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EARNINGS RELEASE FINANCIAL SUPPLEMENT


SECOND QUARTER
FISCAL YEAR 2020 RESULTS










 


RAYMOND JAMES FINANCIAL, INC.             
Consolidated Statements of Income (Unaudited)


 
 
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
)%

Please refer to the footnotes at the end of this supplement for additional information.
2

RAYMOND JAMES FINANCIAL, INC.             
Consolidated Selected Key Metrics (Unaudited)



 
 
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
%
 



Please refer to the footnotes at the end of this supplement for additional information.
3

RAYMOND JAMES FINANCIAL, INC.             
Consolidated Selected Key Metrics (Unaudited)



 
 
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
 %


Please refer to the footnotes at the end of this supplement for additional information.
4

RAYMOND JAMES FINANCIAL, INC.        
Segment Results - Private Client Group (Unaudited)



 
 
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
 %


Please refer to the footnotes at the end of this supplement for additional information.
5

RAYMOND JAMES FINANCIAL, INC.             
Segment Results - Capital Markets (Unaudited)



 
 
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
 %


Please refer to the footnotes at the end of this supplement for additional information.
6

RAYMOND JAMES FINANCIAL, INC.             
Segment Results - Asset Management (Unaudited)



 
 
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
 %


Please refer to the footnotes at the end of this supplement for additional information.
7

RAYMOND JAMES FINANCIAL, INC.             
Segment Results - Raymond James Bank (Unaudited)



 
 
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
)%


Please refer to the footnotes at the end of this supplement for additional information.
8

RAYMOND JAMES FINANCIAL, INC.             
Segment Results - Other (15) (Unaudited)



 
 
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
)%


Please refer to the footnotes at the end of this supplement for additional information.
9

RAYMOND JAMES FINANCIAL, INC.             
Raymond James Bank Selected Key Metrics (Unaudited)



 
 
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
%
 



Please refer to the footnotes at the end of this supplement for additional information.
10


RAYMOND JAMES FINANCIAL, INC.     

Reconciliation of GAAP measures to non-GAAP financial measures (Unaudited)

We utilize certain non-GAAP financial measures as additional measures to aid in, and enhance, the understanding of our financial results and related measures. These non-GAAP financial measures have been separately identified in this document. We believe certain of these non-GAAP financial measures provides useful information to management and investors by excluding certain material items that may not be indicative of our core operating results. We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a comparison of current- and prior-period results. We believe that return on tangible common equity and tangible book value per share are meaningful to investors as they facilitate comparisons of our results to the results of other companies. In the following table, the tax effect of non-GAAP adjustments reflects the statutory rate associated with each non-GAAP item. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other companies. The following table provides a reconciliation of GAAP measures to non-GAAP financial measures for those periods which include non-GAAP adjustments.
 
 
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














Please refer to the footnotes at the end of this supplement for additional information.
11


RAYMOND JAMES FINANCIAL, INC.     

Reconciliation of GAAP measures to non-GAAP financial measures (Unaudited)
(Continued from previous page)

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




Please refer to the footnotes at the end of this supplement for additional information.
12


RAYMOND JAMES FINANCIAL, INC.     

Footnotes

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.


13