REGULATORY CAPITAL REQUIREMENTS

9 Months Ended

Jun. 30, 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 June 30, 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 June 30, 2020:
CET1	$	6,351	24.8	%	$	1,152	4.5	%	$	1,664	6.5	%
Tier 1 capital	$	6,351	24.8	%	$	1,536	6.0	%	$	2,047	8.0	%
Total capital	$	6,661	26.0	%	$	2,047	8.0	%	$	2,559	10.0	%
Tier 1 leverage	$	6,351	14.5	%	$	1,749	4.0	%	$	2,187	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	%

As of June 30, 2020, RJF’s Tier 1 capital ratio was unchanged and our Total capital ratio increased slightly compared to September 30, 2019, due to positive earnings, net of share repurchases and dividends, offset by the impacts of an increase in cash and cash equivalents segregated pursuant to regulations and growth in available-for-sale securities held at RJ Bank. RJF’s Tier 1 leverage ratio at June 30, 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 available-for-sale securities held at RJ Bank, 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 June 30, 2020:
CET1	$	2,247	12.8	%	$	790	4.5	%	$	1,141	6.5	%
Tier 1 capital	$	2,247	12.8	%	$	1,053	6.0	%	$	1,404	8.0	%
Total capital	$	2,468	14.1	%	$	1,404	8.0	%	$	1,755	10.0	%
Tier 1 leverage	$	2,247	7.6	%	$	1,187	4.0	%	$	1,484	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 June 30, 2020 decreased compared to September 30, 2019, due to dividends paid during the period exceeding earnings and growth in assets, primarily available-for-sale securities. RJ Bank’s Tier 1 leverage ratio at June 30, 2020 decreased compared to September 30, 2019, due to the growth in average assets, primarily related to cash, available-for-sale securities 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	June 30, 2020			September 30, 2019
Raymond James & Associates, Inc.:
(Alternative Method elected)
Net capital as a percent of aggregate debit items	46.1		%	39.7		%
Net capital	$	1,183		$	1,056
Less: required net capital	(51)			(53)
Excess net capital	$	1,132		$	1,003

As of June 30, 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.