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Robert Trigaux

RayJay comes out swinging at Barron's



Welcome to the main event: St. Petersburg retail brokerage Raymond James Financial vs. the weekly Barron's business magazine. A lengthy feature story by Sandra Ward headlined "The Siren Song of Banking" raises questions about Raymond James -- a retail broker stuck in a Wall Street storm of declining markets -- and its apparent bullish outlook for its subsidiary Raymond James Bank. The Barron's piece hints that the bank has an excess of risky corporate loans and adjustable-rate mortgages on its books and may not deserve the thumbs-up attitude given it by Raymond James CEO Tom James. In fact, the story says Raymond James' stock could drop 20 percent. The last line of the Barron's article?

"At this point, one's money would probably do better in Raymond James' vault than in its stock."

Now Raymond James is not a company that takes lightly such challenges to its management and stock price. In a rebuttal press release dated Nov. 11 and seemingly as long as the Barron's article that prompted it, Raymond James prints seven excerpts from the article and counters each assertion. Here's a concluding thought from RayJay:

"Raymond James Bank has grown significantly over the past few years and the capital invested in the bank represents approximately 30 percent of the company’s overall capital. Inclusive of our assumptions of a continuing weak economy leading to credit deterioration and somewhat lower interest spreads, we have every reason to believe that Raymond James Bank is well-positioned for 2009."

So, if the Raymond James Bank affiliate is an alleged problem, how's it doing? On Thursday, the bank released its quarterly earnings. The highlights: Net income for the fourth fiscal quarter ended Sept. 30 was $21.4-million, up 1,199 percent -- yes, that's correct -- compared to the lower-than-normal earnings of $1.65-million in the same period of 2007, and down 11 percent from the earlier quarter ended June 30 of this year. For the full fiscal year, net income was $70.6-million, up 308 percent over 2007.

Is this the end of the sword match? Clearly Raymond James does not like being criticized in the midst of wild stock swings on Wall Street. It's an expensive market out there.

-- Robert Trigaux, Times Business Columnist

[Last modified: Tuesday, June 1, 2010 11:23am]


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