Raymond James' fourth-quarter (ended Sep 30) fiscal 2014 earnings
outpaced the Zacks Consensus Estimate. Robust top-line improvement
along with growth in assets under management (AUM) and assets under
administration were among the positives. However, rising expenses
remained a headwind. Going forward, we believe that the company's
capital strength, sturdy growth in the PCG segment and synergies
from the acquisitions are expected to be accretive to its
financials. Further, the company's steady capital deployment
activities continue to be a positive attribute for investors.
Nonetheless, weak cost control, increasing regulatory pressure and
slow economic recovery continue to weigh on profitability.
Established in 1962, Raymond James Financial Inc. is a
diversified company based in St. Petersburg, FL. The company became
public in 1983 and along with its subsidiaries Raymond James &
Associates Inc. (RJ&A), Raymond James Financial Services Inc.
(RJFS), Raymond James Financial Services Advisors Inc. (RJFSA),
Raymond James Ltd. (RJ Ltd.), Eagle Asset Management Inc. (Eagle)
and Raymond James Bank N.A. (RJ Bank) it provides financial
services mainly in the U.S. and Canada.
The financial services offered by Raymond James include
underwriting, distribution, trading and brokerage of equity and
debt securities, and sale of mutual funds and other investment
products. Apart from these, the company provides investment
management services, corporate and retail banking and trust
In 2012, Raymond James became a bank holding company and a
financial holding company. Concurrently, RJ Bank was converted to a
national bank following the approval from the Office of the
Comptroller of the Currency.
Raymond James operates its businesses through the following
The Private Client Group (PCG) segment offers a broad range of
investments and services, including both third-party and
proprietary products as well as a wide range of financial planning
services. The segment provides services through the branch office
systems of RJ&A, RJFS, RJFSA, RJ Ltd. and Raymond James
Investment Services Limited (RJIS), a UK-based joint venture
The Capital Markets segment mainly offers equity and fixed
income products and services, with institutional sales commissions
accounting for a large portion of its revenues.
The Asset Management segment provides asset management services
to individual investment portfolios and mutual funds. The segment
includes the operations of Eagle, the Eagle Family of Funds (Eagle
Funds), and asset management operations of RJ&A (AMS), Raymond
James Trust along with other fee-based programs.
The RJ Bank provides corporate, residential and consumer loans
as well as FDIC insured deposit accounts to Raymond James'
broker-dealer subsidiaries and the general public. RJ Bank is also
active in corporate loan syndications as well as buying residential
whole-loan packages to hold for investment.
The Other segment consists of principal capital and private
equity activities as well as various corporate overhead costs,
which include interest expense on senior debt, acquisition and
integration related expenses as well as losses associated with the
In 2011, Raymond James completed the acquisition of Howe Barnes,
fulfilling its plan of expanding the presence of its capital
markets and private clients in strategic areas.
In Apr 2012, Raymond James completed the acquisition of Morgan
Keegan & Company Inc. and MK Holding Inc. and certain of its
related affiliates from Regions Financial Corporation for about
$1.2 billion. In Dec 2012, Raymond James completed the acquisition
of 45% stake in ClariVest Asset Management, LLC for $8.8
As of Sep 30, 2014, Raymond James had total assets of $23.3
billion and shareholders' equity of $4.1 billion. The company's
fiscal year ends on Sep 30.
Raymond James Financial, Inc. (RJF): Read the Full
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