Raymond James Financial, Inc. - Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended December 31, 2025 (Fiscal Q1 2026). Raymond James Financial, Inc. is a financial holding company providing investment management, brokerage, investment banking, and banking services. The company operates through five segments: Private Client Group (PCG), Capital Markets, Asset Management, Bank, and Other.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Revenues | $3,735 million | $3,537 million |
| Net Income (Available to Common) | $562 million | $599 million |
| Diluted EPS | $2.79 | $2.86 |
| Pre-Tax Income | $728 million | $749 million |
| Total Assets | $88.76 billion | $88.23 billion (Sep 30, 2025) |
| Bank Loans, Net | $53.44 billion | $51.57 billion (Sep 30, 2025) |
| Bank Deposits | $60.15 billion | $58.90 billion (Sep 30, 2025) |
| Cash & Equivalents | $9.89 billion | $11.39 billion (Sep 30, 2025) |
| Return on Common Equity (ROCE) | 18.0% | 20.4% |
Material Changes vs. Prior Period
- Revenue Growth: Net revenues increased 6% year-over-year, driven by a 15% rise in asset management fees (due to higher fee-based assets) and a 9% increase in brokerage revenues. This was partially offset by a 36% decline in investment banking revenues, primarily due to lower M&A advisory activity.
- Profitability Decline: Net income decreased 6% and pre-tax income fell 3% compared to the prior-year quarter. The decline was attributed to higher compensation expenses (up 8%) and lower investment banking revenues.
- Interest Rate Environment: The Federal Reserve lowered rates by 50 basis points during the quarter. While net interest income increased 7% due to asset growth, RJBDP fees from third-party banks dropped 30% due to lower rates and balances.
- Balance Sheet: Bank loans grew by $1.9 billion, while cash and cash equivalents decreased by $1.5 billion. Bank deposits increased by $1.3 billion.
Guidance, Outlook, and Risks
- Acquisitions: The company announced agreements to acquire GreensLedge Holdings LLC (structured credit/securitization) and Clark Capital Management Group (asset management). Both are expected to close in fiscal 2026 and will be funded with cash on hand.
- Capital Actions: The Board authorized a new $2 billion common stock repurchase program in December 2025. During the quarter, the company repurchased 2.5 million shares for $400 million. The quarterly common dividend was increased 8% to $0.54 per share.
- Preferred Stock Redemption: On January 2, 2026, the company redeemed all Series B Preferred Stock for $81 million.
- Risks:
- Interest Rate Sensitivity: Further rate cuts are expected to unfavorably impact net interest income and RJBDP fees in Q2 2026.
- Regulatory: The SEC is reviewing cash sweep program practices; three putative class action lawsuits regarding cash sweep rates were consolidated, with one dismissed.
- Credit Quality: Nonperforming loans remain low at 0.38% of total loans, but a downside economic scenario could increase the allowance for credit losses by approximately $160 million.
Investor Verification Checklist
- Investment Banking Volatility: Verify the sustainability of M&A and advisory revenue given the 36% year-over-year decline.
- Interest Rate Impact: Monitor Q2 2026 results for the full impact of recent Fed rate cuts on net interest income and RJBDP fees.
- Acquisition Integration: Track the closing timeline and integration costs for the GreensLedge and Clark Capital acquisitions.
- Compensation Ratio: Review the trend in the total compensation ratio (65.6% in Q1 2026) relative to revenue mix changes.
- Regulatory Proceedings: Follow the status of the consolidated class action lawsuits regarding cash sweep programs.