Raymond James Financial, Inc. · NYSE:RJF
Raymond James Financial — Investor Day (May 2016)
109 slides from Raymond James Financial's investor day presentation, May 10, 2016
Slide 1: Raymond James Financial Analyst & Investor Day
Raymond James Financial Analyst & Investor Day May 10, 2016 1
Slide 2: Agenda
8:30 am Welcome & General Overview Paul Reilly 9:00 am Raymond James Bank Steve Raney 9:45 am Private Client Group Scott Curtis 10:15 am Break 10:30 am Fixed Income & Public Finance John Carson 11:00 am Raymond James Canada* Paul Allison 11:30 am Financial Review & Closing Jeff Julien AGENDA 2 *Raym
Slide 3: Forward Looking Statements / Non-GAAP Measures
FORWARD LOOKING STATEMENTS / NON-GAAP MEASURES 3 Certain statements made in this presentation may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospe
Slide 4: Welcome and General Overview
WELCOME AND GENERAL OVERVIEW Paul Reilly CEO, Raymond James Financial 4
Slide 5: Overview of Raymond James Financial: Key Facts
OVERVIEW OF RAYMOND JAMES FINANCIAL KEY FACTS (as of March 31, 2016) • Headquartered in St. Petersburg, FL • Founded in 1962; public in 1983 • Over 2,700 locations • United States, Canada and overseas • Nearly 6,800 financial advisors • $514 billion of assets under administration • RJF shareholders’
Slide 6: Consecutive Profitable Quarters
113 CONSECUTIVE PROFITABLE QUARTERS E ar ni ng s P er S ha re (Basic ) Trailing 10 Years 6
Slide 7: Values-Based Culture
OVERVIEW OF RAYMOND JAMES FINANCIAL VALUES-BASED CULTURE INTEGRITY INDEPENDENCE CONSERVATISM CLIENT FIRST 7
Slide 8: Long-Term, Conservative View
LONG-TERM, CONSERVATIVE VIEW >2X Regulatory Requirement ~$1 Billion Cash* 22% As of March 31, 2016 *Parent Cash on hand as of March 31, 2016, including deposits held at RJ Bank Note: >2x regulatory requirement refers to Total Capital Ratio 8
Slide 9: The Premier Alternative to Wall Street
THE PREMIER ALTERNATIVE TO WALL STREET 9
Slide 10: Private Client Group Rankings
PRIVATE CLIENT GROUP RANKINGS *Only includes AUA for PCG; Note: Data from various dates based on availability. The definitions for AUA and FAs may be inconsistent across companies; rankings exclude RIA custodians but include independent B/Ds. Sources: Various company reports, company presentations,
Slide 11: Private Client Group Rankings: Advisor Satisfaction
PRIVATE CLIENT GROUP RANKINGS J.D. POWER INDEPENDENT ADVISOR SATISFACTION SURVEY J.D. POWER EMPLOYEE ADVISOR SATISFACTION SURVEY 2015 J.D. Power Financial Advisor Satisfaction Study Results REP. MAGAZINE BROKER REPORT CARD 2015 11
Slide 12: Fixed Income: Municipal Underwriting League
FIXED INCOME League of Top Municipal Underwriting Firms Source: Thompson Reuters, 2016 Q1, National Lead Managed, Full to Book Rank Firm Par Amount ($B) Market Share (%) # of Issues 1 Citi 13.2 13.7 125 2 Bank of America Merrill Lynch 13.1 13.6 124 3 J P Morgan Securities LLC 8.4 8.8 87 4 Wells Farg
Slide 13: U.S. Capital Markets Underwriting League Tables
U.S. CAPITAL MARKETS - UNDERWRITING LEAGUE TABLES Raymond James Relative to Growth Company Focused Peers Raymond James Relative to All Banks Source: Dealogic; Data from 04/01/15 to 03/31/16; includes US Marketed IPO’s & FO’s for US Issuers raising greater than $10 million, excludes CEF’s & SPAC’s13
Slide 14: Corporate Strategy
CORPORATE STRATEGY S@ corporate =—7 strategy
Slide 15: Recruiting
RECRUITING Public Finance Expansion Advisor Recruiting Investment Banking Life Sciences 15
Slide 16: Acquisitions
ACQUISITIONS All references to "Alex. Brown” are intended for illustrative purposes only and are conditioned upon the closing of the transaction whereby Raymond James acquires Deutsche Bank's Private Client Services business. 16
Slide 17: Acquisition Rationale
ACQUISITION RATIONALE 1 Culture 2 Strategic Benefit Price4 3 Ability to Integrate 17
Slide 18: Culture: Shared Values
CULTURE: SHARED VALUES INTEGRITY INDEPENDENCE CONSERVATISM CLIENT FIRST 18
Slide 19: Strategic Benefit: Geographic Expansion
STRATEGIC BENEFIT: GEOGRAPHIC EXPANSION 19
Slide 20: Strategic Benefit: Ultra HNW
STRATEGIC BENEFIT: ULTRA HNW 20
Slide 21: Strategic Benefit: Continued HNW Growth
STRATEGIC BENEFIT: CONTINUED HNW GROWTH Average Production Top 200 Raymond James $ 2.4 million Alex. Brown $ 1.5 million Average Production Top 800 Raymond James $ 1.5 million Alex. Brown $ 1.5 million Raymond James includes domestic employee and independent contractor advisors. 21
Slide 22: Strategic Benefit: Enhancements
STRATEGIC BENEFIT: ENHANCEMENTS 22
Slide 23: Regulation
REGULATION 23
Slide 24: Regulation: DOL
REGULATION: DOL Fro A Revised Guidelines Rex ‘sea 7 woe Companies — 0 comely BEE ow 2 od New Compliance R pain BS take aston Law Changes jou wares he Deadline Sector New Busines: RAYMOND JAMES”
Slide 25: Client-First, Values-Based Culture
CLIENT-FIRST, VALUES-BASED CULTURE INTEGRITY INDEPENDENCE CONSERVATISM CLIENT FIRST 25
Slide 26: Raymond James Bank
RAYMOND JAMES BANK Steve Raney President & CEO, Raymond James Bank 26
Slide 27: Raymond James Bank
RAYMOND JAMES BANK RJ Bank’s vision is to maximize shareholder value through prudent investing, efficient operations and delivery of selected banking products that enhance client relationships while providing mutually beneficial opportunities for financial advisors and affiliates. Conservative Credi
Slide 28: Raymond James Bank: Targeted Lending Strategy
RAYMOND JAMES BANK Targeted lending strategy focused on corporate, commercial real estate and retail loans. Corporate (C&I) Residential Mortgages Typically target: • Institutional / Capital Markets clients • Relatively mature industries • Near investment grade ratings • EBITDA greater than $25 - $50
Slide 29: Raymond James Bank: Net Revenues and Pre-Tax Income
3.31% 3.43% 3.50% 3.25% 2.98% 3.07% 3.00% RAYMOND JAMES BANK 112 173 240 268 243 279 151 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FYTD 16 302* 258 269 336 347 352 414 234 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FYTD 16 Net Revenues ($ millions) Pre-Tax Income ($ millions) Consistent growth in revenues and pr
Slide 30: Raymond James Bank: Net Loan Growth
RAYMOND JAMES BANK 6,095 6,548 7,992 8,821 10,964 12,988 14,348 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FYTD 16 RAYMOND JAMES BANK NET LOAN GROWTH ($ millions) 16% average annual loan growth since FY 2010. 16% 5 -YR CAGR FYTD 16 is as of March 31, 2016. 30
Slide 31: Raymond James Bank: Loan Composition
RAYMOND JAMES BANK RJ Bank maintains a well-diversified loan portfolio, particularly in terms of type of loans. Commercial and Industrial, 50.0% Commercial Real Estate, 17.8% Residential Mortgages, 15.2% Securities Based Loans, 11.7% Tax Exempt Loans, 4.2% Loans Held for Sale, 1.1% LOAN COMPOSITION
Slide 32: Raymond James Bank: Energy Portfolio
RAYMOND JAMES BANK Energy Portfolio, 3.1% Energy Portfolio Statistics (Q2 FY 2016)Total Loan Portfolio (Q2 FY 2016) Subsector # of Loans Total ($ millions) Natural Gas / Pipeline Services 8 $134.6 Diversified / Downstream 7 $113.7 Crude / Crude Logistics 5 $60.8 Oilfield Services 4 $58.9 Natural Gas
Slide 33: Key Credit Trends
80,413 33,655 25,894 2,565 13,565 23,570 23,539 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FYTD 16 2.48% 1.64% 1.18% 0.99% 0.69% 0.39% 0.40% FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FYTD 16 2.36% 2.18% 1.81% 1.52% 1.33% 1.32% 1.35% FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FYTD 16
Slide 34: Interest Rate Risk Summary
RAYMOND JAMES BANK INTEREST RATE RISK SUMMARY $ in 000s Balance as of 3/31/2016 % of Total Assets 5+ year exposure $1,706,916 10.81% 10+ year exposure $1,006,348 6.37% 15+ year exposure $156,947 0.99% Hedge 8.2Y WAM 2.07% WAC $450,000 Net 5+ Year Exposure less Hedge $1,256,916 7.96% Net 10+ Year Exp
Slide 35: Shared National Credits Criticized Loans
RAYMOND JAMES BANK 17.9% 12.7% 10.6% 10.0% 10.1% 9.5% TBD* 15.7% 6.4% 5.6% 6.6% 2.6% 2.6% 2.3% 2010 2011 2012 2013 2014 2015 Mar-16 All Shared National Credits (Industrywide) RJ Bank Shared National Credits Source: OCC, RJF estimates and analysis *Industrywide classified figures were not yet availab
Slide 36: Raymond James Bank: Growth Initiatives
RAYMOND JAMES BANK Expand Lending and Cash Management Solutions to Private Client Group including Aligning High Net Worth Offering as part of the Alex. Brown Integration* Lending to Capital Markets Clients GROWTH INITIATIVES RJ Bank’s growth initiatives continue to be focused on strengthening relati
Slide 37: Raymond James Bank: Outlook
RAYMOND JAMES BANK Higher levels of bank loan loss provision expense commensurate with loan growth More resilient net interest margins; poised for rising rates given limited fixed-rate exposure OUTLOOK Continued growth in loan portfolio with focus on expanding synergies with PCG and Capital Markets
Slide 38: Private Client Group
PRIVATE CLIENT GROUP Scott Curtis President, Raymond James Financial Services 38
Slide 39: Private Client Group: AdvisorChoice
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. 39
Slide 40: Private Client Group: Advisor Affiliation
PRIVATE CLIENT GROUP BOOK OWNERSHIP INDEPENDENCE for advisors to run their own businesses Highest possible level of SERVICE REGRETTED ATTRITION Book ownership is based on multiple factors, potentially including asset and production requirements, retention agreements, advisor disciplinary actions, an
Slide 41: Private Client Group: Industry Ranking
PRIVATE CLIENT GROUP Raymond James is one of the largest private client firms in the industry. *Only includes AUA for PCG; RJF client assets and FA count are as of 3/31/2016; Note: Data from various dates based on availability. The definitions for client assets and FAs may be inconsistent across com
Slide 42: Private Client Group: Revenue and Pre-Tax Income
1,912 2,192 2,485 2,931 3,290 3,520 1, 75 7 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FYTD 16 PRIVATE CLIENT GROUP ** FY 2012 and 2013 results were adversely impacted by acquisition-related and redundant expenses that were not included in the “Other” segment prior to retail platform consolidation in Feb.
Slide 43: Private Client Group: Commissions and Fees
PRIVATE CLIENT GROUP 882 1,002 1,036 1,171 1,353 1,483 738 539 610 835 1,082 1,082 1,186 605 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FYTD 16 RJIS RJL RJA RJFS 1,585 1,818 2,056 2,455 1,447 * First two quarters of fiscal 2016, annualized. Note: RJA includes MK beginning in FY 2012. Charts not to scale 2,
Slide 44: Private Client Group: Recurring Revenue
PRIVATE CLIENT GROUP Fee-Based Accounts, 53.6%Mutual Funds, 21.0% Equities and Fixed Income Securities, 11.6% Insurance and Annuity Products, 12.8% New Issue Sales Credits, 1.0% SECURITIES COMMISSIONS AND FEES (quarter ended March 31, 2016) * 77% of PCG’s total revenue was recurring for the quarter
Slide 45: Private Client Group: Assets and Advisors
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 Q2 16 Employees ICs 249 254 368 403 451 453 486 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 Q2 16 PRIVATE CLIENT GROUP *Excludes RIAs with custody-only relationships CAGR: 5-Year 2015 12.7% 5-YR CAGR 5.1% 5-YR CAGR 45 Assets Under Administration $ Billions # of Advisors 5
Slide 46: Private Client Group: Near-Term Growth Initiatives
PRIVATE CLIENT GROUP Expand Geographic Footprint Help Advisors Grow Their Business Attract and Retain Highest-Quality Advisors Acquisition of the U.S. Private Client Services Unit of Deutsche Bank Wealth Management NEAR-TERM GROWTH INITIATIVES The near-term growth initiatives for the Private Client
Slide 47: Private Client Group Outlook
PRIVATE CLIENT GROUP OUTLOOK Strong retention and recruiting Continued success leveraging full service resources and capabilities 47
Slide 48: Regulatory Expectations
REGULATORY EXPECTATIONS 48
Slide 49: Fixed Income & Public Finance
FIXED INCOME & PUBLIC FINANCE John Carson President, Raymond James Financial 49
Slide 50: Fixed Income Overview
FIXED INCOME Sales and Trading Research and Strategies Public Finance / Debt Investment Banking • 200+ institutional salespersons and 150+ trading professionals in approximately 35 locations • 50+ experts providing industry-leading research on both taxable and tax-exempt fixed income products • +100
Slide 51: Fixed Income Operating Model
FIXED INCOME Intellectual Capital as a Core Asset Client First, Distribution Focused Model Full-Service Platform Prudent Risk Management High-Grade Product Franchise The fixed income operating model is highly conservative and client-focused. 51
Slide 52: Fixed Income: Institutional Sales and Trading
FIXED INCOME Institutional Sales and Trading The institutional sales and trading business is primarily driven by two broadly-defined client segments – depositories and non-depositories – which have distinct characteristics. Depositories (48%*) Non- Depositories: Investment Managers and Insurance Cos
Slide 53: Fixed Income: Institutional Sales and Trading
FIXED INCOME Institutional Sales and Trading 53
Slide 54: Fixed Income Inventory
FIXED INCOME Institutional Sales and Trading The institutional sales and trading business is supported by relatively high quality / low risk inventory. . . Municipals, 37.1% Corporate, 21.3% Government / Agency, 20.7% Agency MBS and CMOs, 15.3% Non-agency CMOs and ABS, 5.6% TOTAL RJF FIXED INCOME IN
Slide 55: Institutional Fixed Income Commissions
FIXED INCOME Institutional Sales and Trading 151,081 127,436 266,884 326,792 246,131 283,828 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FYTD 16 RAYMOND JAMES FINANCIAL INSTITUTIONAL FIXED INCOME COMMISSIONS ($ thousands) 303,682* *First six months of fiscal 2016, annualized. 55 151,841 A N N U
Slide 56: Estimated Middle Market Peer Market Share
FIXED INCOME Institutional Sales and Trading RAYMOND JAMES FINANCIAL ESTIMATED MIDDLE MARKET PEER* MARKET SHARE (% of Total Estimated Peer Revenues*) * Peers include FTN Capital, Piper Jaffrey, Stifel, and Raymond James. Peer Revenues are estimates, as public information is limited and may contain i
Slide 57: Net Trading Profits
FIXED INCOME Institutional Sales and Trading 38,256 27,506 55,538 34,069 64,643 58,512 36,584 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FYTD 16 RAYMOND JAMES FINANCIAL NET TRADING PROFITS** ($ thousands) *First six months of fiscal 2016, annualized. **Includes Net Trading Profits from all sour
Slide 58: Public Finance / Debt Investment Banking
FIXED INCOME Public Finance / Debt Investment Banking The debt investment banking platform includes public finance and six specialty groups. . . 58
Slide 59: Public Finance League Table
. . . and is a top 10 platform in the country. FIXED INCOME Public Finance / Debt Investment Banking Rank Firm Par Amount ($B) Market Share (%) # of Issues 1 Citi 13.2 13.7 125 2 Bank of America Merrill Lynch 13.1 13.6 124 3 J P Morgan Securities LLC 8.4 8.8 87 4 Wells Fargo & Co 8.4 8.7 86 5 Morgan
Slide 60: Industrywide Negotiated Issuance Trends
355.8 305.9 348.5 257.3 291.4 258.7 222.5 313.3 12 9. 3 2008 2009 2010 2011 2012 2013 2014 2015 FYTD 16 FIXED INCOME Public Finance / Debt Investment Banking * First six months of fiscal 2016, annualized. Source: Thomson Reuters INDUSTRYWIDE NEGOTIATED ISSUANCE TRENDS ($ billions) Challenges • Compe
Slide 61: Fixed Income Investment Banking Revenues
FIXED INCOME Public Finance / Debt Investment Banking 12,943 16,070 36,987 48,133 55,275 42,149 19,683 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FYTD 16 RAYMOND JAMES FINANCIAL FIXED INCOME INVESTMENT BANKING REVENUES** ($ thousands) * First six months of fiscal 2016, annualized. ** Does not i
Slide 62: Fixed Income Outlook
FIXED INCOME Outlook Continued geopolitical uncertainty Low interest rates Intense regulatory pressure: Dodd-Frank, Municipal Advisory Rule, Volcker Rule, Basel III 62
Slide 63: Fixed Income Strategic Growth Initiatives
FIXED INCOME Strategic Growth Initiatives Fortify Strengths in Core Businesses Diversify Revenue Base of Fixed Income Sales and Trading (e.g. corporates, CRA) Expand Public Finance Penetration in Higher-Issuance Geographies and Higher-Margin Specialty Lines 63
Slide 64: Fixed Income Summary of Strategy
FIXED INCOME Summary of Strategy Continue to Invest in Down Markets Recruit and Retain the Best Talent Maintain Conservative Risk Management Manage Expenses and Optimize Margins WHAT IS THE CURRENT STRATEGY IN FIXED INCOME? 64
Slide 65: Raymond James Canada
RAYMOND JAMES CANADA Paul Allison Chairman and CEO, Raymond James Ltd. 65 *Raymond James Canada includes Raymond James Ltd. and other activities in Canada
Slide 66: Overview of Raymond James Canada
OVERVIEW OF RAYMOND JAMES CANADA Private Client Group • Over 370 financial advisors with over C$27 billion of total client assets • ~100 branches throughout Canada, with a concentration in Alberta, British Columbia, and Ontario • AdvisorChoice® platform offering the employee and independent contract
Slide 67: Raymond James Canada: Revenues and Pre-Tax Income
FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 OVERVIEW OF RAYMOND JAMES CANADA 256 339 297 311 323 279 124 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FYTD 16 Notes: Charts not to scale; Figures represent total revenues and pre-tax income generated in Canada, primarily including but not limited to Raymond James Ltd;
Slide 68: Canada Market Overview: TSX vs S&P 500
OVERVIEW OF RAYMOND JAMES CANADA Sources: SNL Financial; Investor Economics; S&P Dow Jones Indices In terms of total population (~35.9 million) and nominal GDP (~$2.0 trillion), Canada is about one tenth the size of the USA. Over the past twelve months, the TSX has seen larger declines than the S&P
Slide 69: Index Industry Weighting: Canada vs USA
OVERVIEW OF RAYMOND JAMES CANADA Financials, 37.9% Energy, 19.3% Materials, 11.0% Industrials, 8.2% Con. Discretionar y, 6.8% Telecom, 5.6% Healthcare, 0.9% Con. Staples, 4.7% Utilities, 2.5% Info Tech, 3.1% Canada – TSX Composite Index Industry Weighting Financials, 15.6% Energy, 6.8% Materials, 2.
Slide 70: Overview of Raymond James Canada
OVERVIEW OF RAYMOND JAMES CANADA 70
Slide 71: Raymond James Canada: Private Client Group Rankings
RAYMOND JAMES CANADA: PRIVATE CLIENT GROUP Note: All client asset figures are estimates based on the best information found. The figures likely have different definitions at the various firms and are only intended to show the approximate relative size of Raymond James Ltd. to its competitors. Data f
Slide 72: Canada Private Client Group: Client Assets and Advisors
RAYMOND JAMES CANADA: PRIVATE CLIENT GROUP 16.8 18.0 20.7 21.5 24.0 26.5 27.2 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FYTD 16Advisor Count 407 417 438 406 Raymond James Canada has over C$27 billion in total client assets, representing a 9% annual growth rate since FY 2010. Since FY 2010, the average pro
Slide 73: Canada Equity Capital Markets: New Sectors
73 RAYMOND JAMES CANADA: EQUITY CAPITAL MARKETS New Investment Banking Sectors in Canada Power and Utilities Consumer Agriculture / Chemicals / Environment Transportation
Slide 74: Canada Equity and M&A League Tables
Raymond James Ltd. M&A League Table RAYMOND JAMES CANADA: EQUITY CAPITAL MARKETS Raymond James Ltd. Equity League Table Source: Thomson Reuters; Bloomberg (Full Credit to Bookrunner) Rank Bank Proceeds (C$M) Market Share (%) 1 RBC Capital Markets $4,867.3 30.7% 2 TD Securities $3,697.6 23.3% 3 CIBC
Slide 75: Canada Equity Capital Markets: Research Coverage
RAYMOND JAMES CANADA: EQUITY CAPITAL MARKETS Raymond James covers 240 companies in Canada. The median market capitalization of the covered companies in Canada is C$915 Million. 240 250 260 271 257 235 240 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FYTD 16 2,657 2,041 2,657 2,965 4,100 3,342 3,535 FY 10 FY
Slide 76: Canada Secondary Commissions
RAYMOND JAMES CANADA: EQUITY CAPITAL MARKETS 4.0% 4.0% 3.7% 4.3% 4.7% 741 683 522 500 600 577 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 Industry Secondary Commissions in Canada (C$ millions) (5%) CAGR Raymond James Market Share Sources: Brendan Wood International Similarly to the USA, industry secondary c
Slide 77: Equity Issuances and M&A Deals in Canada
RAYMOND JAMES CANADA: EQUITY CAPITAL MARKETS Sources: Brendan Wood International 77 1,730 1,740 1,370 1,040 1,400 1,720 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 38.2 38.1 41.4 33.2 38.7 32.6 Equity Issuances in Canada 1,810 1,880 1,943 1,867 2,021 2,276 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 182.4 145.7 234
Slide 78: Strategic Growth Initiatives
STRATEGIC GROWTH INITIATIVES Strengthen the Core Businesses and Recruit High Quality Associates in both PCG and Capital Markets businesses Expand Geographically (Quebec) Selectively Pursue Acquisitions 78
Slide 79: Summary of Strategy
SUMMARY OF STRATEGY Expands Presence in Attractive Market Leverages Capabilities of Raymond James Strengthens Global Platform Provides Diversification The long-term target is to grow Raymond James Canada to 10% of the firm’s overall revenues and pre-tax earnings. Why is Raymond James in Canada? 79
Slide 80: Financial Review & Closing
FINANCIAL REVIEW & CLOSING Jeff Julien CFO, Raymond James Financial 80
Slide 81: Net Revenue Growth
OVERVIEW OF RAYMOND JAMES FINANCIAL 2,917 3,334 3,807 4,485 4,861 5,200 2,586 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FYTD 16 14.6% 14.3% 14.2% 17.8% Net Revenues Recurring Revenues** (%) 53.9% 55.0% 55.5% 56.3% 61.3% * Six months of fiscal 2016, annualized ** Includes fee-based accounts, investment adv
Slide 82: Pre-Tax Income Growth
OVERVIEW OF RAYMOND JAMES FINANCIAL 12.4% 15.1% 14.0% 14.4% 15.4% 15.3% 14.5% Pre-Tax Income Pre-Tax Margin** For a reconciliation of the GAAP to the Non-GAAP measures, please see the Schedule of Non-GAAP Information. ** Based on net revenues. *** Six months of fiscal 2016, annualized 45.4% 39.0% 6.
Slide 83: Pre-Tax Income by Core Segment
OVERVIEW OF RAYMOND JAMES FINANCIAL PRE-TAX INCOME BY CORE SEGMENT ($ millions) 163 220 215 230 330 342 79 83 76 102 131 107 47 66 67 96 128 135 112 173 240 268 243 279 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 RJ Bank Private Client Group Capital Markets Asset Management Note: Historical figures may not
Slide 84: Return on Equity: RJF vs Competitor Group
OVERVIEW OF RAYMOND JAMES FINANCIAL 13.1 15.7 15.6 13.0 7.9 10.6 11.3 9.7 10.6 12.3 11.5 13.5 23.2 13.4 6.7 3.9 8.9 7.8 8.0 10.4 11.6 8.4 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 RJF Competitor Group Median* * Except as otherwise indicated, all numbers
Slide 85: Conservative Financial Management
CONSERVATIVE FINANCIAL MANAGEMENT Total Assets $27.8 billion Equity Attributable to RJF $4.635 billion Leverage (Assets/RJF Equity) 6.0x $1.1 billionSenior Notes Payable Level 3 Assets to RJF Equity Total Capital Ratio Tier 1 Leverage Ratio 6.5%* 21.9%* 15.3% Regulatory Requirements * Level 3 Assets
Slide 86: Corporate Debt and Uses of Cash
CONSERVATIVE FINANCIAL MANAGEMENT 2016* 2019 2024 2042**Maturity $ mm; Coupon Vintage CORPORATE DEBT (as of March 31, 2016) 2009 2012 2012 $300 @ 8.60% $250 @ 5.625% $350 @ 6.90% Substantial Uses of Parent Company Cash in Fiscal 2016 • $144.5 million of share repurchases as of March 31, 2016 • Appro
Slide 87: Capital Discussion
CONSERVATIVE FINANCIAL MANAGEMENT CAPITAL DISCUSSION 19.8% 22.2% 18.8% 17.0% 20.7% 23.4% 19.8% 20.5% 27.4% 23.0% Q1 FY 2014 Q2 FY 2014 Q3 FY 2014 Q4 FY 2014 Q1 FY 2015 Q2 FY 2015 Q3 FY 2015 Q4 FY 2015 Q1 FY 2016 Q2 FY 2016 Earnings per Diluted Share (GAAP) Dividend per Share* Average Dividend Payout
Slide 88: Client Cash Balances to Total Client Assets
CONSERVATIVE FINANCIAL MANAGEMENT 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% M ar -1 0 M ay -1 0 Ju l-1 0 S ep -1 0 N ov -1 0 Ja n- 11 M ar -1 1 M ay -1 1 Ju l-1 1 S ep -1 1 N ov -1 1 Ja n- 12 M ar -1 2 M ay -1 2 Ju l-1 2 S ep -1 2 N ov -1 2 Ja n- 13 M ar -1 3 M ay -1 3 Ju l-1 3 S ep -1 3 N ov -1
Slide 89: Client Cash Balances Flow
CONSERVATIVE FINANCIAL MANAGEMENT Brokerage Client Cash / Cash Interest Program (~$5 B) Raymond James Bank Deposit Program (RJBDP) (~$33 B) Client Margin Loans (~$2 B) Raymond James Bank’s Earning Assets (~$12 B***) Off-Balance Sheet Assets Earning Fees (~$23 B) Segregated Assets (~$3 B) to Raymond
Slide 90: Interest Rate Sensitivity
INTEREST RATE SENSITIVITY 90 Estimates as of March 31, 2016 and based on several assumptions including RJF’s estimates of the timing and amount of: Earning / deposit rates paid on clients’ cash balances, Client cash balance levels, Level of earning assets; and RJ Bank’s net interest margin Assum
Slide 91: Financial Targets
FINANCIAL TARGETS FIRM TARGETS: PRE-TAX MARGIN*, COMPENSATION RATIO, AND RETURN ON EQUITY Metric Target** Commentary Pre-Tax Margin* >16% • Assumes similar revenue level and mix as FYTD 2016 • Targets by segment: PCG (10%), Capital Markets (12% - 15%), Asset Management (30%+) Compensation Ratio* <68
Slide 92: Financial Summary Key Takeaways
FINANCIAL SUMMARY KEY TAKEAWAYS WELL CAPITALIZED (LOW LEVERAGE) AMPLE LIQUIDITYRELATIVELY LOW VOLATILITY OF EARNINGS TRACK RECORD OF PROFITABLE GROWTH 92
Slide 93: Schedule of Non-GAAP Information
SCHEDULE OF NON-GAAP INFORMATION (continued on next slide)93
Slide 94: Schedule of Non-GAAP Information (continued)
SCHEDULE OF NON-GAAP INFORMATION (continued from prior slide) Footnote Explanations: 1. The non-GAAP adjustment adds back to pre-tax income one-time acquisition and integration expenses associated with acquisitions that were incurred during each respective period. 2. The non-GAAP adjustment adds bac
Slide 95: Schedule of Non-GAAP Information
SCHEDULE OF NON-GAAP INFORMATION (continued on next slide)95
Slide 96: Schedule of Non-GAAP Information (continued)
SCHEDULE OF NON-GAAP INFORMATION (continued from prior slide) Footnote Explanations: 1. The non-GAAP adjustment adds back to pre-tax income acquisition-related expenses associated with our announced acquisition of the US Private Client Services unit of Deutsche Bank WM incurred during each respectiv
Slide 97: Executive Committee Bios
97 EXECUTIVE COMMITTEE BIOS
Slide 98: Executive Committee Bios: Paul Reilly
EXECUTIVE COMMITTEE BIOS 98 Paul Reilly Chief Executive Officer Raymond James Financial Presenting 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’s board
Slide 99: Executive Committee Bios: Steven Raney
99 EXECUTIVE COMMITTEE BIOS Presenting Steven Raney is a Tampa native and has worked in the area’s banking community since 1988. He is currently the president and CEO of Raymond James Bank, a wholly-owned subsidiary of Raymond James Financial. RJ Bank’s core business includes a residential lending p
Slide 100: Executive Committee Bios: Scott Curtis
100 EXECUTIVE COMMITTEE BIOS Presenting As president of Raymond James Financial Services, Mr. Curtis directs Raymond James’ independent contractor business that includes approximately 3,200 retail financial advisors. He was promoted to his current position following six years as senior vice presiden
Slide 101: Executive Committee Bios: John Carson
101 EXECUTIVE COMMITTEE BIOS Presenting 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. Mr. Carson joined Raymond James in April 2012 when Morgan Keegan was acquired by
Slide 102: Executive Committee Bios: Paul Allison
102 EXECUTIVE COMMITTEE BIOS PresentingPaul Allison 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, Private
Slide 103: Executive Committee Bios: Jeff Julien
103 EXECUTIVE COMMITTEE BIOS Presenting 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 the Board of both Raymond James Trust Company and Raymond James Bank. He also serves in a direct
Slide 104: Bella Allaire
104 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 technology platforms for our advisors and
Slide 105: Executive Committee Bios: Jeff Dowdle
105 EXECUTIVE COMMITTEE BIOS Not Presenting Serving as executive vice 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. Dowdle was previously
Slide 106: Executive Committee Bios: Tash Elwyn
106 EXECUTIVE COMMITTEE BIOS Not Presenting Prior to being appointed to his current position in January 2012, Tash Elwyn served for five years as divisional director, senior vice president of the Atlantic Division of RJA. In that role, he devoted his energies to attracting new advisors to the firm a
Slide 107: Tom James
107 Tom James Executive Chairman Raymond James Financial Thomas A. James is executive chairman of Raymond James Financial, Inc. (NYSE-RJF), and chairman of its subsidiary, Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. Until May of 2010, he served as chief executive officer o
Slide 108: Executive Committee Bios: Jeffrey Trocin
108 EXECUTIVE COMMITTEE BIOS Not PresentingJeffrey Trocin President Raymond James & Associates Global Equities and Investment Banking Mr. Trocin joined Raymond James & Associates in 1986 and has directed the firm’s Equity Capital Markets group, which includes the firm’s investment banking, research,
Slide 109: Dennis Zank
109 Dennis Zank 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). In his current role, he oversees o