REGULATORY CAPITAL REQUIREMENTS

6 Months Ended

Mar. 31, 2020

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

RJF, as a bank holding company and financial holding company, RJ Bank, our broker-dealer subsidiaries and Raymond James Trust, N.A. (“RJ Trust”) are subject to capital requirements by various regulatory authorities. Capital levels of each entity are monitored to ensure compliance with our various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions, by regulators that, if undertaken, could have a direct material effect on our financial results.

As a bank holding company, RJF is subject to the risk-based capital requirements of the Fed. These risk-based capital requirements are expressed as capital ratios that compare measures of regulatory capital to risk-weighted assets, which involve quantitative measures of our assets, liabilities, and certain off-balance-sheet items as calculated under regulatory guidelines. RJF’s and RJ Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

RJF and RJ Bank are required to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), Tier 1 capital to average assets (as defined), and under rules defined under the Basel III capital framework, Common equity Tier 1 capital (“CET1”) to risk-weighted assets. RJF and RJ Bank each calculate these ratios under the Basel III standardized approach in order to assess compliance with both regulatory requirements and their internal capital policies. In order to maintain our ability to take certain capital actions, including dividends and common equity repurchases, and to make bonus payments, we must hold a capital conservation buffer above our minimum risk-based capital requirements. As of March 31, 2020, both RJF’s and RJ Bank’s capital levels exceeded the capital conservation buffer requirement and were each categorized as “well-capitalized.”

For further discussion of regulatory capital requirements applicable to certain of our businesses and subsidiaries, see Note 22 of our 2019 Form 10-K.

To meet requirements for capital adequacy purposes or to be categorized as “well-capitalized,” RJF must maintain minimum CET1, Tier 1 capital, Total capital and Tier 1 leverage amounts and ratios as set forth in the following table.



	Actual				Requirement for capital adequacy purposes				To be well-capitalized under regulatory provisions
$ in millions	Amount		Ratio		Amount		Ratio		Amount		Ratio
RJF as of March 31, 2020:
CET1	$	6,183	24.1	%	$	1,156	4.5	%	$	1,669	6.5	%
Tier 1 capital	$	6,183	24.1	%	$	1,541	6.0	%	$	2,054	8.0	%
Total capital	$	6,490	25.3	%	$	2,054	8.0	%	$	2,568	10.0	%
Tier 1 leverage	$	6,183	14.2	%	$	1,745	4.0	%	$	2,181	5.0	%

RJF as of September 30, 2019:
CET1	$	5,971	24.8	%	$	1,085	4.5	%	$	1,567	6.5	%
Tier 1 capital	$	5,971	24.8	%	$	1,446	6.0	%	$	1,928	8.0	%
Total capital	$	6,207	25.8	%	$	1,928	8.0	%	$	2,410	10.0	%
Tier 1 leverage	$	5,971	15.7	%	$	1,525	4.0	%	$	1,906	5.0	%

RJF’s Tier 1 capital and Total capital ratios at March 31, 2020 decreased compared to September 30, 2019, due to the impact of increases to cash segregated pursuant to regulations and growth of bank assets, primarily bank loans, partially offset by the impact of higher equity due to positive earnings, net of share repurchases and dividends. RJF’s Tier 1 leverage ratio at March 31, 2020 decreased compared to September 30, 2019 due to the growth of average assets, primarily related to cash, cash and cash equivalents segregated pursuant to regulations, and bank loans, partially offset by the aforementioned change in equity.

To meet the requirements for capital adequacy or to be categorized as “well-capitalized,” RJ Bank must maintain CET1, Tier 1 capital, Total capital and Tier 1 leverage amounts and ratios as set forth in the following table.



	Actual				Requirement for capital adequacy purposes				To be well-capitalized under regulatory provisions
$ in millions	Amount		Ratio		Amount		Ratio		Amount		Ratio
RJ Bank as of March 31, 2020:
CET1	$	2,232	12.7	%	$	792	4.5	%	$	1,144	6.5	%
Tier 1 capital	$	2,232	12.7	%	$	1,056	6.0	%	$	1,408	8.0	%
Total capital	$	2,454	13.9	%	$	1,408	8.0	%	$	1,760	10.0	%
Tier 1 leverage	$	2,232	8.1	%	$	1,102	4.0	%	$	1,377	5.0	%

RJ Bank as of September 30, 2019:
CET1	$	2,246	13.2	%	$	764	4.5	%	$	1,103	6.5	%
Tier 1 capital	$	2,246	13.2	%	$	1,018	6.0	%	$	1,358	8.0	%
Total capital	$	2,458	14.5	%	$	1,358	8.0	%	$	1,697	10.0	%
Tier 1 leverage	$	2,246	8.8	%	$	1,021	4.0	%	$	1,276	5.0	%

RJ Bank’s Tier 1 capital and Total capital ratios at March 31, 2020 decreased compared to September 30, 2019 due to dividends paid during the period exceeding earnings and growth in assets, primarily bank loans. RJ Bank’s Tier 1 leverage ratio at March 31, 2020 decreased compared to September 30, 2019 due to the growth in average assets, primarily related to cash and bank loans, as well as the aforementioned change in equity.

Certain of our broker-dealer subsidiaries are subject to the requirements of the Uniform Net Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934. The following table presents the net capital position of RJ&A.



$ in millions	March 31, 2020			September 30, 2019
Raymond James & Associates, Inc.:
(Alternative Method elected)
Net capital as a percent of aggregate debit items	41.5		%	39.7		%
Net capital	$	1,122		$	1,056
Less: required net capital	(54		)	(53		)
Excess net capital	$	1,068		$	1,003

As of March 31, 2020, RJFS, RJ Ltd., RJ Trust and all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.