BANK LOANS, NET (Tables)

6 Months Ended

Mar. 31, 2021

Schedule of Accounts, Notes, Loans and Financing Receivable

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.


	March 31, 2021				September 30, 2020
$ in millions	Balance		%		Balance		%
C&I loans	$	7,816	34	%	$	7,421	34	%
CRE loans	2,710		12	%	2,489		12	%
REIT loans	1,380		6	%	1,210		5	%
Tax-exempt loans	1,223		5	%	1,259		6	%
Residential mortgage loans	5,001		21	%	4,973		23	%
SBL and other	4,891		21	%	4,087		19	%
Total loans held for investment	23,021		99	%	21,439		99	%
Held for sale loans	203		1	%	110		1	%
Total loans held for sale and investment	23,224		100	%	21,549		100	%
Allowance for credit losses	(345)				(354)
Bank loans, net	$	22,879			$	21,195
Accrued interest receivable on bank loans	$	46			$	45

The following table presents the balances for our loans to financial advisors and the related accrued interest receivable.


$ in millions	March 31, 2021		September 30, 2020
Currently affiliated with the firm (1)	$	1,006	$	1,001
No longer affiliated with the firm (2)	10		15
Total loans to financial advisors	1,016		1,016
Allowance for credit losses	(28)		(4)
Loans to financial advisors, net	$	988	$	1,012
Accrued interest receivable on loans to financial advisors	$	4	$	4

(1) These loans were predominately current.

(2) These loans were predominately past due for a period of 180 days or more and on nonaccrual status.

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, 2021
Purchases	$	538	$	—	$	114	$	652
Sales	$	95	$	—	$	—	$	95
Six months ended March 31, 2021
Purchases	$	660	$	—	$	160	$	820
Sales	$	100	$	—	$	—	$	100
Three months ended March 31, 2020
Purchases	$	296	$	5	$	100	$	401
Sales	$	—	$	—	$	—	$	—
Six months ended March 31, 2020
Purchases	$	396	$	5	$	258	$	659
Sales	$	20	$	—	$	—	$	20

Analysis of the Payment Status of Loans Held for Investment

The following table presents information on delinquency status of our loans held for investment.


$ in millions	30-89 days and accruing		90 days or more and accruing		Total past due and accruing		Nonaccrual with allowance		Nonaccrual with no allowance		Current and accruing		Total loans held for investment
March 31, 2021
C&I loans	$	—	$	—	$	—	$	—	$	—	$	7,816	$	7,816
CRE loans	—		—		—		—		13		2,697		2,710
REIT loans	—		—		—		—		—		1,380		1,380
Tax-exempt loans	—		—		—		—		—		1,223		1,223
Residential mortgage loans	1		—		1		14		4		4,982		5,001
SBL and other	—		—		—		—		—		4,891		4,891
Total loans held for investment	$	1	$	—	$	1	$	14	$	17	$	22,989	$	23,021

September 30, 2020
C&I loans	$	—	$	—	$	—	$	2	$	—	$	7,419	$	7,421
CRE loans	—		—		—		—		14		2,475		2,489
REIT loans	—		—		—		—		—		1,210		1,210
Tax-exempt loans	—		—		—		—		—		1,259		1,259
Residential mortgage loans	—		—		—		3		11		4,959		4,973
SBL and other	—		—		—		—		—		4,087		4,087
Total loans held for investment	$	—	$	—	$	—	$	5	$	25	$	21,409	$	21,439

Credit Quality of Held for Investment Loan Portfolio

The following tables present RJ Bank’s held for investment loan portfolio by year of origination and credit quality indicator as of March 31, 2021.


$ in millions	2021		2020		2019		2018		2017		Prior		Revolving loans		Total
C&I loans
Risk rating:
Pass	$	312	$	1,259	$	1,206	$	1,404	$	1,043	$	1,590	$	649	$	7,463
Special mention	—		—		43		103		—		54		2		202
Substandard	—		—		39		84		—		28		—		151
Doubtful	—		—		—		—		—		—		—		—
Total C&I loans	$	312	$	1,259	$	1,288	$	1,591	$	1,043	$	1,672	$	651	$	7,816



CRE loans
Risk rating:
Pass	$	194	$	435	$	572	$	645	$	226	$	209	$	61	$	2,342
Special mention	—		45		86		49		—		—		—		180
Substandard	—		—		32		86		8		62		—		188
Doubtful	—		—		—		—		—		—		—		—
Total CRE loans	$	194	$	480	$	690	$	780	$	234	$	271	$	61	$	2,710



REIT loans
Risk rating:
Pass	$	171	$	123	$	115	$	87	$	50	$	220	$	364	$	1,130
Special mention	—		—		28		11		39		124		21		223
Substandard	—		—		21		—		4		—		2		27
Doubtful	—		—		—		—		—		—		—		—
Total REIT loans	$	171	$	123	$	164	$	98	$	93	$	344	$	387	$	1,380



Tax-exempt loans
Risk rating:
Pass	$	9	$	59	$	123	$	209	$	276	$	547	$	—	$	1,223
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total tax-exempt loans	$	9	$	59	$	123	$	209	$	276	$	547	$	—	$	1,223



Residential mortgage loans
Risk rating:
Pass	$	836	$	1,459	$	788	$	499	$	556	$	815	$	18	$	4,971
Special mention	—		—		—		—		—		5		—		5
Substandard	—		—		—		1		2		22		—		25
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage loans	$	836	$	1,459	$	788	$	500	$	558	$	842	$	18	$	5,001



SBL and other
Risk rating:
Pass	$	6	$	45	$	12	$	—	$	—	$	—	$	4,828	$	4,891
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total SBL and other	$	6	$	45	$	12	$	—	$	—	$	—	$	4,828	$	4,891

The following table presents the held for investment residential mortgage loan portfolio by FICO score and by LTV ratio at origination.


$ in millions	March 31, 2021		September 30, 2020
FICO score:
Below 600	$	67	$	67
600 - 699	398		363
700 - 799	3,496		3,463
800 +	1,035		1,076
FICO score not available	5		4
Total	$	5,001	$	4,973

LTV ratio:
Below 80%	$	3,901	$	3,852
80%+	1,100		1,121
Total	$	5,001	$	4,973

Changes in the Allowance for Loan Losses

The following table presents changes in the allowance for credit losses on held for investment bank loans by portfolio segment.


$ in millions	C&I loans		CRE loans		REIT loans		Tax-exempt loans		Residential mortgage loans		SBL and other		Total
Three months ended March 31, 2021
Balance at beginning of period	$	198	$	112	$	30	$	2	$	33	$	3	$	378

Provision/(benefit) for credit losses	7		(39)		6		—		(7)		1		(32)
Net (charge-offs)/recoveries:
Charge-offs	(2)		—		—		—		—		—		(2)
Recoveries	—		—		—		—		—		—		—
Net (charge-offs)/recoveries	(2)		—		—		—		—		—		(2)
Foreign exchange translation adjustment	—		1		—		—		—		—		1
Balance at end of period	$	203	$	74	$	36	$	2	$	26	$	4	$	345

Six months ended March 31, 2021
Balance at beginning of period	$	200	$	81	$	36	$	14	$	18	$	5	$	354
Impact of CECL adoption	19		(11)		(9)		(12)		24		(2)		9
Provision/(benefit) for credit losses	(15)		3		9		—		(16)		1		(18)
Net (charge-offs)/recoveries:
Charge-offs	(2)		—		—		—		—		—		(2)
Recoveries	—		—		—		—		—		—		—
Net (charge-offs)/recoveries	(2)		—		—		—		—		—		(2)
Foreign exchange translation adjustment	1		1		—		—		—		—		2
Balance at end of period	$	203	$	74	$	36	$	2	$	26	$	4	$	345

Three months ended March 31, 2020
Balance at beginning of period	$	139	$	36	$	12	$	8	$	17	$	4	$	216
Provision/(benefit) for credit losses	58		18		26		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	$	196	$	54	$	38	$	11	$	18	$	7	$	324

Six months ended March 31, 2020
Balance at beginning of period	$	139	$	34	$	15	$	9	$	16	$	5	$	218
Provision/(benefit) for credit losses	58		20		23		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	$	196	$	54	$	38	$	11	$	18	$	7	$	324