(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
RAYMOND JAMES FINANCIAL, INC. | |||
Date: | April 29, 2020 | By: | /s/ Paul M. Shoukry |
Paul M. Shoukry | |||
Chief Financial Officer and Treasurer | |||
April 29, 2020 | FOR IMMEDIATE RELEASE | |
Media Contact: Steve Hollister, 727.567.2824 | ||
Investor Contact: Kristina Waugh, 727.567.7654 | ||
raymondjames.com/news-and-media/press-releases |
• | Record quarterly net revenues of $2.07 billion, up 11% over the prior year’s fiscal second quarter and 3% over the preceding quarter |
• | Quarterly net income of $169 million, or $1.20 per diluted share, down 35% compared to net income in the prior year’s fiscal second quarter and 37% compared to the preceding quarter, primarily due to the bank loan loss provision of $109 million |
• | Record quarterly net revenues and pre-tax income in the Private Client Group segment |
• | Record number of Private Client Group financial advisors of 8,148, net increases of 286 over March 2019 and 88 over December 2019 |
• | Record clients’ domestic cash sweep balances of $52.9 billion, up 27% over the prior year’s fiscal second quarter and 34% over the preceding quarter |
• | Ended the quarter with capital ratios well in excess of regulatory requirements and substantial liquidity with nearly $2 billion(1) of cash at the parent company, which included the proceeds of a $500 million 10-year senior notes issuance in March |
• | Record quarterly net revenues of $1.50 billion, up 18% over the prior year’s fiscal second quarter and 6% over the preceding quarter |
• | Record quarterly pre-tax income of $170 million, up 29% over the prior year’s fiscal second quarter and 11% over the preceding quarter |
• | Record number of Private Client Group financial advisors of 8,148, net increases of 286 over March 2019 and 88 over December 2019 |
• | Record clients’ domestic cash sweep balances of $52.9 billion, up 27% over the prior year’s fiscal second quarter and 34% over the preceding quarter |
• | Private Client Group assets under administration of $734.0 billion, down 3% compared to March 2019 and 14% compared to December 2019 |
• | Private Client Group assets in fee-based accounts of $383.5 billion, up 1% over March 2019 and down 14% compared to December 2019 |
• | Quarterly net revenues of $290 million, up 5% over the prior year’s fiscal second quarter and 8% over the preceding quarter |
• | Quarterly pre-tax income of $28 million, down 32% compared to the prior year’s fiscal second quarter and 3% compared to the preceding quarter |
• | Quarterly brokerage revenues of $130 million, up 26% over the prior year’s fiscal second quarter and 13% over the preceding quarter |
• | Quarterly investment banking revenues of $137 million, down 12% compared to the prior year’s fiscal second quarter and up 5% over the preceding quarter |
• | Quarterly net revenues of $184 million, up 14% over the prior year’s fiscal second quarter and flat compared to the preceding quarter |
• | Quarterly pre-tax income of $73 million, up 33% over the prior year’s fiscal second quarter and flat compared to the preceding quarter |
• | Quarterly net revenues of $210 million, down 1% compared to the prior year’s fiscal second quarter and 3% compared to the preceding quarter |
• | Quarterly pre-tax income of $14 million, down 90% compared to both the prior year’s fiscal second quarter and the preceding quarter, primarily due to a higher loan loss provision |
• | Record net loans of $21.8 billion, up 8% over March 2019 and 2% over December 2019 |
• | Net interest margin (“NIM”) of 3.02% for the quarter, down 33 basis points compared to the prior year’s fiscal second quarter and 21 basis points compared to the preceding quarter |
RAYMOND JAMES FINANCIAL, INC. Second Quarter Fiscal 2020 | Selected Financial Highlights (Unaudited) |
Three months ended | % change from | |||||||||||||||
$ in millions, except per share amounts | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Net revenues | $ | 2,068 | $ | 1,859 | $ | 2,009 | 11% | 3% | ||||||||
Pre-tax income | $ | 239 | $ | 347 | $ | 359 | (31)% | (33)% | ||||||||
Net income | $ | 169 | $ | 261 | $ | 268 | (35)% | (37)% | ||||||||
Earnings per common share: (2) | ||||||||||||||||
Basic | $ | 1.22 | $ | 1.85 | $ | 1.93 | (34)% | (37)% | ||||||||
Diluted | $ | 1.20 | $ | 1.81 | $ | 1.89 | (34)% | (37)% |
Six months ended | ||||||||||
$ in millions, except per share amounts | March 31, 2020 | March 31, 2019 | % change | |||||||
Net revenues | $ | 4,077 | $ | 3,790 | 8% | |||||
Pre-tax income | $ | 598 | $ | 679 | (12)% | |||||
Net income | $ | 437 | $ | 510 | (14)% | |||||
Earnings per common share: (2) | ||||||||||
Basic | $ | 3.15 | $ | 3.58 | (12)% | |||||
Diluted | $ | 3.09 | $ | 3.51 | (12)% |
Consolidated Statements of Income (Unaudited) | ||||||||||||||||
Three months ended | % change from | |||||||||||||||
in millions, except per share amounts | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Revenues: | ||||||||||||||||
Asset management and related administrative fees | $ | 1,006 | $ | 783 | $ | 955 | 28% | 5% | ||||||||
Brokerage revenues: | ||||||||||||||||
Securities commissions | 410 | 349 | 363 | 17% | 13% | |||||||||||
Principal transactions | 105 | 93 | 97 | 13% | 8% | |||||||||||
Total brokerage revenues | 515 | 442 | 460 | 17% | 12% | |||||||||||
Account and service fees | 172 | 191 | 178 | (10)% | (3)% | |||||||||||
Investment banking | 148 | 163 | 141 | (9)% | 5% | |||||||||||
Interest income | 285 | 324 | 297 | (12)% | (4)% | |||||||||||
Other (3) | (15 | ) | 31 | 29 | NM | NM | ||||||||||
Total revenues | 2,111 | 1,934 | 2,060 | 9% | 2% | |||||||||||
Interest expense | (43 | ) | (75 | ) | (51 | ) | (43)% | (16)% | ||||||||
Net revenues | 2,068 | 1,859 | 2,009 | 11% | 3% | |||||||||||
Non-interest expenses: | ||||||||||||||||
Compensation, commissions and benefits | 1,422 | 1,225 | 1,351 | 16% | 5% | |||||||||||
Non-compensation expenses: | ||||||||||||||||
Communications and information processing | 99 | 94 | 94 | 5% | 5% | |||||||||||
Occupancy and equipment | 56 | 53 | 57 | 6% | (2)% | |||||||||||
Business development | 41 | 41 | 44 | — | (7)% | |||||||||||
Investment sub-advisory fees | 26 | 22 | 26 | 18% | — | |||||||||||
Professional fees | 23 | 17 | 21 | 35% | 10% | |||||||||||
Bank loan loss provision/(benefit) | 109 | 5 | (2 | ) | 2,080% | NM | ||||||||||
Other (3) (4) | 53 | 55 | 59 | (4)% | (10)% | |||||||||||
Total non-compensation expenses | 407 | 287 | 299 | 42% | 36% | |||||||||||
Total non-interest expenses | 1,829 | 1,512 | 1,650 | 21% | 11% | |||||||||||
Pre-tax income | 239 | 347 | 359 | (31)% | (33)% | |||||||||||
Provision for income taxes | 70 | 86 | 91 | (19)% | (23)% | |||||||||||
Net income | $ | 169 | $ | 261 | $ | 268 | (35)% | (37)% | ||||||||
Earnings per common share – basic (2) | $ | 1.22 | $ | 1.85 | $ | 1.93 | (34)% | (37)% | ||||||||
Earnings per common share – diluted (2) | $ | 1.20 | $ | 1.81 | $ | 1.89 | (34)% | (37)% | ||||||||
Weighted-average common shares outstanding – basic | 138.4 | 140.8 | 138.3 | (2)% | — | |||||||||||
Weighted-average common and common equivalent shares outstanding – diluted | 141.1 | 143.9 | 141.5 | (2)% | — |
Consolidated Statements of Income (Unaudited) | ||||||||||
Six months ended | ||||||||||
in millions, except per share amounts | March 31, 2020 | March 31, 2019 | % change | |||||||
Revenues: | ||||||||||
Asset management and related administrative fees | $ | 1,961 | $ | 1,648 | 19% | |||||
Brokerage revenues: | ||||||||||
Securities commissions | 773 | 737 | 5% | |||||||
Principal transactions | 202 | 169 | 20% | |||||||
Total brokerage revenues | 975 | 906 | 8% | |||||||
Account and service fees | 350 | 376 | (7)% | |||||||
Investment banking | 289 | 300 | (4)% | |||||||
Interest income | 582 | 640 | (9)% | |||||||
Other (3) | 14 | 68 | (79)% | |||||||
Total revenues | 4,171 | 3,938 | 6% | |||||||
Interest expense | (94 | ) | (148 | ) | (36)% | |||||
Net revenues | 4,077 | 3,790 | 8% | |||||||
Non-interest expenses: | ||||||||||
Compensation, commissions and benefits | 2,773 | 2,490 | 11% | |||||||
Non-compensation expenses: | ||||||||||
Communications and information processing | 193 | 186 | 4% | |||||||
Occupancy and equipment | 113 | 104 | 9% | |||||||
Business development | 85 | 84 | 1% | |||||||
Investment sub-advisory fees | 52 | 46 | 13% | |||||||
Professional fees | 44 | 39 | 13% | |||||||
Bank loan loss provision | 107 | 21 | 410% | |||||||
Acquisition and disposition-related expenses (5) | — | 15 | (100)% | |||||||
Other (3) (4) | 112 | 126 | (11)% | |||||||
Total non-compensation expenses | 706 | 621 | 14% | |||||||
Total non-interest expenses | 3,479 | 3,111 | 12% | |||||||
Pre-tax income | 598 | 679 | (12)% | |||||||
Provision for income taxes | 161 | 169 | (5)% | |||||||
Net income | $ | 437 | $ | 510 | (14)% | |||||
Earnings per common share – basic (2) | $ | 3.15 | $ | 3.58 | (12)% | |||||
Earnings per common share – diluted (2) | $ | 3.09 | $ | 3.51 | (12)% | |||||
Weighted-average common shares outstanding – basic | 138.4 | 142.5 | (3)% | |||||||
Weighted-average common and common equivalent shares outstanding – diluted | 141.3 | 145.4 | (3)% |
RAYMOND JAMES FINANCIAL, INC. | Consolidated Selected Key Metrics | |
Second Quarter Fiscal 2020 | (Unaudited) |
As of | % change from | ||||||||||||||||
Total company ($ in millions, except per share amounts) | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | ||||||||||||
Total assets | $ | 49,809 | $ | 38,176 | $ | 40,154 | 30% | 24% | |||||||||
Total equity attributable to Raymond James Financial, Inc. | $ | 6,798 | $ | 6,366 | $ | 6,842 | 7% | (1)% | |||||||||
Book value per share (6) | $ | 49.69 | $ | 45.34 | $ | 49.26 | 10% | 1% | |||||||||
Tangible book value per share (6) (7) | $ | 45.50 | $ | 41.10 | $ | 45.10 | 11% | 1% | |||||||||
Capital ratios: | |||||||||||||||||
Tier 1 capital | 24.1 | % | (8) | 24.3 | % | 24.8 | % | ||||||||||
Total capital | 25.3 | % | (8) | 25.3 | % | 25.7 | % | ||||||||||
Tier 1 leverage | 14.2 | % | (8) | 15.1 | % | 15.8 | % |
Three months ended | Six months ended | |||||||||||||||
March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | ||||||||||||
Return on equity (9) | 9.9 | % | 16.7 | % | 16.0 | % | 13.0 | % | 16.2 | % | ||||||
Return on tangible common equity (7) (9) | 10.8 | % | 18.5 | % | 17.5 | % | 14.2 | % | 17.9 | % | ||||||
Pre-tax margin (10) | 11.6 | % | 18.7 | % | 17.9 | % | 14.7 | % | 17.9 | % | ||||||
Total compensation ratio (11) | 68.8 | % | 65.9 | % | 67.2 | % | 68.0 | % | 65.7 | % | ||||||
Effective tax rate | 29.3 | % | 25.4 | % | 25.3 | % | 26.9 | % | 25.4 | % |
Client asset metrics ($ in billions) | As of | % change from | |||||||||||||||
March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||||
Client assets under administration | $ | 773.9 | $ | 796.0 | $ | 896.0 | (3)% | (14)% | |||||||||
Private Client Group assets under administration | $ | 734.0 | $ | 760.0 | $ | 855.2 | (3)% | (14)% | |||||||||
Private Client Group assets in fee-based accounts | $ | 383.5 | $ | 378.4 | $ | 444.2 | 1% | (14)% | |||||||||
Financial assets under management | $ | 128.2 | $ | 138.5 | $ | 151.7 | (7)% | (15)% |
Clients’ domestic cash sweep balances ($ in millions) | As of | % change from | |||||||||||||||||
March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||||||
Raymond James Bank Deposit Program (“RJBDP”): (12) | |||||||||||||||||||
Raymond James Bank | $ | 28,711 | $ | 21,023 | $ | 21,891 | 37% | 31% | |||||||||||
Third-party banks | 20,379 | 14,343 | 15,061 | 42% | 35% | ||||||||||||||
Subtotal RJBDP | 49,090 | 35,366 | 36,952 | 39% | 33% | ||||||||||||||
Money market funds (13) | — | 4,001 | — | (100)% | — | ||||||||||||||
Client Interest Program | 3,782 | 2,349 | 2,528 | 61% | 50% | ||||||||||||||
Total clients’ domestic cash sweep balances | $ | 52,872 | $ | 41,716 | $ | 39,480 | 27% | 34% | |||||||||||
Three months ended | Six months ended | ||||||||||||||||||
March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | |||||||||||||||
Average yield on RJBDP - third-party banks (14) | 1.33 | % | 2.00 | % | 1.64 | % | 1.48 | % | 1.87 | % |
Private Client Group financial advisors | As of | % change from | ||||||||||||
March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | ||||||||||
Employees | 3,376 | 3,192 | 3,331 | 6% | 1% | |||||||||
Independent contractors | 4,772 | 4,670 | 4,729 | 2% | 1% | |||||||||
Total advisors | 8,148 | 7,862 | 8,060 | 4% | 1% |
RAYMOND JAMES FINANCIAL, INC. | Segment Results | |
Second Quarter Fiscal 2020 | (Unaudited) |
Three months ended | % change from | |||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Net revenues: | ||||||||||||||||
Private Client Group | $ | 1,495 | $ | 1,271 | $ | 1,414 | 18% | 6% | ||||||||
Capital Markets | 290 | 277 | 268 | 5% | 8% | |||||||||||
Asset Management | 184 | 162 | 184 | 14% | — | |||||||||||
Raymond James Bank | 210 | 212 | 216 | (1)% | (3)% | |||||||||||
Other (3) (15) | (44 | ) | — | (8 | ) | NM | (450)% | |||||||||
Intersegment eliminations | (67 | ) | (63 | ) | (65 | ) | NM | NM | ||||||||
Total net revenues | $ | 2,068 | $ | 1,859 | $ | 2,009 | 11% | 3% | ||||||||
Pre-tax income/(loss): | ||||||||||||||||
Private Client Group | $ | 170 | $ | 132 | $ | 153 | 29% | 11% | ||||||||
Capital Markets | 28 | 41 | 29 | (32)% | (3)% | |||||||||||
Asset Management | 73 | 55 | 73 | 33% | — | |||||||||||
Raymond James Bank | 14 | 136 | 135 | (90)% | (90)% | |||||||||||
Other (3) (15) | (46 | ) | (17 | ) | (31 | ) | (171)% | (48)% | ||||||||
Pre-tax income | $ | 239 | $ | 347 | $ | 359 | (31)% | (33)% |
Six months ended | ||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | % change | |||||||
Net revenues: | ||||||||||
Private Client Group | $ | 2,909 | $ | 2,627 | 11% | |||||
Capital Markets | 558 | 530 | 5% | |||||||
Asset Management | 368 | 336 | 10% | |||||||
Raymond James Bank | 426 | 415 | 3% | |||||||
Other (3) (15) | (52 | ) | 2 | NM | ||||||
Intersegment eliminations | (132 | ) | (120 | ) | NM | |||||
Total net revenues | $ | 4,077 | $ | 3,790 | 8% | |||||
Pre-tax income/(loss): | ||||||||||
Private Client Group | $ | 323 | $ | 296 | 9% | |||||
Capital Markets | 57 | 53 | 8% | |||||||
Asset Management | 146 | 119 | 23% | |||||||
Raymond James Bank | 149 | 246 | (39)% | |||||||
Other (3) (15) | (77 | ) | (35 | ) | (120)% | |||||
Pre-tax income | $ | 598 | $ | 679 | (12)% |
RAYMOND JAMES FINANCIAL, INC. | Segment Results | |
Second Quarter Fiscal 2020 | (Unaudited) |
Private Client Group | ||||||||||||||||
Three months ended | % change from | |||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Revenues: | ||||||||||||||||
Asset management and related administrative fees | $ | 833 | $ | 638 | $ | 782 | 31% | 7% | ||||||||
Brokerage revenues: | ||||||||||||||||
Mutual and other fund products | 163 | 145 | 144 | 12% | 13% | |||||||||||
Insurance and annuity products | 99 | 99 | 101 | — | (2)% | |||||||||||
Equities, ETFs and fixed income products | 122 | 94 | 102 | 30% | 20% | |||||||||||
Total brokerage revenues | 384 | 338 | 347 | 14% | 11% | |||||||||||
Account and service fees: | ||||||||||||||||
Mutual fund and annuity service fees | 88 | 82 | 90 | 7% | (2)% | |||||||||||
RJBDP fees: (12) | ||||||||||||||||
Third-party banks | 51 | 80 | 58 | (36)% | (12)% | |||||||||||
Raymond James Bank | 48 | 42 | 47 | 14% | 2% | |||||||||||
Client account and other fees | 35 | 27 | 29 | 30% | 21% | |||||||||||
Total account and service fees | 222 | 231 | 224 | (4)% | (1)% | |||||||||||
Investment banking | 11 | 8 | 11 | 38% | — | |||||||||||
Interest income | 45 | 58 | 49 | (22)% | (8)% | |||||||||||
All other | 7 | 9 | 9 | (22)% | (22)% | |||||||||||
Total revenues | 1,502 | 1,282 | 1,422 | 17% | 6% | |||||||||||
Interest expense | (7 | ) | (11 | ) | (8 | ) | (36)% | (13)% | ||||||||
Net revenues | 1,495 | 1,271 | 1,414 | 18% | 6% | |||||||||||
Non-interest expenses: | ||||||||||||||||
Financial advisor compensation and benefits | 915 | 750 | 857 | 22% | 7% | |||||||||||
Administrative compensation and benefits | 245 | 234 | 247 | 5% | (1)% | |||||||||||
Total compensation, commissions and benefits | 1,160 | 984 | 1,104 | 18% | 5% | |||||||||||
Non-compensation expenses | 165 | 155 | 157 | 6% | 5% | |||||||||||
Total non-interest expenses | 1,325 | 1,139 | 1,261 | 16% | 5% | |||||||||||
Pre-tax income | $ | 170 | $ | 132 | $ | 153 | 29% | 11% |
RAYMOND JAMES FINANCIAL, INC. | Segment Results | |
Second Quarter Fiscal 2020 | (Unaudited) |
Private Client Group | ||||||||||
Six months ended | ||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | % change | |||||||
Revenues: | ||||||||||
Asset management and related administrative fees | $ | 1,615 | $ | 1,345 | 20% | |||||
Brokerage revenues: | ||||||||||
Mutual and other fund products | 307 | 302 | 2% | |||||||
Insurance and annuity products | 200 | 203 | (1)% | |||||||
Equities, ETFs and fixed income products | 224 | 197 | 14% | |||||||
Total brokerage revenues | 731 | 702 | 4% | |||||||
Account and service fees: | ||||||||||
Mutual fund and annuity service fees | 178 | 165 | 8% | |||||||
RJBDP fees: (12) | ||||||||||
Third-party banks | 109 | 148 | (26)% | |||||||
Raymond James Bank | 95 | 83 | 14% | |||||||
Client account and other fees | 64 | 60 | 7% | |||||||
Total account and service fees | 446 | 456 | (2)% | |||||||
Investment banking | 22 | 15 | 47% | |||||||
Interest income | 94 | 114 | (18)% | |||||||
All other | 16 | 16 | — | |||||||
Total revenues | 2,924 | 2,648 | 10% | |||||||
Interest expense | (15 | ) | (21 | ) | (29)% | |||||
Net revenues | 2,909 | 2,627 | 11% | |||||||
Non-interest expenses: | ||||||||||
Financial advisor compensation and benefits | 1,772 | 1,553 | 14% | |||||||
Administrative compensation and benefits | 492 | 463 | 6% | |||||||
Total compensation, commissions and benefits | 2,264 | 2,016 | 12% | |||||||
Non-compensation expenses | 322 | 315 | 2% | |||||||
Total non-interest expenses | 2,586 | 2,331 | 11% | |||||||
Pre-tax income | $ | 323 | $ | 296 | 9% |
RAYMOND JAMES FINANCIAL, INC. | Segment Results | |
Second Quarter Fiscal 2020 | (Unaudited) |
Capital Markets | ||||||||||||||||
Three months ended | % change from | |||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Revenues: | ||||||||||||||||
Brokerage revenues: | ||||||||||||||||
Fixed income | $ | 90 | $ | 71 | $ | 81 | 27% | 11% | ||||||||
Equity | 40 | 32 | 34 | 25% | 18% | |||||||||||
Total brokerage revenues | 130 | 103 | 115 | 26% | 13% | |||||||||||
Investment banking: | ||||||||||||||||
Merger & acquisition and advisory | 72 | 121 | 60 | (40)% | 20% | |||||||||||
Equity underwriting | 43 | 18 | 39 | 139% | 10% | |||||||||||
Debt underwriting | 22 | 17 | 31 | 29% | (29)% | |||||||||||
Total investment banking | 137 | 156 | 130 | (12)% | 5% | |||||||||||
Interest income | 10 | 9 | 8 | 11% | 25% | |||||||||||
Tax credit fund revenues | 12 | 14 | 18 | (14)% | (33)% | |||||||||||
All other | 7 | 3 | 3 | 133% | 133% | |||||||||||
Total revenues | 296 | 285 | 274 | 4% | 8% | |||||||||||
Interest expense | (6 | ) | (8 | ) | (6 | ) | (25)% | — | ||||||||
Net revenues | 290 | 277 | 268 | 5% | 8% | |||||||||||
Non-interest expenses: | ||||||||||||||||
Compensation, commissions and benefits | 184 | 168 | 166 | 10% | 11% | |||||||||||
Non-compensation expenses (4) | 78 | 68 | 73 | 15% | 7% | |||||||||||
Total non-interest expenses | 262 | 236 | 239 | 11% | 10% | |||||||||||
Pre-tax income | $ | 28 | $ | 41 | $ | 29 | (32)% | (3)% |
RAYMOND JAMES FINANCIAL, INC. | Segment Results | |
Second Quarter Fiscal 2020 | (Unaudited) |
Capital Markets | ||||||||||
Six months ended | ||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | % change | |||||||
Revenues: | ||||||||||
Brokerage revenues: | ||||||||||
Fixed income | $ | 171 | $ | 128 | 34% | |||||
Equity | 74 | 74 | — | |||||||
Total brokerage revenues | 245 | 202 | 21% | |||||||
Investment banking: | ||||||||||
Merger & acquisition and advisory | 132 | 206 | (36)% | |||||||
Equity underwriting | 82 | 45 | 82% | |||||||
Debt underwriting | 53 | 34 | 56% | |||||||
Total investment banking | 267 | 285 | (6)% | |||||||
Interest income | 18 | 19 | (5)% | |||||||
Tax credit fund revenues | 30 | 33 | (9)% | |||||||
All other | 10 | 7 | 43% | |||||||
Total revenues | 570 | 546 | 4% | |||||||
Interest expense | (12 | ) | (16 | ) | (25)% | |||||
Net revenues | 558 | 530 | 5% | |||||||
Non-interest expenses: | ||||||||||
Compensation, commissions and benefits | 350 | 326 | 7% | |||||||
Non-compensation expenses (4) (5) | 151 | 151 | — | |||||||
Total non-interest expenses | 501 | 477 | 5% | |||||||
Pre-tax income | $ | 57 | $ | 53 | 8% |
RAYMOND JAMES FINANCIAL, INC. | Segment Results | |
Second Quarter Fiscal 2020 | (Unaudited) |
Asset Management | ||||||||||||||||
Three months ended | % change from | |||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Revenues: | ||||||||||||||||
Asset management and related administrative fees: | ||||||||||||||||
Managed programs | $ | 124 | $ | 109 | $ | 125 | 14% | (1)% | ||||||||
Administration and other | 53 | 40 | 51 | 33% | 4% | |||||||||||
Total asset management and related administrative fees | 177 | 149 | 176 | 19% | 1% | |||||||||||
Account and service fees | 4 | 10 | 5 | (60)% | (20)% | |||||||||||
All other | 3 | 3 | 3 | — | — | |||||||||||
Net revenues | 184 | 162 | 184 | 14% | — | |||||||||||
Non-interest expenses: | ||||||||||||||||
Compensation, commissions and benefits | 45 | 45 | 45 | — | — | |||||||||||
Non-compensation expenses (4) | 66 | 62 | 66 | 6% | — | |||||||||||
Total non-interest expenses | 111 | 107 | 111 | 4% | — | |||||||||||
Pre-tax income | $ | 73 | $ | 55 | $ | 73 | 33% | — |
Six months ended | ||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | % change | |||||||
Revenues: | ||||||||||
Asset management and related administrative fees: | ||||||||||
Managed programs | $ | 249 | $ | 226 | 10% | |||||
Administration and other | 104 | 84 | 24% | |||||||
Total asset management and related administrative fees | 353 | 310 | 14% | |||||||
Account and service fees | 9 | 19 | (53)% | |||||||
All other | 6 | 7 | (14)% | |||||||
Net revenues | 368 | 336 | 10% | |||||||
Non-interest expenses: | ||||||||||
Compensation, commissions and benefits | 90 | 88 | 2% | |||||||
Non-compensation expenses (4) | 132 | 129 | 2% | |||||||
Total non-interest expenses | 222 | 217 | 2% | |||||||
Pre-tax income | $ | 146 | $ | 119 | 23% |
RAYMOND JAMES FINANCIAL, INC. | Segment Results | |
Second Quarter Fiscal 2020 | (Unaudited) |
Raymond James Bank | ||||||||||||||||
Three months ended | % change from | |||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Revenues: | ||||||||||||||||
Interest income | $ | 223 | $ | 247 | $ | 231 | (10)% | (3)% | ||||||||
Interest expense | (18 | ) | (42 | ) | (21 | ) | (57)% | (14)% | ||||||||
Net interest income | 205 | 205 | 210 | — | (2)% | |||||||||||
All other | 5 | 7 | 6 | (29)% | (17)% | |||||||||||
Net revenues | 210 | 212 | 216 | (1)% | (3)% | |||||||||||
Non-interest expenses: | ||||||||||||||||
Compensation and benefits | 13 | 12 | 12 | 8% | 8% | |||||||||||
Non-compensation expenses: | ||||||||||||||||
Loan loss provision/(benefit) | 109 | 5 | (2 | ) | 2,080% | NM | ||||||||||
RJBDP fees to Private Client Group (12) | 48 | 42 | 47 | 14% | 2% | |||||||||||
All other | 26 | 17 | 24 | 53% | 8% | |||||||||||
Total non-compensation expenses | 183 | 64 | 69 | 186% | 165% | |||||||||||
Total non-interest expenses | 196 | 76 | 81 | 158% | 142% | |||||||||||
Pre-tax income | $ | 14 | $ | 136 | $ | 135 | (90)% | (90)% |
Six months ended | ||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | % change | |||||||
Revenues: | ||||||||||
Interest income | $ | 454 | $ | 486 | (7)% | |||||
Interest expense | (39 | ) | (84 | ) | (54)% | |||||
Net interest income | 415 | 402 | 3% | |||||||
All other | 11 | 13 | (15)% | |||||||
Net revenues | 426 | 415 | 3% | |||||||
Non-interest expenses: | ||||||||||
Compensation and benefits | 25 | 23 | 9% | |||||||
Non-compensation expenses: | ||||||||||
Loan loss provision | 107 | 21 | 410% | |||||||
RJBDP fees to Private Client Group (12) | 95 | 83 | 14% | |||||||
All other | 50 | 42 | 19% | |||||||
Total non-compensation expenses | 252 | 146 | 73% | |||||||
Total non-interest expenses | 277 | 169 | 64% | |||||||
Pre-tax income | $ | 149 | $ | 246 | (39)% |
RAYMOND JAMES FINANCIAL, INC. | Segment Results | |
Second Quarter Fiscal 2020 | (Unaudited) |
Other | ||||||||||||||||
Three months ended | % change from | |||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Revenues: | ||||||||||||||||
Interest income | $ | 12 | $ | 14 | $ | 12 | (14)% | — | ||||||||
Gains/(losses) on private equity investments (3) | (39 | ) | 2 | (2 | ) | NM | (1,850)% | |||||||||
All other | — | 3 | 2 | (100)% | (100)% | |||||||||||
Total revenues | (27 | ) | 19 | 12 | NM | NM | ||||||||||
Interest expense | (17 | ) | (19 | ) | (20 | ) | (11)% | (15)% | ||||||||
Net revenues | (44 | ) | — | (8 | ) | NM | (450)% | |||||||||
Non-interest expenses (3) (4) | 2 | 17 | 23 | (88)% | (91)% | |||||||||||
Pre-tax loss | $ | (46 | ) | $ | (17 | ) | $ | (31 | ) | (171)% | (48)% |
Six months ended | ||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | % change | |||||||
Revenues: | ||||||||||
Interest income | $ | 24 | $ | 30 | (20)% | |||||
Gains/(losses) on private equity investments (3) | (41 | ) | 6 | NM | ||||||
All other | 2 | 4 | (50)% | |||||||
Total revenues | (15 | ) | 40 | NM | ||||||
Interest expense | (37 | ) | (38 | ) | (3)% | |||||
Net revenues | (52 | ) | 2 | NM | ||||||
Non-interest expenses (3) (4) | 25 | 37 | (32)% | |||||||
Pre-tax loss | $ | (77 | ) | $ | (35 | ) | (120)% |
RAYMOND JAMES FINANCIAL, INC. | Raymond James Bank Selected Key Metrics | |
Second Quarter Fiscal 2020 | (Unaudited) |
Raymond James Bank ($ in millions) | As of | % change from | ||||||||||||||
March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | ||||||||||||
Total assets | $ | 33,656 | $ | 24,925 | $ | 26,469 | 35% | 27% | ||||||||
Total equity | $ | 2,263 | $ | 2,136 | $ | 2,300 | 6% | (2)% | ||||||||
Bank loans, net | $ | 21,788 | $ | 20,135 | $ | 21,296 | 8% | 2% | ||||||||
Allowance for loan losses | $ | 324 | $ | 218 | $ | 216 | 49% | 50% | ||||||||
Allowance for loan losses as a % of loans held for investment | 1.47 | % | 1.08 | % | 1.01 | % | ||||||||||
Total nonperforming assets | $ | 27 | $ | 61 | $ | 41 | (56)% | (34)% | ||||||||
Nonperforming assets as a % of total assets | 0.08 | % | 0.25 | % | 0.16 | % | ||||||||||
Total criticized loans | $ | 387 | $ | 246 | $ | 349 | 57% | 11% | ||||||||
Criticized loans as a % of loans held for investment | 1.76 | % | 1.21 | % | 1.64 | % | ||||||||||
Capital ratios: | ||||||||||||||||
Tier 1 capital | 12.7 | % | (8) | 12.8 | % | 13.3 | % | |||||||||
Total capital | 13.9 | % | (8) | 14.1 | % | 14.5 | % | |||||||||
Tier 1 leverage | 8.1 | % | (8) | 8.6 | % | 8.8 | % | |||||||||
Three months ended | % change from | |||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | December 31, 2019 | |||||||||||
Bank loan loss provision/(benefit) | $ | 109 | $ | 5 | $ | (2 | ) | 2,080% | NM | |||||||
Net charge-offs | $ | — | $ | 6 | $ | — | (100)% | — | ||||||||
Six months ended | ||||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | % change | |||||||||||||
Bank loan loss provision | $ | 107 | $ | 21 | 410% | |||||||||||
Net charge-offs | $ | — | $ | 5 | (100)% |
RAYMOND JAMES FINANCIAL, INC. | Raymond James Bank Selected Key Metrics | |
Second Quarter Fiscal 2020 | (Unaudited) |
Three months ended | |||||||||||||||||||||||||||||||||||
March 31, 2020 | March 31, 2019 | December 31, 2019 | |||||||||||||||||||||||||||||||||
$ in millions | Average balance | Interest inc./exp. | Average yield/ cost | Average balance | Interest inc./exp. | Average yield/ cost | Average balance | Interest inc./exp. | Average yield/ cost | ||||||||||||||||||||||||||
Interest-earning banking assets: | |||||||||||||||||||||||||||||||||||
Cash | $ | 2,052 | $ | 5 | 0.89 | % | $ | 1,391 | $ | 9 | 2.40 | % | $ | 1,201 | $ | 5 | 1.64 | % | |||||||||||||||||
Available-for-sale securities | 3,443 | 19 | 2.28 | % | 2,876 | 17 | 2.43 | % | 3,089 | 18 | 2.30 | % | |||||||||||||||||||||||
Bank loans, net of unearned income and deferred expenses: | |||||||||||||||||||||||||||||||||||
Loans held for investment: | |||||||||||||||||||||||||||||||||||
Commercial and industrial loans | 8,043 | 81 | 3.99 | % | 8,160 | 97 | 4.76 | % | 8,078 | 86 | 4.15 | % | |||||||||||||||||||||||
Commercial real estate construction loans | 181 | 2 | 4.58 | % | 197 | 3 | 5.70 | % | 233 | 3 | 4.87 | % | |||||||||||||||||||||||
Commercial real estate loans | 3,735 | 36 | 3.81 | % | 3,379 | 40 | 4.73 | % | 3,611 | 37 | 4.00 | % | |||||||||||||||||||||||
Tax-exempt loans (16) | 1,212 | 8 | 3.36 | % | 1,280 | 8 | 3.34 | % | 1,225 | 8 | 3.36 | % | |||||||||||||||||||||||
Residential mortgage loans | 4,847 | 38 | 3.13 | % | 3,979 | 34 | 3.33 | % | 4,641 | 37 | 3.19 | % | |||||||||||||||||||||||
Securities-based loans and other | 3,469 | 31 | 3.60 | % | 3,066 | 37 | 4.71 | % | 3,337 | 34 | 3.97 | % | |||||||||||||||||||||||
Loans held for sale | 142 | 2 | 3.85 | % | 144 | 1 | 4.26 | % | 161 | 1 | 4.06 | % | |||||||||||||||||||||||
Total bank loans, net | 21,629 | 198 | 3.67 | % | 20,205 | 220 | 4.38 | % | 21,286 | 206 | 3.85 | % | |||||||||||||||||||||||
Federal Home Loan Bank stock, Federal Reserve Bank stock and other | 230 | 1 | 2.48 | % | 153 | 1 | 4.44 | % | 215 | 2 | 3.00 | % | |||||||||||||||||||||||
Total interest-earning banking assets | 27,354 | 223 | 3.28 | % | 24,625 | 247 | 4.04 | % | 25,791 | 231 | 3.56 | % | |||||||||||||||||||||||
Total interest-bearing banking liabilities | 25,032 | 18 | 0.29 | % | 22,397 | 42 | 0.77 | % | 23,493 | 21 | 0.36 | % | |||||||||||||||||||||||
Excess of interest-earning banking assets over interest-bearing banking liabilities/net interest income | $ | 2,322 | $ | 205 | $ | 2,228 | $ | 205 | $ | 2,298 | $ | 210 | |||||||||||||||||||||||
Net interest margin (net yield on interest-earning banking assets) | 3.02 | % | 3.35 | % | 3.23 | % |
Six months ended | |||||||||||||||||||||||
March 31, 2020 | March 31, 2019 | ||||||||||||||||||||||
$ in millions | Average balance | Interest inc./exp. | Average yield/cost | Average balance | Interest inc./exp. | Average yield/cost | |||||||||||||||||
Interest-earning banking assets: | |||||||||||||||||||||||
Cash | $ | 1,624 | $ | 10 | 1.17 | % | $ | 1,347 | $ | 16 | 2.32 | % | |||||||||||
Available-for-sale securities | 3,265 | 37 | 2.29 | % | 2,796 | 33 | 2.38 | % | |||||||||||||||
Bank loans, net of unearned income and deferred expenses: | |||||||||||||||||||||||
Loans held for investment: | |||||||||||||||||||||||
Commercial and industrial loans | 8,061 | 167 | 4.07 | % | 7,959 | 188 | 4.67 | % | |||||||||||||||
Commercial real estate construction loans | 207 | 5 | 4.75 | % | 184 | 5 | 5.66 | % | |||||||||||||||
Commercial real estate loans | 3,673 | 73 | 3.91 | % | 3,469 | 81 | 4.64 | % | |||||||||||||||
Tax-exempt loans (16) | 1,218 | 16 | 3.36 | % | 1,282 | 17 | 3.34 | % | |||||||||||||||
Residential mortgage loans | 4,743 | 75 | 3.16 | % | 3,934 | 66 | 3.32 | % | |||||||||||||||
Securities-based loans and other | 3,403 | 65 | 3.78 | % | 3,085 | 73 | 4.65 | % | |||||||||||||||
Loans held for sale | 151 | 3 | 3.97 | % | 165 | 4 | 4.90 | % | |||||||||||||||
Total bank loans, net | 21,456 | 404 | 3.76 | % | 20,078 | 434 | 4.32 | % | |||||||||||||||
Federal Home Loan Bank stock, Federal Reserve Bank stock and other | 222 | 3 | 2.74 | % | 161 | 3 | 4.19 | % | |||||||||||||||
Total interest-earning banking assets | 26,567 | 454 | 3.41 | % | 24,382 | 486 | 3.99 | % | |||||||||||||||
Total interest-bearing banking liabilities | 24,258 | 39 | 0.32 | % | 22,239 | 84 | 0.76 | % | |||||||||||||||
Excess of interest-earning banking assets over interest-bearing banking liabilities/net interest income | $ | 2,309 | $ | 415 | $ | 2,143 | $ | 402 | |||||||||||||||
Net interest margin (net yield on interest-earning banking assets) | 3.12 | % | 3.30 | % |
RAYMOND JAMES FINANCIAL, INC. | Non-GAAP Financial Measures |
Second Quarter Fiscal 2020 | (Unaudited) |
Book value per share | As of | |||||||||||
$ in millions, except per share amounts | March 31, 2020 | March 31, 2019 | December 31, 2019 | |||||||||
Total equity attributable to Raymond James Financial, Inc. | $ | 6,798 | $ | 6,366 | $ | 6,842 | ||||||
Less non-GAAP adjustments: | ||||||||||||
Goodwill and identifiable intangible assets, net | 603 | 630 | 609 | |||||||||
Deferred tax liabilities, net | (30 | ) | (35 | ) | (31 | ) | ||||||
Tangible common equity attributable to Raymond James Financial, Inc. | $ | 6,225 | $ | 5,771 | $ | 6,264 | ||||||
Common shares outstanding | 136.8 | 140.4 | 138.9 | |||||||||
Book value per share (6) | $ | 49.69 | $ | 45.34 | $ | 49.26 | ||||||
Tangible book value per share (6) | $ | 45.50 | $ | 41.10 | $ | 45.10 |
Return on equity | Three months ended | Six months ended | |||||||||||||||||||
$ in millions | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | ||||||||||||||||
Average equity (17) | $ | 6,820 | $ | 6,255 | $ | 6,712 | $ | 6,740 | $ | 6,292 | |||||||||||
Less: | |||||||||||||||||||||
Average goodwill and identifiable intangible assets, net | 606 | 632 | 610 | 608 | 634 | ||||||||||||||||
Average deferred tax liabilities, net | (31 | ) | (35 | ) | (30 | ) | (30 | ) | (34 | ) | |||||||||||
Average tangible common equity (17) | $ | 6,245 | $ | 5,658 | $ | 6,132 | $ | 6,162 | $ | 5,692 | |||||||||||
Return on equity (9) | 9.9 | % | 16.7 | % | 16.0 | % | 13.0 | % | 16.2 | % | |||||||||||
Return on tangible common equity (9) | 10.8 | % | 18.5 | % | 17.5 | % | 14.2 | % | 17.9 | % |
1. | This amount includes cash on hand at the parent, as well as parent cash loaned to Raymond James & Associates (“RJ&A”), which RJ&A has invested on behalf of RJF in cash and cash equivalents or otherwise deployed in its normal business activities. |
2. | Earnings per common share is computed by dividing net income (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period. |
3. | Other revenues for the three and six months ended March 31, 2020 included $39 million and $41 million, respectively, of private equity valuation losses, which are included in our Other segment. Of these losses, approximately $22 million and $23 million, respectively, were attributable to noncontrolling interests and are presented as an offset in Other expenses. |
4. | The offset for the net gain/(loss) attributable to noncontrolling interests is in Other expenses. Prior period results have been conformed to the current presentation. |
5. | The six months ended March 31, 2019 included a $15 million loss in our Capital Markets segment on the sale of our operations related to research, sales and trading of European equities. |
6. | Book value per share is computed by dividing total equity attributable to Raymond James Financial, Inc. by the number of common shares outstanding at the end of each respective period or, in the case of tangible book value per share, computed by dividing tangible common equity by the number of common shares outstanding at the end of each respective period. Tangible common equity is defined as total equity attributable to Raymond James Financial, Inc. less goodwill and intangible assets, net of related deferred taxes. |
7. | These are non-GAAP financial measures. See the schedules on the previous pages of this document for a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. |
8. | Estimated. |
9. | Return on equity is computed by dividing annualized net income by average equity for each respective period or, in the case of return on tangible common equity, computed by dividing annualized net income by average tangible common equity for each respective period. |
10. | Pre-tax margin is computed by dividing pre-tax income by net revenues for each respective period. |
11. | Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period. |
12. | We earn fees from RJBDP, a multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into interest-bearing deposit accounts at Raymond James Bank and various third-party banks. Fees earned by Private Client Group on Raymond James Bank deposits are eliminated in consolidation. |
13. | Money market funds were discontinued as a sweep option during the third fiscal quarter of 2019. Balances in those funds were converted to RJBDP or reinvested by the client. |
14. | Average yield on RJBDP - third-party banks is computed by dividing annualized RJBDP fees - third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balance at third-party banks. |
15. | The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, and certain corporate overhead costs of Raymond James Financial, Inc., including the interest costs on our public debt. |
16. | The average yield is presented on a tax-equivalent basis for each respective period. |
17. | Average equity is computed by adding the total equity attributable to Raymond James Financial, Inc. as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two. For the year-to-date period, computed by adding the total equity attributable to Raymond James Financial, Inc. as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by three, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by three. |
Three months ended | % change from | Six months ended | |||||||||||||||||||||||||||||||||||
in millions, except per share amounts | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | March 31, 2020 | % change | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||
Asset management and related administrative fees | $ | 783 | $ | 879 | $ | 924 | $ | 955 | $ | 1,006 | 28 | % | 5 | % | $ | 1,648 | $ | 1,961 | 19 | % | |||||||||||||||||
Brokerage revenues: | |||||||||||||||||||||||||||||||||||||
Securities commissions | 349 | 358 | 355 | 363 | 410 | 17 | % | 13 | % | 737 | 773 | 5 | % | ||||||||||||||||||||||||
Principal transactions | 93 | 93 | 95 | 97 | 105 | 13 | % | 8 | % | 169 | 202 | 20 | % | ||||||||||||||||||||||||
Total brokerage revenues | 442 | 451 | 450 | 460 | 515 | 17 | % | 12 | % | 906 | 975 | 8 | % | ||||||||||||||||||||||||
Account and service fees | 191 | 183 | 179 | 178 | 172 | (10 | )% | (3 | )% | 376 | 350 | (7 | )% | ||||||||||||||||||||||||
Investment banking | 163 | 139 | 157 | 141 | 148 | (9 | )% | 5 | % | 300 | 289 | (4 | )% | ||||||||||||||||||||||||
Interest income | 324 | 321 | 320 | 297 | 285 | (12 | )% | (4 | )% | 640 | 582 | (9 | )% | ||||||||||||||||||||||||
Other (1) | 31 | 27 | 55 | 29 | (15 | ) | NM | NM | 68 | 14 | (79 | )% | |||||||||||||||||||||||||
Total revenues | 1,934 | 2,000 | 2,085 | 2,060 | 2,111 | 9 | % | 2 | % | 3,938 | 4,171 | 6 | % | ||||||||||||||||||||||||
Interest expense | (75 | ) | (73 | ) | (62 | ) | (51 | ) | (43 | ) | (43 | )% | (16 | )% | (148 | ) | (94 | ) | (36 | )% | |||||||||||||||||
Net revenues | 1,859 | 1,927 | 2,023 | 2,009 | 2,068 | 11 | % | 3 | % | 3,790 | 4,077 | 8 | % | ||||||||||||||||||||||||
Non-interest expenses: | |||||||||||||||||||||||||||||||||||||
Compensation, commissions and benefits | 1,225 | 1,277 | 1,320 | 1,351 | 1,422 | 16 | % | 5 | % | 2,490 | 2,773 | 11 | % | ||||||||||||||||||||||||
Non-compensation expenses: | |||||||||||||||||||||||||||||||||||||
Communications and information processing | 94 | 92 | 95 | 94 | 99 | 5 | % | 5 | % | 186 | 193 | 4 | % | ||||||||||||||||||||||||
Occupancy and equipment | 53 | 55 | 59 | 57 | 56 | 6 | % | (2 | )% | 104 | 113 | 9 | % | ||||||||||||||||||||||||
Business development | 41 | 57 | 53 | 44 | 41 | — | (7 | )% | 84 | 85 | 1 | % | |||||||||||||||||||||||||
Investment sub-advisory fees | 22 | 24 | 24 | 26 | 26 | 18 | % | — | 46 | 52 | 13 | % | |||||||||||||||||||||||||
Professional fees | 17 | 22 | 24 | 21 | 23 | 35 | % | 10 | % | 39 | 44 | 13 | % | ||||||||||||||||||||||||
Bank loan loss provision/(benefit) | 5 | (5 | ) | 6 | (2 | ) | 109 | 2,080 | % | NM | 21 | 107 | 410 | % | |||||||||||||||||||||||
Acquisition and disposition-related expenses (2) | — | — | — | — | — | — | — | 15 | — | (100 | )% | ||||||||||||||||||||||||||
Other (1) (3) (4) | 55 | 63 | 88 | 59 | 53 | (4 | )% | (10 | )% | 126 | 112 | (11 | )% | ||||||||||||||||||||||||
Total non-compensation expenses | 287 | 308 | 349 | 299 | 407 | 42 | % | 36 | % | 621 | 706 | 14 | % | ||||||||||||||||||||||||
Total non-interest expenses | 1,512 | 1,585 | 1,669 | 1,650 | 1,829 | 21 | % | 11 | % | 3,111 | 3,479 | 12 | % | ||||||||||||||||||||||||
Pre-tax income | 347 | 342 | 354 | 359 | 239 | (31 | )% | (33 | )% | 679 | 598 | (12 | )% | ||||||||||||||||||||||||
Provision for income taxes | 86 | 83 | 89 | 91 | 70 | (19 | )% | (23 | )% | 169 | 161 | (5 | )% | ||||||||||||||||||||||||
Net income | $ | 261 | $ | 259 | $ | 265 | $ | 268 | $ | 169 | (35 | )% | (37 | )% | $ | 510 | $ | 437 | (14 | )% | |||||||||||||||||
Earnings per common share – basic (5) | $ | 1.85 | $ | 1.84 | $ | 1.90 | $ | 1.93 | $ | 1.22 | (34 | )% | (37 | )% | $ | 3.58 | $ | 3.15 | (12 | )% | |||||||||||||||||
Earnings per common share – diluted (5) | $ | 1.81 | $ | 1.80 | $ | 1.86 | $ | 1.89 | $ | 1.20 | (34 | )% | (37 | )% | $ | 3.51 | $ | 3.09 | (12 | )% | |||||||||||||||||
Weighted-average common shares outstanding – basic | 140.8 | 140.4 | 138.6 | 138.3 | 138.4 | (2 | )% | — | 142.5 | 138.4 | (3 | )% | |||||||||||||||||||||||||
Weighted-average common and common equivalent shares outstanding – diluted | 143.9 | 143.6 | 141.8 | 141.5 | 141.1 | (2 | )% | — | 145.4 | 141.3 | (3 | )% |
As of | % change from | |||||||||||||||||||||||||||||||||||
$ in millions, except per share amounts | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | |||||||||||||||||||||||||||||
Total assets | $ | 38,176 | $ | 38,677 | $ | 38,830 | $ | 40,154 | $ | 49,809 | 30 | % | 24 | % | ||||||||||||||||||||||
Total equity attributable to Raymond James Financial, Inc. | $ | 6,366 | $ | 6,502 | $ | 6,581 | $ | 6,842 | $ | 6,798 | 7 | % | (1 | )% | ||||||||||||||||||||||
Book value per share (6) | $ | 45.34 | $ | 46.54 | $ | 47.76 | $ | 49.26 | $ | 49.69 | 10 | % | 1 | % | ||||||||||||||||||||||
Tangible book value per share (6) (7) | $ | 41.10 | $ | 42.18 | $ | 43.53 | $ | 45.10 | $ | 45.50 | 11 | % | 1 | % | ||||||||||||||||||||||
Capital ratios: | ||||||||||||||||||||||||||||||||||||
Tier 1 capital | 24.3 | % | 24.2 | % | 24.8 | % | 24.8 | % | 24.1 | % | (8) | |||||||||||||||||||||||||
Total capital | 25.3 | % | 25.2 | % | 25.8 | % | 25.7 | % | 25.3 | % | (8) | |||||||||||||||||||||||||
Tier 1 leverage | 15.1 | % | 15.7 | % | 15.7 | % | 15.8 | % | 14.2 | % | (8) | |||||||||||||||||||||||||
Three months ended | % change from | Six months ended | ||||||||||||||||||||||||||||||||||
March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | March 31, 2020 | % change | |||||||||||||||||||||||||||
Adjusted pre-tax income (7) | NA | NA | $ | 373 | NA | NA | NA | NA | $ | 694 | NA | (14 | )% | |||||||||||||||||||||||
Adjusted net income (7) | NA | NA | $ | 284 | NA | NA | NA | NA | $ | 525 | NA | (17 | )% | |||||||||||||||||||||||
Adjusted earnings per common share - basic (5) (7) | NA | NA | $ | 2.04 | NA | NA | NA | NA | $ | 3.68 | NA | (14 | )% | |||||||||||||||||||||||
Adjusted earnings per common share - diluted (5) (7) | NA | NA | $ | 2.00 | NA | NA | NA | NA | $ | 3.61 | NA | (14 | )% | |||||||||||||||||||||||
Return on equity (9) | 16.7 | % | 16.1 | % | 16.2 | % | 16.0 | % | 9.9 | % | 16.2 | % | 13.0 | % | ||||||||||||||||||||||
Adjusted return on equity (7) (9) | NA | NA | 17.3 | % | NA | NA | 16.7 | % | NA | |||||||||||||||||||||||||||
Return on tangible common equity (7) (9) | 18.5 | % | 17.8 | % | 17.8 | % | 17.5 | % | 10.8 | % | 17.9 | % | 14.2 | % | ||||||||||||||||||||||
Adjusted return on tangible common equity (7) (9) | NA | NA | 19.1 | % | NA | NA | 18.4 | % | NA | |||||||||||||||||||||||||||
Pre-tax margin (10) | 18.7 | % | 17.7 | % | 17.5 | % | 17.9 | % | 11.6 | % | 17.9 | % | 14.7 | % | ||||||||||||||||||||||
Adjusted pre-tax margin (7) (10) | NA | NA | 18.4 | % | NA | NA | 18.3 | % | NA | |||||||||||||||||||||||||||
Total compensation ratio (11) | 65.9 | % | 66.3 | % | 65.2 | % | 67.2 | % | 68.8 | % | 65.7 | % | 68.0 | % | ||||||||||||||||||||||
Effective tax rate | 25.4 | % | 24.4 | % | 25.1 | % | 25.3 | % | 29.3 | % | 25.4 | % | 26.9 | % |
As of | % change from | ||||||||||||||||||||||||||
March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | |||||||||||||||||||||
Client asset metrics ($ in billions): | |||||||||||||||||||||||||||
Client assets under administration | $ | 796.0 | $ | 824.2 | $ | 838.3 | $ | 896.0 | $ | 773.9 | (3 | )% | (14 | )% | |||||||||||||
Private Client Group assets under administration | $ | 760.0 | $ | 787.4 | $ | 798.4 | $ | 855.2 | $ | 734.0 | (3 | )% | (14 | )% | |||||||||||||
Private Client Group assets in fee-based accounts | $ | 378.4 | $ | 398.0 | $ | 409.1 | $ | 444.2 | $ | 383.5 | 1 | % | (14 | )% | |||||||||||||
Financial assets under management | $ | 138.5 | $ | 143.1 | $ | 143.1 | $ | 151.7 | $ | 128.2 | (7 | )% | (15 | )% | |||||||||||||
Clients' domestic cash sweep balances ($ in millions): | |||||||||||||||||||||||||||
Raymond James Bank Deposit Program (“RJBDP”): (12) | |||||||||||||||||||||||||||
Raymond James Bank | $ | 21,023 | $ | 21,600 | $ | 21,649 | $ | 21,891 | $ | 28,711 | 37 | % | 31 | % | |||||||||||||
Third-party banks | 14,343 | 14,425 | 14,043 | 15,061 | 20,379 | 42 | % | 35 | % | ||||||||||||||||||
Subtotal RJBDP | 35,366 | 36,025 | 35,692 | 36,952 | 49,090 | 39 | % | 33 | % | ||||||||||||||||||
Money market funds (13) | 4,001 | — | — | — | — | (100 | )% | — | |||||||||||||||||||
Client Interest Program | 2,349 | 2,130 | 2,022 | 2,528 | 3,782 | 61 | % | 50 | % | ||||||||||||||||||
Total clients’ domestic cash sweep balances | $ | 41,716 | $ | 38,155 | $ | 37,714 | $ | 39,480 | $ | 52,872 | 27 | % | 34 | % | |||||||||||||
Three months ended | Six months ended | ||||||||||||||||||||||||||
March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | March 31, 2020 | |||||||||||||||||||||
Average yield on RJBDP - third-party banks (14) | 2.00 | % | 1.95 | % | 1.83 | % | 1.64 | % | 1.33 | % | 1.87 | % | 1.48 | % | |||||||||||||
As of | % change from | ||||||||||||||||||||||||||
March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | |||||||||||||||||||||
Private Client Group financial advisors: | |||||||||||||||||||||||||||
Employees | 3,192 | 3,228 | 3,301 | 3,331 | 3,376 | 6 | % | 1 | % | ||||||||||||||||||
Independent contractors | 4,670 | 4,676 | 4,710 | 4,729 | 4,772 | 2 | % | 1 | % | ||||||||||||||||||
Total advisors | 7,862 | 7,904 | 8,011 | 8,060 | 8,148 | 4 | % | 1 | % |
Three months ended | % change from | Six months ended | |||||||||||||||||||||||||||||||||||
$ in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | March 31, 2020 | % change | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||
Asset management and related administrative fees | $ | 638 | $ | 718 | $ | 757 | $ | 782 | $ | 833 | 31 | % | 7 | % | $ | 1,345 | $ | 1,615 | 20 | % | |||||||||||||||||
Brokerage revenues: | |||||||||||||||||||||||||||||||||||||
Mutual and other fund products | 145 | 147 | 150 | 144 | 163 | 12 | % | 13 | % | 302 | 307 | 2 | % | ||||||||||||||||||||||||
Insurance and annuity products | 99 | 105 | 104 | 101 | 99 | — | (2 | )% | 203 | 200 | (1 | )% | |||||||||||||||||||||||||
Equities, ETFs, and fixed income products | 94 | 94 | 87 | 102 | 122 | 30 | % | 20 | % | 197 | 224 | 14 | % | ||||||||||||||||||||||||
Total brokerage revenues | 338 | 346 | 341 | 347 | 384 | 14 | % | 11 | % | 702 | 731 | 4 | % | ||||||||||||||||||||||||
Account and service fees: | |||||||||||||||||||||||||||||||||||||
Mutual fund and annuity service fees | 82 | 85 | 84 | 90 | 88 | 7 | % | (2 | )% | 165 | 178 | 8 | % | ||||||||||||||||||||||||
RJBDP fees: (12) | |||||||||||||||||||||||||||||||||||||
Third-party banks | 80 | 67 | 65 | 58 | 51 | (36 | )% | (12 | )% | 148 | 109 | (26 | )% | ||||||||||||||||||||||||
Raymond James Bank | 42 | 44 | 46 | 47 | 48 | 14 | % | 2 | % | 83 | 95 | 14 | % | ||||||||||||||||||||||||
Client account and other fees | 27 | 32 | 30 | 29 | 35 | 30 | % | 21 | % | 60 | 64 | 7 | % | ||||||||||||||||||||||||
Total account and service fees | 231 | 228 | 225 | 224 | 222 | (4 | )% | (1 | )% | 456 | 446 | (2 | )% | ||||||||||||||||||||||||
Investment banking | 8 | 10 | 7 | 11 | 11 | 38 | % | — | 15 | 22 | 47 | % | |||||||||||||||||||||||||
Interest income | 58 | 56 | 55 | 49 | 45 | (22 | )% | (8 | )% | 114 | 94 | (18 | )% | ||||||||||||||||||||||||
All other | 9 | 3 | 7 | 9 | 7 | (22 | )% | (22 | )% | 16 | 16 | — | |||||||||||||||||||||||||
Total revenues | 1,282 | 1,361 | 1,392 | 1,422 | 1,502 | 17 | % | 6 | % | 2,648 | 2,924 | 10 | % | ||||||||||||||||||||||||
Interest expense | (11 | ) | (10 | ) | (11 | ) | (8 | ) | (7 | ) | (36 | )% | (13 | )% | (21 | ) | (15 | ) | (29 | )% | |||||||||||||||||
Net revenues | 1,271 | 1,351 | 1,381 | 1,414 | 1,495 | 18 | % | 6 | % | 2,627 | 2,909 | 11 | % | ||||||||||||||||||||||||
Non-interest expenses: | |||||||||||||||||||||||||||||||||||||
Financial advisor compensation and benefits | 750 | 805 | 832 | 857 | 915 | 22 | % | 7 | % | 1,553 | 1,772 | 14 | % | ||||||||||||||||||||||||
Administrative compensation and benefits | 234 | 237 | 233 | 247 | 245 | 5 | % | (1 | )% | 463 | 492 | 6 | % | ||||||||||||||||||||||||
Total compensation, commissions and benefits | 984 | 1,042 | 1,065 | 1,104 | 1,160 | 18 | % | 5 | % | 2,016 | 2,264 | 12 | % | ||||||||||||||||||||||||
Non-compensation expenses | 155 | 169 | 173 | 157 | 165 | 6 | % | 5 | % | 315 | 322 | 2 | % | ||||||||||||||||||||||||
Total non-interest expenses | 1,139 | 1,211 | 1,238 | 1,261 | 1,325 | 16 | % | 5 | % | 2,331 | 2,586 | 11 | % | ||||||||||||||||||||||||
Pre-tax income | $ | 132 | $ | 140 | $ | 143 | $ | 153 | $ | 170 | 29 | % | 11 | % | $ | 296 | $ | 323 | 9 | % |
Three months ended | % change from | Six months ended | |||||||||||||||||||||||||||||||||||
$ in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | March 31, 2020 | % change | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||
Brokerage revenues: | |||||||||||||||||||||||||||||||||||||
Fixed income | $ | 71 | $ | 73 | $ | 82 | $ | 81 | $ | 90 | 27 | % | 11 | % | $ | 128 | $ | 171 | 34 | % | |||||||||||||||||
Equity | 32 | 31 | 26 | 34 | 40 | 25 | % | 18 | % | 74 | 74 | — | |||||||||||||||||||||||||
Total brokerage revenues | 103 | 104 | 108 | 115 | 130 | 26 | % | 13 | % | 202 | 245 | 21 | % | ||||||||||||||||||||||||
Investment banking: | |||||||||||||||||||||||||||||||||||||
Merger & acquisition and advisory | 121 | 80 | 93 | 60 | 72 | (40 | )% | 20 | % | 206 | 132 | (36 | )% | ||||||||||||||||||||||||
Equity underwriting | 18 | 27 | 28 | 39 | 43 | 139 | % | 10 | % | 45 | 82 | 82 | % | ||||||||||||||||||||||||
Debt underwriting | 17 | 22 | 29 | 31 | 22 | 29 | % | (29 | )% | 34 | 53 | 56 | % | ||||||||||||||||||||||||
Total investment banking | 156 | 129 | 150 | 130 | 137 | (12 | )% | 5 | % | 285 | 267 | (6 | )% | ||||||||||||||||||||||||
Interest income | 9 | 10 | 9 | 8 | 10 | 11 | % | 25 | % | 19 | 18 | (5 | )% | ||||||||||||||||||||||||
Tax credit fund revenues | 14 | 16 | 37 | 18 | 12 | (14 | )% | (33 | )% | 33 | 30 | (9 | )% | ||||||||||||||||||||||||
All other | 3 | 2 | 6 | 3 | 7 | 133 | % | 133 | % | 7 | 10 | 43 | % | ||||||||||||||||||||||||
Total revenues | 285 | 261 | 310 | 274 | 296 | 4 | % | 8 | % | 546 | 570 | 4 | % | ||||||||||||||||||||||||
Interest expense | (8 | ) | (10 | ) | (8 | ) | (6 | ) | (6 | ) | (25 | )% | — | (16 | ) | (12 | ) | (25 | )% | ||||||||||||||||||
Net revenues | 277 | 251 | 302 | 268 | 290 | 5 | % | 8 | % | 530 | 558 | 5 | % | ||||||||||||||||||||||||
Non-interest expenses: | |||||||||||||||||||||||||||||||||||||
Compensation, commissions and benefits | 168 | 160 | 179 | 166 | 184 | 10 | % | 11 | % | 326 | 350 | 7 | % | ||||||||||||||||||||||||
Non-compensation expenses (2) (3) (4) | 68 | 67 | 90 | 73 | 78 | 15 | % | 7 | % | 151 | 151 | — | |||||||||||||||||||||||||
Total non-interest expenses | 236 | 227 | 269 | 239 | 262 | 11 | % | 10 | % | 477 | 501 | 5 | % | ||||||||||||||||||||||||
Pre-tax income | $ | 41 | $ | 24 | $ | 33 | $ | 29 | $ | 28 | (32 | )% | (3 | )% | $ | 53 | $ | 57 | 8 | % |
Three months ended | % change from | Six months ended | |||||||||||||||||||||||||||||||||||
$ in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | March 31, 2020 | % change | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||
Asset management and related administrative fees: | |||||||||||||||||||||||||||||||||||||
Managed programs | $ | 109 | $ | 120 | $ | 121 | $ | 125 | $ | 124 | 14 | % | (1 | )% | $ | 226 | $ | 249 | 10 | % | |||||||||||||||||
Administration and other | 40 | 45 | 49 | 51 | 53 | 33 | % | 4 | % | 84 | 104 | 24 | % | ||||||||||||||||||||||||
Total asset management and related administrative fees | 149 | 165 | 170 | 176 | 177 | 19 | % | 1 | % | 310 | 353 | 14 | % | ||||||||||||||||||||||||
Account and service fees | 10 | 8 | 4 | 5 | 4 | (60 | )% | (20 | )% | 19 | 9 | (53 | )% | ||||||||||||||||||||||||
All other | 3 | 4 | 4 | 3 | 3 | — | — | 7 | 6 | (14 | )% | ||||||||||||||||||||||||||
Net revenues | 162 | 177 | 178 | 184 | 184 | 14 | % | — | 336 | 368 | 10 | % | |||||||||||||||||||||||||
Non-interest expenses: | |||||||||||||||||||||||||||||||||||||
Compensation, commissions and benefits | 45 | 47 | 44 | 45 | 45 | — | — | 88 | 90 | 2 | % | ||||||||||||||||||||||||||
Non-compensation expenses (3) | 62 | 65 | 65 | 66 | 66 | 6 | % | — | 129 | 132 | 2 | % | |||||||||||||||||||||||||
Total non-interest expenses | 107 | 112 | 109 | 111 | 111 | 4 | % | — | 217 | 222 | 2 | % | |||||||||||||||||||||||||
Pre-tax income | $ | 55 | $ | 65 | $ | 69 | $ | 73 | $ | 73 | 33 | % | — | $ | 119 | $ | 146 | 23 | % |
Three months ended | % change from | Six months ended | |||||||||||||||||||||||||||||||||||
$ in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | March 31, 2020 | % change | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||
Interest income | $ | 247 | $ | 246 | $ | 243 | $ | 231 | $ | 223 | (10 | )% | (3 | )% | $ | 486 | $ | 454 | (7 | )% | |||||||||||||||||
Interest expense | (42 | ) | (38 | ) | (33 | ) | (21 | ) | (18 | ) | (57 | )% | (14 | )% | (84 | ) | (39 | ) | (54 | )% | |||||||||||||||||
Net interest income | 205 | 208 | 210 | 210 | 205 | — | (2 | )% | 402 | 415 | 3 | % | |||||||||||||||||||||||||
All other | 7 | 7 | 6 | 6 | 5 | (29 | )% | (17 | )% | 13 | 11 | (15 | )% | ||||||||||||||||||||||||
Net revenues | 212 | 215 | 216 | 216 | 210 | (1 | )% | (3 | )% | 415 | 426 | 3 | % | ||||||||||||||||||||||||
Non-interest expenses: | |||||||||||||||||||||||||||||||||||||
Compensation and benefits | 12 | 13 | 13 | 12 | 13 | 8 | % | 8 | % | 23 | 25 | 9 | % | ||||||||||||||||||||||||
Non-compensation expenses: | |||||||||||||||||||||||||||||||||||||
Loan loss provision/(benefit) | 5 | (5 | ) | 6 | (2 | ) | 109 | 2,080 | % | NM | 21 | 107 | 410 | % | |||||||||||||||||||||||
RJBDP fees to Private Client Group (12) | 42 | 44 | 46 | 47 | 48 | 14 | % | 2 | % | 83 | 95 | 14 | % | ||||||||||||||||||||||||
All other | 17 | 25 | 20 | 24 | 26 | 53 | % | 8 | % | 42 | 50 | 19 | % | ||||||||||||||||||||||||
Total non-compensation expenses | 64 | 64 | 72 | 69 | 183 | 186 | % | 165 | % | 146 | 252 | 73 | % | ||||||||||||||||||||||||
Total non-interest expenses | 76 | 77 | 85 | 81 | 196 | 158 | % | 142 | % | 169 | 277 | 64 | % | ||||||||||||||||||||||||
Pre-tax income | $ | 136 | $ | 138 | $ | 131 | $ | 135 | $ | 14 | (90 | )% | (90 | )% | $ | 246 | $ | 149 | (39 | )% |
Three months ended | % change from | Six months ended | |||||||||||||||||||||||||||||||||||
$ in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | March 31, 2020 | % change | |||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||
Interest income | $ | 14 | $ | 12 | $ | 21 | $ | 12 | $ | 12 | (14 | )% | — | $ | 30 | $ | 24 | (20 | )% | ||||||||||||||||||
Gains/(losses) on private equity investments (1) | 2 | 2 | 6 | (2 | ) | (39 | ) | NM | (1,850 | )% | 6 | (41 | ) | NM | |||||||||||||||||||||||
All other | 3 | 1 | (2 | ) | 2 | — | (100 | )% | (100 | )% | 4 | 2 | (50 | )% | |||||||||||||||||||||||
Total revenues | 19 | 15 | 25 | 12 | (27 | ) | NM | NM | 40 | (15 | ) | NM | |||||||||||||||||||||||||
Interest expense | (19 | ) | (19 | ) | (18 | ) | (20 | ) | (17 | ) | (11 | )% | (15 | )% | (38 | ) | (37 | ) | (3 | )% | |||||||||||||||||
Net revenues | — | (4 | ) | 7 | (8 | ) | (44 | ) | NM | (450 | )% | 2 | (52 | ) | NM | ||||||||||||||||||||||
Non-interest expenses (1) (3) | 17 | 21 | 29 | 23 | 2 | (88 | )% | (91 | )% | 37 | 25 | (32 | )% | ||||||||||||||||||||||||
Pre-tax loss | $ | (17 | ) | $ | (25 | ) | $ | (22 | ) | $ | (31 | ) | $ | (46 | ) | (171 | )% | (48 | )% | $ | (35 | ) | $ | (77 | ) | (120 | )% |
As of | % change from | |||||||||||||||||||||||||
$ in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | |||||||||||||||||||
Total assets | $ | 24,925 | $ | 25,668 | $ | 25,705 | $ | 26,469 | $ | 33,656 | 35 | % | 27 | % | ||||||||||||
Total equity | $ | 2,136 | $ | 2,198 | $ | 2,248 | $ | 2,300 | $ | 2,263 | 6 | % | (2 | )% | ||||||||||||
Bank loans, net | $ | 20,135 | $ | 20,691 | $ | 20,891 | $ | 21,296 | $ | 21,788 | 8 | % | 2 | % | ||||||||||||
Allowance for loan losses | $ | 218 | $ | 215 | $ | 218 | $ | 216 | $ | 324 | 49 | % | 50 | % | ||||||||||||
Allowance for loan losses as a % of loans held for investment | 1.08 | % | 1.03 | % | 1.04 | % | 1.01 | % | 1.47 | % | ||||||||||||||||
Total nonperforming assets | $ | 61 | $ | 56 | $ | 46 | $ | 41 | $ | 27 | (56 | )% | (34 | )% | ||||||||||||
Nonperforming assets as a % of total assets | 0.25 | % | 0.22 | % | 0.18 | % | 0.16 | % | 0.08 | % | ||||||||||||||||
Total criticized loans | $ | 246 | $ | 197 | $ | 285 | $ | 349 | $ | 387 | 57 | % | 11 | % | ||||||||||||
Criticized loans as a % of loans held for investment | 1.21 | % | 0.95 | % | 1.36 | % | 1.64 | % | 1.76 | % | ||||||||||||||||
Capital ratios: | ||||||||||||||||||||||||||
Tier 1 capital | 12.8 | % | 12.8 | % | 13.2 | % | 13.3 | % | 12.7 | % | (8) | |||||||||||||||
Total capital | 14.1 | % | 14.1 | % | 14.5 | % | 14.5 | % | 13.9 | % | (8) | |||||||||||||||
Tier 1 leverage | 8.6 | % | 8.8 | % | 8.8 | % | 8.8 | % | 8.1 | % | (8) |
Three months ended | % change from | Six months ended | ||||||||||||||||||||||||||||||||||
$ in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | December 31, 2019 | March 31, 2019 | March 31, 2020 | % change | ||||||||||||||||||||||||||
Bank loan loss provision/(benefit) | $ | 5 | $ | (5 | ) | $ | 6 | $ | (2 | ) | $ | 109 | 2,080 | % | NM | $ | 21 | $ | 107 | 410 | % | |||||||||||||||
Net charge-offs/(recoveries) | $ | 6 | $ | (1 | ) | $ | 2 | $ | — | $ | — | (100 | )% | — | $ | 5 | $ | — | (100 | )% | ||||||||||||||||
Net interest margin (net yield on interest-earning banking assets) | 3.35 | % | 3.37 | % | 3.30 | % | 3.23 | % | 3.02 | % | 3.30 | % | 3.12 | % |
Three months ended | Six months ended | |||||||
$ in millions, except per share amounts | September 30, 2019 | March 31, 2019 | ||||||
Net income | $ | 265 | $ | 510 | ||||
Non-GAAP adjustments: | ||||||||
Acquisition and disposition-related expenses (2) | — | 15 | ||||||
Goodwill impairment (4) | 19 | — | ||||||
Pre-tax impact of non-GAAP adjustments | 19 | 15 | ||||||
Tax effect of non-GAAP adjustments | — | — | ||||||
Total non-GAAP adjustments, net of tax | 19 | 15 | ||||||
Adjusted net income | $ | 284 | $ | 525 | ||||
Pre-tax income | $ | 354 | $ | 679 | ||||
Pre-tax impact of non-GAAP adjustments (as detailed above) | 19 | 15 | ||||||
Adjusted pre-tax income | $ | 373 | $ | 694 | ||||
Pre-tax margin (10) | 17.5 | % | 17.9 | % | ||||
Adjusted pre-tax margin (10) | 18.4 | % | 18.3 | % | ||||
Earnings per common share (5) | ||||||||
Basic | $ | 1.90 | $ | 3.58 | ||||
Adjusted basic | $ | 2.04 | $ | 3.68 | ||||
Diluted | $ | 1.86 | $ | 3.51 | ||||
Adjusted diluted | $ | 2.00 | $ | 3.61 |
Book value per share | As of | |||||||||||||||||||
$ in millions, except per share amounts | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | |||||||||||||||
Total equity attributable to Raymond James Financial, Inc. | $ | 6,366 | $ | 6,502 | $ | 6,581 | $ | 6,842 | $ | 6,798 | ||||||||||
Less non-GAAP adjustments: | ||||||||||||||||||||
Goodwill and identifiable intangible assets, net | 630 | 635 | 611 | 609 | 603 | |||||||||||||||
Deferred tax liabilities, net | (35 | ) | (26 | ) | (28 | ) | (31 | ) | (30 | ) | ||||||||||
Tangible common equity attributable to Raymond James Financial, Inc. | $ | 5,771 | $ | 5,893 | $ | 5,998 | $ | 6,264 | $ | 6,225 | ||||||||||
Common shares outstanding | 140.4 | 139.7 | 137.8 | 138.9 | 136.8 | |||||||||||||||
Book value per share (6) | $ | 45.34 | $ | 46.54 | $ | 47.76 | $ | 49.26 | $ | 49.69 | ||||||||||
Tangible book value per share (6) | $ | 41.10 | $ | 42.18 | $ | 43.53 | $ | 45.10 | $ | 45.50 |
Return on equity | Three months ended | Six months ended | |||||||||||||||||||||||||||
$ in millions | March 31, 2019 | June 30, 2019 | September 30, 2019 | December 31, 2019 | March 31, 2020 | March 31, 2019 | March 31, 2020 | ||||||||||||||||||||||
Average equity (16) | $ | 6,255 | $ | 6,434 | $ | 6,542 | $ | 6,712 | $ | 6,820 | $ | 6,292 | $ | 6,740 | |||||||||||||||
Impact on average equity of non-GAAP adjustments: | |||||||||||||||||||||||||||||
Acquisition and disposition-related expenses (2) | NA | NA | — | NA | NA | 10 | NA | ||||||||||||||||||||||
Goodwill impairment (4) | NA | NA | 9 | NA | NA | — | NA | ||||||||||||||||||||||
Adjusted average equity (16) | NA | NA | $ | 6,551 | NA | NA | $ | 6,302 | NA | ||||||||||||||||||||
Average equity (16) | $ | 6,255 | $ | 6,434 | $ | 6,542 | $ | 6,712 | $ | 6,820 | $ | 6,292 | $ | 6,740 | |||||||||||||||
Less: | |||||||||||||||||||||||||||||
Average goodwill and identifiable intangible assets, net | 632 | 633 | 623 | 610 | 606 | 634 | 608 | ||||||||||||||||||||||
Average deferred tax liabilities, net | (35 | ) | (31 | ) | (27 | ) | (30 | ) | (31 | ) | (34 | ) | (30 | ) | |||||||||||||||
Average tangible common equity (16) | $ | 5,658 | $ | 5,832 | $ | 5,946 | $ | 6,132 | $ | 6,245 | $ | 5,692 | $ | 6,162 | |||||||||||||||
Impact on average equity of non-GAAP adjustments: | |||||||||||||||||||||||||||||
Acquisition and disposition-related expenses (2) | NA | NA | — | NA | NA | 10 | NA | ||||||||||||||||||||||
Goodwill impairment (4) | NA | NA | 9 | NA | NA | — | NA | ||||||||||||||||||||||
Adjusted average tangible common equity (16) | NA | NA | $ | 5,955 | NA | NA | $ | 5,702 | NA | ||||||||||||||||||||
Return on equity (9) | 16.7 | % | 16.1 | % | 16.2 | % | 16.0 | % | 9.9 | % | 16.2 | % | 13.0 | % | |||||||||||||||
Adjusted return on equity (9) | NA | NA | 17.3 | % | NA | NA | 16.7 | % | NA | ||||||||||||||||||||
Return on tangible common equity (9) | 18.5 | % | 17.8 | % | 17.8 | % | 17.5 | % | 10.8 | % | 17.9 | % | 14.2 | % | |||||||||||||||
Adjusted return on tangible common equity (9) | NA | NA | 19.1 | % | NA | NA | 18.4 | % | NA |
1. | Other revenues for the three and six months ended March 31, 2020 included $39 million and $41 million, respectively, of private equity valuation losses, which are included in our Other segment. Of these losses, approximately $22 million and $23 million, respectively, were attributable to noncontrolling interests and are presented as an offset in Other expenses. |
2. | The six months ended March 31, 2019 included a $15 million loss in our Capital Markets segment on the sale of our operations related to research, sales and trading of European equities. |
3. | The offset for the net gain/(loss) attributable to noncontrolling interests is in Other expenses. Prior period results have been conformed to the current presentation. |
4. | The three months ended September 30, 2019 included a $19 million goodwill impairment charge associated with our Canadian Capital Markets business. |
5. | Earnings per common share is computed by dividing net income (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period or, in the case of adjusted earnings per share, computed by dividing adjusted net income (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period. |
6. | Book value per share is computed by dividing total equity attributable to Raymond James Financial, Inc. by the number of common shares outstanding at the end of each respective period or, in the case of tangible book value per share, computed by dividing tangible common equity by the number of common shares outstanding at the end of each respective period. Tangible common equity is defined as total equity attributable to Raymond James Financial, Inc. less goodwill and intangible assets, net of related deferred taxes. |
7. | These are non-GAAP financial measures. See the schedules on the previous pages of this document for a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. There were no non-GAAP adjustments to earnings for the three months ended March 31, 2019, June 30, 2019, December 31, 2019 and March 31, 2020, as well as the six months ended March 31, 2020. Therefore, percent changes for earnings-related non-GAAP financial measures are calculated based on GAAP results for the six months ended March 31, 2020 as compared to non-GAAP results for the six months ended March 31, 2019. |
8. | Estimated. |
9. | Return on equity is computed by dividing annualized net income by average equity for each respective period or, in the case of return on tangible common equity, computed by dividing annualized net income by average tangible common equity for each respective period. Adjusted return on equity is computed by dividing annualized adjusted net income by adjusted average equity for each respective period, or in the case of adjusted return on tangible common equity, computed by dividing annualized adjusted net income by adjusted average tangible common equity for each respective period. |
10. | Pre-tax margin is computed by dividing pre-tax income by net revenues for each respective period or, in the case of adjusted pre-tax margin, computed by dividing adjusted pre-tax income by net revenues for each respective period. |
11. | Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period. |
12. | We earn fees from RJBDP, a multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into interest-bearing deposit accounts at Raymond James Bank and various third-party banks. Fees earned by Private Client Group on Raymond James Bank deposits are eliminated in consolidation. |
13. | Money market funds were discontinued as a sweep option during the third fiscal quarter of 2019. Balances in those funds were converted to RJBDP or reinvested by the client. |
14. | Average yield on RJBDP - third-party banks is computed by dividing annualized RJBDP fees - third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balance at third-party banks. |
15. | The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, and certain corporate overhead costs of Raymond James Financial, Inc., including the interest costs on our public debt. |
16. | Average equity is computed by adding the total equity attributable to Raymond James Financial, Inc. as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two. For the year-to-date period, computed by adding the total equity attributable to Raymond James Financial, Inc. as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by three, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by three. Adjusted average equity is computed by adjusting for the impact on average equity of the non-GAAP adjustments, as applicable for each respective period. Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period. |
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