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BANK LOANS, NET (Tables)
 6 Months Ended
Mar. 31, 2020
Receivables [Abstract]  
Held for Sale and Held for Investment Loan Portfolios
The following table presents the balances for both the held for sale and held for investment loan portfolios, as well as the associated percentage of each portfolio segment in RJ Bank’s total loan portfolio. “Loans held for sale, net” and “Total loans held for investment, net” in the following table are presented net of unearned income and deferred expenses, which include purchase premiums, purchase discounts and net deferred origination fees and costs.
 
 
March 31, 2020
 
September 30, 2019
$ in millions
 
Balance
 
%
 
Balance
 
%
Loans held for investment:
 
 

 
 

 
 

 
 

C&I loans
 
$
8,316

 
38
%
 
$
8,098

 
38
%
CRE construction loans
 
180

 
1
%
 
185

 
1
%
CRE loans
 
3,830

 
17
%
 
3,652

 
17
%
Tax-exempt loans
 
1,266

 
5
%
 
1,241

 
6
%
Residential mortgage loans
 
4,864

 
22
%
 
4,454

 
21
%
SBL and other
 
3,546

 
16
%
 
3,349

 
16
%
Total loans held for investment
 
22,002

 
 

 
20,979

 
 

Net unearned income and deferred expenses
 
(13
)
 
 

 
(12
)
 
 

Total loans held for investment, net
 
21,989

 
 

 
20,967

 
 

Loans held for sale, net
 
123

 
1
%
 
142

 
1
%
Total loans held for sale and investment
 
22,112

 
100
%
 
21,109

 
100
%
Allowance for loan losses
 
(324
)
 
 

 
(218
)
 
 

Bank loans, net
 
$
21,788

 
 

 
$
20,891

 
 
Loan Purchases and Sales
The following table presents purchases and sales of any loans held for investment by portfolio segment.
$ in millions
 
C&I loans
 
CRE loans
 
Residential mortgage loans
 
Total
Three months ended March 31, 2020
 
 
 
 
 
 
 
 
Purchases
 
$
296

 
$
5

 
$
100

 
$
401

Sales
 
$
—

 
$
—

 
$
—

 
$
—

Six months ended March 31, 2020
 
 
 
 
 
 
 
 
Purchases
 
$
363

 
$
5

 
$
258

 
$
626

Sales
 
$
20

 
$
—

 
$
—

 
$
20

Three months ended March 31, 2019
 
 
 
 
 
 
 
 
Purchases
 
$
428

 
$
25

 
$
46

 
$
499

Sales
 
$
24

 
$
—

 
$
—

 
$
24

Six months ended March 31, 2019
 
 
 
 
 
 
 
 
Purchases
 
$
690

 
$
25

 
$
122

 
$
837

Sales
 
$
93

 
$
—

 
$
—

 
$
93
Analysis of the Payment Status of Loans Held for Investment
The following table presents an analysis of the payment status of loans held for investment. Amounts in the table exclude any net unearned income and deferred expenses.
$ in millions
 
30-89
days and accruing
 
90 days or more and accruing
 
Total past due and accruing
 
Nonaccrual
 
Current and accruing
 
Total loans held for investment
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
C&I loans
 
$
—

 
$
—

 
$
—

 
$
4

 
$
8,312

 
$
8,316

CRE construction loans
 
—

 
—

 
—

 
—

 
180

 
180

CRE loans
 
—

 
—

 
—

 
6

 
3,824

 
3,830

Tax-exempt loans
 
—

 
—

 
—

 
—

 
1,266

 
1,266

Residential mortgage loans:
 
 
 
 
 


 
 
 
 
 


First mortgage loans
 
1

 
—

 
1

 
14

 
4,824

 
4,839

Home equity loans/lines
 
—

 
—

 
—

 
—

 
25

 
25

SBL and other
 
—

 
—

 
—

 
—

 
3,546

 
3,546

Total loans held for investment
 
$
1

 
$
—

 
$
1

 
$
24

 
$
21,977

 
$
22,002

 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
C&I loans
 
$
—

 
$
—

 
$
—

 
$
19

 
$
8,079

 
$
8,098

CRE construction loans
 
—

 
—

 
—

 
—

 
185

 
185

CRE loans
 
—

 
—

 
—

 
8

 
3,644

 
3,652

Tax-exempt loans
 
—

 
—

 
—

 
—

 
1,241

 
1,241

Residential mortgage loans:
 
 
 
 
 
 
 
 
 
 
 

First mortgage loans
 
2

 
—

 
2

 
16

 
4,409

 
4,427

Home equity loans/lines
 
—

 
—

 
—

 
—

 
27

 
27

SBL and other
 
—

 
—

 
—

 
—

 
3,349

 
3,349

Total loans held for investment
 
$
2

 
$
—

 
$
2

 
$
43

 
$
20,934

 
$
20,979
Summary of Impaired Loans
The following table provides a summary of RJ Bank’s impaired loans.
 
 
March 31, 2020
 
September 30, 2019
$ in millions
 
Gross
recorded
investment
 
Unpaid
principal
balance
 
Allowance
for losses
 
Gross
recorded
investment
 
Unpaid
principal
balance
 
Allowance
for losses
Impaired loans with allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
C&I loans
 
$
4

 
$
4

 
$
1

 
$
19

 
$
20

 
$
6

Residential - first mortgage loans
 
8

 
10

 
1

 
11

 
13

 
1

Total
 
12

 
14

 
2

 
30

 
33

 
7

Impaired loans without allowance for loan losses:
 
 
 
 

 
 

 
 

 
 

 
 

CRE loans
 
7

 
12

 
—

 
8

 
13

 
—

Residential - first mortgage loans
 
11

 
17

 
—

 
11

 
17

 
—

Total
 
18

 
29

 
—

 
19

 
30

 
—

Total impaired loans
 
$
30

 
$
43

 
$
2

 
$
49

 
$
63

 
$
7
Average Balance of Impaired Loans and Interest Income Recognized
The average balance of the total impaired loans was as follows.
 
 
Three months ended March 31,
 
Six months ended March 31,
$ in millions
 
2020
 
2019
 
2020
 
2019
C&I loans
 
$
9

 
$
27

 
$
13

 
$
16

CRE loans
 
7

 
3

 
7

 
2

Residential - first mortgage loans
 
20

 
25

 
21

 
26

Total average impaired loan balance
 
$
36

 
$
55

 
$
41

 
$
44
Credit Quality of Held for Investment Loan Portfolio
The following table presents the credit quality of RJ Bank’s held for investment loan portfolio.
$ in millions
 
Pass
 
Special mention
 
Substandard
 
Doubtful
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
C&I loans
 
$
8,045

 
$
142

 
$
129

 
$
—

 
$
8,316

CRE construction loans
 
180

 
—

 
—

 
—

 
180

CRE loans
 
3,745

 
36

 
49

 
—

 
3,830

Tax-exempt loans
 
1,266

 
—

 
—

 
—

 
1,266

Residential mortgage loans:
 
 
 
 
 
 
 
 
 
 
First mortgage loans
 
4,808

 
8

 
23

 
—

 
4,839

Home equity loans/lines
 
25

 
—

 
—

 
—

 
25

SBL and other
 
3,546

 
—

 
—

 
—

 
3,546

Total loans held for investment
 
$
21,615

 
$
186

 
$
201

 
$
—

 
$
22,002

 
 
 
 
 
 
 
 
 
 
 
September 30, 2019
 
 
 
 
 
 
 
 
 
C&I loans
 
$
7,870

 
$
152

 
$
76

 
$
—

 
$
8,098

CRE construction loans
 
185

 
—

 
—

 
—

 
185

CRE loans
 
3,630

 
—

 
22

 
—

 
3,652

Tax-exempt loans
 
1,241

 
—

 
—

 
—

 
1,241

Residential mortgage loans:
 
 
 
 
 
 
 
 
 
 
First mortgage loans
 
4,392

 
10

 
25

 
—

 
4,427

Home equity loans/lines
 
27

 
—

 
—

 
—

 
27

SBL and other
 
3,349

 
—

 
—

 
—

 
3,349

Total loans held for investment
 
$
20,694

 
$
162

 
$
123

 
$
—

 
$
20,979
Changes in the Allowance for Loan Losses
The following table presents changes in the allowance for loan losses of RJ Bank by portfolio segment.
 
 
Loans held for investment
$ in millions
 
C&I loans
 
CRE construction loans
 
CRE loans
 
Tax-exempt loans
 
Residential mortgage loans
 
SBL and other
 
Total
Three months ended March 31, 2020
 
 
 
 

 
 

 
 
 
 

 
 

 
 

Balance at beginning of period
 
$
139

 
$
2

 
$
46

 
$
8

 
$
17

 
$
4

 
$
216

Provision for loan losses
 
59

 
1

 
42

 
3

 
1

 
3

 
109

Net (charge-offs)/recoveries:
 
 

 
 

 
 

 
 
 
 

 
 
 
 

Charge-offs
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Recoveries
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Net (charge-offs)/recoveries
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Foreign exchange translation adjustment
 
(1
)
 
—

 
—

 
—

 
—

 
—

 
(1
)
Balance at end of period
 
$
197

 
$
3

 
$
88

 
$
11

 
$
18

 
$
7

 
$
324

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
139

 
$
3

 
$
46

 
$
9

 
$
16

 
$
5

 
$
218

Provision for loan losses
 
59

 
—

 
42

 
2

 
2

 
2

 
107

Net (charge-offs)/recoveries:
 
 

 
 

 
 

 
 
 
 

 
 

 
 
Charge-offs
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Recoveries
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Net (charge-offs)/recoveries
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Foreign exchange translation adjustment
 
(1
)
 
—

 
—

 
—

 
—

 
—

 
(1
)
Balance at end of period
 
$
197

 
$
3

 
$
88

 
$
11

 
$
18

 
$
7

 
$
324

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
137

 
$
3

 
$
46

 
$
9

 
$
19

 
$
5

 
$
219

Provision/(benefit) for loan losses
 
6

 
—

 
2

 
(1
)
 
(2
)
 
—

 
5

Net (charge-offs)/recoveries:
 
 

 
 

 
 

 
 
 
 
 
 
 
 
Charge-offs
 
(3
)
 
—

 
(3
)
 
—

 
—

 
—

 
(6
)
Recoveries
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Net (charge-offs)/recoveries
 
(3
)
 
—

 
(3
)
 
—

 
—

 
—

 
(6
)
Foreign exchange translation adjustment
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Balance at end of period
 
$
140

 
$
3

 
$
45

 
$
8

 
$
17

 
$
5

 
$
218

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended March 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
123

 
$
3

 
$
47

 
$
9

 
$
17

 
$
4

 
$
203

Provision/(benefit) for loan losses
 
21

 
—

 
1

 
(1
)
 
(1
)
 
1

 
21

Net (charge-offs)/recoveries:
 
 

 
 

 
 

 
 
 
 
 
 
 
 
Charge-offs
 
(3
)
 
—

 
(3
)
 
—

 
—

 
—

 
(6
)
Recoveries
 
—

 
—

 
—

 
—

 
1

 
—

 
1

Net (charge-offs)/recoveries
 
(3
)
 
—

 
(3
)
 
—

 
1

 
—

 
(5
)
Foreign exchange translation adjustment
 
(1
)
 
—

 
—

 
—

 
—

 
—

 
(1
)
Balance at end of period
 
$
140

 
$
3

 
$
45

 
$
8

 
$
17

 
$
5

 
$
218
Recorded Investment and Related Allowance for Loan Losses, by Loan Portfolio Segment
The following table presents, by loan portfolio segment, RJ Bank’s recorded investment (excluding any net unearned income and deferred expenses) and the related allowance for loan losses.
 
 
Loans held for investment
 
 
Allowance for loan losses
 
Recorded investment
$ in millions
 
Individually evaluated for impairment
 
Collectively evaluated for impairment
 
Total
 
Individually evaluated for impairment
 
Collectively evaluated for impairment
 
Total
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
C&I loans
 
$
1

 
$
196

 
$
197

 
$
4

 
$
8,312

 
$
8,316

CRE construction loans
 
—

 
3

 
3

 
—

 
180

 
180

CRE loans
 
—

 
88

 
88

 
6

 
3,824

 
3,830

Tax-exempt loans
 
—

 
11

 
11

 
—

 
1,266

 
1,266

Residential mortgage loans
 
1

 
17

 
18

 
25

 
4,839

 
4,864

SBL and other
 
—

 
7

 
7

 
—

 
3,546

 
3,546

Total
 
$
2

 
$
322

 
$
324

 
$
35

 
$
21,967

 
$
22,002

 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
C&I loans
 
$
6

 
$
133

 
$
139

 
$
19

 
$
8,079

 
$
8,098

CRE construction loans
 
—

 
3

 
3

 
—

 
185

 
185

CRE loans
 
—

 
46

 
46

 
8

 
3,644

 
3,652

Tax-exempt loans
 
—

 
9

 
9

 
—

 
1,241

 
1,241

Residential mortgage loans
 
1

 
15

 
16

 
28

 
4,426

 
4,454

SBL and other
 
—

 
5

 
5

 
—

 
3,349

 
3,349

Total
 
$
7

 
$
211

 
$
218

 
$
55

 
$
20,924

 
$
20,979