Nearly a year after announcing that it had plans to purchase Morgan Keegan, Raymond James continues to see modest growth as it moves toward finalizing the integration.

The St. Petersburg, Fla.-based firm announced that net revenues topped out at $1.14 billion for the first fiscal quarter of 2013, up 42% from last year and four percent from $1.09 billion last quarter. Net income rose by 28% from last year’s $67.3 million to $85.9 million. Earnings per share hit $0.61, up from $0.60 last quarter but below Thompson Reuters estimates of $0.68.

“The company generated impressive revenue given the market environment,” CEO Paul Reilly said in a statement. “This quarter, the bottom line was satisfactory given that we continue to operate as planned at elevated support levels while we move toward completion of the Morgan Keegan integration.”

That growth was reflected in the firm’s Private Client Group, which features both independent and employee advisory channels. Revenues in that channel rose 35% from a year earlier and three percent from last quarter, nearly touching $713 million. Net income, however, was up five percent from last quarter and only seven percent from last year as the Morgan Keegan integration continued to inflate expenses, the firm said. Acquisition related expenses dropped only slightly by seven percent to $17.4 million from $18.7 million last quarter.

“Pretax income was up 5% over the preceding quarter as compensation and technology expenses continue to remain elevated during the Morgan Keegan integration,” Raymond James reported.

Offsetting those costs, revenue from commissions and fees at the Private Client Group rose from $433 million one year ago to nearly $596 million.

Moreover, although the S&P fell one percent over the firm’s first quarter of the year, client assets lurched ahead. The total assets under management rose from $34.9 billion a year ago to $46.5 billion thanks in large part to a $3.1 billion boost the firm received from the asset management division’s acquisition of 45% of ClariVest Asset Management in December of 2012.

“Productivity for financial advisors reached record highs for both our employee and independent contractor divisions,” the firm said.

Headcount continued to decline as the firm shed lower producing Morgan Keegan advisors. The firm reported 5,427 advisors at the end of the first quarter of 2013, which was down 25 from the preceeding quarter and down 62 from June of last year. That decline was represented in the tally of former Morgan Keegan advisors, which fell 69 from June of 2012 to 869, although the firm maintained that retention of the higher producing teams remained high following the deal.

“Retention levels remain extremely high for those Morgan Keegan advisors offered retention packages,” the firm said.

The firm expects to finalize the integration next month, fully converting the Private Client Group to the Raymond James system, according to Reilly.

“Morgan Keegan advisors are excited about getting access to our systems and products,” Reilly noted in the release. “We will continue to run at elevated support levels through the conversion and look to achieve our efficiency targets after integration is completed late in this fiscal year.”

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