The first quarter was positive, but not stellar for the stock markets. While the Dow Jones managed to produce a 0.3% gain, the S&P 500 had a slightly more favorable rise of nearly 1%.

Meanwhile, the Financial Select Sector SPDR ETF (XLF) traded down about 2%, but the iShares U.S. Broker-Dealer ETF moved up about 0.5% during the first three months of 2015. Year to date, the broker-dealer ETF is up about 2%, while the financial-sector fund is off about 1%.

As for the financial group’s earnings and sales growth, the industry boosted sales 32% on average in Q1’15 vs. Q1’14. On top of that revenue growth, earnings expanded 53% year over year, according to analysis done by Reuters.

(Check out the previous quarter’s list: 12 Best & Worst Broker-Dealers: Q4 Earnings, 2014.)

Read on to see which of these 12 broker-dealers’ profits grew fastest, and which ones underperformed in terms of earnings per share.

WORST BROKER-DEALER

Bill Dwyer, CEO of Realty Capital Securities 

12th Place

RCS Capital (RCAP)

RCS Capital, which includes the Cetera Financial Group of independent broker-dealers, said its adjusted net income fell 54%, to $17.4 million, or $0.19 a share, from $38.4 million, or $0.44 a share, in the first quarter of 2014.

On a pre-adjusted basis, the company reported a net loss of $13.5 million, or -0.14 a share, vs. a net loss of $7.4 million, or -0.09 a share in the year-ago period — representing an 82% decline from a year earlier.

Equity sales dropped 54% in the first quarter of 2015 from last year to $1.1 billion, and its total revenue was down 8% year over year to $625.6 million in the period ending March 31.

The number of advisors in the Cetera network of independent broker-dealers stands at 9,539, up 4% from a year ago, while retail assets under administration grew 15% year over year to $240.3 million. Retail assets under management improved 32% to $46.5 billion

Realty Capital Securities’ distributed non-traded REIT programs – including American Realty Capital Trust Global, American Realty Capital Trust V and American Realty Capital Healthcare Trust II – were hurt by news in late October that American Realty Capital (ARCP) had $23 million of accounting errors, which prompted a number of broker-dealers and other entities to stop selling American Realty Capital products.

Ronald Kruszewski, CEO of Stifel Financial. (Photo: AP)

11th Place

Stifel Financial (SF)

Stifel Financial (SF) reported that it had first-quarter net income of $43.1 million, or $0.56 per share, down 9% compared with net income of $47.4 million, or $0.63 per share, last year. Its non-GAAP earnings, which excluded acquisition expenses, were $49.9 million, or $0.65 a share, down 3% from the year-ago period.

These results missed analysts’ estimates of $0.73. Revenues of $561 for Q1’15 were up 3% year over year, but fell short of estimates of $590.7 million.

Global wealth management total sales were $329.4 million, up 11% from a year earlier. They produced profits of $98.9 million in Q1’15, a 24% jump from the prior year.

Its wealth-management operations include 2,097 advisors vs. 2,103 in the prior quarter and 2,081 a year ago.

Mark Casady, CEO of LPL Financial.

10th Place

LPL Financial (LPLA)

LPL Financial, the largest independent U.S. broker-dealer, reported a 4.6% drop in net income for the first quarter to $50.7 million from $53.1 million a year ago, but revenues and assets rose.

Net revenues rose 2% to $1.1 billion and assets increased 9% to $485 billion.

On an adjusted basis, net income fell 11.1% to $63.2 million from $71.0 million a year ago and earnings per share fell to $0.64 from $0.69.

In a statement following the earnings release, LPL Financial President Dan Arnold said regulatory-related costs plus costs for two advisor conferences and a decrease in cash sweep revenues more than offset benefits from business growth and reduction in the number of outstanding shares.

LPL Financial paid $11 million in regulatory charges for the quarter, including fines and legal and regulatory consulting fees, and, according to its earnings statement, expects such costs will remain elevated for the rest of the year but not as high in subsequent quarters.

The IBD continued to add advisors during the first quarter, ending with 14,098, or 62 more than the previous quarter and 372 more than year ago. Advisory assets grew 16.3% to $183.7 billion and accounted for almost 38% of the firm’s assets under custody.

Assets under custody on LPL’s Hybrid RIA platform – for RIAs who may also be registered as broker-dealers– grew 51% to $104.8 billion and net new advisory assets, which exclude the impact of changes in the market, grew $5.2 billion. Total payouts for advisors, however, declined 75 basis points to 85.64%.

Ameriprise Financial Headquarters in Minneapolis.

9th Place

Ameriprise Financial (AMP)

Ameriprise reported a 1.75% drop in first-quarter earnings despite growth in its advice and wealth management operations. The company also increased its quarterly dividend to $0.67 a share from $0.58.

Net income fell to $393 million from $401 million in the first quarter of 2014, to $2.08 a share. Operating earnings per share rose 7% to $2.18. Analysts were expecting $2.33 a share.

Operating net revenues, however, rose 3% to $2.9 billion, but growth was partially offset by the negative impact of foreign exchange effects, a drop in net investment income and lower activity due to market volatility.

Total assets under management jumped 4% from a year ago to $815 billion, driven by net inflows from advisor clients, which grew 8% to $453 billion. Wrap account assets increased 13% to $180 billion.

Among advisors, average yearly fees and commissions per capita rose 11% to $505,000 from $454,000 a year ago. Total advisor headcount as of the end of the first quarter, however, fell slightly to 9,691, down from 9,704 for the same period a year ago. That reflects a slight decline in retention of advisors in both the employee channel, which accounts for 22% of financial advisors, and in the franchisee channel, which comprises the rest, to 91% and 94.3%, respectively.

John Stumpf, CEO of Wells Fargo. (Photo: AP)

8th Place

Wells Fargo (WFC)

Despite a healthy jump in its wealth-management operations, Wells Fargo reported that its net income dropped 1.70% to $5.8 billion, or $1.04 per share, in the first quarter vs. $5.9 billion, or $1.05 per share, a year ago. These results beat analysts’ estimates of $0.98 a share.

Total revenue for the San Francisco-based bank was $21.3 billion, a 3% improvement from a year ago.

Its largest business segment, community banking, saw its revenue grow slightly from last year to nearly $12.8 billion, which was a small drop from the fourth quarter. The segment’s net income, though, was about $3.7 billion compared with $3.8 billion a year earlier (and $3.4 billion in the prior quarter).

The wholesale banking unit had total revenue of about $5.9 billion and net income of $1.8 billion vs. year-ago results of $5.6 billion and $1.7 billion, respectively. 

The company’s third unit — Wealth, Brokerage and Retirement — reported revenue for Q1 of $3.7 billion, a 6% improvement from $3.5 billion last year. Net income jumped 18% to $561 million from $475 million in the year-ago period.

These operations include 15,314 financial advisors. The retail brokerage operations include $1.4 trillion of client assets under management, of which $455 billion are in managed accounts – a 12% year-over-year increase, representing both net flows and increased market valuations.

Paul Reilly, CEO of Raymond James Financial.

7th Place

Raymond James Financial (RJF)

Raymond James posted a 7% year-over-year gain in profits for the quarter ended March 31, as revenue rose 9%. In the most recent quarter, net income was $113.5 million, or $0.77 per diluted share, on $1.3 billion in revenues, vs. profits of $104.6 million, or $0.72 per diluted share, on sales of $1.2 billion a year earlier.

The company announced a record number of advisors in its Private Client Group, which includes both its employee FAs and independent contractor registered reps: 6,384.

In an interview following release of its quarterly results, Raymond James CEO Paul Reilly credited an 11% drop in pretax income from the period ended Dec. 31 to several seasonal and onetime factors, including an increase in advertising for the quarter, higher FICA expenses and the firm’s decision in February to reimburse some advisors’ end clients for certain mutual fund fees.

Looking at results for the first two quarters, Reilly said “it’s the best first half we’ve ever had,” including “record net assets” along with the record advisor headcount. In the first six months of its fiscal year, Raymond James Financial posted $240 million in net income, or $1.64/diluted share, on net revenues of $2.54 billion.

Reilly played down the fear that Raymond James was “getting too big,” saying that since 2009 through 2015’s second quarter, advisor headcount increased at a CAGR of 3.9%, while Private Client Group assets under administration had increased at a CAGR of 15.1%. “We bring our advisors in one by one — that’s our desired growth,” he said, joking that Raymond James only makes acquisitions, like with Morgan Keegan, “every 20 years.”

Speaking during Raymond James’ national conference for its independent contractor reps in Las Vegas in late-April, he pointed out that “a record number” of advisor prospects—72—were attending the conference. “Recruiting is robust,” he said, while existing RJ “advisors choose to stay here; our turnover is very low.”

Jamie Dimon, CEO of JPMorgan Chase (Photo: AP)

6th Place

JPMorgan Chase (JPM)

JPMorgan Chase, the biggest U.S. bank, said profit climbed 12%, beating analysts’ estimates, as first-quarter revenue from trading stocks and bonds increased for the first time since 2010.

Net income rose to $5.91 billion, or $1.45 a share, from $5.27 billion, or $1.28, a year earlier, according to a statement from New York-based JPMorgan. Thirty-one analysts surveyed by Bloomberg estimated per-share earnings of $1.41. Excluding 13 cents in legal expenses and about 3 cents in accounting adjustments, earnings were $1.61 a share.

Trading revenue had a “very strong” start to the year as higher volatility boosted volume, Daniel Pinto, chief executive officer of JPMorgan’s investment bank, said in February. Wall Street firms suffered declines in trading revenues last year amid unusually calm markets. That turned in the fourth quarter, and higher volatility helped results in the first three months of 2015, Chief Financial Officer Marianne Lake said in a recent statement.

Profit in Pinto’s division rose 19% to $2.54 billion, the biggest increase in the firm’s four main businesses. The company said “macro events” drove client activity in currencies, emerging markets, rates and equities.

Fixed-income trading revenue advanced 4.5% to $4.07 billion, exceeding the $3.94 billion average estimate of analysts surveyed by Bloomberg. Equity-trading revenue increased 22% to $1.61 billion, beating the $1.41 billion estimate. Trading during the first three months climbed on a year-over-year basis for the first time since 2010.

Higher capital requirements prompted JPMorgan, the world’s biggest investment bank, to lower its target for returns at that business to 13% from 15%, according to a February presentation. The firm is also considering whether to shrink in areas including interest-rates trading and prime brokerage because of the new capital rules, Pinto has said.

Investment-banking fees in the quarter rose, fueling a 12% increase in the division’s revenue to $3.1 billion.

Net income from consumer and community banking, run by Gordon Smith, increased 12% to $2.22 billion as revenue advanced 2% and expenses declined 4%.

JPMorgan said profit in asset management, run by Mary Erdoes, rose 11% to $502 million. Assets under management climbed $111 billion to $1.8 trillion amid greater inflows and rising equity markets.

Commercial banking, the unit run by Doug Petno, posted a 1% profit increase to $598 million. The division’s provision for credit losses was $61 million, up $56 million from a year earlier as the bank set aside more reserves related to loans to energy companies.

Michael Corbat, CEO of Citigroup. (Photo: AP)

5th Place

Citigroup (C)

Citi posted its biggest quarterly profit since the financial crisis after a cost-cutting push helped the third-largest U.S. bank weather a slump in trading.

First-quarter net income jumped 21% to $4.77 billion, or $1.51 a share, the firm said in a statement, the most since the second quarter of 2007. Excluding accounting adjustments, earnings per share were $1.52, surpassing the $1.39 average estimate of 27 analysts surveyed by Bloomberg, and up 17% from a year ago.

CEO Michael Corbat is focusing on targets for curbing costs and boosting returns after winning Federal Reserve approval to increase capital payouts to shareholders. In the fourth quarter, he sought to put much of the bank’s expenses from probes, severance and office closures in the past by setting aside more than $3.5 billion. Chief Financial Officer John Gerspach has said the move would resolve a “significant portion” of the firm’s legal burden.

First-quarter expenses dropped 10% to $10.9 billion. Legal and repositioning costs accounted for $403 million of that, down 65% from a year earlier.

The lender is still contending with investigations into money-laundering controls and rigging of interest-rate and currency benchmarks. Its main banking subsidiary is under pressure to plead guilty to a felony in the foreign-exchange probe, two people briefed on the matter said this month.

Lloyd Blankfein, CEO Goldman Sachs. (Photo: AP)

4th Place

Goldman Sachs Group (GS)

Goldman Sachs posted the highest earnings per share in more than five years as all of its major businesses topped analysts’ estimates and the firm paid out a smaller portion of revenue to compensate employees.

Net income surged 40% to $2.84 billion, or $5.94 a share, from $2.03 billion, or $4.02, a year earlier, the New York-based company said in a statement. That was higher than all 26 estimates in a Bloomberg survey of analysts.

Chief Executive Officer Lloyd C. Blankfein, 60, has preached patience as he stuck with trading businesses that competitors pared. His firm’s 12% increase in bond-trading revenue and 46% jump in equities surpassed gains at JPMorgan Chase & Co., the biggest U.S. bank by assets.

“In short, nothing not to like about these results,” Chris Kotowski, an analyst at Oppenheimer & Co., wrote in a note to clients. “Equity trading shines in all-around great quarter.”

Goldman Sachs, which climbed 3.8% this year through Wednesday, advanced 0.6% to $202.25 at 8:18 a.m. in New York.

Revenue rose 14% to $10.6 billion, the highest in four years. The firm’s return on equity, a measure of profitability that takes into account how much capital the business uses, was 14.7% in the first quarter, compared with 10.9% a year earlier.

James Gorman, CEO of Morgan Stanley. (Photo: AP)

3rd Place

Morgan Stanley (MS)

Morgan Stanley beat estimates and reported first-quarter of $2.4 billion, or $1.18 a share vs. $1.5 billion, or $0.74 a share, a year earlier – representing a 60% improvement. Net revenues were $9.9 billion compared with $9.0 billion a year ago

Excluding certain adjustments, net revenues for the current quarter were $9.8 billion compared with $8.9 billion a year ago, while net income was $2.3 billion, or $1.14 a share, compared with $1.4 billion, or $0.70 a share a year ago – for a 64% increase in adjusted profits.

Compensation costs, though, grew to $4.5 billion vs. $4.3 billion a year ago primarily, while non-compensation expenses increased to $2.5 billion from $2.3 billion.

The Wealth Management unit reported net revenues were $3.8 billion, up 1% from the prior quarter and 6% from the earlier quarter. Net income improved 27% from the earlier period to $535 million; this represents a drop of 71% from last year, reflecting an unusual income-tax benefit in Q1’14.

Pre-tax profits for the operations rose to 22% from 19% last quarter and last year, as compensation and benefits declined to 58% of net revenues from 60% in the prior and year-ago periods. The number of advisors with the firm stands at 15,915, down from 16,076 in Q4’14 and 16,426 in Q1’14.

Sergio Ermotti, CEO of UBS. (Photo: AP)

2nd Place

UBS Group (UBS)

UBS Group rose to the highest price in Zurich trading since its October 2008 rescue in early May 2015 after profit surged 88% in the first quarter compared to last year’s quarter.

Switzerland’s biggest bank posted net income of 1.98 billion Swiss francs ($2.1 billion), or 0.53 francs per share, topping the 1.22 billion-franc average estimate of seven analysts in a survey compiled by Bloomberg. All of the bank’s key divisions beat forecasts.

Chief Executive Officer Sergio Ermotti, who reorganized the bank to shrink the securities unit and focus on wealth management, is improving returns by cutting costs while litigation expenses persist. The bank attracted 14.4 billion francs in new funds at the main money management unit, topping estimates after a weak fourth quarter.

UBS’s return on tangible equity — a measure of profitability — amounted to about 14% in the quarter, above its target of 10% for the year. The bank aims for a return of more than 15% from next year.

Pretax profit at the investment bank rose 82% to 774 million francs, helped by an increase in trading amid higher market volatility and strong client activity. The unit’s return on equity amounted to 42% in the quarter.

Revenue in equities rose 15% to 1.16 billion francs, while fixed-income trading was up 71% to 701 million francs. The unit that advises companies on deals and underwrites securities offerings saw a 4% increase in sales to 801 million francs.

Wealth management pretax profit rose 54% to 951 million francs, beating the 699 million francs estimated by analysts.

Wealth management Americas saw earnings rise 4.5% to 253 million francs. The unit added $4.8 billion in net new money. Global asset management posted pretax profit of 168 million, above analysts’ estimate of 139 million.

BEST BROKER-DEALER

Brian Moynihan, President and CEO of Bank of America. (Photo: AP) 

1st Place

Bank of America (BAC)

Bank of American reported first-quarter net income of $3.4 billion, or $0.27 per share, compared to a loss of $276 million, or $0.05 per share, in the year-ago period – missing analysts’ EPS estimates by $0.02. But a more than $3.6 billion increase over last year easily outpaced their rivals.

Revenue, net of interest expense, was $21.4 billion vs, about $22.7 billion a year ago, mainly due to one-time items. Excluding these items, revenue was $21.9 billion in the first quarter.

“Continuing the trend from last quarter, we saw core loan and deposit growth, higher mortgage originations, and increased wealth management client balances,” said CEO Brian Moynihan, in a statement. “We retained a top position in investment banking as our team generated the highest advisory fees since the Merrill Lynch merger.”

Global Wealth and Investment Management had Q1 net income of $651 million, down 11% from a year ago. Revenue dropped slightly to $4.5 billion from $4.6 billion in Q1’14.

Non-interest expenses grew 3% to $3.5 billion, as the unit spent more money on “revenue-related incentive compensation and investment in client-facing professionals,” BofA says. This pushed the unit’s return on average allocated capital to 22% in the first quarter of 2015 vs. 25% in the year-ago quarter.

First-quarter 2015 net flows of assets under management were $13.2 billion vs. $9.1 billion in Q4’14 and $15.0 billion in Q1’14.

BofA Merrill has 16,175 financial advisors. Excluding reps in Consumer Banking, its FA force numbers 14,183 – a jump of 103 from the prior quarter and an increase of 458 from last year.

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