Core Insights - Raymond James Financial Inc. reported mixed first-quarter fiscal 2026 results, with net revenues of $3.7 billion, a 6% increase year-over-year, but pre-tax income and net income available to common shareholders fell by 3% and 6% respectively [1][2]. Group 1: Financial Performance - The Private Client Group, the largest sector of the company, generated revenues of $2.77 billion, reflecting a 9% year-over-year increase [2]. - Asset Management revenues increased by 11% year-over-year, reaching $326 million [2]. Group 2: Future Outlook - The company anticipates quarterly share buybacks between $400 million and $500 million and a 1% increase in fiscal Q2 asset management fees [3]. - Management is focused on organic growth and potential acquisitions, with an expected effective tax rate of 24-25% for fiscal 2026 [3]. Group 3: Company Overview - Raymond James Financial Inc. is a diversified financial services company providing wealth management, capital markets, asset management, banking, and other services to individuals, corporations, and institutions [4].

Core Insights - Raymond James has successfully recruited a team from Bank of America's Merrill Lynch, managing $1 billion in client assets [1][2] Group 1: Recruitment and Team Details - The advisory team consists of four financial advisors and two client service associates, joining the Thrift Private Wealth of Raymond James in Easton, Md [2] - Key members include Garrett Thrift, managing director and private wealth advisor, who has 15 years of experience at Merrill [2][3] - Other team members include financial planning consultant Kara Burt (8 years at Merrill) and advisors Blake Saulsbury and Wade Oursler (3 years at Merrill) [3] Group 2: Company Performance and Strategy - Raymond James reported strong recruiting results for its fiscal first quarter ending December 31, adding advisors with approximately $13 billion in client assets [5] - The firm increased its spending on recruiting and retention-related compensation by 22% to $107 million during the quarter [5] - The decision to join Raymond James was influenced by the firm's private wealth resources and direct access to senior leadership [4] Group 3: Industry Context - According to Wolfe Research, Raymond James ranked just behind LPL Financial in total net advisor gains for 2025, while Bank of America was the largest net loser of advisors [6] - Bank of America reported historic lows in advisor attrition and strong revenue growth in its wealth management divisions [7] Group 4: Services Offered - Thrift Private Wealth will provide various services, including alternative investing, banking and lending, and estate, charitable giving, and trust services [8]

Core Insights - Raymond James Financial reported a 22% increase in recruiting and retention-related compensation in its fiscal first quarter ending December 31, 2025, as part of its strategy to attract financial advisors [1][5] - The firm successfully recruited advisors with approximately $13 billion in client assets and a trailing 12-month production of $96 million, marking a strong performance despite seasonal slowdowns [2] - The company achieved an annualized net new asset growth of 8%, totaling $31 billion, which is the second-best result in its history [2] Recruitment and Advisor Growth - The recruiting activity at Raymond James is described as robust and broad-based, with a recent tilt towards independent contractor channels [3] - As of the end of fiscal year 2025, the firm reached a record of 8,943 financial advisors, reflecting a 2% increase from the previous year [3] Competitive Landscape - Increased competition is noted in the financial advisory space, particularly from private equity-backed firms, but Raymond James emphasizes its long-term stability and ongoing investments in technology [4] - The firm recently introduced a proprietary artificial intelligence agent for advisors, named Rai, to enhance its service offerings [4] Financial Metrics - The recruiting and retention-related compensation for the first fiscal quarter was reported at $107 million, a 22% increase quarter-over-quarter [5] - The average compensation ratio for advisors was 65.4%, excluding acquisition-related expenses, with total compensation expenses amounting to $2.45 billion [6]

Core Insights - Raymond James (RJF) reported adjusted earnings of $2.86 per share for Q1 fiscal 2026, surpassing the Zacks Consensus Estimate of $2.83, but reflecting a 2% decline from the previous year [1][9] Financial Performance - The company achieved record quarterly net revenues of $3.74 billion, marking a 6% year-over-year increase and exceeding the Zacks Consensus Estimate of $3.73 billion [3][9] - The Private Client Group saw a 9% year-over-year growth in net revenues, while Asset Management's net revenues increased by 11%. However, Capital Markets experienced a significant decline of 21% [3] - Non-interest expenses rose by 8% to $3.01 billion, attributed to increases across all cost components except for bank loan provisions for credit losses [4] Asset Management and Growth - As of December 31, 2025, client assets under administration reached a record $1.77 trillion, up 14% from the prior year, with financial assets under management growing by 15% to $280.8 billion [4] Balance Sheet and Capital Ratios - Total assets stood at $88.8 billion, a 1% increase from the previous quarter, while total common equity rose to $12.5 billion [5] - Book value per share increased to $63.41 from $49.49 a year earlier, although the total capital ratio decreased to 24.3% from 25% [5] Share Repurchase Program - In the reported quarter, Raymond James repurchased shares worth $400 million at an average price of $162 per share, with an authorization for up to $2 billion in share repurchases [7] Market Position and Outlook - The company is expected to benefit from global diversification efforts, strategic acquisitions, and relatively high interest rates, which are anticipated to support top-line growth [10]

Core Insights - The company is focused on retaining and attracting top financial advisers through investments in technology and service offerings, including a proprietary AI operations agent named RA [1][2][3] - The firm has successfully recruited advisers with a total production of nearly $460 million and over $69 billion in client assets over the past 12 months, indicating strong growth potential [2][4] - The company reported record net revenues of $3.7 billion for the fiscal first quarter, with a net income of $562 million and an adjusted earnings per diluted share of $2.86 [11][12] Investment and Technology - The company continues to invest in its platform and technology, including a focus on AI to enhance service models for financial advisers [1][3][6] - A significant investment of approximately $1.1 billion in technology is planned for the year, aimed at improving efficiency and decision-making for advisers [30][74] - The firm has launched AI tools to support advisers, which are expected to create efficiencies and improve client service [75] Financial Performance - The Private Client Group generated record quarterly net revenues of $2.77 billion, driven by higher assets under administration and market appreciation [12][14] - The Capital Markets segment experienced a decline in revenues due to lower M&A and advisory revenues, but a robust pipeline is expected to support future growth [5][40] - The Asset Management segment reported record net revenues of $326 million, attributed to strong inflows and market appreciation [13] Client and Adviser Dynamics - The company has a strong adviser recruiting pipeline, with a focus on high net worth clients, which is expected to drive future growth [2][4][24] - Adviser satisfaction and retention rates are at their highest since 2014, indicating a strong culture that values independence and client ownership [30][36] - The firm is positioned as a long-term stable option for advisers, differentiating itself from competitors focused on short-term gains [36][38] Capital Deployment and Shareholder Returns - The company has repurchased $400 million of common stock in the recent quarter and plans to maintain a similar level of repurchases going forward [10][77] - A total of $1.45 billion in common shares has been repurchased over the past 12 months, reflecting a commitment to returning capital to shareholders [23] - The firm maintains a strong balance sheet with a Tier 1 leverage ratio of 12.7%, providing flexibility for future investments and acquisitions [21][22]

Financial Data and Key Metrics Changes - The company reported record net revenues of $3.7 billion for the fiscal first quarter, with net income available to common shareholders at $562 million and earnings per diluted share of $2.79 [12] - Adjusted net income available to common shareholders was $577 million, resulting in adjusted earnings per diluted share of $2.86, with a pre-tax margin of 19.5% and an adjusted pre-tax margin of 20% [13] - The annualized return on common equity was 18%, and the annualized adjusted return on tangible common equity was 21.4% [13] Business Line Data and Key Metrics Changes - The Private Client Group generated pre-tax income of $439 million on record quarterly net revenues of $2.77 billion, driven by higher assets under administration [14] - The Capital Markets segment generated quarterly net revenues of $380 million and a pre-tax income of $9 million, with revenues declining year-over-year and sequentially due to lower M&A and advisory revenues [14][15] - The asset management segment achieved record pre-tax income of $143 million on record net revenues of $326 million, attributed to higher financial assets under management and strong net inflows [15] - The bank segment generated net revenues of $487 million and record pre-tax income of $173 million, with net interest income growing 6% sequentially [15] Market Data and Key Metrics Changes - The company reported net new asset annualized growth of 8% this quarter, with $31 billion of net new assets, marking the second-best quarter ever [5][31] - Total client assets recruited over the past twelve months exceeded $69 billion across all platforms, reflecting strong recruiting momentum [6] Company Strategy and Development Direction - The company is focused on long-term capital deployment, including investments in technology, acquisitions, and share repurchases, with a commitment to maintaining a strong balance sheet [5][10] - Recent acquisitions, including Clark Capital Management and GreensLedge, are aimed at enhancing the platform and expanding capabilities [9][11] - The company emphasizes a culture that respects advisor independence and ownership, which is seen as a differentiator in attracting and retaining financial advisors [7][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth driven by a robust advisor recruiting pipeline and strong commitments from prospective advisors [7] - The company acknowledged headwinds from lower interest rates and seasonal impacts typical in the second fiscal quarter but remains focused on generating long-term sustainable growth [27][28] - Management highlighted the importance of personal relationships and a stable platform for advisors, which is expected to differentiate the company in a competitive environment [28][41] Other Important Information - The company repurchased $400 million of common stock at an average share price of $162 during the quarter, with a Tier 1 Leverage Ratio of 12.7% [11][24] - The effective tax rate for the quarter was 22.7%, with an expectation of approximately 24%-25% for fiscal 2026 [24] Q&A Session Summary Question: On net new assets and areas of strength - Management noted that $31 billion of net new assets in the quarter was broad-based, with strong retention of existing advisors and a robust recruiting activity [31][32] Question: On sustainability of net new assets growth - Management expressed confidence in sustaining growth based on strong pipelines and advisor satisfaction, despite competitive pressures [41][54] Question: On capital markets outlook and revenue growth - Management indicated a strong pipeline in capital markets, with expectations for revenue to improve above the current quarter's level [46][61] Question: On M&A results and advisory performance - Management acknowledged challenges in comparing results with peers but emphasized long-term growth trends and sector expertise [82][84] Question: On non-compensation expenses and technology investments - Management highlighted ongoing investments in technology as a key driver of non-compensation expenses, balancing growth with operational efficiency [88][89]

Financial Data and Key Metrics Changes - The firm reported record net revenues of $3.7 billion for the fiscal first quarter, with net income available to common shareholders at $562 million and earnings per diluted share of $2.79 [13] - Adjusted net income available to common shareholders was $577 million, resulting in adjusted earnings per diluted share of $2.86, with a pre-tax margin of 19.5% and an adjusted pre-tax margin of 20% [13] - The annualized return on common equity was 18%, and the annualized adjusted return on tangible common equity was 21.4% [13] Business Line Data and Key Metrics Changes - The Private Client Group generated pre-tax income of $439 million on record quarterly net revenues of $2.77 billion, driven by higher assets under administration [14] - The Capital Markets segment generated quarterly net revenues of $380 million and a pre-tax income of $9 million, with revenues declining year-over-year and sequentially [14] - The Asset Management segment achieved record pre-tax income of $143 million on record net revenues of $326 million, attributed to higher financial assets under management and strong net inflows [15] - The Bank segment generated net revenues of $487 million and record pre-tax income of $173 million, with net interest income growing 6% sequentially [15] Market Data and Key Metrics Changes - The firm ended the quarter with total assets of $88.8 billion, a 1% sequential increase, primarily due to loan growth [22] - Record bank loans reached $53.4 billion, reflecting a 13% year-over-year growth and a 4% sequential increase [22] - Clients' domestic cash sweep and Enhanced Savings Program balances ended the quarter at $58.1 billion, up 3% over the preceding quarter [17] Company Strategy and Development Direction - The company is focused on long-term capital deployment, with investments in technology and platform enhancements, including a newly launched AI operations agent named Rai [7][8] - The firm announced the acquisition of Clark Capital Management and GreensLedge, emphasizing cultural and strategic fit in its M&A strategy [11][66] - The company aims to maintain a strong balance sheet and liquidity while pursuing both organic and inorganic growth opportunities [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a robust advisor recruiting pipeline and strong commitments to join in the coming quarters [7] - The company acknowledged headwinds from lower interest rates and seasonal impacts typical in the second fiscal quarter but remains focused on generating long-term sustainable growth [26] - Management highlighted the importance of personal relationships and a strong culture in attracting and retaining financial advisors amid increasing competition [42] Other Important Information - The firm returned $511 million of capital to shareholders during the quarter through dividends and share repurchases, maintaining a long-term commitment to capital management [24] - The effective tax rate for the quarter was 22.7%, with an estimated effective tax rate for fiscal 2026 expected to be around 24%-25% [23] Q&A Session Summary Question: On net new assets and areas of strength - Management noted $31 billion of net new assets in the quarter, the second-best quarter ever, with robust recruiting activity across various affiliation options [30][31] Question: On sustainability of net new assets growth - Management expressed confidence in sustaining growth based on strong retention and recruiting results, despite competitive pressures [51] Question: On capital markets outlook and revenue growth - Management indicated a strong pipeline in capital markets, with expectations for revenue improvement above the current quarter's $380 million level [58] Question: On M&A results and advisory performance - Management acknowledged challenges in comparing results with peers but emphasized long-term growth trends in investment banking [77][79] Question: On non-compensation expenses and technology investments - Management confirmed ongoing investments in technology as a key driver of non-compensation expenses, balancing growth with cost management [82]

Financial Data and Key Metrics Changes - The firm reported record net revenues of $3.7 billion for the fiscal first quarter, with net income available to common shareholders at $562 million and earnings per diluted share of $2.79 [11] - Adjusted net income available to common shareholders was $577 million, resulting in adjusted earnings per diluted share of $2.86, with a pre-tax margin of 19.5% and an adjusted pre-tax margin of 20% [11][12] - The annualized return on common equity was 18%, and the annualized adjusted return on tangible common equity was 21.4% [11] Business Line Data and Key Metrics Changes - The Private Client Group generated pre-tax income of $439 million on record quarterly net revenues of $2.77 billion, driven by higher assets under administration [12] - The Capital Markets segment generated quarterly net revenues of $380 million and a pre-tax income of $9 million, with revenues declining year-over-year and sequentially [12] - The asset management segment achieved record pre-tax income of $143 million on record net revenues of $326 million, attributed to higher financial assets under management and strong net inflows [13] - The bank segment generated net revenues of $487 million and record pre-tax income of $173 million, with net interest income growing 6% sequentially [13] Market Data and Key Metrics Changes - The firm ended the quarter with total assets of $88.8 billion, a 1% sequential increase, primarily due to loan growth [21] - Record bank loans reached $53.4 billion, reflecting a 13% year-over-year growth and a 4% sequential increase [21] - Clients' domestic cash sweep and enhanced savings program balances ended the quarter at $58.1 billion, up 3% over the preceding quarter [16] Company Strategy and Development Direction - The company is focused on long-term capital deployment, with investments in technology, acquisitions, and share repurchases [4][10] - Recent acquisitions include Clark Capital Management and GreensLedge, aimed at enhancing the firm's capabilities and maintaining cultural fit [10][23] - The firm emphasizes a client-first culture and aims to attract and retain financial advisors through a strong value proposition and technology investments [5][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a robust advisor recruiting pipeline and strong commitments from prospective advisors [5] - The firm acknowledges headwinds from lower interest rates and seasonal impacts but remains focused on generating long-term sustainable growth [26] - Management believes that their established approach and focus on personal relationships differentiate them in a competitive environment [26][41] Other Important Information - The firm repurchased $400 million of common stock at an average share price of $162 during the quarter [10] - The effective tax rate for the quarter was 22.7%, with an estimated effective tax rate for fiscal 2026 expected to be around 24%-25% [23] Q&A Session Summary Question: What areas saw particular strength in net new assets this quarter? - Management noted that $31 billion of net new assets was the second-best quarter ever, with robust recruiting activity across various affiliation options, particularly in the independent contractor side [30] Question: How should we think about the sustainability of the 8% net new asset growth? - Management indicated that while the 8% growth benefited from year-end dynamics, they are confident in sustaining growth based on current pipelines and advisor retention [52] Question: What is the outlook for capital markets revenue growth? - Management expressed optimism about the capital markets pipeline, noting pent-up demand from buyers and sellers, but acknowledged that timing of revenue recognition can be unpredictable [45] Question: Can you elaborate on the Clark Capital acquisition? - Management highlighted that Clark Capital represents a good cultural and strategic fit, focusing on long-term client relationships, and is expected to enhance the firm's offerings [67] Question: How do you see the interplay of liquidity and net new assets? - Management explained that they are seeing a shift in client behavior towards reinvestment rather than holding cash, which is expected to support future growth in securities-based loans [72]

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Forward-looking statements Certain statements made in this presentation and the associated conference call 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, inflatio ...