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Raymond James Financial NYSE: RJF reported record net revenues in its fiscal first quarter of 2026, supported by continued momentum in advisor recruiting, solid net new asset growth, and higher fee-based assets, while lower interest rates and a slower quarter in capital markets weighed on certain revenue streams. Executives also highlighted ongoing investments in technology, including new AI tools, and reiterated a disciplined approach to capital deployment across organic growth, acquisitions, dividends, and share repurchases.
Quarterly results and profitability
Chief Financial Officer Butch Oorlog said the firm posted record net revenues of $3.7 billion for the quarter. Net income available to common shareholders was $562 million, or $2.79 per diluted share. Excluding acquisition-related expenses, adjusted net income available to common shareholders was $577 million, resulting in adjusted earnings per diluted share of $2.86.
Raymond James reported a pre-tax margin of 19.5% and an adjusted pre-tax margin of 20%. The firm generated an annualized return on common equity of 18% and an annualized adjusted return on tangible common equity of 21.4%.
Wealth management growth and recruiting momentum
CEO Paul Shoukry said the firm’s client-first culture, technology platform, and balance sheet strength continue to resonate with advisors. He cited “solid recruiting momentum” and net new asset annualized growth of 8% during the quarter.
Shoukry said Raymond James recruited financial advisors into its domestic independent contractor and employee channels with trailing 12-month production of $96 million and about $13 billion of client assets at their prior firms. Over the past 12 months, the firm recruited advisors with nearly $460 million of trailing 12-month production and more than $63 billion of client assets. Including assets recruited into the RIA and custody services division, total recruited client assets over the last 12 months exceeded $69 billion across all platforms.
During Q&A, management said net new assets totaled $31 billion in the quarter, which Shoukry characterized as the firm’s second-best quarter ever. He described recruiting activity as “broad-based” across affiliation options and noted it has been more tilted toward the independent contractor channel in the past six months. He also emphasized strong retention, saying advisor satisfaction is at its highest level since 2014.
Shoukry addressed industry competition from private equity-backed “roll-ups,” framing it as “short-term noise” for advisors seeking longer-term stability. He said advisors are evaluating balance sheet strength, leverage, and tangible equity as they look for a platform that can remain independent.
Segment performance: strengths in asset management and banking, weaker capital markets
In the Private Client Group (PCG), Oorlog said the segment generated pre-tax income of $439 million on record quarterly net revenues of $2.77 billion. PCG results reflected higher assets under administration versus a year earlier, aided by market appreciation, retention, and net new assets. However, PCG pre-tax income declined 5% year-over-year, which management attributed primarily to interest rate reductions lowering non-compensable revenues. Oorlog said interest rates have declined 125 basis points since early November 2024.
The Capital Markets segment posted quarterly net revenues of $380 million and pre-tax income of $9 million. Shoukry said results declined primarily due to lower M&A and advisory revenues as well as lower debt underwriting and affordable housing investment revenues on a sequential basis, with “tough comparables” given strong M&A in the year-ago and prior quarter. Still, he said the firm entered the second quarter with a “robust pipeline.” In response to analyst questions, he said the firm would be “disappointed” if capital markets revenue does not improve “meaningfully above the $380 million level” for the rest of the year, while reiterating that deal timing is difficult to predict.
Asset Management delivered record results, with pre-tax income of $143 million on record net revenues of $326 million. Oorlog attributed performance largely to higher assets under management year-over-year from market appreciation and strong net inflows into PCG fee-based accounts. Shoukry added that net inflows into managed fee-based programs in PCG were strong, annualizing at nearly 10%.
The Bank segment reported net revenues of $487 million and record pre-tax income of $173 million. Loans ended the quarter at a record $53.4 billion, which Shoukry said was driven primarily by 28% annual growth in securities-based lending balances and 10% growth in the quarter alone. Oorlog said bank net interest income grew 6% sequentially, supported by loan growth and lower funding costs from declining short-term rates and a favorable deposit mix shift. Management said credit quality remains strong.
Rates, fee-based assets, expenses, and capital deployment
Asset management and related administrative fees were nearly $2.0 billion, up 15% year-over-year and 6% sequentially, according to Oorlog. PCG fee-based assets ended the quarter at a record $1.04 trillion, up 19% year-over-year and 3% sequentially. Looking ahead, the company expects fiscal second-quarter asset management and related administrative fees to be about 1% higher than first-quarter levels, with two fewer billing days partially offsetting the impact of higher fee-based assets.
Client domestic cash sweep and Enhanced Savings Program (ESP) balances ended the quarter at $58.1 billion, up 3% sequentially. However, management said balances declined in January due to the collection of record quarterly fee billings of $1.8 billion and client reinvestment activity. Oorlog later clarified that combined program sweep and ESP balances were down $2.6 billion in January to date, including the $1.8 billion in fee billings. He said $2.1 billion of the decline was in sweep balances and about $500 million in ESP balances, noting clients appear less attracted to high-yield savings as rates decline.
Net interest income (NII) and RJBDP fees from third-party banks rose 2% sequentially to $667 million. The Bank segment’s net interest margin increased 10 basis points to 2.81%, while the average yield on RJBDP balances with third-party banks fell 15 basis points to 2.76% due to Fed rate cuts. Oorlog said the firm would expect the aggregate of NII and RJBDP fees to be down in the second quarter, largely due to two fewer interest-earning days, while emphasizing that results depend on multiple variables, including rate actions and balance sheet trends.
On expenses, compensation was $2.45 billion and the total compensation ratio was 65.6% (65.4% adjusted). Management said the quarter’s compensation ratio reflected revenue mix, including a greater share of PCG business in the independent channel, and weaker capital markets revenues. Beginning this quarter, the firm began presenting recruiting and retention-related compensation expense in the PCG segment to help investors understand the impact of those costs, which it said have increased due to recruiting success.
Non-compensation expenses were $557 million, up 8% year-over-year but down 7% sequentially. For fiscal 2026, Oorlog guided to approximately $2.3 billion of non-compensation expenses (excluding certain items and non-GAAP adjustments), representing about 8% growth over the prior year’s adjusted metric. He said the increase largely reflects continued investment in technology and growth-related items such as transition support, sub-advisory fees, and FDIC insurance premiums as the bank balance sheet expands.
On capital deployment, management pointed to dividends, share repurchases, and acquisitions. The firm repurchased $400 million of common stock during the quarter at an average price of $162 and ended the quarter with a Tier 1 Leverage Ratio of 12.7%. Over the past 12 months, the firm repurchased $1.45 billion of common shares and, including dividends, returned nearly $1.87 billion to common shareholders, which management said represented 89% of earnings.
Shoukry highlighted two announced acquisitions: Clark Capital Management, which he described as a leading wealth-focused asset manager with expertise in model portfolios and SMA and UMA wrappers, and the boutique investment bank GreensLedge, which he said is expected to close later in the year. Management emphasized cultural fit, strategic fit, and attractive shareholder returns as key criteria for acquisitions.
About Raymond James Financial NYSE: RJF
Raymond James Financial is a diversified financial services firm headquartered in St. Petersburg, Florida. Founded in 1962, the company provides a range of services to individual investors, businesses and institutions through a combination of wealth management, capital markets, investment banking, asset management, banking and trust services. Its business model centers on a network of financial advisors and broker-dealer operations that deliver personalized financial planning, investment advisory services and brokerage solutions.
The firm’s core offerings include private client wealth management delivered by independent and employee advisors, equity and fixed-income research, institutional sales and trading, and investment banking services such as mergers and acquisitions advisory and capital raising.
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