13 unchanged sentences
Critical accounting estimates 71
−Removed: Recent accounting developments 86
+Added: Accounting standards update
Risk management 73
4 unchanged sentences
Certain statements made in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995.
−Removed: Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions, demand for and pricing of our products, acquisitions, divestitures, anticipated results of litigation, regulatory developments, and general economic conditions.
−Removed: In addition, words such as “believes,” “expects,” “anticipates,” “estimates,” “projects,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.
+Added: Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions (including changes in interest rates and inflation), demand for and pricing of our products (including cash sweep and deposit offerings), acquisitions, anticipated results of litigation, regulatory developments, and general economic conditions.
+Added: In addition, words such as “believes,” “expects,” “anticipates,” “estimates,” “projects,” and future or conditional verbs such as “may,” “will,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.
Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions.
9 unchanged sentences
Overall market conditions, economic, political and regulatory trends, and industry competition are among the factors which could affect us and which are unpredictable and beyond our control.
−Removed: These factors affect the financial decisions made by market participants, including investors, depositors, borrowers, and competitors, impacting their level of participation in the financial markets.
+Added: These factors affect the financial decisions made by market participants, including investors, borrowers, and competitors, impacting their level of participation in the financial markets.
These factors also impact the level of investment banking activity and asset valuations, which ultimately affect our business results.
EXECUTIVE OVERVIEW
−Removed: Quarter ended June 30, 2023 compared with the quarter ended June 30, 2022
−Removed: For our fiscal third quarter of 2023, we generated net revenues of $2.91 billion, an increase of 7% compared with the prior-year quarter, and pre-tax income of $486 million increased 17%.
−Removed: Our net income available to common shareholders of $369 million increased 23%, and our earnings per diluted share were $1.71, reflecting a 24% increase.
+Added: Quarter ended December 31, 2023 compared with the quarter ended December 31, 2022
+Added: For our fiscal first quarter of 2024, we generated net revenues of $3.01 billion, an increase of 8% compared with the prior-year quarter, while pre-tax income of $630 million decreased $22 million, or 3%.
+Added: Our net income available to common shareholders of $497 million decreased 2%, and our earnings per diluted share were $2.32, reflecting an increase of 1%.
Our annualized return on common equity (“ROCE”) for the quarter was 19.1%, compared with 21.3% for the prior-year quarter, and our annualized return on tangible common equity (“ROTCE”) was 23.0% (1) , compared with 26.2% (1) for the prior-year quarter.
−Removed: Excluding $40 million of expenses related to acquisitions completed in prior years, such as compensation related to retention awards and amortization of identifiable intangible assets, our adjusted net income available to common shareholders was $399 million (1) for the three months ended June 30, 2023 and our adjusted earnings per diluted share were $1.85 (1) , each 15% higher compared with the prior-year quarter.
+Added: Excluding the impact of $23 million of expenses related to acquisitions completed in prior years, such as compensation related to retention awards and amortization of identifiable intangible assets, our adjusted net income available to common shareholders was $514 million (1) for the three months ended December 31, 2023, an increase of $9 million, or 2%, compared with adjusted net income available to common shareholders for the prior-year quarter which, in addition to acquisition-related expenses, excluded the impact of a $32 million favorable insurance settlement received in the prior-year quarter related to a previously-settled legal matter, which did not recur.
+Added: Our adjusted earnings per diluted share were $2.40 (1) , an increase of 5% compared with the prior-year quarter.
Adjusted annualized ROCE for the quarter was 19.7% (1) and adjusted annualized ROTCE was 23.8% (1) compared with adjusted annualized ROCE of 21.2% (1) and adjusted annualized ROTCE of 26.1% (1) for the prior-year quarter.
4 unchanged sentences
Management’s Discussion and Analysis
−Removed: Quarterly net revenues increased compared with the prior-year quarter primarily due to the benefit of higher short-term interest rates on net interest income and RJBDP fees from third-party banks, as well as incremental revenues from our prior-year acquisitions of TriState Capital in June 2022 and SumRidge Partners, LLC (“SumRidge Partners”) in July 2022.
−Removed: These increases were offset by lower investment banking revenues due to a challenging market environment during the current quarter, which continued to dampen capital markets activity not only in our business but across the industry, as well as lower asset management and related administrative fees, primarily as a result of lower PCG client assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter.
−Removed: Brokerage revenues also declined compared with the prior-year quarter primarily due to lower asset-based trailing revenues in the PCG segment, as well as decreased activity from depository institution clients in the Capital Markets segment.
−Removed: Compensation, commissions and benefits expense increased 1%, primarily due to incremental compensation expenses arising from the aforementioned acquisitions, as well as an increase in compensation costs to support our growth and annual salary increases, partially offset by a decrease in compensable revenues compared with the prior-year quarter.
+Added: The increase in net revenues compared with the prior-year quarter was primarily due to higher asset management and related administrative fees, largely the result of higher PCG client assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter.
+Added: Investment banking revenues increased compared with the prior-year quarter but continued to be impacted by market uncertainty, which negatively impacted industry-wide investment banking activity.
+Added: Brokerage revenues also increased compared with the prior-year quarter largely due to an increase in client activity in the PCG segment.
+Added: Offsetting these increases was a decrease in combined net interest income and RJBDP fees of $25 million, or 3%, as the benefits of higher short-term interest rates on net interest income and RJBDP fees from third-party banks and of higher average interest-earning assets were more than offset by a significant increase in interest expense, primarily resulting from a shift in the mix of deposit balances at our Bank segment, as lower-cost RJBDP balances declined compared with the prior-year quarter, while balances in the higher-cost ESP, which was launched to PCG clients in March 2023, continued to increase.
+Added: Compensation, commissions and benefits expense increased 11%, primarily due to an increase in compensable revenues, as well as an increase in compensation costs both to support our growth and annual cost increases, including salaries.
Our compensation ratio, or the ratio of compensation, commissions and benefits expense to net revenues, was 63.8%, compared with 62.3% for the prior-year quarter.
Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 63.4% (1) , compared with 61.7% (1) for the prior-year quarter.
−Removed: The decline in the compensation ratio primarily resulted from changes in our revenue mix due to higher net interest income and RJBDP fees from third-party banks, which have little associated direct compensation.
−Removed: Non-compensation expenses increased $101 million or 22%.
−Removed: Elevated provisions for legal and regulatory matters during the current quarter accounted for approximately $65 million of the increase, with the remainder primarily resulting from incremental expenses arising from the aforementioned acquisitions, as well as higher communications and information processing expenses, arising both from acquisitions and continued investments in technology to support our growth, and higher business development expenses.
−Removed: The bank loan provision for credit losses was $54 million for the current-year quarter compared with a provision of $56 million for the prior-year quarter, which included an initial provision for credit losses of $26 million on loans acquired as part of the TriState Capital acquisition.
−Removed: The bank loan provision for credit losses in the current-year quarter largely reflected the impacts of a weaker economic outlook for the CRE portfolio as reflected in the Moody’s CRE Price Index in our CECL model and, to a lesser extent, loan downgrades during the quarter.
−Removed: Our effective income tax rate was 24.1% for our fiscal third quarter of 2023, a decrease compared with the 27.5% effective income tax rate for the prior-year quarter, primarily due to the impact on our provision for income taxes from nontaxable valuation gains associated with our company-owned life insurance policies in the current-year quarter compared with nondeductible valuation losses in the prior-year quarter.
−Removed: As of June 30, 2023, our Tier 1 leverage ratio of 11.4% and Total capital ratio of 22.0% were both more than double the regulatory requirement to be considered well-capitalized.
−Removed: We also continue to have substantial liquidity with $1.7 billion (2) of cash at the parent as of June 30, 2023, which includes cash the parent loaned to RJ&A to invest on its behalf.
+Added: The increase in the compensation ratio primarily resulted from changes in our revenue mix due to increases in compensable revenues compared with the prior-year quarter, as well as a decrease in combined net interest income and RJBDP fees from third-party banks, which have little associated direct compensation.
+Added: Non-compensation expenses increased $64 million, or 16%, largely due to the favorable impact of a $32 million insurance settlement received in the prior-year quarter related to a previously settled litigation matter, the impact of a FDIC special assessment of $9 million, as well as higher communications and information processing expenses, primarily resulting from continued investments in technology to support our growth.
+Added: Our effective income tax rate was 21.0% for our fiscal first quarter of 2024, a slight decrease compared with the 21.9% effective income tax rate for the prior-year quarter.
+Added: As of December 31, 2023, our Tier 1 leverage ratio of 12.1% and Total capital ratio of 23.0% were both significantly higher than the regulatory requirement to be considered well-capitalized.
+Added: We also continue to have substantial liquidity with $2.1 billion (2) of cash at the parent as of December 31, 2023.
We believe our capital and funding position provides us the opportunity to manage our balance sheet prudently and to continue to be opportunistic and invest in growth.
−Removed: We also have access to significant sources of funding for our business activities should the need arise, including borrowings against the $750 million balance available on our revolving credit facility, which was recently renewed and increased from $500 million in April 2023, as well as nearly $10 billion of FHLB borrowing capacity in the Bank segment.
−Removed: During the three months ended June 30, 2023, we repurchased 3.31 million shares of our common stock for $300 million at an average price of $91 per share under the Board of Directors’ common stock repurchase authorization.
−Removed: After the effect of those repurchases, $750 million remained under such authorization.
−Removed: We currently expect to continue to repurchase our common stock in our fiscal fourth quarter of 2023 to offset the shares issued with the acquisition of TriState Capital in fiscal 2022, as well as to offset dilution from share-based compensation;
−Removed: however, we will continue to monitor market conditions and other capital needs as we consider the magnitude and timing of these repurchases.
+Added: During the three months ended December 31, 2023, we repurchased 1.41 million shares of our common stock for $150 million at an average price of $106.51 per share under the Board of Directors’ common stock repurchase authorization.
+Added: After the effect of those repurchases, $1.39 billion remained under such authorization.
+Added: We currently expect to continue to repurchase our common stock in our fiscal second quarter of 2024 to offset the remaining impact of shares issued with the acquisition of TriState Capital in fiscal 2022 and to offset dilution from share-based compensation;
+Added: however, we will continue to monitor market conditions and other capital needs as we consider these repurchases.
+Added: As we look ahead to our fiscal second quarter of 2024, we believe we are well-positioned for long-term growth, with our strong capital position and total client assets under administration of $1.37 trillion.
+Added: We expect our fiscal second quarter of 2024 results to be favorably impacted by higher asset management and related administrative fees, which will benefit from the 9% sequential increase in both PCG fee-based assets and financial assets under management as of December 31, 2023.
+Added: In addition, our financial advisor recruiting activity remains robust, including a strong recruiting pipeline.
+Added: However, absent a change to interest rates from December 31, 2023 levels, we expect our combined net interest income and RJBDP fees from third-party banks to further decline an estimated 5% in total in our fiscal second quarter compared with our fiscal first quarter of 2024 due to lower net interest income in our Bank segment reflecting the impact from higher-cost diversified funding sources, including our ESP which was launched to PCG clients in March 2023.
+Added: While we have a healthy investment banking pipeline and we believe the environment for M&A and advisory activity is improving, the pace and timing of transactions are heavily influenced by market conditions, and we expect investment banking activity to continue to be negatively impacted by market uncertainty during our fiscal second quarter of 2024 but start to improve later in our fiscal 2024.
+Added: We expect to continue to experience headwinds for brokerage revenues due to flat or declining cash balances at many of our depository institution clients.
+Added: In addition, although we have proactively taken steps to manage our credit risk in our loan portfolio, future economic deterioration or changes in our macroeconomic outlook could result in increased bank loan provisions for credit losses in future periods.
(1) Adjusted compensation ratio is a non-GAAP financial measure.
−Removed: Please see the “Reconciliation of non-GAAP financial measures to GAAP financial measures” in this MD&A for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, and for other important disclosures.
+Added: Please see the “Reconciliation of non-GAAP financial measures to GAAP financial measures” in this MD&A for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure, and for other important disclosures.
(2) For additional information, please see the “Liquidity and capital resources - Sources of liquidity” section in this MD&A.
2 unchanged sentences
Management’s Discussion and Analysis
−Removed: As we look ahead to our fiscal fourth quarter of 2023, we expect our results to be favorably impacted by higher asset management and related administrative fees, which will benefit from the 5% sequential increase in PCG fee-based assets and 3% sequential increase in financial assets under management as of June 30, 2023.
−Removed: However, we expect our combined net interest income and RJBDP fees from third-party banks to decline an estimated 5% in total in our fiscal fourth quarter compared with our fiscal third quarter of 2023 due to lower net interest income in our Bank segment reflecting the impact from higher-cost diversified funding sources, including our Enhanced Savings Program which was launched to PCG clients in March 2023, as well as elevated cash balances we plan to maintain in our Bank segment due to market conditions, partially offset by an increase in RJBDP fees from third-party banks due to the combination of higher average balances swept to such banks as well as recent increases in short-term interest rates.
−Removed: While we have a healthy investment banking pipeline, market uncertainty continues to impact the pace and timing of transactions, and we expect such uncertainty to continue in our fiscal fourth quarter, which may continue to have a negative impact on investment banking revenues compared to prior year levels.
−Removed: We expect to continue to experience headwinds for brokerage revenues due to a decline in cash balances at many of our depository institution clients.
−Removed: In addition, although we have proactively taken steps to manage our credit risk in our loan portfolio, including selling approximately $450 million of corporate loans during the fiscal third quarter of 2023, future economic deterioration or changes in our macroeconomic outlook could result in increased bank loan provisions for credit losses in future periods.
−Removed: Nine months ended June 30, 2023 compared with the nine months ended June 30, 2022
−Removed: For the nine months ended June 30, 2023, we generated net revenues of $8.57 billion, an increase of 5% compared with the prior-year period, and pre-tax income of $1.70 billion, an increase of 21%.
−Removed: Our net income available to common shareholders of $1.30 billion was 22% higher than the prior-year period and our earnings per diluted share were $5.95, reflecting a 19% increase.
−Removed: Our annualized ROCE was 17.9%, compared with 16.3% for the prior-year period, and our annualized ROTCE was 22.0% (1) , compared with 18.7% (1) for the prior-year period.
−Removed: The nine months ended June 30, 2023 included $97 million of expenses related to acquisitions completed in prior years, such as compensation related to retention awards and amortization of identifiable intangible assets.
−Removed: The nine months ended June 30, 2023 also included the favorable impact of a $32 million insurance settlement received during our fiscal first quarter related to a previously-settled legal matter.
−Removed: Excluding these items, our adjusted net income available to common shareholders was $1.35 billion (1) , an increase of 17% compared with the prior-year period, and our adjusted earnings per diluted share were $6.17 (1) , an increase of 14%.
−Removed: Adjusted annualized ROCE was 18.5% (1) , compared with 17.6% (1) in the prior-year period, and adjusted annualized ROTCE was 22.7% (1) , compared with 20.1% (1) in the prior-year period.
−Removed: The increase in net revenues compared with the prior-year period was primarily driven by the benefit of significantly higher short-term interest rates in the current-year period on both net interest income and RJBDP fees from third-party banks, as well as incremental revenues arising from our prior-year acquisitions of Charles Stanley, TriState Capital and SumRidge.
−Removed: These increases were offset by lower investment banking and brokerage revenues, primarily due to a more challenging market environment during the current-year period, and a decline in asset management and related administrative fees, primarily attributable to lower PCG client assets in fee-based accounts at the beginning of each of the current-year quarterly billing periods.
−Removed: Compensation, commissions and benefits expense decreased 3%, primarily attributable to the decrease in compensable revenues compared with the prior-year period, partially offset by incremental expenses arising from our prior-year acquisitions of Charles Stanley, TriState Capital, and SumRidge, as well as an increase in compensation costs to support our growth and annual salary increases.
−Removed: Our compensation ratio was 63.1%, compared with 68.2% for the prior-year period.
−Removed: Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 62.4% (1) , compared with an adjusted compensation ratio of 67.6% (1) for the prior-year period.
−Removed: Non-compensation expenses increased $268 million, or 22%, due most significantly to incremental expenses arising from our prior-year acquisitions of Charles Stanley, TriState Capital, and SumRidge, elevated provisions for legal and regulatory matters during the current period of approximately $100 million, as well as increases in business development expenses, communications and information processing expenses, and the bank loan provision for credit losses.
−Removed: Partially offsetting these increases was the aforementioned favorable insurance settlement received.
−Removed: (1) ROTCE, adjusted net income available to common shareholders, adjusted earnings per diluted share, adjusted annualized ROCE, adjusted annualized ROTCE, and adjusted compensation ratio are non-GAAP financial measures.
−Removed: Please see the “Reconciliation of non-GAAP financial measures to GAAP financial measures” in this MD&A for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, and for other important disclosures.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Our effective income tax rate was 23.0% for the nine months ended June 30, 2023, a decrease from 23.9% for the prior-year period, primarily due to the impact on our provision for income taxes of nontaxable valuation gains associated with our company-owned life insurance policies in the current year compared with nondeductible valuation losses in the prior-year period.
−Removed: In December 2022, the Board of Directors increased the quarterly cash dividend on common shares to $0.42 per share and authorized common stock repurchases of up to $1.5 billion.
−Removed: During the nine months ended June 30, 2023, we repurchased 8.35 million shares of our common stock under the Board of Directors’ common stock repurchase authorization for $788 million at an average price of $94 per share.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES
3 unchanged sentences
We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a comparison of current- and prior-period results.
−Removed: We believe that return on tangible common equity is meaningful to investors as it facilitates comparisons of our results to the results of other companies.
+Added: We believe that ROTCE is meaningful to investors as it facilitates comparisons of our results to the results of other companies.
In the following tables, the tax effect of non-GAAP adjustments reflects the statutory rate associated with each non-GAAP item.
2 unchanged sentences
The following tables provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures.
−Removed: Three months ended Nine months ended
−Removed: $ in millions June 30,
−Removed: 2023 June 30,
−Removed: 2022 June 30,
−Removed: 2023 June 30,
+Added: Three months ended December 31,
+Added: $ in millions, except per share amounts
Net income available to common shareholders $ 497 $ 507
Non-GAAP adjustments :
−Removed: Expenses directly related to acquisitions included in the following financial statement line items:
−Removed: Compensation, commissions and benefits:
−Removed: Acquisition-related retention 18 16 53 41
−Removed: Other acquisition-related compensation 10 2 10 2
−Removed: Total “Compensation, commissions and benefits” expense 28 18 63 43
+Added: Expenses related to acquisitions:
+Added: Compensation, commissions and benefits — Acquisition-related retention
Professional fees
−Removed: Bank loan provision for credit losses — Initial provision for credit losses on acquired loans
−Removed: Amortization of identifiable intangible assets 11 8 33 22
−Removed: Initial provision for credit losses on acquired lending commitments — 5 — 5
−Removed: All other acquisition-related expenses
−Removed: Total “Other” expense 11 17 33 37
+Added: Other — Amortization of identifiable intangible assets
Total expenses related to acquisitions 23 29
4 unchanged sentences
Adjusted net income available to common shareholders $ 514 $ 505
+Added: Pre-tax income $ 630 $ 652
+Added: Pre-tax impact of non-GAAP adjustments (as detailed above) 23 (3)
+Added: Adjusted pre-tax income $ 653 $ 649
Compensation, commissions and benefits expense $ 1,921 $ 1,736
−Removed: Total compensation-related acquisition expenses (as detailed above) 28 18 63 43
+Added: Acquisition-related retention (as detailed above)
Adjusted “Compensation, commissions and benefits” expense $ 1,910 $ 1,718
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Three months ended Nine months ended
−Removed: 2023 June 30,
−Removed: 2022 June 30,
−Removed: 2023 June 30,
Total compensation ratio 63.8 % 62.3 %
1 unchanged sentence
Acquisition-related retention 0.4 % 0.6 %
−Removed: Other acquisition-related compensation 0.3 % 0.1 % 0.1 % 0.1 %
−Removed: Total “Compensation, commissions and benefits” expenses related to acquisitions 1.0 % 0.7 % 0.7 % 0.6 %
Adjusted total compensation ratio 63.4 % 61.7 %
−Removed: Three months ended Nine months ended
−Removed: 2023 June 30,
−Removed: 2022 June 30,
−Removed: 2023 June 30,
Diluted earnings per common share $ 2.32 $ 2.30
Impact of non-GAAP adjustments on diluted earnings per common share:
−Removed: Compensation, commissions and benefits:
−Removed: Acquisition-related retention 0.09 0.07 0.24 0.19
−Removed: Other acquisition-related compensation 0.05 0.01 0.05 0.01
−Removed: Total “Compensation, commissions and benefits” expense 0.14 0.08 0.29 0.20
+Added: Expenses related to acquisitions:
+Added: Compensation, commissions and benefits — Acquisition-related retention
Professional fees 0.01 —
−Removed: Bank loan provision for credit losses — Initial provision for credit losses on acquired loans
−Removed: — 0.12 — 0.12
−Removed: Amortization of identifiable intangible assets 0.05 0.04 0.15 0.11
−Removed: Initial provision for credit losses on acquired lending commitments — 0.02 — 0.02
−Removed: All other acquisition-related expenses — 0.02 — 0.05
−Removed: Total “Other” expense 0.05 0.08 0.15 0.18
+Added: Other — Amortization of identifiable intangible assets
Total expenses related to acquisitions 0.11 0.14
3 unchanged sentences
Adjusted diluted earnings per common share $ 2.40 $ 2.29
−Removed: Return on common equity Three months ended Nine months ended
−Removed: $ in millions June 30,
−Removed: 2023 June 30,
−Removed: 2022 June 30,
−Removed: 2023 June 30,
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
+Added: Return on common equity Three months ended December 31,
+Added: $ in millions 2023 2022
Average common equity $ 10,423 $ 9,537
Impact of non-GAAP adjustments on average common equity :
−Removed: Compensation, commissions and benefits:
−Removed: Acquisition-related retention 9 8 27 19
−Removed: Other acquisition-related compensation 4 1 2 1
−Removed: Total “Compensation, commissions and benefits” expense 13 9 29 20
+Added: Expenses related to acquisitions:
+Added: Compensation, commissions and benefits — Acquisition-related retention
Professional fees — —
−Removed: Bank loan provision for credit losses — Initial provision for credit losses on acquired loans
−Removed: Amortization of identifiable intangible assets 6 4 17 11
−Removed: Initial provision for credit losses on acquired lending commitments — 3 — 1
−Removed: All other acquisition-related expenses — 2 — 4
−Removed: Total “Other” expense 6 9 17 16
+Added: Other — Amortization of identifiable intangible assets
Total expenses related to acquisitions 12 14
3 unchanged sentences
Adjusted average common equity $ 10,432 $ 9,536
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Three months ended Nine months ended
−Removed: $ in millions June 30,
−Removed: 2023 June 30,
−Removed: 2022 June 30,
−Removed: 2023 June 30,
Average common equity $ 10,423 $ 9,537
3 unchanged sentences
Impact of non-GAAP adjustments on average tangible common equity:
−Removed: Compensation, commissions and benefits:
−Removed: Acquisition-related retention 9 8 27 19
−Removed: Other acquisition-related compensation 4 1 2 1
−Removed: Total “Compensation, commissions and benefits” expense 13 9 29 20
+Added: Expenses related to acquisitions:
+Added: Compensation, commissions and benefits — Acquisition-related retention
Professional fees — —
−Removed: Bank loan provision for credit losses — Initial provision for credit losses on acquired loans
−Removed: Amortization of identifiable intangible assets 6 4 17 11
−Removed: Initial provision for credit losses on acquired lending commitments — 3 — 1
−Removed: All other acquisition-related expenses — 2 — 4
−Removed: Total “Other” expense 6 9 17 16
+Added: Other — Amortization of identifiable intangible assets
Total expenses related to acquisitions 12 14
11 unchanged sentences
Average common equity is computed by adding the total common equity attributable to RJF as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two.
−Removed: Average common equity for the year-to-date period is computed by adding the total common equity attributable to RJF as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by four, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated year-to-date period to the beginning of year total, and dividing by four.
Adjusted average common equity is computed by adjusting for the impact on average common equity of the non-GAAP adjustments, as applicable for each respective period.
6 unchanged sentences
NET INTEREST ANALYSIS
−Removed: Largely in response to inflationary pressures since the beginning of fiscal year 2022, the Fed rapidly and consistently increased its benchmark short-term interest rates commencing in March 2022 and continuing into our fiscal third quarter of 2023.
−Removed: Over this period, the Fed has increased the Fed funds target rate from a March 31, 2022 range of 0.25% to 0.50% to a June 30, 2023 range of 5.00% to 5.25%.
−Removed: The Fed has further increased the Fed funds target rate by 25 basis points in July 2023 and indicated that it intends to closely monitor short-term interest rates throughout the remainder of our fiscal 2023.
−Removed: The following table details the Fed’s recent short-term interest rate activity.
−Removed: Fed Funds Target Rate Schedule
−Removed: RJF fiscal quarter ended Effective date of interest rate action Increase/(decrease) in interest rates (in basis points) Fed funds target rate
−Removed: March 31 2020 March 16, 2020 (100) 0.00% - 0.25%
−Removed: March 31, 2022 March 17, 2022 25 0.25% - 0.50%
−Removed: June 30, 2022 May 5, 2022 50 0.75% - 1.00%
−Removed: June 30, 2022 June 16, 2022 75 1.50% - 1.75%
−Removed: September 30, 2022 July 28, 2022 75 2.25% - 2.50%
−Removed: September 30, 2022 September 22, 2022 75 3.00% - 3.25%
+Added: Largely in response to inflationary pressures since the beginning of fiscal year 2022, the Fed rapidly and consistently increased its benchmark short-term interest rates commencing in March 2022 and continuing throughout our fiscal 2023.
+Added: Since the beginning of our fiscal 2023, the Fed has increased the Fed funds target rate from a September 30, 2022 range of 2.25% to 2.50% to a December 31, 2023 range of 5.25% to 5.50%.
+Added: While the Fed has left its benchmark rate unchanged in its most recent meetings, it has indicated that it intends to closely monitor market conditions to determine whether it will continue to hold rates steady or initiate rate cuts in our fiscal 2024.
+Added: The following table details the Fed’s short-term interest rate activity since the beginning of our fiscal 2023.
+Added: RJF fiscal quarter ended Effective date of interest rate action Increase in interest rates (in basis points)
+Added: Fed funds target rate
December 31, 2022 November 3, 2022 75 3.75% - 4.00%
3 unchanged sentences
June 30, 2023 May 4, 2023 25 5.00% - 5.25%
−Removed: Rate changes subsequent to June 30, 2023
September 30, 2023 July 27, 2023 25 5.25% - 5.50%
1 unchanged sentence
Increases in short-term interest rates generally result in an increase in our net earnings, although the magnitude of the impact to our net interest margin depends on the yields on interest-earning assets relative to the cost of interest-bearing liabilities, including deposit rates paid to clients on their cash balances.
−Removed: Our domestic client cash sweep balances continue to represent a relatively low-cost funding source.
−Removed: In fiscal 2023, we introduced the Enhanced Savings Program to our clients as part of our strategy to diversify our funding sources, albeit at a higher relative cost than other alternatives.
−Removed: Changes to the regulatory landscape governing the fees the firm earns on client assets, including cash sweep balances, as well as other market driven factors, could negatively impact our earnings.
−Removed: As a result of our diverse funding sources and high concentration of floating-rate assets, we benefited from the increases in short-term interest rates during the second half of fiscal 2022 and continuing into the three and nine months ended June 30, 2023.
−Removed: However, despite recent increases in short-term interest rates, our net interest income and net interest margin decreased during our fiscal third quarter of 2023 compared with the preceding quarter due to a more rapid increase in deposit costs than in recent periods due to growth in the Enhanced Savings Program.
−Removed: Despite an additional 25-basis point increase in the Fed funds target rate in July 2023 and higher RJBDP balances swept to third-party banks, we expect our combined net interest income and RJBDP fees from third-party banks to further decline an estimated 5% in our fiscal fourth quarter compared to the fiscal third quarter of 2023, due to lower net interest income in our Bank segment largely resulting from higher interest expense associated with the continued success of our Enhanced Savings Program.
−Removed: Further, we expect to continue to carry a relatively higher level of cash balances in our Bank segment due to market conditions.
−Removed: In addition, our pace of loan growth may continue to be muted, or otherwise fluctuate over time in response to a number of factors which include changes in interest rates, credit spreads, and other market factors, which may moderate growth in interest income generated by loans in the Bank segment in the near-term.
+Added: Our domestic client cash sweep balances continue to represent a relatively low-cost funding source, while other deposit products utilized as part of our strategy to diversify our funding sources, such as our ESP introduced to our clients in fiscal 2023, have a higher relative cost than other alternatives.
+Added: Combined net interest income and RJBDP fees from third-party banks of $698 million for three months ended December 31, 2023 was $25 million, or 3%, lower compared with the prior-year quarter.
+Added: The benefits from increases in short-term interest rates throughout our fiscal 2023 and higher interest-earning asset balances compared with the prior-year quarter were more than offset by a significant increase in interest expense, primarily resulting from a shift in the mix of deposit balances in our Bank segment, as lower-cost RJBDP balances declined compared with the prior-year quarter and a significant portion was replaced with higher-cost ESP balances.
+Added: However, growth in the ESP allowed us to deploy remaining RJBDP balances to third-party banks, which coupled with higher rates earned on such balances resulted in an increase in RJBDP fees from such banks compared with the prior-year quarter.
Refer to the discussion of our net interest income within the “Management’s Discussion and Analysis - Results of Operations” of our PCG, Bank, and Other segments, where applicable.
4 unchanged sentences
The following table presents our consolidated average interest-earning asset and interest-bearing liability balances, interest income and expense and the related rates.
−Removed: Quarter ended June 30, 2023 compared with the quarter ended June 30, 2022
−Removed: Three months ended June 30,
+Added: Quarter ended December 31, 2023 compared with the quarter ended December 31, 2022
+Added: Three months ended December 31,
$ in millions Average
52 unchanged sentences
Interest income on residential mortgage nonaccrual loans is recognized on a cash basis.
−Removed: (3) The yield on tax-exempt loans in the preceding table is presented on a taxable-equivalent basis utilizing the applicable federal statutory rates for each of the years presented.
+Added: (3) The average rate on tax-exempt loans in the preceding table is presented on a taxable-equivalent basis utilizing the applicable federal statutory rates for each of the periods presented.
(4) The average balance, interest expense, and average rate for “Total bank deposits” included amounts associated with affiliate deposits.
8 unchanged sentences
Changes attributable to both volume and rate have been allocated proportionately.
−Removed: Three months ended June 30,
+Added: Three months ended December 31,
2023 compared to 2022
39 unchanged sentences
Brokerage client payables (12) 15 3
−Removed: All other interest-bearing liabilities 17 (16) 1
−Removed: Interest-bearing liabilities — all other segments $ 21 $ 2 $ 23
−Removed: Total interest-bearing liabilities $ 129 $ 197 $ 326
−Removed: Change in firmwide net interest income $ (29) $ 316 $ 287
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Nine months ended June 30, 2023 compared with the nine months ended June 30, 2022
−Removed: Nine months ended June 30,
−Removed: $ in millions Average
−Removed: balance Interest Annualized
−Removed: balance Interest Annualized
−Removed: Interest-earning assets:
−Removed: Bank segment:
−Removed: Cash and cash equivalents $ 3,637 $ 128 4.66 % $ 1,785 $ 5 0.42 %
−Removed: Available-for-sale securities 10,886 163 1.99 % 9,116 84 1.23 %
−Removed: Loans held for sale and investment:
−Removed: Loans held for investment:
−Removed: SBL 14,580 717 6.49 % 7,630 152 2.62 %
−Removed: C&I loans 11,109 555 6.59 % 8,989 185 2.72 %
−Removed: CRE loans 6,951 369 6.99 % 3,476 76 2.90 %
−Removed: REIT loans 1,671 86 6.80 % 1,278 27 2.76 %
−Removed: Residential mortgage loans 7,960 186 3.12 % 5,851 119 2.69 %
−Removed: Tax-exempt loans (3)
−Removed: 1,625 31 3.13 % 1,305 25 3.18 %
−Removed: Loans held for sale 184 10 7.46 % 243 6 2.98 %
−Removed: Total loans held for sale and investment 44,080 1,954 5.88 % 28,772 590 2.73 %
−Removed: All other interest-earning assets 141 6 5.54 % 127 3 2.66 %
−Removed: Interest-earning assets — Bank segment $ 58,744 $ 2,251 5.08 % $ 39,800 $ 682 2.28 %
−Removed: All other segments:
−Removed: Cash and cash equivalents $ 3,084 $ 111 4.81 % $ 4,034 $ 11 0.35 %
−Removed: Assets segregated for regulatory purposes and restricted cash 5,125 152 3.96 % 15,879 39 0.32 %
−Removed: Trading assets — debt securities 1,055 40 5.05 % 452 13 3.90 %
−Removed: Brokerage client receivables 2,236 124 7.46 % 2,533 66 3.50 %
−Removed: All other interest-earning assets 1,829 51 3.25 % 1,892 30 2.20 %
−Removed: Interest-earning assets — all other segments $ 13,329 $ 478 4.73 % $ 24,790 $ 159 0.86 %
−Removed: Total interest-earning assets $ 72,073 $ 2,729 5.02 % $ 64,590 $ 841 1.74 %
−Removed: Interest-bearing liabilities:
−Removed: Bank segment:
−Removed: Bank deposits:
−Removed: Money market and savings accounts $ 42,828 $ 383 1.20 % $ 34,099 $ 12 0.05 %
−Removed: Interest-bearing demand deposits 7,881 266 4.49 % 909 10 1.26 %
−Removed: Certificates of deposit 1,960 54 3.66 % 806 10 1.76 %
−Removed: Total bank deposits (4)
−Removed: 52,669 703 1.78 % 35,814 32 0.12 %
−Removed: FHLB advances and all other interest-bearing liabilities 1,408 30 2.82 % 928 14 2.06 %
−Removed: Interest-bearing liabilities — Bank segment $ 54,077 $ 733 1.81 % $ 36,742 $ 46 0.17 %
−Removed: All other segments:
−Removed: Trading liabilities — debt securities $ 736 $ 26 4.80 % $ 179 $ 3 1.97 %
−Removed: Brokerage client payables 6,291 57 1.25 % 16,741 4 0.03 %
Senior notes payable — — —
All other interest-bearing liabilities 1 — 1
−Removed: 655 26 4.06 % 231 13 7.45 %
Interest-bearing liabilities — all other segments $ (11) $ 16 $ 5
Total interest-bearing liabilities $ 121 $ 145 $ 266
−Removed: Firmwide net interest income $ 1,818 $ 706
−Removed: Net interest margin (net yield on interest-earning assets)
−Removed: Bank segment 3.41 % 2.14 %
−Removed: Firmwide 3.37 % 1.46 %
−Removed: (1) Loans are presented net of unamortized discounts, unearned income, deferred loan fees and costs, and charge-offs.
−Removed: (2) Nonaccrual loans are included in the average loan balances.
−Removed: Any payments received for corporate nonaccrual loans are applied entirely to principal.
−Removed: Interest income on residential mortgage nonaccrual loans is recognized on a cash basis.
−Removed: (3) The yield on tax-exempt loans in the preceding table is presented on a taxable-equivalent basis utilizing the applicable federal statutory rates for each of the years presented.
−Removed: (4) The average balance, interest expense, and average rate for “Total bank deposits” included amounts associated with affiliate deposits.
−Removed: Such amounts are eliminated in consolidation and are offset in “All other interest-bearing liabilities” under “All other segments”.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates.
−Removed: The following table shows the effect that these factors had on the interest earned on our interest-earning assets and the interest incurred on our interest-bearing liabilities.
−Removed: The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average yield/cost.
−Removed: Similarly, the effect of rate changes is calculated by multiplying the change in average yield/cost by the previous period’s volume.
−Removed: Changes attributable to both volume and rate have been allocated proportionately.
−Removed: Nine months ended June 30,
−Removed: 2023 compared to 2022
−Removed: Increase/(decrease) due to
−Removed: $ in millions Volume Rate Total
−Removed: Interest-earning assets:
−Removed: Interest income
−Removed: Bank segment:
−Removed: Cash and cash equivalents $ 12 $ 111 $ 123
−Removed: Available-for-sale securities 19 60 79
−Removed: Loans held for sale and investment:
−Removed: Loans held for investment:
−Removed: SBL 215 350 565
−Removed: C&I loans 53 317 370
−Removed: CRE loans 122 171 293
−Removed: REIT loans 10 49 59
−Removed: Residential mortgage loans 47 20 67
−Removed: Tax-exempt loans 7 (1) 6
−Removed: Loans held for sale (3) 7 4
−Removed: Total loans held for sale and investment 451 913 1,364
−Removed: All other interest-earning assets — 3 3
−Removed: Interest-earning assets — Bank segment $ 482 $ 1,087 $ 1,569
−Removed: All other segments:
−Removed: Cash and cash equivalents $ (4) $ 104 $ 100
−Removed: Assets segregated for regulatory purposes and restricted cash (61) 174 113
−Removed: Trading assets — debt securities 22 5 27
−Removed: Brokerage client receivables (14) 72 58
−Removed: All other interest-earning assets (1) 22 21
−Removed: Interest-earning assets — all other segments $ (58) $ 377 $ 319
−Removed: Total interest-earning assets $ 424 $ 1,464 $ 1,888
−Removed: Interest-bearing liabilities:
−Removed: Interest expense
−Removed: Bank segment:
−Removed: Bank deposits:
−Removed: Money market and savings accounts $ 4 $ 367 $ 371
−Removed: Interest-bearing demand deposits 192 64 256
−Removed: Certificates of deposit 25 19 44
−Removed: Total bank deposits 221 450 671
−Removed: FHLB advances and all other interest-bearing liabilities 9 7 16
−Removed: Interest-bearing liabilities — Bank segment $ 230 $ 457 $ 687
−Removed: All other segments:
−Removed: Trading liabilities — debt securities $ 16 $ 7 $ 23
−Removed: Brokerage client payables (5) 58 53
−Removed: All other interest-bearing liabilities 21 (8) 13
−Removed: Interest-bearing liabilities — all other segments $ 32 $ 57 $ 89
−Removed: Total interest-bearing liabilities $ 262 $ 514 $ 776
Change in firmwide net interest income $ (120) $ 80 $ (40)
5 unchanged sentences
Operating results
−Removed: Three months ended June 30, Nine months ended June 30,
−Removed: $ in millions 2023 2022 % change 2023 2022 % change
+Added: Three months ended December 31,
+Added: $ in millions 2023 2022 % change
Asset management and related administrative fees
2 unchanged sentences
Mutual and other fund products
−Removed: 135 149 (9) % 398 486 (18) %
Insurance and annuity products
−Removed: 103 109 (6) % 320 330 (3) %
Equities, ETFs and fixed income products
−Removed: 111 115 (3) % 340 351 (3) %
Total brokerage revenues 382 345 11 %
1 unchanged sentence
Mutual fund and annuity service fees
−Removed: 103 102 1 % 306 325 (6) %
Bank segment 223 268 (17) %
1 unchanged sentence
Client account and other fees
−Removed: 59 59 — % 175 161 9 %
Total account and service fees 546 563 (3) %
Investment banking
−Removed: 9 6 50 % 27 28 (4) %
Interest income
−Removed: 114 68 68 % 340 138 146 %
−Removed: 25 11 127 % 40 24 67 %
Total revenues 2,252 2,085 8 %
10 unchanged sentences
Communications and information processing
−Removed: 94 86 9 % 283 241 17 %
Occupancy and equipment
−Removed: 53 50 6 % 157 146 8 %
Business development
−Removed: 43 39 10 % 113 91 24 %
Professional fees
−Removed: 17 19 (11) % 47 41 15 %
−Removed: 58 20 190 % 117 58 102 %
Total non-compensation expenses
−Removed: 265 214 24 % 717 577 24 %
Total non-interest expenses 1,787 1,629 10 %
5 unchanged sentences
PCG client asset balances
−Removed: $ in billions June 30,
−Removed: 2023 March 31,
+Added: $ in billions December 31,
2023 September 30,
−Removed: 2022 June 30,
−Removed: 2022 March 31,
+Added: 2023 December 31,
2022 September 30,
1 unchanged sentence
$ 1,310.5 $ 1,201.2 $ 1,114.3 $ 1,039.0
+Added: Registered Investment Advisor (“RIA”) & Custody Services (“RCS”) AUA (1)
+Added: $ 146.9 $ 133.3 $ 115.6 $ 108.5
Assets in fee-based accounts (2)
$ 746.6 $ 683.2 $ 633.1 $ 586.0
+Added: RCS assets in fee-based accounts (1)
+Added: $ 122.8 $ 111.7 $ 96.6 $ 89.9
Percent of AUA in fee-based accounts
57.0 % 56.9 % 56.8 % 56.4 %
−Removed: (1) Includes assets associated with firms affiliated with us through our Registered Investment Advisor & Custody Services (“RCS”) division of $130.5 billion as of June 30, 2023, $123.5 billion as of March 31, 2023, $108.5 billion as of September 30, 2022, $109.7 billion as of June 30, 2022, $99.2 billion as of March 31, 2022, and $92.7 billion as of September 30, 2021.
−Removed: Of these amounts, $109.9 billion as of June 30, 2023, $103.6 billion as of March 31, 2023, $89.9 billion as of September 30, 2022, $90.3 billion as of June 30, 2022, $84.0 billion as of March 31, 2022, and $77.2 billion as of September 30, 2021 were fee-based assets.
+Added: (1) Represents assets associated with firms affiliated with us through our RCS division, which are included in AUA and assets in fee-based accounts.
Based on the nature of the services provided to such firms, revenues related to these assets are included in “Account and service fees.”
2 unchanged sentences
PCG net new assets
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in millions 2023 2022
2 unchanged sentences
Domestic Private Client Group net new assets growth - annualized (2)
−Removed: 5.4 % 5.4 % 8.3 % 9.5 %
(1) Domestic Private Client Group net new assets represents domestic Private Client Group client inflows, including dividends and interest, less domestic Private Client Group client outflows, including commissions, advisory fees and other fees.
−Removed: (2) This metric includes the impact of the departure of approximately $4.6 billion of assets under administration related to the portion of advisors previously associated through a single relationship in our independent contractors division whose affiliation with the firm ended in the fiscal third quarter of 2023.
(2) The Domestic Private Client Group net new asset growth - annualized percentage is based on the beginning Domestic Private Client Group AUA balance for the indicated period.
−Removed: PCG AUA and PCG assets in fee-based accounts as of June 30, 2023 each increased 5% compared with March 31, 2023, increased 18% and 19%, respectively, compared with September 30, 2022, and each increased 15% compared with June 30, 2022 due to net equity market appreciation and strong net inflows of client assets during the period, primarily due to the favorable impact of our recruiting.
−Removed: We expect that the 5% increase in PCG fee-based assets as of June 30, 2023 compared with March 31, 2023 will positively impact our asset management and related administrative fees for our fiscal fourth quarter of 2023.
+Added: PCG AUA and PCG assets in fee-based accounts as of December 31, 2023 each increased 9% compared with September 30, 2023, due to market appreciation and strong net inflows of client assets during the quarter, primarily due to the favorable impact of our recruiting.
PCG assets in fee-based accounts continued to be a significant percentage of overall PCG AUA due to many clients’ preference for fee-based alternatives versus transaction-based accounts and, as a result, a significant portion of our PCG revenues is more directly impacted by market movements.
5 unchanged sentences
Revenues related to managed programs are shared by our PCG and Asset Management segments.
−Removed: The Asset Management segment receives a higher portion of the revenues related to accounts invested in managed programs, as compared to the portion received for programs for which our financial advisors provide investment advisory services, as it is performing portfolio management services in addition to administrative services.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
+Added: The Asset Management segment receives a higher portion of the revenues related to accounts invested in managed programs, as compared to the portion received for non-managed programs, as it is performing portfolio management services in addition to administrative services.
The vast majority of the revenues we earn from fee-based accounts are recorded in “Asset management and related administrative fees” on our Condensed Consolidated Statements of Income and Comprehensive Income.
1 unchanged sentence
As fees for the majority of such accounts are billed based on balances as of the beginning of the quarter, revenues from fee-based accounts may not be immediately affected by changes in asset values, but rather the impacts are seen in the following quarter.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
Financial advisors
−Removed: 2023 March 31,
2023 September 30,
1 unchanged sentence
2023 March 31,
−Removed: 2022 September 30,
+Added: 2023 December 31,
Employees 3,718 3,693 3,654 3,628 3,631
2 unchanged sentences
Total advisors 8,710 8,712 8,704 8,726 8,699
−Removed: (1) Includes the impact of the transfer of one firm with 166 financial advisors previously affiliated as independent contractors to our RCS division during our fiscal third quarter of 2022 and the impact of the departure of 60 financial advisors, representing the portion of advisors previously associated through a single relationship in our independent contractors division whose affiliation with the firm ended in the fiscal third quarter of 2023.
−Removed: The number of financial advisors as of June 30, 2023 decreased compared with March 31, 2023, primarily due to the impact of an independent contractor relationship whose affiliation with the firm ended in our fiscal third quarter.
−Removed: The number of financial advisors as of June 30, 2023 increased compared with September 30, 2022, as the number of new recruits and trainees that were moved into production roles exceeded the number of financial advisors who left the firm, including planned retirements where assets are generally retained at the firm pursuant to advisor succession plans.
−Removed: The recruiting pipeline remains solid across our affiliation options;
−Removed: however, the timing of financial advisors joining the firm may be impacted by market uncertainty.
−Removed: We expect to continue to experience transfers to our RCS division in fiscal 2023;
−Removed: however, consistent with our experience in fiscal 2022, we do not expect these financial advisor transfers to significantly impact our results of operations.
+Added: The number of financial advisors as of December 31, 2023 decreased slightly compared with September 30, 2023, as planned retirements drove a small net decrease in advisor count, net of new recruits and trainees that were moved into production roles.
+Added: Planned retirements, where assets are generally retained at the firm pursuant to advisor succession plans, are seasonally higher in the fiscal first quarter.
+Added: We have and may continue to experience transfers to our RCS division in fiscal 2024;
+Added: however, consistent with our experience in fiscal 2023, we would not expect these financial advisor transfers to significantly impact our results of operations.
Advisors in our RCS division are not included in our financial advisor metric although their client assets are included in PCG AUA.
−Removed: Clients’ domestic cash sweep balances and Enhanced Savings Program balances
−Removed: $ in millions June 30,
−Removed: 2023 March 31,
+Added: Clients’ domestic cash sweep balances and ESP balances
+Added: $ in millions December 31,
2023 September 30,
1 unchanged sentence
2023 March 31,
−Removed: 2022 September 30,
+Added: 2023 December 31,
Bank segment $ 23,912 $ 25,355 $ 27,915 $ 37,682 $ 39,098
4 unchanged sentences
43,497 42,833 46,753 49,475 60,382
−Removed: Enhanced Savings Program (1)
14,476 13,592 11,225 2,746 —
−Removed: Total clients’ domestic cash sweep and Enhanced Savings Program balances $ 57,978 $ 52,221 $ 67,114 $ 75,841 $ 76,470 $ 66,668
−Removed: (1) In March 2023, we launched our Enhanced Savings Program, in which Private Client Group clients may deposit cash in a high-yield Raymond James Bank account.
−Removed: These balances are reflected in Bank deposits on our Condensed Consolidated Statements of Financial Condition.
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Total clients’ domestic cash sweep and ESP balances
$ 57,973 $ 56,425 $ 57,978 $ 52,221 $ 60,382
+Added: (1) In March 2023, we launched our ESP, in which Private Client Group clients may deposit cash in a high-yield Raymond James Bank account.
+Added: These balances are reflected in Bank deposits on our Condensed Consolidated Statements of Financial Condition.
+Added: Three months ended December 31,
Average yield on RJBDP - third-party banks
3.66 % 2.72 %
−Removed: A significant portion of our domestic clients’ cash is included in the RJBDP, a multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into interest-bearing deposit accounts at either Raymond James Bank or TriState Capital Bank, which are included in our Bank segment, or various third-party banks.
−Removed: Such balances swept to third-party balances are not reflected on our Condensed Consolidated Statements of Financial Condition.
+Added: A significant portion of our domestic clients’ cash is included in the RJBDP, a multi-bank sweep program in which clients’ cash deposits in their accounts are swept into interest-bearing deposit accounts at either of our bank subsidiaries, which are included in our Bank segment, or various third-party banks.
+Added: Balances swept to third-party banks are not reflected on our Condensed Consolidated Statements of Financial Condition.
Our PCG segment earns servicing fees for the administrative services we provide related to our clients’ deposits that are swept to such banks as part of the RJBDP.
1 unchanged sentence
Under our intersegment policies, the PCG segment receives the greater of a base servicing fee or a net yield equivalent to the average yield that the firm would otherwise receive from third-party banks in the RJBDP.
−Removed: In the current interest-rate environment the PCG segment revenues
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: throughout fiscal 2023 reflect RJBDP fee revenues derived from the yield from third-party banks in the program and the Bank segment RJBDP servicing costs reflect such market rate for the deposits.
−Removed: In fiscal 2022, the PCG segment revenues reflected the base servicing fee until May 2022, when the yield from third-party banks first exceeded such level.
+Added: In the current interest-rate environment, the PCG segment revenues reflect RJBDP fee revenues derived from the yield from third-party banks in the program and the Bank segment RJBDP servicing costs reflect such market rate for the deposits.
The fees that the PCG segment earns from the Bank segment, as well as the servicing costs incurred on the deposits in the Bank segment, are eliminated in consolidation.
The “Average yield on RJBDP - third-party banks” in the preceding table is computed by dividing annualized RJBDP fees from third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balance at third-party banks.
−Removed: The average yield on RJBDP - third-party banks increased from the prior-year periods as a result of the significant increases in the Fed’s short-term benchmark interest rate, which began in March 2022.
−Removed: We expect an increase in our RJBDP fees from third-party banks in our fiscal fourth quarter of 2023 compared with our fiscal third quarter of 2023 due to higher average balances held at third-party banks in the program resulting in part from additional funding flexibility the Enhanced Savings Program provides us, as well as the recent increases in short-term interest rates including the 25-basis point increase in July 2023.
−Removed: Total client domestic cash sweep and Enhanced Savings Program balances increased 11% compared with March 31, 2023 due to growth of Enhanced Savings Program balances at Raymond James Bank which more than offset a decline in domestic cash sweep balances largely due to quarterly fee billings and client tax payments in April 2023.
−Removed: Total client domestic cash sweep and Enhanced Savings Program balances decreased 14% compared with September 30, 2022, as a result of cash sorting activity given the higher short-term interest rate environment, partially offset by the launch of the Enhanced Savings Program in March 2023, which resulted in $11.2 billion of client cash balances as of June 30, 2023.
−Removed: PCG segment results can be impacted by not only changes in the level of client cash balances, but also by the allocation of client cash balances between RJBDP, CIP, and the Enhanced Savings Program, as the PCG segment may earn different amounts from each of these client cash destinations, depending on multiple factors.
−Removed: Quarter ended June 30, 2023 compared with the quarter ended June 30, 2022
−Removed: Net revenues of $2.18 billion increased 11% and pre-tax income of $411 million increased 64%.
−Removed: Asset management and related administrative fees decreased $50 million, or 4%, primarily due to lower assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter primarily due to declines in the equity market.
−Removed: Brokerage revenues decreased $24 million, or 6%, primarily due to lower trailing revenues from mutual and other fund products and variable annuity products, primarily resulting from market-driven declines in asset values for products for which we receive trails.
−Removed: Account and service fees increased $250 million, or 84%, primarily due to higher RJBDP fees from both our Bank segment and third-party banks resulting from significantly higher short-term interest rates compared with the prior-year quarter, partially offset by lower average balances.
−Removed: Net interest income increased $31 million, or 53%, due to the increase in short-term interest rates applicable to our cash, segregated cash, and client margin account balances, partially offset by lower average balances.
−Removed: Other revenues increased $14 million, or 127%, primarily due to a favorable arbitration award during the fiscal third quarter of 2023.
−Removed: The benefit of this award was largely offset by associated compensation expenses and external legal fees incurred over the duration of the claim period, a portion of which was incurred during the fiscal third quarter of 2023.
−Removed: Compensation-related expenses increased $13 million, or 1%, primarily due to an increase in compensation costs to support our growth and annual salary increases, partially offset by lower commission expense resulting from lower compensable revenues, including asset management and related administrative fees and brokerage revenues.
−Removed: Non-compensation expenses increased $51 million, or 24%, primarily driven by higher provisions for legal and regulatory matters and, to a lesser extent, higher communications and information processing expenses.
+Added: The average yield on RJBDP - third-party banks increased from the prior-year quarter, largely as a result of the significant increases in the Fed’s short-term benchmark interest rate.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Management’s Discussion and Analysis
−Removed: Nine months ended June 30, 2023 compared with the nine months ended June 30, 2022
−Removed: Net revenues of $6.39 billion increased 12% and pre-tax income of $1.29 billion increased 95%.
−Removed: Asset management and related administrative fees decreased $302 million, or 8%, primarily due to lower assets in fee-based accounts at the beginning of each of the current-year quarterly billing periods compared with the prior-year quarterly billing periods, partially offset by incremental revenues arising from the acquisition of Charles Stanley.
−Removed: Brokerage revenues decreased $109 million, or 9%, primarily due to lower trailing revenues from mutual fund and annuity products primarily resulting from market-driven declines in asset values for products for which we receive trails, as well as lower sales of equity products, mutual and other fund products, variable annuities, and insurance products.
−Removed: These decreases were partially offset by higher fixed annuity and fixed income product sales.
−Removed: Account and service fees increased $924 million, or 122%, primarily due to an increase in RJBDP fees from both our Bank segment and third-party banks resulting from significantly higher short-term interest rates compared with the prior-year period.
−Removed: Mutual fund service fees decreased primarily due to market-driven declines in mutual fund assets.
+Added: Total clients’ domestic cash sweep and ESP balances increased 3% compared with September 30, 2023, due to growth in both the ESP as well as client cash sweep balances.
+Added: PCG segment results can be impacted by not only changes in the level of client cash balances, but also by the allocation of client cash balances between the RJBDP, the CIP, and the ESP, as the PCG segment may earn different amounts from each of these client cash destinations, depending on multiple factors.
+Added: For example, continued growth in the ESP, which was launched to PCG clients in March 2023, has allowed us to sweep more RJBDP balances to third-party banks and reduce the amount of RJBDP balances held in our Bank segment.
+Added: Quarter ended December 31, 2023 compared with the quarter ended December 31, 2022
+Added: Net revenues of $2.23 billion increased 8% and pre-tax income of $439 million increased 1%.
+Added: Asset management and related administrative fees increased $138 million, or 13%, primarily due to higher assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter resulting from growth as a result of advisor recruiting as well as market appreciation.
+Added: Brokerage revenues increased $37 million, or 11%, primarily due to higher client activity in the current quarter, particularly in fixed annuities.
+Added: Account and service fees decreased $17 million, or 3%, primarily due to a decrease in RJBDP fees resulting from lower client cash sweep balances.
+Added: RJBDP fees paid to PCG from our Bank segment decreased due to a decline in balances allocated to our Bank segment partially offset by an increase in short-term interest rates, while RJBDP fees from third-party banks increased slightly resulting from the aforementioned increase in short-term interest rates, partially offset by a decrease in RJBDP balances.
+Added: Partially offsetting the decline in total RJBDP fees, mutual fund service fees increased, primarily from higher average mutual fund assets.
Net interest income increased $5 million, or 6%, primarily due to the significant increase in short-term interest rates applicable to our cash, segregated cash, and client margin account balances.
−Removed: Other revenues increased $16 million, or 67%, primarily due to the aforementioned favorable arbitration award during the fiscal third quarter of 2023.
−Removed: The benefit of this award was largely offset by associated compensation expenses and external legal fees incurred over the duration of the claim period, a portion of which was incurred during fiscal 2023.
−Removed: Compensation-related expenses decreased $97 million, or 2%, primarily due to lower commission expense resulting from lower compensable revenues, including asset management and related administrative fees and brokerage revenues, partially offset by an increase in compensation costs to support our growth, annual salary increases, and incremental expenses resulting from our acquisition of Charles Stanley.
−Removed: Non-compensation expenses increased $140 million, or 24%, due to higher provisions for legal and regulatory matters, incremental expenses resulting from our acquisition of Charles Stanley, higher communications and information processing expenses primarily due to ongoing enhancements of our technology platforms, and increases in travel and event-related expenses compared with the low levels incurred in the prior-year period.
+Added: Compensation-related expenses increased $152 million, or 11%, primarily due to higher commission expense resulting from higher compensable revenues, including asset management and related administrative fees and brokerage revenues, as well as an increase in compensation costs both to support our growth and annual cost increases, including salaries.
+Added: Non-compensation expenses increased $6 million, or 3%, due to higher communications and information processing expenses, occupancy expenses, and business development expenses, partially offset by the impact of lower provisions for legal and regulatory matters.
RAYMOND JAMES FINANCIAL, INC.
4 unchanged sentences
Operating results
−Removed: Three months ended June 30, Nine months ended June 30,
−Removed: $ in millions 2023 2022 % change 2023 2022 % change
+Added: Three months ended December 31,
+Added: $ in millions 2023 2022 % change
Brokerage revenues:
2 unchanged sentences
Total brokerage revenues
−Removed: 110 139 (21) % 374 464 (19) %
Investment banking:
Merger & acquisition and advisory
−Removed: 88 147 (40) % 277 557 (50) %
Equity underwriting
−Removed: 25 36 (31) % 69 185 (63) %
Debt underwriting
−Removed: 28 34 (18) % 73 113 (35) %
Total investment banking 170 133 28 %
Interest income
−Removed: 21 6 250 % 65 16 306 %
Affordable housing investments business revenues 23 24 (4) %
−Removed: 4 3 33 % 11 12 (8) %
Total revenues 360 318 13 %
4 unchanged sentences
Compensation, commissions and benefits
−Removed: 220 243 (9) % 664 827 (20) %
Non-compensation expenses:
Communications and information processing
−Removed: 27 22 23 % 77 66 17 %
Occupancy and equipment
−Removed: 10 10 — % 31 29 7 %
Business development
−Removed: 14 12 17 % 46 29 59 %
Professional fees
−Removed: 12 10 20 % 39 31 26 %
−Removed: 27 25 8 % 100 79 27 %
Total non-compensation expenses
−Removed: 90 79 14 % 293 234 25 %
Total non-interest expenses 335 311 8 %
−Removed: Pre-tax income/(loss) $ (34) $ 61 NM $ (84) $ 349 NM
−Removed: Quarter ended June 30, 2023 compared with the quarter ended June 30, 2022
−Removed: Net revenues of $276 million decreased 28% and the pre-tax loss was $34 million compared with pre-tax income of $61 million for the prior-year quarter.
−Removed: Investment banking revenues decreased $76 million, or 35%, as activity levels in the current quarter were negatively impacted by macroeconomic uncertainties which continue to dampen capital markets activity across the industry.
−Removed: Our investment banking pipeline remains healthy and reflects the investments we have made over the past several years;
−Removed: however, market uncertainty continues to impact the pace and timing of transactions, and we expect such uncertainty to continue to negatively impact our investment banking activity in our fiscal fourth quarter of 2023.
−Removed: Brokerage revenues decreased $29 million, or 21%, due to a decrease in fixed income brokerage revenues resulting from decreased activity from depository institution clients due to challenging market conditions, partially offset by incremental revenues from SumRidge Partners, which was acquired on July 1, 2022.
−Removed: We expect our fixed income brokerage revenues to continue to be negatively impacted by a decline in cash balances at many of our depository institution clients, decreasing their immediate demand for our products and services.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Compensation-related expenses decreased $23 million, or 9%, due to lower revenues, partially offset by incremental compensation expenses arising from growth investments, including our acquisition of SumRidge Partners in July 2022, as well as higher share-based compensation amortization resulting from production-related awards granted in prior periods which are amortized over the vesting period.
−Removed: Non-compensation expenses increased $11 million, or 14%, primarily attributable to incremental expenses associated with SumRidge Partners.
−Removed: Nine months ended June 30, 2023 compared with the nine months ended June 30, 2022
−Removed: Net revenues of $873 million decreased 38% and the pre-tax loss was $84 million compared with pre-tax income of $349 million for the prior-year period.
−Removed: Investment banking revenues decreased $436 million, or 51%, compared with a strong prior-year period, as activity levels were negatively impacted in the current-year period by very different market conditions compared with the prior-year period, resulting from the aforementioned macroeconomic uncertainties impacting the industry.
−Removed: Brokerage revenues decreased $90 million, or 19%, primarily due to a decrease in fixed income brokerage revenues as a result of the aforementioned challenging market conditions, partially offset by incremental revenues from SumRidge Partners.
−Removed: Compensation-related expenses decreased $163 million, or 20%, primarily due to the decrease in revenues, partially offset by incremental expenses associated with growth investments, including our acquisition of SumRidge Partners, higher salaries, in part due to inflationary and market compensation pressures, and higher share-based compensation amortization resulting from production-related awards granted in prior periods which are amortized over the vesting period.
−Removed: Non-compensation expenses increased $59 million, or 25%, primarily due to incremental expenses associated with SumRidge Partners, increased travel and event-related expenses, and higher professional fees and provisions for legal and regulatory matters compared with the prior-year period.
+Added: Pre-tax income/(loss) $ 3 $ (16) NM
+Added: Quarter ended December 31, 2023 compared with the quarter ended December 31, 2022
+Added: Net revenues of $338 million increased 15% and the pre-tax income was $3 million, a $19 million increase over the pre-tax loss of $16 million in the prior-year quarter.
+Added: Investment banking revenues increased $37 million, or 28%, compared with the prior-year quarter.
+Added: Market conditions improved compared with the prior-year quarter;
+Added: however, market uncertainty continued to negatively impact industry-wide investment banking activity.
+Added: Compensation-related expenses increased $25 million, or 12%, primarily due to the increase in revenues, as well as an increase in compensation costs both to support our growth and annual cost increases, including salaries.
+Added: Non-compensation expenses decreased $1 million, or 1%.
RAYMOND JAMES FINANCIAL, INC.
4 unchanged sentences
Operating results
−Removed: Three months ended June 30, Nine months ended June 30,
−Removed: $ in millions 2023 2022 % change 2023 2022 % change
+Added: Three months ended December 31,
+Added: $ in millions 2023 2022 % change
Asset management and related administrative fees:
4 unchanged sentences
Account and service fees
−Removed: 5 5 — % 16 17 (6) %
All other 5 5 — %
2 unchanged sentences
Compensation, commissions and benefits
−Removed: 51 49 4 % 150 142 6 %
Non-compensation expenses:
Communications and information processing
−Removed: 15 13 15 % 43 39 10 %
Investment sub-advisory fees
−Removed: 39 38 3 % 107 114 (6) %
−Removed: 32 35 (9) % 98 100 (2) %
Total non-compensation expenses 89 80 11 %
4 unchanged sentences
Management fees recorded in our Asset Management segment are generally calculated as a percentage of the value of our fee-billable financial assets under management (“AUM”).
−Removed: These AUM include the portion of fee-based AUA in our PCG segment that is invested in programs overseen by our Asset Management segment (included in the “AMS” line of the following table), as well as retail accounts managed on behalf of third-party institutions, institutional accounts and mutual funds that we manage (collectively included in the “Raymond James Investment Management” line of the following table).
+Added: These AUM include the portion of fee-based AUA in our PCG segment that is invested in programs overseen by our Asset Management segment (included in the “AMS” line of the following table), as well as retail accounts managed on behalf of third-party institutions, institutional accounts and proprietary mutual funds that we manage (collectively included in the Raymond James Investment Management (“RJIM”) line of the following table).
Revenues related to fee-based AUA in our PCG segment are shared by the PCG and Asset Management segments, the amount of which depends on whether or not clients are invested in assets that are in managed programs overseen by our Asset Management segment and the administrative services provided (see our “Management’s Discussion and Analysis - Results of Operations - Private Client Group” for more information).
Our AUM in AMS are impacted by market fluctuations and net inflows or outflows of assets, including transfers between fee-based accounts and transaction-based accounts within our PCG segment.
−Removed: Revenues earned by Raymond James Investment Management for retail accounts managed on behalf of third-party institutions, institutional accounts and our mutual funds are recorded entirely in the Asset Management segment.
−Removed: Our AUM in Raymond James Investment Management are impacted by market and investment performance and net inflows or outflows of assets.
+Added: Revenues earned by RJIM for retail accounts managed on behalf of third-party institutions, institutional accounts and our proprietary mutual funds are recorded entirely in the Asset Management segment.
+Added: Our AUM in RJIM are impacted by market and investment performance and net inflows or outflows of assets.
Fees for our managed programs are generally collected quarterly.
4 unchanged sentences
Financial assets under management
−Removed: $ in billions June 30,
−Removed: 2023 March 31,
+Added: $ in billions December 31,
2023 September 30,
−Removed: 2022 June 30,
−Removed: 2022 March 31,
+Added: 2023 December 31,
2022 September 30,
$ 154.2 $ 139.2 $ 129.5 $ 119.8
−Removed: Raymond James Investment Management 70.2 69.4 64.2 67.2 64.0 67.8
+Added: 73.3 68.7 67.4 64.2
Subtotal financial assets under management 227.5 207.9 196.9 184.0
Assets managed for affiliated entities (2)
+Added: (12.5) (11.5) (11.0) (10.2)
Total financial assets under management $ 215.0 $ 196.4 $ 185.9 $ 173.8
(1) Represents the portion of our PCG segment fee-based AUA (as disclosed in “Assets in fee-based accounts” in the “Selected key metrics - PCG client asset balances” section of our “Management’s Discussion and Analysis - Results of Operations - Private Client Group”) that is invested in managed programs overseen by the Asset Management segment.
+Added: (2) Represents the portion of the AMS AUM that is managed by RJIM and, as a result, are included in both AMS and RJIM in the preceding table.
+Added: This amount is removed in the calculation of “Total financial assets under management.”
Activity (including activity in assets managed for affiliated entities)
−Removed: Three months ended June 30, Nine months ended June 30,
+Added: Three months ended December 31,
$ in billions 2023 2022
Financial assets under management at beginning of period $ 207.9 $ 184.0
−Removed: Acquisition of Chartwell Investment Partners (1)
−Removed: Raymond James Investment Management - net inflows/(outflows) (0.4) 0.3 1.3 (0.9)
+Added: RJIM - net inflows/(outflows)
AMS - net inflows 1.7 1.0
−Removed: Net market appreciation/(depreciation) in asset values 6.2 (23.0) 23.7 (26.9)
+Added: Net market appreciation in asset values
Financial assets under management at end of period $ 227.5 $ 196.9
−Removed: (1) Represents June 1, 2022 assets under management of Chartwell Investment Partners, a registered investment advisor acquired as part of the TriState Capital acquisition.
−Removed: See Note 3 of the Notes to Consolidated Financial Statements of our 2022 Form 10-K for further information about this acquisition.
See “Management’s Discussion and Analysis - Results of Operations - Private Client Group” for further information about our retail client assets, including those fee-based assets invested in programs managed by AMS.
−Removed: Raymond James Investment Management
−Removed: Assets managed by Raymond James Investment Management include assets managed by our subsidiaries:
−Removed: Eagle Asset Management, Scout Investments, Reams Asset Management (a division of Scout Investments), ClariVest Asset Management, Cougar Global Investments, and Chartwell Investment Partners (“Chartwell”), which was acquired on June 1, 2022 in connection with our acquisition of TriState Capital.
−Removed: The following table presents Raymond James Investment Management’s AUM by objective, excluding assets for which it does not exercise discretion, as well as the approximate average client fee rate earned on such assets.
−Removed: As of June 30, 2023
+Added: Assets managed by RJIM include assets managed by our subsidiaries:
+Added: Eagle Asset Management, Scout Investments, Reams Asset Management (a division of Scout Investments), ClariVest Asset Management, Cougar Global Investments, and Chartwell Investment Partners (“Chartwell”).
+Added: The following table presents RJIM’s AUM by objective, excluding assets for which it does not exercise discretion, as well as the approximate average client fee rate earned on such assets.
+Added: As of December 31, 2023
$ in billions AUM Average fee rate
3 unchanged sentences
Total financial assets under management $ 73.3 0.33 %
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
Non-discretionary asset-based programs
−Removed: The following table includes assets held in certain non-discretionary asset-based programs for which the Asset Management segment does not exercise discretion but provides administrative support (including for affiliated entities).
+Added: The following table includes assets held in certain non-discretionary asset-based programs for which the Asset Management segment does not exercise discretion but provides other services such as administrative support (including for affiliated entities) and investment advice.
The vast majority of these assets are also included in our PCG segment fee-based AUA (as disclosed in “Assets in fee-based accounts” in the “Selected key metrics - PCG client asset balances” section of our “Management’s Discussion and Analysis - Results of Operations - Private Client Group”).
−Removed: Administrative fees associated with these programs are predominantly based on balances at the beginning of the quarter.
−Removed: $ in billions June 30,
−Removed: 2023 March 31,
+Added: $ in billions December 31,
2023 September 30,
−Removed: 2022 June 30,
−Removed: 2022 March 31,
+Added: 2023 December 31,
2022 September 30,
Total assets $ 431.4 $ 391.1 $ 355.6 $ 329.2
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: The increase in assets as of June 30, 2023 compared with March 31, 2023, September 30, 2022, and June 30, 2022 was largely due to equity market appreciation and continued growth in the PCG segment.
+Added: The increase in these assets as of December 31, 2023 compared with September 30, 2023 was primarily due to market appreciation, successful financial advisor recruiting and retention, and the continued trend of clients moving to fee-based accounts from transaction-based accounts.
+Added: Administrative fees associated with these programs are predominantly based on balances at the beginning of the quarter.
Raymond James Trust
1 unchanged sentence
(including those managed for affiliated entities).
−Removed: $ in billions June 30,
−Removed: 2023 March 31,
+Added: $ in billions December 31,
2023 September 30,
−Removed: 2022 June 30,
−Removed: 2022 March 31,
+Added: 2023 December 31,
2022 September 30,
Total assets $ 9.4 $ 8.5 $ 7.8 $ 7.3
−Removed: Quarter ended June 30, 2023 compared with the quarter ended June 30, 2022
−Removed: Net revenues of $226 million decreased 1% and pre-tax income of $89 million decreased 4%.
−Removed: Asset management and related administrative fees decreased $3 million, or 1%, driven by a lower beginning balance of assets in non-discretionary asset-based programs and financial assets under management at AMS, as well as lower average financial assets under management at Raymond James Investment Management (excluding Chartwell, which was acquired on June 1, 2022), in each case primarily due to market-driven depreciation in asset values.
−Removed: These declines were partially offset by incremental revenues arising from the acquisition of Chartwell.
−Removed: We expect the increase in financial assets under management and assets in non-discretionary asset-based programs as of June 30, 2023 compared with March 31, 2023, which occurred due to equity market appreciation and net inflows during the quarter, to positively affect our fiscal fourth quarter of 2023, as the majority of our asset management and related administrative fees are billed based on balances as of the beginning of the quarter.
−Removed: Compensation expenses increased $2 million, or 4%, due to incremental compensation expenses of Chartwell, and non-compensation expenses were flat compared with the prior-year quarter.
−Removed: Nine months ended June 30, 2023 compared with the nine months ended June 30, 2022
−Removed: Net revenues of $649 million decreased 7% and pre-tax income of $251 million decreased 17%.
−Removed: Asset management and related administrative fees decreased $53 million, or 8%, driven by lower assets in non-discretionary asset-based programs and financial assets under management at AMS at the beginning of each of the current-year quarterly billing periods compared with the prior-year quarterly billing periods, as well as lower average financial assets under management at Raymond James Investment Management (excluding Chartwell), in each case primarily due to market-driven depreciation in asset values.
−Removed: These declines were partially offset by incremental revenues of Chartwell.
−Removed: Compensation expenses increased $8 million, or 6%, due to incremental expenses resulting from the acquisition of Chartwell and higher salary expenses in part due to annual salary increases.
−Removed: Non-compensation expenses decreased $5 million, or 2% due to lower investment sub-advisory fees, resulting from the decrease in assets under management in sub-advised programs, and lower platform fees, partially offset by incremental expenses resulting from the Chartwell acquisition.
+Added: Fees earned on trust services are primarily reported within “Asset management and related administrative fees” on the Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: Quarter ended December 31, 2023 compared with the quarter ended December 31, 2022
+Added: Net revenues of $235 million increased 14% and pre-tax income of $93 million increased 16%.
+Added: Asset management and related administrative fees increased $27 million, or 14%, driven by higher beginning balances of assets in non-discretionary asset-based programs and financial assets under management at AMS, as well as higher average financial assets under management at RJIM, in each case primarily due to market-driven appreciation in asset values.
+Added: Compensation expenses increased $6 million, or 13%, including an increase in compensation costs both to support our growth and annual cost increases, including salaries.
+Added: Non-compensation expenses increased $9 million, or 11%, largely due to higher investment sub-advisory fees, resulting from the increase in the beginning balance of assets under management in sub-advised programs.
RAYMOND JAMES FINANCIAL, INC.
3 unchanged sentences
For an overview of our Bank segment operations, as well as a description of the key factors impacting our Bank segment results of operations, refer to the information presented in “Item 1 - Business” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2023 Form 10-K.
−Removed: Our Bank segment results include the results of TriState Capital Bank since the acquisition date of June 1, 2022.
Operating results
−Removed: Three months ended June 30, Nine months ended June 30,
−Removed: $ in millions 2023 2022 % change 2023 2022 % change
+Added: Three months ended December 31,
+Added: $ in millions 2023 2022 % change
Interest income $ 872 $ 676 29 %
5 unchanged sentences
Compensation and benefits
−Removed: 48 21 129 % 136 48 183 %
Non-compensation expenses:
2 unchanged sentences
223 268 (17) %
−Removed: 69 46 50 % 181 105 72 %
Total non-compensation expenses 306 332 (8) %
1 unchanged sentence
Pre-tax income $ 92 $ 136 (32) %
−Removed: Quarter ended June 30, 2023 compared with the quarter ended June 30, 2022
−Removed: Net revenues of $514 million increased 86%, while pre-tax income of $66 million decreased 11%.
−Removed: Net interest income increased $227 million, or 84%, primarily due to the significant increase in short-term interest rates and higher average interest-earning assets at Raymond James Bank, as well as incremental net interest income from the June 1, 2022 acquisition of TriState Capital Bank.
−Removed: The increase in average interest-earning assets at Raymond James Bank was primarily driven by growth in the bank loan portfolio and higher average cash balances.
−Removed: These increases were partially offset by increased interest expense at Raymond James Bank as we pursue more diversified funding sources which have a higher relative cost, such as an increased emphasis on certificates of deposit and the Enhanced Savings Program launched to PCG clients in our fiscal second quarter of 2023.
−Removed: The net interest margin increased to 3.26% from 2.41% for the prior-year quarter.
−Removed: We anticipate that the Bank segment net interest income and net interest margin will decline during our fiscal fourth quarter of 2023 due to the impact from the aforementioned higher-cost diversified funding sources.
+Added: Quarter ended December 31, 2023 compared with the quarter ended December 31, 2022
+Added: Net revenues of $441 million decreased 13%, while pre-tax income of $92 million decreased 32%.
+Added: Net interest income decreased $65 million, or 13%, primarily due to increased interest expense resulting from a higher-cost mix of deposits, as balances from the ESP, which launched in March 2023, replaced a portion of lower-cost RJBDP cash sweep balances.
+Added: The increase in interest expense was partially offset by an increase in interest income due to higher short-term interest rates and higher average interest-earning asset balances during the current quarter.
+Added: The net interest margin decreased to 2.74% from 3.36% for the prior-year quarter.
The bank loan provision for credit losses was $12 million for the current quarter, compared with $14 million for the prior-year quarter.
−Removed: The current quarter provision for credit losses largely reflected the impacts of a weaker economic outlook for the CRE portfolio as reflected in Moody’s CRE Price Index utilized in our CECL model and, to a lesser extent, loan downgrades.
−Removed: The prior-year quarter provision for credit losses was primarily due to an initial provision for credit losses of $26 million on loans acquired as part of the TriState Capital acquisition, as well as additional provisions for credit losses at Raymond James Bank due to loan growth and a weaker macroeconomic outlook at that time.
−Removed: Compensation expenses increased $27 million, or 129%, primarily due to incremental expenses of TriState Capital Bank.
−Removed: Non-compensation expenses, excluding the bank loan provision for credit losses, increased $221 million, or 177%, primarily due to an increase in RJBDP fees paid to PCG and incremental expenses of TriState Capital Bank.
−Removed: RJBDP fees to PCG increased $198 million, or 251%, due to a significant increase in short-term interest rates, partially offset by a decrease in balances swept to our Bank segment as part of the RJBDP, as deposit balances raised in the Enhanced Savings Program during our fiscal third quarter of 2023 resulted in a decrease in balances swept to the Bank segment from the RJBDP.
−Removed: These Bank segment fees and the related revenues earned by the PCG segment are eliminated in consolidation (see “Management’s Discussion and Analysis - Results of Operations - Private Client Group” for further information on these servicing fees).
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Nine months ended June 30, 2023 compared with the nine months ended June 30, 2022
−Removed: Net revenues of $1.56 billion increased 138%, while pre-tax income of $293 million increased 13%.
−Removed: Net interest income increased $882 million, or 139%, due to the significant increase in short-term interest rates and higher average interest-earning assets at Raymond James Bank, primarily bank loans, as well as incremental net interest income from the acquisition of TriState Capital Bank.
−Removed: These increases were partially offset by the aforementioned increased deposit costs at Raymond James Bank.
−Removed: The net interest margin increased to 3.41% from 2.14% for the prior-year period.
−Removed: All other revenues increased $24 million, or 120%, primarily due to incremental revenues from the TriState Capital acquisition largely related to derivatives, valuation gains on certain company-owned life insurance policies compared with losses in the prior-year period, and higher foreign currency gains compared with the prior-year period.
−Removed: The bank loan provision for credit losses was $96 million for the current-year period, compared with $66 million for the prior-year period.
−Removed: The current year provision for credit losses primarily reflected the impacts of a weakened macroeconomic outlook for certain loan portfolios, including the impact of a weaker economic outlook for the CRE portfolio as reflected in Moody’s CRE Price Index utilized in our CECL model, as well as loan downgrades during the period.
−Removed: These increases were partially offset by the impact of loan repayments and sales, which had a larger impact than provisions on new loans during the period.
−Removed: The provision for credit losses in the prior-year period primarily reflected the aforementioned initial provision for credit losses on loans acquired as part of the TriState Capital acquisition, as well as the impact of both loan growth at Raymond James Bank and a weaker macroeconomic outlook at that time.
−Removed: Compensation expenses increased $88 million, or 183%, primarily due to incremental expenses of TriState Capital Bank and, to a lesser extent, increased headcount and annual salary increases.
−Removed: Non-compensation expenses, excluding the bank loan provision for credit losses, increased $754 million, or 266%, primarily due to an increase in RJBDP fees paid to PCG and incremental expenses associated with TriState Capital Bank.
−Removed: RJBDP fees to PCG increased $678 million, or 381%, primarily due to a significant increase in short-term interest rates and, to a lesser extent, an increase in client cash swept to our Bank segment as part of the RJBDP.
−Removed: These Bank segment fees and the revenues earned by the PCG segment are eliminated in consolidation.
+Added: The bank loan provision for credit losses for the current quarter primarily reflected the impacts of specific reserves in our C&I and CRE portfolios, loan downgrades, and charge-offs, partially offset by the favorable impact of loan repayments and sales, which had a larger impact on the current quarter expense than provisions on new loans.
+Added: The provision for credit losses for the prior-year quarter primarily reflected the impact of a weaker macroeconomic outlook at that time, primarily on the residential mortgage portfolio, and the impact of loan growth during the quarter.
+Added: Compensation expenses increased $3 million, or 8%, primarily due to increased compensation costs both to support growth and annual cost increases, including salaries.
+Added: Non-compensation expenses, excluding the bank loan provision for credit losses, decreased $24 million, or 8%, primarily due to a decrease in RJBDP fees paid to PCG resulting from the aforementioned decline in RJBDP balances swept to the Bank segment, partially offset by an increase in rates for such balances.
+Added: These Bank segment fees and the related revenues earned by the PCG segment are eliminated in consolidation (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Private Client Group” for further information about these servicing fees).
+Added: Offsetting this decline was an increase in expenses related to deposits, including a special assessment enacted during the quarter by the FDIC to recover losses to its Deposit Insurance Fund, as well as expenses related to the ESP and certificates of deposit issuances during the quarter.
+Added: The impact of the special assessment was $9 million of incremental expense for the three months ended December 31, 2023.
RAYMOND JAMES FINANCIAL, INC.
2 unchanged sentences
RESULTS OF OPERATIONS – OTHER
−Removed: This segment includes our private equity investments, interest income on certain corporate cash balances, certain costs incurred in acquisition activities, and certain corporate overhead costs of RJF that are not allocated to other segments, including the interest costs on our public debt as well as certain provisions for legal and regulatory matters.
+Added: This segment includes interest income on certain corporate cash balances, our private equity investments, which predominantly consist of investments in third-party funds, certain other corporate investing activity, and certain corporate overhead costs of RJF that are not allocated to other segments, including the interest costs on our public debt, certain provisions for legal and regulatory matters, and certain acquisition-related expenses.
For an overview of our Other segment operations, refer to the information presented in “Item 1 - Business” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2023 Form 10-K.
Operating results
−Removed: Three months ended June 30, Nine months ended June 30,
−Removed: $ in millions 2023 2022 % change 2023 2022 % change
+Added: Three months ended December 31,
+Added: $ in millions 2023 2022 % change
Interest income $ 49 $ 30 63 %
−Removed: Net gains/(losses) on private equity investments 2 (3) NM 5 — NM
All other 2 3 (33) %
1 unchanged sentence
Interest expense (25) (24) 4 %
−Removed: Net revenues 15 (21) NM 34 (54) NM
+Added: Net revenues 26 9 189 %
Non-interest expenses:
Compensation and benefits 17 18 (6) %
−Removed: Insurance settlement received — — — % (32) — NM
+Added: Insurance settlement received — (32) 100 %
All other 6 5 20 %
−Removed: Total non-interest expenses 61 43 42 % 85 110 (23) %
−Removed: Pre-tax loss $ (46) $ (64) 28 % $ (51) $ (164) 69 %
−Removed: Quarter ended June 30, 2023 compared with the quarter ended June 30, 2022
−Removed: Pre-tax loss was $46 million compared with a pre-tax loss of $64 million for the prior-year quarter.
+Added: Total non-interest expenses 23 (9) NM
+Added: Pre-tax income
+Added: $ 3 $ 18 (83) %
+Added: Quarter ended December 31, 2023 compared with the quarter ended December 31, 2022
+Added: Pre-tax income was $3 million, a decrease of 83% compared with pre-tax income of $18 million for the prior-year quarter.
Net revenues increased $17 million primarily due to an increase in interest income earned as a result of higher short-term interest rates applicable to our corporate cash balances.
−Removed: Non-interest expenses increased $18 million, primarily due to an increase in provisions for legal and regulatory matters and an increase in advertising expenses, partially offset by a decrease in acquisition-related expenses.
−Removed: Nine months ended June 30, 2023 compared with the nine months ended June 30, 2022
−Removed: The pre-tax loss was $51 million compared with a pre-tax loss of $164 million in the prior-year period.
−Removed: Net revenues increased $88 million, primarily due to an increase in interest income earned as a result of higher short-term interest rates applicable to our corporate cash balances, partially offset by an increase in interest expense due to the subordinated notes assumed as part of our acquisition of TriState Capital in June 2022.
−Removed: Non-interest expenses decreased $25 million, or 23%, primarily due to a $32 million insurance settlement received during the current-year period related to a previously settled legal matter, which was reflected as an offset to Other expenses, as well as a decrease in acquisition-related expenses.
−Removed: These decreases were partially offset by an increase in provisions for legal and regulatory matters.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
+Added: Non-interest expenses increased $32 million, primarily due to a $32 million insurance settlement received during the prior-year quarter related to a previously settled legal matter, which did not recur in the current-year quarter.
STATEMENT OF FINANCIAL CONDITION ANALYSIS
1 unchanged sentence
A significant portion of our assets were liquid in nature, providing us with flexibility in financing our business.
−Removed: Total assets of $77.63 billion as of June 30, 2023 were $3.32 billion, or 4%, less than our total assets as of September 30, 2022.
−Removed: Assets segregated for regulatory purposes and restricted cash decreased $4.64 billion, primarily due to a decrease in client cash sweep balances, which resulted in a decline in client cash held in our CIP and a corresponding decline in segregated assets.
−Removed: Brokerage client receivables, collateralized agreements, and trading assets also decreased $570 million, $294 million, and $114 million, respectively, compared with September 30, 2022.
−Removed: The available-for-sale securities portfolio balances declined $319 million as a result of our intention to utilize the cash generated from maturities in this portfolio as a source of funding for our business activities.
−Removed: Partially offsetting these decreases was a $2.20 billion increase in cash and cash equivalents as we have increased the cash held in our Bank segment since September 30, 2022 as a result of market factors that have impacted the banking industry during fiscal 2023, providing us flexibility to meet the needs of our clients.
−Removed: As of June 30, 2023, our total liabilities of $67.71 billion were $3.81 billion, or 5%, less than our total liabilities as of September 30, 2022.
−Removed: Brokerage client payables decreased $5.41 billion, primarily related to the aforementioned decrease in CIP balances as of June 30, 2023.
−Removed: Collateralized financings and derivative liabilities also decreased $285 million and $137 million, respectively.
−Removed: These decreases were partially offset by an increase in bank deposits of $2.41 billion, primarily due to the launch of the Enhanced Savings Program to PCG clients in March 2023, which raised $11.23 billion of deposits during the period ended June 30, 2023, enabling us to shift a portion of our client cash sweep balances in the RJBDP from being held as bank deposits in our Bank segment to third-party banks in our RJBDP, which do not impact our Condensed Consolidated Statements of Financial Condition.
−Removed: The increase in deposits also allowed us to reduce our already modest level of borrowings from the FHLB by $190 million compared to September 30, 2022, despite the banking market conditions that arose during fiscal 2023.
+Added: Total assets of $80.13 billion as of December 31, 2023 were $1.77 billion, or 2%, greater than our total assets as of September 30, 2023.
+Added: Cash and cash equivalents increased $893 million primarily driven by an increase in cash held at our bank subsidiaries, largely resulting from an increase in bank deposits during the period.
+Added: Assets segregated for regulatory purposes and restricted cash increased $496 million, primarily due to an increase in client cash balances in our broker-dealer subsidiaries, which resulted in an increase in brokerage client payables and a corresponding increase in segregated assets.
+Added: Bank loans, net increased $407 million primarily related to increases in corporate and residential mortgage loans.
+Added: As of December 31, 2023, our total liabilities of $69.35 billion were $1.18 billion, or 2%, greater than our total liabilities as of September 30, 2023.
+Added: Bank deposits increased $1.19 billion, primarily driven by an increase in ESP balances.
+Added: Brokerage client payables increased $346 million, primarily related to the aforementioned increase in client cash balances in our broker-dealer subsidiaries as of December 31, 2023.
+Added: These increases were partially offset by a decrease in accrued compensation, commissions, and benefits of $418 million due to the payment of prior-year bonuses during the quarter.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
LIQUIDITY AND CAPITAL RESOURCES
Liquidity and capital are essential to our business.
−Removed: The primary goal of our liquidity management activities is to ensure adequate funding and liquidity to conduct our business over a range of economic and market environments, including times of broader industry or market liquidity stress events, such as those which occurred in the banking industry during fiscal 2023.
+Added: The primary goal of our liquidity management activities is to ensure adequate funding and liquidity to conduct our business over a range of economic and market environments, including times of broader industry or market liquidity stress events.
In times of market stress or uncertainty, we generally maintain higher levels of capital and liquidity, including increased cash levels in our Bank segment, to ensure we have adequate funding to support our business and meet our clients’ needs.
1 unchanged sentence
Liquidity and capital resources are provided primarily through our business operations and financing activities.
−Removed: Financing activities could include bank borrowings, collateralized financing arrangements, new or enhanced deposit product offerings such as the Enhanced Savings Program, or additional capital raising activities under our “universal” shelf registration statement.
+Added: Our business operations generate substantially all of their own liquidity and funding needs.
+Added: We have a contingency funding plan which would guide our actions if one or more of our businesses were to experience disruptions from normal funding and liquidity sources.
+Added: These actions include reallocating client cash balances in the RJBDP from third-party banks to our bank subsidiaries thereby bringing those deposits onto our Consolidated Statements of Financial Condition, increasing our FHLB borrowings at our bank subsidiaries, accessing committed and uncommitted lines of credit at the parent or certain operating subsidiaries, accessing capital markets or, in certain circumstances, accessing certain borrowings from the Federal Reserve.
+Added: We also have the ability to create additional sources of funding by developing new products to meet the financial needs of our clients, such as the ESP deposit offering launched to PCG clients in fiscal 2023.
+Added: With each of our deposit offerings, we work to obtain sufficient liquidity to support our business operations while also maintaining a high level of FDIC insurance coverage for our clients.
+Added: Our financing activities could also include bank borrowings, collateralized financing arrangements, or additional capital raising activities under our “universal” shelf registration statement.
We believe our existing assets, most of which are liquid in nature, together with funds generated from operations and available from committed and uncommitted financing facilities, provide adequate funds for continuing operations at current levels of activity in the short-term.
−Removed: We also believe that we will be able to continue to meet our long-term cash requirements due to our strong financial position and ability to access capital from financial markets.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
+Added: We also believe that we will be able to continue to meet our long-term funding and liquidity requirements due to our strong financial position and ability to access capital from financial markets.
Liquidity and capital management
Senior management establishes our liquidity and capital management frameworks.
−Removed: Our liquidity and capital management frameworks are overseen by the RJF Asset and Liability Committee, a senior management committee that develops and executes strategies and policies to manage our liquidity risk and interest rate risk, as well as provides oversight over the firm’s investments.
+Added: Our liquidity and capital management frameworks are overseen by our Asset and Liability Committee, a senior management committee that develops and executes strategies and policies to manage our liquidity risk and interest rate risk, as well as provides oversight over the firm’s investments.
Our liquidity management framework is designed to ensure we have a sufficient amount of funding, even when funding markets experience stress.
−Removed: We manage the maturities and diversity of our funding across products and seek to maintain a diversified funding profile with an appropriate tenor, taking into consideration the characteristics and liquidity profile of our assets.
+Added: We manage the maturities and diversity of our funding across products and seek to maintain a diversified funding profile with an appropriate tenor, taking into consideration the characteristics and liquidity profile of our assets (e.g., the maturities of our available-for-sale securities portfolio).
The liquidity management framework includes senior management’s review of short- and long-term cash flow forecasts, review of necessary expenditures, monitoring of the availability of alternative sources of financing, and daily monitoring of liquidity in our significant subsidiaries.
9 unchanged sentences
We conduct enterprise-wide capital stress testing to ensure that we maintain adequate capital to adhere to our established tolerances under multiple scenarios, including a stressed scenario.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
Capital structure
12 unchanged sentences
On July 27, 2023, U.S.
−Removed: banking regulators issued proposed rules that, if enacted, would result in changes to regulations applicable to bank holding companies, including higher capital requirements and eliminating the AOCI opt-out election, which could negatively impact our regulatory capital ratios in the future.
+Added: banking regulators issued proposed rules that, if enacted, would result in changes to regulations applicable to bank holding companies, including higher capital requirements and eliminating the AOCI opt-out election, which could reduce our regulatory capital ratios in the future.
+Added: Under the proposed rule, if enacted, there would be a three-year transition period for the elimination of the AOCI opt-out election.
We are evaluating these proposals, most of which would apply to us if our average total consolidated assets for four consecutive calendar quarters exceeded $100 billion, to assess their potential impact to our current businesses and strategies.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
The following table presents the components of RJF’s regulatory capital used to calculate the aforementioned regulatory capital ratios.
$ in millions
−Removed: June 30, 2023 September 30, 2022
+Added: December 31, 2023 September 30, 2023
Common equity tier 1 capital/Tier 1 capital
1 unchanged sentence
Retained earnings
+Added: 10,609 10,213
Treasury stock
12 unchanged sentences
Total capital $ 10,271 $ 9,934
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
The following table presents RJF’s risk-weighted assets by exposure type used to calculate the aforementioned regulatory capital ratios.
$ in millions
−Removed: June 30, 2023 September 30, 2022
+Added: December 31, 2023 September 30, 2023
On-balance sheet assets:
Corporate exposures $ 19,435 $ 19,262
−Removed: $ 19,822 $ 20,147
Exposures to sovereign and government-sponsored entities (1)
2 unchanged sentences
Residential mortgage exposures 4,476 4,377
−Removed: Statutory multifamily mortgage exposures 108 71
+Added: Statutory multi-family mortgage exposures 121 118
High volatility commercial real estate exposures 146 141
11 unchanged sentences
Total standardized risk-weighted assets $ 44,605 $ 43,547
−Removed: (1) RJF’s exposure is predominantly to the U.S.
+Added: (1) Exposure is predominantly to the U.S.
government and its agencies.
−Removed: Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) of $8.38 billion at June 30, 2023 increased $2.20 billion compared with September 30, 2022.
−Removed: The increase in cash and cash equivalents primarily resulted from net income earned during the period and an increase in bank deposits, as additional deposits from the launch of our Enhanced Savings Program to PCG clients in March 2023 and certificate of deposit issuances during the period more than offset a decline in RJBDP balances swept to our Bank segment.
−Removed: These increases were partially offset by common stock repurchases during the fiscal year of $788 million and dividends.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
+Added: Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) of $10.21 billion at December 31, 2023 increased $893 million compared with September 30, 2023.
+Added: The increase in cash and cash equivalents primarily resulted from an increase in bank deposits and net income earned during the period.
+Added: These increases were partially offset by payments of prior-year bonuses, purchases of bank loans, common stock repurchases and dividends paid on our common and preferred stock during the three months ended December 31, 2023.
Sources of liquidity
−Removed: Approximately $1.72 billion of our total June 30, 2023 cash and cash equivalents included cash held at the parent company, which included cash loaned to RJ&A.
−Removed: As of June 30, 2023, RJF had loaned $1.00 billion to RJ&A (such amount is included in the RJ&A cash balance in the following table), which RJ&A has invested on behalf of RJF in cash and cash equivalents or otherwise deployed in its normal business activities.
+Added: Approximately $2.08 billion of our total December 31, 2023 cash and cash equivalents was RJF corporate cash, which included the cash held at the parent company, as well as cash it loaned to RJ&A.
+Added: As of December 31, 2023, RJF had loaned $1.38 billion to RJ&A (such amount is included in the RJ&A cash balance in the following table), which RJ&A has invested on behalf of RJF in cash and cash equivalents or otherwise deployed in its normal business activities.
The following table presents our holdings of cash and cash equivalents.
−Removed: $ in millions June 30, 2023
−Removed: Raymond James Bank 2,299
+Added: $ in millions December 31, 2023
TriState Capital Bank 3,765
+Added: Raymond James Bank 2,295
Raymond James Ltd.
1 unchanged sentence
Raymond James Financial Services, Inc.
−Removed: Charles Stanley Group Limited 129
+Added: Charles Stanley Group Limited (“Charles Stanley”) 149
Raymond James Trust Company of New Hampshire 100
−Removed: Raymond James Capital Services, LLC 94
Raymond James Investment Management 95
+Added: Raymond James Capital Services, LLC 65
Other subsidiaries 310
Total cash and cash equivalents $ 10,206
−Removed: Due to market volatility in the banking industry during fiscal 2023, we maintained a higher level of cash balances at Raymond James Bank and TriState Capital Bank as of June 30, 2023 compared with September 30, 2022 as part of our liquidity management practices.
−Removed: RJF maintained depository accounts at Raymond James Bank and TriState Capital Bank totaling $279 million as of June 30, 2023.
−Removed: The portion of this total that was available on demand without restrictions, which amounted to $237 million as of June 30, 2023, is reflected in the RJF cash balance and excluded from Raymond James Bank’s cash balance in the preceding table.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
+Added: RJF maintained depository accounts at Raymond James Bank and TriState Capital Bank totaling $286 million as of December 31, 2023.
+Added: The portion of this total that was available on demand without restrictions, which amounted to $244 million as of December 31, 2023, is reflected in the RJF cash balance and excluded from Raymond James Bank’s cash balance in the preceding table.
A large portion of the cash and cash equivalents balances at our non-U.S.
subsidiaries, including RJ Ltd.
−Removed: and Charles Stanley Group Limited, as of June 30, 2023 was held to meet regulatory requirements and was not available for use by the parent.
+Added: and Charles Stanley, as of December 31, 2023 was held to meet regulatory requirements and was not available for use by the parent.
In addition to the cash balances described, we have various other potential sources of cash available to the parent company from subsidiaries, as described in the following section.
6 unchanged sentences
In addition, covenants in RJ&A’s committed financing facilities require its net capital to be a minimum of 10% of aggregate debit items.
−Removed: At June 30, 2023, RJ&A significantly exceeded the minimum regulatory requirements, the covenants in its financing arrangements pertaining to net capital, as well as its internally-targeted net capital tolerances.
+Added: At December 31, 2023, RJ&A significantly exceeded the minimum regulatory requirements, the covenants in its financing arrangements pertaining to net capital, as well as its internally-targeted net capital tolerances.
FINRA may impose certain restrictions, such as restricting withdrawals of equity capital, if a member firm were to fall below a certain threshold or fail to meet minimum net capital requirements which may result in RJ&A limiting dividends it would otherwise remit to RJF.
We evaluate regulatory requirements, loan covenants and certain internal tolerances when determining the amount of liquidity available to RJF from RJ&A.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
Raymond James Bank may pay dividends to RJF without prior approval of its regulator as long as the dividends do not exceed the sum of its current calendar year and the previous two calendar years’ retained net income, and it maintains its targeted regulatory capital ratios.
6 unchanged sentences
Our ability to borrow under these arrangements is dependent upon compliance with the conditions in our various loan agreements and, in the case of secured borrowings, collateral eligibility requirements.
−Removed: As of June 30, 2023, RJF and RJ&A had the ability to borrow under our $750 million Credit Facility, a committed unsecured line of credit;
−Removed: however, we had no such borrowings outstanding under this facility as of June 30, 2023.
−Removed: See our discussion of the Credit Facility in Note 14 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q.
+Added: As of December 31, 2023, RJF and RJ&A had the ability to borrow under our $750 million Credit Facility, a committed unsecured line of credit;
+Added: however, we had no such borrowings outstanding under this facility as of December 31, 2023.
+Added: See Note 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding our Credit Facility.
In addition to our Credit Facility, we have various uncommitted financing arrangements with third-party lenders, which are in the form of secured lines of credit, secured bilateral repurchase agreements, or unsecured lines of credit.
Our uncommitted secured financing arrangements generally require us to post collateral in excess of the amount borrowed and are generally collateralized by RJ&A-owned securities or by securities that we have received as collateral under reverse repurchase agreements (i.e., securities purchased under agreements to resell).
−Removed: As of June 30, 2023, we had outstanding borrowings under one uncommitted secured borrowing arrangement out of a total of 13 uncommitted financing arrangements (nine uncommitted secured and four uncommitted unsecured).
+Added: As of December 31, 2023, we had outstanding borrowings under two uncommitted secured borrowing arrangements out of a total of 12 uncommitted financing arrangements (eight uncommitted secured and four uncommitted unsecured).
However, lenders are under no contractual obligation to lend to us under uncommitted credit facilities.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
Our borrowings on uncommitted financing arrangements, which were in the form of repurchase agreements in RJ&A, were included in “Collateralized financings” on our Condensed Consolidated Statements of Financial Condition.
11 unchanged sentences
during the quarter End of period
−Removed: June 30, 2023 $ 123 $ 128 $ 110 $ 179 $ 181 $ 181
−Removed: March 31, 2023 $ 174 $ 223 $ 150 $ 236 $ 310 $ 167
December 31, 2023 $ 171 $ 193 $ 169 $ 225 $ 252 $ 194
1 unchanged sentence
June 30, 2023 $ 123 $ 128 $ 110 $ 179 $ 181 $ 181
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
+Added: March 31, 2023 $ 174 $ 223 $ 150 $ 236 $ 310 $ 167
+Added: December 31, 2022 $ 245 $ 257 $ 150 $ 288 $ 306 $ 156
Other borrowings and collateralized financings
−Removed: We had $1.00 billion in FHLB borrowings outstanding at June 30, 2023, comprised of floating-rate and fixed-rate advances, which reflects a decrease of $550 million from the balance outstanding as of March 31, 2023.
−Removed: The interest rates on our floating-rate advances are generally based on SOFR.
+Added: We had $1 billion in FHLB borrowings outstanding at December 31, 2023, comprised of floating-rate and fixed-rate advances.
+Added: The interest rates on our floating-rate advances are based on SOFR.
We use interest rate swaps to manage the risk of increases in interest rates associated with the majority of our floating-rate FHLB advances by converting the balances subject to variable interest rates to a fixed interest rate.
We pledge certain of our bank loans and available-for-sale securities with the FHLB as security for both the repayment of certain borrowings and to secure capacity for additional borrowings as needed.
−Removed: During the nine months ended June 30, 2023, we increased our borrowing capacity with the FHLB through the pledge of additional available-for-sale securities.
−Removed: At June 30, 2023, we had pledged with the FHLB bank loans and available-for-sale securities of $9.27 billion and $3.86 billion, respectively, as both security for the repayment of outstanding FHLB borrowings and also to secure capacity for additional borrowings as needed.
−Removed: As of June 30, 2023, we had an additional $9.67 billion in immediate credit available from the FHLB based on the collateral pledged.
−Removed: Further, with the pledge of additional collateral, we have additional credit available to us from certain FHLB member banks.
−Removed: See Notes 4, 6, 7, and 14 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding bank loans, net and available-for-sale securities pledged with the FHLB and for further information on our FHLB borrowings, including the related maturities and interest rates.
+Added: As of December 31, 2023, we had an additional $9.37 billion in immediate credit available from the FHLB based on the collateral pledged.
+Added: With the pledge of incremental collateral, we could further increase credit available to us from the FHLB.
+Added: See Notes 4, 6, 7, and 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding bank loans and available-for-sale securities pledged with the FHLB and for further information on our FHLB borrowings, including the related maturities and interest rates.
A portion of our fixed income transactions are cleared through a third-party clearing organization, which provides financing for the purchase of trading instruments to support such transactions.
1 unchanged sentence
Amounts outstanding under this financing arrangement are collateralized by a portion of our trading inventory and accrue interest based on market rates.
−Removed: While we had borrowings outstanding as of June 30, 2023, the clearing organization is under no contractual obligation to lend to us under this arrangement.
−Removed: Raymond James Bank and TriState Capital Bank have access to the Federal Reserve’s discount window and may have access to other lending programs that may be established by the Federal Reserve in unusual and exigent circumstances, including the Bank Term Funding Program that was created by the Federal Reserve on March 12, 2023;
+Added: While we had borrowings outstanding as of December 31, 2023, the clearing organization is under no contractual obligation to lend to us under this arrangement.
+Added: As member banks, our bank subsidiaries have access to the Federal Reserve’s discount window and may have access to other lending programs that may be established by the Federal Reserve in unusual and exigent circumstances, including the Bank Term Funding Program that was created by the Federal Reserve in March 2023 and is expected to expire in March 2024;
however, we do not view borrowings from the Federal Reserve as one of our primary sources of funding.
−Removed: See Note 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding bank loans, net pledged with the FRB.
−Removed: At June 30, 2023, TriState Capital had subordinated notes due 2030, with an aggregate principal amount of $98 million.
+Added: See Note 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding available-for-sale securities and bank loans pledged with the FRB.
+Added: At December 31, 2023, we had subordinated notes due 2030 outstanding, with an aggregate principal amount of $98 million.
See Note 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 16 of our 2023 Form 10-K for additional information regarding these borrowings.
−Removed: We may act as an intermediary between broker-dealers and other financial institutions whereby we borrow securities from one broker-dealer and then lend them to another.
−Removed: Where permitted, we have also loaned, to broker-dealers and other financial institutions, securities owned by clients or the firm.
−Removed: We account for each of these types of transactions as collateralized agreements and financings, with the outstanding balance of $71 million as of June 30, 2023 related to the securities loaned included in “Collateralized financings” on our Condensed Consolidated Statements of Financial Condition of this Form 10-Q.
+Added: We may act as an intermediary between broker-dealers and other financial institutions whereby we borrow securities from one counterparty and then lend them to another counterparty.
+Added: Where permitted, we have also loaned securities owned by clients or the firm to broker-dealers and other financial institutions.
+Added: We account for each of these types of transactions as collateralized agreements and financings, with the outstanding balance of $347 million as of December 31, 2023 related to the securities loaned included in “Collateralized financings” on our Condensed Consolidated Statements of Financial Condition of this Form 10-Q.
See Note 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 2 of our 2023 Form 10-K for more information on our collateralized agreements and financings.
−Removed: Senior notes payable
−Removed: At June 30, 2023, we had aggregate outstanding senior notes payable of $2.04 billion which, exclusive of any unaccreted premiums or discounts and debt issuance costs, was comprised of $500 million par 4.65% senior notes due 2030, $800 million par 4.95% senior notes due 2046, and $750 million par 3.75% senior notes due 2051.
−Removed: See Note 17 of the Notes to the Consolidated Financial Statements of our 2022 Form 10-K for additional information on senior notes payable.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Management’s Discussion and Analysis
+Added: Senior notes payable
+Added: At December 31, 2023, we had aggregate outstanding senior notes payable of $2.04 billion, which, exclusive of any unaccreted premiums or discounts and debt issuance costs, was comprised of $500 million par 4.65% senior notes due 2030, $800 million par 4.95% senior notes due 2046, and $750 million par 3.75% senior notes due 2051.
+Added: See Note 17 of the Notes to the Consolidated Financial Statements of our 2023 Form 10-K for additional information on senior notes payable.
Credit ratings
1 unchanged sentence
Credit Rating
−Removed: Rating Agency Fitch Ratings, Inc.
+Added: Fitch Ratings, Inc.
Moody’s Standard & Poor’s Ratings Services
−Removed: Issuer and senior long-term debt A- A3 A-
−Removed: Preferred stock BB+ Baa3 (hyb) Not rated
+Added: Issuer and senior long-term debt:
Outlook Stable Stable Stable
−Removed: (1) On March 17, 2023, Fitch Ratings, Inc.
−Removed: affirmed RJF’s issuer and senior long term debt A- rating, preferred stock BB+ rating, and stable rating outlook.
−Removed: (2) On February 13, 2023, Standard & Poor’s Rating Services upgraded RJF’s issuer and senior long-term debt from BBB+ to A- and changed the rating outlook to stable.
+Added: Last rating action
+Added: Date of last rating action
+Added: February 2022
+Added: February 2023
+Added: Preferred stock:
+Added: BB+ Baa3 (hyb) Not rated
+Added: Last rating action
+Added: Date of last rating action
Our current credit ratings depend upon a number of factors, including industry dynamics, operating and economic environment, operating results, operating margins, earnings trends and volatility, balance sheet composition, liquidity and liquidity management, capital structure, overall risk management, business diversification and market share, and competitive position in the markets in which we operate.
4 unchanged sentences
A downgrade below investment grade could result in the termination of certain derivative contracts and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing overnight collateralization on our derivative instruments in liability positions.
−Removed: A credit downgrade could damage our reputation and result in certain counterparties limiting their business with us, result in negative comments by analysts, potentially negatively impact investors’ and/or clients’ perception of us and cause a decline in our stock price.
+Added: A credit downgrade could damage our reputation and result in certain counterparties limiting their business with us, result in negative comments by analysts, potentially negatively impact investors’ and/or clients’ perception of us, cause clients to withdraw bank deposits that exceed FDIC insurance limits from our bank subsidiaries, and cause a decline in our stock price.
None of our borrowing arrangements contains a condition or event of default related to our credit ratings.
3 unchanged sentences
We have company-owned life insurance policies which are utilized to fund certain non-qualified deferred compensation plans and other employee benefit plans.
−Removed: Certain of our non-qualified deferred compensation plans and other employee benefit plans are employee-directed while others are company-directed.
+Added: Certain of our non-qualified deferred compensation plans and other employee benefit plans are employee-directed (i.e., the participant chooses investment portfolio benchmarks) while others are company-directed.
Of the company-owned life insurance policies which fund these plans, certain policies could be used as a source of liquidity for the firm.
−Removed: Those policies against which we could readily borrow had a cash surrender value of $917 million as of June 30, 2023, comprised of $598 million related to employee-directed plans and $319 million related to company-directed plans, and we were able to borrow up to 90%, or $825 million, of the June 30, 2023 total without restriction.
+Added: Those policies against which we could readily borrow had a cash surrender value of $1.01 billion as of December 31, 2023, comprised of $667 million related to employee-directed plans and $343 million related to company-directed plans, and we were able to borrow up to 90%, or $909 million, of the December 31, 2023 total without restriction.
To effect any such borrowing, the underlying investments would be converted to money market investments, therefore requiring us to take market risk related to the employee-directed plans.
−Removed: There were no borrowings outstanding against any of these policies as of June 30, 2023.
+Added: There were no borrowings outstanding against any of these policies as of December 31, 2023.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
On May 12, 2021, we filed a “universal” shelf registration statement with the SEC pursuant to which we can issue debt, equity and other capital instruments if and when necessary or perceived by us to be opportune.
1 unchanged sentence
As part of our ongoing operations, we also enter into contractual arrangements that may require future cash payments, including certificates of deposit, lease obligations and other contractual arrangements, such as for software and various services.
−Removed: See Notes 12 and 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding our lease obligations and certificates of deposit, respectively.
+Added: See Notes 11 and 12 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Notes 14 and 15 of our 2023 Form 10-K for information regarding our lease obligations and certificates of deposit, respectively.
We have entered into investment commitments, lending commitments and other commitments to extend credit for which we are unable to reasonably predict the timing of future payments.
See Note 15 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
Refer to the discussion of the regulatory environment in which we operate and the impact on our operations of certain rules and regulations in “Item 1 - Business - Regulation” of our 2023 Form 10-K.
RJF and many of its subsidiaries are each subject to various regulatory capital requirements.
−Removed: As of June 30, 2023, all of our active regulated domestic and international subsidiaries had net capital in excess of minimum requirements.
−Removed: In addition, RJF, Raymond James Bank, and TriState Capital Bank were categorized as “well-capitalized” as of June 30, 2023.
+Added: As of December 31, 2023, all of our active regulated domestic and international subsidiaries had net capital in excess of minimum requirements.
+Added: In addition, RJF, Raymond James Bank, and TriState Capital Bank were categorized as “well-capitalized” as of December 31, 2023.
The maintenance of certain risk-based and other regulatory capital levels could influence various capital allocation decisions impacting one or more of our businesses.
However, due to the current capital position of RJF and its regulated subsidiaries, we do not anticipate these capital requirements will have a negative impact on our future business activities.
−Removed: Effective August 1, 2023, TriState Capital Bank completed its conversion from a state non-member bank, which was primarily supervised by the Pennsylvania Department of Banking and Securities (“PDBS”) and the FDIC, to a state member bank, which is primarily supervised by the PDBS and the Fed.
−Removed: As a state member bank, TriState Capital Bank will continue to be supervised by the FDIC and the Consumer Financial Protection Bureau.
−Removed: We do not anticipate any material changes to TriState Capital Bank’s existing business or operations as a result of the conversion.
−Removed: The Financial Conduct Authority, which regulated the widely-referenced benchmark London Interbank Offered Rate (“LIBOR”), ceased publication of the most commonly used U.S.
−Removed: dollar LIBOR tenors (“USD LIBOR”) on June, 30, 2023.
−Removed: On September 30, 2022, the Adjustable Interest (LIBOR) Rate Act (“LIBOR Act”) was enacted into U.S.
−Removed: federal law to provide a statutory framework to replace LIBOR with a benchmark rate based on the SOFR in contracts that do not have fallback provisions or that have fallback provisions resulting in a replacement rate based on LIBOR.
−Removed: As of June 30, 2023, we no longer offer new contracts referencing LIBOR and legacy contracts indexed to USD LIBOR have transitioned to SOFR-based or other alternative reference rates in accordance with existing fallback provisions or the LIBOR Act.
See Note 20 of the Notes to Condensed Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and capital resources - Capital structure” of this Form 10-Q for further information on regulatory capital requirements.
+Added: The Department of Labor (“DOL”) recently proposed the “Retirement Security Rule.” This proposed regulation amends the definition of a “fiduciary” in connection with investment advice regarding employee benefit plans and individual retirement accounts (“the Proposed Fiduciary Rule”).
+Added: Along with the Proposed Fiduciary Rule, the DOL issued proposed amendments to several prohibited transaction exemptions.
+Added: If finalized, the Proposed Fiduciary Rule, along with the amended prohibited transaction exemptions, could have a material adverse effect on our business and results of operations.
CRITICAL ACCOUNTING ESTIMATES
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For a description of the significant estimates and judgments associated with establishing such accruals, see the “Contingent liabilities” section of Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K.
−Removed: In addition, refer to Note 16 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding legal and regulatory matters contingencies as of June 30, 2023.
−Removed: Allowance for credit losses
−Removed: We evaluate certain of our financial assets, including bank loans, to estimate an allowance for credit losses based on expected credit losses over a financial asset’s lifetime.
−Removed: The remaining life of our financial assets is determined by considering contractual terms and expected prepayments, among other factors.
−Removed: We use multiple methodologies in estimating an allowance
+Added: In addition, refer to Note 15 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding legal and regulatory matters contingencies as of December 31, 2023.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Management’s Discussion and Analysis
−Removed: for credit losses and our approaches differ by type of financial asset and the risk characteristics within each financial asset type.
+Added: Allowance for credit losses
+Added: We evaluate certain of our financial assets, including bank loans, to estimate an allowance for credit losses based on expected credit losses over a financial asset’s lifetime.
+Added: The remaining life of our financial assets is determined by considering contractual terms and expected prepayments, among other factors.
+Added: We use 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.
Our estimates are based on ongoing evaluations of our financial assets, the related credit risk characteristics, and the overall economic and environmental conditions affecting the financial assets.
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gross domestic product, equity market indices, unemployment rates, and commercial real estate and residential home price indices.
−Removed: To demonstrate the sensitivity of credit loss estimates on our bank loan portfolio to macroeconomic forecasts, we compared our modeled estimates under the base case economic scenario used to estimate the allowance for credit losses as of June 30, 2023, to what our estimate would have been under a downside case scenario and an upside scenario, without considering any offsetting effects in the qualitative component of our allowance for credit losses as of June 30, 2023.
−Removed: As of June 30, 2023, use of the downside case scenario would have resulted in an increase of approximately $230 million in the quantitative portion of our allowance for credit losses on bank loans, while the use of the upside case would have resulted in a reduction of approximately $50 million in the quantitative portion of our allowance for credit losses on bank loans at June 30, 2023.
+Added: To demonstrate the sensitivity of credit loss estimates on our bank loan portfolio to macroeconomic forecasts, we compared our modeled estimates under the base case economic scenario used to estimate the allowance for credit losses as of December 31, 2023, to what our estimate would have been under a downside case scenario and an upside scenario, without considering any offsetting effects in the qualitative component of our allowance for credit losses as of December 31, 2023.
+Added: As of December 31, 2023, use of the downside case scenario would have resulted in an increase of approximately $230 million in the quantitative portion of our allowance for credit losses on bank loans, while the use of the upside case would have resulted in a reduction of approximately $45 million in the quantitative portion of our allowance for credit losses on bank loans at December 31, 2023.
These hypothetical outcomes reflect the relative sensitivity of the modeled portion of our allowance estimate to macroeconomic forecasted scenarios but do not consider any potential impact qualitative adjustments could have on the allowance for credit losses in such environments.
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See Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K for information regarding our methodologies and assumptions used in estimating the allowance for credit losses.
−Removed: See Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding our allowance for credit losses related to bank loans as of June 30, 2023.
+Added: See Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding our allowance for credit losses related to bank loans as of December 31, 2023.
+Added: ACCOUNTING STANDARDS UPDATE
+Added: In November 2023, the FASB issued amended guidance related to disclosures for segment reporting (ASU 2023-07).
+Added: The amendment requires a public entity to disclose on an annual and interim basis, for each reportable segment, the significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.
+Added: The guidance also requires a public entity to disclose, for each reportable segment, an amount for other segment items (those not captured as a significant expense) and the reported measure of a segment’s profit or loss.
+Added: This new guidance is effective for annual periods beginning in our fiscal 2025 and interim periods beginning in our fiscal first quarter of 2026 with early adoption permitted.
+Added: This guidance will be applied on a retrospective basis.
+Added: We are evaluating the impact that this new guidance will have on our disclosures.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Management’s Discussion and Analysis
−Removed: RECENT ACCOUNTING DEVELOPMENTS
−Removed: In March 2022, the Financial Accounting Standards Board (“FASB”) issued new guidance related to troubled debt restructurings and disclosures regarding write-offs of financing receivables (ASU 2022-02), amending guidance related to the measurement of credit losses on financial instruments (ASU 2016-13).
−Removed: The amendment eliminates the accounting guidance for troubled debt restructurings for creditors, but requires enhanced disclosures for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty, and requires disclosure of current-period gross write-offs by year of origination for financing receivables.
−Removed: This new guidance is effective for our fiscal year beginning on October 1, 2023 and will be applied on a prospective basis.
−Removed: Although permitted, we do not plan to early adopt.
−Removed: We do not expect the adoption of this new guidance to have a material impact on our financial position and results of operations.
−Removed: In March 2023, the FASB issued amended guidance related to accounting for investments in tax credit structures using the proportional amortization method (ASU 2023-02).
−Removed: The amendment permits reporting entities to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met and makes the delayed equity contributions guidance applicable only when the proportional amortization method is applied to a tax equity investment.
−Removed: This amendment also requires entities to make disclosures about all investments in a tax credit program for which they have elected to account for using the proportional amortization method, including those investments in an elected tax credit program that do not meet the conditions to use the proportional amortization method.
−Removed: This new guidance is effective for our fiscal year beginning on October 1, 2024.
−Removed: This guidance may be applied on a retrospective basis or modified retrospective basis to all qualifying tax equity investments;
−Removed: however, the transition method must be applied consistently to all affected investments.
−Removed: Early adoption is permitted on a program-by-program basis.
−Removed: We are still evaluating the impact, including from any potential early adoption, that this new guidance will have on our financial position, results of operations, and disclosures.
+Added: In December 2023, the FASB issued amended guidance related to disclosures for income taxes (ASU 2023-09).
+Added: The amendment requires a public entity to enhance its existing annual tabular reconciliation of its statutory income tax rate to its effective tax rate, with certain reconciling items at or above 5% of the applicable statutory income tax rate broken out by nature and/or jurisdiction.
+Added: The guidance also requires an entity to disclose income taxes paid (net of refunds received), disaggregated by federal, state, and foreign taxes, and net amounts paid to an individual jurisdiction when they represent 5% or more of the total income taxes paid.
+Added: This new guidance is effective for annual periods beginning in our fiscal 2026 with early adoption permitted.
+Added: This guidance will be applied on a prospective basis with retrospective application permitted.
+Added: We are evaluating the impact that this new guidance will have on our disclosures.
+Added: See Note 2 of the Notes to the Condensed Consolidated Financial Statements of this Form 10-Q for information regarding new accounting guidance we adopted during the three months ended December 31, 2023.
RISK MANAGEMENT
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Inventory levels may fluctuate daily as a result of client demand.
−Removed: We also hold investments within our available-for-sale securities portfolio, and from time to time may hold SBA loan securitizations not yet transferred.
+Added: We also hold investments within our available-for-sale securities portfolio, and from time to time may hold Small Business Administration loan securitizations not yet sold.
Our primary market risks relate to interest rates, equity prices, and foreign exchange rates.
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Foreign exchange risk results from changes in spot prices, forward prices, and volatility of foreign exchange rates.
−Removed: See Note 2 of the Notes to
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Consolidated Financial Statements of our 2022 Form 10-K and Notes 3, 4, and 5 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for fair value and other information regarding our trading inventories, available-for-sale securities, and derivative instruments.
−Removed: We regularly enter into underwriting commitments and, as a result, we may be subject to market risk on any unsold shares issued in the offerings to which we are committed.
+Added: See Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K and Notes 3, 4, and 5 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for fair value and other information regarding our trading inventories, available-for-sale securities, and derivative instruments.
+Added: We regularly enter into underwriting commitments and, as a result, we may be subject to market risk on any unsold securities issued in the offerings to which we are committed.
Risk exposure is controlled by limiting our participation, the transaction size, or through the syndication process.
1 unchanged sentence
While Market Risk Management maintains ongoing communication with the revenue-generating business units, it is independent of such units.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
Interest rate risk
1 unchanged sentence
We are exposed to interest rate risk as a result of our trading inventory (primarily comprised of fixed income instruments) in our Capital Markets segment.
−Removed: Changes in value of our trading inventory may result from fluctuations in interest rates, credit spreads, equity prices, macroeconomic factors, investor expectations or risk appetites, liquidity, as well as dynamic relationships among these factors.
−Removed: Other market factors, such as the recent downgrade of the U.S.
−Removed: government’s credit rating by Fitch, could also impact the market value of our trading inventory and other financial instruments on our Condensed Consolidated Statements of Financial Condition.
+Added: Changes in the value of our trading inventory may result from fluctuations in interest rates, credit spreads, equity prices, macroeconomic factors, investor expectations or risk appetites, liquidity, as well as dynamic relationships between these factors.
We actively manage interest rate risk arising from our fixed income trading inventory through the use of hedging strategies utilizing U.S.
1 unchanged sentence
Our primary method for controlling risks within trading inventories is through the use of dollar-based and exposure-based limits.
−Removed: A hierarchy of limits exists at multiple levels, including firm, business unit, desk (e.g., for equities, corporate bonds, municipal bonds), product sub-type (e.g., below-investment-grade positions) and, at times, at the individual position.
+Added: A hierarchy of limits exists at multiple levels, including firm, business unit, desk (e.g., for equities, corporate bonds, municipal bonds), product sub-type (e.g., below-investment-grade positions) and issuer concentration.
For derivative positions, which are primarily comprised of interest rate swaps, we have established sensitivity-based and foreign exchange spot limits.
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VaR is an appropriate statistical technique for estimating potential losses in trading portfolios due to typical adverse market movements over a specified time horizon with a suitable confidence level.
−Removed: However, there are inherent limitations of utilizing VaR including:
+Added: However, there are inherent limitations to utilizing VaR including:
historical movements in markets may not accurately predict future market movements;
4 unchanged sentences
As a result, management complements VaR with sensitivity analysis and stress testing and employs additional controls such as a daily review of trading results, review of aged inventory, independent review of pricing, monitoring of concentrations, and review of issuer ratings.
−Removed: To calculate VaR, we use models which incorporate historical simulation.
+Added: To calculate VaR, we use models that incorporate historical simulation.
This approach assumes that historical changes in market conditions, such as in interest rates and equity prices, are representative of future changes.
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The modeling of the risk characteristics of trading positions involves a number of assumptions and approximations that management believes to be reasonable.
−Removed: However, there is no uniform industry methodology for estimating VaR, and different
+Added: However, there is no uniform industry methodology for estimating VaR, and different assumptions or approximations could produce materially different VaR estimates.
+Added: As a result, VaR results are more reliable when used as indicators of risk levels and trends within a firm than as a basis for inferring differences in risk-taking across firms.
RAYMOND JAMES FINANCIAL, INC.
1 unchanged sentence
Management’s Discussion and Analysis
−Removed: assumptions or approximations could produce materially different VaR estimates.
−Removed: As a result, VaR results are more reliable when used as indicators of risk levels and trends within a firm than as a basis for inferring differences in risk-taking across firms.
The following table sets forth the high, low, period-end and average daily one-day VaR for all of our trading portfolios, including fixed income and equity instruments, and for our derivatives for the periods and dates indicated.
−Removed: Nine months ended June 30, 2023 Period-end VaR Three months ended June 30, Nine months ended June 30,
−Removed: $ in millions High Low June 30,
+Added: Three months ended December 31, 2023 Period-end VaR Three months ended December 31,
+Added: $ in millions High Low December 31,
2023 September 30,
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Daily VaR $ 3 $ 1 $ 1 $ 2 Average daily VaR $ 2 $ 2
−Removed: Average daily VaR was higher during the three and nine months ended June 30, 2023 compared with the three and nine months ended June 30, 2022 due to the impact of increased market volatility during the period, as well as the addition of the SumRidge Partners trading inventory beginning in July 2022.
−Removed: Period-end VaR was lower at June 30, 2023 compared to September 30, 2022, due to a decline in trading inventory.
+Added: Period-end VaR was lower at December 31, 2023 compared with September 30, 2023, due to lower net exposure as a result of a change in the mix of our trading inventory.
The Fed’s MRR requires us to perform daily back-testing procedures for our VaR model, whereby we compare each day’s projected VaR to its regulatory-defined daily trading losses, which exclude fees, commissions, reserves, net interest income, and intraday trading.
1 unchanged sentence
Based on these daily “ex ante” versus “ex post” comparisons, we determine whether the number of times that regulatory-defined daily trading losses exceed VaR is consistent with our expectations at a 99% confidence level.
−Removed: During the three months ended June 30, 2023, our regulatory-defined daily losses in our trading portfolios did not exceed our predicted VaR.
−Removed: During the nine months ended June 30, 2023, our regulatory-defined daily losses in our trading portfolios exceeded our predicted VaR on one occasion.
+Added: During the three months ended December 31, 2023, our regulatory-defined daily losses in our trading portfolios did not exceed our predicted VaR.
Separately, RJF provides additional market risk disclosures to comply with the MRR, including 10-day VaR and 10-day Stressed VaR, which are available on our website at https://www.raymondjames.com/investor-relations/financial-information/filings-and-reports within “Other Reports and Information.”
Banking operations
−Removed: Our Bank segment maintains an interest-earning asset portfolio that is comprised of cash, SBL, C&I loans, CRE loans, REIT loans, and tax-exempt loans, as well as securities held in the available-for-sale securities portfolio.
+Added: Our Bank segment maintains an interest-earning asset portfolio that is comprised of cash, SBL, C&I loans, CRE loans, REIT loans, residential mortgage loans, and tax-exempt loans, as well as securities held in the available-for-sale securities portfolio.
These interest-earning assets are primarily funded by client deposits.
1 unchanged sentence
We analyze interest rate risk based on forecasted net interest income, which is the net amount of interest received and interest paid, and the net portfolio valuation, both across a range of interest rate scenarios.
−Removed: One of the objectives of the Asset and Liability Committee is to manage the sensitivity of net interest income to changes in market interest rates.
+Added: One of the objectives of our Asset and Liability Committee is to manage the sensitivity of net interest income to changes in market interest rates.
This committee uses several measures to monitor and limit interest rate risk in our banking operations, including scenario analysis and economic value of equity (“EVE”).
1 unchanged sentence
For further information regarding this hedging strategy, see Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K and Notes 12 and 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q.
+Added: See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and capital resources” of our 2023 Form 10-K for further information.
To ensure that we remain within the tolerances established for net interest income, a sensitivity analysis of net interest income to interest rate conditions is estimated under a variety of scenarios.
7 unchanged sentences
Management’s Discussion and Analysis
−Removed: The following table is an analysis of our banking operations’ estimated net interest income over a 12-month period based on instantaneous shifts in interest rates (expressed in basis points) using our previously described asset/liability model, which assumes a dynamic balance sheet, that the interest rates on substantially all of our deposits change by an amount equal to the change in market interest rates (i.e., deposit beta of 100%), and that interest rates do not decline below zero.
+Added: The following table is an analysis of our banking operations’ estimated net interest income over a 12-month period based on instantaneous shifts in interest rates (expressed in basis points) using our previously described asset/liability model, which assumes a dynamic balance sheet, a weighted-average deposit beta on our interest-bearing deposit accounts without stated maturities of approximately 40% as both interest rates rise and fall, and that interest rates do not decline below zero.
While not presented, additional rate scenarios are performed, including interest rate ramps and yield curve shifts that may more realistically mimic the speed of potential interest rate movements.
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-200 $1,548 (11)%
−Removed: (1) Our 0-basis point scenario was based on interest rates as of June 30, 2023 and did not include the impact of the Fed’s July 27, 2023 increase in its benchmark short-term rate.
+Added: (1) Our 0-basis point scenario was based on interest rates as of December 31, 2023.
The preceding table does not include the impacts of an instantaneous change in interest rates on net interest income on assets and liabilities outside of our banking operations or on our RJBDP fees from third-party banks, which are also sensitive to changes in interest rates and are included in “Account and service fees” on our Condensed Consolidated Statements of Income and Comprehensive Income.
−Removed: Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net interest analysis” of this Form 10-Q for a discussion of the impact changes in short-term interest rates could have on the consolidated firm’s operations.
+Added: Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net interest analysis” of this Form 10-Q for additional information on our net interest income.
+Added: We have classified all of our investments in debt securities as available-for-sale and have not classified any of our investments in debt securities as held-to-maturity.
+Added: In our available-for-sale securities portfolio, we hold primarily fixed-rate agency-backed MBS, agency-backed CMOs, and U.S.
+Added: Treasuries, which are carried at fair value on our Condensed Consolidated Statements of Financial Condition, with changes in the fair value of the portfolio recorded through OCI on our Condensed Consolidated Statements of Income and Comprehensive Income.
+Added: As the majority of our available-for-sale securities portfolio is comprised of U.S.
+Added: government and government agency-backed securities, changes in fair value are primarily driven by changes in interest rates.
+Added: At December 31, 2023, our available-for-sale securities portfolio had a fair value of $9.20 billion with a weighted-average yield of 2.13% and a weighted-average life, after factoring in estimated prepayments, of 4.0 years.
+Added: To evaluate the interest rate sensitivity of our available-for-sale securities portfolio we also monitor, among other things, effective duration, defined as the approximate percentage change in price for a 100-basis point change in rates.
+Added: As of December 31, 2023, the effective duration of our available-for-sale securities portfolio was approximately 3.37, which means that we would expect the market value of our available-for-sale securities portfolio to decline approximately 3.37% for every 100-basis point increase in interest rates and increase approximately 3.37% for every 100-basis point decline in interest rates.
+Added: See Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K and Note 4 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information on our available-for-sale securities portfolio.
The Asset and Liability Committee also reviews EVE, which is a point in time analysis of current interest-earning assets and interest-bearing liabilities that incorporates all cash flows over their estimated remaining lives, discounted at current rates.
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These limits set a risk tolerance to changing interest rates and assist in determining strategies for mitigating this risk as EVE approaches these limits.
−Removed: As of June 30, 2023, our EVE analyses were within approved limits.
−Removed: The following table shows the maturities of our bank loan portfolio at June 30, 2023, including contractual principal repayments.
+Added: As of December 31, 2023, our EVE analyses were within approved limits.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
+Added: The following table shows the maturities of our bank loan portfolio at December 31, 2023, including contractual principal repayments.
Maturities are generally determined based upon contractual terms;
1 unchanged sentence
This table does not include any estimates of prepayments, which could shorten the average loan lives and cause the actual timing of the loan repayments to differ significantly from those shown in the table.
−Removed: $ in millions One year or less > One year – five years > Five years - fifteen years > Fifteen years Total
+Added: $ in millions One year or less > One year - five years
+Added: > Five years - fifteen years > Fifteen years Total
SBL $ 14,096 $ 514 $ 36 $ 1 $ 14,647
7 unchanged sentences
Total loans held for sale and investment $ 16,639 $ 13,670 $ 5,489 $ 8,863 $ 44,661
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: The following table shows the distribution of the recorded investment of those bank loans that mature in more than one year between fixed and adjustable interest rate loans at June 30, 2023.
+Added: The following table shows the distribution of the recorded investment of those bank loans that mature in more than one year between fixed and adjustable interest rate loans at December 31, 2023.
Interest rate type
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See the discussion within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk - Risk monitoring process” section of this Form 10-Q for additional information regarding our interest-only residential mortgage loan portfolio.
−Removed: In our available-for-sale securities portfolio, we hold primarily fixed-rate agency-backed MBS, agency-backed CMOs, and U.S.
−Removed: Treasuries, which are carried at fair value on our Condensed Consolidated Statements of Financial Condition, with changes in the fair value of the portfolio recorded through OCI on our Condensed Consolidated Statements of Income and Comprehensive Income.
−Removed: At June 30, 2023, our available-for-sale securities portfolio had a fair value of $9.57 billion with a weighted-average yield of 2.07% and a weighted-average life, after factoring in estimated prepayments, of 4.30 years.
−Removed: The effective duration of our available-for-sale securities portfolio as of June 30, 2023 was approximately 3.54, where duration is defined as the approximate percentage change in price for a 100-basis point change in rates.
−Removed: See Note 4 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information on our available-for-sale securities portfolio.
Equity price risk
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See Note 3 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information on this portfolio.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
Foreign exchange risk
We are subject to foreign exchange risk due to our investments in foreign subsidiaries as well as transactions and resulting balances denominated in a currency other than the U.S.
−Removed: For example, our bank loan portfolio includes loans which are denominated in Canadian dollars, totaling $1.49 billion and $1.51 billion at June 30, 2023 and September 30, 2022, respectively, when converted to the U.S.
+Added: dollar (“USD”).
+Added: For example, our bank loan portfolio includes loans which are denominated in Canadian dollars (“CAD”), totaling $1.40 billion as of both December 31, 2023 and September 30, 2023, when converted to the USD.
A majority of such loans are held in a Canadian subsidiary of Raymond James Bank, which is discussed in the following sections.
4 unchanged sentences
See Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K and Note 5 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding these derivatives.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: At June 30, 2023, we had foreign exchange risk in our investment in RJ Ltd.
+Added: At December 31, 2023, we had foreign exchange risk in our investment in RJ Ltd.
of CAD 429 million and in our investment in Charles Stanley of £289 million, which were not hedged.
−Removed: All of our other investments, consisting primarily of subsidiaries located in Europe, are not hedged, and we do not believe we had material foreign exchange risk either individually, or in the aggregate, pertaining to these subsidiaries as of June 30, 2023.
+Added: We had other, less significant investments in foreign domiciled subsidiaries, primarily in Europe, which were not hedged;
+Added: however, we do not believe we had material foreign exchange risk either individually, or in the aggregate, pertaining to these subsidiaries as of December 31, 2023.
Foreign exchange gains/losses related to our foreign investments are primarily reflected in OCI on our Condensed Consolidated Statements of Income and Comprehensive Income.
See Note 16 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding our components of OCI.
−Removed: Transactions and resulting balances denominated in a currency other than the U.S.
−Removed: We are subject to foreign exchange risk due to our holdings of cash and certain other assets and liabilities resulting from transactions denominated in a currency other than the U.S.
+Added: Transactions and resulting balances denominated in a currency other than the USD
+Added: We are subject to foreign exchange risk due to our holdings of cash and certain other assets and liabilities resulting from transactions denominated in a currency other than the USD.
Any currency-related gains/losses arising from these foreign currency denominated balances are reflected in “Other” revenues in our Condensed Consolidated Statements of Income and Comprehensive Income.
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Corporate activities
−Removed: We maintain cash balances with the Fed and with various financial institutions, primarily global systemically important banks, in our normal course of business.
+Added: We maintain cash balances with the Fed and with various financial institutions, primarily global systemically important financial institutions, in our normal course of business.
A large portion of such balances are in excess of FDIC insurance limits.
1 unchanged sentence
In order to mitigate our credit risk to such financial institutions, we monitor our exposure with each institution on a daily basis and subject each institution to limits based on various factors including but not limited to financial strength, capitalization levels, liquidity, credit ratings, and market factors to the extent applicable.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
Brokerage activities
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In addition, we may be subject to concentration risk if we hold large positions in or have large commitments to a single counterparty, borrower, or group of similar counterparties or borrowers (e.g., in the same industry).
−Removed: We seek to mitigate these risks by imposing and monitoring individual and aggregate position limits within each business segment for each counterparty, conducting regular credit reviews of financial counterparties, reviewing security, derivative and loan concentrations, holding and calculating the fair value of collateral on certain transactions and conducting business through clearing organizations, which may guarantee performance.
+Added: We seek to mitigate these risks by imposing and monitoring individual and aggregate position limits within each business segment for each counterparty, conducting regular credit reviews of financial counterparties, reviewing security, derivative and loan concentrations, holding collateral as security for certain transactions and conducting business through clearing organizations, which may guarantee performance.
See Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K and Notes 5 and 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information about our credit risk mitigation related to derivatives and collateralized agreements.
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Credit exposure results from client margin loans, which are monitored daily and are collateralized by the securities in the clients’ accounts.
−Removed: We monitor exposure to industry sectors and individual securities and perform analysis on a daily basis in connection with our margin lending activities.
+Added: We monitor exposure to industry sectors and individual securities on a daily basis in connection with our margin lending activities.
We adjust our margin requirements if we believe our risk exposure is not appropriate based on market conditions.
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If this occurs, we may have to liquidate the position at a loss.
−Removed: See Note 2 of the Notes to the Consolidated Financial Statements of our 2022
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
−Removed: Form 10-K for further information about our determination of the allowance for credit losses associated with certain of our brokerage lending activities.
+Added: See Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K for additional information about our determination of the allowance for credit losses associated with certain of our brokerage lending activities.
We offer loans to financial advisors for recruiting and retention purposes.
We have credit risk and may incur a loss primarily in the event that such borrower is no longer affiliated with us.
−Removed: See Note 2 of the Notes to the Consolidated Financial Statements of our 2022 Form 10-K and Note 8 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information about our loans to financial advisors.
+Added: See Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K and Note 8 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information about our loans to financial advisors.
Banking activities
1 unchanged sentence
Our strategy for credit risk management related to bank loans includes well-defined credit policies, uniform underwriting criteria, and ongoing risk monitoring and review processes for all credit exposures.
−Removed: The strategy also includes diversification across loan types, geographic location, industry and client level, regular credit examinations and management reviews of all corporate and tax-exempt loans as well as individual delinquent residential loans.
−Removed: The credit risk management process also includes annual independent reviews of the credit risk monitoring process that performs assessments of compliance with credit policies, risk ratings, and other critical credit information.
+Added: The strategy also includes diversification across loan types, geographic locations, industries and clients, regular credit examinations and management reviews of all corporate and tax-exempt loans as well as individual delinquent residential loans.
+Added: The credit risk management process also includes independent reviews at least annually of the credit risk monitoring process that performs assessments of compliance with credit policies, risk ratings, and other critical credit information.
We seek to identify potential problem loans early, record any necessary risk rating changes and charge-offs promptly, and maintain appropriate reserve levels for expected losses.
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On an ongoing basis, we evaluate our methods for determining the allowance for each class of loans and make enhancements we consider appropriate.
−Removed: Our allowance for credit losses methodology is described in Note 2 of the Notes to the Consolidated Financial Statements of our 2022 Form 10-K.
+Added: Our allowance for credit losses methodology is described in Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K.
As our bank loan portfolio is segregated into six portfolio segments, likewise, the allowance for credit losses is segregated by these same segments.
See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk” of our 2023 Form 10-K for further information about the risk characteristics relevant to each portfolio segment.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
The level of charge-off activity is a factor that is considered in evaluating the potential severity of future credit losses.
The following table presents net loan (charge-offs)/recoveries and the annualized percentage of net loan (charge-offs)/recoveries to the average outstanding loan balances by loan portfolio segment.
−Removed: Three months ended June 30, Nine Months Ended June 30,
−Removed: 2023 2022 2023 2022
+Added: Three months ended December 31,
$ in millions Net loan
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amount Annualized
−Removed: loans Net loan
−Removed: (charge-off)/recovery
−Removed: amount Annualized
−Removed: loans Net loan
−Removed: (charge-off)/recovery
−Removed: amount Annualized
C&I loans $ (6) 0.23 % $ (4) 0.14 %
CRE loans (2) 0.11 % 2 0.12 %
−Removed: Residential mortgage loans — — % — — % — — % 1 0.02 %
Total loans held for sale and investment $ (8) 0.07 % $ (2) 0.02 %
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
The level of nonperforming assets is another indicator of potential future credit losses.
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The following table presents the balance of nonperforming loans, nonperforming assets, and related key credit ratios.
−Removed: $ in millions June 30, 2023 September 30, 2022
+Added: $ in millions December 31, 2023 September 30, 2023
Nonperforming loans (1)
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Nonperforming assets as a % of Bank segment total assets 0.27 % 0.21 %
−Removed: (1) Nonperforming loans at June 30, 2023 and September 30, 2022 included $118 million and $63 million of loans, respectively, which were current pursuant to their contractual terms.
−Removed: The nonperforming loan balances in the preceding table excluded $8 million and $7 million as of June 30, 2023 and September 30, 2022, respectively, of residential troubled debt restructurings which were returned to accrual status in accordance with our policy.
−Removed: Although our nonperforming assets as a percentage of our Bank segment’s assets remained low as of June 30, 2023, any prolonged period of market deterioration could result in an increase in our nonperforming assets, an increase in our allowance for credit losses and/or an increase in net charge-offs in future periods, although the extent would depend on future developments that are highly uncertain.
−Removed: See further explanation of our bank loan portfolio segments, allowance for credit losses, and the credit loss provision in Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and “Management’s Discussion and Analysis - Results of Operations - Bank” of this Form 10-Q and Note 2 of the Notes to the Consolidated Financial Statements of our 2022 Form 10-K.
+Added: (1) Nonperforming loans at December 31, 2023 and September 30, 2023 included $87 million and $96 million of loans, respectively, which were current pursuant to their contractual terms.
+Added: The increase in nonperforming loans and assets as of December 31, 2023 as compared with September 30, 2023 was primarily due to two loans that were placed on nonaccrual status with an associated allowance during the three months ended December 31, 2023.
+Added: See table summarizing nonaccrual loans by category in Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q.
+Added: Although our nonperforming assets as a percentage of our Bank segment’s assets remained low as of December 31, 2023, any prolonged period of market deterioration could result in an increase in our nonperforming assets, an increase in our allowance for credit losses and/or an increase in net charge-offs in future periods, although the extent would depend on future developments that are highly uncertain.
+Added: See further explanation of our bank loan portfolio segments, allowance for credit losses, and the credit loss provision in Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and “Management’s Discussion and Analysis - Results of Operations - Bank” of this Form 10-Q and Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K.
Loan underwriting policies
3 unchanged sentences
There are various other factors included in these processes, depending on the loan portfolio.
−Removed: There were no significant changes to those processes during the three months ended June 30, 2023.
+Added: There were no significant changes to those processes during the three months ended December 31, 2023.
+Added: See further discussion of our risk monitoring process in “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk - Banking activities” of our 2023 Form 10-K.
+Added: RAYMOND JAMES FINANCIAL, INC.
+Added: AND SUBSIDIARIES
+Added: Management’s Discussion and Analysis
SBL and residential mortgage loan portfolios
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Collateral adjustments, as triggered by our monitoring procedures, are made by the borrower as necessary to ensure our loans are adequately secured, resulting in minimizing our credit risk.
−Removed: Collateral calls have been minimal relative to our SBL portfolio with insignificant losses incurred to date.
+Added: Collateral calls have been minimal relative to our SBL portfolio with no losses incurred during the three months ended December 31, 2023.
We track and review many factors to monitor credit risk in our residential mortgage loan portfolio.
2 unchanged sentences
See Note 7 of the Notes to the Condensed Consolidated Financial Statements of this Form 10-Q for additional information about our residential mortgage loan portfolio.
−Removed: RAYMOND JAMES FINANCIAL, INC.
−Removed: AND SUBSIDIARIES
−Removed: Management’s Discussion and Analysis
The following table presents a summary of delinquent residential mortgage loans, the vast majority of which are first mortgage loans, which are comprised of loans which are two or more payments past due as well as loans in the process of foreclosure.
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$ in millions 30-89 days 90 days or more Total 30-89 days 90 days or more Total
−Removed: June 30, 2023 $ 3 $ 4 $ 7 0.03 % 0.05 % 0.08 %
+Added: December 31, 2023 $ 5 $ 3 $ 8 0.06 % 0.03 % 0.09 %
September 30, 2023 $ 3 $ 4 $ 7 0.03 % 0.05 % 0.08 %
−Removed: Our June 30, 2023 percentage compares favorably to the national average for over 30 day delinquencies of 1.91%, as most recently reported by the Fed.
+Added: Our December 31, 2023 percentage compares favorably to the national average for over 30 day delinquencies of 1.88%, as most recently reported by the Fed.
Credit risk is also managed by diversifying the residential mortgage portfolio.
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The following table details the geographic concentrations (top five states) of our one-to-four family residential mortgage loans.
−Removed: June 30, 2023
+Added: December 31, 2023
Loans outstanding as a % of
1 unchanged sentence
total loans held for sale and investment
+Added: California 24% 5%
+Added: Florida 18% 4%
+Added: New York 8% 1%
+Added: Colorado 4% 1%
The occurrence of a natural disaster or severe weather event in any of these states, for example wildfires in California and hurricanes in Florida, could result in additional credit loss provisions and/or charge-offs on our loans in such states and therefore negatively impact our net income and regulatory capital in any given period.
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Payments may increase significantly when the interest-only period ends and the loan principal begins to amortize.
−Removed: At June 30, 2023 and September 30, 2022, these loans totaled $2.78 billion and $2.55 billion, respectively, or approximately 33% and 35% of the residential mortgage portfolio, respectively.
−Removed: The weighted-average number of years before the remainder of the loans, which were still in their interest-only period at June 30, 2023, begins amortizing is six years.
+Added: At December 31, 2023 and September 30, 2023, these loans totaled $2.87 billion and $2.85 billion, respectively, or approximately 32% and 33% of the residential mortgage portfolio, respectively.
+Added: The weighted-average number of years before the remainder of the loans, which were still in their interest-only period at December 31, 2023, begins amortizing is six years.
RAYMOND JAMES FINANCIAL, INC.
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The following table details the industry concentrations (top five categories) of our corporate bank loans.
−Removed: June 30, 2023
+Added: December 31, 2023
Loans outstanding as a % of
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Industrial warehouse 9% 4%
−Removed: Loan fund 7% 3%
Office real estate 7% 3%
−Removed: Consumer products and services 5% 2%
−Removed: The Fed’s measures to control inflation, including through increases in short-term interest rates, have had a dampening effect on the economy and are likely to continue to do so in the near-term.
−Removed: These and related factors could negatively impact our borrowers, particularly those in rate-sensitive industries.
−Removed: In response to changing trends, and industry-wide challenges following the COVID-19 pandemic, we have closely monitored each loan in our commercial real estate portfolio, particularly office real estate, utilizing LTV ratios and other metrics.
−Removed: We have also focused on reducing our corporate loan exposure in certain sectors with increasing credit concerns, and have sold approximately $450 million, before charge-offs and discounts or premiums, of corporate loans during the three months ended June 30, 2023.
−Removed: Additional sales of corporate loans may be made during the remainder of fiscal 2023 as part of our credit risk mitigation strategies.
−Removed: However, to the extent credit spreads widen and present what we consider to be an attractive risk-adjusted return, we may increase our pace of corporate loan growth over the year-to-date levels during our fiscal fourth quarter of 2023.
+Added: Loan fund 6% 3%
+Added: Subscription lines of credit 5% 2%
+Added: The Fed’s measures to control inflation, including through increases in short-term interest rates in prior fiscal years, have had a dampening effect on the economy.
+Added: Coupled with the present uncertainty regarding future Fed interest rate cuts, both in terms of timing and magnitude, all lead to our expectation that such dampening will continue during our fiscal 2024.
+Added: These and related factors could continue to negatively impact our borrowers.
+Added: We continue to closely monitor economic factors, including inflation, interest rates, and a potential recession, that may impact our corporate loan portfolio, including our CRE portfolio.
+Added: We continue to maintain conservative underwriting standards for our CRE portfolio, including LTV limits that generally range between 65% to 80% at origination depending upon property type.
+Added: LTV ratios are subject to change over the life of the loan as property values change.
+Added: Our underwriting standards for our CRE portfolio, including LTV at origination, may be tightened in times of uncertainty.
+Added: Further, within the CRE portfolio, we have limited our exposure to office real estate loans to 3% of total loans held for sale and investment.
+Added: In addition, we have sold and may continue to sell corporate loans as part of our credit risk mitigation strategies.
Liquidity risk
5 unchanged sentences
These losses can result from, but are not limited to, trade errors, failed transaction settlements, late collateral calls to borrowers and counterparties, or interruptions to our system processing.
−Removed: We did not incur any significant losses related to such operational challenges during the nine months ended June 30, 2023.
+Added: We did not incur any significant losses related to such operational challenges during the three months ended December 31, 2023.
As more fully described in the discussion of our business technology risks included in various risk factors presented in “Item 1A - Risk Factors” of our 2023 Form 10-K, despite our implementation of protective measures and endeavoring to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable to human error, natural disasters, power loss, cyber-attacks and other information security breaches, and other events that could have an impact on the security and stability of our operations.
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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.