RAYMOND JAMES FINANCIAL INC - FORM 8-K - EX-99.2 - EX-99.2 FINANCIAL SUPPLEMENT FISCAL THIRD QUARTER 2021 OF RJF

Attached files

file	filename
EX-99.3 - EX-99.3 EARNINGS PRESENTATION FISCAL THIRD QUARTER 2021 OF RJF - RAYMOND JAMES FINANCIAL INC	q3fy21earningspresentati.htm
EX-99.1 - EX-99.1 PRESS RELEASE DATED JULY 28, 2021 - RAYMOND JAMES FINANCIAL INC	rjf20210630q321earnings.htm
8-K - 8-K - RAYMOND JAMES FINANCIAL INC	rjf-20210728.htm

EARNINGS RELEASE FINANCIAL SUPPLEMENT

THIRD QUARTER

OF FISCAL 2021 RESULTS

RAYMOND JAMES FINANCIAL, INC.

Consolidated Statements of Income (Unaudited)


	Three months ended										% change from				Nine months ended
in millions, except per share amounts	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		June 30, 2020		March 31, 2021		June 30, 2020		June 30, 2021		% change
Revenues:
Asset management and related administrative fees	$	867	$	1,006	$	1,067	$	1,173	$	1,262	46	%	8	%	$	2,828	$	3,502	24	%
Brokerage revenues:
Securities commissions	343		352		381		443		415		21	%	(6)	%	1,116		1,239		11	%
Principal transactions	143		143		147		148		137		(4)	%	(7)	%	345		432		25	%
Total brokerage revenues	486		495		528		591		552		14	%	(7)	%	1,461		1,671		14	%
Account and service fees	134		140		145		159		161		20	%	1	%	484		465		(4)	%
Investment banking	139		222		261		242		276		99	%	14	%	428		779		82	%
Interest income	217		201		203		200		205		(6)	%	3	%	799		608		(24)	%
Other (1)	33		57		56		44		55		67	%	25	%	47		155		230	%
Total revenues	1,876		2,121		2,260		2,409		2,511		34	%	4	%	6,047		7,180		19	%
Interest expense	(42)		(42)		(38)		(37)		(40)		(5)	%	8	%	(136)		(115)		(15)	%
Net revenues	1,834		2,079		2,222		2,372		2,471		35	%	4	%	5,911		7,065		20	%
Non-interest expenses:
Compensation, commissions and benefits	1,277		1,415		1,500		1,648		1,661		30	%	1	%	4,050		4,809		19	%
Non-compensation expenses:
Communications and information processing	100		100		99		107		109		9	%	2	%	293		315		8	%
Occupancy and equipment	55		57		57		57		58		5	%	2	%	168		172		2	%
Business development	21		28		23		21		31		48	%	48	%	106		75		(29)	%
Investment sub-advisory fees	23		26		28		31		34		48	%	10	%	75		93		24	%
Professional fees	24		23		30		24		26		8	%	8	%	68		80		18	%
Bank loan provision/(benefit) for credit losses (2)	81		45		14		(32)		(19)		NM		NM		188		(37)		NM
Losses on extinguishment of debt (3)	—		—		—		—		98		NM		NM		—		98		NM
Acquisition and disposition-related expenses (4)	—		7		2		—		7		NM		NM		—		9		NM
Reduction in workforce expenses (5)	—		46		—		—		—		—		—		—		—		—
Other (1)	55		76		70		69		81		47	%	17	%	167		220		32	%
Total non-compensation expenses	359		408		323		277		425		18	%	53	%	1,065		1,025		(4)	%
Total non-interest expenses	1,636		1,823		1,823		1,925		2,086		28	%	8	%	5,115		5,834		14	%
Pre-tax income	198		256		399		447		385		94	%	(14)	%	796		1,231		55	%
Provision for income taxes	26		47		87		92		78		200	%	(15)	%	187		257		37	%
Net income	$	172	$	209	$	312	$	355	$	307	78	%	(14)	%	$	609	$	974	60	%

Earnings per common share – basic (6)	$	1.25	$	1.53	$	2.27	$	2.58	$	2.24	79	%	(13)	%	$	4.41	$	7.09	61	%
Earnings per common share – diluted (6)	$	1.23	$	1.50	$	2.23	$	2.51	$	2.18	77	%	(13)	%	$	4.33	$	6.92	60	%
Weighted-average common shares outstanding – basic	137.1		136.9		136.8		137.8		137.2		—		—		137.9		137.2		(1)	%
Weighted-average common and common equivalent shares outstanding – diluted	139.4		139.6		139.7		141.2		141.1		1	%	—		140.5		140.6		—

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

RAYMOND JAMES FINANCIAL, INC.

Consolidated Selected Key Metrics (Unaudited)


	As of																% change from
$ in millions, except per share amounts	June 30, 2020			September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021				June 30, 2020		March 31, 2021
Total assets	$	44,682		$	47,482		$	53,657		$	56,066		$	57,161			28	%	2	%
Total equity attributable to Raymond James Financial, Inc.	$	6,965		$	7,114		$	7,363		$	7,592		$	7,863			13	%	4	%
Book value per share (7)	$	50.84		$	52.08		$	53.59		$	55.34		$	57.44			13	%	4	%
Tangible book value per share (7) (8)	$	46.69		$	47.94		$	47.93		$	49.42		$	51.55			10	%	4	%

Capital ratios:
Tier 1 capital	24.8		%	24.2		%	23.4		%	23.6		%	24.3		%	(9)
Total capital	26.0		%	25.4		%	24.6		%	24.7		%	25.5		%	(9)
Tier 1 leverage	14.5		%	14.2		%	12.9		%	12.2		%	12.6		%	(9)


	Three months ended													% change from				Nine months ended
$ in millions	June 30, 2020		September 30, 2020			December 31, 2020			March 31, 2021		June 30, 2021			June 30, 2020		March 31, 2021		June 30, 2020		June 30, 2021			% change
Adjusted pre-tax income (8)	NA		$	309		$	401		NA		$	490		147	%	10	%	NA		$	1,338		68	%
Adjusted net income (8)	NA		$	249		$	314		NA		$	386		124	%	9	%	NA		$	1,055		73	%
Adjusted earnings per common share - basic (6) (8)	NA		$	1.82		$	2.29		NA		$	2.81		125	%	9	%	NA		$	7.68		74	%
Adjusted earnings per common share - diluted (6) (8)	NA		$	1.78		$	2.24		NA		$	2.74		123	%	9	%	NA		$	7.50		73	%
Return on equity (10)	10.0	%	11.9		%	17.2		%	19.0	%	15.9		%					11.9	%	17.4		%
Adjusted return on equity (8) (10)	NA		14.1		%	17.3		%	NA		19.9		%					NA		18.7		%
Return on tangible common equity (8) (10)	10.9	%	12.9		%	19.0		%	21.2	%	17.7		%					13.1	%	19.3		%
Adjusted return on tangible common equity (8) (10)	NA		15.3		%	19.1		%	NA		22.2		%					NA		20.8		%
Pre-tax margin (11)	10.8	%	12.3		%	18.0		%	18.8	%	15.6		%					13.5	%	17.4		%
Adjusted pre-tax margin (8) (11)	NA		14.9		%	18.0		%	NA		19.8		%					NA		18.9		%
Total compensation ratio (12)	69.6	%	68.1		%	67.5		%	69.5	%	67.2		%					68.5	%	68.1		%
Effective tax rate	13.1	%	18.4		%	21.8		%	20.6	%	20.3		%					23.5	%	20.9		%

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

RAYMOND JAMES FINANCIAL, INC.

Consolidated Selected Key Metrics (Unaudited)


	As of										% change from
	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		June 30, 2020		March 31, 2021
Client asset metrics ($ in billions):
Client assets under administration	$	876.9	$	930.1	$	1,024.8	$	1,085.4	$	1,165.0	33	%	7	%
Private Client Group assets under administration	$	833.1	$	883.3	$	974.2	$	1,028.1	$	1,102.9	32	%	7	%
Private Client Group assets in fee-based accounts	$	443.0	$	475.3	$	532.7	$	567.6	$	616.7	39	%	9	%
Financial assets under management	$	145.4	$	153.1	$	169.6	$	178.2	$	191.0	31	%	7	%

Clients' domestic cash sweep balances ($ in millions):
Raymond James Bank Deposit Program (“RJBDP”): (13)
Raymond James Bank	$	24,101	$	25,599	$	26,697	$	28,174	$	29,253	21	%	4	%
Third-party banks	24,661		25,998		26,142		25,110		25,080		2	%	—
Subtotal RJBDP	48,762		51,597		52,839		53,284		54,333		11	%	2	%

Client Interest Program	3,157		3,999		8,769		9,517		8,610		173	%	(10)	%
Total clients’ domestic cash sweep balances	$	51,919	$	55,596	$	61,608	$	62,801	$	62,943	21	%	—


	Three months ended										Nine months ended
	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		June 30, 2020		June 30, 2021
Average yield on RJBDP - third-party banks (14)	0.33	%	0.33	%	0.31	%	0.30	%	0.29	%	0.97	%	0.30	%


	As of					% change from
	June 30, 2020	September 30, 2020	December 31, 2020	March 31, 2021	June 30, 2021	June 30, 2020		March 31, 2021
Private Client Group financial advisors:
Employees	3,379	3,404	3,387	3,375	3,423	1	%	1	%
Independent contractors	4,776	4,835	4,846	4,952	4,990	4	%	1	%
Total advisors	8,155	8,239	8,233	8,327	8,413	3	%	1	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Private Client Group (Unaudited)


	Three months ended										% change from				Nine months ended
$ in millions	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		June 30, 2020		March 31, 2021		June 30, 2020		June 30, 2021		% change
Revenues:
Asset management and related administrative fees	$	715	$	832	$	885	$	979	$	1,050	47	%	7	%	$	2,330	$	2,914	25	%
Brokerage revenues:
Mutual and other fund products	131		129		148		183		167		27	%	(9)	%	438		498		14	%
Insurance and annuity products	88		109		98		109		113		28	%	4	%	288		320		11	%
Equities, ETFs, and fixed income products	100		95		107		121		110		10	%	(9)	%	324		338		4	%
Total brokerage revenues	319		333		353		413		390		22	%	(6)	%	1,050		1,156		10	%
Account and service fees:
Mutual fund and annuity service fees	82		88		94		99		105		28	%	6	%	260		298		15	%
RJBDP fees: (13)
Third-party banks	20		21		21		19		18		(10)	%	(5)	%	129		58		(55)	%
Raymond James Bank	43		42		43		44		47		9	%	7	%	138		134		(3)	%
Client account and other fees	32		33		32		42		39		22	%	(7)	%	96		113		18	%
Total account and service fees	177		184		190		204		209		18	%	2	%	623		603		(3)	%
Investment banking	7		12		6		16		11		57	%	(31)	%	29		33		14	%
Interest income	31		30		30		30		31		—		3	%	125		91		(27)	%
All other	4		7		5		8		7		75	%	(13)	%	20		20		—
Total revenues	1,253		1,398		1,469		1,650		1,698		36	%	3	%	4,177		4,817		15	%
Interest expense	(4)		(4)		(2)		(3)		(2)		(50)	%	(33)	%	(19)		(7)		(63)	%
Net revenues	1,249		1,394		1,467		1,647		1,696		36	%	3	%	4,158		4,810		16	%
Non-interest expenses:
Financial advisor compensation and benefits	783		873		931		1,040		1,082		38	%	4	%	2,555		3,053		19	%
Administrative compensation and benefits	235		244		249		260		251		7	%	(3)	%	727		760		5	%
Total compensation, commissions and benefits	1,018		1,117		1,180		1,300		1,333		31	%	3	%	3,282		3,813		16	%
Non-compensation expenses	140		152		147		155		168		20	%	8	%	462		470		2	%
Total non-interest expenses	1,158		1,269		1,327		1,455		1,501		30	%	3	%	3,744		4,283		14	%
Pre-tax income	$	91	$	125	$	140	$	192	$	195	114	%	2	%	$	414	$	527	27	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Capital Markets (Unaudited)


	Three months ended										% change from				Nine months ended
$ in millions	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		June 30, 2020		March 31, 2021		June 30, 2020		June 30, 2021		% change
Revenues:
Brokerage revenues:
Fixed income	$	125	$	125	$	131	$	142	$	124	(1)	%	(13)	%	$	296	$	397	34	%
Equity	41		35		42		34		36		(12)	%	6	%	115		112		(3)	%
Total brokerage revenues	166		160		173		176		160		(4)	%	(9)	%	411		509		24	%
Investment banking:
Merger & acquisition and advisory	60		98		149		122		153		155	%	25	%	192		424		121	%
Equity underwriting	35		68		60		67		69		97	%	3	%	117		196		68	%
Debt underwriting	37		43		46		37		43		16	%	16	%	90		126		40	%
Total investment banking	132		209		255		226		265		101	%	17	%	399		746		87	%
Interest income	4		3		3		5		4		—		(20)	%	22		12		(45)	%
Tax credit fund revenues	20		33		16		24		17		(15)	%	(29)	%	50		57		14	%
All other	3		7		7		4		3		—		(25)	%	13		14		8	%
Total revenues	325		412		454		435		449		38	%	3	%	895		1,338		49	%
Interest expense	(2)		(2)		(2)		(2)		(3)		50	%	50	%	(14)		(7)		(50)	%
Net revenues	323		410		452		433		446		38	%	3	%	881		1,331		51	%
Non-interest expenses:
Compensation, commissions and benefits	195		229		252		259		256		31	%	(1)	%	545		767		41	%
Acquisition and disposition-related expenses (4)	—		7		—		—		3		NM		NM		—		3		NM
Other non-compensation expenses	66		68		71		69		72		9	%	4	%	217		212		(2)	%
Total non-interest expenses	261		304		323		328		331		27	%	1	%	762		982		29	%
Pre-tax income	$	62	$	106	$	129	$	105	$	115	85	%	10	%	$	119	$	349	193	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Asset Management (Unaudited)


	Three months ended										% change from				Nine months ended
$ in millions	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		June 30, 2020		March 31, 2021		June 30, 2020		June 30, 2021		% change
Revenues:
Asset management and related administrative fees:
Managed programs	$	109	$	123	$	129	$	137	$	148	36	%	8	%	$	358	$	414	16	%
Administration and other	48		55		59		64		70		46	%	9	%	152		193		27	%
Total asset management and related administrative fees	157		178		188		201		218		39	%	8	%	510		607		19	%
Account and service fees	3		4		4		5		4		33	%	(20)	%	12		13		8
All other	3		2		3		3		3		—		—		9		9		—
Net revenues	163		184		195		209		225		38	%	8	%	531		629		18	%
Non-interest expenses:
Compensation, commissions and benefits	44		43		45		50		43		(2)	%	(14)	%	134		138		3	%
Non-compensation expenses	59		63		67		72		77		31	%	7	%	191		216		13	%
Total non-interest expenses	103		106		112		122		120		17	%	(2)	%	325		354		9	%
Pre-tax income	$	60	$	78	$	83	$	87	$	105	75	%	21	%	$	206	$	275	33	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Raymond James Bank (Unaudited)


	Three months ended										% change from				Nine months ended
$ in millions	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		June 30, 2020		March 31, 2021		June 30, 2020		June 30, 2021		% change
Revenues:
Interest income	$	181	$	165	$	168	$	165	$	172	(5)	%	4	%	$	635	$	505	(20)	%
Interest expense	(12)		(11)		(11)		(10)		(11)		(8)	%	10	%	(51)		(32)		(37)	%
Net interest income	169		154		157		155		161		(5)	%	4	%	584		473		(19)	%
All other	9		7		10		5		8		(11)	%	60	%	20		23		15	%
Net revenues	178		161		167		160		169		(5)	%	6	%	604		496		(18)	%
Non-interest expenses:
Compensation and benefits	13		13		12		13		13		—		—		38		38		—
Non-compensation expenses:
Bank loan provision/(benefit) for credit losses (2)	81		45		14		(32)		(19)		NM		NM		188		(37)		NM
RJBDP fees to Private Client Group (13)	43		42		43		44		47		9	%	7	%	138		134		(3)	%
All other	27		28		27		24		24		(11)	%	—		77		75		(3)	%
Total non-compensation expenses	151		115		84		36		52		(66)	%	44	%	403		172		(57)	%
Total non-interest expenses	164		128		96		49		65		(60)	%	33	%	441		210		(52)	%
Pre-tax income	$	14	$	33	$	71	$	111	$	104	643	%	(6)	%	$	163	$	286	75	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Other (15) (Unaudited)


	Three months ended										% change from				Nine months ended
$ in millions	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		June 30, 2020		March 31, 2021		June 30, 2020		June 30, 2021		% change
Revenues:
Interest income	$	3	$	3	$	3	$	3	$	—	(100)	%	(100)		$	27	$	6	(78)	%
Gains/(losses) on private equity investments (1)	1		12		24		8		24		2,300	%	200	%	(40)		56		NM
All other	2		—		1		2		4		100	%	100	%	4		7		75	%
Total revenues	6		15		28		13		28		367	%	115	%	(9)		69		NM
Interest expense	(26)		(25)		(24)		(25)		(26)		—		4	%	(63)		(75)		19	%
Net revenues	(20)		(10)		4		(12)		2		NM		NM		(72)		(6)		92	%
Non-interest expenses:
Compensation and all other (1)	9		30		26		36		34		278	%	(6)	%	34		96		182	%
Losses on extinguishment of debt (3)	—		—		—		—		98		NM		NM		—		98		NM
Acquisition-related expenses (4)	—		—		2		—		4		NM		NM		—		6		NM
Reduction in workforce expenses (5)	—		46		—		—		—		—		—		—		—		—
Total non-interest expenses	9		76		28		36		136		1,411	%	278	%	34		200		488	%
Pre-tax loss	$	(29)	$	(86)	$	(24)	$	(48)	$	(134)	(362)	%	(179)	%	$	(106)	$	(206)	(94)	%

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

RAYMOND JAMES FINANCIAL, INC.

Raymond James Bank Selected Key Metrics (Unaudited)

The following metrics are attributable to our Raymond James Bank banking subsidiary, which is a component of our Raymond James Bank segment.


	As of																% change from
$ in millions	June 30, 2020			September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021				June 30, 2020		March 31, 2021
Total assets	$	29,066		$	30,610		$	31,580		$	33,221		$	34,576			19	%	4	%
Total equity	$	2,279		$	2,315		$	2,364		$	2,409		$	2,532			11	%	5	%
Bank loans, net	$	21,223		$	21,195		$	21,957		$	22,879		$	23,896			13	%	4	%
Bank loan allowance for credit losses (2)	$	334		$	354		$	378		$	345		$	322			(4)	%	(7)	%
Bank loan allowance for credit losses as a % of loans held for investment (2)	1.56		%	1.65		%	1.71		%	1.50		%	1.34		%
Total nonperforming assets	$	23		$	32		$	28		$	31		$	43			87	%	39	%
Nonperforming assets as a % of total assets	0.08		%	0.10		%	0.09		%	0.09		%	0.12		%
Total criticized loans	$	733		$	933		$	899		$	1,001		$	980			34	%	(2)	%
Criticized loans as a % of loans held for investment	3.41		%	4.35		%	4.06		%	4.35		%	4.07		%

Capital ratios:
Tier 1 capital	12.8		%	13.0		%	13.1		%	13.1		%	13.5		%	(9)
Total capital	14.1		%	14.3		%	14.4		%	14.4		%	14.7		%	(9)
Tier 1 leverage	7.6		%	7.7		%	7.5		%	7.5		%	7.5		%	(9)


	Three months ended															% change from				Nine months ended
$ in millions	June 30, 2020			September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			June 30, 2020		March 31, 2021		June 30, 2020			June 30, 2021			% change
Bank loan provision/(benefit) for credit losses (2)	$	81		$	45		$	14		$	(32)		$	(19)		NM		NM		$	188		$	(37)		NM
Net charge-offs	$	72		$	26		$	—		$	2		$	4		(94)	%	100	%	$	72		$	6		(92)	%
Net interest margin (net yield on interest-earning assets)	2.29		%	2.09		%	2.02		%	1.94		%	1.92		%					2.82		%	1.96		%

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

RAYMOND JAMES FINANCIAL, INC.

Reconciliation of non-GAAP financial measures to 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 tables, 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 tables provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures for those periods which include non-GAAP adjustments.


	Three months ended									Nine months ended
$ in millions	September 30, 2020			December 31, 2020			June 30, 2021				June 30, 2021
Net income	$	209		$	312		$	307			$	974
Non-GAAP adjustments:
Losses on extinguishment of debt (3)	—			—			98				98
Acquisition and disposition-related expenses (4)	7			2			7				9
Reduction in workforce expenses (5)	46			—			—				—

Pre-tax impact of non-GAAP adjustments	53			2			105				107
Tax effect of non-GAAP adjustments	(13)			—			(26)				(26)
Total non-GAAP adjustments, net of tax	40			2			79				81
Adjusted net income	$	249		$	314		$	386			$	1,055

Pre-tax income	$	256		$	399		$	385			$	1,231
Pre-tax impact of non-GAAP adjustments (as detailed above)	53			2			105				107
Adjusted pre-tax income	$	309		$	401		$	490			$	1,338

Pre-tax margin (11)	12.3		%	18.0		%	15.6		%		17.4		%
Non-GAAP adjustments:
Losses on extinguishment of debt (3)	—			—			3.9		%		1.4		%
Acquisition and disposition-related expenses (4)	0.4		%	—			0.3		%		0.1		%
Reduction in workforce expenses (5)	2.2		%	—			—				—

Total non-GAAP adjustments, net of tax	2.6		%	—			4.2		%		1.5		%
Adjusted pre-tax margin (11)	14.9		%	18.0		%	19.8		%		18.9		%

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

RAYMOND JAMES FINANCIAL, INC.

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

(Continued from previous page)


	Three months ended						Nine months ended
Earnings per common share (6)	September 30, 2020		December 31, 2020		June 30, 2021			June 30, 2021





















Basic	$	1.53	$	2.27	$	2.24		$	7.09
Non-GAAP adjustments:
Losses on extinguishment of debt (3)	—		—		0.71			0.71
Acquisition and disposition-related expenses (4)	0.05		0.02		0.05			0.07
Reduction in workforce expenses (5)	0.34		—		—			—

Tax effect of non-GAAP adjustments	(0.10)		—		(0.19)			(0.19)
Total non-GAAP adjustments, net of tax	0.29		0.02		0.57			0.59
Adjusted basic	$	1.82	$	2.29	$	2.81		$	7.68

Diluted	$	1.50	$	2.23	$	2.18		$	6.92
Non-GAAP adjustments:
Losses on extinguishment of debt (3)	—		—		0.69			0.70
Acquisition and disposition-related expenses (4)	0.05		0.01		0.05			0.06
Reduction in workforce expenses (5)	0.33		—		—			—

Tax effect of non-GAAP adjustments	(0.10)		—		(0.18)			(0.18)
Total non-GAAP adjustments, net of tax	0.28		0.01		0.56			0.58
Adjusted diluted	$	1.78	$	2.24	$	2.74		$	7.50


Book value per share	As of
$ in millions, except per share amounts	June 30, 2020		September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021
Total equity attributable to Raymond James Financial, Inc.	$	6,965	$	7,114	$	7,363	$	7,592	$	7,863
Less non-GAAP adjustments:
Goodwill and identifiable intangible assets, net	602		600		834		868		862
Deferred tax liabilities, net	(33)		(34)		(56)		(56)		(56)
Tangible common equity attributable to Raymond James Financial, Inc.	$	6,396	$	6,548	$	6,585	$	6,780	$	7,057
Common shares outstanding	137.0		136.6		137.4		137.2		136.9
Book value per share (7)	$	50.84	$	52.08	$	53.59	$	55.34	$	57.44
Tangible book value per share (7)	$	46.69	$	47.94	$	47.93	$	49.42	$	51.55

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

RAYMOND JAMES FINANCIAL, INC.

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

(Continued from previous page)


Return on equity	Three months ended															Nine months ended
$ in millions	June 30, 2020			September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			June 30, 2020			June 30, 2021

Average equity (16)	$	6,882		$	7,040		$	7,239		$	7,478		$	7,728		$	6,797		$	7,483
Impact on average equity of non-GAAP adjustments:
Losses on extinguishment of debt (3)	NA			—			—			NA			49			NA			25
Acquisition and disposition-related expenses (4)	NA			4			1			NA			4			NA			2
Reduction in workforce expenses (5)	NA			23			—			NA			—			NA			—

Tax effect of non-GAAP adjustments	NA			(7)			—			NA			(13)			NA			(7)
Adjusted average equity (16)	NA			$	7,060		$	7,240		NA			$	7,768		NA			$	7,503

Average equity (16)	$	6,882		$	7,040		$	7,239		$	7,478		$	7,728		$	6,797		$	7,483
Less:
Average goodwill and identifiable intangible assets, net	603			601			717			851			865			606			791
Average deferred tax liabilities, net	(32)			(33)			(45)			(56)			(56)			(30)			(51)

Average tangible common equity (16)	$	6,311		$	6,472		$	6,567		$	6,683		$	6,919		$	6,221		$	6,743
Impact on average equity of non-GAAP adjustments:
Losses on extinguishment of debt (3)	NA			—			—			NA			49			NA			25
Acquisition and disposition-related expenses (4)	NA			4			1			NA			4			NA			2
Reduction in workforce expenses (5)	NA			23			—			NA			—			NA			—

Tax effect of non-GAAP adjustments	NA			(7)			—			NA			(13)			NA			(7)
Adjusted average tangible common equity (16)	NA			$	6,492		$	6,568		NA			$	6,959		NA			$	6,763

Return on equity (10)	10.0		%	11.9		%	17.2		%	19.0		%	15.9		%	11.9		%	17.4		%
Adjusted return on equity (10)	NA			14.1		%	17.3		%	NA			19.9		%	NA			18.7		%
Return on tangible common equity (10)	10.9		%	12.9		%	19.0		%	21.2		%	17.7		%	13.1		%	19.3		%
Adjusted return on tangible common equity (10)	NA			15.3		%	19.1		%	NA			22.2		%	NA			20.8		%

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

RAYMOND JAMES FINANCIAL, INC.

Footnotes


(1)						Other revenues included $1 million, $12 million, $24 million, $8 million, and $24 million of private equity gains for the three months ended June 30, 2020, September 30, 2020, December 31, 2020, March 31, 2021 and June 30, 2021, respectively, which were included in our Other segment. Of these amounts, an insignificant amount of the gains for the three months ended June 30, 2020, $3 million of the gains for the three months ended September 30, 2020, $10 million of the gains for the three months ended December 31, 2020, an insignificant amount of the gains for the three months ended March 31, 2021 and $10 million of the gains for the three months ended June 30, 2021 were attributable to noncontrolling interests and were offset in Other expenses. Other revenues included $40 million of private equity losses and $56 million of private equity gains for the nine months ended June 30, 2020 and 2021, respectively. Of these amounts, approximately $23 million of the losses for the nine months ended June 30, 2020, and $20 million of the gains for the nine months ended June 30, 2021 were attributable to noncontrolling interests and were offset in Other expenses.

(2)						The allowances for credit losses as of December 31, 2020, March 31, 2021, and June 30, 2021 were determined under the current expected credit loss (“CECL”) model as a result of our October 1, 2020 adoption of new accounting guidance related to the measurement of credit losses on financial instruments. The impact of adoption on October 1, 2020 resulted in an increase in our allowance for credit losses, including reserves for unfunded lending commitments, of approximately $45 million (primarily $25 million related to loans to financial advisors in the Private Client Group and approximately $10 million related to Bank loans outstanding) and a corresponding reduction in retained earnings of approximately $35 million, net of tax. The Bank loan provision/(benefit) for credit losses of $14 million, $(32) million and $(19) million for the three months ended December 31, 2020, March 31, 2021 and June 30, 2021, respectively, and $(37) million for the nine months ended June 30, 2021 were determined under the CECL model and represented the provision/(benefit) for credit losses post the CECL adoption date.

(3)						Losses on extinguishment of debt as presented in the Condensed Consolidated Statements of Income include make-whole premiums, the accelerated amortization of debt issuance costs, and certain legal and other professional fees associated with the redemptions of our $250 million of 5.625% senior notes due 2024 and our $500 million of 3.625% senior notes due 2026 which occurred during our fiscal third quarter of 2021.

(4)						The three months ended September 30, 2020 included a $7 million loss in our Capital Markets segment related to the sale of our interests in certain entities that operated predominantly in France, which closed during our fiscal first quarter of 2021. Acquisition-related expenses in our 2021 fiscal year primarily included professional and integration expenses associated with our acquisitions of NWPS Holdings, Inc. and Financo, which were completed in December 2020 and March 2021, respectively, and Cebile Capital, announced in May 2021, which were included in our Other segment. Acquisition-related expenses for the three and nine months ended June 30, 2021 also included amortization expense related to intangible assets with short-term useful lives associated with our Financo acquisition, which was included in our Capital Markets segment.

(5)						The reduction in workforce expenses for the three months ended September 30, 2020 were associated with position eliminations in response to the economic environment. These expenses were included in our Other segment and primarily consisted of severance and related payroll expenses, as well as expenses related to company-paid benefits.

(6)						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 common 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.

(7)						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.

(8)						These are non-GAAP financial measures. See the schedules on the previous pages for a reconciliation of 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 June 30, 2020 and March 31, 2021 and the nine months ended June 30, 2020; therefore percent changes for earnings-related non-GAAP financial measures are calculated based on non-GAAP financial measures for the current periods as compared to GAAP results for the comparative periods.

(9)						Estimated.

(10)						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.

(11)						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.

(12)						Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period.

(13)						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 the Private Client Group on Raymond James Bank deposits are eliminated in consolidation.

(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 balances at third-party banks.

(15)						The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, losses on extinguishment of debt, acquisition-related expenses, reduction in workforce expenses and certain corporate overhead costs of Raymond James Financial, Inc., including the interest costs on our public debt.

RAYMOND JAMES FINANCIAL, INC.



(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, average equity is computed by adding the total equity attributable to Raymond James Financial, Inc. as of each quarter-end date during the indicated period to the beginning of year total, and dividing by four, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated period to the beginning of year total, and dividing by four. 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.

Attached files

Stock widget

Investing forum

RAYMOND JAMES FINANCIAL INC Reports