Raymond James Financial, Inc. · NYSE:RJF
Raymond James Financial — Investor Day (June 2018)
125 slides from Raymond James Financial's investor day presentation, Jun 14, 2018
Slide 1: Analyst & Investor Day June 14, 2018
Analyst & Investor Day June 14, 2018 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain statements made in this presentation and the associated webcast may constitute “forward- looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business
Slide 3: Agenda
AGENDA Agenda 7:45 am Arrival & Breakfast with RJF Management 8:30 am Welcome & General Overview Paul Reilly 9:15 am Asset Management Group Jeff Dowdle 9:45 am Equity Capital Markets Jim Bunn 10:15 am Break 10:30 am Private Client Group Tash Elwyn 11:15 am Financial Review and Closing Jeff Julien 12
Slide 4: Welcome & General Overview
WELCOME & GENERAL OVERVIEW Paul Reilly Chairman & CEO, Raymond James Financial 4
Slide 5: Overview of Raymond James Financial
OVERVIEW OF RAYMOND JAMES FINANCIAL Fiscal Year 2017 Net Revenues* $6,371,097,000 KEY FACTS (as of March 31, 2018) • Headquartered in St. Petersburg, FL • Founded in 1962; public in 1983 • 3,000 locations in the U.S., Canada and overseas • Approximately 7,600 financial advisors • $730 billion of AUA
Slide 6: Continued Profitability
CONTINUED PROFITABILITY 121 Consecutive Profitable Quarters Earnings Share Per Earnings (Basic) Trailing 10 Years 6
Slide 7: RJF Highlights: Fiscal Year to Date
RJF HIGHLIGHTS: FISCAL YEAR TO DATE Six Months Six Months Ended March 2018 Ended March 2017 Change* Total Revenue $3.62 billion $3.13 billion 16% Net Revenue $3.54 billion $3.06 billion 16% Net Income $362 million $259 million 39% Adjusted Net Income** $482 million $365 million 32% * Percentage chan
Slide 8: RJF Highlights
RJF HIGHLIGHTS Balance Sheet Highlights, as of March 31, 2018 Total Assets $36.0 billion Equity Attributable to RJF $5.9 billion Book Value Per Share $40.82 Market Capitalization $13.0 billion 8
Slide 9: RJF Stock Price vs. Sector, Five-Year Change
RAYMOND JAMES FINANCIAL RJF Stock Price vs. Sector, Five-Year Change Five Years Ended May 31, 2018 140% 120% 120% 100% 80% 66% 62% 60% Percent Change 40% 20% 0% RJF S&P 500 DJ US Financials Index 9
Slide 10: RJF Stock Price vs. Sector, 10-Year Change
RAYMOND JAMES FINANCIAL RJF Stock Price vs. Sector, 10-Year Change 10 Years Ended May 31, 2018 250% 225% 200% 150% 100% 93% Percent Change 50% 42% 0% RJF S&P 500 DJ US Financials Index 10
Slide 11: Stability
STABILITY >2X Regulatory Requirement *Approximately $1.20 billion of our total March 31, 2018 cash and cash equivalents included cash on 11 hand held at the parent, as well as parent cash loaned to RJ&A.
Slide 12: Recent Recognition
RECENT RECOGNITION Raymond James Upgraded to ‘Baa1’ by Moody’s (July 12, 2017) Raymond James Upgraded to 'BBB+' by S&P (May 4, 2017) 500 Added January 2018 2018: No 431 | 2017: 469 12
Slide 13: But... S&P Average Company Life Expectancy
BUT … S&P 500 – AVERAGE COMPANY “LIFE EXPECTANCY” 1965: 33 years 2015: 25 years 2025: 10-15 (expected) 13
Slide 14: Raymond James Financial IPO Underwriting Companies 1983
RAYMOND JAMES FINANCIAL – IPO Underwriting Companies – 1983 Drexel Burnham Eppler, Guerin & Turner D A Davidson Dain Bosworth First of Michigan Davis Scaggs Bear Stearns Gruntal R G Dickinson First Boston Herzfeld Evans & Co AG Becker Paribas Howard, Weil, Labousse First Albany Blyth Eastman Paine I
Slide 15: Raymond James Financial IPO Underwriting Companies Today
RAYMOND JAMES FINANCIAL – IPO Underwriting Companies – Today D A Davidson Oppenheimer Legg Mason Edward Jones Piper Jaffray Boenning & Scattergood Neuberger & Berman Stifel Nicolaus 15
Slide 16: Growth Cycle
GROWTH CYCLE GROWTH EXPANSION/ IMPROVEMENT Services & Solutions PROFITS INVESTMENT People, Businesses, Technology 16
Slide 17: Organic Growth
a ORGANIC GROWTH y RAYMOND JAMES”
Slide 18: Private Client Group Advisor Growth
PRIVATE CLIENT GROUP ADVISOR GROWTH YEAR-OVER-YEAR GROWTH + 5.3% Advisors +13.7% +17.4% PCG Total Client Assets Revenues STRONG PIPELINE FOR REMAINDER 18
Slide 19: Broker Protocol
BROKER PROTOCOL RAYMOND JAMES”
Slide 20: Acquisitions
ACQUISITIONS ALEX#BROWN ®3Macs ‘ivision of RAYMOND JAMES' ra? ura ea IOICE sercaee Morgan Keegan HOWE BARNES HOEFER & ARNETT Lane Berry FB INVESTMENT BANKING Vinca AM, SSS 8CMENT C SCOUE Investments CLARIVEST Mummert & Company CORPORATE FINANCE RAYMOND JAMES*
Slide 21: Future Acquisitions
FUTURE ACQUISITIONS Culture Strategic Ability Price 1 2 Benefit 3 to Integrate 4 21
Slide 22: Looking Ahead
LOOKING AHEAD RAYMOND JAMES*
Slide 23: Assessing Our Position
ASSESSING OUR POSITION RAYMOND JAMES*
Slide 24: Technology: Advisor & Client Tools
TECHNOLOGY: ADVISOR & CLIENT TOOLS Mobile Connected Advisor 24
Slide 25: Technology: Data Security
TECHNOLOGY: DATA SECURITY 25
Slide 26: High-Net-Worth Solutions
HIGH-NET-WORTH SOLUTIONS • Enhanced Alternative Investments • Private Wealth Mortgage • Private Institutional Client Desk 26
Slide 27: Asset Management Trends
ASSET MANAGEMENT TRENDS RAYMOND JAMES”
Slide 28: Regulation
REGULATION Senate Bill 2155 Economic Growth, Regulatory Relief and Consumer Protection Act 28
Slide 29: Risk Management
RISK MANAGEMENT RAYMOND JAMES*
Slide 30: Focus on People
FOCUS ON PEOPLE Our business is PEOPLE 30
Slide 31: People: Succession
PEOPLE: SUCCESSION RAYMOND JAMES*
Slide 32: Unique Competitive Position
UNIQUE COMPETITIVE POSITION 32
Slide 33: Integrity, Client First, Independence, Conservatism
INTEGRITY CLIENT FIRST INDEPENDENCE CONSERVATISM 33
Slide 34: Asset Management Group
ASSET MANAGEMENT GROUP Jeff Dowdle President, Asset Management Group 34
Slide 35: Asset Management Group
ASSET MANAGEMENT GROUP The Asset Management segment includes the Asset Management Services Division (AMS), Carillon Tower Advisers (CTA), and Raymond James Trust. Asset Management Services Carillon Tower Advisers Raymond James Trust (AMS) (CTA) $76.1 billion of financial assets $61.8 billion o
Slide 36: Asset Management Group Net Revenues and Pre-Tax Income
ASSET MANAGEMENT GROUP Net Revenues Pre-Tax Income ($ millions) ($ millions) 21% 5-YR 16% 5-YR CAGR CAGR 628* 227* 488 172 392 404 370 128 135 132 293 96 237 67 314 113 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 * First two quarters of fiscal 2018, annual
Slide 37: Asset Management Group Financial Assets Under Management
ASSET MANAGEMENT GROUP FINANCIAL ASSETS UNDER MANAGEMENT* ($ billions) 18% 5-YR CAGR 132.3 96.4 61.8 65.2 77.0 64.6 31.8 56.0 27.2 42.8 28.8 25.7 27.9 20.0 70.0 76.1 54.5 40.6 43.4 27.0 32.9 (4.2) (4.8) (4.8) (3.9) (4.7) (5.4) (5.5) FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18** AMS* CTA Managed for
Slide 38: Asset Management Services (AMS)
ASSET MANAGEMENT SERVICES (AMS) 38
Slide 39: Asset Management Services Asset Breakdown
ASSET MANAGEMENT SERVICES ASSET BREAKDOWN - AMS (March 31, 2018) 100% = $251.6 billion Financial Assets Under Management, $76.1 Non-Discretionary Asset-Based Programs*, $175.5 * The firm does not have discretion over the investments in these accounts, but they are advised by financial 39 advisors on
Slide 40: Asset Management Services Net Flows
ASSET MANAGEMENT SERVICES NET FLOWS OF FINANCIAL ASSETS UNDER MANAGEMENT - AMS (March 31, 2018) Financial Assets Under Management Non-Discretionary Asset-Based Programs** 23.6% 23.1% 23.1%* 20.8% 17.8% 16.3% 15.8% 14.8% 14.1%* 13.1% 12.5% 12.7% 11.3% 11.6% 11.5% 7.1% FY 12 FY 13 FY 14 FY 15 FY 16 FY
Slide 41: Asset Management Services Investment Performance Highlights
ASSET MANAGEMENT SERVICES INVESTMENT PERFORMANCE HIGHLIGHTS - AMS (March 31, 2018) AMS Managed Performance VS. PEER GROUPS FREEDOM EXCESS RETURNS 3Y 5Y 10Y Conservative Balanced (50%/50%) +0.7% +0.5% +0.4% Balanced (65/35) +0.9% +0.6% +0.3% Balanced with Growth (80/20) +1.6% +0.5% +0.1% Growth (100%
Slide 42: Carillon Tower Advisers (CTA)
CARILLON TOWER ADVISERS (CTA) 42
Slide 43: Carillon Tower Advisers
CARILLON TOWER ADVISERS Carillon Tower Advisers (CTA) is structured as a global investment-management firm that leverages a multiple-boutique business model to deliver a range of investment strategies through independent investment affiliates. Our autonomous investment teams manage over $61.8 billio
Slide 44: Carillon Tower Advisers Diversification by Assets
CARILLON TOWER ADVISERS DIVERSIFICATION BY PERCENTAGE OF ASSETS UNDER ADMINISTRATION FY 2012 FY 2018* 64% U.S. Small 34% Cap/SMID/Mid Cap 12% U.S. Large Cap 13% 24% Fixed Income 47% 0% International 5% * Period also includes 1% concentration of Other, which includes global, micro and tactical alloca
Slide 45: Carillon Tower Advisers AUM by Distribution Channel
CARILLON TOWER ADVISERS FINANCIAL ASSETS UNDER MANAGEMENT - CTA (March 31, 2018) BY DISTRIBUTION CHANNEL SALES BUILD-OUT 100% = $61.8 billion Restructured the sales/distribution team of Approximately 5% of CTA’s AUM is 80+ professionals as part of the Scout & distributed through Retail SMA Reams i
Slide 46: Carillon Tower Advisers Net Flows
CARILLON TOWER ADVISERS NET FLOWS OF FINANCIAL ASSETS UNDER MANAGEMENT – CTA* 8.8%** 4.9% 2.3% 0.9% 4.4% FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 -4.7% -4.5% -6.6% *Excludes non-discretionary asset-based programs 46 **First two quarters of fiscal 2018, annualized Note: CTA flow calculation includ
Slide 47: Scout & Reams Post-Acquisition Update
ASSET MANAGEMENT GROUP SCOUT & REAMS POST-ACQUISITION UPDATE Benefits to Carillon Firm AUA/AUM: $27B Strong, saleable track records Run Rate Revenue: $74M Materially diversifies Carillon platform 40-Act Fund AUA/AUM: $6B Provides expertise in RIA distribution Tax shield Significant g
Slide 48: Asset Management Group Outlook
ASSET MANAGEMENT GROUP The outlook for the Asset Management segment is continued growth of assets, largely driven by growth in the Private Client Group and a focus on acquisitions and lift outs to diversify and strengthen the array of products for clients. A structural headwind expected to continue
Slide 49: Equity Capital Markets
EQUITY CAPITAL MARKETS Jim Bunn Co-President, Global Equities & Investment Banking 49
Slide 50: Capital Markets Segment
CAPITAL MARKETS SEGMENT Net Revenues Pre-Tax Income ($ millions) ($ millions) 5% 5-YR 13% 5-YR CAGR CAGR 1,014 953 963 1,002 927 895* 805 131 139 141 102 107 76 447 42* 21 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 * First two quarters of fiscal 2018, ann
Slide 51: Capital Markets Segment FYTD 2018 Net Revenues
CAPITAL MARKETS SEGMENT FYTD 2018 CAPITAL MARKETS SEGMENT NET REVENUES 100% = $447 million ECM (Canada/Other) 7% Tax Credit Funds 6% ECM (US/Europe) 47% Fixed Income 40% 51
Slide 52: ECM United States & Europe Net Revenues
EQUITY CAPITAL MARKETS EQUITY CAPITAL MARKETS United States & Europe Net Revenues ($ millions) 11% 5-YR CAGR 464 415 419* 379 405 366 281 210 FY 12 FY13 FY 14 FY 15 FY 16 FY 17 FYTD 18 * First two quarters of fiscal 2018, annualized. 52 Note: CAGR: 5-Year 2017
Slide 53: ECM Global Investment Banking Revenues
EQUITY CAPITAL MARKETS GLOBAL INVESTMENT BANKING REVENUES - ECM ($ millions) 14% 5-YR CAGR 301 274* 251 236 214 203 155 137 FY 12 FY13 FY 14 FY 15 FY 16 FY 17 FYTD 18 * First two quarters of fiscal 2018, annualized. 53 Note: CAGR: 5-Year 2017
Slide 54: ECM U.S. Investment Banking M&A/PP Advisory Revenues
EQUITY CAPITAL MARKETS U.S. INVESTMENT BANKING - ECM M&A/PP** ADVISORY REVENEUES ($ millions) 23% 5-YR 229 225* CAGR 165 156 148 132 80 112 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 * First two quarters of fiscal 2018, annualized. 54 **Merger & Acquisition 1and Merger Private and acquisition Place
Slide 55: U.S. Investment Banking: Advisory
EQUITY CAPITAL MARKETS U.S. Investment Banking: Advisory March 2018 August 2017 Announced May 2018 May 2018 May 2018 August 2017 Has entered into an Has entered into a definitive Auto and Mortgage Lending Has acquired Has been acquired by Has been acquired by agreement to acquire agreement to merge
Slide 56: U.S. Investment Banking: Equity Underwriting
EQUITY CAPITAL MARKETS U.S. INVESTMENT BANKING: EQUITY UNDERWRITING Number of RJ Deals RJ as Active Bookrunner 132 32% 122 31% 119 112* 27% 109 26% 25% 90 22% 75 19% 56 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 * First two quarters of fiscal 2018, annual
Slide 57: Investment Banking Recent Accolades
EQUITY CAPITAL MARKETS Investment Banking Recent Accolades 2018 2017 • Information Technology Deal of the Year • # 2 in Shareholder Activism Defense • Corporate/ Strategic Deal of the Year ($100MM-$1B) • M&A Deal of the Year ($250MM-$1B) • Cross Border Deal of the Year ($100MM-$250MM) 2016 • Private
Slide 58: European Investment Banking
EQUITY CAPITAL MARKETS European Investment Banking In June 2016, Raymond James acquired Mummert & Co., a leading European advisory firm based in Munich, Germany to create a platform for further international expansion, add highly complementary industry coverage, enhance our cross-border transaction
Slide 59: Institutional Equity Commissions
EQUITY CAPITAL MARKETS INSTITUTIONAL EQUITY COMMISSIONS ($ millions) Only represents ~3.5% of RJF’s Net Revenues 261 247 247 230 228 223 199* 100 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 * First two quarters of fiscal 2018, annualized. 59
Slide 60: U.S. Equity Research
EQUITY CAPITAL MARKETS U.S. EQUITY RESEARCH* 888 Total Companies Industry Focus Market-Cap Focus** < $100 Transportation, million, 1.5% 32 Consumer, 85 $500 million- $100 million, 10.6% $10 billion+, Technology & Communications, 28.4% 181 Energy, 141 $2 billion- $500 million, 25.2% Real Estate, 89 $
Slide 61: Global Equity Research
EQUITY CAPITAL MARKETS Global Equity Research Ranked #1 in “Top Five Relationships for Small/Mid-Cap Portfolio Managers” The Raymond James Equity Research team is composed of more than 70 fundamental equity analysts covering Ranked #1 in Overall U.S. Small/Mid-Cap Equity Sales & approximately 900 U.
Slide 62: 2018 Growth Initiatives: Advisory
2018 GROWTH INITIATIVES Advisory . Continue to improve key operating metrics: average fee, deal size, revenue per MD, revenue per banker . Capitalize on 2017 senior banker hires in Europe to significantly increase European revenues . Selectively but aggressively add senior banker talent through targ
Slide 63: 2018 Growth Initiatives (Cont.)
2018 GROWTH INITIATIVES (CONT.) Equity Underwriting . Continue to invest in and grow the U.S. platform, in particular in life sciences, financial services, real estate and energy . Increase market share of target transaction fees Research, Sales & Trading • Increase wallet share of NY hedge fund mar
Slide 64: Equity Capital Markets Outlook
EQUITY CAPITAL MARKETS OUTLOOK The M&A pipeline for the second half of fiscal 2018 is strong Since late March, the relative stability in the equity markets has enabled a broadening of ECM business, with strong participation from technology, industrials, and financials; backlog remains high, boding w
Slide 65: Private Client Group
PRIVATE CLIENT GROUP Tash Elwyn President, Raymond James & Associates, Private Client Group 65
Slide 66: Private Client Group
PRIVATE CLIENT GROUP Over 7,600 financial advisors Approximately 3 million client accounts Approximately $695 billion in PCG client assets under administration Over 3,000 locations, including major financial centers in North America and abroad As of March 31, 2018 66
Slide 67: Private Client Group Affiliation Options
PRIVATE CLIENT GROUP The Private Client Group segment includes multiple affiliation options – referred to as AdvisorChoice® – as well as support functions, including technology, operations and practice management. 67
Slide 68: Private Client Group Industry Rankings
PRIVATE CLIENT GROUP Raymond James is one of the largest private client firms in the industry. Client Assets Rank Firm FAs ($ billions) 1 Bank of America / Merrill Lynch $2,725 17,367 2 Morgan Stanley 2,373 15,712 3 Wells Fargo & Co. 1,600 14,544 4 UBS Americas 1,225 6,822 5 Edward Jones & Co. 1,121
Slide 69: Private Client Group Assets and Advisors
PRIVATE CLIENT GROUP Assets Under Administration Number of Advisors ($ billions) 3.4% 12.4% 5-YR CAGR 5-YR CAGR 695 7,146 7,346 7,604 659 6,596 574 6,210 6,197 6,265 451 453 403 368 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 Q2 18 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 Q2 18 Employees ICs CAGR: 5-Year 2017 69
Slide 70: Private Client Group Net Revenues and Pre-Tax Income
PRIVATE CLIENT GROUP Net Revenues Pre-Tax Income ($ millions) ($ millions) 12.3% 11.6% 5-Year 5-Year CAGR CAGR 625* 5,010* 4,422 3,508 3,616 ANNUALIZED 3,280 342 373 2,919 330 341 2,474 215 230 313 313 2,505 2,505 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 1
Slide 71: Private Client Group Commissions and Fees
PRIVATE CLIENT GROUP Commissions and Fees ($ millions) 12% 5-YR 4,026* CAGR 3,566 2,937 2,978 2,758 RJIS 2,455 1,564 RJL 2,013 2,056 1,245 1,247 1,186 RJA 1,082 RJFS 835 862 1,717 1,483 1,507 1,171 1,353 1,036 981 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 * First two quarters of fiscal 2018, annua
Slide 72: Private Client Group Securities Commissions and Fees
PRIVATE CLIENT GROUP SECURITIES COMMISSIONS AND FEES (quarter ended March 31, 2018) Insurance and Annuity Products, 9.8% New Issue Sales Credits, 1.1% Equities and Fixed Income Securities, 11.5% Mutual Funds, Fee-Based 16.6% Accounts, 61.0% RECURRING REVENUE* * 81% of PCG’s total revenue was recurri
Slide 73: Client Assets Under Administration Growth
PRIVATE CLIENT GROUP CLIENT ASSETS UNDER ADMINISTRATION GROWTH March 31, 2017 to March 31, 2018 22.1% 13.7% 13.1% 11.6% 9.0% 8.8% 8.4% 6.3% 5.4% LPL w/ Raymond Schwab Ameriprise LPL w/o Stifel (SF) Morgan Wells Fargo Bank of Acquisition* James (RJF) (SCHW) (AMP) Acquisition* Stanley (MS) (WFC) Ameri
Slide 74: Private Client Group Total Revenue Growth
PRIVATE CLIENT GROUP PRIVATE CLIENT GROUP** TOTAL REVENUE GROWTH Quarter Ended March 31, 2017 to Quarter Ended March 31, 2018 The estimated impact to revenues from the acquisition* was not disclosed. 19.9% 17.4% 15.2% 14.2% 9.7% 7.8% 5.7% -0.4% LPL w/ Raymond Schwab (SCHW) Ameriprise Stifel (SF) Mor
Slide 75: Financial Advisor Growth
PRIVATE CLIENT GROUP PRIVATE CLIENT GROUP** FINANCIAL ADVISOR GROWTH March 31, 2017 to March 31, 2018 11.9% 5.3% 4.1% 2.2% -0.6% -1.3% -1.4% LPL w/ Raymond James Bank of America Ameriprise (AMP) Morgan Stanley LPL w/o Stifel (SF) Acquisition* (RJF) Merrill Lynch (MS) Acquisition* (LPLA) (BAC) (LPLA)
Slide 76: Private Client Group Market Share by State
PRIVATE CLIENT GROUP MARKET SHARE BY STATE* RJF has the strongest market share in the Sun Belt; economics continue to grow in this area, and there is still upside to gain market share. RJF market share in California and the Northeast geographies is still in its infancy. With the largest pockets
Slide 77: Client Satisfaction
PRIVATE CLIENT GROUP CLIENT SATISFACTION Top NPS Performing NET PROMOTER SCORE Brands Examples* • Apple 89 • Starbucks 77 90 • Netflix 68 80 • Southwest 62 • Amazon 61 70 60 50 “excellent” 40 30 20 10 0 Raymond James Client Raymond James Client >$1MM Financial Services Average Source: 2018 Client Sa
Slide 78: Advisor Satisfaction
PRIVATE CLIENT GROUP ADVISOR SATISFACTION NET PROMOTER SCORE 60 50 “excellent” 40 30 20 10 0 Raymond Raymond Competitor Competitor Competitor Competitor Competitor Competitor -10 James New James -20 Advisor Tenured Advisor -30 -40 Source: RJ 2018 External Advisor Survey and 2017 Internal Satisfactio
Slide 79: External Advisor Survey
EXTERNAL ADVISOR SURVEY If you were unable to continue working with your current firm, which other broker/dealers would you consider joining? % of advisors who would consider working for a given firm 60% 51% 50% 40% 36% 30% <23% 20% 10% 0% Raymond James Next Competitor All Others Source: RJ 2018 Ext
Slide 80: Successful Recent Acquisitions
PRIVATE CLIENT GROUP SUCCESSFUL RECENT ACQUISITIONS 80
Slide 81: Regulatory Expectations
PRIVATE CLIENT GROUP REGULATORY EXPECTATIONS 81
Slide 82: Broker Protocol
PRIVATE CLIENT GROUP BROKER PROTOCOL 82
Slide 83: Private Client Group Outlook
PRIVATE CLIENT GROUP OUTLOOK Continued success recruiting and retaining financial advisors across all affiliation options Providing high-quality support, products and technology to help our advisors in serving their clients 83
Slide 84: Financial Review
FINANCIAL REVIEW Jeff Julien Chief Financial Officer, Raymond James Financial 84
Slide 85: Track Record of Profitable Growth: Net Revenues
TRACK RECORD OF PROFITABLE GROWTH NET REVENUES ($ millions) 10.8% 5-YR CAGR 7,078* 6,371 5,204 5,405 4,862 73.6% 4,488 3,807 69.4% Net Revenues* 66.2% 64.3% 61.3% 56.3% 55.5% Recurring 3,539 Revenues* (%) FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 Annual 14.2% 17.8% 8.3% 7.0% 3.9% 17.9% Growth CAGR
Slide 86: Pre-Tax Income Growth GAAP
TRACK RECORD OF PROFITABLE GROWTH PRE-TAX INCOME GROWTH GAAP ($ millions) Pre-Tax Margin* (GAAP) 18.2% 15.4% 15.3% 14.8% 12.4% 12.6% 14.5% 14.4% 5-YR CAGR 1,285** 925 Pre-Tax Income 748 798 801 (GAAP) 564 472 643 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 Annual Growth 2.2% 19.5% 32.6% 6.7% 0.4% 15
Slide 87: Pre-Tax Income Growth Non-GAAP
TRACK RECORD OF PROFITABLE GROWTH PRE-TAX INCOME GROWTH NON-GAAP ($ millions; %) 17.6% 18.3% 15.9% 15.4% 15.3% Adjusted Pre- 14.0% 14.4% Tax Margin* (Non-GAAP) 16.0% 5-YR CAGR 1,293*** 1,119 861 748 798 644 Adjusted Pre- 533 Tax Income (Non-GAAP) 647 FY 12 FY 13 FY 14** FY 15** FY 16 FY 17 FYTD 18 A
Slide 88: Pre-Tax Income by Core Segment
TRACK RECORD OF PROFITABLE GROWTH PRE-TAX INCOME BY CORE SEGMENT as of Q2 FY 2018 ($ millions; %) Asset Management, 18% Capital $113 Markets, 3% $21 PCG, 49% $313 $232 RJ Bank, Other: (6%) 36% 88
Slide 89: Quarterly Return on Equity
TRACK RECORD OF PROFITABLE GROWTH QUARTERLY RETURN ON EQUITY* GAAP Non-GAAP 16.8% 16.0% 15.8% 16.7%** 14.4% 14.0% 14.0% 14.1% 11.8% 13.8% 14.2% 11.7% 10.7% 8.8% 8.4% Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY 17 Q3 FY17 Q4 FY17 Q1FY 18 Q2 FY18 * Quarter, annualized 89 **There was no non-GAAP adjustment during th
Slide 90: Return on Equity vs. Return on Tangible Equity
TRACK RECORD OF PROFITABLE GROWTH RETURN ON EQUITY VS. RETURN ON TANGIBLE EQUITY* 2.0% 18.7%* 16.7% Q2 FY 2018 Portion Q2 FY 2018 Annualized Annualized Return Attributable to Return on Tangible on Equity Goodwill and Equity* Intangible Assets *Return on Tangible Equity is a non-GAAP financial measur
Slide 91: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS (March 31, 2018) Total Assets $36.0 billion Equity Attributable to RJF $5.9 billion Approximately Consolidated Cash $3.1 billion $1.2 billion at RJF* Shares Outstanding 145.6 million Book Value Per Share $40.82 Leverage (Assets / RJF Equity) 6.1x To be Considered Leverage Ex
Slide 92: Conservative Financial Management: Dividends and Repurchases
CONSERVATIVE FINANCIAL MANAGEMENT Dividends: Target is typically 15-25% of earnings. In market downturns, the company maintains its most recent dividend if feasible. Securities Historically, an opportunistic approach. Typically target stock repurchases when the price of RJF stock falls to relati
Slide 93: Domestic Client Cash Sweep Balances
CONSERVATIVE FINANCIAL MANAGEMENT DOMESTIC CLIENT CASH SWEEP BALANCES* TO TOTAL CLIENT ASSETS UNDER ADMINISTRATION (%) 10.0% 9.5% 9.0% 8.5% 8.0% 7.5% 7.7% Average 7.0% 6.5% 6.0% 5.5% * Does not include cash held through non-money market mutual funds or cash equivalents, etc. Domestic retail business
Slide 94: Sensitivity to Changes in Short-Term Interest Rates
CONSERVATIVE FINANCIAL MANAGEMENT OVERVIEW OF SENSITIVITY TO CHANGES IN SHORT-TERM INTEREST RATES (March 31, 2018; $ billions) DOMESTIC CLIENT CASH CORRESPONDING ASSETS SWEEPS BALANCES (~$43) Client Margin Brokerage Client • NII to PCG Loans Segment Cash / Client (~$2) Interest Program (~$3) Segrega
Slide 95: RJ Bank Deposit Program (RJBDP)
CONSERVATIVE FINANCIAL MANAGEMENT RJ BANK DEPOSIT PROGRAM (RJBDP) September 30, March 31, 2015 2018 Federal Funds Target Rate 0%-0.25% 1.50%-1.75% RJBDP balances at third-party banks $18.5 billion $19.7 billion Net Spread on RJBDP ~0.25% ~1.50% balances at third-party banks 95
Slide 96: Financial Targets
FINANCIAL TARGETS FIRM TARGETS: PRE-TAX MARGIN*, COMPENSATION RATIO*, AND RETURN ON EQUITY Metric Previous New Target** Commentary Target Pre-Tax Margin* >17% >18% • New Targets by segment: PCG (12.5%+), Capital Markets (10%+), Asset Management (33%+) • Previous Targets by segment: PCG (12%), Capita
Slide 97: Financial Advisor Transition Assistance and Retention Costs
PRIVATE CLIENT GROUP FINANCIAL ADVISOR TRANSITION ASSISTANCE AND RETENTION COSTS PRIVATE CLIENT GROUP FINANCIAL ADVISOR TRANSITION ASSISTANCE & RETENTION COSTS Represents a 3.86% 4.9% impact to 3.49% the PCG 3.23% segment Impact to RJF’s 3.19% Compensation Ratio and Pre-Tax Margin** 246 247* 175 166
Slide 98: Raymond James Bank Update
RAYMOND JAMES BANK UPDATE RAYMOND JAMES*
Slide 99: RJ Bank Total Assets
RAYMOND JAMES BANK RJ BANK TOTAL ASSETS (Average Balances as of Q2 FY 2018) Cash and Other Assets, 7% Available-for- Sale Securities, Commercial and 11% Industrial Loans, 35% Tax-Exempt Loans, 5% Securities Based Loans, 12% Residential Commercial Real Mortgages, 15% Estate Loans, 15% 99
Slide 100: Raymond James Bank Net Revenues and Pre-Tax Income
RAYMOND JAMES BANK Net Revenues Pre-Tax Income ($ millions) ($ millions) Net 3.50% 3.25% 3.15% Interest 3.07% 3.04% 3.10% 2.98% Margin 11% 5-YR CAGR 688* 464* Net 593 409 Revenues 494 337 279 414 268 240 243 336 347 352 344 232 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 FY 12 FY 13 FY 14 FY 15 FY 1
Slide 101: Raymond James Bank Net Loan Growth
RAYMOND JAMES BANK NET LOAN GROWTH ($ millions) 16% 5 -YR CAGR 18,151 17,007 15,211 12,988 10,964 7,992 8,821 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 CAGR: 5-Year 2017 101
Slide 102: Raymond James Bank Key Credit Trends
RAYMOND JAMES BANK KEY CREDIT TRENDS PROVISION EXPENSE NET CHARGE OFFS ($ thousands) ($ thousands) 25,894 28,167 23,570 24,214 20,652 13,309 13,565 12,987 * 7,549 * 1,747 3,009 3,715 2,565 -2,757 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FYTD 18 NONPERFORMING AS
Slide 103: Securities Portfolio
SECURITIES PORTFOLIO RJ Bank’s Agency-Backed Securities Portfolio ($ billions) ~$6.00 +$3.5 B +$1.5 B $2.29 $2.45 $1.88 $2.08 $1.55 $0.99 12/31/2016 3/31/2017 6/30/2017 9/30/2017 12/31/2017 3/31/2018 2022 - Current Plan Considerations Limit duration risk, especially in a rising interest rate envir
Slide 104: Executive Committee Bios
EXECUTIVE COMMITTEE BIOS 104
Slide 105: Executive Committee Bios: Paul Reilly
EXECUTIVE COMMITTEE BIOS Paul Reilly Presenting Chairman & Chief Executive Officer Raymond James Financial Paul Reilly became chief executive officer of Raymond James Financial in May 2010, after joining the firm’s management team as president and CEO-designate in May 2009. He has served on the firm
Slide 106: Executive Committee Bios: Jeff Dowdle
EXECUTIVE COMMITTEE BIOS Jeff Dowdle Presenting President Asset Management Group Serving as president of Raymond James Financial Inc.’s asset management group, Jeff Dowdle oversees the firm’s investment management subsidiaries and fee-based advisory programs. A 23-year veteran of Raymond James, Mr.
Slide 107: Executive Committee Bios: James Bunn
EXECUTIVE COMMITTEE BIOS James Bunn Presenting Co-President Raymond James & Associates Global Equities and Investment Banking Jim Bunn is the co-president of Global Equities & Investment Banking and head of Investment Banking for Raymond James. Prior to his current role, Mr. Bunn served as the head
Slide 108: Executive Committee Bios: Tash Elwyn
EXECUTIVE COMMITTEE BIOS Tash Elwyn Presenting President Raymond James and Associates Private Client Group As President of Raymond James & Associates (RJA) since January 2012, Tash Elwyn supports the financial advisors in our employee Private Client Group. He also serves on the Board of Raymond Jame
Slide 109: Executive Committee Bios: Jeffrey P. Julien
EXECUTIVE COMMITTEE BIOS Jeffrey P. Julien Presenting Chief Finance Officer Executive Vice President, Finance Raymond James Financial In addition to his positions as executive vice president of finance and chief financial officer of Raymond James Financial, Inc., Jeff Julien serves as chairman of th
Slide 110: Executive Committee Bios: Steve Raney
EXECUTIVE COMMITTEE BIOS Steve Raney Not Presenting President and CEO Raymond James Bank Steve Raney is a Tampa native and has worked in the area’s banking community since 1988. He is the president and CEO of Raymond James Bank, a wholly owned subsidiary of Raymond James Financial. The bank’s core b
Slide 111: Executive Committee Bios: Jeffrey Trocin
EXECUTIVE COMMITTEE BIOS Jeffrey Trocin Not Presenting Co-President Raymond James & Associates Global Equities and Investment Banking Jeff Trocin joined Raymond James in 1986 and serves as president of Global Equities and Investment Banking. He also serves as a member of the firm’s Executive Committ
Slide 112: Executive Committee Bios: Dennis Zank
EXECUTIVE COMMITTEE BIOS Dennis Zank Not Presenting Chief Operating Officer Raymond James Financial Chief Executive Officer Raymond James & Associates Dennis Zank serves as chief operating officer of Raymond James Financial, Inc. as well as Chief Executive Officer of Raymond James & Associates (RJA)
Slide 113: Executive Committee Bios: Bella Allaire
EXECUTIVE COMMITTEE BIOS Not Presenting Bella Allaire Executive Vice President Technology and Operations As executive vice president of technology and operations for Raymond James, Bella Loykhter Allaire oversees the firm’s technology and operations functions, including client service and the techno
Slide 114: Executive Committee Bios: Paul Allison
EXECUTIVE COMMITTEE BIOS Paul Allison Not Presenting Chairman and CEO Raymond James Ltd. As chairman and chief executive officer of Raymond James Ltd., Paul Allison oversees business-building efforts and strategic leadership of the firm’s Canadian operations, including Equity Capital Markets and Pri
Slide 115: Executive Committee Bios: John Carson Jr.
EXECUTIVE COMMITTEE BIOS John Carson Jr. Not Presenting President Raymond James Financial John Carson is president of Raymond James Financial, Inc. and a member of the firm’s executive committee. He also serves as head of the fixed income and public finance divisions, as well as head of corporate de
Slide 116: Executive Committee Bios: Scott Curtis
EXECUTIVE COMMITTEE BIOS Scott Curtis Not Presenting President Raymond James Financial Services Private Client Group As president of Raymond James Financial Services (RJFS), Scott Curtis directs Raymond James’ independent advisor business, including its Financial Institutions Division. The 3,900 fin
Slide 117: Executive Committee Bios: Jonathan N. Santelli
EXECUTIVE COMMITTEE BIOS Not Presenting Jonathan N. Santelli Executive Vice President and General Counsel Raymond James Financial Prior to joining Raymond James as executive vice president and general counsel, Jonathan Santelli was senior vice president and deputy general counsel of First Republic B
Slide 118: Chairman Emeritus Bio: Tom James
CHAIRMAN EMERITUS BIO Tom James Not Presenting Chairman Emeritus Raymond James Financial Thomas A. James is Chairman Emeritus of the Raymond James Financial, Inc. (NYSE: RJF) Board of Directors. He was previously CEO and Chairman of the Board for more than 40 years before handing over those roles to
Slide 119: Appendix
APPENDIX RAYMOND JAMES*
Slide 120: Schedule of Non-GAAP Information
SCHEDULE OF NON-GAAP INFORMATION Three months ended December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015 ($ in thousands, except per share amounts) Net Income (1) $ 118,842 $ 193,489 $ 183,424 $ 112,755
Slide 121: Schedule of Non-GAAP Information (continued)
SCHEDULE OF NON-GAAP INFORMATION (continued from prior slide) Footnote Explanations: 1. Excludes noncontrolling interests. 2. Acquisition-related expenses associated with our announced acquisition of Scout Investments and Reams Asset Management as well as the 2016 acquisitions of the U.S. Private Cl
Slide 122: Schedule of Non-GAAP Information
SCHEDULE OF NON-GAAP INFORMATION Six months ended March 31, 2018 March 31, 2017 ($ in thousands, except per share amounts) Net Income (1) $ 361,689 $ 259,322 Non-GAAP adjustments: Acquisition-related expenses (2) 3,927 13,752 Losses on extinguishment of debt (3) - 8,282 Jay Peak settlement (4) - 130
Slide 123: Schedule of Non-GAAP Information (continued)
SCHEDULE OF NON-GAAP INFORMATION (continued from prior slide) Footnote Explanations: 1. Excludes noncontrolling interests. 2. Acquisition-related expenses associated with our announced acquisition of Scout Investments and Reams Asset Management as well as the 2016 acquisitions of the U.S. Private Cl
Slide 124: Schedule of Non-GAAP Information
SCHEDULE OF NON-GAAP INFORMATION Twelve months ended September 30, 2017 September 30, 2016 September 30, 2013 September 30, 2012 ($ in thousands, except per share amounts) Pre-tax income (1) $ 925,346 $ 800,643 $ 564,187 $ 471,525 Pre-tax non-GAAP adjustments (as detailed below) 193,741 60,706 - - A
Slide 125: Schedule of Non-GAAP Information (continued)
SCHEDULE OF NON-GAAP INFORMATION (continued from prior slide) Footnote Explanations: 1. Excludes noncontrolling interests. 2. Computed by dividing the pre-tax income attributable to Raymond James Financial, Inc. by net revenues for each respective period or, in the case of adjusted pre-tax margin on