x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
|
THE
SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
|
THE
SECURITIES EXCHANGE ACT OF 1934
|
For
the transition period from
|
to
|
Florida
|
No. 59-1517485
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
Large
accelerated filer x
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller
reporting company o
|
RAYMOND
JAMES FINANCIAL, INC. AND SUBSIDIARIES
|
|||
Form
10-Q for the Quarter Ended June 30, 2008
|
|||
INDEX
|
|||
PART
I.
|
FINANCIAL
INFORMATION
|
PAGE
|
|
Item
1.
|
Financial
Statements (unaudited)
|
||
Condensed
Consolidated Statements of Financial Condition as of June 30, 2008
and
September 30, 2007 (unaudited)
|
3
|
||
Condensed
Consolidated Statements of Income and Comprehensive Income for
the three
months ended June 30, 2008 and June 30, 2007 (unaudited)
|
4
|
||
Condensed
Consolidated Statements of Income and Comprehensive Income for
the nine
months ended June 30, 2008 and June 30, 2007 (unaudited)
|
4
|
||
Condensed
Consolidated Statements of Cash Flows for the nine months ended
June 30,
2008 and June 30, 2007 (unaudited)
|
5
|
||
Notes
to Condensed Consolidated Financial Statements (unaudited)
|
7
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
30
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
53
|
|
Item
4.
|
Controls
and Procedures
|
56
|
|
PART
II.
|
OTHER
INFORMATION
|
56
|
|
Item
1.
|
Legal
Proceedings
|
56
|
|
Item
1A.
|
Risk
Factors
|
57
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
57
|
|
Item
6.
|
Exhibits
|
57
|
|
Signatures
|
58
|
||
June
30,
|
September
30,
|
|
2008
|
2007
|
|
(in
000’s)
|
||
Assets:
|
||
Cash
and Cash Equivalents
|
$ 669,541
|
$ 644,943
|
Assets
Segregated Pursuant to Regulations and Other Segregated
Assets
|
4,121,260
|
4,127,667
|
Securities
Purchased under Agreements to Resell and Other Collateralized
Financings
|
972,996
|
1,295,004
|
Financial
Instruments:
|
||
Trading
Instruments, at Fair Value
|
491,599
|
467,761
|
Available
for Sale Securities, at Fair Value
|
619,166
|
569,952
|
Other
Investments, at Fair Value
|
88,694
|
90,637
|
Receivables:
|
||
Brokerage
Clients, Net
|
1,965,787
|
1,704,300
|
Stock
Borrowed
|
1,166,913
|
1,292,265
|
Bank
Loans, Net
|
6,680,362
|
4,664,209
|
Brokers-Dealers
and Clearing Organizations
|
141,609
|
228,865
|
Other
|
339,150
|
315,227
|
Investments
in Real Estate Partnerships - Held by Variable Interest
Entities
|
222,692
|
221,147
|
Property
and Equipment, Net
|
184,665
|
166,963
|
Deferred
Income Taxes, Net
|
112,733
|
107,922
|
Deposits
With Clearing Organizations
|
75,746
|
36,416
|
Goodwill
|
62,575
|
62,575
|
Prepaid
Expenses and Other Assets
|
363,700
|
258,315
|
$
18,279,188
|
$
16,254,168
|
|
Liabilities
And Shareholders' Equity:
|
||
Loans
Payable
|
$ 312,904
|
$ 122,640
|
Loans
Payable Related to Investments by Variable Interest Entities in
Real
Estate Partnerships
|
101,197
|
116,479
|
Payables:
|
||
Brokerage
Clients
|
5,825,439
|
5,675,860
|
Stock
Loaned
|
1,177,188
|
1,280,747
|
Bank
Deposits
|
7,746,139
|
5,585,259
|
Brokers-Dealers
and Clearing Organizations
|
197,299
|
128,298
|
Trade
and Other
|
186,450
|
450,008
|
Trading
Instruments Sold but Not Yet Purchased, at Fair Value
|
241,974
|
149,729
|
Securities
Sold Under Agreements to Repurchase
|
88,707
|
393,282
|
Accrued
Compensation, Commissions and Benefits
|
311,515
|
356,627
|
Income
Taxes Payable
|
3,504
|
7,755
|
16,192,316
|
14,266,684
|
|
Minority
Interests
|
239,494
|
229,670
|
Shareholders'
Equity:
|
||
Preferred
Stock; $.10 Par Value; Authorized
|
||
10,000,000
Shares; Issued and Outstanding -0- Shares
|
-
|
-
|
Common
Stock; $.01 Par Value; Authorized 350,000,000 Shares
|
||
with
123,611,432 Issued at June
30, 2008 and Authorized
|
||
180,000,000
Shares with 120,903,331 Issued at September 30,
2007
|
1,197
|
1,176
|
Shares
Exchangeable into Common Stock; 273,042
|
||
at
June 30, 2008 and September 30, 2007
|
3,504
|
3,504
|
Additional
Paid-In Capital
|
334,091
|
277,095
|
Retained
Earnings
|
1,603,478
|
1,461,898
|
Accumulated
Other Comprehensive Income
|
(8,695)
|
30,191
|
1,933,575
|
1,773,864
|
|
Less:
3,978,879 and
1,005,668 Common Shares in Treasury, at Cost
|
(86,197)
|
(16,050)
|
1,847,378
|
1,757,814
|
|
$
18,279,188
|
$
16,254,168
|
|
See
accompanying Notes to Condensed Consolidated Financial
Statements.
|
Three
Months
Ended
|
Nine
Months
Ended
|
|||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2008
|
2007
|
2008
|
2007
|
|
Revenues:
|
||||
Securities
Commissions and
Fees
|
$
483,225
|
$
462,047
|
$1,437,327
|
$1,281,204
|
Investment
Banking
|
36,236
|
51,818
|
87,323
|
131,682
|
Investment
Advisory
Fees
|
51,492
|
51,754
|
161,416
|
152,487
|
Interest
|
156,935
|
191,691
|
561,199
|
514,727
|
Net
Trading
Profits
|
11,100
|
7,050
|
5,256
|
16,434
|
Financial
Service
Fees
|
31,774
|
30,285
|
97,512
|
91,683
|
Other
|
37,986
|
28,108
|
95,040
|
82,436
|
Total
Revenues
|
808,748
|
822,753
|
2,445,073
|
2,270,653
|
Interest
Expense
|
66,724
|
134,093
|
325,535
|
352,374
|
Net
Revenues
|
742,024
|
688,660
|
2,119,538
|
1,918,279
|
|
||||
Non-Interest
Expenses:
|
||||
Compensation,
Commissions and
Benefits
|
490,479
|
462,459
|
1,434,389
|
1,299,862
|
Communications
and Information
Processing
|
30,899
|
28,828
|
93,140
|
83,080
|
Occupancy
and Equipment
Costs
|
26,102
|
19,983
|
71,600
|
59,849
|
Clearance
and Floor
Brokerage
|
7,969
|
8,180
|
23,648
|
22,662
|
Business
Development
|
24,527
|
22,416
|
70,130
|
66,252
|
Investment
Advisory
Fees
|
12,997
|
12,111
|
38,490
|
34,615
|
Other
|
34,358
|
29,156
|
87,552
|
60,686
|
Total
Non-Interest
Expenses
|
627,331
|
583,133
|
1,818,949
|
1,627,006
|
Minority
Interest in
Subsidiaries
|
(425)
|
(4,371)
|
(3,104)
|
(5,346)
|
Income
Before Provision for Income
Taxes
|
115,118
|
109,898
|
303,693
|
296,619
|
Provision
for Income
Taxes
|
45,180
|
41,545
|
117,723
|
109,156
|
Net
Income
|
$ 69,938
|
$ 68,353
|
$ 185,970
|
$ 187,463
|
Net
Income per
Share-Basic
|
$ 0.60
|
$ 0.59
|
$ 1.59
|
$ 1.63
|
Net
Income per
Share-Diluted
|
$ 0.59
|
$ 0.57
|
$ 1.56
|
$ 1.58
|
Weighted
Average Common
Shares
|
||||
Outstanding-Basic
|
115,633
|
116,135
|
116,573
|
115,353
|
Weighted
Average Common and
Common
|
||||
Equivalent
Shares
Outstanding-Diluted
|
118,272
|
119,140
|
119,212
|
118,425
|
Cash
Dividend per Common
Share
|
$ 0.11
|
$ 0.10
|
$ 0.33
|
$ 0.30
|
Net
Income
|
$ 69,938
|
$ 68,353
|
$
185,970
|
$ 187,463
|
Other
Comprehensive
Income:
|
||||
Net
Unrealized Gain (Loss) on
Available
|
||||
for
SaleSecurities,
Net of
Tax
|
1,834
|
(954)
|
(35,383)
|
(834)
|
Net
Change in Currency
Translations, Net of Tax
|
874
|
9,190
|
(3,503)
|
7,842
|
Total
Comprehensive
Income
|
$ 72,646
|
$ 76,589
|
$ 147,084
|
$
194,471
|
Nine
Months
Ended
|
||
June
30,
|
June
30,
|
|
2008
|
2007
|
|
Cash
Flows From Operating
Activities:
|
||
Net
Income
|
$
185,970
|
$ 187,463
|
Adjustments
to Reconcile Net
Income to Net
|
||
Cash
Provided by (Used in)
Operating Activities:
|
||
Depreciation
and
Amortization
|
20,240
|
16,310
|
Excess
Tax Benefits from
Share-Based
Payment
Arrangements
|
(392)
|
(1,781)
|
Deferred
Income
Taxes
|
17,351
|
(2,673)
|
Premium
and Discount
Amortization on
Available for Sale Securities
|
||
and
Unrealized Gain on Other
Investments
|
(379)
|
673
|
Other-than-temporary
Impairment on
Available for Sale Securities
|
2,823
|
-
|
Loss
on Sale of
Property and
Equipment
|
40
|
13
|
Gain
on Sale of
Loans Available for
Sale
|
(304)
|
(397)
|
Gain
on Sale of
Joint Venture
Interest
|
-
|
(2,559)
|
Provision
for Loan Loss, Legal
Proceedings, Bad Debts and Other Accruals
|
43,465
|
17,169
|
Share-Based
Compensation
Expense
|
27,102
|
27,089
|
(Increase)
Decrease in Operating
Assets:
|
||
Assets
Segregated Pursuant to
Regulations and Other Segregated Assets
|
6,407
|
(583,594)
|
Receivables:
|
||
Brokerage
Clients,
Net
|
(264,674)
|
(205,536)
|
Stock
Borrowed
|
125,352
|
(308,900)
|
Brokers-Dealers
and Clearing
Organizations
|
87,256
|
(243,963)
|
Other
|
(35,921)
|
(87,014)
|
Securities
Purchased Under
Agreements to Resell and Other Collateralized
|
||
Financings,
Net of Securities Sold
Under Agreements to Repurchase
|
(162,567)
|
(183,317)
|
Trading
Instruments,
Net
|
68,407
|
(4,854)
|
Proceeds
from Sale of
Loans Available for
Sale
|
26,907
|
29,396
|
Origination
of Loans Available for
Sale
|
(26,111)
|
(30,906)
|
Prepaid
Expenses and Other
Assets
|
(145,135)
|
(17,781)
|
Increase
(Decrease) in Operating
Liabilities:
|
||
Payables:
|
||
Brokerage
Clients
|
149,579
|
779,159
|
Stock
Loaned
|
(103,559)
|
267,231
|
Brokers-Dealers
and Clearing
Organizations
|
69,001
|
148,455
|
Trade
and
Other
|
19,395
|
27,507
|
Accrued
Compensation, Commissions
and Benefits
|
(44,241)
|
(15,941)
|
Income
Taxes
Payable
|
(9,967)
|
(23,073)
|
Minority
Interest
|
(3,104)
|
(5,346)
|
Net
Cash Provided
by (Used in)Operating
Activities
|
52,941
|
(217,170)
|
Nine
Months
Ended
|
||
June
30,
|
June
30,
|
|
2008
|
2007
|
|
Cash
Flows from Investing
Activities:
|
||
Additions
to Property and
Equipment, Net
|
(35,348)
|
(30,062)
|
Proceeds
from Sale of
Joint Venture Interest, Net of
Cash Disposed
|
-
|
3,514
|
Bank
loan Originations
and
Purchases
|
(4,342,767)
|
(2,563,294)
|
Bank
loan
Repayments
|
2,006,563
|
1,388,809
|
Purchases
of Other
Investments,
Net
|
2,482
|
(18,434)
|
Investments
in Real Estate
Partnerships-Held by Variable
|
||
Interest
Entities
|
(1,545)
|
(16,818)
|
Repayments
of Loans by Investor
Members of Variable Interest Entities Related
|
||
to
Investments in Real Estate
Partnerships
|
6,112
|
12,780
|
Securities
Purchased Under
Agreements to Resell, Net
|
180,000
|
(895,000)
|
Sales
of Available for
Sale Securities
|
-
|
81
|
Purchases
of Available for
Sale Securities
|
(189,565)
|
(325,096)
|
Available
for Sale Securities
Maturations and
Repayments
|
81,376
|
75,995
|
Net
Cash Used in Investing
Activities
|
(2,292,692)
|
(2,367,525)
|
Cash
Flows from Financing
Activities:
|
||
Proceeds
from Borrowed Funds,
Net
|
200,000
|
426,900
|
Repayments
of Mortgage and
Borrowings, Net
|
(9,736)
|
(15,233)
|
Proceeds
from Borrowed Funds
Related to Investments by Variable Interest
|
||
Entities
in Real Estate
Partnerships
|
4,237
|
5,202
|
Repayments
of Borrowed Funds
Related to Investments by Variable Interest
|
||
Entities
in Real Estate
Partnerships
|
(19,519)
|
(36,339)
|
Proceeds
from Capital Contributed
to Variable Interest Entities Related to
|
||
Investments
in Real Estate
Partnerships
|
28,264
|
58,816
|
Minority
Interest
|
(15,336)
|
(29,479)
|
Exercise
of Stock Options and
Employee Stock Purchases
|
26,140
|
32,811
|
Increase
in Bank
Deposits
|
2,160,880
|
2,217,666
|
Purchase
of Treasury
Stock
|
(67,243)
|
(1,350)
|
Dividends
on Common
Stock
|
(40,227)
|
(36,411)
|
Excess
Tax Benefits from
Share-Based
Payment
Arrangements
|
392
|
1,781
|
Net
Cash Provided by Financing
Activities
|
2,267,852
|
2,624,364
|
Currency
Adjustment:
|
||
Effect
of Exchange Rate Changes on
Cash
|
(3,503)
|
7,842
|
Net
Increase in Cash and Cash
Equivalents
|
24,598
|
47,511
|
Cash
Resulting from Consolidation
of Variable Interest Entities Related to
|
||
Investments
in Real Estate
Partnerships
|
-
|
(291)
|
Cash
Resulting from Consolidation
of Limited Partnerships
|
-
|
3,945
|
Cash
and Cash Equivalents at
Beginning of Year
|
644,943
|
392,418
|
Cash
and Cash Equivalents at End
of Period
|
$ 669,541
|
$ 443,583
|
Supplemental
Disclosures of Cash
Flow Information:
|
||
Cash
Paid for
Interest
|
$ 330,370
|
$ 349,101
|
Cash
Paid for Income
Taxes
|
$ 109,942
|
$ 128,364
|
June
30, 2008
|
September
30, 2007
|
|||
Instruments
|
Instruments
|
|||
Sold
but
|
Sold
but
|
|||
Trading
|
Not
Yet
|
Trading
|
Not
Yet
|
|
Instruments
|
Purchased
|
Instruments
|
Purchased
|
|
(in
000's)
|
||||
Municipal
Obligations
|
$ 199,145
|
$ 60,258
|
$ 200,024
|
$ 54
|
Corporate
Obligations
|
66,601
|
312
|
56,069
|
952
|
Government
Obligations
|
74,140
|
80,460
|
83,322
|
45,275
|
Agencies
|
66,214
|
54,289
|
47,123
|
60,829
|
Total
Debt Securities
|
406,100
|
195,319
|
386,538
|
107,110
|
Derivative
Contracts
|
40,522
|
20,650
|
30,603
|
8,445
|
Equity
Securities
|
42,074
|
26,005
|
46,913
|
34,174
|
Other
Securities
|
2,903
|
-
|
3,707
|
-
|
Total
|
$ 491,599
|
$ 241,974
|
$ 467,761
|
$ 149,729
|
June
30, 2008
|
||||
Gross
|
Gross
|
|||
Unrealized
|
Unrealized
|
|||
Cost
Basis
|
Gains
|
Losses
|
Fair
Value
|
|
(in
000's)
|
||||
Available
for Sale Securities:
|
||||
Agency
Mortgage Backed Securities
|
$
257,562
|
$
262
|
$ (1,460)
|
$
256,364
|
Non-Agency
Collateralized Mortgage Obligations
|
420,440
|
-
|
(57,651)
|
362,789
|
Total
RJBank Available for Sale Securities
|
678,002
|
262
|
(59,111)
|
619,153
|
Other
Securities
|
3
|
10
|
-
|
13
|
Total
Available for Sale Securities
|
$
678,005
|
$
272
|
$
(59,111)
|
$
619,166
|
September
30, 2007
|
||||
Gross
|
Gross
|
|||
Unrealized
|
Unrealized
|
|||
Cost
Basis
|
Gains
|
Losses
|
Fair
Value
|
|
(in
000's)
|
||||
Available
for Sale Securities:
|
||||
Agency
Mortgage Backed Securities
|
$
189,816
|
$
283
|
$ (404)
|
$
189,695
|
Non-Agency
Collateralized Mortgage Obligations
|
382,980
|
239
|
(3,003)
|
380,216
|
Total
RJBank Available for Sale Securities
|
572,796
|
522
|
(3,407)
|
569,911
|
Other
Securities
|
3
|
38
|
-
|
41
|
Total
Available for Sale Securities
|
$
572,799
|
$
560
|
$ (3,407)
|
$
569,952
|
June
30,
|
September
30,
|
|||
2008
|
2007
|
|||
Balance
|
%
|
Balance
|
%
|
|
($
in 000’s)
|
||||
Commercial
Loans (1)
|
$ 757,660
|
11%
|
$ 343,783
|
7%
|
Real
Estate Construction Loans
|
304,877
|
5%
|
123,664
|
3%
|
Commercial
Real Estate Loans (2)
|
3,175,649
|
47%
|
2,317,840
|
49%
|
Residential
Mortgage Loans
|
2,542,853
|
37%
|
1,934,645
|
41%
|
Consumer
Loans
|
16,326
|
-
|
4,541
|
-
|
Total
Loans
|
6,797,365
|
100%
|
4,724,473
|
100%
|
Net
Unearned Income and Deferred Expenses (3)
|
(39,421)
|
(13,242)
|
||
Allowance
for Loan Losses
|
(77,582)
|
(47,022)
|
||
(117,003)
|
(60,264)
|
|||
Loans,
Net
|
$
6,680,362
|
$
4,664,209
|
Due
in
|
||||
1
Year or Less
|
1
Year – 5 Years
|
>5
Years
|
Total
|
|
(in
000’s)
|
||||
Commercial
Loans (1)
|
$ 977
|
$ 384,261
|
$ 372,422
|
$ 757,660
|
Real
Estate Construction Loans
|
65,879
|
214,976
|
24,022
|
304,877
|
Commercial
Real Estate Loans (2)
|
152,334
|
2,296,024
|
727,291
|
3,175,649
|
Residential
Mortgage Loans
|
1,513
|
4,171
|
2,537,169
|
2,542,853
|
Consumer
Loans
|
12,867
|
3,459
|
-
|
16,326
|
Total
Loans
|
$
233,570
|
$
2,902,891
|
$
3,660,904
|
$
6,797,365
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
($
in 000’s)
|
||
Nonaccrual
Loans
|
$
29,619
|
$
1,391
|
Accruing
Loans Which are 90 Days or More
|
||
Past
Due
|
6,336
|
2,674
|
Total
Nonperforming Loans
|
35,955
|
4,065
|
Real
Estate Owned and Other
|
||
Repossessed
Assets, Net
|
1,913
|
1,653
|
Total
Nonperforming Assets, Net
|
$
37,868
|
$
5,718
|
Total
Nonperforming Assets as a % of
|
||
Total
Loans, Net and Other Real Estate Owned, Net
|
0.57%
|
0.12%
|
Three
Months Ended
|
Nine
Months Ended
|
|||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2008
|
2007
|
2008
|
2007
|
|
($
in 000’s)
|
||||
Allowance
for Loan Losses,
|
||||
Beginning
of Period
|
$
70,219
|
$
25,341
|
$
47,022
|
$
18,694
|
Provision
For Loan Losses
|
12,366
|
5,343
|
36,299
|
12,035
|
Charge-Offs:
|
||||
Commercial
Loans (1)
|
-
|
-
|
-
|
-
|
Real
Estate Construction Loans
|
-
|
-
|
-
|
-
|
Commercial
Real Estate Loans (2)
|
(3,492)
|
-
|
(3,864)
|
-
|
Residential
Mortgage Loans
|
(1,509)
|
(131)
|
(1,939)
|
(176)
|
Consumer
Loans
|
-
|
-
|
-
|
-
|
Total
Charge-Offs
|
(5,001)
|
(131)
|
(5,803)
|
(176)
|
Recoveries
|
(2)
|
-
|
64
|
-
|
Net
Charge-Offs
|
(5,003)
|
(131)
|
(5,739)
|
(176)
|
Allowance
for Loan Losses,
|
||||
End
of Period
|
$
77,582
|
$
30,553
|
$
77,582
|
$
30,553
|
Annualized
Net Charge-Offs to Average
|
||||
Bank
Loans, Net Outstanding
|
0.31%
|
0.02%
|
0.13%
|
0.01%
|
June
30, 2008
|
September
30, 2007
|
|||
Weighted
|
Weighted
|
|||
Average
|
Average
|
|||
Balance
|
Rate
(1)
|
Balance
|
Rate
(1)
|
|
($
in 000's)
|
||||
Bank
Deposits:
|
||||
NOW
Accounts
|
$ 3,575
|
0.34%
|
$ 4,493
|
1.57%
|
Demand
Deposits (Non-Interest Bearing)
|
2,592
|
-
|
3,645
|
-
|
Savings
and Money Market Accounts
|
7,506,516
|
1.53%
|
5,337,587
|
4.59%
|
Certificates
of Deposit
|
233,456
|
4.31%
|
239,534
|
4.75%
|
Total
Bank Deposits
|
$7,746,139
|
1.61%
|
$5,585,259
|
4.59%
|
June
30, 2008
|
September
30, 2007
|
|||
Denominations
|
Denominations
|
|||
Greater
than
|
Denominations
|
Greater
than
|
Denominations
|
|
or
Equal
|
Less
than
|
or
Equal
|
Less
than
|
|
to
$100,000
|
$100,000
|
to
$100,000
|
$100,000
|
|
(in
000's)
|
||||
Three
Months or Less
|
$
11,437
|
$ 28,865
|
$
14,386
|
$ 23,922
|
Over
Three Through Six Months
|
9,032
|
19,896
|
10,949
|
28,980
|
Over
Six Through Twelve Months
|
15,301
|
38,052
|
11,790
|
38,005
|
Over
One Through Two Years
|
14,718
|
39,765
|
14,706
|
36,997
|
Over
Two Through Three Years
|
6,631
|
18,632
|
7,978
|
22,345
|
Over
Three Through Four Years
|
7,123
|
12,789
|
7,857
|
14,103
|
Over
Four Years
|
3,097
|
8,118
|
1,802
|
5,714
|
Total
|
$
67,339
|
$
166,117
|
$
69,468
|
$
170,066
|
Three
Months Ended
|
Nine
Months Ended
|
|||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2008
|
2007
|
2008
|
2007
|
|
(in
000's)
|
||||
Certificates
of Deposit
|
$ 2,570
|
$ 2,749
|
$ 8,233
|
$ 8,204
|
Money
Market, Savings and
|
||||
NOW
Accounts
|
30,348
|
52,908
|
142,692
|
119,311
|
Total
|
$
32,918
|
$
55,657
|
$
150,925
|
$
127,515
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
(in
000's)
|
||
Short-Term
Borrowings:
|
||
Borrowings
on Lines of Credit (1)
|
$ 200,000
|
$ 2,685
|
Current
Portion of Mortgage Notes Payable
|
2,833
|
2,731
|
Federal
Home Loan Bank Advances (2)
|
-
|
5,000
|
Total
Short-Term Borrowings
|
202,833
|
10,416
|
Long-Term
Borrowings:
|
||
Mortgage
Notes Payable
(3)
|
60,071
|
62,224
|
Federal
Home Loan Bank Advances (2)
|
50,000
|
50,000
|
Total
Long-Term Borrowings
|
110,071
|
112,224
|
Total
Loans Payable
|
$ 312,904
|
$
122,640
|
(1)
|
At
June 30, 2008, the Company maintained two 364-day committed and
several
uncommitted lines of credit denominated in U.S. dollars and one
uncommitted line of credit denominated in Canadian dollars (“CDN”). At
June 30, 2008, the aggregate domestic lines were $1.3 billion and
CDN $40
million, respectively. The interest rates for these lines of credit
are
variable and are based on the Fed Funds rate, LIBOR, and Canadian
prime
rate. For the three months ended June 30, 2008, interest rates
on the
lines of credit ranged from 2.36% to 4.38%. For the three months
ended
June 30, 2007, interest rates on the lines of credit ranged from
5.00% to
6.28%. Loans on the secured uncommitted lines of credit are collateralized
by Company owned securities. The Company maintains a $600 million
uncommitted tri-party repurchase agreement line of credit. Under
this
agreement, the Company pledges certain of its trading inventory
as
collateral against borrowings on this line. The required market
value of
the collateral ranges from 102% to 105% of the cash borrowed. The
interest
rate is set daily based on market conditions for Fed funds. The
lender is
under no obligation to lend to the Company under this tri-party
line at
any given time. Under this agreement, there were no secured short-term
borrowings outstanding at June 30, 2008. The Company’s $200 million and
$50 million committed lines of credit are subject to 0.125% and
0.15% per
annum facility fees, respectively. At June 30, 2008, the Company’s entire
$200 million committed line of credit was outstanding. Subsequent
to June
30, 2008 the Company repaid $80 million of this debt and entered
into a
new 364-day $100 million committed tri-party repurchase agreement
line of
credit.
|
(2)
|
RJBank
had $50 million in FHLB advances outstanding at June 30, 2008,
which was
comprised of several long-term, fixed rate advances. The weighted
average
interest rate on these fixed rate advances at June 30, 2008 was
5.19%. The
outstanding FHLB advances mature between September 2010 and February
2011.
The maximum amount of FHLB advances outstanding at any month-end
during
the three months ended June 30, 2008 and 2007 was $55 million and
$60
million, respectively. The average amounts of FHLB advances outstanding
and the weighted average interest rate thereon for the three months
ended
June 30, 2008 and 2007 were $53.6 million at a rate of 5.25% and
$59.6
million at a rate of 5.26%, respectively. These advances are secured
by a
blanket lien on RJBank's residential loan portfolio granted to
FHLB. The
FHLB has the right to convert advances totaling $35 million at
June 30,
2008 to a floating rate at one or more future dates. RJBank has
the right
to prepay these advances without penalty if the FHLB exercises
its
right.
|
(3)
|
Mortgage
notes payable evidences a mortgage loan for the financing of the
Company's
home office complex. The mortgage loan bears interest at 5.7% and
is
secured by land, buildings, and improvements with a net book value
of
$68.5 million at June 30, 2008.
|
Sources
of Collateral (In 000's):
|
|
Securities
Purchased Under Agreements to Resell and Other
|
|
Collateralized
Financings
|
$ 986,727
|
Securities
Received in Securities Borrowed Vs. Cash Transactions
|
868,734
|
Collateral
Received for Margin Loans
|
1,619,573
|
Total
|
$3,475,034
|
Uses
of Collateral and Trading Securities (In 000's):
|
|
Securities
Purchased Under Agreements to Resell and Other
|
|
Collateralized
Financings
|
$ 68,792
|
Securities
Received in Securities Borrowed Vs. Cash Transactions
|
815,533
|
Collateral
Received for Margin Loans
|
134,575
|
Total
|
$1,018,900
|
Number
of
|
Average
|
||
Period
|
Shares
Purchased (1)
|
Price
Per Share
|
|
April
1, 2008 – April 30, 2008
|
-
|
-
|
|
May
1, 2008 – May 31, 2008
|
-
|
-
|
|
June
1, 2008 – June 30, 2008
|
397
|
$28.55
|
|
Total
|
397
|
$28.55
|
(1)
|
The
Company does not have a formal stock repurchase plan. On May 20,
2004, the
Board of Directors authorized $75 million for repurchases pursuant
to
prior authorization from the Board of Directors. During March 2008,
the
Company exhausted this authorization. On March 11, 2008, the Board
of
Directors authorized an additional $75 million for repurchases
at the
discretion of the Board’s Share Repurchase Committee. Since May 2004,
3,355,961 shares have been repurchased for a total of $77.4 million,
leaving $72.6 million available to repurchase shares. Historically
the
Company has considered such purchases when the price of its stock
approaches 1.5 times book value or when employees surrender shares
as
payment for option exercises. The decision to repurchase shares
is subject
to cash availability and other factors. Accordingly, the Company
purchased
2,634,833 shares in open market transactions for the nine months
ended
June 30, 2008. During the nine months ended June 30, 2008, 241,614
shares
were purchased for the trust fund that was established and funded
to
acquire Company common stock in the open market to be used to settle
restricted stock units granted as a retention vehicle for certain
employees of the Company’s wholly owned Canadian subsidiary (see Note 17
of the Notes to the Consolidated Financial Statements included
in the
Company's Annual Report on Form 10-K for the year ended September
30, 2007
for more information on this trust fund). The Company also purchased
397
shares that were surrendered by employees as payment for option
exercises
during the three months ended June 30,
2008.
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
($
in 000's)
|
||
Raymond
James & Associates, Inc.:
|
||
(Alternative
Method Elected)
|
||
Net
Capital as a Percent of Aggregate
|
||
Debit
Items
|
19.27%
|
21.94%
|
Net
Capital
|
$
320,567
|
$
332,873
|
Less:
Required Net Capital
|
(33,268)
|
(30,344)
|
Excess
Net Capital
|
$
287,299
|
$
302,529
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
(in
000's)
|
||
Raymond
James Financial Services, Inc.:
|
||
(Alternative
Method Elected)
|
||
Net
Capital
|
$
59,702
|
$
70,583
|
Less:
Required Net Capital
|
(250)
|
(250)
|
Excess
Net Capital
|
$
59,452
|
$
70,333
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
(in
000’s)
|
||
Heritage
Fund Distributors, Inc.:
|
||
(Alternative
Method Elected)
|
||
Net
Capital
|
$
2,359
|
$
6,039
|
Less:
Required Net Capital
|
(250)
|
(250)
|
Excess
Net Capital
|
$
2,109
|
$
5,789
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
($
in 000's)
|
||
Raymond
James (USA) Ltd.:
|
||
(Alternative
Method Elected)
|
||
Net
Capital as a Percent of Aggregate
|
||
Debit
Items
|
96.44%
|
23.00%
|
Net
Capital
|
$
3,762
|
$
3,418
|
Less:
Required Net Capital
|
(250)
|
(299)
|
Excess
Net Capital
|
$
3,512
|
$
3,119
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
(in
000’s)
|
||
Raymond
James Ltd.:
|
||
Risk
Adjusted Capital before minimum
|
$
51,517
|
$
47,974
|
Less:
Required Minimum Capital
|
(250)
|
(250)
|
Risk
Adjusted Capital
|
$
51,267
|
$
47,724
|
To
be well
capitalized
|
||||||
Requirement
for
capital
|
under
prompt
|
|||||
adequacy
|
corrective
action
|
|||||
Actual
|
purposes
|
provisions
|
||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|
($
in
000's)
|
||||||
As
of June 30, 2008:
|
||||||
Total
Capital
(to
|
||||||
Risk-Weighted
Assets)
|
$
624,732
|
10.2%
|
$
491,984
|
8.0%
|
$
614,980
|
10.0%
|
Tier I
Capital
(to
|
||||||
Risk-Weighted
Assets)
|
547,909
|
8.9%
|
245,992
|
4.0%
|
368,988
|
6.0%
|
Tier I
Capital
(to
|
||||||
Adjusted
Assets)
|
547,909
|
6.5%
|
335,124
|
4.0%
|
418,905
|
5.0%
|
As
of September 30,
2007:
|
||||||
Total
Capital
(to
|
||||||
Risk-Weighted
Assets)
|
$
420,704
|
10.1%
|
$
332,832
|
8.0%
|
$
416,040
|
10.0%
|
Tier I
Capital
(to
|
||||||
Risk-Weighted
Assets)
|
368,699
|
8.9%
|
166,416
|
4.0%
|
249,624
|
6.0%
|
Tier I
Capital
(to
|
||||||
Adjusted
Assets)
|
368,699
|
5.8%
|
253,048
|
4.0%
|
316,309
|
5.0%
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
(in
000's)
|
||
Standby
Letters of Credit
|
$ 229,810
|
$ 100,397
|
Open
End Consumer Lines of Credit
|
41,988
|
27,871
|
Commercial
Lines of Credit
|
1,345,688
|
1,218,690
|
Unfunded
Loan Commitments - Variable Rate (1)
|
570,643
|
397,752
|
Unfunded
Loan Commitments - Fixed Rate
|
6,956
|
12,831
|
(1)
|
Includes
commitments to purchase pools of adjustable rate whole first mortgage
loans.
|
Three
Months Ended
|
Nine
Months Ended
|
|||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2008
|
2007
|
2008
|
2007
|
|
(in
000’s, except per share amounts)
|
||||
Net
Income
|
$ 69,938
|
$ 68,353
|
$
185,970
|
$
187,463
|
Weighted
Average Common Shares
|
||||
Outstanding
During the Period
|
115,633
|
116,135
|
116,573
|
115,353
|
Dilutive
Effect of Stock Options and Awards (1)
|
2,639
|
3,005
|
2,639
|
3,072
|
Weighted
Average Diluted Common
|
||||
Shares
(1)
|
118,272
|
119,140
|
119,212
|
118,425
|
Net
Income per Share – Basic
|
$ 0.60
|
$ 0.59
|
$ 1.59
|
$ 1.63
|
Net
Income per Share - Diluted (1)
|
$ 0.59
|
$ 0.57
|
$ 1.56
|
$ 1.58
|
Securities
Excluded from Weighted Average
|
||||
Diluted
Common Shares Because Their Effect
|
||||
Would
Be Antidilutive
|
3,623
|
694
|
3,045
|
1,247
|
(1)
|
Diluted
earnings per share is computed on the basis of the weighted average
number
of shares of common stock plus the effect of dilutive potential
common
shares outstanding during the period using the treasury stock method.
Dilutive potential common shares include stock options, units and
awards.
|
Three
Months Ended
|
Nine
Months Ended
|
|||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2008
|
2007
|
2008
|
2007
|
|
(in
000’s)
|
||||
Revenues:
|
||||
Private
Client Group
|
$ 472,843
|
$ 499,475
|
$
1,488,871
|
$
1,421,824
|
Capital
Markets
|
147,047
|
146,383
|
386,009
|
373,508
|
Asset
Management
|
57,629
|
58,094
|
179,826
|
173,652
|
RJBank
|
96,222
|
79,221
|
303,945
|
186,000
|
Emerging
Markets
|
10,339
|
14,676
|
32,985
|
43,126
|
Stock
Loan/Borrow
|
6,728
|
19,573
|
29,015
|
49,284
|
Proprietary
Capital
|
16,134
|
6,715
|
18,475
|
11,917
|
Other
|
1,806
|
(1,384)
|
5,947
|
11,342
|
Total
Revenues
|
$ 808,748
|
$ 822,753
|
$
2,445,073
|
$
2,270,653
|
Income
Before Provision for Income Taxes:
|
||||
Private
Client Group
|
$ 36,654
|
$ 56,158
|
$ 143,478
|
$ 161,527
|
Capital
Markets
|
27,882
|
25,571
|
41,722
|
53,022
|
Asset
Management
|
13,365
|
16,480
|
45,050
|
46,520
|
RJBank
|
37,957
|
8,729
|
78,622
|
24,962
|
Emerging
Markets
|
(348)
|
(2,931)
|
(1,618)
|
1,674
|
Stock
Loan/Borrow
|
1,893
|
1,421
|
4,827
|
2,995
|
Proprietary
Capital
|
5,794
|
4,400
|
4,563
|
4,617
|
Other
|
(8,079)
|
70
|
(12,951)
|
1,302
|
Pre-Tax
Income
|
$
115,118
|
$
109,898
|
$ 303,693
|
$ 296,619
|
Three
Months Ended
|
Nine
Months Ended
|
|||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2008
|
2007
|
2008
|
2007
|
|
(in
000’s)
|
||||
Net
Interest Income (Expense):
|
||||
Private
Client Group
|
$ 22,205
|
$ 31,710
|
$ 70,896
|
$ 92,729
|
Capital
Markets
|
638
|
(2,265)
|
1,048
|
(6,309)
|
Asset
Management
|
145
|
359
|
928
|
1,021
|
RJBank
|
63,922
|
22,498
|
147,109
|
55,712
|
Emerging
Markets
|
240
|
808
|
1,950
|
2,219
|
Stock
Loan/Borrow
|
2,338
|
2,344
|
7,027
|
6,496
|
Proprietary
Capital
|
152
|
289
|
1,160
|
915
|
Other
|
571
|
1,855
|
5,546
|
9,570
|
Net
Interest Income
|
$ 90,211
|
$ 57,598
|
$ 235,664
|
$ 162,353
|
June
30,
|
September
30,
|
|
2008
|
2007
|
|
(in
000’s)
|
||
Total
Assets:
|
||
Private
Client Group *
|
$ 6,874,482
|
$ 6,608,059
|
Capital
Markets **
|
1,399,285
|
1,533,273
|
Asset
Management
|
78,029
|
95,894
|
RJBank
|
8,339,757
|
6,312,966
|
Emerging
Markets
|
82,271
|
104,238
|
Stock
Loan/Borrow
|
1,186,139
|
1,302,937
|
Proprietary
Capital
|
167,082
|
115,062
|
Other
|
152,143
|
181,739
|
Total
|
$
18,279,188
|
$
16,254,168
|
Three
Months Ended
|
Nine
Months Ended
|
|||
June
30,
|
June
30,
|
June
30,
|
June
30,
|
|
2008
|
2007
|
2008
|
2007
|
|
(in
000’s)
|
||||
Revenues:
|
||||
United
States
|
$
717,014
|
$ 732,547
|
$ 2,164,936
|
$
2,013,485
|
Canada
|
69,804
|
63,551
|
203,832
|
177,651
|
Europe
|
13,159
|
12,682
|
45,764
|
38,957
|
Other
|
8,771
|
13,973
|
30,541
|
40,560
|
Total
|
$
808,748
|
$ 822,753
|
$ 2,445,073
|
$
2,270,653
|
|
Item
2. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Three
Months
Ended
|
|||||
June
30,
|
June
30,
|
Percentage
|
|||
2008
|
2007
|
Change
|
|||
(in
000’s)
|
|||||
Total
Company
|
|||||
Revenues
|
$
808,748
|
$
822,753
|
(2%)
|
||
Pre-tax
Earnings
|
$
115,118
|
$
109,898
|
5%
|
||
Private
Client
Group
|
|||||
Revenues
|
472,843
|
499,475
|
(5%)
|
||
Pre-tax
Earnings
|
36,654
|
56,158
|
(35%)
|
||
Capital
Markets
|
|||||
Revenues
|
147,047
|
146,383
|
0%
|
||
Pre-tax
Earnings
|
27,882
|
25,571
|
9%
|
||
Asset
Management
|
|||||
Revenues
|
57,629
|
58,094
|
(1%)
|
||
Pre-tax
Earnings
|
13,365
|
16,480
|
(19%)
|
||
Raymond
James Bank
|
|||||
Revenues
|
96,222
|
79,221
|
21%
|
||
Pre-tax
Earnings
|
37,957
|
8,729
|
335%
|
||
Emerging
Markets
|
|||||
Revenues
|
10,339
|
14,676
|
(30%)
|
||
Pre-tax
Loss
|
(348)
|
(2,931)
|
88%
|
||
Stock
Loan/Borrow
|
|||||
Revenues
|
6,728
|
19,573
|
(66%)
|
||
Pre-tax
Earnings
|
1,893
|
1,421
|
33%
|
||
Proprietary
Capital
|
|||||
Revenues
|
16,134
|
6,715
|
140%
|
||
Pre-tax
Earnings
|
5,794
|
4,400
|
32%
|
||
Other
|
|||||
Revenues
|
1,806
|
(1,384)
|
230%
|
||
Pre-tax
(Loss)Earnings
|
(8,079)
|
70
|
(11,641%)
|
Three
Months Ended
|
||||||||
June
30,
|
June
30,
|
|||||||
2008
|
2007
|
|||||||
Average
|
Average
|
|||||||
Average
|
Interest
|
Yield/
|
Average
|
Interest
|
Yield/
|
|||
Balance
|
Inc./Exp.
|
Cost
|
Balance
|
Inc./Exp.
|
Cost
|
|||
($
in 000’s)
|
||||||||
Interest-Earning
Assets:
|
||||||||
Margin
Balances
|
$1,575,228
|
$
17,662
|
4.48%
|
$1,423,603
|
$ 27,116
|
7.62%
|
||
Assets
Segregated Pursuant
|
||||||||
to
Regulations and Other
|
||||||||
Segregated
Assets
|
4,072,571
|
21,381
|
2.10%
|
3,732,500
|
49,269
|
5.28%
|
||
Interest-Earning
Assets
|
||||||||
of
RJBank (1)
|
8,286,161
|
97,692
|
4.72%
|
5,243,979
|
78,939
|
6.02%
|
||
Stock
Borrow
|
6,728
|
19,573
|
||||||
Interest-Earning
Assets
|
||||||||
of
Variable Interest Entities
|
125
|
174
|
||||||
Other
|
13,347
|
16,620
|
||||||
Total
Interest Income
|
156,935
|
191,691
|
||||||
Interest-Bearing
Liabilities:
|
||||||||
Client
Interest Program
|
$5,211,264
|
20,827
|
1.60%
|
$4,616,939
|
50,795
|
4.40%
|
||
Interest-Bearing
Liabilities
|
||||||||
of
RJBank (1)
|
7,796,117
|
33,770
|
1.73%
|
4,897,454
|
56,441
|
4.61%
|
||
Stock
Loan
|
4,390
|
17,229
|
||||||
Interest-Bearing
Liabilities of
|
||||||||
Variable
Interest Entities
|
973
|
1,842
|
||||||
Other
|
6,764
|
7,786
|
||||||
Total
Interest Expense
|
66,724
|
134,093
|
||||||
Net
Interest Income
|
$
90,211
|
$
57,598
|
(1)
|
See
Raymond James Bank section in Item 2 of Part I for
details.
|
June
30,
|
June
30,
|
|||
Independent
|
2008
|
2007
|
||
Employee
|
Contractors
|
Total
|
Total
|
|
Private
Client Group - Financial Advisors:
|
||||
RJA
|
1,159
|
-
|
1,159
|
1,054
|
RJFS
|
-
|
3,114
|
3,114
|
3,074
|
RJ
Ltd.
|
193
|
164
|
357
|
325
|
RJIS
|
-
|
86
|
86
|
76
|
Total
Financial Advisors
|
1,352
|
3,364
|
4,716
|
4,529
|
Three
Months Ended
|
|||
June
30,
|
June
30, |