UPDATE 1-Raymond James withdraws TARP application

* Withdraws application for bailout funds

* Says has adequate sources of funding

NEW YORK, May 19 (Reuters) - Raymond James Financial Inc (RJF.N), which runs one of the largest U.S. brokerages, withdrew its application for government bailout funds, saying it does not need more capital.

The St. Petersburg, Florida-based company said it notified its federal regulator, the Office of Thrift Supervision, that it is withdrawing its application to participate in the Treasury Department's Troubled Asset Relief Program.

Chief Executive Thomas James in a statement said the company had "adequate" funds from internal and external sources to avoid having to enter the program.

Last week, the company said it expects $251 million of loan losses and $17.5 million in securities losses over two years under its own "stress test," but added it does not expect to need fresh capital to be well-capitalized.

At the time, Raymond James also said that under its own more "extreme" stress test scenario, cumulative loan losses could total $459 million over the same period.

Many companies that explored entering TARP have decided to go without federal aid. Several that have taken TARP money have complained about the program's restrictions, and many investors now view the acceptance of aid as a sign of weakness.

Shares of the company closed Tuesday up 2 cents at $16.72 on the New York Stock Exchange. Raymond James announced its plans after U.S. markets closed. (Reporting by Tenzin Pema; Editing by Phil Berlowitz)