight in the first half of the year, enjoying the good times as the broad stock market rose close to 16% through mid-May. Second, Raymond James Financial is finished with its integration of Morgan Keegan, allowing it to focus on recruiting.
“We’re a lot more focused now on the outside versus the inside,” Mr. Reilly said.
Raymond James & Associates, the employee broker-dealer that absorbed Morgan Keegan brokers earlier this year, suffered a net loss of 43 reps and advisers after combining the two securities businesses. Its head count as of Sept. 30 was 2,443 reps and advisers.
“All four operating segments generated net revenue and earnings this year, which is a testament to the firm’s conservative business model and our associates’ unwavering focus on serving clients and advisers,” Mr. Reilly said in a statement.
Private client group revenue for the year increased 18% to $2.9 billion. Pretax income in the private client group was up 7% to $230.3 million. The private client group is the largest of Raymond James’ businesses, account for roughly two-thirds the firm’s revenue. The other segments are: capital markets, asset management and a bank.
Overall for the company, earnings reached $2.58 per diluted share, up 17% from $2.20 per diluted share in the previious fiscal year. Excluding $80 million in pretax charges for acquisition-related expenses and other items, net income would have been $2.95 per diluted share. The firm also reported record assets under administration of $425 billion, up 10% for the year, and record assets under management of $56 billion, up 31% for the year.
The results included a full year of Morgan Keegan business operations, which Raymond James acquired for $930 million in April 2012 from Regions Financial Corp.