3 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
−Removed: $ in millions, except per share amounts June 30, 2021 September 30, 2020
+Added: $ in millions, except per share amounts December 31, 2021 September 30, 2021
Cash and cash equivalents $ 8,216 $ 7,201
−Removed: Assets segregated pursuant to regulations ( $ 3,000 and $ 0 at fair value)
+Added: Assets segregated for regulatory purposes and restricted cash ( $ 9,599 and $ 2,100 at fair value)
+Added: 15,490 11,348
Collateralized agreements 347 480
8 unchanged sentences
Loans to financial advisors, net 1,108 1,057
−Removed: Property and equipment, net
Deferred income taxes, net
23 unchanged sentences
350,000,000 shares authorized;
−Removed: 159,303,913 and 159,007,158 shares issued as of June 30, 2021 and September 30, 2020, respectively, and 136,948,422 and 136,556,559 shares outstanding as of June 30, 2021 and September 30, 2020, respectively
+Added: 239,160,005 and 239,062,254 shares issued as of December 31, 2021 and September 30, 2021, respectively, and 207,465,632 and 205,738,821 shares outstanding as of December 31, 2021 and September 30, 2021, respectively
Additional paid-in capital 2,055 2,088
1 unchanged sentence
Treasury stock, at cost;
−Removed: 22,355,491 and 22,450,599 common shares as of June 30, 2021 and September 30, 2020, respectively
+Added: 31,694,373 and 33,323,433 common shares as of December 31, 2021 and September 30, 2021, respectively
( 1,373 ) ( 1,437 )
−Removed: Accumulated other comprehensive income/(loss) ( 10 ) 11
+Added: Accumulated other comprehensive loss ( 87 ) ( 41 )
Total equity attributable to Raymond James Financial, Inc.
6 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
in millions, except per share amounts 2021 2020
6 unchanged sentences
Investment banking
−Removed: 276 139 779 428
Interest income
−Removed: 205 217 608 799
Total revenues
−Removed: 2,511 1,876 7,180 6,047
Interest expense
( 37 ) ( 38 )
−Removed: 2,471 1,834 7,065 5,911
Non-interest expenses:
Compensation, commissions and benefits
−Removed: 1,661 1,277 4,809 4,050
Non-compensation expenses:
Communications and information processing
−Removed: 109 100 315 293
Occupancy and equipment
−Removed: 58 55 172 168
Business development
2 unchanged sentences
Bank loan provision/(benefit) for credit losses ( 11 ) 14
−Removed: Losses on extinguishment of debt 98 — 98 —
Acquisition-related expenses 6 2
−Removed: 81 55 220 167
Total non-compensation expenses 339 323
1 unchanged sentence
Pre-tax income
−Removed: 385 198 1,231 796
Provision for income taxes
−Removed: 78 26 257 187
−Removed: $ 307 $ 172 $ 974 $ 609
Earnings per common share – basic
3 unchanged sentences
Weighted-average common shares outstanding – basic
−Removed: 137.2 137.1 137.2 137.9
Weighted-average common and common equivalent shares outstanding – diluted
−Removed: 141.1 139.4 140.6 140.5
−Removed: $ 307 $ 172 $ 974 $ 609
Other comprehensive income/(loss), net of tax:
3 unchanged sentences
Cash flow hedges
−Removed: ( 2 ) ( 4 ) 22 ( 37 )
Total other comprehensive income/(loss), net of tax ( 46 ) 6
4 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions, except per share amounts 2021 2020
1 unchanged sentence
Balance beginning of period
−Removed: $ 2 $ 2 $ 2 $ 2
Share issuances
2 unchanged sentences
Balance beginning of period
−Removed: 1,953 2,007 1,938
Employee stock purchases
−Removed: Exercise of stock options and vesting of restricted stock units, net of forfeitures
−Removed: ( 3 ) ( 70 ) ( 74 )
−Removed: Restricted stock, stock option and restricted stock unit expense
+Added: Vesting of restricted stock units and exercise of stock options, net of forfeitures ( 105 )
+Added: Restricted stock unit and stock option expense 64
Balance end of period
−Removed: 2,060 1,984 2,060 1,984
Retained earnings:
Balance beginning of period
−Removed: 6,205 6,484 5,874
Cumulative adjustments for changes in accounting principles — ( 35 )
3 unchanged sentences
Balance end of period
−Removed: 7,257 6,326 7,257 6,326
Treasury stock:
3 unchanged sentences
( 10 ) ( 18 )
−Removed: Exercise of stock options and vesting of restricted stock units, net of forfeitures
+Added: Vesting of restricted stock units and exercise of stock options, net of forfeitures 74 54
Balance end of period
2 unchanged sentences
Balance beginning of period
−Removed: ( 38 ) ( 11 ) 11 ( 23 )
Other comprehensive income/(loss), net of tax ( 46 ) 6
Balance end of period
−Removed: ( 10 ) 1 ( 10 ) 1
Total equity attributable to Raymond James Financial, Inc.
2 unchanged sentences
Balance beginning of period
−Removed: $ 45 $ 36 $ 62 $ 62
−Removed: Net income/(loss) attributable to noncontrolling interests 12 ( 2 ) 24 ( 26 )
+Added: Net income attributable to noncontrolling interests 2 13
Other ( 8 ) —
6 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
3 unchanged sentences
Deferred income taxes 14 18
−Removed: Premium and discount amortization on available-for-sale securities and loss on other investments
+Added: Premium and discount amortization on available-for-sale securities and net (gain)/loss on other investments 14 ( 1 )
Provisions/(benefits) for credit losses and legal and regulatory proceedings ( 8 ) 16
1 unchanged sentence
Unrealized gain on company-owned life insurance policies, net of expenses ( 38 ) ( 83 )
−Removed: Losses on extinguishment of debt 98 —
+Added: Other ( 1 ) 22
Net change in:
−Removed: Assets segregated pursuant to regulations excluding cash and cash equivalents ( 3,000 ) —
+Added: Assets segregated for regulatory purposes excluding cash and cash equivalents ( 7,499 ) ( 2,749 )
Collateralized agreements, net of collateralized financings 125 ( 62 )
Loans provided to financial advisors, net of repayments ( 56 ) 5
−Removed: Brokerage client receivables and other accounts receivable, net
+Added: Brokerage client receivables and other receivables, net 197 254
Trading instruments, net 209 22
1 unchanged sentence
Other assets ( 431 ) ( 530 )
−Removed: Brokerage client payables and other accounts payable 4,673 1,621
+Added: Brokerage client payables and other payables 5,021 4,970
Accrued compensation, commissions and benefits ( 395 ) ( 253 )
Purchases and originations of loans held for sale, net of proceeds from sales of securitizations and loans held for sale ( 43 ) ( 86 )
−Removed: Net cash provided by operating activities 2,124 2,655
+Added: Net cash provided by/(used in) operating activities ( 2,287 ) 1,921
Cash flows from investing activities:
−Removed: Additions to property and equipment
−Removed: ( 99 ) ( 97 )
Increase in bank loans, net
6 unchanged sentences
Business acquisitions, net of cash acquired — ( 218 )
+Added: Additions to property and equipment
+Added: ( 19 ) ( 25 )
+Added: Investment in note receivable ( 125 ) —
Other investing activities, net ( 26 ) ( 12 )
4 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
Cash flows from financing activities:
−Removed: Proceeds from Federal Home Loan Bank advances — 850
−Removed: Repayments of Federal Home Loan Bank advances and other borrowed funds ( 29 ) ( 854 )
−Removed: Proceeds from senior notes issuances, net of debt issuance costs paid 737 494
−Removed: Extinguishment of senior notes payable ( 844 ) —
−Removed: Exercise of stock options and employee stock purchases 42 55
Increase in bank deposits 1,597 989
−Removed: Purchases of treasury stock ( 127 ) ( 222 )
+Added: Repurchases of common stock and share-based awards withheld for payment of withholding tax requirements ( 51 ) ( 35 )
Dividends on common stock ( 60 ) ( 55 )
+Added: Exercise of stock options and employee stock purchases 17 18
+Added: Repayments of Federal Home Loan Bank advances and other borrowed funds ( 1 ) ( 26 )
Other financing, net ( 5 ) —
2 unchanged sentences
Effect of exchange rate changes on cash 3 73
−Removed: Net increase in cash and cash equivalents, including those segregated pursuant to regulations 2,230 2,866
−Removed: Cash and cash equivalents, including those segregated pursuant to regulations at beginning of year 9,634 5,971
−Removed: Cash and cash equivalents, including those segregated pursuant to regulations at end of period $ 11,864 $ 8,837
+Added: Net increase/(decrease) in cash and cash equivalents, including those segregated for regulatory purposes and restricted cash ( 2,342 ) 1,762
+Added: Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at beginning of year 16,449 9,634
+Added: Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of period $ 14,107 $ 11,396
Cash and cash equivalents $ 8,216 $ 5,377
−Removed: Cash and cash equivalents segregated pursuant to regulations 5,882 3,205
−Removed: Total cash and cash equivalents, including those segregated pursuant to regulations at end of period $ 11,864 $ 8,837
+Added: Cash and cash equivalents segregated for regulatory purposes and restricted cash 5,891 6,019
+Added: Total cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of period $ 14,107 $ 11,396
Supplemental disclosures of cash flow information:
2 unchanged sentences
Cash outflows for lease liabilities $ 25 $ 27
−Removed: Non-cash right-of-use (“ROU”) assets recorded for new and modified leases $ 101 $ 60
+Added: Non-cash right-of-use assets recorded for new and modified leases $ 16 $ 50
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
2 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
−Removed: June 30, 2021
+Added: December 31, 2021
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Raymond James Financial, Inc.
−Removed: (“RJF,” the “firm” or the “Company”) is a financial holding company which, together with its subsidiaries, is engaged in various financial services activities, including providing investment management services to retail and institutional clients, the underwriting, distribution, trading and brokerage of equity and debt securities, and the sale of mutual funds and other investment products.
+Added: (“RJF” or the “firm”) is a financial holding company which, together with its subsidiaries, is engaged in various financial services activities, including providing investment management services to retail and institutional clients, merger & acquisition and advisory services, the underwriting, distribution, trading and brokerage of equity and debt securities, and the sale of mutual funds and other investment products.
The firm also provides corporate and retail banking services, and trust services.
8 unchanged sentences
All material intercompany balances and transactions have been eliminated in consolidation.
+Added: During our fiscal fourth quarter of 2021, our Board approved a three-for-two stock split, effected in the form of a 50 % stock dividend, paid on September 21, 2021.
+Added: All share and per share information has been retroactively adjusted to reflect this stock split.
Accounting estimates and assumptions
8 unchanged sentences
Certain prior-period amounts have been reclassified to conform to the current period’s presentation.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 2 – UPDATE OF SIGNIFICANT ACCOUNTING POLICIES
A summary of our significant accounting policies is included in Note 2 of our 2021 Form 10-K.
−Removed: During the nine months ended June 30, 2021, there were no significant changes to our significant accounting policies other than the accounting policies adopted or modified as part of our implementation of new or amended accounting guidance, as noted in the following sections.
−Removed: Accounting guidance adopted in fiscal 2021
−Removed: Credit losses
−Removed: In June 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance related to the measurement of credit losses on financial instruments (ASU 2016-13), which replaces the incurred credit loss and other models with the Current Expected Credit Losses (“CECL”) model.
−Removed: The guidance involves several aspects of the accounting for credit losses related to certain financial instruments, including assets measured at amortized cost, available-for-sale debt securities and certain off-balance sheet commitments.
−Removed: The new guidance, and subsequent updates, broadens the information that an entity must consider in developing its estimated credit losses expected to occur over the remaining life of in-scope financial assets.
−Removed: The measurement of expected credit losses includes historical experience, current conditions and reasonable and supportable economic forecasts.
−Removed: This new guidance was effective for our fiscal year beginning on October 1, 2020 and was adopted under a modified retrospective approach.
−Removed: The impact of adoption of this new standard resulted in an increase in our allowance for credit losses of $ 42 million (including $ 25 million related to loans to financial advisors, $ 9 million related to funded bank loans and $ 8 million related to unfunded lending commitments) and a corresponding reduction in the beginning balance of retained earnings of $ 35 million, net of tax.
−Removed: Prior-period amounts were calculated under the incurred loss model and have not been restated.
−Removed: See Notes 8 and 9 for further information related to bank loans and loans to financial advisors and the related allowances for credit losses.
−Removed: The following sections highlight changes to our accounting policies as a result of this adoption.
−Removed: Available-for-sale securities
−Removed: Available-for-sale securities are generally held by Raym ond James Bank and are classified at the date of purchase.
−Removed: They are comprised primarily of agency mortgage-backed securities (“MBS”) and agency collateralized mortgage obligations (“CMOs”), which are guaranteed by the U.S.
−Removed: government or its agencies.
−Removed: Available-for-sale securities owned by Raymond James Bank are used as part of its interest rate risk and liquidity management strategies and may be sold in response to changes in interest rates, changes in prepayment risks, or other factors.
−Removed: As a result of the adoption of the new CECL guidance, credit losses on available-for-sale securities are limited to the difference between the security’s amortized cost basis and its fair value and should be recognized through an allowance for credit losses rather than as a direct reduction in amortized cost basis.
−Removed: Given that our available-for-sale securities portfolio is comprised of government agency securities for which payments of both principal and interest are guaranteed, and based on the lack of historical credit losses, we expect zero credit losses on this portfolio and the related accrued interest receivable.
−Removed: On a quarterly basis, we reassess our expectation of zero credit losses to consider changes in the available-for-sale securities portfolio.
−Removed: Other receivables, net
−Removed: Other receivables primarily include receivables from brokers, dealers and clearing organizations, accrued interest receivables and accrued fees from product sponsors.
−Removed: Receivables from brokers, dealers and clearing organizations primarily consist of deposits placed with clearing organizations, which includes initial margin, and receivables related to sales of securities which have traded, but not yet settled including amounts receivable for securities failed to deliver.
−Removed: We present “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition, net of any allowance for credit losses.
−Removed: However, these receivables generally have minimal credit risk due to the low probability of clearing organization default and the short-term nature of receivables related to securities settlements and therefore, the allowance for credit losses on such receivables is not significant.
−Removed: Any allowance for credit losses for other receivables is estimated using assumptions based on historical experience, current facts and other factors.
−Removed: We update these estimates through periodic evaluations against actual trends experienced.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: As permitted under the CECL guidance, we include accrued interest receivables related to our financial assets in “Other receivables, net” on the Condensed Consolidated Statements of Financial Condition instead of with the related financial instrument.
−Removed: We reverse any uncollectible accrued interest into interest income generally when the related financial asset is moved to nonaccrual status.
−Removed: As we write off uncollectible amounts in a timely manner, we do not recognize an allowance for credit losses against accrued interest receivable.
−Removed: Loans to financial advisors, net
−Removed: We offer loans to financial advisors for recruiting and retention purposes.
−Removed: The decision to extend credit to a financial advisor or other key revenue producer is generally based on their ability to generate future revenues.
−Removed: Loans offered are generally repaid over a five to 10 year period, with interest recognized as earned, and are contingent upon affiliation with us.
−Removed: These loans are not assignable by the financial advisor and may only be assigned by us to a successor in interest.
−Removed: There is no fee income associated with these loans.
−Removed: In the event that the financial advisor is no longer affiliated with us, any unpaid balance of such loan becomes immediately due and payable to us.
−Removed: Based upon the nature of these financing receivables, affiliation status is the primary credit risk factor within this portfolio.
−Removed: We present the outstanding balance of loans to financial advisors on our Condensed Consolidated Statements of Financial Condition, net of the allowance for credit losses.
−Removed: Refer to the allowance for credit losses section that follows for further information related to our allowance for credit losses on our loans to financial advisors.
−Removed: See Note 9 for additional information on our loans to financial advisors.
−Removed: Loans to financial advisors are considered past due once they are 30 days or more delinquent as to the payment of contractual interest or principal.
−Removed: Loans are placed on nonaccrual status when we determine that full payment of contractual principal and interest is in doubt, or the loan is past due 180 days or more as to contractual interest or principal.
−Removed: When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is written-off against interest income.
−Removed: Interest is recognized on a cash basis until the loan qualifies for return to accrual status.
−Removed: Loans are returned to an accrual status when the loans have been brought contractually current with the original terms and have been maintained on a current basis for a reasonable period, generally six months.
−Removed: When we determine that it is likely a loan will not be collected in full, the loan is evaluated for a potential write down of the carrying value.
−Removed: After consideration of the borrower’s ability to restructure the loan, sources of repayment, and other factors affecting the borrower’s ability to repay the debt, the portion of the loan deemed a confirmed loss, if any, is charged-off.
−Removed: A charge-off is taken against the allowance for credit losses for the difference between the amortized cost and the amount we estimate will ultimately be collected.
−Removed: Additional charge-offs are taken if there is an adverse change in the expected cash flows.
−Removed: Allowance for credit losses
−Removed: We evaluate our held for investment bank loans, unfunded lending commitments, loans to financial advisors and certain other financial assets to estimate an allowance for credit losses over the remaining life of the financial instrument.
−Removed: The remaining life of our financial assets is determined by considering contractual terms and expected prepayments, among other factors.
−Removed: We employ multiple methodologies in estimating an allowance for credit losses and our approaches differ by type of financial asset and the risk characteristics within each financial asset type.
−Removed: Our estimates are based on ongoing evaluations of the portfolio, the related credit risk characteristics, and the overall economic and environmental conditions affecting the financial assets.
−Removed: For certain of our financial assets with collateral maintenance provisions (e.g., collateralized agreements, margin loans and securities-based loans), we apply the practical expedient allowed under the CECL model in estimating an allowance for credit losses.
−Removed: We reasonably expect that borrowers (or counterparties, as applicable) will replenish the collateral as required.
−Removed: As a result, we estimate zero credit losses to the extent that the fair value equals or exceeds the related carrying value of the financial asset.
−Removed: When the fair value of the collateral securing the financial asset is less than the carrying value, qualitative factors such as historical experience (adjusted for current risk characteristics and economic conditions) as well as reasonable and supportable forecasts are considered in estimating the allowance for credit losses on the unsecured portion of the financial asset.
−Removed: Credit losses are charged-off against the allowance when we believe the uncollectibility of the financial asset is confirmed.
−Removed: Subsequent recoveries, if any, are credited to the allowance once received.
−Removed: A credit loss expense, or benefit, is recorded in earnings in an amount necessary to adjust the allowance for credit losses to our estimate as of the end of each reporting period.
−Removed: Our provision or benefit for credit losses for outstanding bank loans is included in “Bank loan provision/(benefit) for credit losses” on our Condensed Consolidated Statements of Income and Comprehensive Income and our provision or benefit for credit losses for all other financing receivables and unfunded lending commitments is included in “Other” expense.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: We generally estimate the allowance for credit losses on our loan portfolios using credit risk models which incorporate relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable economic forecasts.
−Removed: After testing the reasonableness of a variety of economic forecast scenarios, we select a single forecast scenario for use in our models.
−Removed: Our forecasts incorporate assumptions related to macroeconomic indicators including, but not limited to, U.S.
−Removed: gross domestic product, equity market indices, unemployment rates, and commercial real estate and residential home price indices.
−Removed: At the conclusion of our reasonable and supportable forecast period, which currently ranges from two to three years depending on the model and macroeconomic variables, we use a straight-line reversion approach over a one-year period to revert to historical loss information for commercial and industrial (“C&I”), real estate investment trust (“REIT”) and tax-exempt loans.
−Removed: For commercial real estate (“CRE”) and residential mortgage loans, we incorporate a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the assets.
−Removed: The development of the forecast used for CRE and residential mortgage loans incorporates an assumption that each macroeconomic variable will revert to a long-term expectation starting in years two to three of the forecast and largely completing within the first five years of the forecast.
−Removed: We assess the length of the reasonable and supportable forecast period and the reversion period, our reversion approach, our economic forecasts and our methodology for estimating the historical loss information on a quarterly basis.
−Removed: The allowance for credit losses on loans is generally evaluated and measured on a collective basis, typically by loan portfolio segment, due to similar risk characteristics.
−Removed: When a loan does not share similar risk characteristics with other loans, the loan is evaluated for credit losses on an individual basis.
−Removed: Various risk characteristics are considered when determining whether the loan should be collectively evaluated including, but not limited to, financial asset type, internal risk ratings, collateral type, industry of the borrower, and historical or expected credit loss patterns.
−Removed: The allowance for credit losses on collectively evaluated loans is comprised of two components:
−Removed: (a) a quantitative allowance;
−Removed: and (b) a qualitative allowance, which is based on an analysis of model limitations and other factors not considered by the quantitative models.
−Removed: There are several factors considered in estimating the quantitative allowance for credit losses on collectively evaluated loans which generally include, but are not limited to, the internal risk rating, historical loss experience (including adjustments due to current risk characteristics and economic conditions), prepayments, borrower-controlled extensions, and expected recoveries.
−Removed: We use third-party data for historical information on collectively evaluated corporate loans (C&I, CRE and REIT loans) and residential mortgage loans.
−Removed: The qualitative portion of our allowance for credit losses includes certain factors that are not incorporated into the quantitative estimate and would generally require adjustments to the allowance for credit losses.
−Removed: These qualitative factors are intended to address developing trends related to each portfolio segment and would generally include, but are not limited to:
−Removed: changes in lending policies and procedures, including changes in underwriting standards and collection;
−Removed: our loan review process;
−Removed: volume and severity of delinquent loans;
−Removed: changes in the nature, volume and terms of loans;
−Removed: credit concentrations;
−Removed: changes in the value of underlying collateral;
−Removed: changes in legal and regulatory environments;
−Removed: and local, regional, national and international economic conditions.
−Removed: Held for investment bank loans
−Removed: The allowance for credit losses for the C&I, CRE (primarily loans that are secured by income-producing properties and commercial real estate construction loans), REIT (loans made to businesses that own or finance income-producing real estate), tax-exempt and residential mortgage portfolio segments is estimated using credit risk models that project a probability of default (“PD”), which is then multiplied by the loss given default (“LGD”) and the estimated exposure at default (“EAD”) at the loan-level for every period remaining in the loan’s expected life, including the maturity period.
−Removed: Historical data, combined with macroeconomic variables, are used in estimating the PD, LGD and EAD.
−Removed: Our credit risk models consider several factors when estimating the expected credit losses which may include, but are not limited to, financial performance and position, estimated prepayments, geographic location, industry or sector type, debt type, loan size, capital structure, initial risk levels and the economic outlook.
−Removed: Additional factors considered by the residential mortgage model include Fair Isaac Corporation (“FICO”) scores and loan-to-value (“LTV”) ratios.
+Added: There have been no significant changes in our significant accounting policies since September 30, 2021.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: We generally use one of two methods to measure the allowance for credit losses on individually evaluated loans.
−Removed: A discounted cash flow approach is used to estimate the allowance for credit losses on certain nonaccrual corporate loans and all troubled debt restructurings (“TDRs”) that are not collateral-dependent.
−Removed: For collateral-dependent loans and for instances where foreclosure is probable, we use an approach that considers the fair value of the collateral less selling costs when measuring the allowance for credit losses.
−Removed: A loan is collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the collateral.
−Removed: See Note 8 for further information about our bank loans, including credit quality indicators considered in developing the allowance for credit losses.
−Removed: Unfunded lending commitments
−Removed: We estimate credit losses on unfunded lending commitments using a methodology consistent with that used in the corresponding bank loan portfolio segment and also based on the expected funding probabilities for fully binding commitments.
−Removed: As a result, the allowance for credit losses for unfunded lending commitments will vary depending upon the mix of lending commitments and future funding expectations.
−Removed: All classes of individually evaluated unfunded lending commitments are analyzed in conjunction with the specific allowance process previously described.
−Removed: The allowance for credit losses related to unfunded lending commitments is included in “Other payables” on our Condensed Consolidated Statements of Financial Condition.
−Removed: Loans to financial advisors
−Removed: The allowance for credit losses on loans to financial advisors is estimated using credit risk models that incorporate average annual loan-level loss rates and estimated prepayments based on historical data.
−Removed: The qualitative component of our estimate considers internal and external factors that are not incorporated into the quantitative estimate such as the reasonable and supportable forecast period.
−Removed: In estimating an allowance for credit losses on our individually-evaluated loans to financial advisors, we generally take into account the affiliation status of the financial advisor (i.e., whether the advisor is actively affiliated with us or has terminated affiliation with us), the borrower’s ability to restructure the loan, sources of repayment, and other factors affecting the borrower’s ability to repay the debt.
NOTE 3 – ACQUISITIONS
−Removed: Acquisitions announced and completed during the nine months ended June 30, 2021
−Removed: In December 2020, we completed our acquisition of all of the outstanding shares of NWPS Holdings, Inc.
−Removed: and its wholly-owned subsidiaries (collectively “NWPS”), doing business as NWPS and Northwest Plan Services.
−Removed: As an independent provider of retirement plan administration, consulting, actuarial and administration services, the addition of NWPS expands our retirement services offerings, which now include retirement plan administration services, to advisors and clients.
−Removed: For purposes of certain acquisition-related financial reporting requirements, the NWPS acquisition was not considered a material acquisition.
−Removed: NWPS has been integrated into our Private Client Group (“PCG”) segment and its results of operations have been included in our results prospectively from the closing date of December 24, 2020.
−Removed: During the nine months ended June 30, 2021, the NWPS acquisition resulted in the addition of $ 139 million of goodwill and $ 96 million of identifiable intangible assets.
−Removed: The goodwill associated with this acquisition primarily represents synergies from combining NWPS with our existing businesses.
−Removed: The identifiable intangible assets primarily relate to client relationships and have a weighted-average useful life of 24.8 years.
−Removed: In March 2021, we completed our acquisition of all of the outstanding ownership interests of Financo, LLC and its subsidiaries (collectively “Financo”), an investment bank focused on the consumer sector.
−Removed: The addition of Financo expands our investment banking capabilities in the consumer and retail space, both domestically and internationally.
−Removed: For purposes of certain acquisition-related financial reporting requirements, the Financo acquisition was not considered a material acquisition.
−Removed: Financo has been integrated into our Capital Markets segment and its results of operations have been included in our results prospectively from the closing date of March 30, 2021.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: During the nine months ended June 30, 2021, the Financo acquisition resulted in the addition of $ 30 million of goodwill and $ 9 million of identifiable intangible assets.
−Removed: The goodwill associated with this acquisition primarily represents synergies from combining Financo with our existing businesses and is generally deductible for tax purposes over 15 years.
−Removed: The identifiable intangible assets primarily relate to client relationships and have a weighted-average useful life of 9 months.
−Removed: See Notes 2 and 10 of our 2020 Form 10-K and Note 11 of this Form 10-Q for additional information about our goodwill and identifiable intangible assets, including the related accounting policies.
−Removed: Acquisition announcements
−Removed: On May 25, 2021, we announced we had entered into a definitive agreement to acquire all of the outstanding shares of Cebile Capital (“Cebile”), a leading private fund placement agent and secondary market advisor to private equity firms.
−Removed: The addition of Cebile deepens our investment banking relationships with the private equity community and expands our related service offerings.
−Removed: For purposes of certain acquisition-related financial reporting requirements, the Cebile acquisition will not be considered a material acquisition.
−Removed: Cebile will operate within our Capital Markets segment upon closing of the acquisition, which we expect to occur during our fiscal fourth quarter of 2021 once all regulatory and other closing conditions are satisfactorily resolved.
+Added: Recent acquisition activities
Charles Stanley
−Removed: On July 29, 2021, we announced our firm intention to make an offer for the entire issued and to be issued share capital of United Kingdom (“U.K.”)-based Charles Stanley Group PLC (“Charles Stanley”) at a price of £ 5.15 per share, or approximately £ 279 million.
−Removed: The combination would provide us the opportunity to accelerate growth in the U.K.;
−Removed: and, through Charles Stanley’s multiple affiliation options, give us the ability to offer wealth management affiliation choices consistent with our model in Canada and the U.S.
−Removed: For purposes of certain acquisition-related financial reporting requirements, the Charles Stanley acquisition will not be considered a material acquisition.
−Removed: The transaction, subject to U.K.
−Removed: Financial Conduct Authority and Charles Stanley shareholder approval, is expected to close in our fiscal first quarter of 2022.
−Removed: Charles Stanley will operate within our PCG segment upon completion of the acquisition.
+Added: On January 21, 2022, we completed our acquisition of all of the outstanding share capital of United Kingdom (“U.K.”)-based Charles Stanley Group PLC (“Charles Stanley”) at a price of £ 5.15 per share, or £ 274 million ($ 372 million as of January 21, 2022).
+Added: As of December 31, 2021, we had segregated $ 385 million in cash to fund the acquisition on the closing date, which was included in “Assets segregated for regulatory purposes and restricted cash” on our Condensed Consolidated Statements of Financial Condition.
+Added: The acquisition enables us to accelerate our financial planning, investment advisory and securities transaction services growth in the U.K.
+Added: and, through Charles Stanley’s multiple affiliation options, gives us the ability to offer wealth management affiliation choices to financial advisors in the U.K.
+Added: consistent with our Private Client Group (“PCG”) model in the U.S.
+Added: For purposes of certain acquisition-related financial reporting requirements, the Charles Stanley acquisition is not considered a material acquisition.
+Added: Charles Stanley will be integrated into our PCG segment and its results of operations will be included in our results prospectively from the closing date of January 21, 2022.
+Added: TriState Capital
+Added: On October 20, 2021, we announced we had entered into a definitive agreement to acquire TriState Capital Holdings, Inc.
+Added: (“TriState Capital”) in a combination cash and stock transaction, valued at approximately $ 1.1 billion.
+Added: Under the terms of the agreement, TriState Capital common stockholders will receive $ 6.00 cash and 0.25 RJF shares for each share of TriState Capital common stock, which represents per share consideration of $ 31.09 based on the closing price of RJF common stock on October 19, 2021.
+Added: We have entered into an agreement with the sole holder of the TriState Capital Series C Perpetual Non-Cumulative Convertible Non-Voting Preferred Stock (“Series C Convertible Preferred Stock”) pursuant to which the Series C Convertible Preferred Stock will be converted to common shares at the prescribed exchange ratio and cashed out at $ 30 per share.
+Added: The TriState Capital Series A Non-Cumulative Perpetual Preferred Stock (“Series A Preferred Stock”) and Series B Non-Cumulative Perpetual Preferred Stock (“Series B Preferred Stock”) will remain outstanding and will be converted into equivalent preferred stock of RJF.
+Added: The transaction, which is subject to customary closing conditions, including regulatory approvals and approval by TriState Capital shareholders, is expected to close later in fiscal 2022.
+Added: We currently have the ability to utilize our cash on hand to fund the cash component of the acquisition.
+Added: TriState Capital offers private banking, commercial banking, and investment management products and services.
+Added: TriState Capital will continue to operate as a separately branded firm and as an independently-charted bank subsidiary upon closing of the acquisition.
+Added: On December 15, 2021, we loaned TriState Capital $ 125 million under an unsecured fixed-to-floating rate note (the “Note”).
+Added: The Note matures on December 15, 2024 and bears interest at a fixed annual rate of 2.25 % for the first year, and at a floating annual rate thereafter until maturity.
+Added: The floating rate resets quarterly to a rate equal to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 2.11 %.
+Added: The Note is not redeemable prior to December 15, 2022.
+Added: On and after December 15, 2022, the Note is redeemable on any interest payment date at 100 % of the principal amount thereof, plus accrued and unpaid interest to the redemption date.
+Added: As of December 31, 2021, the outstanding Note balance of $ 125 million and the related accrued interest was included in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.
Acquisition-related expenses
−Removed: Certain acquisition and integration costs associated with these acquisitions were included in “Acquisition-related expenses” during fiscal 2021 on our Condensed Consolidated Statements of Income and Comprehensive Income.
−Removed: Such costs primarily included legal and other professional fees and, with respect to Financo, amortization expense related to intangible assets with short useful lives.
+Added: Certain acquisition and integration costs associated with these acquisitions and acquisitions completed in our prior fiscal year were included in “Acquisition-related expenses” on our Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: Such costs primarily included legal and other professional fees and amortization expense related to identifiable intangible assets with short useful lives associated with our fiscal 2021 acquisitions of Financo LLC (“Financo”) and Cebile Capital (“Cebile”).
+Added: The following table details our acquisition-related expenses.
+Added: Three months ended December 31,
+Added: $ in millions 2021 2020
+Added: Acquisition-related expenses:
+Added: Legal fees $ 2 $ 1
+Added: Identifiable intangible asset amortization 4 —
+Added: Other professional fees — 1
+Added: Total Acquisition-related expenses $ 6 $ 2
RAYMOND JAMES FINANCIAL, INC.
2 unchanged sentences
NOTE 4 – FAIR VALUE
−Removed: Our “Financial instruments” and “Financial instrument liabilities” on our Condensed Consolidated Statements of Financial Condition are recorded at fair value under GAAP.
+Added: Our “Financial instruments” and “Financial instrument liabilities” on our Condensed Consolidated Statements of Financial Condition are recorded at fair value.
For further information about such instruments and our significant accounting policies related to fair value, see Notes 2 and 4 of our 2021 Form 10-K.
3 unchanged sentences
$ in millions Level 1 Level 2 Level 3 Netting
−Removed: adjustments Balance as of June 30, 2021
+Added: adjustments Balance as of December 31, 2021
Assets at fair value on a recurring basis:
−Removed: Assets segregated pursuant to regulations $ 3,000 $ — $ — $ — $ 3,000
+Added: Assets segregated for regulatory purposes (1)
+Added: $ 9,599 $ — $ — $ — $ 9,599
Trading assets:
2 unchanged sentences
Government and agency obligations 23 71 — — 94
−Removed: Agency MBS and agency CMOs — 122 — — 122
−Removed: Non-agency CMOs and asset-backed securities (“ABS”) — 17 — — 17
+Added: Agency mortgage-backed securities (“MBS”), collateralized mortgage obligations (“CMOs”) and asset-backed securities (“ABS”) — 89 — — 89
+Added: Non-agency CMOs and ABS — 27 — — 27
Total debt securities 34 318 — — 352
8 unchanged sentences
Interest rate - other 3 111 — ( 72 ) 42
−Removed: Foreign exchange — 7 — — 7
Other — — 1 — 1
11 unchanged sentences
Trading liabilities:
−Removed: Municipal and provincial obligations $ 2 $ — $ — $ — $ 2
Corporate obligations $ — $ 11 $ — $ — $ 11
6 unchanged sentences
Interest rate - other 2 101 — ( 74 ) 29
−Removed: Other — — 4 — 4
+Added: Foreign exchange — 32 — — 32
Total derivative liabilities 2 304 — ( 74 ) 232
6 unchanged sentences
Assets at fair value on a recurring basis:
+Added: Assets segregated for regulatory purposes (1)
+Added: $ 2,100 $ — $ — $ — $ 2,100
Trading assets:
4 unchanged sentences
15 94 — — 109
−Removed: Agency MBS and agency CMOs — 130 — — 130
+Added: Agency MBS, CMOs and ABS — 211 — — 211
Non-agency CMOs and ABS — 14 — — 14
9 unchanged sentences
Interest rate - other 16 128 — ( 87 ) 57
+Added: Foreign exchange — 5 — — 5
Total derivative assets 16 326 — ( 87 ) 255
2 unchanged sentences
Government and agency obligations (3)
−Removed: 103 — — — 103
Other 77 2 23 — 102
9 unchanged sentences
Government and agency obligations 137 — — — 137
−Removed: Non-agency CMOs and ABS — 2 — — 2
Total debt securities 139 6 — — 145
6 unchanged sentences
16 106 — ( 88 ) 34
−Removed: Foreign exchange
Total derivative liabilities 16 299 1 ( 88 ) 228
1 unchanged sentence
$ 183 $ 308 $ 1 $ ( 88 ) $ 404
+Added: (1) These assets consist of U.S.
+Added: Treasury securities (“U.S.
+Added: Treasuries”) with maturities greater than 3 months as of our date of purchase.
(2) Substantially all of our available-for-sale securities consist of agency MBS and agency CMOs.
1 unchanged sentence
(3) These assets are comprised of U.S.
−Removed: Treasuries purchased to meet certain deposit requirements with clearing organizations or to meet future customer reserve requirements.
+Added: Treasuries primarily purchased to meet certain deposit requirements with clearing organizations or to meet future broker-dealer customer reserve requirements.
RAYMOND JAMES FINANCIAL, INC.
4 unchanged sentences
The realized and unrealized gains and losses in the tables may include changes in fair value that were attributable to both observable and unobservable inputs.
−Removed: In the following tables, gains/(losses) on trading instruments are reported in “Principal transactions” and gains/(losses) on other investments are reported in “Other” revenues.
−Removed: Three months ended June 30, 2021
−Removed: Level 3 instruments at fair value
−Removed: Financial assets Financial liabilities
−Removed: Trading assets Derivative assets Other investments Trading liabilities Derivative liabilities
−Removed: $ in millions Other Other Private equity investments All other Other Other
−Removed: Fair value beginning of period
−Removed: $ 5 $ — $ 52 $ 23 $ ( 1 ) $ ( 4 )
−Removed: Total gains/(losses) included in earnings
−Removed: Purchases and contributions
−Removed: Sales and distributions
−Removed: ( 5 ) — — — — —
−Removed: Into Level 3 — — — — — —
−Removed: Out of Level 3 — — — — — —
−Removed: Fair value end of period
−Removed: $ 10 $ 1 $ 66 $ 23 $ — $ ( 4 )
−Removed: Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period
−Removed: $ — $ 1 $ 14 $ — $ — $ —
−Removed: Nine Months Ended June 30, 2021
+Added: In the following tables, gains/(losses) on trading instruments are reported in “Principal transactions” and gains/(losses) on other investments are reported in “Other” revenues on our Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: Three months ended December 31, 2021
Level 3 instruments at fair value
Financial assets Financial liabilities
−Removed: Trading assets Derivative assets Other investments Trading liabilities Derivative liabilities
−Removed: $ in millions Other Other Private equity investments All other Other Other
+Added: Trading assets Derivative assets Other investments Derivative liabilities
+Added: $ in millions Other Other Private equity investments All other Other
Fair value beginning of period
$ 14 $ — $ 75 $ 23 $ ( 1 )
−Removed: Total gains/(losses) included in earnings
+Added: Total gains included in earnings 2 1 — — 1
Purchases and contributions
7 unchanged sentences
$ ( 1 ) $ 2 $ — $ — $ —
−Removed: The net unrealized gains included in earnings on our Level 3 private equity investments for the three and nine months ended June 30, 2021 primarily reflected the impact of continued improvement in market conditions and an improved outlook for certain of our investments.
−Removed: Of these gains, $ 9 million and $ 18 million were attributable to noncontrolling interests, which are reflected as an offset in “Other” expenses on our Condensed Consolidated Statements of Income and Comprehensive Income.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: Three months ended June 30, 2020
−Removed: Level 3 instruments at fair value
−Removed: Financial assets Financial liabilities
−Removed: Trading assets Other investments Trading liabilities
−Removed: $ in millions Other Private equity investments All other Other
−Removed: Fair value beginning of period
−Removed: $ 21 $ 30 $ 22 $ —
−Removed: Total gains/(losses) included in earnings
−Removed: Purchases and contributions
−Removed: Sales and distributions
−Removed: Into Level 3 — — — —
−Removed: Out of Level 3 — — — —
−Removed: Fair value end of period
−Removed: $ 15 $ 30 $ 22 $ —
−Removed: Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period
−Removed: $ 2 $ — $ — $ —
−Removed: Nine Months Ended June 30, 2020
+Added: Three months ended December 31, 2020
Level 3 instruments at fair value
Financial assets Financial liabilities
−Removed: Trading assets Other investments Trading liabilities
+Added: Trading assets Other investments Derivative liabilities
$ in millions Other Private equity investments All other Other
2 unchanged sentences
Total gains/(losses) included in earnings
−Removed: ( 2 ) ( 32 ) ( 2 ) —
Purchases and contributions
Sales and distributions
−Removed: ( 50 ) ( 1 ) — ( 1 )
Into Level 3 — — — —
4 unchanged sentences
$ 3 $ 15 $ — $ 3
−Removed: The net unrealized losses on our Level 3 private equity investments for the nine months ended June 30, 2020 were primarily driven by the then anticipated negative impact of the coronavirus (“COVID-19”) pandemic on certain of our investments.
−Removed: Of these losses, $ 20 million were attributable to noncontrolling interests, which are reflected as an offset in “Other” expenses on our Condensed Consolidated Statements of Income and Comprehensive Income.
−Removed: As of June 30, 2021, 22 % of our assets and 1 % of our liabilities were measured at fair value on a recurring basis.
−Removed: In comparison, as of September 30, 2020, 19 % of our assets and 2 % of our liabilities were measured at fair value on a recurring basis.
−Removed: The increase in assets measured at fair value on a recurring basis as a percentage of total assets was primarily due to a significant increase in assets segregated pursuant to regulations at fair value during fiscal 2021, driven by a significant increase in client cash balances.
−Removed: As of both June 30, 2021 and September 30, 2020, Level 3 assets represented less than 1 % of our assets measured at fair value on a recurring basis.
+Added: As of December 31, 2021, 28 % of our assets and less than 1 % of our liabilities were measured at fair value on a recurring basis.
+Added: In comparison, as of September 30, 2021, 19 % of our assets and less than 1 % of our liabilities were measured at fair value on a recurring basis.
+Added: The increase in assets measured at fair value on a recurring basis as a percentage of total assets was primarily due to a significant increase in assets segregated for regulatory purposes, driven by a significant increase in client cash balances.
+Added: As of both December 31, 2021 and September 30, 2021, Level 3 assets represented less than 1 % of our assets measured at fair value on a recurring basis.
RAYMOND JAMES FINANCIAL, INC.
9 unchanged sentences
$ in millions
−Removed: Fair value at June 30, 2021
+Added: Fair value at December 31, 2021
Valuation technique(s) Unobservable input Range
2 unchanged sentences
$ 75 Discounted cash flow, transaction price or other investment-specific events Discount rate 25 %
+Added: Terminal earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiple 10.0 x
Terminal year 2023 - 2035 (2024)
2 unchanged sentences
$ 75 Discounted cash flow, transaction price or other investment-specific events Discount rate 25 %
−Removed: Terminal earnings before interest, tax, depreciation and amortization (“EBITDA”) multiple 9.0 x
+Added: Terminal EBITDA multiple 10.0 x
Terminal year 2023 - 2035 (2024)
7 unchanged sentences
We utilize NAV when the fund investment does not have a readily determinable fair value and the NAV of the fund is calculated in a manner consistent with the measurement principles of investment company accounting, including measurement of the investments at fair value.
−Removed: Our private equity portfolio as of June 30, 2021 includes various direct investments, as well as investments in third-party private equity funds and various legacy private equity funds which we sponsor.
+Added: Our private equity portfolio as of December 31, 2021 included various direct investments, as well as investments in third-party private equity funds.
The portfolio is primarily invested in a broad range of strategies including leveraged buyouts, growth capital, distressed capital, venture capital and mezzanine capital.
6 unchanged sentences
$ in millions Recorded value Unfunded commitment
−Removed: June 30, 2021
+Added: December 31, 2021
Private equity investments measured at NAV $ 82 $ 8
5 unchanged sentences
Total private equity investments $ 169
−Removed: Of the total private equity investments, the portions we owned were $ 115 million and $ 90 million as of June 30, 2021 and September 30, 2020, respectively.
−Removed: The portions of the private equity investments we did not own were $ 44 million and $ 26 million as of June 30, 2021 and September 30, 2020, respectively, and were included as a component of noncontrolling interests on our Condensed Consolidated Statements of Financial Condition.
+Added: Of the total private equity investments, the portions we owned were $ 115 million and $ 120 million as of December 31, 2021 and September 30, 2021, respectively.
+Added: The portions of the private equity investments we did not own were $ 42 million and $ 49 million as of December 31, 2021 and September 30, 2021, respectively, and were included as a component of noncontrolling interests on our Condensed Consolidated Statements of Financial Condition.
As a financial holding company, we are subject to holding period limitations for our merchant banking activities.
−Removed: As a result, we will be required to exit certain of our private equity investments by February 2022.
−Removed: Additionally, many of our private equity fund investments meet the definition of prohibited covered funds as defined by the Volcker Rule enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”).
+Added: Additionally, many of our private equity fund investments meet the definition of prohibited covered funds as defined by the Volcker Rule enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).
We have received approval from the Board of Governors of the Federal Reserve System (“the Fed”) to continue to hold the majority of our covered fund investments until July 2022.
+Added: As a result of our holding period limitations, we have continued to exit or restructure certain of our private equity investments and will continue to do so during the remainder of fiscal 2022 in accordance with our regulatory deadlines.
Financial instruments measured at fair value on a nonrecurring basis
4 unchanged sentences
(weighted-average)
−Removed: June 30, 2021
+Added: December 31, 2021
Residential mortgage loans $ 3 $ 10 $ 13 Collateral or discounted cash flow (1)
11 unchanged sentences
Loans held for sale $ 29 $ — $ 29 N/A N/A N/A
−Removed: Other assets:
−Removed: other real estate owned $ 1 $ — $ 1 N/A N/A N/A
(1) The valuation techniques used to estimate the fair values are based on collateral value less selling costs for the collateral-dependent loans and discounted cash flows for loans that are not collateral-dependent.
4 unchanged sentences
Many, but not all, of the financial instruments we hold were recorded at fair value on the Condensed Consolidated Statements of Financial Condition.
−Removed: The following table presents the estimated fair value and fair value hierarchy of financial assets and liabilities that are not recorded at fair value in accordance with GAAP on the Condensed Consolidated Statements of Financial Condition at June 30, 2021 and September 30, 2020.
+Added: The following table presents the estimated fair value and fair value hierarchy of financial assets and liabilities that are not recorded at fair value on the Condensed Consolidated Statements of Financial Condition at December 31, 2021 and September 30, 2021.
This table excludes financial instruments that are carried at amounts which approximate fair value.
1 unchanged sentence
$ in millions Level 2 Level 3 Total estimated fair value Carrying amount
−Removed: June 30, 2021
+Added: December 31, 2021
Financial assets:
13 unchanged sentences
Available-for-sale securities are primarily comprised of agency MBS and agency CMOs owned by Raymond James Bank.
−Removed: As of October 1, 2020, we adopted new accounting guidance related to the measurement of credit losses on financial instruments, including available-for-sale securities.
−Removed: Refer to Note 2 for further information about this guidance and a discussion of our available-for-sale securities.
+Added: Refer to Note 2 of our 2021 Form 10-K for a discussion of our accounting policies applicable to our available-for-sale securities.
The following table details the amortized costs and fair values of our available-for-sale securities.
2 unchanged sentences
unrealized losses Fair value
−Removed: June 30, 2021
+Added: December 31, 2021
Agency residential MBS
15 unchanged sentences
$ 8,322 $ 62 $ ( 69 ) $ 8,315
−Removed: The amortized costs and fair values in the preceding table exclude $ 14 million and $ 15 million of accrued interest on available-for-sale securities as of June 30, 2021 and September 30, 2020, respectively, which was included in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.
+Added: The amortized costs and fair values in the preceding table exclude $ 14 million of accrued interest on available-for-sale securities as of both December 31, 2021 and September 30, 2021, which was included in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.
See Note 4 for additional information regarding the fair value of available-for-sale securities.
4 unchanged sentences
Since our MBS and CMO available-for-sale securities are backed by mortgages, actual maturities may differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment penalties.
−Removed: As a result, as of June 30, 2021, the weighted-average life of our available-for-sale securities portfolio was approximately 4 years.
−Removed: June 30, 2021
+Added: As a result, as of December 31, 2021, the weighted-average life of our available-for-sale securities portfolio was approximately four years .
+Added: December 31, 2021
$ in millions Within one year After one but
35 unchanged sentences
fair value Unrealized
−Removed: June 30, 2021
+Added: December 31, 2021
Agency residential MBS
11 unchanged sentences
918 ( 12 ) 231 ( 4 ) 1,149 ( 16 )
+Added: Other securities
$ 4,721 $ ( 50 ) $ 602 $ ( 19 ) $ 5,323 $ ( 69 )
1 unchanged sentence
government or its agencies.
−Removed: At June 30, 2021, of the 208 available-for-sale securities in an unrealized loss position, 205 were in a continuous unrealized loss position for less than 12 months and three securities were in a continuous unrealized loss position for greater than 12 months.
+Added: At December 31, 2021, of the 392 available-for-sale securities in an unrealized loss position, 315 were in a continuous unrealized loss position for less than 12 months and 77 securities were in a continuous unrealized loss position for greater than 12 months.
We do not consider unrealized losses associated with these securities to be credit losses due to the guarantee of the full payment of principal and interest, and the fact that we have the ability and intent to hold these securities.
In addition, unrealized losses related to these available-for-sale securities are generally due to changes in market interest rates.
−Removed: At June 30, 2021, based on our assessment of this portfolio, we did not recognize an allowance for credit losses on our available-for-sale securities.
−Removed: At June 30, 2021, debt securities we held in excess of ten percent of our equity included those issued by the Federal National Home Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) with amortized costs of $ 4.84 billion and $ 2.79 billion, respectively, which also approximated the fair values of the securities.
−Removed: During the three and nine months ended June 30, 2021, we received proceeds of $ 450 million and $ 969 million, respectively, from the sales of agency MBS and agency CMO available-for-sale securities.
−Removed: During the three and nine months ended June 30, 2020, we received proceeds of $ 222 million from sales of available-for-sale securities.
−Removed: These sales resulted in insignificant
+Added: At December 31, 2021, based on our assessment of this portfolio, we did not recognize an allowance for credit losses on our available-for-sale securities.
+Added: At December 31, 2021, debt securities we held in excess of ten percent of our equity included those issued by the Federal National Home Mortgage Association and Federal Home Loan Mortgage Corporation with amortized costs of $ 5.47 billion and $ 2.93 billion, respectively, which also approximated the fair values of the securities.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: gains in each period, which were included in “Other” revenues on our Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: During the three months ended December 31, 2021, there were no sales of available-for-sale securities.
+Added: During the three months ended December 31, 2020, we received proceeds of $ 519 million, resulting in an insignificant gain, from the sales of agency MBS and agency CMO available-for-sale securities.
+Added: The gain that resulted from the sales was included in “Other” revenues on our Condensed Consolidated Statements of Income and Comprehensive Income.
NOTE 6 – DERIVATIVE ASSETS AND DERIVATIVE LIABILITIES
4 unchanged sentences
The following table presents the gross fair values and notional amounts of derivatives by product type, the amounts of counterparty and cash collateral netting on our Condensed Consolidated Statements of Financial Condition, as well as collateral posted and received under credit support agreements that do not meet the criteria for netting under GAAP.
−Removed: June 30, 2021 September 30, 2020
+Added: December 31, 2021 September 30, 2021
$ in millions Derivative assets Derivative liabilities Notional amount Derivative assets Derivative liabilities Notional amount
26 unchanged sentences
$ 33 $ 61 $ 50 $ 35
−Removed: (1) Substantially all relates to interest rate derivatives entered into as part of our fixed income business operations, including to-be-announced (“TBA”) security contracts that are accounted for as derivatives.
+Added: (1) Substantially all relates to interest rate derivatives entered into as part of our fixed income business operations, including to-be-announced security contracts (“TBAs”) that are accounted for as derivatives.
(2) Although the matched book derivative arrangements do not meet the definition of a master netting arrangement as specified by GAAP, the agreement with the third-party intermediary includes terms that are similar to a master netting agreement.
As a result, we present the matched book amounts net in the preceding table.
−Removed: The following table details the gains/(losses) included in accumulated other comprehensive income (“AOCI”), net of income taxes, on derivatives designated as hedging instruments.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
+Added: The following table details the gains/(losses) included in accumulated other comprehensive income/(loss) (“AOCI”), net of income taxes, on derivatives designated as hedging instruments.
These gains/(losses) included any amounts reclassified from AOCI to net income during the period.
See Note 16 for additional information.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
2 unchanged sentences
Total gains/(losses) in AOCI, net of taxes $ 8 $ ( 24 )
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for each of the three and nine months ended June 30, 2021 and 2020.
+Added: There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for each of the three months ended December 31, 2021 and 2020.
We expect to reclassify $ 13 million of interest expense out of AOCI and into earnings within the next 12 months.
1 unchanged sentence
The following table details the gains/(losses) on derivatives not designated as hedging instruments recognized on the Condensed Consolidated Statements of Income and Comprehensive Income.
−Removed: $ in millions Three months ended June 30, Nine months ended June 30,
+Added: $ in millions Three months ended December 31,
Location of gain/(loss) 2021 2020
3 unchanged sentences
Other Principal transactions $ 3 $ 4
−Removed: Other Compensation, commissions and benefits expense $ — $ — $ — $ ( 1 )
Risks associated with our derivatives and related risk mitigation
We are exposed to credit losses in the event of nonperformance by the counterparties to derivatives that are not cleared through a clearing organization.
−Removed: Where we are subject to credit exposure, we perform a credit evaluation of counterparties prior to entering into derivative transactions and we monitor their credit standings.
+Added: Where we are subject to credit exposure, we perform a credit evaluation of counterparties prior to entering into derivative transactions and we continue to monitor their credit standings on an ongoing basis.
We may require initial margin or collateral from counterparties in the form of cash or other marketable securities to support certain of these obligations as established by the credit threshold specified by the agreement and/or as a result of monitoring the credit standing of the counterparties.
−Removed: Our only exposure to credit risk on matched book derivatives is related to our uncollected derivative transaction fee revenues, which were insignificant as of both June 30, 2021 and September 30, 2020.
+Added: Our only exposure to credit risk on matched book derivatives is related to our uncollected derivative transaction fee revenues, which were insignificant as of both December 31, 2021 and September 30, 2021.
We are not exposed to market risk on these derivatives due to the pass-through transaction structure described in Note 2 of our 2021 Form 10-K.
3 unchanged sentences
On a daily basis, we monitor our risk exposure on our derivatives based on established limits with respect to a number of factors, including interest rate, foreign exchange spot and forward rates, spread, ratio, basis and volatility risks, both for the total portfolio and by maturity period.
+Added: Derivatives with credit-risk-related contingent features
+Added: Certain of our derivative contracts contain provisions that require our debt to maintain an investment-grade rating from one or more of the major credit rating agencies.
+Added: If our debt were to fall below investment-grade, the counterparties to the derivative instruments could terminate the derivative and request immediate payment, or demand immediate and ongoing overnight collateralization on our derivative instruments in liability positions.
+Added: The aggregate fair value of all derivative instruments with such credit-risk-related contingent features that were in a liability position was $ 14 million as of December 31, 2021 and was insignificant as of September 30, 2021.
RAYMOND JAMES FINANCIAL, INC.
11 unchanged sentences
$ in millions Reverse repurchase agreements Securities borrowed Total Repurchase agreements Securities loaned Total
−Removed: June 30, 2021
+Added: December 31, 2021
Gross amounts of recognized assets/liabilities $ 204 $ 143 $ 347 $ 203 $ 65 $ 268
11 unchanged sentences
Collateral received and pledged
−Removed: We receive cash and securities as collateral, primarily in connection with reverse repurchase agreements, securities borrowed, derivative transactions and client margin loans.
+Added: We receive cash and securities as collateral, primarily in connection with reverse repurchase agreements, securities borrowing agreements, derivative transactions and client margin loans.
The collateral we receive reduces our credit exposure to individual counterparties.
4 unchanged sentences
The following table presents financial instruments at fair value that we received as collateral, were not included on our Condensed Consolidated Statements of Financial Condition, and that were available to be delivered or repledged, along with the balances of such instruments that were delivered or repledged, to satisfy one of our purposes previously described.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Collateral we received that was available to be delivered or repledged $ 3,548 $ 3,429
3 unchanged sentences
The following table presents information about our assets that have been pledged for one of the purposes previously described.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Had the right to deliver or repledge $ 333 $ 368
4 unchanged sentences
$ in millions Overnight and continuous Up to 30 days 30-90 days Greater than 90 days Total
−Removed: June 30, 2021
+Added: December 31, 2021
Repurchase agreements:
15 unchanged sentences
Total collateralized financings $ 277 $ — $ — $ — $ 277
−Removed: As of both June 30, 2021 and September 30, 2020, we did not have any “repurchase-to-maturity” agreements, which are repurchase agreements where a security is transferred under an agreement to repurchase and the maturity date of the repurchase agreement matches the maturity date of the underlying security.
+Added: As of both December 31, 2021 and September 30, 2021, we did not have any “repurchase-to-maturity” agreements, which are repurchase agreements where a security is transferred under an agreement to repurchase and the maturity date of the repurchase agreement matches the maturity date of the underlying security.
RAYMOND JAMES FINANCIAL, INC.
2 unchanged sentences
NOTE 8 – BANK LOANS, NET
−Removed: Bank client receivables are comprised of loans originated or purchased by Raymond James Bank and include C&I loans, REIT loans, tax-exempt loans, commercial and residential real estate loans, and SBL and other loans.
+Added: Bank client receivables are comprised of loans originated or purchased by Raymond James Bank and include commercial and industrial (“C&I”) loans, real estate investment trust (“REIT”) loans, tax-exempt loans, commercial and residential real estate loans, and securities-based loans (“SBL”) and other loans.
These receivables are collateralized by first and, to a lesser extent, second mortgages on residential or other real property, other assets of the borrower, a pledge of revenue, securities or are unsecured.
−Removed: See Note 2 of our 2020 Form 10-K for a discussion of accounting policies related to bank loans.
−Removed: As of October 1, 2020, we adopted new accounting guidance related to the measurement of credit losses on financial instruments.
−Removed: See Note 2 for further information about this guidance and a discussion of our accounting policies related to our allowance for credit losses.
We segregate our loan portfolio into six loan portfolio segments:
−Removed: C&I, CRE, REIT, tax-exempt, residential mortgage, and SBL and other.
−Removed: Upon adoption, we redefined certain of our portfolio segments to align with the new methodology applied in determining the allowance for credit losses.
−Removed: Prior-period loan portfolio segment balances have been revised to conform to the current presentation.
+Added: C&I, commercial real estate (“CRE”), REIT, tax-exempt, residential mortgage, and SBL and other.
+Added: See Note 2 of our 2021 Form 10-K for a discussion of our October 1, 2020 adoption of new accounting guidance related to the measurement of credit losses on financial instruments and our accounting policies related to bank loans and the allowance for credit losses.
Loan balances in the following tables are presented at amortized cost (outstanding principal balance net of unearned income and deferred expenses, which include purchase premiums, purchase discounts and net deferred origination fees and costs), except for certain held for sale loans recorded at fair value.
1 unchanged sentence
The following table presents the balances for both the held for sale and held for investment loan portfolios, as well as the associated percentage of each portfolio segment in Raymond James Bank’s total loan portfolio.
−Removed: June 30, 2021 September 30, 2020
+Added: December 31, 2021 September 30, 2021
$ in millions Balance % Balance %
11 unchanged sentences
Accrued interest receivable on bank loans $ 51 $ 48
−Removed: The allowance for credit losses as of June 30, 2021 was determined using the new CECL methodology, which was adopted on October 1, 2020.
−Removed: Prior periods have not been restated and were calculated under the incurred loss methodology.
+Added: The allowance for credit losses was 1.18 % and 1.27 % of the held for investment loan portfolio as of December 31, 2021 and September 30, 2021, respectively.
Accrued interest receivables presented in the preceding table are reported in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.
−Removed: At June 30, 2021, the FHLB had a blanket lien on Raymond James Bank’s residential mortgage loan portfolio as security for the repayment of certain borrowings.
+Added: At December 31, 2021, the FHLB had a blanket lien on Raymond James Bank’s residential mortgage loan portfolio as security for the repayment of certain borrowings.
See Note 16 of our 2021 Form 10-K for more information regarding borrowings from the FHLB.
Held for sale loans
−Removed: Raymond James Bank originated or purchased $ 385 million and $ 1.50 billion of loans held for sale during the three and nine months ended June 30, 2021, respectively, and $ 185 million and $ 1.33 billion during the three and nine months ended June 30, 2020, respectively.
−Removed: Proceeds from the sale of these held for sale loans amounted to $ 230 million and $ 625 million during the three and nine months ended June 30, 2021, respectively, and $ 130 million and $ 564 million during the three and nine months ended June 30, 2020, respectively.
−Removed: Net gains resulting from such sales were insignificant in all periods during the three and nine months ended June 30, 2021 and 2020.
+Added: Raymond James Bank originated or purchased $ 968 million and $ 582 million of loans held for sale during the three months ended December 31, 2021 and 2020, respectively.
+Added: The majority of these loans were purchases of the guaranteed portions of Small Business Administration (“SBA”) loans intended for resale in the secondary market as individual SBA loans or as securitized pools of SBA loans.
+Added: Proceeds from the sales of these held for sale loans amounted to $ 338 million and $ 188 million during the three months ended December 31, 2021 and 2020, respectively.
+Added: Net gains resulting from such sales were insignificant for each of the three months ended December 31, 2021 and 2020.
RAYMOND JAMES FINANCIAL, INC.
3 unchanged sentences
The following table presents purchases and sales of loans held for investment by portfolio segment.
−Removed: $ in millions C&I loans CRE loans Residential mortgage loans Total
−Removed: Three months ended June 30, 2021
−Removed: Purchases $ 381 $ — $ 190 $ 571
−Removed: Sales $ 116 $ — $ — $ 116
−Removed: Nine months ended June 30, 2021
−Removed: Purchases $ 1,041 $ — $ 350 $ 1,391
−Removed: Sales $ 216 $ — $ — $ 216
−Removed: Three months ended June 30, 2020
+Added: $ in millions C&I loans Residential mortgage loans Total
+Added: Three months ended December 31, 2021
Purchases $ 339 $ 184 $ 523
Sales $ 51 $ — $ 51
−Removed: Nine months ended June 30, 2020
+Added: Three months ended December 31, 2020
Purchases $ 122 $ 46 $ 168
5 unchanged sentences
$ in millions 30-89 days and accruing 90 days or more and accruing Total past due and accruing Nonaccrual with allowance Nonaccrual with no allowance Current and accruing Total loans held for investment
−Removed: June 30, 2021
+Added: December 31, 2021
C&I loans $ — $ — $ — $ 38 $ — $ 8,570 $ 8,608
13 unchanged sentences
Total loans held for investment $ 2 $ — $ 2 $ 41 $ 33 $ 25,093 $ 25,169
−Removed: The preceding table includes $ 28 million and $ 15 million at June 30, 2021 and September 30, 2020, respectively, of nonaccrual loans which were current pursuant to their contractual terms.
−Removed: The table also includes TDRs of $ 13 million for both CRE and residential first mortgage loans at June 30, 2021, and $ 6 million and $ 15 million, respectively, at September 30, 2020.
−Removed: Other real estate owned, included in “Other assets” on our Condensed Consolidated Statements of Financial Condition, was insignificant at both June 30, 2021 and September 30, 2020.
+Added: The preceding table includes $ 59 million and $ 61 million at December 31, 2021 and September 30, 2021, respectively, of nonaccrual loans which were current pursuant to their contractual terms.
+Added: The table also includes troubled debt restructurings (“TDRs”) of $ 12 million for CRE loans and $ 13 million for residential first mortgage loans at both December 31, 2021 and September 30, 2021.
+Added: Other real estate owned, included in “Other assets” on our Condensed Consolidated Statements of Financial Condition, was insignificant at both December 31, 2021 and September 30, 2021.
RAYMOND JAMES FINANCIAL, INC.
3 unchanged sentences
A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the underlying collateral.
−Removed: At June 30, 2021, we had $ 27 million of collateral-dependent CRE loans, which were fully collateralized by retail and industrial real estate, and $ 8 million of collateral-dependent residential loans, which were fully collateralized by single family homes.
−Removed: Collateral-dependent loans do not include loans to borrowers who have been granted forbearance as result of the COVID-19 pandemic or loans for which the borrower had requested a loan modification, where the request had been initiated but had not been approved or completed as of the end of the quarter.
+Added: We had $ 20 million of collateral-dependent CRE loans at both December 31, 2021 and September 30, 2021, which were fully collateralized by retail and industrial real estate.
+Added: We had $ 7 million and $ 5 million of collateral-dependent residential loans at December 31, 2021 and September 30, 2021, respectively, which were fully collateralized by single family homes.
+Added: Collateral-dependent loans do not include loans to borrowers who have been granted forbearance as result of the COVID-19 pandemic or loans for which the borrower had requested a loan modification, where the request had been initiated but had not been approved or completed as of December 31, 2021.
Such loans may be considered collateral-dependent after the forbearance period expires.
−Removed: The recorded investment in mortgage loans secured by one-to-four family residential properties for which formal foreclosure proceedings were in process was $ 4 million and $ 6 million at June 30, 2021 and September 30, 2020, respectively.
+Added: The recorded investment in mortgage loans secured by one-to-four family residential properties for which formal foreclosure proceedings were in process was $ 4 million at both December 31, 2021 and September 30, 2021.
Credit quality indicators
14 unchanged sentences
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: The following tables present our held for investment bank loan portfolio by year of origination and credit quality indicator as of June 30, 2021.
+Added: The following tables present our held for investment bank loan portfolio by credit quality indicator.
+Added: December 31, 2021
+Added: Loans by origination fiscal year
$ in millions 2022 2021 2020 2019 2018 Prior Revolving loans Total
32 unchanged sentences
Total SBL and other $ — $ 6 $ 45 $ 12 $ — $ — $ 6,500 $ 6,563
−Removed: Loans classified as special mention, substandard or doubtful are all considered to be “criticized” loans.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: We also monitor the credit quality of the residential mortgage loan portfolio utilizing FICO scores and LTV ratios.
+Added: September 30, 2021
+Added: Loans by origination fiscal year
+Added: $ in millions 2021 2020 2019 2018 2017 Prior Revolving loans Total
+Added: Pass $ 999 $ 1,273 $ 1,180 $ 1,408 $ 935 $ 1,633 $ 739 $ 8,167
+Added: Special mention — — 41 — 26 54 1 122
+Added: Substandard — — 24 84 — 28 — 136
+Added: Doubtful — — 15 — — — — 15
+Added: Total C&I loans $ 999 $ 1,273 $ 1,260 $ 1,492 $ 961 $ 1,715 $ 740 $ 8,440
+Added: Pass $ 533 $ 459 $ 442 $ 652 $ 223 $ 174 $ 62 $ 2,545
+Added: Special mention — 45 58 36 — — — 139
+Added: Substandard — — 32 98 8 50 — 188
+Added: Doubtful — — — — — — — —
+Added: Total CRE loans $ 533 $ 504 $ 532 $ 786 $ 231 $ 224 $ 62 $ 2,872
+Added: Pass $ 235 $ 95 $ 75 $ 60 $ 46 $ 167 $ 237 $ 915
+Added: Special mention — — 13 11 33 106 6 169
+Added: Substandard — — 21 — 4 — 3 28
+Added: Doubtful — — — — — — — —
+Added: Total REIT loans $ 235 $ 95 $ 109 $ 71 $ 83 $ 273 $ 246 $ 1,112
+Added: Tax-exempt loans
+Added: Pass $ 158 $ 57 $ 124 $ 204 $ 272 $ 506 $ — $ 1,321
+Added: Special mention — — — — — — — —
+Added: Substandard — — — — — — — —
+Added: Doubtful — — — — — — — —
+Added: Total tax-exempt loans $ 158 $ 57 $ 124 $ 204 $ 272 $ 506 $ — $ 1,321
+Added: Residential mortgage loans
+Added: Pass $ 1,861 $ 1,266 $ 640 $ 386 $ 451 $ 666 $ 20 $ 5,290
+Added: Special mention — — — — — 5 — 5
+Added: Substandard — — — 1 2 20 — 23
+Added: Doubtful — — — — — — — —
+Added: Total residential mortgage loans $ 1,861 $ 1,266 $ 640 $ 387 $ 453 $ 691 $ 20 $ 5,318
+Added: SBL and other
+Added: Pass $ 3 $ 45 $ 12 $ — $ — $ — $ 6,046 $ 6,106
+Added: Special mention — — — — — — — —
+Added: Substandard — — — — — — — —
+Added: Doubtful — — — — — — — —
+Added: Total SBL and other $ 3 $ 45 $ 12 $ — $ — $ — $ 6,046 $ 6,106
+Added: Loans classified as special mention, substandard or doubtful are all considered to be “criticized” loans.
+Added: We also monitor the credit quality of the residential mortgage loan portfolio utilizing Fair Isaac Corporation (“FICO”) scores and loan-to-value (“LTV”) ratios.
A FICO score measures a borrower’s creditworthiness by considering factors such as payment and credit history.
LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table presents the held for investment residential mortgage loan portfolio by FICO score and by LTV ratio at origination.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Below 600 $ 67 $ 67
7 unchanged sentences
Total $ 5,568 $ 5,318
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
Allowance for credit losses
1 unchanged sentence
$ in millions C&I loans CRE loans REIT loans Tax-exempt loans Residential mortgage loans SBL and other Total
−Removed: Three months ended June 30, 2021
−Removed: Balance at beginning of period
−Removed: $ 203 $ 74 $ 36 $ 2 $ 26 $ 4 $ 345
−Removed: Provision/(benefit) for credit losses ( 14 ) 2 ( 10 ) — 3 — ( 19 )
−Removed: Net (charge-offs)/recoveries:
−Removed: Charge-offs ( 1 ) ( 3 ) — — — — ( 4 )
−Removed: Recoveries — — — — — — —
−Removed: Net (charge-offs)/recoveries
−Removed: ( 1 ) ( 3 ) — — — — ( 4 )
−Removed: Foreign exchange translation adjustment
−Removed: — — — — — — —
−Removed: Balance at end of period
−Removed: $ 188 $ 73 $ 26 $ 2 $ 29 $ 4 $ 322
−Removed: Nine months ended June 30, 2021
+Added: Three months ended December 31, 2021
Balance at beginning of period
$ 191 $ 66 $ 22 $ 2 $ 35 $ 4 $ 320
−Removed: Impact of CECL adoption 19 ( 11 ) ( 9 ) ( 12 ) 24 ( 2 ) 9
Provision/(benefit) for credit losses ( 10 ) 6 — — ( 6 ) ( 1 ) ( 11 )
8 unchanged sentences
$ 179 $ 72 $ 22 $ 2 $ 30 $ 3 $ 308
−Removed: Three months ended June 30, 2020
−Removed: Balance at beginning of period
−Removed: $ 196 $ 54 $ 38 $ 11 $ 18 $ 7 $ 324
−Removed: Provision/(benefit) for credit losses 59 24 ( 3 ) 2 1 ( 2 ) 81
−Removed: Net (charge-offs)/recoveries:
−Removed: Charge-offs ( 71 ) ( 2 ) — — — — ( 73 )
−Removed: Recoveries — — — — 1 — 1
−Removed: Net (charge-offs)/recoveries ( 71 ) ( 2 ) — — 1 — ( 72 )
−Removed: Foreign exchange translation adjustment
−Removed: 1 — — — — — 1
−Removed: Balance at end of period
−Removed: $ 185 $ 76 $ 35 $ 13 $ 20 $ 5 $ 334
−Removed: Nine months ended June 30, 2020
+Added: Three months ended December 31, 2020
Balance at beginning of period
$ 200 $ 81 $ 36 $ 14 $ 18 $ 5 $ 354
+Added: Impact of current expected credit loss (“CECL”) adoption 19 ( 11 ) ( 9 ) ( 12 ) 24 ( 2 ) 9
Provision/(benefit) for credit losses ( 22 ) 42 3 — ( 9 ) — 14
3 unchanged sentences
Net (charge-offs)/recoveries — — — — — — —
−Removed: ( 71 ) ( 2 ) — — 1 — ( 72 )
Foreign exchange translation adjustment
2 unchanged sentences
$ 198 $ 112 $ 30 $ 2 $ 33 $ 3 $ 378
−Removed: The allowance for credit losses on held for investment bank loans decreased $ 23 million to $ 322 million during three months ended June 30, 2021, primarily due to an improved forecast for macroeconomic inputs, including unemployment and gross domestic product, and improved credit ratings within the corporate loan portfolio.
−Removed: The allowance for credit losses decreased $ 41 million to $ 322 million since the adoption of CECL on October 1, 2020, largely attributable to improved forecasts for certain macroeconomic inputs to our CECL model since our adoption date, including improved outlooks on unemployment and gross domestic product, which favorably impact most of our loan portfolios, as well as improved credit ratings within our corporate loan portfolio.
+Added: The allowance for credit losses on held for investment bank loans decreased $ 12 million to $ 308 million during three months ended December 31, 2021, largely attributable to improvement in credit quality in the C&I bank loan portfolio and continued improvement in macroeconomic inputs to our CECL model, which positively impacted most loan portfolios, partially offset by provisions for credit losses related to loan growth.
+Added: The allowance for credit losses on unfunded lending commitments, which is included in “Other payables” on our Condensed Consolidated Statements of Financial Condition, was $ 12 million and $ 13 million at December 31, 2021 and September 30, 2021, respectively.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: The allowance for credit losses on unfunded lending commitments, which is included in “Other payables” on our Condensed Consolidated Statements of Financial Condition, was $ 15 million, $ 17 million and $ 12 million at June 30, 2021, March 31, 2021 and September 30, 2020, respectively.
−Removed: The decrease in the allowance for credit losses on unfunded lending commitments during the three months ended June 30, 2021 was primarily due to an improved outlook for commercial real estate compared with March 31, 2021.
−Removed: The increase in the allowance for credit losses on unfunded lending commitments as of June 30, 2021 compared with September 30, 2020 was predominantly due to the adoption impact of CECL.
−Removed: See Note 2 for further information about the adoption of CECL and the impact to the allowance for credit losses.
NOTE 9 – LOANS TO FINANCIAL ADVISORS, NET
Loans to financial advisors are primarily comprised of loans originated as a part of our recruiting activities.
−Removed: See Note 2 for a discussion of our accounting policies related to loans to financial advisors and the related allowance for credit losses.
+Added: See Note 2 of our 2021 Form 10-K for a discussion of our accounting policies related to loans to financial advisors and the related allowance for credit losses.
The following table presents the balances for our loans to financial advisors and the related accrued interest receivable.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Currently affiliated with the firm (1)
5 unchanged sentences
Accrued interest receivable on loans to financial advisors $ 4 $ 4
−Removed: (1) These loans were predominately current.
−Removed: (2) These loans were predominately past due for a period of 180 days or more and on nonaccrual status.
−Removed: The allowance for credit losses as of June 30, 2021 was determined using the CECL methodology, which we adopted on October 1, 2020.
−Removed: Prior periods calculated under the incurred loss methodology have not been restated.
−Removed: The increase in the allowance from September 30, 2020 to June 30, 2021 was primarily due to the October 1, 2020 CECL adoption, which resulted in an increase in our allowance for credit losses of $ 25 million.
−Removed: See Note 2 for further information on the CECL adoption.
+Added: Allowance for credit losses as a percent of the loan portfolio
+Added: 2.55 % 2.49 %
+Added: (1) These loans were predominantly current.
+Added: (2) These loans were predominantly past due for a period of 180 days or more.
Accrued interest receivables presented in the preceding table are reported in “Other receivables, net” on the Condensed Consolidated Statements of Financial Condition.
7 unchanged sentences
Aggregate assets and aggregate liabilities may differ from the consolidated carrying value of assets and liabilities due to the elimination of intercompany assets and liabilities held by the consolidated VIE.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
$ in millions Aggregate assets Aggregate liabilities
−Removed: June 30, 2021
+Added: December 31, 2021
Private Equity Interests
5 unchanged sentences
Total $ 192 $ 71
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table presents information about the carrying value of the assets and liabilities of the VIEs which we consolidate and which are included on our Condensed Consolidated Statements of Financial Condition.
Intercompany balances are eliminated in consolidation and not reflected in the following table.
−Removed: $ in millions June 30, 2021 September 30, 2020
−Removed: Cash and cash equivalents and assets segregated pursuant to regulations $ 7 $ 9
+Added: $ in millions December 31, 2021 September 30, 2021
+Added: Cash and cash equivalents and assets segregated for regulatory purposes and restricted cash $ 7 $ 10
Other investments 47 63
9 unchanged sentences
The aggregate assets, liabilities, and our exposure to loss from those VIEs in which we hold a variable interest, but as to which we have concluded we are not the primary beneficiary, are provided in the following table.
−Removed: June 30, 2021 September 30, 2020
+Added: December 31, 2021 September 30, 2021
$ in millions Aggregate
8 unchanged sentences
Total $ 15,251 $ 2,729 $ 111 $ 14,869 $ 2,482 $ 163
−Removed: NOTE 11 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET
−Removed: Our goodwill and identifiable intangible assets result from various acquisitions.
−Removed: During the nine months ended June 30, 2021, we acquired NWPS and Financo, both of which resulted in goodwill and identifiable intangible assets.
−Removed: See Note 3 for additional information on these acquisitions and the related goodwill and identifiable intangible assets.
−Removed: See Notes 2 and 10 of our 2020 Form 10-K for additional information about our goodwill and intangible assets, including the related accounting policies.
+Added: NOTE 11 - OTHER ASSETS
+Added: The following table details the components of other assets.
+Added: See Note 2 of our 2021 Form 10-K for a discussion of the accounting polices related to certain of these components.
+Added: $ in millions December 31, 2021 September 30, 2021
+Added: Investments in company-owned life insurance policies $ 1,013 $ 952
+Added: Property and equipment, net 491 499
+Added: Lease right-of-use (“ROU”) asset 439 446
+Added: Prepaid expenses 134 127
+Added: Investments in FHLB and Federal Reserve Bank stock 72 72
+Added: All other 239 161
+Added: Total other assets $ 2,388 $ 2,257
+Added: See Note 13 of our 2021 Form 10-K for further information regarding our property and equipment and Note 12 of this Form 10-Q and Note 14 of our 2021 Form 10-K for further information regarding our leases.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: We perform goodwill and indefinite-lived intangible asset impairment testing on an annual basis or when an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value or indicate that the asset is impaired.
−Removed: We performed our latest annual impairment testing for our goodwill and indefinite-lived intangible asset as of January 1, 2021, our annual evaluation date, evaluating balances as of December 31, 2020.
−Removed: In this annual evaluation, we performed a qualitative impairment assessment for each of our reporting units that had goodwill, as well as for our indefinite-lived intangible asset.
−Removed: Our qualitative assessments consider macroeconomic indicators, such as trends in equity and fixed income markets, gross domestic product, unemployment rates, interest rates, and housing markets.
−Removed: We also consider regulatory changes, reporting unit specific results, and changes in key personnel and strategy.
−Removed: Changes in these indicators, and our ability to respond to such changes, may trigger the need for impairment testing at a point other than our annual assessment date.
−Removed: Based upon the outcome of these qualitative assessments, no impairment was identified.
−Removed: No events have occurred since such assessments that would cause us to update this impairment testing.
NOTE 12 – LEASES
The following table presents the balances related to our leases on our Condensed Consolidated Statements of Financial Condition.
−Removed: The weighted-average remaining lease term and discount rate for our leases was 5.8 years and 3.70 %, respectively, as of June 30, 2021.
−Removed: See Note 2 of our 2020 Form 10-K for a discussion of our accounting policies related to leases.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: See Note 2 and 14 of our 2021 Form 10-K for additional information related to our leases, including a discussion of our accounting policies.
+Added: $ in millions December 31, 2021 September 30, 2021
ROU assets (included in Other assets) $ 439 $ 446
Lease liabilities (included in Other payables) $ 445 $ 450
+Added: Lease liabilities as of December 31, 2021 excluded $ 34 million of minimum lease payments related to lease arrangements that were signed but not yet commenced.
+Added: These leases are estimated to commence between fiscal year 2022 and 2023 with lease terms ranging from four to 11 years.
Lease expense
The following table details the components of lease expense, which is included in “Occupancy and equipment” expense on our Condensed Consolidated Statements of Income and Comprehensive Income.
−Removed: Lease expense is recognized on a straight-line basis over the lease term if the ROU asset has not been impaired or abandoned.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
1 unchanged sentence
Variable lease costs $ 7 6
−Removed: Variable lease costs in the preceding table include payments for common area maintenance charges and other variable costs that are not reflected in the measurement of ROU assets and lease liabilities.
−Removed: Lease liabilities
−Removed: The maturities by fiscal year of our lease liabilities as of June 30, 2021 are presented in the following table.
−Removed: $ in millions
−Removed: Remainder of 2021 $ 18
−Removed: Thereafter 114
−Removed: Gross lease payments 417
−Removed: interest ( 45 )
−Removed: Present value of lease liabilities $ 372
−Removed: Lease payments in the preceding table exclude $ 136 million of legally binding minimum lease payments for leases signed but not yet commenced.
−Removed: These leases are estimated to commence between fiscal year 2021 and 2022 with lease terms ranging from one year to 11 years.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
+Added: Variable lease costs in the preceding table include payments required under lease arrangements for common area maintenance charges and other variable costs that are not reflected in the measurement of ROU assets and lease liabilities.
NOTE 13 – BANK DEPOSITS
2 unchanged sentences
The calculation of the weighted-average rates were based on the actual deposit balances and rates at each respective period end.
−Removed: June 30, 2021 September 30, 2020
+Added: December 31, 2021 September 30, 2021
$ in millions Balance Weighted-average rate Balance Weighted-average rate
4 unchanged sentences
Total bank deposits $ 34,092 0.06 % $ 32,495 0.07 %
−Removed: Total bank deposits in the preceding table exclude affiliate deposits of $ 185 million at both June 30, 2021 and September 30, 2020, all of which were held in a deposit account at Raymond James Bank on behalf of RJF.
+Added: Total bank deposits in the preceding table exclude affiliate deposits of $ 302 million and $ 301 million at December 31, 2021 and September 30, 2021, respectively.
+Added: As of December 31, 2021, these affiliate deposits included $ 229 million and $ 73 million held in deposit accounts at Raymond James Bank on behalf of RJF and Raymond James Trust Company of New Hampshire, respectively.
Savings and money market accounts in the preceding table consist primarily of deposits that are cash balances swept to Raymond James Bank from the client investment accounts maintained at Raymond James & Associates, Inc.
These balances are held in Federal Deposit Insurance Corporation (“FDIC”)-insured bank accounts through the Raymond James Bank Deposit Program (“RJBDP”).
−Removed: The aggregate amount of individual time deposit account balances that exceeded the FDIC insurance limit at June 30, 2021 was approximately $ 23 million.
+Added: The aggregate amount of individual time deposit account balances that exceeded the FDIC insurance limit at December 31, 2021 was approximately $ 43 million.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table sets forth the scheduled maturities of certificates of deposit.
−Removed: June 30, 2021 September 30, 2020
+Added: December 31, 2021 September 30, 2021
$ in millions Denominations
17 unchanged sentences
Interest expense on deposits, excluding interest expense related to affiliate deposits, is summarized in the following table.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
2 unchanged sentences
Total interest expense on deposits
−Removed: $ 5 $ 7 $ 17 $ 35
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: NOTE 14 – SENIOR NOTES PAYABLE
−Removed: The following table summarizes our senior notes payable.
−Removed: $ in millions June 30, 2021 September 30, 2020
−Removed: 4.65 % senior notes, due 2030
−Removed: 4.95 % senior notes, due 2046
−Removed: 3.750 % senior notes, due 2051
−Removed: 5.625 % senior notes, due 2024
−Removed: 3.625 % senior notes, due 2026
−Removed: Total principal amount 2,050 2,050
−Removed: Unaccreted premium 5 10
−Removed: Unamortized debt issuance costs ( 18 ) ( 15 )
−Removed: Total senior notes payable $ 2,037 $ 2,045
−Removed: In March 2020, we sold in a registered underwritten public offering $ 500 million in aggregate principal amount of 4.65 % senior notes due April 2030.
−Removed: Interest on these senior notes is payable semi-annually.
−Removed: We may redeem some or all of these senior notes at any time prior to January 1, 2030, at a redemption price equal to the greater of (i) 100 % of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S.
−Removed: Treasury rate, plus 50 basis points;
−Removed: and on or after January 1, 2030, at 100 % of the principal amount of the notes redeemed;
−Removed: plus, in each case, accrued and unpaid interest thereon to the redemption date.
−Removed: In July 2016, we sold in a registered underwritten public offering $ 300 million in aggregate principal amount of 4.95 % senior notes due July 2046.
−Removed: In May 2017, we reopened the offering and sold, in a registered underwritten public offering, an additional $ 500 million in aggregate principal amount of 4.95 % senior notes due July 2046.
−Removed: These additional senior notes were consolidated, formed into a single series, and are fully fungible with the $ 300 million in aggregate principal amount of 4.95 % senior notes issued in July 2016.
−Removed: Interest on these senior notes is payable semi-annually.
−Removed: We may redeem some or all of these senior notes at any time prior to their maturity, at a redemption price equal to the greater of (i) 100 % of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S.
−Removed: Treasury rate, plus 45 basis points, plus accrued and unpaid interest thereon to the redemption date.
−Removed: In April 2021, we sold in a registered underwritten public offering $ 750 million in aggregate principal amount of 3.75 % senior notes due April 2051.
−Removed: Interest on these senior notes is payable semi-annually.
−Removed: We may redeem some or all of these senior notes at any time prior to October 1, 2050, at a redemption price equal to the greater of (i) 100 % of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S.
−Removed: Treasury rate, plus 20 basis points;
−Removed: and on or after October 1, 2050, at 100 % of the principal amount of the notes redeemed;
−Removed: plus, in each case, accrued and unpaid interest thereon to the redemption date.
−Removed: Tender offers and redemptions of certain senior notes
−Removed: Concurrently with the launch of our offering of $ 750 million in aggregate principal amount of 3.75 % senior notes due April 2051 described above, we commenced cash tender offers (the “Tender Offers”) for any and all of our then outstanding 5.625 % senior notes due 2024 and 3.625 % senior notes due 2026 (the “Pre-existing Notes”).
−Removed: Pursuant to the Tender Offers, in April 2021 we repurchased an aggregate of $ 332 million outstanding Pre-existing Notes for an aggregate purchase price of $ 373 million.
−Removed: In addition, in April 2021 we issued notices of redemption to holders of the Pre-existing Notes pursuant to the indentures governing such notes, to redeem any Pre-existing Notes that remained outstanding following the closing of the Tender Offers.
−Removed: In May 2021 we redeemed the remaining outstanding balance of the Pre-existing Notes of $ 418 million for an aggregate redemption price of $ 473 million.
−Removed: These repurchases and redemptions of the Pre-existing Notes were funded with the net proceeds from our 3.75 % senior notes due April 2051 and cash on hand, and resulted in a loss of $ 98 million which is comprised of make-whole premiums, unamortized debt issuance costs which were accelerated, and certain legal and professional fees.
−Removed: This loss was presented in
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: “Losses on extinguishment of debt” on our Condensed Consolidated Statements of Income and Comprehensive Income in our third fiscal quarter of 2021.
NOTE 14 – INCOME TAXES
5 unchanged sentences
Effective tax rate
−Removed: Our effective income tax rate was 20.9 % for the nine months ended June 30, 2021, which was lower than the 22.2 % effective tax rate for fiscal 2020.
−Removed: The decrease in the effective income tax rate was primarily due to an increase in valuation gains associated with our company-owned life insurance policies which are not subject to tax.
+Added: Our effective income tax rate of 20.1 % for the three months ended December 31, 2021 was lower than the 21.7 % effective tax rate for fiscal 2021.
+Added: The decrease in the effective income tax rate was primarily due to a large tax benefit recognized during the fiscal first quarter related to share-based compensation that vested during the period, partially offset by lower valuation gains associated with our company-owned life insurance policies which are not subject to tax.
Uncertain tax positions
4 unchanged sentences
In the normal course of business, we enter into commitments for debt and equity underwritings.
−Removed: As of June 30, 2021, we had three such open underwriting commitments, which were subsequently settled in open market transactions and did not result in significant losses.
+Added: As of December 31, 2021, we had no open underwriting commitments.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
Lending commitments and other credit-related financial instruments
3 unchanged sentences
The following table presents Raymond James Bank’s commitments to extend credit and other credit-related off-balance sheet financial instruments outstanding.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Open-end consumer lines of credit (primarily SBL)
5 unchanged sentences
Open-end consumer lines of credit primarily represent the unfunded amounts of bank loans to consumers that are secured by marketable securities at advance rates consistent with industry standards.
−Removed: The proceeds from repayment or, if necessary, the liquidation of collateral, which is monitored daily, are expected to satisfy the amounts drawn against these existing lines of
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
+Added: The proceeds from repayment or, if necessary, the liquidation of collateral, which is monitored daily, are expected to satisfy the amounts drawn against these existing lines of credit.
These lines of credit are primarily uncommitted, as we reserve the right to not make any advances or may terminate these lines at any time.
1 unchanged sentence
The allowance for credit losses calculated under CECL provides for potential losses related to the unfunded lending commitments.
−Removed: See Notes 2 and 8 for further discussion of this allowance for credit losses related to unfunded lending commitments.
+Added: See Note 2 of our 2021 Form 10-K and Note 8 of this Form 10-Q for further discussion of this allowance for credit losses related to unfunded lending commitments.
RJ&A enters into margin lending arrangements which allow customers to borrow against the value of qualifying securities.
1 unchanged sentence
Collateral levels and established credit terms are monitored daily and we require customers to deposit additional collateral or reduce balances as necessary.
−Removed: We offer loans to prospective financial advisors for recruiting and retention purposes (see Notes 2 and 9 for further discussion of our loans to financial advisors).
−Removed: These offers are contingent upon certain events occurring, including the individuals joining us and meeting certain conditions outlined in their offer.
+Added: We offer loans to prospective financial advisors for recruiting and retention purposes (see Note 2 of our 2021 Form 10-K and Note 9 of this Form 10-Q for further discussion of our loans to financial advisors).
+Added: These offers are contingent upon certain events occurring, including the individuals joining us and meeting certain other conditions outlined in their offer.
Investment commitments
−Removed: We had unfunded commitments to various investments, including private equity investments and certain Raymond James Bank investments, of $ 37 million as of June 30, 2021.
+Added: We had unfunded commitments to various investments, including private equity investments and certain Raymond James Bank investments, of $ 25 million as of December 31, 2021.
Other commitments
−Removed: Raymond James Tax Credit Funds, Inc.
−Removed: (“RJTCF”) sells investments in project partnerships to various LIHTC funds, which have third-party investors, and for which RJTCF serves as the managing member or general partner.
−Removed: RJTCF typically sells investments in project partnerships to LIHTC funds within 90 days of their acquisition.
−Removed: Until such investments are sold to LIHTC funds, RJTCF is responsible for funding investment commitments to such partnerships.
−Removed: As of June 30, 2021, RJTCF had committed approximately $ 167 million to project partnerships that had not yet been sold to LIHTC funds.
+Added: Raymond James Affordable Housing Investments, Inc.
+Added: (“RJAHI”), formerly known as Raymond James Tax Credit Funds, Inc., sells investments in project partnerships to various LIHTC funds, which have third-party investors, and for which RJAHI serves as the managing member or general partner.
+Added: RJAHI typically sells investments in project partnerships to LIHTC funds within 90 days of their acquisition.
+Added: Until such investments are sold to LIHTC funds, RJAHI is responsible for funding investment commitments to such partnerships.
+Added: As of December 31, 2021, RJAHI had committed approximately $ 97 million to project partnerships that had not yet been sold to LIHTC funds.
Because we expect to sell these project partnerships to LIHTC funds and the equity funding events arise over future periods, the contractual commitments are not expected to materially impact our future liquidity requirements.
−Removed: RJTCF may also make short-term loans or advances to project partnerships and LIHTC funds.
+Added: RJAHI may also make short-term loans or advances to project partnerships and LIHTC funds.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
As a part of our fixed income public finance operations, we enter into forward commitments to purchase agency MBS.
−Removed: See Note 2 of our 2020 Form 10-K for further discussion of these activities.
−Removed: At June 30, 2021, we had $ 222 million of principal amount of outstanding forward MBS purchase commitments, which were expected to be purchased within 90 days following commitment.
−Removed: In order to hedge the market interest rate risk to which we would otherwise be exposed between the date of the commitment and the date of sale of the MBS, we enter into TBA security contracts with investors for generic MBS at specific rates and prices to be delivered on settlement dates in the future.
−Removed: We may be subject to loss if the timing of, or the actual amount of, the MBS differs significantly from the term and notional amount of the TBA security contract to which we entered.
−Removed: These TBA securities and related purchase commitments are accounted for at fair value.
−Removed: As of June 30, 2021, the fair value of the TBA securities and the estimated fair value of the purchase commitments were insignificant.
−Removed: For information regarding our lease commitments, including the maturities of our lease liabilities, see Note 12.
+Added: At December 31, 2021, we had $ 140 million of principal amount of outstanding forward MBS purchase commitments, which were expected to be purchased within 90 days following commitment.
+Added: In order to hedge the market interest rate risk to which we would otherwise be exposed between the date of the commitment and the date of sale of the MBS, we enter into TBAs with investors for generic MBS at specific rates and prices to be delivered on settlement dates in the future.
+Added: We may be subject to loss if the timing of, or the actual amount of, the MBS differs significantly from the term and notional amount of the TBAs to which we entered.
+Added: These TBAs and related purchase commitments are accounted for at fair value.
+Added: As of December 31, 2021, the fair value of the TBAs and the estimated fair value of the purchase commitments were insignificant.
+Added: For information regarding our acquisition commitments associated with our recent purchase of Charles Stanley and intended acquisition of TriState Capital, see Note 3 of this Form 10-Q.
+Added: For information regarding our lease commitments, see Note 12 of this Form 10-Q and for information on the maturities of our lease liabilities, see Note 14 of our 2021 Form 10-K.
broker-dealer subsidiaries are required by federal law to be members of the Securities Investors Protection Corporation (“SIPC”).
5 unchanged sentences
RJF has provided an indemnity to Lloyd’s of London against any and all losses they may incur associated with the excess SIPC policies.
−Removed: We guarantee the debt of one of our private equity investments.
−Removed: The amount of such debt, including the undrawn portion of a revolving credit facility, was $ 13 million as of June 30, 2021.
−Removed: The debt, which matures in 2022, is secured by substantially all of the assets of the borrower.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
Legal and regulatory matter contingencies
4 unchanged sentences
We may contest liability and/or the amount of damages, as appropriate, in each pending matter.
−Removed: Over the last several years, the level of litigation and investigatory activity (both formal and informal) by government and self-regulatory agencies in the financial services industry continues to be significant.
+Added: The level of litigation and investigatory activity (both formal and informal) by government and self-regulatory agencies in the financial services industry continues to be significant.
There can be no assurance that material losses will not be incurred from claims that have not yet been asserted or are not yet determined to be material.
13 unchanged sentences
There are certain matters for which we are unable to estimate the upper end of the range of reasonably possible loss.
−Removed: With respect to legal and regulatory matters for which management has been able to estimate a range of reasonably possible loss as of June 30, 2021, we estimated the upper end of the range of reasonably possible aggregate loss to be approximately $ 175 million in excess of the aggregate accruals for such matters.
+Added: With respect to legal and regulatory matters for which management has been able to estimate a range of reasonably possible loss as of December 31, 2021, we estimated the upper end of the range of reasonably possible aggregate loss to be approximately $ 90 million in excess of the aggregate accruals for such matters.
Refer to Note 2 of our 2021 Form 10-K for a discussion of our criteria for recognizing liabilities for contingencies.
3 unchanged sentences
NOTE 16 – ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)
−Removed: All of the components of other comprehensive income (“OCI”), net of tax, were attributable to RJF.
+Added: All of the components of other comprehensive income/(loss) (“OCI”), net of tax, were attributable to RJF.
The following table presents the net change in AOCI as well as the changes, and the related tax effects, of each component of AOCI.
1 unchanged sentence
net investment hedges and currency translations Available- for-sale securities Cash flow hedges Total
−Removed: Three months ended June 30, 2021
−Removed: AOCI as of beginning of period
−Removed: $ 76 $ ( 81 ) $ ( 5 ) $ ( 4 ) $ ( 29 ) $ ( 38 )
−Removed: OCI before reclassifications and taxes ( 12 ) 14 2 36 ( 7 ) 31
−Removed: Amounts reclassified from AOCI, before tax
−Removed: — — — ( 2 ) 3 1
−Removed: Pre-tax net OCI ( 12 ) 14 2 34 ( 4 ) 32
−Removed: Income tax effect 3 — 3 ( 9 ) 2 ( 4 )
−Removed: OCI for the period, net of tax ( 9 ) 14 5 25 ( 2 ) 28
−Removed: AOCI as of end of period
−Removed: $ 67 $ ( 67 ) $ — $ 21 $ ( 31 ) $ ( 10 )
−Removed: Nine months ended June 30, 2021
−Removed: AOCI as of beginning of period
−Removed: $ 115 $ ( 140 ) $ ( 25 ) $ 89 $ ( 53 ) $ 11
−Removed: OCI before reclassifications and taxes
−Removed: ( 63 ) 71 8 ( 84 ) 18 ( 58 )
−Removed: Amounts reclassified from AOCI, before tax
−Removed: — 2 2 ( 7 ) 11 6
−Removed: Pre-tax net OCI
−Removed: ( 63 ) 73 10 ( 91 ) 29 ( 52 )
−Removed: Income tax effect 15 — 15 23 ( 7 ) 31
−Removed: OCI for the period, net of tax ( 48 ) 73 25 ( 68 ) 22 ( 21 )
−Removed: AOCI as of end of period
−Removed: $ 67 $ ( 67 ) $ — $ 21 $ ( 31 ) $ ( 10 )
−Removed: Three months ended June 30, 2020
+Added: Three months ended December 31, 2021
AOCI as of beginning of period $ 81 $ ( 90 ) $ ( 9 ) $ ( 5 ) $ ( 27 ) $ ( 41 )
−Removed: $ 149 $ ( 191 ) $ ( 42 ) $ 83 $ ( 52 ) $ ( 11 )
OCI before reclassifications and taxes ( 2 ) 1 ( 1 ) ( 72 ) 8 ( 65 )
−Removed: ( 29 ) 32 3 7 ( 7 ) 3
Amounts reclassified from AOCI, before tax — — — — 4 4
Pre-tax net OCI ( 2 ) 1 ( 1 ) ( 72 ) 12 ( 61 )
−Removed: ( 29 ) 32 3 7 ( 5 ) 5
Income tax effect 1 — 1 17 ( 3 ) 15
−Removed: 8 — 8 ( 2 ) 1 7
OCI for the period, net of tax ( 1 ) 1 — ( 55 ) 9 ( 46 )
−Removed: ( 21 ) 32 11 5 ( 4 ) 12
AOCI as of end of period $ 80 $ ( 89 ) $ ( 9 ) $ ( 60 ) $ ( 18 ) $ ( 87 )
−Removed: $ 128 $ ( 159 ) $ ( 31 ) $ 88 $ ( 56 ) $ 1
−Removed: Nine months ended June 30, 2020
+Added: Three months ended December 31, 2020
AOCI as of beginning of period $ 115 $ ( 140 ) $ ( 25 ) $ 89 $ ( 53 ) $ 11
−Removed: $ 110 $ ( 135 ) $ ( 25 ) $ 21 $ ( 19 ) $ ( 23 )
OCI before reclassifications and taxes ( 38 ) 45 7 ( 18 ) 3 ( 8 )
−Removed: 23 ( 24 ) ( 1 ) 90 ( 51 ) 38
Amounts reclassified from AOCI, before tax — 2 2 ( 5 ) 4 1
Pre-tax net OCI ( 38 ) 47 9 ( 23 ) 7 ( 7 )
−Removed: 23 ( 24 ) ( 1 ) 90 ( 49 ) 40
Income tax effect 9 — 9 6 ( 2 ) 13
−Removed: ( 5 ) — ( 5 ) ( 23 ) 12 ( 16 )
OCI for the period, net of tax ( 29 ) 47 18 ( 17 ) 5 6
−Removed: 18 ( 24 ) ( 6 ) 67 ( 37 ) 24
AOCI as of end of period $ 86 $ ( 93 ) $ ( 7 ) $ 72 $ ( 48 ) $ 17
−Removed: $ 128 $ ( 159 ) $ ( 31 ) $ 88 $ ( 56 ) $ 1
−Removed: Reclassifications from AOCI to net income, excluding taxes, for the three and nine months ended June 30, 2021 were primarily recorded in “Other” revenue and “Interest expense” on the Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: Reclassifications from AOCI to net income, excluding taxes, for the three months ended December 31, 2021 were recorded in “Interest expense” on the Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: Reclassifications from AOCI to net income, excluding taxes, for the three months ended December 31, 2020 were primarily recorded in “Other” revenue and “Interest expense” on the Condensed Consolidated Statements of Income and Comprehensive Income.
Our net investment hedges and cash flow hedges relate to our derivatives associated with Raymond James Bank’s business operations.
For further information about our significant accounting policies related to derivatives, see Note 2 of our 2021 Form 10-K.
−Removed: See Note 6 of this Form 10-Q for additional information on these derivatives.
+Added: In addition, see Note 6 of this Form 10-Q for additional information on these derivatives.
RAYMOND JAMES FINANCIAL, INC.
5 unchanged sentences
See Note 22 of this Form 10-Q for additional information on our segment results.
−Removed: Three months ended June 30, 2021
+Added: Three months ended December 31, 2021
$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total
9 unchanged sentences
Total brokerage revenues 397 159 2 — — 558
−Removed: Account and services fees:
−Removed: Mutual fund and annuity service fees 105 — — — ( 1 ) 104
−Removed: RJBDP fees 65 — — — ( 47 ) 18
−Removed: Client account and other fees 39 1 4 — ( 5 ) 39
−Removed: Total account and service fees 209 1 4 — ( 53 ) 161
−Removed: Investment banking:
−Removed: Merger & acquisition and advisory — 153 — — — 153
−Removed: Equity underwriting 11 69 — — — 80
−Removed: Debt underwriting — 43 — — — 43
−Removed: Total investment banking 11 265 — — — 276
−Removed: Tax credit fund revenues — 17 — — — 17
−Removed: All other (1)
−Removed: 7 1 1 8 21 38
−Removed: Total other 7 18 1 8 21 55
−Removed: Total non-interest revenues 1,667 445 225 8 ( 39 ) 2,306
−Removed: Interest income (1)
−Removed: 31 4 — 172 ( 2 ) 205
−Removed: Total revenues 1,698 449 225 180 ( 41 ) 2,511
−Removed: Interest expense ( 2 ) ( 3 ) — ( 11 ) ( 24 ) ( 40 )
−Removed: Net revenues $ 1,696 $ 446 $ 225 $ 169 $ ( 65 ) $ 2,471
−Removed: (1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: Three months ended June 30, 2020
−Removed: $ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total
−Removed: Asset management and related administrative fees $ 715 $ 1 $ 157 $ — $ ( 6 ) $ 867
−Removed: Brokerage revenues:
−Removed: Securities commissions:
−Removed: Mutual and other fund products 131 2 2 — ( 1 ) 134
−Removed: Insurance and annuity products 88 — — — — 88
−Removed: Equities, ETFs and fixed income products 84 37 — — — 121
−Removed: Subtotal securities commissions 303 39 2 — ( 1 ) 343
−Removed: Principal transactions (1)
−Removed: 16 127 — — — 143
−Removed: Total brokerage revenues 319 166 2 — ( 1 ) 486
−Removed: Account and services fees:
−Removed: Mutual fund and annuity service fees 82 — 1 — — 83
−Removed: RJBDP fees 63 1 — — ( 44 ) 20
−Removed: Client account and other fees 32 1 2 — ( 4 ) 31
−Removed: Total account and service fees 177 2 3 — ( 48 ) 134
−Removed: Investment banking:
−Removed: Merger & acquisition and advisory — 60 — — — 60
−Removed: Equity underwriting 7 35 — — — 42
−Removed: Debt underwriting — 37 — — — 37
−Removed: Total investment banking 7 132 — — — 139
−Removed: Tax credit fund revenues — 20 — — — 20
−Removed: All other (1)
−Removed: 4 — 1 9 ( 1 ) 13
−Removed: Total other 4 20 1 9 ( 1 ) 33
−Removed: Total non-interest revenues 1,222 321 163 9 ( 56 ) 1,659
−Removed: Interest income (1)
−Removed: 31 4 — 181 1 217
−Removed: Total revenues 1,253 325 163 190 ( 55 ) 1,876
−Removed: Interest expense ( 4 ) ( 2 ) — ( 12 ) ( 24 ) ( 42 )
−Removed: Net revenues $ 1,249 $ 323 $ 163 $ 178 $ ( 79 ) $ 1,834
−Removed: (1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: Nine Months Ended June 30, 2021
−Removed: $ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total
−Removed: Asset management and related administrative fees $ 2,914 $ 3 $ 607 $ — $ ( 22 ) $ 3,502
−Removed: Brokerage revenues:
−Removed: Securities commissions:
−Removed: Mutual and other fund products 498 5 7 — ( 2 ) 508
−Removed: Insurance and annuity products 320 — — — — 320
−Removed: Equities, ETFs and fixed income products 300 110 — — 1 411
−Removed: Subtotal securities commissions 1,118 115 7 — ( 1 ) 1,239
−Removed: Principal transactions (1)
−Removed: 38 394 — 1 ( 1 ) 432
−Removed: Total brokerage revenues 1,156 509 7 1 ( 2 ) 1,671
−Removed: Account and services fees:
+Added: Account and service fees:
Mutual fund and annuity service fees 114 — — — ( 1 ) 113
9 unchanged sentences
All other (1)
−Removed: 20 5 2 22 49 98
Total other 7 37 1 6 — 51
9 unchanged sentences
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: Nine Months Ended June 30, 2020
+Added: Three months ended December 31, 2020
$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total
9 unchanged sentences
Total brokerage revenues 353 173 2 1 ( 1 ) 528
−Removed: Account and services fees:
+Added: Account and service fees:
Mutual fund and annuity service fees 94 — — — — 94
18 unchanged sentences
(1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.
−Removed: At June 30, 2021 and September 30, 2020, net receivables related to contracts with customers were $ 359 million and $ 342 million, respectively.
+Added: At December 31, 2021 and September 30, 2021, net receivables related to contracts with customers were $ 343 million and $ 416 million, respectively.
RAYMOND JAMES FINANCIAL, INC.
3 unchanged sentences
The following table details the components of interest income and interest expense.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
1 unchanged sentence
Cash and cash equivalents $ 3 $ 4
−Removed: Assets segregated pursuant to regulations 3 3 11 25
+Added: Assets segregated for regulatory purposes and restricted cash 4 3
Available-for-sale securities
1 unchanged sentence
Bank loans, net of unearned income and deferred expenses
−Removed: 150 157 437 561
All other 11 10
Total interest income
−Removed: $ 205 $ 217 $ 608 $ 799
Interest expense:
Bank deposits
−Removed: $ 5 $ 7 $ 17 $ 35
Brokerage client payables
3 unchanged sentences
Total interest expense
−Removed: 40 42 115 136
Net interest income 188 165
3 unchanged sentences
NOTE 19 – SHARE-BASED COMPENSATION
−Removed: We have one share-based compensation plan for our employees, Board of Directors and independent contractor financial advisors.
−Removed: Generally, we reissue our treasury shares under The Amended and Restated 2012 Stock Incentive Plan;
+Added: We have one share-based compensation plan, The Amended and Restated 2012 Stock Incentive Plan (“the Plan”), for our employees, Board of Directors and independent contractor financial advisors.
+Added: Generally, we reissue our treasury shares under the Plan;
however, we are also permitted to issue new shares.
2 unchanged sentences
Other information related to our share-based awards is presented in Note 23 of our 2021 Form 10-K.
−Removed: During the three and nine months ended June 30, 2021, we granted approximately 50 thousand and 1.5 million RSUs, respectively, to employees and outside members of our Board of Directors with a weighted-average grant-date fair value of $ 131.81 and $ 94.75 , respectively.
−Removed: For the three and nine months ended June 30, 2021, total compensation expense for RSUs granted to our employees and members of our Board of Directors was $ 27 million and $ 98 million, respectively, compared with $ 22 million and $ 89 million for the three and nine months ended June 30, 2020, respectively.
−Removed: As of June 30, 2021, there were $ 209 million of total pre-tax compensation costs not yet recognized (net of estimated forfeitures) related to RSUs granted to employees and members of our Board of Directors, including those granted during the nine months ended June 30, 2021.
+Added: During the three months ended December 31, 2021, we granted approximately 2.3 million RSUs with a weighted-average grant-date fair value of $ 96.99 , compared with approximately 2.0 million RSUs granted during the three months ended December 31, 2020 with a weighted-average grant-date fair value of $ 60.85 (as adjusted for the September 21, 2021 three-for-two stock split).
+Added: For the three months ended December 31, 2021, total compensation expense related to RSUs was $ 63 million, compared with $ 41 million for the three months ended December 31, 2020.
+Added: As of December 31, 2021, there were $ 336 million of total pre-tax compensation costs not yet recognized (net of estimated forfeitures) related to RSUs, including those granted during the three months ended December 31, 2021.
These costs are expected to be recognized over a weighted-average period of 3.2 years.
NOTE 20 – REGULATORY CAPITAL REQUIREMENTS
−Removed: RJF, as a bank holding company and financial holding company, Raymond James Bank, our banking subsidiary, Raymond James Trust, N.A.
−Removed: (“RJ Trust”), and our broker-dealer subsidiaries are subject to capital requirements by various regulatory authorities.
+Added: RJF, as a bank holding company and financial holding company, Raymond James Bank, our broker-dealer subsidiaries and our trust subsidiaries are subject to capital requirements by various regulatory authorities.
Capital levels of each entity are monitored to ensure compliance with our various regulatory capital requirements.
3 unchanged sentences
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: As a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”) that has made an election to be a financial holding company (“FHC”), RJF is subject to supervision, examination and regulation by the Fed.
+Added: As a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”) that has made an election to be a financial holding company, RJF is subject to supervision, examination and regulation by the Fed.
We are subject to the Fed’s capital rules which establish an integrated regulatory capital framework and implement, in the U.S., the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act.
1 unchanged sentence
Under these rules, minimum requirements are established for both the quantity and quality of capital held by banking organizations.
−Removed: RJF and Raymond James Bank are required to maintain minimum ratios of common equity tier 1 (“CET1”), tier 1 and total capital to risk-weighted assets, as well as minimum leverage ratios (defined as tier 1 capital divided by adjusted average assets).
+Added: RJF and Raymond James Bank are required to maintain minimum ratios of common equity tier 1 (“CET1”), tier 1 capital and total capital to risk-weighted assets, as well as minimum leverage ratios (defined as tier 1 capital divided by adjusted average assets).
These capital ratios incorporate quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under the regulatory capital rules and are subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.
1 unchanged sentence
In order to maintain our ability to take certain capital actions, including dividends and common equity repurchases, and to make bonus payments, we must hold a capital conservation buffer above our minimum risk-based capital requirements.
−Removed: As of June 30, 2021, both RJF’s and Raymond James Bank’s capital levels exceeded the capital conservation buffer requirement and were each categorized as “well-capitalized.”
+Added: As of December 31, 2021, both RJF’s and Raymond James Bank’s capital levels exceeded the capital conservation buffer requirement and were each categorized as “well-capitalized.”
For further discussion of regulatory capital requirements applicable to certain of our businesses and subsidiaries, see Note 24 of our 2021 Form 10-K.
−Removed: To meet requirements for capital adequacy purposes or to be categorized as “well-capitalized,” RJF must maintain minimum CET1, Tier 1 capital, Total capital and Tier 1 leverage amounts and ratios as set forth in the following table.
+Added: To meet requirements for capital adequacy or to be categorized as “well-capitalized,” RJF must maintain minimum CET1, Tier 1 capital, Total capital and Tier 1 leverage amounts and ratios as set forth in the following table.
Actual Requirement for capital
2 unchanged sentences
$ in millions Amount Ratio Amount Ratio Amount Ratio
−Removed: RJF as of June 30, 2021:
+Added: RJF as of December 31, 2021:
CET1 $ 7,842 25.9 % $ 1,365 4.5 % $ 1,972 6.5 %
8 unchanged sentences
Tier 1 leverage $ 7,428 12.6 % $ 2,363 4.0 % $ 2,954 5.0 %
−Removed: As of June 30, 2021, RJF’s regulatory capital increase was driven by positive earnings, partially offset by dividends and share repurchases, as well as an increase in goodwill and identifiable intangible assets arising from the NWPS and Financo acquisitions.
−Removed: See Note 3 for additional information.
−Removed: RJF’s Tier 1 and Total capital ratios increased compared to September 30, 2020, resulting from the increase in regulatory capital, partially offset by an increase in risk-weighted assets.
−Removed: The increase in risk-weighted assets was driven by increases in our loan portfolio and available-for-sale securities.
−Removed: RJF’s Tier 1 leverage ratio at June 30, 2021 decreased compared to September 30, 2020 due to increased average assets, driven by higher assets segregated pursuant to regulations due to an increase in client cash in the Client Interest Program (“CIP”), as well as growth in loans and available-for-sale securities.
−Removed: The impact of higher average assets was partially offset by the increase in regulatory capital.
+Added: As of December 31, 2021, RJF’s regulatory capital increase compared to September 30, 2021 was driven by positive earnings, net of dividends paid during our fiscal first quarter.
+Added: RJF’s Tier 1 and Total capital ratios increased compared to September 30, 2021, resulting from the increase in regulatory capital, partially offset by an increase in risk-weighted assets driven by increases in our loan portfolio and cash and cash equivalents.
+Added: RJF’s Tier 1 leverage ratio at December 31, 2021 decreased compared to September 30, 2021 due to increased average assets, driven by higher assets segregated for regulatory purposes and cash and cash equivalents, primarily resulting from an increase in client cash in the Client Interest Program (“CIP”), as well as growth in available-for-sale securities and loans.
+Added: The increase in average assets was partially offset by the increase in regulatory capital.
RAYMOND JAMES FINANCIAL, INC.
6 unchanged sentences
$ in millions Amount Ratio Amount Ratio Amount Ratio
−Removed: Raymond James Bank as of June 30, 2021:
+Added: Raymond James Bank as of December 31, 2021:
CET1 $ 2,675 13.3 % $ 905 4.5 % $ 1,307 6.5 %
9 unchanged sentences
Tier 1 leverage $ 2,626 7.4 % $ 1,411 4.0 % $ 1,763 5.0 %
−Removed: As of June 30, 2021, Raymond James Bank’s regulatory capital increase was driven by positive earnings.
−Removed: Raymond James Bank’s Tier 1 capital and Total capital ratios at June 30, 2021 increased compared to September 30, 2020, due to the increase in regulatory capital, partially offset by the impact of higher risk-weighted assets, primarily resulting from increases in our loan portfolio and available-for-sale securities.
−Removed: Raymond James Bank’s Tier 1 leverage ratio at June 30, 2021 decreased compared to September 30, 2020, due to increased average assets, driven by the growth in loans and available-for-sale securities, which was partially offset by the impact of the increase in regulatory capital.
+Added: As of December 31, 2021, Raymond James Bank’s Tier 1 capital and Total capital ratios decreased compared to September 30, 2021, due to higher risk-weighted assets, primarily due to increased loans and available-for-sale securities, which were funded by increased client cash balances in the RJBDP swept to Raymond James Bank.
+Added: The increase in risk-weighted assets was partially offset by higher regulatory capital.
+Added: Raymond James Bank’s Tier 1 leverage ratio at December 31, 2021 decreased compared to September 30, 2021, due to increased average assets, driven by growth in loans, cash and available-for-sale securities.
Certain of our broker-dealer subsidiaries are subject to the requirements of the Uniform Net Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934.
The following table presents the net capital position of RJ&A.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Raymond James & Associates, Inc.
7 unchanged sentences
$ 1,869 $ 1,979
−Removed: As of June 30, 2021, Raymond James Financial Services, Inc.
−Removed: (“RJFS”), Raymond James Ltd.
−Removed: (“RJ Ltd.”), RJ Trust, and all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.
+Added: As of December 31, 2021, all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.
RAYMOND JAMES FINANCIAL, INC.
2 unchanged sentences
NOTE 21 – EARNINGS PER SHARE
+Added: During our fiscal fourth quarter of 2021 the Board of Directors approved a three-for-two stock split, effected in the form of a 50 % stock dividend, paid on September 21, 2021.
+Added: All share and per share information has been retroactively adjusted to reflect this stock split.
The following table presents the computation of basic and diluted earnings per common share.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
in millions, except per share amounts 2021 2020
Income for basic earnings per common share:
−Removed: $ 307 $ 172 $ 974 $ 609
Less allocation of earnings and dividends to participating securities
−Removed: — — ( 1 ) ( 1 )
Net income attributable to RJF common shareholders
−Removed: $ 307 $ 172 $ 973 $ 608
Income for diluted earnings per common share:
−Removed: $ 307 $ 172 $ 974 $ 609
Less allocation of earnings and dividends to participating securities
−Removed: — — ( 1 ) ( 1 )
Net income attributable to RJF common shareholders
−Removed: $ 307 $ 172 $ 973 $ 608
Common shares:
Average common shares in basic computation
−Removed: 137.2 137.1 137.2 137.9
Dilutive effect of outstanding stock options and certain RSUs
−Removed: 3.9 2.3 3.4 2.6
Average common and common equivalent shares used in diluted computation 212.4 209.6
3 unchanged sentences
Stock options and certain RSUs excluded from weighted-average diluted common shares because their effect would be antidilutive
−Removed: — 1.8 0.1 1.6
The allocation of earnings and dividends to participating securities in the preceding table represents dividends paid during the period to participating securities, consisting of certain RSUs, plus an allocation of undistributed earnings to such participating securities.
−Removed: Participating securities and related dividends paid on these participating securities were insignificant for the three and nine months ended June 30, 2021 and 2020.
+Added: Participating securities and related dividends paid on these participating securities were insignificant for each of the three months ended December 31, 2021 and 2020.
Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed.
Dividends per common share declared and paid are detailed in the following table for each respective period.
−Removed: Three months ended June 30, Nine months ended June 30,
−Removed: 2021 2020 2021 2020
+Added: Three months ended December 31,
Dividends per common share - declared $ 0.34 $ 0.26
Dividends per common share - paid $ 0.26 $ 0.25
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 22 – SEGMENT INFORMATION
5 unchanged sentences
For a further discussion of our segments, see Note 26 of our 2021 Form 10-K.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table presents information concerning operations in these segments.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
2 unchanged sentences
Capital Markets
−Removed: 446 323 1,331 881
Asset Management
−Removed: 225 163 629 531
Raymond James Bank 183 167
−Removed: 2 ( 20 ) ( 6 ) ( 72 )
Intersegment eliminations
4 unchanged sentences
Capital Markets
−Removed: 115 62 349 119
Asset Management
−Removed: 105 60 275 206
Raymond James Bank 102 71
1 unchanged sentence
Total pre-tax income
−Removed: $ 385 $ 198 $ 1,231 $ 796
No individual client accounted for more than ten percent of revenues in any of the periods presented.
The following table presents our net interest income on a segment basis.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
1 unchanged sentence
Private Client Group
−Removed: $ 29 $ 27 $ 84 $ 106
Capital Markets
−Removed: Asset Management
Raymond James Bank 177 157
2 unchanged sentences
The following table presents our total assets on a segment basis.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Total assets:
6 unchanged sentences
Total $ 68,461 $ 61,891
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table presents goodwill, which was included in our total assets, on a segment basis.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Private Client Group $ 417 $ 417
2 unchanged sentences
Total $ 660 $ 660
−Removed: (1) The balance includes $ 139 million of goodwill arising from our acquisition of NWPS in December 2020.
−Removed: (2) The balance includes $ 30 million of goodwill arising from our acquisition of Financo in March 2021.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
We have operations in the U.S., Canada and Europe.
1 unchanged sentence
The following table presents our net revenues and pre-tax income classified by major geographic area in which they were earned.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2021 2020
2 unchanged sentences
Canada 137 105
−Removed: Europe 68 42 154 117
Total $ 2,781 $ 2,222
Pre-tax income:
−Removed: $ 353 $ 191 $ 1,165 $ 770
−Removed: Canada 15 5 41 26
−Removed: Europe 17 2 25 —
Total $ 558 $ 399
The following table presents our total assets by major geographic area in which they were held.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Total assets:
4 unchanged sentences
The following table presents goodwill, which was included in our total assets, classified by major geographic area in which it was held.
−Removed: $ in millions June 30, 2021 September 30, 2020
+Added: $ in millions December 31, 2021 September 30, 2021
Total $ 660 $ 660
−Removed: (1) The balance includes $ 139 million of goodwill arising from our acquisition of NWPS in December 2020 and $ 30 million of goodwill arising from our acquisition of Financo in March 2021.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.