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EX-99.3 - EXHIBIT 99.3 EARNINGS PRESENTATION SECOND QUARTER FISCAL YEAR 2020 OF RJF - RAYMOND JAMES FINANCIAL INC | fiscal2q20earningspresen.htm |
EX-99.1 - EXHIBIT 99.1 PRESS RELEASE DATED APRIL 29, 2020 - RAYMOND JAMES FINANCIAL INC | rjf20200331q220earnings.htm |
8-K - 8-K - RAYMOND JAMES FINANCIAL INC | a8-kmarch2020earningsr.htm |
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.
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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.
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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.
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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.
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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.
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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