EX-99.1 2 ex99_1.htm UPDATED 12-31-09 EARNINGS RELEASE ex99_1.htm
               




 
February 3, 2010                                                                                                FOR IMMEDIATE RELEASE
 
RAYMOND JAMES FINANCIAL, INC.
UPDATES FIRST QUARTER RESULTS
FOR UNANTICIPATED LEGAL DECISION

ST. PETERSBURG, Fla. – Raymond James Financial, Inc. (RJF: NYSE) announced today that an award in the amount of $12,115,000 was entered in a FINRA arbitration against the company’s subsidiary, Raymond James & Associates, Inc. (RJA). The unanticipated judgment was based on the arbitrators’ decision that found RJA liable for the raiding of four A.G. Edwards & Sons, Inc. (“A.G. Edwards”) branches shortly after it was announced that A.G. Edwards had been acquired by Wachovia Securities, which was subsequently sold to Wells Fargo Advisors. The panel did not provide any explanation for their conclusion. Raymond James does not agree with the panel’s decision and believes that the financial advisors concerned were evaluating other affiliation alternatives at that time, in response to the takeover of A.G. Edwards by Wachovia. Although the company is currently reviewing the matter to determine its next course of action, it is difficult to appeal arbitration panel decisions.
 
Raymond James Financial’s financial information previously included in its Form 8-K dated January 21, 2010, was therefore updated for the three months ending December 31, 2009, to reflect this decision. This resulted in an increase in other expense of $10.75 million, related adjustments to profit-based accruals, a decrease in Private Client Group pre-tax results of $10.1 million, a decrease in net income of $6 million and a decrease in diluted earnings per share of $0.04. The updated financial information will be reflected in the company’s financial statements in its first quarter report and on Form 10-Q when filed.
 
Raymond James Financial (NYSE-RJF) is a Florida-based diversified holding company providing financial services to individuals, corporations and municipalities through its subsidiary companies. Its three wholly owned broker/dealers (Raymond James & Associates, Raymond James Financial Services and Raymond James Ltd.) and Raymond James Investment Services Limited, a majority-owned independent contractor subsidiary in the United Kingdom, have a total of more than 5,300 financial advisors serving approximately 1.9 million accounts in more than 2,300 locations throughout the United States, Canada and overseas. In addition, total client assets are approximately $232 billion, of which $30 billion are managed by the firm’s asset management subsidiaries.
 
To the extent that Raymond James makes or publishes forward-looking statements (regarding economic conditions, management expectations, strategic objectives, business prospects, anticipated expense savings, loan reserves/losses, financial results, anticipated results of litigation and regulatory proceedings, and other similar matters), a variety of factors, many of which are beyond Raymond James’ control, could cause actual results and experiences to differ materially from the expectations and objectives expressed in these statements. These factors are described in Raymond James’ 2009 annual report on Form 10-K which is available on raymondjames.com and sec.gov.


 

Raymond James Financial, Inc.
Unaudited Report
For the three months ended
(all data in thousands, except per share earnings)
 
 
Dec 31,
  
Dec 31,
  
%
  
Sept 30,
  
%
 
2009
  
2008
  
Change
  
2009
  
Change
Total Revenues
$702,669
  
$695,833 
  
1% 
  
$678,023 
  
4% 
Net Revenues
686,967
  
663,942 
  
3% 
  
667,158 
  
3% 
Pre-Tax Income
69,388
  
101,664 
  
(32%)
  
61,883 
  
12%
Net Income
42,903
  
61,093 
  
(30%)
  
42,969 
  
-


 
Dec 31,
  
Dec 31,
  
%
  
Sept 30,
  
%
 
2009
  
2008
  
Change
  
2009
  
Change
Income for basic earnings per common
                  
share1:
                  
Net Income applicable to Raymond
                  
James Financial, Inc.
$42,903 
  
$ 61,093 
  
(30%)
  
$ 42,969 
  
-
Less allocation of earnings and
                  
dividends to participating securities
1,789 
  
2,403 
  
(26%)
  
1,847
  
(3%) 
Net income applicable to Raymond
                  
James Financial, Inc. common
                  
shareholders
$  41,114
  
$58,690 
  
(30%)
  
$ 41,122
  
-
Income for diluted earnings per common
                  
share1:
                  
Net Income applicable to Raymond
                  
James Financial, Inc.
$ 42,903 
  
$  61,093 
  
(30%)
  
$ 42,969 
  
-
Less allocation of earnings and
                  
dividends to participating securities
1,787 
  
2,399 
  
(26%)
  
1,845 
  
(3%)
Net income applicable to Raymond
                  
James Financial, Inc. common
                  
shareholders
$ 41,116 
  
$  58,694 
  
(30%)
  
$ 41,124 
  
-
Common shares1:
                  
Average common shares in basic
                  
computation:
118,763 
  
116,307 
      
118,147 
    
Dilutive effect of outstanding stock
                  
options
220 
  
252 
      
157 
    
Average common shares used in
                  
diluted computation
118,983 
  
116,559 
      
118,304 
    
                   
Earnings per common share1:
                  
Basic
     $   0.35 
  
$      0.50 
  
(30%)
  
$      0.35 
  
-
Diluted
$    0.35 
  
$      0.50 
  
(30%)
  
$      0.35 
  
-

 


 
Balance Sheet Data
     
 
December
September
 
2009
2009
Total assets
$ 14.7 bil.
$ 18.2 bil.
Shareholders’ equity
$2,093 mil.
$2,032 mil.
Book value per share
$17.53
$17.11

 
December 31,
  
December 31,
  
%
  
September 30,
  
%
 
2009
  
2008
  
Change
  
2009
  
Change
Revenues:
                  
  Private Client Group
$ 454,824 
  
$ 414,544 
  
10% 
  
$ 421,157 
  
8% 
  Capital Markets
133,773 
  
128,706 
  
4% 
  
142,011 
  
(6%)
  Asset Management
49,998 
  
51,291 
  
(3%)
  
44,489 
  
12%
  RJ Bank
68,922 
  
109,239 
  
(37%)
  
70,044 
  
(2%)
  Emerging Markets
3,718 
  
4,323 
  
(14%)
  
4,263 
  
(13%)
  Stock Loan/Borrow
1,875 
  
3,290 
  
(43%)
  
2,011 
  
(7%)
  Proprietary Capital
(35)
  
538 
  
(107%)
  
2,962 
  
(101%)
  Other
1,758 
  
1,086 
  
62% 
  
2,566 
  
(31%)
  Intersegment Eliminations
(12,164)
  
(17,184)
  
29% 
  
(11,480)
  
(6%)
     Total Revenues
$ 702,669 
  
$ 695,833 
  
1% 
  
$ 678,023
  
4% 
                   
Pre-Tax Income:
                  
  Private Client Group
$   31,712 
  
$  32,585 
  
(3%) 
  
$  22,286 
  
42% 
  Capital Markets
11,394 
  
14,289 
  
(20%)
  
22,986 
  
(50%)
  Asset Management
12,066 
  
9,074 
  
33% 
  
9,742 
  
24% 
  RJ Bank
24,637 
  
54,626 
  
(55%)
  
10,395 
  
137% 
  Emerging Markets
(1,412)
  
(465)
  
(204%)
  
(821)
  
(72%)
  Stock Loan/Borrow
687 
  
1,223 
  
(44%)
  
696 
  
(1%)
  Proprietary Capital
(812)
  
(544)
  
(49%)
  
2,389 
  
(134%)
  Other
(8,884)
  
(9,124)
  
3% 
  
(5,790)
  
(53%)
Pre-Tax Income
$  69,388 
  
$ 101,664 
  
(32%)
  
$ 61,883 
  
12% 


 
1 During the quarter ended December 31, 2009, we changed the methodology used to calculate basic and diluted earnings per share in accordance with new accounting guidance. Prior period earnings per basic and diluted shares have been restated. Earnings per basic and diluted shares have been reduced by $0.02 and $0.01 for the quarters ended December 31, 2008 and September 30, 2009, respectively. The relevant accounting guidance is Financial Accounting Standards Board ASC 260-10-45.

 
 
 
 
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Quarter-to-Date
(in thousands, except per share amounts)
 
Three Months Ended
 
Dec 31,
  
Dec 31,
  
%
  
Sept 30,
  
%
 
2009
  
2008
  
Change
  
2009
  
Change
Revenues:
                  
Securities commissions and fees
$ 469,151 
  
$ 418,225 
  
12% 
  
$ 440,430 
  
7% 
Investment banking
25,718 
  
20,733 
  
24% 
  
35,804 
  
(28%)
Investment advisory fees
43,975 
  
44,435 
  
(1%)
  
36,844 
  
19% 
Interest
91,372 
  
143,612 
  
(36%)
  
93,862 
  
(3%)
Net trading profits
11,637 
  
9,175 
  
27% 
  
12,791 
  
(9%)
Financial service fees
36,782 
  
33,135 
  
11% 
  
31,631 
  
16% 
Other
24,034 
  
26,518 
  
(9%)
  
26,661 
  
(10%)
                   
Total Revenues
702,669 
  
695,833 
  
1% 
  
678,023 
  
4% 
Interest Expense
15,702 
  
31,891 
  
(51%)
  
10,865 
  
45% 
Net Revenues
686,967 
  
663,942 
  
3% 
  
667,158 
  
3% 
                   
Non-Interest Expenses:
                  
Compensation, commissions
                  
and benefits
471,079 
  
419,254 
  
12% 
  
455,149 
  
4% 
Communications and information
                  
processing
28,074 
  
35,223 
  
(20%)
  
29,777 
  
(6%)
Occupancy and equipment costs
26,715 
  
26,435 
  
1% 
  
26,506 
  
1% 
Clearance and floor brokerage
8,502 
  
8,588 
  
(1%)
  
8,829 
  
(4%)
Business development
19,881 
  
24,724 
  
(20%)
  
16,434 
  
21% 
Investment advisory fees
9,103 
  
9,722 
  
(6%)
  
8,082 
  
13% 
Bank loan loss provision
22,835 
  
24,870 
  
(8%)
  
39,702 
  
(42%)
Other
33,665 
  
18,469 
  
82% 
  
25,851 
  
30% 
Total Non-Interest Expenses
619,854 
  
567,285 
  
9% 
  
610,330 
  
2% 
                   
Income before provision for income taxes
                  
and noncontrolling interests
67,113 
  
96,657 
  
(31%)
  
56,828 
  
18% 
Provision for income taxes
26,485 
  
40,571 
  
(35%)
  
18,914 
  
40% 
Net Income before noncontrolling
                  
Interests
40,628
  
56,086 
  
(28%)
  
37,914 
  
7% 
Net loss applicable to noncontrolling
                  
interests
(2,275)
  
(5,007)
  
55% 
  
(5,055)
  
55% 
Net Income applicable to Raymond
                  
James Financial, Inc.
$  42,903 
  
$  61,093 
  
(30%)
  
$  42,969 
  
_ 
                   
Net Income per common share basic
$       0.35
  
$      0.50 
  
(30%)
  
$      0.35 
  
_ 
Net Income per common share diluted
$       0.35
  
$      0.50 
  
(30%)
  
$      0.35 
  
_ 
Weighted average common shares
                  
outstanding-basic
118,763 
  
116,307 
      
118,147 
    
Weighted average common
                  
and common equivalent
                  
shares outstanding-diluted
118,983 
  
116,559 
      
118,304