Paul Reilly to Replace Tom James as Raymond James CEO on May 1

RJ board confirms succession plan; declares dividend for 25th straight year

The board of Raymond James Financial confirmed February 19 that Paul Reilly will succeed Tom James as CEO on May 1, as was first announced by the company in March 2009; Reilly became president of the company in May 2009. The board also declared a quarterly cash dividend of $0.11/common share, marketing the 25th consecutive year that Raymond James has paid a dividend.

Last month, Raymond James Financial reported a 20% decrease in first quarter net income to $49 million, or $0.39/diluted share, on a 3% increase in net revenue to $686.96 million (for the quarter ended December 31, 2009).

In a conference call with analysts on January 21 discussing the results, Tom James noted that in the preceding quarter, net income rose 14% on a 3% rise in revenues, and that Raymond James's Private Client Group saw commissions and fees rise 15% over the prior year's first quarter, "generating an increased contribution to pre-tax profits of 28% in the segment over last year and an 88% improvement" over the fourth quarter ended September 30, 2009.

During the call, James noted that "client assets are up dramatically due to all that early good recruiting we did and the market. You're beginning to see client activity slowly beginning to increase, but slower than you might have anticipated." James said that "fortunately, we have a strong fee-based business--assets under management for a fee or pure asset management. Those balances have continued to trend upward so revenues in this quarter should continue to show sequential improvement."

James said that "Generally speaking, net income before all these adjustments the accountants are slapping on us now ... the $49 million was actually very good." But speaking of the decline, James said "As a generalization, it's the bank, it's the bank, it's the bank," referring to Raymond James Bank.

As for Raymond James's recruiting, Research Magazine's Janet Levaux reported on February 12 that RJ had recently recruited advisors with more than $1 billion in assets under management.

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