REGULATORY CAPITAL REQUIREMENTS

3 Months Ended

Dec. 31, 2020

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

RJF, as a bank holding company and financial holding company, RJ Bank, N.A., Raymond James Trust, N.A. (“RJ Trust”) and our broker-dealer subsidiaries 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 incorporates quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under the applicable regulatory guidelines. RJF’s and RJ Bank, N.A.’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, N.A. 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, N.A. 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 December 31, 2020, both RJF’s and RJ Bank, N.A.’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 2020 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 December 31, 2020:
CET1	$	6,538	23.4	%	$	1,255	4.5	%	$	1,813	6.5	%
Tier 1 capital	$	6,538	23.4	%	$	1,674	6.0	%	$	2,232	8.0	%
Total capital	$	6,860	24.6	%	$	2,232	8.0	%	$	2,790	10.0	%
Tier 1 leverage	$	6,538	12.9	%	$	2,028	4.0	%	$	2,535	5.0	%

RJF as of September 30, 2020:
CET1	$	6,490	24.2	%	$	1,208	4.5	%	$	1,744	6.5	%
Tier 1 capital	$	6,490	24.2	%	$	1,610	6.0	%	$	2,147	8.0	%
Total capital	$	6,804	25.4	%	$	2,147	8.0	%	$	2,684	10.0	%
Tier 1 leverage	$	6,490	14.2	%	$	1,824	4.0	%	$	2,280	5.0	%

As of December 31, 2020 RJF’s Tier 1 and Total capital ratios declined compared to September 30, 2020, resulting from an increase in goodwill and intangible assets arising from the NWPS acquisition and an increase in risk-weighted assets, partially offset by an increase in equity due to positive earnings, net of dividends. The increase in risk-weighted assets was driven by increases in our loan portfolio and market risk-equivalent assets.

RJF’s Tier 1 leverage ratio at December 31, 2020 decreased compared to September 30, 2020 due to increased average assets, driven by higher assets segregated pursuant to regulations due to an increase in client cash in the Client Interest Program (“CIP”), as well as growth in available-for-sale securities and loans.

To meet the requirements for capital adequacy or to be categorized as “well-capitalized,” RJ Bank, N.A. 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, N.A. as of December 31, 2020:
CET1	$	2,340	13.1	%	$	803	4.5	%	$	1,160	6.5	%
Tier 1 capital	$	2,340	13.1	%	$	1,071	6.0	%	$	1,428	8.0	%
Total capital	$	2,565	14.4	%	$	1,428	8.0	%	$	1,784	10.0	%
Tier 1 leverage	$	2,340	7.5	%	$	1,251	4.0	%	$	1,563	5.0	%

RJ Bank, N.A. as of September 30, 2020:
CET1	$	2,279	13.0	%	$	788	4.5	%	$	1,138	6.5	%
Tier 1 capital	$	2,279	13.0	%	$	1,051	6.0	%	$	1,401	8.0	%
Total capital	$	2,500	14.3	%	$	1,401	8.0	%	$	1,751	10.0	%
Tier 1 leverage	$	2,279	7.7	%	$	1,183	4.0	%	$	1,479	5.0	%

RJ Bank, N.A.’s Tier 1 capital and Total capital ratios at December 31, 2020 increased compared to September 30, 2020, due to positive earnings, partially offset by growth in loans and lending commitments and available-for-sale securities. RJ Bank, N.A.’s Tier 1 leverage ratio at December 31, 2020 decreased compared to September 30, 2020, due to increased average assets, driven by growth in available-for-sale securities and loans.

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	December 31, 2020			September 30, 2020
Raymond James & Associates, Inc.:
(Alternative Method elected)
Net capital as a percent of aggregate debit items	59.9		%	48.0		%
Net capital	$	1,498		$	1,245
Less: required net capital	(50)			(52)
Excess net capital	$	1,448		$	1,193

As of December 31, 2020, Raymond James Financial Services, Inc. (“RJFS”), Raymond James Ltd. (“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.