Raymond James Financial, Inc. · NYSE:RJF
Raymond James Financial — Q3 FY2020 Earnings Presentation
27 slides from Raymond James Financial's earnings presentation, Jul 29, 2020
Slide 1: Fiscal 3Q20 Results
FISCAL 3Q20 RESULTS July 29, 2020
Slide 2: Fiscal 3Q20 Overview
FISCAL 3Q20 OVERVIEW Paul Reilly Chairman & CEO, Raymond James Financial 2
Slide 3: Fiscal 3Q20 Highlights
FISCAL 3Q20 HIGHLIGHTS vs. vs. $ in millions, except per share amounts 3Q20 3Q19 2Q20 Net revenues $ 1,834 (5)% (11)% Net income $ 172 (34)% 2% Earnings per common share - diluted $ 1.23 (32)% 3% 3Q19 2Q20 Return on equity 10.0 % 16.1% 9.9% Return on tangible common equity* 10.9 % 17.8% 10.8% * This
Slide 4: Fiscal 3Q20 Key Metrics
FISCAL 3Q20 KEY METRICS vs. vs. $ in billions 3Q20 3Q19 2Q20 Client assets under administration $ 876.9 6% 13% Private Client Group (PCG) assets under administration $ 833.1 6% 14% PCG assets in fee-based accounts $ 443.0 11% 16% Financial assets under management $ 145.4 2% 13% Total clients' domest
Slide 5: Private Client Group
PRIVATE CLIENT GROUP Net Revenues Pre-Tax Income $ in millions $ in millions 1,495 170 1,414 153 1,351 1,381 140 143 1,249 91 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Year-over-year change: (8)% Year-over-year change: (35)% Sequential change: (16)% Sequential change: (46)% Number of Financi
Slide 6: Capital Markets
CAPITAL MARKETS Net Revenues Pre-Tax Income $ in millions $ in millions 323 62 302 290 268 33 251 29 28 24 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19* 1Q20 2Q20 3Q20 Year-over-year change: 29% Year-over-year change: 158% Sequential change: 11% Sequential change: 121% Investment Banking Revenues Brokerage Re
Slide 7: Asset Management
ASSET MANAGEMENT Net Revenues Pre-Tax Income $ in millions $ in millions 184 184 73 73 177 178 69 65 163 60 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Year-over-year change: (8)% Year-over-year change: (8)% Sequential change: (11)% Sequential change: (18)% Financial Assets Under Management $
Slide 8: Raymond James Bank
RAYMOND JAMES BANK Net Revenues Pre-Tax Income $ in millions $ in millions 138 215 216 216 210 131 135 178 14 14 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Year-over-year change: (17)% Year-over-year change: (90)% Sequential change: (15)% Sequential change: 0% Bank Loans, Net $ in billions 21
Slide 9: Raymond James Bank Key Credit Trends
RAYMOND JAMES BANK KEY CREDIT TRENDS Loan Loss Provision Net Charge-Offs/(Recoveries) $ in millions $ in millions 188 107 169 84 72 35 80 24 21 14 13 8 55 2 3 6 34 26 28 24 20 22 14 13 -3 3 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FYTD20 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY1
Slide 10: FYTD 2020 Highlights
FYTD 2020 HIGHLIGHTS Compared to Compared to GAAP Adjusted* Results Results FYTD 2020 vs. vs. $ in millions, except per share amounts GAAP FYTD 2019 FYTD 2019 Net revenues RECORD $ 5,911 3% NA Net income $ 609 (21)% (22)% Earnings per common share - diluted $ 4.33 (18)% (20)% FYTD 2019 FYTD 2019 Ret
Slide 11: Financial Review
FINANCIAL REVIEW Paul Shoukry Chief Financial Officer, Raymond James Financial 11
Slide 12: Consolidated Net Revenues
CONSOLIDATED NET REVENUES vs. vs. $ in millions 3Q20 3Q19 2Q20 Asset management and related administrative fees $ 867 (1)% (14)% Brokerage revenues 486 8% (6)% Account and service fees 134 (27)% (22)% Investment banking 139 —% (6)% Interest income 217 (32)% (24)% Other 33 22% NM Total revenues 1,876
Slide 13: Domestic Cash Sweep Balances
DOMESTIC CASH SWEEP BALANCES Clients' Domestic Cash Sweep Balances as a % of Domestic PCG Assets Under Administration (AUA) 7.6% Ca sh Sweep Balances as a % of Domestic PCG AUA 6.6% 5.1% 5.0% 4.9% 52.9 51.9 3.8 3.2 38.2 37.7 39.5 20.4 2.1 2.0 2.5 24.7 14.4 14.0 15.1 28.7 Cl ients' Domestic Cash Swee
Slide 14: Net Interest Income & RJBDP Fees (Third-Party Banks)
NET INTEREST INCOME & RJBDP FEES (THIRD-PARTY BANKS) Firmwide Net Interest Income RJBDP Fees (Third-Party Banks)* 315 323 304 293 67 65 58 51 195 20 $ in millions 248 258 246 242 175 3Q19 4Q19 1Q20 2Q20 3Q20 Raymond James Bank Average Yield on RJBDP Net Interest Margin** (Third-Party Banks)*** 3.37%
Slide 15: Consolidated Expenses
CONSOLIDATED EXPENSES vs. vs. Total Compensation Ratio $ in millions 3Q20 3Q19 2Q20 68.8% 69.6% 67.2% Compensation, commissions and benefits $ 1,277 —% (10)% 66.3% 65.2% Non-compensation expenses: Communications and information processing 100 9% 1% Occupancy and equipment 55 —% (2)% 3Q19 4Q19 1Q20 2
Slide 16: Consolidated Pre-Tax Margin
CONSOLIDATED PRE-TAX MARGIN 18.4% 17.7% 17.9% 17.5% 11.6% 10.8% 3Q19 4Q19* 1Q20 2Q20 3Q20 Pre-tax margin (GAAP) Pre-tax margin (Adjusted)** * 4Q19 included a $19 million goodwill impairment charge associated with our Canadian Capital Markets business. 16 ** This is a non-GAAP measure. See the schedu
Slide 17: Other Financial Information
OTHER FINANCIAL INFORMATION vs. vs. $ in millions, except per share amounts 3Q20 3Q19 2Q20 Total assets $ 44,682 16% (10)% RJF corporate cash* $ 2,119 73% 10% Total equity attributable to RJF $ 6,965 7% 2% Book value per share $ 50.84 9% 2% Tangible book value per share** $ 46.69 11% 3% Weighted-ave
Slide 18: Capital Management
CAPITAL MANAGEMENT Dividends Paid and Share Repurchases* $ in millions Total of ~$709 million Share Repurchases* Dividends Paid over the past 5 quarters 254 209 52 48 133 48 202 ** 161 62 51 85 51 51 3Q19 4Q19 1Q20 2Q20 3Q20 Number of Shares Repurchased* 1,044 2,127 126 2,546 — (thousands) Average S
Slide 19: Raymond James Bank Asset Composition
RAYMOND JAMES BANK ASSET COMPOSITION Asset Mix Commercial & Industrial Portfolio (C&I) as of June 30, 2020 • All senior positions; no mezzanine lending • Highly diversified with no industry category representing more than 3.9% of Cash and Other Assets: total loans (e.g. Energy ~1.6%, Airlines ~1.4%,
Slide 20: Raymond James Bank Loan Sales
RAYMOND JAMES BANK LOAN SALES Loan Sales by Industry for Quarter Ended June 30, 2020 Restaurants: Other: 5% 16% Restaurants, 5% Entertainment/ Leisure: 32% Retail Trade: 6% Energy: 13% Transportation: Hospitality: 14% 14% Total Loan Sales: $355.0 million 20
Slide 21: Outlook
OUTLOOK RAYMOND JAMES
Slide 22: Appendix
APPENDIX % RAYMOND JAMES
Slide 23: Reconciliation of GAAP Measures to Non-GAAP Financial Measures
RECONCILIATION OF GAAP MEASURES TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) We utilize certain non-GAAP financial measures as additional measures to aid in, and enhance, the understanding of our financial results and related measures. These non-GAAP financial measures have been separately identified
Slide 24: Reconciliation of GAAP Measures to Non-GAAP Financial Measures
RECONCILIATION OF GAAP MEASURES TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) Three months ended Nine months ended $ in millions, except per share amounts September 30, 2019 June 30, 2019 Net income $ 265 $ 769 Non-GAAP adjustments: Acquisition and disposition-related expenses (1) — 15 Goodwill impairm
Slide 25: Reconciliation of GAAP Measures to Non-GAAP Financial Measures
RECONCILIATION OF GAAP MEASURES TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) Book value per share As of $ in millions, except per share amounts June 30, 2019 March 31, 2020 June 30, 2020 Total equity attributable to Raymond James Financial, Inc. $ 6,502 $ 6,798 $ 6,965 Less non-GAAP adjustments: Goodw
Slide 26: Reconciliation of GAAP Measures to Non-GAAP Financial Measures
RECONCILIATION OF GAAP MEASURES TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) Return on equity Three months ended Nine months ended $ in millions June 30, 2019 March 31, 2020 June 30, 2020 June 30, 2019 June 30, 2020 Average equity (6) $ 6,434 $ 6,820 $ 6,882 $ 6,345 $ 6,797 Impact on average equity of
Slide 27: Footnotes
FOOTNOTES 1. The nine months ended June 30, 2019 included a $15 million loss in our Capital Markets segment on the sale of our operations related to research, sales and trading of European equities. 2. The three months ended September 30, 2019 included a $19 million goodwill impairment charge associ
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