By Joseph A. Giannone
NEW YORK, April 25 Raymond James Financial Inc
on Wednesday said its fiscal second-quarter profit fell
after reporting $21 million of pretax expenses related to its
April 2 takeover of Morgan Keegan, offsetting strong improvement
in brokerage and bank revenue.
The St. Petersburg, Florida-based regional investment bank
and brokerage reported net income of $68.9 million, or 52 cents
a share, in the three months ended March 31, down 15 percent
from $80.9 million, or 64 cents, in the year-earlier period.
Net revenue rose 2 percent to a record $871.9 million from a
year earlier, driven by record results in its private client
business and its bank unit. Capital markets revenue fell 7
percent from a year earlier, driven by a slowdown in stock
Analysts on average had forecast earnings of 56 cents a
share and $843 million of revenue, according to Thomson Reuters
Excluding the acquisition-related costs, Raymond James said
it earned $81.9 million, or 64 cents, in the period.
Earlier this month, Raymond James closed its largest
takeover ever when it acquired Memphis-based Morgan Keegan,
another Southeast U.S. investment bank and brokerage, from
Regions Financial for $1.2 billion. Raymond James issued
11.1 million shares in February to help finance the deal.
Without the merger, Raymond James said its brokerage
business grew thanks to the recruiting of more advisers and a
rebound in the financial markets. Private client revenue in the
quarter rose 2 percent to $568 million from the year-ago period.
The ranks of advisers climbed to 5,398 on March 31 from
5,356 at the end of December, while client assets rose 8 percent
to a record $292 billion from $270 billion. With Morgan Keegan,
the combined company has about 6,500 financial advisers.
RJBank, a unit that had dragged on performance during the
financial crisis, reported record results in the second quarter
thanks to an increase in loans driven by the purchase of $400
million of assets from Allied Irish Bank's Canada unit.