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    RJF
    Earnings call· Mar 2026(Q2 FY26)

    RAYMOND JAMES FINANCIAL Q2 FY26 earnings call RJF

    Apr 22, 2026 Source

    Executive summary

    Raymond James Financial Q2 FY26 — Record Revenues and Strong Adviser Recruiting

    Raymond James Financial delivered record Q2 FY26 revenues and pretax income, driven by strong adviser recruiting and robust loan growth, particularly in securities-based lending. Despite headwinds from lower interest-related revenues impacting PCG, the firm's diversified business model and strategic investments in technology and acquisitions position it for continued long-term growth, with a focus on personal relationships and adviser support.

    Highlights

    5

    • Record quarterly revenues of $3.86 billion, representing growth of 13% over the prior year quarter and 3% above the preceding quarter.

    • Pretax income of $735 million, increased 10% compared to the year ago quarter and 1% over the preceding quarter.

    • Domestic net new assets were $23 billion, representing a 5.8% annualized growth rate.

    • Recruited financial advisers with trailing 12-month production totaling $141 million and nearly $21 billion of client assets.

    • Bank loans ended the quarter at a record $54.8 billion, up 14% year-over-year and 3% sequentially, driven by securities-based lending growth of 31% year-over-year.

    Concerns

    3

    • Private Client Group pretax income declined 3% year-over-year, primarily due to the impact of interest rate reductions on non-compensable revenues.

    • Combined net interest income and RJBDP fees from third-party banks declined 3% from the prior quarter to $650 million.

    • Clients' domestic cash sweep and enhanced savings program balances ended the quarter at $57.8 billion, down 1% compared to the preceding quarter.

    Guidance & targets

    4
    CategoryTargetConfidence
    Asset management and related administrative fees
    higher by approximately 1%
    medium materiality
    High
    Aggregate Net Interest Income and RJBDP third-party fees
    up approximately 1%
    medium materiality
    High
    Effective tax rate
    approximately 24% to 25%
    medium materiality
    High
    Non-compensation expenses
    approximately $2.3 billion
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Private Client Group
    This performance was driven by higher PCG assets under administration compared to the previous year, resulting from the impacts of market appreciation, retention and the consistent addition of net new assets. Pretax income declined 3% year-over-year, primarily due to the impact on the segment of interest rate reductions over the past year, which reduced non-compensable revenues.
    Client assets under administration: $1.7 trillionClient assets under administration growth YoY: 15%Domestic net new assets: $23 billionAnnualized net new asset growth rate: 5.8%Recruited TTM production: $141 millionRecruited client assets: $21 billion
    		$2.81 billion——$416 million
    Capital Markets
    Segment net revenues grew year-over-year and sequentially due to higher debt and equity underwriting revenues as well as higher M&A and advisory revenues.
    		$464 milliongrew year-over-yeargrew sequentially$51 million
    Asset Management
    Results were largely attributable to higher financial assets under management compared to the prior year quarter due to market appreciation over the 12-month period and strong net inflows into PCG fee-based accounts.
    		$327 million——$137 million
    Bank
    Sequentially, the bank segment's net interest income increased marginally. Despite robust loan growth driven by securities-based lending, incremental interest revenues were nearly offset by the impact of 2 fewer interest earning days during the quarter and a full quarter impact of interest rate cuts during the prior quarter.
    Loans: $54.8 billionLoans growth YoY: 14%Loans growth QoQ: 3%Securities-based lending growth YoY: 31%Securities-based lending growth QoQ: 6%Securities-based loans as % of total loans: 42%Residential mortgages as % of total loans: 20%
    		$486 million——$166 million

    Operational metrics

    24
    Common stock repurchased
    $400 million
    Q2 FY26

    This quarter, we repurchased $400 million of common stock at an average share price of $155 per share.

    Common shares repurchased
    $1.6 billion
    LTM

    Over the past 12 months, we have repurchased $1.6 billion of common shares.

    Annualized return on common equity
    17.3%
    Q2 FY26

    Generated annualized return on common equity of 17.3%.

    Annualized adjusted return on tangible common equity
    20.9%
    Q2 FY26

    Generated annualized adjusted return on tangible common equity of 20.9%.

    Tier 1 leverage ratio
    12.4%declined 90 basis points over the past year
    Q2 FY26

    Ended the quarter with a Tier 1 leverage ratio of 12.4%, with approximately $2.1 billion of excess capital capacity to deploy before reaching the conservative target of 10%.

    Total capital ratio
    24%
    Q2 FY26

    Total capital ratio of 24%, well above regulatory requirements.

    Total capital returned to shareholders (dividends + buybacks)
    $507 million
    Q2 FY26

    Through the combination of common dividends paid and share repurchases, we returned $507 million of capital to shareholders during the quarter.

    Total capital returned to common shareholders (dividends + buybacks)
    $2 billion
    LTM

    Over the past 12 months, including dividends paid, we've returned over $2 billion of capital to common shareholders, reflecting a combined return of 94% of our earnings.

    Asset management and related administrative fees
    $2.02 billion17% over the prior year and 1% over the preceding quarter
    Q2 FY26

    Asset management and related administrative fees of $2.02 billion grew 17% over the prior year and 1% over the preceding quarter.

    Effective tax rate
    26%
    Q2 FY26

    The effective tax rate for the quarter was 26%, which includes the unfavorable impact of nondeductible losses on the corporate-owned life insurance portfolio in the quarter.

    Net interest margin (Bank segment)
    2.81%stable
    Q2 FY26

    Net interest margin in the bank segment remained stable at 2.81% for the quarter.

    Pretax margin
    19%
    Q2 FY26

    Our pretax margin for the quarter was 19%.

    Adjusted pretax margin
    19.7%
    Q2 FY26

    The adjusted pretax margin was 19.7%.

    RJF corporate cash at parent
    $3 billion
    Q2 FY26 end

    RJF corporate cash at the parent ended the quarter at $3 billion, providing excess liquidity of $1.8 billion above our $1.2 billion target.

    Combined net interest income and RJBDP fees from third-party banks
    $650 milliondeclined 3% from the prior quarter
    Q2 FY26

    Combined net interest income and RJBDP fees from third-party banks declined 3% from the prior quarter to $650 million.

    Average yield on RJBDP balances with third-party banks
    2.7%decreased 6 basis points
    Q2 FY26

    The average yield on RJBDP balances with third-party banks decreased 6 basis points to 2.7%, primarily due to the full quarter impact of the Fed interest rate cuts in the December quarter.

    Non-compensation expenses
    $583 millionincreased 10% over the year ago quarter and 5% sequentially
    Q2 FY26

    Non-compensation expenses of $583 million increased 10% over the year ago quarter and 5% sequentially.

    Non-compensation expenses target
    $2.3 billion
    Fiscal Year

    For the fiscal year, we remain on track with our target level of non-compensation expenses of approximately $2.3 billion.

    Investment banking pipeline
    robust
    Q3 FY26 outlook

    We entered this third quarter with a robust pipeline that continues to reflect the opportunities. The pipeline, the activity levels, the engagement letters being signed are all very promising.

    Annual technology spend
    $1.1 billion
    Annual

    We will continue investing in automation, process improvement and AI as part of our more than $1.1 billion annual technology spend.

    Transition assistance to adviser retention
    100%
    Ongoing

    We know, first, 100% of the transition assistance is going to retention of the adviser.

    Clients' domestic cash sweep and enhanced savings program balances
    $57.8 billiondown 1% compared to the preceding quarter
    Q2 FY26 end

    Clients' domestic cash sweep and enhanced savings program balances ended the quarter at $57.8 billion, down 1% compared to the preceding quarter and representing 3.7% of domestic PCG client assets.

    Average cash balance per account (fee-based)
    less than $10,000
    Current

    In fee-based accounts, the average cash balance per account is less than $10,000.

    Record quarterly fee billings collection
    $1.9 billion
    April activity

    Domestic cash sweep and enhanced savings program balances have declined due to the collection of record quarterly fee billings of approximately $1.9 billion.

    Industry KPIs

    2
    MetricValueDetails
    AUM$1.7 trillionUSD
    Fundraising inflows$23 billionUSD

    Product announcements

    1
    ProductTypeDetails
    Proprietary AI operations agent ("Ray")launch

    Deals & partnerships

    2
    GreensLedgeacquisition

    Acquisition closed towards the end of the quarter, enhancing Capital Markets capabilities.

    Clark Capitalacquisition

    Acquisition expected to close this quarter (Q3 FY26).

    Risks & headwinds

    4
    Challenging and volatile market environmentQ2 FY26

    null

    Mitigation: Disciplined execution against objective of being the best firm for financial professionals and clients; diversified business model.

    Interest rate reductions impacting non-compensable revenues in Private Client GroupPast year (Q2 FY26 compared to prior year)

    PCG pretax income declined 3% year-over-year.

    Mitigation: Strong organic growth, ongoing technology and platform investments, and successful adviser recruiting.

    Geopolitical issues, oil prices, and AI concerns in certain sectors (e.g., technology, software, fintech) creating volatilityOngoing (Q3 FY26 outlook)

    null

    Mitigation: Strong platform with expert bankers across various verticals; robust investment banking pipeline with motivated buyers and sellers.

    Seasonal impact of client tax activity and record fee billings on cash balancesApril activity (Q3 FY26)

    Domestic cash sweep and enhanced savings program balances declined due to collection of $1.9 billion in fee billings.

    Mitigation: Anticipated and managed as a recurring seasonal factor; sweep balances have stabilized over several quarters outside of these impacts.

    Q&A highlights

    8

    Inquiring about the competitive landscape for adviser recruiting, especially regarding M&A-driven adviser movement and the firm's confidence in its pipeline.

    Paul Shoukry expressed confidence based on high volume of home office visits and new commitments, noting an uptick in employee affiliation options. He highlighted the firm's consistent focus on being the best destination for advisers, matching culture with capabilities. He also commented on private equity's competitiveness and potential future catalysts if valuations shift.

    “our focus is just to remain the absolute best destination for financial advisers and their clients across all of our affiliation options. We call it adviser choice, and that's really what's driven the 7% annualized net new assets for the first half of our fiscal year, which is leading the industry.”

    asked by Benjamin Budish · answered by Paul Shoukry

    2 min read6 chapters

    Detailed Narrative

    01

    Adviser Recruiting and Retention

    Raymond James continues to attract and retain high-quality financial professionals, with strong recruiting momentum reflected in the second-highest quarterly results for recruited production and client assets. The firm emphasizes its unique combination of adviser and client-focused culture, leading technology, and strong balance sheet as key differentiators in a competitive environment. Management noted an uptick in commitments from prospective advisers across all affiliation options, including the employee channel, driving a 7% annualized net new asset growth rate for the first half of the fiscal year.

    02

    Technology and AI Investments

    The company is investing over $1.1 billion annually in technology, including automation, process improvement, and AI, primarily focused on the Private Client Group. A proprietary AI operations agent, 'Ray,' has been rolled out to a few hundred advisers and home office service groups, receiving strong initial feedback for providing curated natural language answers and guidance. The firm aims to expand adviser and associate access over time⏳, leveraging AI to create efficiencies and enhance client experience.

    03

    Capital Markets Momentum

    The Capital Markets segment saw improved results, primarily from stronger investment banking revenues, with a particularly strong performance in March. The firm has a robust pipeline, driven by strategic investments and motivated buyers and sellers, and remains committed to opportunistic enhancements through strategic hiring or acquisitions like GreensLedge. Management expressed confidence in building on this momentum, despite geopolitical and sector-specific volatilities.

    04

    Bank Segment Growth and Credit Quality

    The Bank segment achieved record loans of $54.8 billion, primarily due to outstanding growth in securities-based lending (SBL) balances, which increased over $5 billion or 31% year-over-year and 6% sequentially. SBL and residential mortgages represent 62% of total loans. The loan portfolio's credit quality remains strong, and SBL growth reflects a synergistic impact from the growing Private Client Group business, with growth almost identical between TriState's platform and the private client business.

    05

    Capital Management and Deployment

    Raymond James maintains disciplined capital deployment strategies, including organic growth, technology investments, and recent acquisitions (GreensLedge closed, Clark Capital expected to close this quarter). The firm repurchased $400 million of common stock at an average price of $155 per share this quarter and has returned over $2 billion to common shareholders over the past 12 months, representing 94% of earnings. The firm ended the quarter with a Tier 1 leverage ratio of 12.4% and $2.1 billion of excess capital capacity above its 10% target.

    06

    Cash Sweep and NII Dynamics

    Domestic cash sweep and enhanced savings program balances stabilized over the last several quarters, ending at $57.8 billion, representing 3.7% of domestic PCG client assets. April activity saw declines due to record quarterly fee billings of $1.9 billion and seasonal tax activity. The net interest margin in the bank segment remained stable at 2.81%, despite the impact of fewer interest-earning days and prior interest rate cuts, with the average yield on RJBDP balances decreasing 6 basis points to 2.7%.

    AI-generated summary of the company’s earnings call. Not investment advice.