RCAP Posts Strong Quarter, Has $475 Million on Hand to Grow Platform

Investment firm RCS Capital Corporation (RCAP), announced its 2014 second quarter operating results today for the three months ended June 30, 2014.

During the second quarter, the company completed its five previously announced retail broker-dealer acquisitions, which include Cetera Financial Group, First Allied Securities Inc., Investors Capital Corporation, J.P. Turner & Company, Summit Financial Services Group Inc., as well as the purchase of the investment management business of The Hatteras Funds Group. In addition, the company announced yesterday that it has agreed to acquire VSR.

RCAP’s pro Forma revenue for the second quarter increased to $825.7 million, which is an increase of 22% from quarter one. The company also recruited 272 new financial advisors in the second quarter, growing its advisor base to 9,200 independent retail financial advisors.

“We had an outstanding second quarter with pro forma revenue and adjusted net income up 22% and 12%, respectively, compared to the first quarter of 2014. Our pro forma assets under administration rose nearly $6 billion and we continue to expect to realize approximately $57 to $65 million in 2014 run-rate synergies, with additional incremental revenue and expense synergies expected in 2015,” said Michael Weil, RCAP’s President.

RCAP also reports a strong balance sheet with $475 million of cash and cash equivalents, with which the company intends to further its platform and advisor initiatives through investments in human capital and technologies.

The company’s Adjusted Net Income increased 12% quarter-over-quarter to $42.6 million, or $0.49 per fully diluted share. RCAP continues to expect $304 – $327 million pro forma run-rate adjusted EBITDA for 2014.

The company also began a new initiative in the second quarter, creating a crowdfunding investment platform expected to launch in September 2014.

RCS Capital Corporation will host an earnings conference call today at 1:00 p.m. EST to discuss the results.

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