Raymond James Financial, Inc. · NYSE:RJF
Raymond James Financial — Investor Presentation (August 2012)
50 slides from Raymond James Financial's investor presentation, Aug 9, 2012
Slide 1: Raymond James
RAYMOND JAMES*® RAYMOND JAMES”
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Raymond James’ management and are subject to significant risks and un
Slide 3: Paul Reilly, CEO, Raymond James Financial
PAUL REILLY CEO, Raymond James Financial
Slide 4: Raymond James Core Values
INTEGRITY INDEPENDENCE CONSERVATISM CLIENT FIRST RAYMOND JAMES CORE VALUES
Slide 5: Independence and Conservatism
INDEPEN a 7 ERVATISM RAYMOND JAMES”
Slide 6: Continued Profitability
CONTINUED PROFITABILITY Trailing 10 Years Consecutive Profitable Quarters
Slide 7: RJF Stock Price vs. Sector, Five-Year Change
RAYMOND JAMES FINANCIAL RJF Stock Price vs. Sector, Five-Year Change 11% -9% -52% -60% -40% -20% 0% 20% 40% RJF S&P 500 DJ US Financials Index Five Years Ended June 30, 2012
Slide 8: Core Business Total Revenue, Nine Months Ended
Private Client Group $1.8 bil 64% RJ Bank $251 mil 9% Private Client Group $1 6 bil % RJ Bank $214 mil % . 64 8 RAYMOND JAMES FINANCIAL Core Business Total Revenue, Nine Months Ended Other $37 mil 1% Other $36 mil 1% Capital Markets $559 mil 20% Asset Mgmt. 176 mil % $ June 30, 2012 $2,804,432,000 C
Slide 9: Core Business Pre-Tax Income, Nine Months Ended
Private Client Group 155 mil 38% RJ Bank 131 mil 32% $ $ Private Client Group 160 36 RJ Bank $170 mil 39% $ mil % RAYMOND JAMES FINANCIAL Core Business Pre-Tax Income, Nine Months Ended Other ($72 mil) Other ($92 mil) Capital Markets $73 mil 18% Asset Mgmt. $48 mil 12% June 30 , 2011 335, 418,000 $
Slide 10: Core Business Total Revenue, Three Months Ended
Private Client Group $685 mil 61% RJ Bank $90 mil 8% Private Client Group $568 mil 65% RJ Bank $83 mil 9% RAYMOND JAMES FINANCIAL Core Business Total Revenue, Three Months Ended Other 3% Other 0% Capital Markets $257 mil 23% Asset Mgmt. $61 mil 5% June 30, 2012 $1,115,762,000 Capital Markets $165 mi
Slide 11: Core Business Pre-Tax Income, Three Months Ended
Private Client Group $64 mil 38% RJ Bank $60 mil 35% Private Client Group 46 mil 32% RJ Bank $57 mil 40% $ RAYMOND JAMES FINANCIAL Core Business Pre-Tax Income, Three Months Ended Other ($31 mil) Capital Markets $28 mil 17% Asset Mgmt. June 30, 124, 870, $17 mil 10% $ Other ($44 mil) Capital Markets
Slide 12: Changing Competitive Landscape
CHANGING COMPETITIVE LANDSCAPE FIRST UNION-WACHOVIA CORP STRONG FINANCIAL CORP MARQUETTE FINANCIAL GROUP INC RAGEN MACKENZIE GROUP INC. H.D. VEST PRUDENTIAL SECURITIES INC. GOLDEN WEST FINANCIAL CORP. A.G. EDWARDS INC. INTERSTATE/JOHNSON LANE INC. EVERGREEN BANK OF AMERICA MERRILL LYNCH THE ADVEST G
Slide 13: Changing Competitive Landscape
CHANGING COMPETITIVE LANDSCAPE BANK OF AMERICA MERRILL LYNCH JP MORGAN & CHASE UBS EDWARD JONES AMERIPRISE LPL STIFEL COMMONWEALTH FIDELITY TD AMERITRADE LINCOLN FINANCIAL RW BAIRD CITIGROUP PIPER JAFFRAY COWEN BMO RBC JEFFERIES GOLDMAN SACHS HARRIS WILLIAMS MOELIS VINING SPARKS KBW LAZARD CHARLES S
Slide 14: Why Morgan Keegan?
WHY MORGAN KEEGAN? Culture Strategic Benefit Price Ability to Integrate
Slide 15: Positive Impact on Business Units
Equity Capital Markets Private Client Group Fixed Income POSITIVE IMPACT ON BUSINESS UNITS Ranking by Number of Deals th th Ranking by Par Amount th th Number of Financial Advisors
Slide 16: Foundation for Success
FOUNDATION FOR SUCCESS Management Commitment Advisor Commitment
Slide 17: Day One Accomplishments
DAY 1 ACCOMPLISHMENTS Trading Inventory Shared Benefits Integrated Payroll Converted Email Cross-Functional
Slide 18: Vision for Growth
VISION FOR GROWTH STRATEGIC THINKING EXECUTION +
Slide 19: Integration Timeline Overview
PCG Equity Capital Markets Fixed Income Within 30 days Within 12 months Within 24 months Public Finance Full transition to Raymond James brand Institutional and Municipal Retail trading transitioned to Raymond James broker/dealer Full transition to Raymond James brand Transitioned to Raymond James b
Slide 20: Culture: Service/Client Orientation
RJ CULTURE: SERVICE/CLIENT ORIENTATION WIREHOUSES BOUTIQUES REGIONALS CUSTODIANS THE PREMIER ALTERNATIVE TO WALL STREET INDEPENDENTS VISION FOR GROWTH
Slide 21: Culture: Service/Client Orientation
CULTURE: SERVICE/CLIENT ORIENTATION WIREHOUSES BOUTIQUES REGIONALS CUSTODIANS THE PREMIER ALTERNATIVE TO WALL STREET INDEPENDENTS VISION FOR GROWTH
Slide 22: Jeff Julien, Chief Financial Officer and Treasurer
JEFF JULIEN Executive Vice President, Finance Chief Financial Officer and Treasurer
Slide 23: RJF Highlights: Balance Sheet Highlights
RJF HIGHLIGHTS Total Assets $21 billion Total Shareholders’ Equity $3.2 billion Shares Outstanding 137.4 million Book Value Per Share Leverage (Assets/Equity) 6.7x Leverage Ex. RJ Bank $1.3 billion Corporate Debt $23.29 5.4x Balance Sheet Highlights, as of June 30, 2012
Slide 24: RJF Highlights
RJF HIGHLIGHTS Total Revenues Net Revenues Net Income Net Income Per Share (diluted) Shareholders’ Equity Market Capitalization As of June 2011 Nine Months Ended June 2011 Change* $2.8 billion $2.7 billion $213 million $1.60 $3.2 billion $4.7 billion $2.6 billion $2.5 billion $209 million $1.65 $2.6
Slide 25: RJF Highlights
RJF HIGHLIGHTS Total Revenues Net Revenues Net Income Net Income Per Share (diluted) Three Months Ended March 31, 2012 Change* $1.1 billion $1.09 billion $76 million $0.55 $890 million $872 million $69 million $0.52 25% 25% 11% 6% Three Months Ended June 30, 2012 * Percentage change in this table re
Slide 26: RJF Five-Year Trends
26 Net Revenues ($mm) Net Income ($mm) Shareholders’ Equity ($mm) Net Margin 2011 Five-Year CAGR 5% RJF FIVE-YEAR TRENDS 2011 Five-Year CAGR 7% 2,349 2,610 2,813 2,546 2,917 3,334 2,741 3Q12 YTD 3Q12 YTD 1,464 1,758 1,884 2,033 2,303 2,588 3,158 3Q12 YTD 9.1% 9.6% 8.4% 6.0% 7.8% 8.3% 7.8% 3Q12 YTD
Slide 27: Private Client Group Trends
PRIVATE CLIENT GROUP TRENDS 5.4% CAGR 5-year 2011 * Annualized and adjusted for MK 5.3% CAGR 5-year 2011 1,680 1,987 2,000 1,557 1,903 2,186 1,781 YTD 3Q12 Total Revenue $ Millions 2,449 * YTD 3Q12 Pre- Tax Income $ Millions 220 *
Slide 28: Private Client Group Trends
PRIVATE CLIENT GROUP TRENDS 7.1% CAGR 5-year 2011 2.4% CAGR 5-year 2011 3Q12 Assets $ Billions Retail Institutional 3Q12 Number of Advisors IAR RJL RJ&A RJFS MK 4,743 4,659 4,929 5,368 5,350 6,367 5,249
Slide 29: Private Client Group Key Statistics
PRIVATE CLIENT GROUP Total Securities Commissions/Fees Revenue ($mm) $1,263 $1,812 7.4% Client Assets ($bil) $186 $256 6.6% Fee-based Assets ($bil) $47 $82 10.9% Recurring Revenue 52% 64% 4.2% Financial Advisors 4,666 5,350 2.8% Avg. AUA per FA ($mm) 3.1% Pre-tax Income ($mm) 5.3% FAs T12 > $1mm 13.
Slide 30: Private Client Group Key Statistics
PRIVATE CLIENT GROUP Total Securities Commissions/Fees Revenue ($mm) $469 $576 23% Client Assets ($bil) $290 $356 23% Fee-based Assets ($bil) $86 $95 10% Recurring Revenue 63% 64% 2% Financial Advisors 5,398 6,367 18% Avg. AUA per FA ($mm) $52 $59 13% Pre-tax Income ($mm) $46 $64 18% FAs T12 > $1mm
Slide 31: Capital Markets Trends
CAPITAL MARKETS TRENDS 5.7% CAGR 5-year 2011 * Annualized and adjusted for MK 816 * YTD 3Q12 Total Revenues $ Millions YTD 3Q12 Pre- Tax Income $ Millions *
Slide 32: Capital Markets Trends
CAPITAL MARKETS TRENDS * Annualized based on first two quarters * *Annualized and adjusted for MK 1% CAGR 5-year 2011 2.8% CAGR 5-year 2011 2Q12 Number of Domestic Underwriting Deals * 3Q12 Institutional Equity Commissions $ Millions 221**
Slide 33: Capital Markets Trends
CAPITAL MARKETS TRENDS * Annualized and adjusted for MK 21.8% CAGR 5-year 2011 0.6% CAGR 5-year 2011 27.2 16.5 1.7 YTD 3Q12 Firm Trading Profits $ Millions * YTD 3Q12 Institutional Fixed Income Commissions $ Millions * -
Slide 34: Asset Management Group Trends
ASSET MANAGEMENT GROUP TRENDS 1.8% CAGR 5-year 2011 6.1% CAGR 5-year 2011 * Annualized YTD 3Q12 Pre-Tax Income $ Millions * YTD 3Q12 Total Revenues $ Millions *
Slide 35: Asset Management Group Trends
ASSET MANAGEMENT GROUP TRENDS Assets as of Sep. 30 of each fiscal year. Eagle’s assets shown here include retail, institutional/sub-advised and long mutual-fund programs, both managed and non-managed, but exclude the Eagle money-market funds. Assets Under Management: Fee-Based 7.5% CAGR 5-year 2011
Slide 36: Raymond James Bank Trends
RAYMOND JAMES BANK TRENDS * Annualized 19.7% CAGR 5-year 2011 61% CAGR 5-year 2011 23.8% CAGR 5-year 2011 Includes $1.9 billion borrowed overnight for regulatory reasons; Includes $3.2 billion excess for regulatory reasons; Includes $3.5 billion excess for regulatory reasons. YTD 3Q12 Total Revenue
Slide 37: Raymond James Bank Trends
RAYMOND JAMES BANK Trends - - - - - - - - - - - as of 9/30 - - - - - - - - 6/30/12 - - - - - - - - - - - as of 9/30 - - - - - - - - 6/30/12 4,724 7,225 6,782 6,281 6,730 8,045 YTD Total Loans $ Millions Residential Corporate YTD Total Loan Loss Reserves $ Millions
Slide 38: Raymond James Bank Asset Composition
Residential Loans $1.8 Cash $0.8 RAYMOND JAMES BANK Asset Composition 6/30/12 Total Assets $9.4 billion Top 5 Corporate Loan Industry Concentrations Business Systems & Services 3.8% Media 3.6% Pharmaceuticals 3.1% Telecommunications 2.9% Hospitals 2.9% *Investments at market value, net of unrealized
Slide 39: Raymond James Bank Credit Ratios
RAYMOND JAMES BANK Tier 1 Capital Tier 1 Risk Based Capital Total Risk Based Capital Tangible Common Equity to Risk Weighted Assets 10.9% 11.5% 12.8% 11.2% Credit Ratios as of June 30, 2012
Slide 40: Quarterly Loan Loss Provision and Charge-Offs
RAYMOND JAMES BANK Quarterly Loan Loss Provision and Charge-Offs $4.8 charge- offs $9.3 provisions
Slide 41: Criticized Loan Trend
$254 $147 $121 $147 $165 $215 $233 $264 RAYMOND JAMES BANK $631 $451 $462 $459 $484 $489 $431 $506 $230 $169 $207 $184 $145 $69 $121 $26 $11 $10 $19 $17 $13 $11 $8 $32 $32 $31 $24 $26 $30 $24 $89 $92 $93 $92 $95 $90 $88 $89 $0 $100 $200 $400 $500 $600 $700 Dec Mar Jun Sep Dec Mar Jun Residential Sub
Slide 42: Non-Performing Asset Trend
RAYMOND JAMES BANK Non-Performing Asset Trend ($ in millions) $86 $87 $88 $92 $87 $87 $87 $68 $49 $44 $52 $42 $24 $16 $13 $8 $9 $9 $7 $7 $8 $4 $20 $12 $11 $10 $8 $5 $6 $5 $0 $20 $40 $80 $100 $120 $140 $160 $180 $200 Sep Dec Mar Jun Sep Dec Mar Jun Commercial OREO Residential OREO Commercial NPLs Res
Slide 43: Net Interest Earnings
RAYMOND JAMES FINANCIAL Net Interest Earnings * Annualized YTD 3Q12 Other Stock Loan/Stock Borrow Retail Balances Raymond James Bank 361*
Slide 44: Impact of Rising Short-Term Interest Rates
RAYMOND JAMES FINANCIAL A 100 basis point rise in short-term interest rates would equate to an increase of approximately $110 million in pre-tax earnings $49 mm $48 mm $13 mm $110 mm Net Interest Earnings Client Account and Service Fees Money Market Mutual Fund Fees Estimated Incremental Pre-Tax Ear
Slide 45: Transactional vs. Recurring Revenues
RAYMOND JAMES FINANCIAL Transactional vs. Recurring Revenues Transactional Recurring 52% 59% 61% 53% 54% 55% 56% 48% 41% 39% 47% 46% 45% 44% 0% 10% 20% 30% 40% 50% 60% 70% 3Q12 Percentage of Total Revenues
Slide 46: Debt Maturities
RAYMOND JAMES FINANCIAL $350 @ 6.90% Debt Maturities ($ in millions) $300 @ 8.60% $250 @ 5.625% $250 @ 4.25%
Slide 47: Return on Equity
RAYMOND JAMES FINANCIAL Return on Equity *2012 YTD Non GAAP ROE: 11.1% 11.1* 18.7 10.0 19.0 21. 24.4 29. 26. 19.4 .7 22. 19.0 19.8 16. 21.0 0.0 5.0 .0 15.0 20.0 25.0 30.0 35.0 13.3 9.7 9.7 12.8 13.1 15. 15.6 13.0 7. 10.6 11. 9.
Slide 48: Summary Metrics
June 30, 2012 RAYMOND JAMES FINANCIAL Debt / EBITDA 2.12x Assets / Equity 6.70x Debt / Total Capitalization 30% Total capital (to risk-weighted assets) 17.9% Tier I capital (to risk-weighted assets) 16.9% Tier I capital (to adjusted assets) 13.7% Note: Excludes non-controlling interests; RJF , Assum
Slide 49: Liquidity Analysis: RJF Cash Balance at 6/30/12
(in thousands) RJF Cash Balance at 6/30/12 RAYMOND JAMES FINANCIAL Cash on hand (includes cash invested by RJ&A) $616,000 Dividends available* : RJ&A $62,000 RJ Bank $65,000 Morgan Keegan $163,000 COLI borrowings available (3 days) $122,000 Uncommitted, unsecured lines of credit (RJF only) $100,000
Slide 50: Raymond James
RAYMOND JAMES* RAYMOND JAMES”
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