Raymond James Financial, Inc. · NYSE:RJF
Raymond James Financial — Investor Day (June 2019)
133 slides from Raymond James Financial's investor day presentation, Jun 21, 2019
Slide 1: Raymond James 2019 Analyst & Investor Day
RAYMOND JAMES 2019 Analyst & Investor Day
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 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 prospects, anticipated savin
Slide 3: Agenda
2019 ANALYST & INVESTOR DAY Agenda 8:15 am Registration & Breakfast Paul Reilly 9:00 – 9:30 am Welcome & General Overview Chairman & CEO, Raymond James Financial Scott Curtis 9:30 –10:00 am Private Client Group President, Private Client Group John Carson 10:00 – 10:20 am Fixed Income / Public Financ
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 NET REVENUES* FISCAL 2018 $ MILLIONS KEY FACTS (as of March 31, 2019) • Headquartered in St. Petersburg, FL • Founded in 1962; public in 1983 • Approximately 7,900 financial advisors • $796 billion of AUA • RJF shareholders’ equity of $6.4 billion • Market capital
Slide 6: Integrity, Client First, Independence, Conservatism
INTEGRITY CLIENT FIRST INDEPENDENCE CONSERVATISM 6
Slide 7: Raymond James Financial RJF
RAYMOND JAMES FINANCIAL RJF 7
Slide 8: Financial Priorities
FINANCIAL PRIORITIES Attractive Long-Term Growth Return on Equity 8
Slide 9: Long-Term Growth: Earnings Per Share
LONG-TERM GROWTH 125 CONSECUTIVE PROFITABLE QUARTERS Earnings Per Share(Basic) EarningsPer Trailing 10 Years 9
Slide 10: RJF Stock Price vs. Sector Year-to-Date
LONG-TERM GROWTH RJF STOCK PRICE VS. SECTOR YEAR-TO-DATE 2019* 12.1% 11.0% 9.8% Percent Change Percent RJF S&P 500 DJ US Financials Index * Performance from December 31, 2018 to May 31, 2019. 10
Slide 11: RJF Stock Price vs. Sector 3-Year Change
LONG-TERM GROWTH RJF STOCK PRICE VS. SECTOR 3-YEAR CHANGE* 47.3% 34.0% 31.2% Percent Change Percent RJF S&P 500 DJ US Financials Index * Performance from May 31, 2016 to May 31, 2019. 11
Slide 12: RJF Stock Price vs. Sector 5-Year Change
LONG-TERM GROWTH RJF STOCK PRICE VS. SECTOR 5-YEAR CHANGE* 70.6% 43.1% 45.5% Percent Change Percent RJF S&P 500 DJ US Financials Index * Performance from May 30, 2014 to May 31, 2019. 12
Slide 13: RJF Stock Price vs. Sector 10-Year Change
LONG-TERM GROWTH RJF STOCK PRICE VS. SECTOR 10-YEAR CHANGE* 419.4% 199.4% 171.6% Percent Change Percent RJF S&P 500 DJ US Financials Index * Performance from May 29, 2009 to May 31, 2019. 13
Slide 14: Number of Financial Advisors
LONG-TERM GROWTH NUMBER OF FINANCIAL ADVISORS 4.7% 5-YR CAGR 7,813 7,862* 7,146 7,346 6,596 6,197 6,265 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 Employees Independent Contractors Annual -0.2% 1.1% 5.3% 8.3% 2.8% 6.4% Growth *FYTD 19 as of March 31, 2019 14 5-year CAGR for period FY 20
Slide 15: Total PCG Client Assets 1-Year Change
LONG-TERM GROWTH TOTAL PCG CLIENT ASSETS UNDER ADMINISTRATION 1-YEAR CHANGE* Raymond James 9.4% Peer Group Median 5.6% Note: Based on publicly available information and RJF estimates and analysis. Peer Group Median includes: Ameriprise, Bank of America/Merrill 15 Lynch, Charles Schwab, LPL Financial
Slide 16: Total PCG Client Assets 3-Year Change
LONG-TERM GROWTH TOTAL PCG CLIENT ASSETS UNDER ADMINISTRATION 3-YEAR CHANGE* Raymond James 56.5% Peer Group Median 29.3% Note: Based on publicly available information and RJF estimates and analysis. Peer Group Median includes: Ameriprise, Bank of America/Merrill 16 Lynch, Charles Schwab, LPL Financi
Slide 17: Total PCG Client Assets 5-Year Change
LONG-TERM GROWTH TOTAL PCG CLIENT ASSETS UNDER ADMINISTRATION 5-YEAR CHANGE* Raymond James 75.1% Peer Group Median 40.6% Note: Based on publicly available information and RJF estimates and analysis. Peer Group Median includes: Ameriprise, Bank of America/Merrill 17 Lynch, Charles Schwab, LPL Financi
Slide 18: Total PCG Client Assets 10-Year Change
LONG-TERM GROWTH TOTAL PCG CLIENT ASSETS UNDER ADMINISTRATION 10-YEAR CHANGE* Raymond James 390.3% Peer Group Median 210.6% Note: Based on publicly available information and RJF estimates and analysis. Peer Group Median includes: Ameriprise, Bank of America/Merrill 18 Lynch, Charles Schwab, LPL Fina
Slide 19: Attractive Return on Equity
ATTRACTIVE RETURN ON EQUITY ANNUAL RETURN ON EQUITY 16.7% 16.0% 16.2% 14.5% 14.4% 12.0% 12.3% 12.1% 11.5% 12.2% 11.3% 10.6% FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 Annualized Adjusted-ROE* ROE *Adjusted return on equity is a non-GAAP financial measure. Please see the schedule of our
Slide 20: Adjusted ROE vs. Adjusted Return on Tangible Equity
ATTRACTIVE RETURN ON EQUITY ADJUSTED RETURN ON EQUITY VS. ADJUSTED RETURN ON TANGIBLE EQUITY 1.8% 18.5% 16.7% Q2 FY 2019 Portion Q2 FY 2019 Annualized Annualized Attributable to Adjusted Return on Adjusted Return Goodwill and Tangible Equity* on Equity* Intangible Assets * Annualized Adjusted Return
Slide 21: Remaining Opportunistic
REMAINING OPPORTUNISTIC Morgan Keegan 2009 Recruiting Share Buybacks Acquisition Success 21
Slide 22: Acquisitions
ACQUISITIONS ALEX#BROWN @ 3M acs A pivision or RAYMOND JAMES® MacDougall, MacDougall & MacTier Inc Morgan Keegan IREAMS ASSET Lane Ber ry IR HOWE BARNES A) MANAGEMENT INVESTMENT BANKING =] & Mummert & Company F ces: ae CORPORATE FINANCE a NEBARNES PRODUCERS HOEFER Scout investments Fa CHOICE sermon
Slide 23: Looking Ahead
LOOKING AHEAD RAYMOND JAMES
Slide 24: Growth Initiatives: Private Client Group
GROWTH INITIATIVES: PRIVATE CLIENT GROUP Geographic New Advisor Advisor Advisor Support Expansion Training Recruitment 24
Slide 25: Growth Initiatives: Private Client Group Cash Platform
GROWTH INITIATIVES: PRIVATE CLIENT GROUP Cash Platform Everyday Savings Spending & Strategic 25
Slide 26: Growth Initiatives: Capital Markets
GROWTH INITIATIVES: CAPITAL MARKETS Expanding M&A New Market Strengthening Client Platform Expansion Relationships 26
Slide 27: Growth Initiatives: Asset Management
GROWTH INITIATIVES: ASSET MANAGEMENT Increase Fee-Based Expand and Deepen Account Utilization Product Offering 27
Slide 28: Growth Initiatives: Raymond James Bank
GROWTH INITIATIVES: RAYMOND JAMES BANK Expand Solutions for PCG Maintain Strong Clients Conservative Principles 28
Slide 29: Investing in Infrastructure
INVESTING IN INFRASTRUCTURE 29
Slide 30: Investing in Technology
INVESTING IN TECHNOLOGY RJ CRM Advisor Mobile Product Catalog Client Reporting 30
Slide 31: Response to Regulation
RESPONSE TO REGULATION State Fiduciary Rules 31
Slide 32: Succession Planning
SUCCESSION PLANNING RAYMOND JAMES
Slide 33: Integrity, Client First, Independence, Conservatism
INTEGRITY CLIENT FIRST INDEPENDENCE CONSERVATISM 33
Slide 34: Q&A Paul Reilly
Q&A Paul Reilly Chairman & CEO, Raymond James Financial 34
Slide 35: Private Client Group
PRIVATE CLIENT GROUP Scott Curtis President, Private Client Group 35
Slide 36: Private Client Group
PRIVATE CLIENT GROUP ~7,900 Financial advisors ~3 million Client accounts $760 billion PCG client assets under administration As of March 31, 2019 36
Slide 37: Advisor Choice
ADVISOR CHOICE ar INDEPENDENT CONTRACTOR INDEPENDENT RIA TRADITIONAL EMPLOYEE kz INDEPENDENT EMPLOYEE ADVISOR CHOICE BANK & CREDIT UNION HYBRID RIA RAYMOND JAMES
Slide 38: Private Client Group Ranking
PRIVATE CLIENT GROUP Client Assets Rank Firm FAs ($ billions) 1 Bank of America / Merrill Lynch $2,837 17,534 2 Morgan Stanley 2,476 15,708 3 Wells Fargo & Co. 1,800 13,828 4 UBS Americas 1,298 6,790 5 Edward Jones & Co. 1,208 17,894 6 RAYMOND JAMES* 760 7,862 7 LPL Financial 684 16,189 8 Ameriprise
Slide 39: Financial Advisor Growth
FINANCIAL ADVISOR GROWTH NUMBER OF ADVISORS 4.7% 5-YR CAGR 7,813 7,862* 7,146 7,346 6,596 6,197 6,265 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 Employees Independent Contractors Annual -0.2% 1.1% 5.3% 8.3% 2.8% 6.4% Growth *FYTD 19 as of March 31, 2019 39 5-year CAGR for period FY 2013
Slide 40: Competitive Landscape: Financial Advisor Growth
COMPETITIVE LANDSCAPE PRIVATE CLIENT GROUP FINANCIAL ADVISOR GROWTH MARCH 31, 2018 TO MARCH 31, 2019 3.4% 2.0% 1.0% 1.0% 0.8% 0.2% -4.0% Raymond James Stifel (SF) Ameriprise (AMP) Bank of America LPL (LPLA) Morgan Stanley Wells Fargo (WFC) (RJF) Merrill Lynch (MS) (BAC) Note: Based on publicly avail
Slide 41: Client Assets Under Administration
CLIENT ASSETS UNDER ADMINISTRATION ASSETS UNDER ADMINISTRATION ($ BILLIONS) 13.4% 5-YR CAGR 756 760 * 659 574 451 453 403 50% 49% 45% 40% 40% 35% 37% % Fee-based assets FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 *FYTD 19 as of March 31, 2019 41 5-year CAGR for period FY 2013 – FY 2018
Slide 42: Competitive Landscape: Client Assets Growth
COMPETITIVE LANDSCAPE TOTAL PCG CLIENT ASSETS UNDER ADMINISTRATION GROWTH MARCH 31, 2018 TO MARCH 31, 2019 9.4% 9.2% 8.5% 5.7% 5.6% 4.4% 4.1% -2.0% Raymond Stifel (SF) Schwab (SCHW) Ameriprise LPL (LPLA) Morgan Stanley Bank of America Wells Fargo James (RJF) (AMP) (MS) Merrill Lynch (WFC) (BAC) Note
Slide 43: Competitive Landscape: Fee-Based Assets Growth
COMPETITIVE LANDSCAPE FEE-BASED PCG CLIENT ASSETS UNDER ADMINISTRATION GROWTH MARCH 31, 2018 TO MARCH 31, 2019 16.4% 11.8% 11.1% 10.0% 8.9% 5.5% 3.8% 1.3% Raymond Stifel (SF) Ameriprise LPL (LPLA) Schwab (SCHW) Morgan Stanley Bank of America Wells Fargo James (RJF) (AMP) (MS) Merrill Lynch (WFC) (BA
Slide 44: Private Client Group Net Revenues and Pre-Tax Income
PRIVATE CLIENT GROUP NET REVENUES PRE-TAX INCOME ($ MILLIONS) ($ MILLIONS) 11.8% 20.2% 5-Year 5-Year CAGR CAGR 5,254* 592* 5,093 576 4,422 3,508 3,616 ANNUALIZED 3,280 373 342 341 2,919 330 230 296 2,627 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Slide 45: Private Client Group Revenue Mix
PRIVATE CLIENT GROUP REVENUE MIX NET REVENUES (QUARTER ENDED MARCH 31, 2019) Account & All Other, 1% Service Fees, 18% Asset Management & Related Admin Net Interest Fees, 50% Income, 4% Investment Banking, 1% RECURRING REVENUE* Brokerage, 27% Pie chart may not total 100% due to rounding 45 * 83% of
Slide 46: Private Client Group Brokerage Revenues
PRIVATE CLIENT GROUP BROKERAGE REVENUES BROKERAGE REVENUES FYTD 2Q19 ($ MILLIONS) Mutual fund and other fund products ~30% ~70% $302 Insurance and annuity products ~40% ~60% $203 48% Equities, ETFs, and fixed income products 100% $197 Transactional Asset-Based * FYTD ended March 31, 2019. 46
Slide 47: Market Share Opportunity
MARKET SHARE OPPORTUNITY This state view excludes Alaska and Hawaii, which have 5.0% and 7.8% market share, respectively. Data is as of December 2018. 47
Slide 48: Market Share Opportunity by State
MARKET SHARE OPPORTUNITY CA: 1.9% FL: 7.6% NY: 2.6% TX: 6.6% IL: 4.5% NJ: 3.1% RJ AUA Total AUA Data as of Dec 31, 2018 48
Slide 49: Client Satisfaction - Net Promoter Score
CLIENT SATISFACTION CLIENT SATISFACTION - NET PROMOTER SCORE Top NPS Performing Brands Examples* 80 • Apple 89 • Starbucks 77 70 • Netflix 64 • Southwest 62 60 • Amazon 61 50 “excellent” 40 30 20 10 0 Raymond James Client Raymond James Client >$1MM Financial Services Average Source: 2019 Client Sati
Slide 50: Advisor Satisfaction - Net Promoter Score
ADVISOR SATISFACTION 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 2019 External Advisor Survey and 2017 Internal Satisfact
Slide 51: 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 55% 35% <24% Raymond James Next Competitor All Others Source: RJ 2019 External Advisor Survey 51 Not
Slide 52: New Join Advisor Survey
NEW JOIN ADVISOR SURVEY OF THESE CHARACTERISTICS, WHICH WOULD YOU SAY WERE MOST IMPORTANT IN YOUR EVALUATION OF RAYMOND JAMES AND OTHER FIRMS? (IMPORTANT / VERY IMPORTANT) Survey conducted in Fall 2018 and Spring 2019 to new advisors who transitioned to Raymond James from another firm in the last si
Slide 53: Trends and Opportunities
TRENDS AND OPPORTUNITIES Fiduciary Trends Client Demographics Market Uncertainty Client Preferences 53
Slide 54: Q&A Scott Curtis
Q&A Scott Curtis President, Private Client Group 54
Slide 55: Fixed Income & Public Finance
FIXED INCOME & PUBLIC FINANCE John Carson President, Raymond James Financial 55
Slide 56: Fixed Income
FIXED INCOME THE FIXED INCOME DIVISION INCLUDES FIXED INCOME SALES & TRADING, PUBLIC FINANCE / DEBT INVESTMENT BANKING, AND RESEARCH AND STRATEGIES. Public Finance / Fixed Income Capital Markets Debt Investment Banking Business Overview Business Overview • ~195 institutional salespersons and ~130 •
Slide 57: Operating Model
OPERATING MODEL THE FIXED INCOME OPERATING MODEL IS HIGHLY CONSERVATIVE AND CLIENT-FOCUSED Intellectual Capital as a Core Asset Client First, High-Grade Distribution Product Focused Franchise Model Prudent Risk Full-Service Management Platform 57
Slide 58: Fixed Income Net Revenues
FIXED INCOME NET REVENUES NET REVENUES ($ MILLIONS) $461 $405 $402 $329 $342* $171 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 * First six months of fiscal 2019, annualized. 58
Slide 59: Fixed Income Sales and Trading
FIXED INCOME SALES AND TRADING THE FIXED INCOME SALES AND TRADING BUSINESS IS PRIMARILY DRIVEN BY TWO BROADLY-DEFINED CLIENT SEGMENTS – DEPOSITORIES AND NON-DEPOSITORIES – WHICH HAVE DISTINCT CHARACTERISTICS. CLIENT BASE PRODUCTS DRIVERS • Interest Rates / Yield Curve Depositories Primarily MBS • Lo
Slide 60: Fixed Income Sales and Trading
FIXED INCOME SALES AND TRADING 60
Slide 61: Fixed Income Inventory
FIXED INCOME INVENTORY THE FIXED INCOME BROKERAGE BUSINESS IS SUPPORTED BY RELATIVELY HIGH QUALITY / LOW RISK INVENTORY. . . TOTAL RJF FIXED INCOME INVENTORY Commentary (as of 3/31/2019) $780 million Non-agency CMOs and ABS, 11% • Typically, ~98.5% of inventory is investment grade, of which ~50% is
Slide 62: Public Finance / Debt Investment Banking
PUBLIC FINANCE / DEBT INVESTMENT BANKING THE DEBT INVESTMENT BANKING PLATFORM INCLUDES PUBLIC FINANCE AND SIX SPECIALTY GROUPS 62
Slide 63: Investment Banking Revenues
PUBLIC FINANCE / DEBT INVESTMENT BANKING INVESTMENT BANKING REVENUES ($ MILLIONS) Commentary $96 • Historically low rates $87 $84 $78* $76 • Political uncertainty • Elimination of SALT deduction $39 • Lowered corporate tax rates • Elimination of advance FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 refund
Slide 64: Public Finance Overview
PUBLIC FINANCE OVERVIEW NATIONAL PRESENCE BY THE NUMBERS: 169 Public Finance professionals Office locations nationwide 31 (LA, Austin, Honolulu, Denver, KC) Institutional Fixed Income sales 330+ and trading professionals ~7,900 PCG Financial advisors AREAS OF EXPERTISE: • General Obligation • Non-Ad
Slide 65: Public Finance Underwriter Rankings
PUBLIC FINANCE Raymond James consistently ranks as a top national underwriter of negotiated long-term new issues 2016 2017 2018 11th RANKED UNDERWRITER 11th RANKED UNDERWRITER 8th RANKED UNDERWRITER National Negotiated New Issues National Negotiated New Issues National Negotiated New Issues Full to
Slide 66: Strategic Growth Initiatives
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 66
Slide 67: Outlook
OUTLOOK Continued regulatory/political uncertainty Flat yield curve & low long-term rates 67
Slide 68: Q&A John Carson
Q&A John Carson President, Raymond James Financial 68
Slide 69: Raymond James Technology Platforms
RAYMOND JAMES TECHNOLOGY PLATFORMS Vin Campagnoli Chief Information Officer, Raymond James Financial 69
Slide 70: Technology Strategy
TECHNOLOGY STRATEGY Approach Objectives . “Built from the mind of the . Attract and retain Advisor” financial advisors . Develop leading capabilities . Help advisors increase that are: their productivity through o Simple and easy-to-use efficiencies and o Customizable deepening client o Fast and sec
Slide 71: Technology Platforms
TECHNOLOGY PLATFORMS ADVISOR MOBILE Award winning mobile app that provides instant access to key client & account information from wherever you are. INFORMATION SECURITY Non-stop monitoring and advanced cyber CLIENT ACCESS protection for advisors and their clients. Desktop & mobile app for clients t
Slide 72: Technology Platforms Presenters
TECHNOLOGY PLATFORMS Advisor Mobile – Andy DePasquale, Vice President Client Access – Neil Deakin, Vice President & Luis Pineda, Director Client Center & RJ CRM – Kimberly Tays, Vice President Presented by: Client Reporting – Brian LaPierre, Vice President Information Security – Andy Zolper, CISO Pr
Slide 73: Advisor Mobile
Advisor Mobile The app that allows you to take your office with you. Serve clients from Anywhere — Even here.
Slide 74: Advisor Mobile Features
ADVISOR MOBILE VOICE TO TEXT Easily capture information within the app. RUN & PRINT REPORTS Run or print any Custom or Firm Defined Package or Report while on the go. RJ CRM INTEGRATION Enter notes, create appointments and assign tasks. 74
Slide 75: Client Access
Client Access A dynamic resource that keeps clients connected from virtually anywhere Tech for your clients.
Slide 76: Client Access Features
CLIENT ACCESS VIEW ACCOUNT DETAILS, TRANSFER FUNDS & PAY BILLS Tailor their account views to access their investment information and easily complete fund transactions. PLAN & MONITOR GOALS Clients can track the status of their finanicial plan, see how changes may impact it and stay engaged in their
Slide 77: Client Center & RJ CRM
Client Center & RJ CRM An integrated platform of 30+ applications, built to suit your needs. Your hub.
Slide 78: Client Center & RJ CRM Features
CLIENT CENTER & RJ CRM ADVISOR MOBILE, CLIENT CENTER & OUTLOOK INTEGRATION Conveniently capture and view CRM activities. TOUCHPOINT MANAGEMENT & WORKFLOWS Automate your key tasks so you never miss a beat. ANALYZE HOLDINGS & INITIATE TRADES View account holdings and place trades, all in one place. 78
Slide 79: Client Reporting
Client Reporting Custom reporting that strengthens client reviews. There’s a report for that.
Slide 80: Client Reporting Features
CLIENT REPORTING PACKAGES Create custom report packages from simple to complex to meet clients’ needs. DOCUMENT RETENTION & VAULT Use the Vault and ‘Mark as Delivered’ feature to support your compliance and supervision obligations. SCHEDULING Reports can be automatically generated for selected clien
Slide 81: Information Security
Information Security Cyber protection for advisors and their clients. Your security. Our priority.
Slide 82: Information Security
INFORMATION SECURITY • State of the art defenses. • 24/7/365 cyber threat monitoring. • Cyber advisory services for advisors. • Security awareness resources for clients. • Secure collaboration tools for advisors and clients. 82
Slide 83: Portfolio Management
Portfolio Management Construct and analyze your own custom investment portfolios. Analyze your portfolios.
Slide 84: Portfolio Management Features
PORTFOLIO MANAGEMENT CONSTRUCT Create custom asset class & product allocations. MONITOR Evaluate accounts that have drifted outside set tolerances. ANALYZE Run in-depth analytics for relationships, accounts or new investment portfolios. 84
Slide 85: Product Catalog
Product Catalog Central location for research and product monitoring. What’s in your investment lineup?
Slide 86: Product Catalog Features
PRODUCT CATALOG PRODUCT SCREENER Refine your search with attributes such as sector, rating or annual dividend. PRODUCT COMPARE View performance & analytics side by side. PRODUCT LISTS Create custom product lists to manage your investment lineups. INTEGRATION Consolidates 21 data sources (including M
Slide 87: In Progress: Technology Platform Demos
IN PROGRESS: TECHNOLOGY PLATFORM DEMOS Webcast will resume at approximately 11:30am ET 87
Slide 88: Raymond James Bank
RAYMOND JAMES BANK Steve Raney President & CEO, Raymond James Bank 88
Slide 89: Business Model
BUSINESS MODEL RJ Bank Conservative Credit (as of March 31, 2019) Standards ~$25 billion in Total Assets Stable, low cost source of deposits Serve Financial Prudent Financial / Flexible deposit base and capital base Advisors, Retail & Capital Management Institutional Clients Synergies with P
Slide 90: Raymond James Bank Net Revenues and Pre-Tax Income
RAYMOND JAMES BANK NET REVENUES ($ MILLIONS) PRE-TAX INCOME ($ MILLIONS) Net Interest Margin 3.25% 3.22% 3.30% 3.07% 3.10% 2.98% 3.04% 13% 5-YR CAGR 492 492* 830* 409 727 593 337 279 494 268 414 243 347 352 246 415 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 FY 2013 FY 2014 FY 2015 FY 20
Slide 91: Raymond James Bank Net Loans
RAYMOND JAMES BANK NET LOANS ($ MILLIONS) 17% 5-YR CAGR * 19,518 20,135 17,007 15,211 12,988 10,964 8,821 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 5-year CAGR for period FY 2013 – FY 2018. 91 *FYTD 19 is as of March 31, 2019.
Slide 92: Targeted Lending Strategy
TARGETED LENDING STRATEGY FOCUSED ON CORPORATE, COMMERCIAL REAL ESTATE AND LOANS TO PCG CLIENTS Corporate (C&I) & Commercial Real Estate Securities Based Lending and Residential Mortgages Tax-Exempt (CRE) Other PCG Typically target: Typically target: Typically target: Typically target: • Institution
Slide 93: Loan Composition
RAYMOND JAMES BANK LOAN COMPOSITION YEAR-OVER-YEAR GROWTH RATES (% OF TOTAL LOANS, 2Q FY 2019) Total Loan 10.9% Portfolio Net Loans = Tax-Exempt Loans Held for Loans, 6% Sale, 1% $20.1B Commercial and Industrial 8.6% SBL and Other, 15% Commercial 5.0% Commercial and Real Estate Industrial, 41% Resid
Slide 94: Key Credit Trends
KEY CREDIT TRENDS PROVISION EXPENSE NET CHARGE OFFS ($ MILLIONS) ($ MILLIONS) 20.7 28.2 23.6 13.3 20.5 21.0 7.7 5.0 13.6 13.0 1.7 3 2.6 -2.8 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19* FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19* NONPERFORMING ASSETS ALLOWANCE FOR LOAN LOSSE
Slide 95: Securities Portfolio
SECURITIES PORTFOLIO RJ BANK SECURITIES PORTFOLIO STRATEGY Current To increase the portfolio ~$1.5 billion per year to a total of approximately $6 billion portfolio by fiscal 2021 Plan (subject to change). • Currently decelerating growth for a period of time due to flat yield curve Focus on Credit T
Slide 96: Interest Rate Risk Management
INTEREST RATE RISK MANAGEMENT OVERVIEW Establish and maintain interest rate risk measuring system Formulate and execute strategies to manage interest rate risk (e.g. hedging strategies) Identify potential interest rate risk arising from existing or new products or activities Monitoring economic cond
Slide 97: Average Balances and Yields
RAYMOND JAMES AVERAGE YIELD AVERAGE BALANCES AND YIELDS FYTD 18 FYTD 19 Average Average Average Average ($ billions) Balance Yield Balance Yield Cash $1.1 1.53% $1.4 2.40% Securities $2.4 1.99% $2.9 2.43% C&I $7.6 4.14% $8.2 4.76% CRE $3.2 4.05% $3.4 4.73% Residential Mortgage $3.3 3.09% $4.0 3.33%
Slide 98: Raymond James Bank Duration Profile
RAYMOND JAMES BANK DURATION PROFILE DURATION PROFILE (AS OF MARCH 31, 2019) Weighted Duration Average Life ($ billions) Balance (years) (years) Cash $1.5 - - Securities $2.9 2.3 2.9 C&I Loans $8.3 0.1 2.3 CRE Loans* $3.6 0.1 2.5 Residential Mortgages $4.0 2.8 5.0 SBL and Other $3.0 0.1 3.0 Tax-Exemp
Slide 99: Outlook
OUTLOOK Continued growth in loan portfolio with focus on expanding synergies with PCG and Capital Markets Resilient net interest margins, assuming current short- term rates 99
Slide 100: Q&A Steve Raney
Q&A Steve Raney President & CEO, Raymond James Bank 100
Slide 101: Financial Review
FINANCIAL REVIEW Jeff Julien Chief Financial Officer, Raymond James Financial 101
Slide 102: Track Record of Profitable Growth: Net Revenues
TRACK RECORD OF PROFITABLE GROWTH NET REVENUES ($ MILLIONS) 10.2% 5-YR 7,580* CAGR 7,274 6,371 5,204 5,405 74% 74% 4,862 Net Revenues* 4,488 69% 66% 64% 61% 3,790 Recurring 56% Revenues** (%) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 Annual 17.9% 8.3% 7.0% 3.9% 17.9% 14.2% Growth 5-yea
Slide 103: Track Record of Profitable Growth: Pre-Tax Income GAAP
TRACK RECORD OF PROFITABLE GROWTH PRE-TAX INCOME – GAAP ($ MILLIONS) 18.0% 17.9% 15.4% 15.3% Pre-Tax Margin* 14.8% 14.5% (GAAP) 12.6% 18.4% 5-YR 1,311 1,358** CAGR 925 801 748 798 564 Pre-Tax Income 679 (GAAP) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 Annual 19.5% 32.6% 6.7% 0.4% 15.5%
Slide 104: Adjusted Pre-Tax Income Non-GAAP
TRACK RECORD OF PROFITABLE GROWTH ADJUSTED PRE-TAX INCOME* – NON-GAAP ($ MILLIONS) 17.6% 18.1% 18.3% Adjusted 15.9% ** 15.4% Pre-Tax Margin 14.4% 15.3% (Non-GAAP) 15.3% 1,388*** 5-YR 1,315 CAGR 1,119 861 748 798 644 Adjusted Pre-Tax Income 694 (Non-GAAP) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 20
Slide 105: Net Revenues by Core Segment
TRACK RECORD OF PROFITABLE GROWTH NET REVENUES BY CORE SEGMENT ($ MILLIONS) 5,093 4,422 NET REVENUES 5-YR CAGR 3,616 (FY 13 – FY 18) 3,508 3,280 Private Client Group 11.8% 2,919 2,627 Capital Markets 0.8% Asset Management 17.4% RJ Bank 15.9% 927 953 963 1,002 1,014 964 654 727 494 593 530 Consolidat
Slide 106: Pre-Tax Income by Core Segment
TRACK RECORD OF PROFITABLE GROWTH PRE-TAX INCOME BY CORE SEGMENT ($ MILLIONS) 576 492 PRE-TAX INCOME 5-YR CAGR 409 (FY 13 – FY 18) 373 342 Private Client Group 20.2% 330 341 337 296 268 279 Capital Markets (2.3%) 243 246 230 235 Asset Management 19.6% 172 131 135 139 132 141 128 119 RJ Bank 12.9% 10
Slide 107: Annual Return on Equity
TRACK RECORD OF PROFITABLE GROWTH ANNUAL RETURN ON EQUITY 16.7% 16.0% 16.2% 14.5% 14.4% 12.0% 12.3% 12.1% 11.5% 12.2% 11.3% 10.6% FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FYTD 19 Annualized Adjusted-ROE* ROE *Adjusted return on equity is a non-GAAP financial measure. Please see the schedule o
Slide 108: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS as of March 31, 2019 Total Assets $38.2 billion Equity Attributable to RJF $6.4 billion RJF Corporate Debt $1.55 billion RJF Corporate Cash * $3.8 billion Shares Outstanding 140.4 million Book Value per Share $45.34 Leverage (Assets / RJF Equity) 6.0x Regulatory Leverage exc
Slide 109: Conservative Capital Management
CONSERVATIVE CAPITAL MANAGEMENT Quarterly dividend rate of $0.34 per share. Increased 36% year-over-year Dividends Target is typically 15-25% of earnings. In market downturns, the company strives to maintain its most recent dividend, if feasible. Repurchased 6.7 million shares for $505 million
Slide 110: Clients' Domestic Cash Sweep Balances
CLIENTS’ DOMESTIC CASH SWEEP BALANCES DOMESTIC CLIENT CASH SWEEP BALANCES* TO CLIENT PCG ASSETS UNDER ADMINISTRATION (%) 10.0% 9.5% 9.0% 8.5% 8.0% 7.8% Average 7.5% 7.0% 6.5% 6.0% ~6.0% 5.5% Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-
Slide 111: Clients' Domestic Cash Sweep Balances and Corresponding Assets
CLIENTS’ DOMESTIC CASH SWEEP BALANCES CLIENTS’ DOMESTIC CASH SWEEP BALANCES AND CORRESPONDING ASSETS (MARCH 31, 2019; $ BILLIONS) CLIENTS’ DOMESTIC CASH SWEEP BALANCES ($41.7) CORRESPONDING ASSETS Brokerage Client Cash / Client Client Margin Loans & Interest Program • Net Interest Income (NII) ($2.3
Slide 112: RJ Bank Deposit Program
CLIENTS’ DOMESTIC CASH SWEEP BALANCES RJ BANK DEPOSIT PROGRAM (RJBDP) September 30, 2015 March 31, 2019 Federal Funds Target Rate 0%-0.25% 2.25%-2.50% RJBDP balances at third-party banks $18.5 billion $14.3 billion Net spread on RJBDP balances at third-party banks ~0.25% ~2.00% 112
Slide 113: Cash Platform Changes
CASH PLATFORM CHANGES Everyday Savings & Spending Strategic FDIC Cash-Based Money Market Other Insurance Interest Rates Funds Alternatives 113
Slide 114: Aggregate Cash
AGGREGATE CASH FDIC deposit insurance provides a maximum of $250,000 of coverage per depositor per bank. To provide our clients with additional combined FDIC insurance coverage, the Raymond James Bank Deposit Program (“RJBDP”) sweeps client deposits into numerous deposit accounts with multiple banks
Slide 115: Investments Associated with Growth
INVESTMENTS ASSOCIATED WITH GROWTH Transition Assistance to Financial Advisors Retention Associated with Acquisitions New Branch/Branch Expansion Expenses Business Development Expenses 115
Slide 116: Financial Advisor Transition Assistance and Retention Costs
PRIVATE CLIENT GROUP FINANCIAL ADVISOR TRANSITION ASSISTANCE AND RETENTION COSTS Represents a 5% impact to the 3.86% PCG segment Impact to RJF’s 3.51% Compensation Ratio and 3.23% 3.51% 3.19% Pre-Tax Margin* 266** 246 255 166 175 Financial Advisor Retention and Transition 133 Assistance Amortization
Slide 117: Financial Targets
FINANCIAL TARGETS Pre-tax Margin* Compensation Adjusted Return Consolidated Private Client Capital Asset Ratio* on Equity** RJF** Group Markets Management Previous Firm Target*** >18% 12.5%+ 10%+ 33%+ <66.5% 16-17% Avg 4 qtrs ended 2Q FY19 18.1% 10.7% 11.5% 35.6% 65.6% 16.3% New Firm Target**** >18%
Slide 118: Q&A Jeff Julien
Q&A Jeff Julien Chief Financial Officer, Raymond James Financial 118
Slide 119: Appendix
APPENDIX RAYMOND JAMES
Slide 120: Presenter Biographies
PRESENTER BIOGRAPHIES RAYMOND JAMES
Slide 121: Paul Reilly Biography
Paul Reilly 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’s board of directors since 2006 and
Slide 122: Scott Curtis Biography
EXECUTIVE COMMITTEE BIOS Scott Curtis President Private Client Group Scott Curtis is president of Raymond James’ Private Client Group, leading the firm’s domestic wealth management businesses that include more than 7,000 employee and independent financial advisors and generate approximately 70% of o
Slide 123: John Carson Jr. Biography
EXECUTIVE COMMITTEE BIOS John Carson Jr. 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 Development for R
Slide 124: Vin Campagnoli Biography
EXECUTIVE COMMITTEE BIOS Vin Campagnoli Chief Information Officer Raymond James Financial A 30-year veteran of the financial services industry, Vin Campagnoli as CIO, is responsible for managing all aspects of technology across Raymond James’ businesses including the 1,300 technology associates in 4
Slide 125: Steve Raney Biography
EXECUTIVE COMMITTEE BIOS Steve Raney President and CEO Raymond James Bank Steve Raney is the president and CEO of Raymond James Bank, a wholly-owned subsidiary of Raymond James Financial. Mr. Raney also serves as Chairman of Raymond James Trust Company and is one of the 13 members of Raymond James F
Slide 126: Jeffrey Julien Biography
EXECUTIVE COMMITTEE BIOS Jeffrey Julien 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 the board of Ray
Slide 127: Raymond James Executive Committee
RAYMOND JAMES EXECUTIVE COMMITTEE James Bunn Paul Reilly Bella Loykhter Allaire Paul Allison President Global Equities Chairman & CEO EVP Technology & Operations Chairman & CEO & Investment Banking Raymond James Financial Raymond James & Associates Raymond James Limited Raymond James & Associates Je
Slide 128: Non-GAAP Information
NON-GAAP INFORMATION RAYMOND JAMES
Slide 129: Schedule of Non-GAAP Information
SCHEDULE OF NON-GAAP INFORMATION Six months ended Twelve months ended March 31, 2019 September 30, 2018 September 30, 2017 September 30, 2016 September 30, 2013 ($ in millions, except share amounts) Net income (1) $ 510 $ 857 $ 636 $ 529 $ 367 Total non-GAAP adjustments, net of tax (as detailed belo
Slide 130: 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. (“RJF”) by net revenues for each respective period or, in the case of adjusted pre-tax m
Slide 131: Schedule of Non-GAAP Information
SCHEDULE OF NON-GAAP INFORMATION Three months ended March 31, 2019 ($ in millions, except share amounts) Net income (1) $ 261 Average equity (2) $ 6,255 Average tangible equity (2) $ 5,658 Annualized return on average equity (3) 16.7% Annualized return on average tangible equity (3) 18.5% Footnote E
Slide 132: Schedule of Non-GAAP Information
SCHEDULE OF NON-GAAP INFORMATION Three months ended December 31, 2018 September 30, 2018 December 31, 2017 September 30, 2017 June 30, 2017 ($ in millions, except share amounts) Net Income (1) $ 249 $ 263 $ 119 $ 193 $ 183 Non-GAAP adjustments: Acquisition and disposition-related expenses (2) 15 - 4
Slide 133: Schedule of Non-GAAP Information (continued)
SCHEDULE OF NON-GAAP INFORMATION (continued from prior slide) Footnote Explanations: 1. Excludes noncontrolling interests. 2. Acquisition and disposition-related expenses in the three months ended December 31, 2018 includes a loss in our Capital Markets segment on the sale of our operations related