Raymond James (RJF) missed earnings estimates, reporting a 5% drop in net income to $129.2 million, or $0.88 per share, compared with $136.4 million, or $0.94 per share, a year ago for the quarter ending Sept. 30. Revenues in the latest period, though, jumped 4% to $1.34 billion.
The company says the decline in net income was “largely attributable to a substantial increase in the loan loss provision associated with significant loan growth at Raymond James Bank.” Overall, expenses grew 6% year over year to $1.14 billion.
CEO Paul Reilly explained the dichotomy in an interview on CNBC following the company’s earnings release: “It was a great quarter … The bottom line was impacted by growth … Really, we think it’s a very, very solid quarter.”
Overall, the company’s core segments “generated record net revenues in fiscal 2015,” Reilly said earlier in a statement. “Additionally, despite significant growth investments made during the year, the Private Client Group segment, Asset Management segment and Raymond James Bank generated record pretax income in fiscal 2015.”
Reilly added that the firm remains committed to expanding the Asset Management segment’s product offering, “both organically and through acquisitions. Continued Private Client Group recruiting momentum also bodes well for growth in this segment.”
There is speculation that the company could move to acquire the U.S. private wealth business of Deutsche Bank – a matter on which Raymond James declined to comment. In mid-August, Charles von Arentschildt, the former chairman of Global Markets, North America, at Deutsche Bank Securities, joined the Raymond James board of directors.
Private Client Results