Raymond James reported net income of $67.3 million for the first fiscal quarter of 2012 on Wednesday, an 18% decline from the first quarter of last year and 2% fall from last quarter.
Net income for the first quarter of last year totaled $81.7 million and $68.9 million last quarter. Price per diluted share for the first quarter is $0.53, versus $0.65 per diluted share in the first quarter of 2011 and $0.54 per diluted share last quarter.
Net revenue totaled $782.8 million for the first quarter, a 4% fall both from the first quarter of 2011 with $813.8 million and last quarter with $817.8 million.
The results come as Raymond James won a $930 million bid to buy Regions Financial’s Morgan Keegan brokerage unit earlier this month. That transaction is expected to close on March 30.
The declines in net income and net revenue were a result of lower fee levels affecting the Private Client Group and asset management businesses, Raymond James Chief Executive Paul Reilly said in a statement on Wednesday.
“We started the quarter with a headwind in both Private Client Group and asset management, as wrap fee assets billed quarterly in advance were 6% lower on Oct. 1 than they were July 1,” Reilly said. “Unfortunately, we were unable to overcome that lower fee level, thus both segments trailed the previous quarter in revenues and pretax profits.”
The first quarter results also showed that Raymond James’s net loans rose to more than $7 billion, a 7% or $467 million increase from the previous quarter.
Assets under administration came in at $270 billion, a 3% increase from the first quarter of last year and a 5% climb from the end of last quarter. Assets under management totaled $35 billion, a 5% increase from the first quarter of last year and a 9% jump from the end of last quarter.
Raymond James’s Private Client Group posted $528.6 million in revenue for the first quarter, a 2% increase from the first quarter of 2010 with $519.4 million. That revenue declined 4% from last quarter, with $552.9 million.
The Private Client Group’s total force of financial advisor and investment advisor representatives rose to 4,495 in the United States, up from 4,489 in the first quarter of last year and 4,504 last quarter. Raymond James’s Private Client Group now has a total of 5,356 financial advisors and investment advisor representatives including Canada and the United Kingdom.
Those results do not include the Morgan Keegan brokerage force, which will add more than 1,000 new advisors to Raymond James, mostly in its Private Client Group unit.
“We are excited about the strategic impact of the acquisition of Morgan Keegan,” Reilly said. “Although still in the early days, integration discussions have gone extremely well due to the strong cultural fit and synergies between the two organizations.”
Raymond James also now has approval to convert from its thrift status to a national bank, the firm said. Raymond James is scheduled to become both a banking holding company and financial holding company on Feb. 1.
Lorie Konish writes for On Wall Street.