Bank client receivables are comprised of loans originated or purchased by Raymond James Bank and include C&I loans, REIT loans, tax-exempt loans, commercial and residential real estate loans, and SBL and other loans. These receivables are collateralized by first and, to a lesser extent, second mortgages on residential or other real property, other assets of the borrower, a pledge of revenue, securities or are unsecured. See Note 2 for a discussion of accounting policies related to bank loans.

As of October 1, 2020, we adopted new accounting guidance related to the measurement of credit losses on financial instruments. See Note 2 for further information about this guidance and a discussion of our accounting policies related to our allowance for credit losses. We segregate our loan portfolio into six loan portfolio segments: C&I, CRE, REIT, tax-exempt, residential mortgage, and SBL and other. Upon adoption, we redefined certain of our portfolio segments to align with the new methodology applied in determining the allowance for credit losses. Prior-period loan portfolio segment balances have been revised to conform to the current presentation. Loan balances in the following tables are presented at amortized cost (outstanding principal balance net of unearned income and deferred expenses, which include purchase premiums, purchase discounts and net deferred origination fees and costs), except for certain held for sale loans recorded at fair value. Bank loans

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 Raymond James Bank’s total loan portfolio.


	September 30,
	2021				2020				2019				2018				2017
$ in millions	Balance		%		Balance		%		Balance		%		Balance		%		Balance		%
C&I loans	$	8,440	33	%	$	7,421	34	%	$	8,056	38	%	$	7,741	39	%	$	7,339	43	%
CRE loans	2,872		11	%	2,489		12	%	2,507		12	%	2,309		12	%	1,859		11	%
REIT loans	1,112		5	%	1,210		5	%	1,333		6	%	1,470		8	%	1,361		8	%
Tax-exempt loans	1,321		5	%	1,259		6	%	1,241		6	%	1,227		6	%	1,018		6	%
Residential mortgage loans	5,318		21	%	4,973		23	%	4,479		21	%	3,775		19	%	3,162		18	%
SBL and other	6,106		24	%	4,087		19	%	3,351		16	%	3,035		15	%	2,388		14	%
Total loans held for investment	25,169		99	%	21,439		99	%	20,967		99	%	19,557		99	%	17,127		100	%
Held for sale loans	145		1	%	110		1	%	142		1	%	164		1	%	70		—	%
Total loans held for sale and investment	25,314		100	%	21,549		100	%	21,109		100	%	19,721		100	%	17,197		100	%
Allowance for credit losses	(320)				(354)				(218)				(203)				(190)
Bank loans, net	$	24,994			$	21,195			$	20,891			$	19,518			$	17,007
Accrued interest receivable on bank loans	$	48			$	45			$	53			$	52			$	37

The allowance for credit losses was 1.27% of the held for investment loan portfolio as of September 30, 2021 and was determined using the CECL methodology, which we adopted on October 1, 2020. Prior periods have not been restated and were calculated under the incurred loss methodology, which differs from the CECL methodology in that it was based on historical loss experience and did not include an estimate of credit losses using a reasonable and supportable forecast period.

At September 30, 2021, the FHLB had a blanket lien on Raymond James Bank’s residential mortgage loan portfolio as security for the repayment of certain borrowings. See Note 16 for more information regarding borrowings from the FHLB.

Raymond James Bank originated or purchased $2.15 billion, $1.79 billion and $2.33 billion of loans held for sale during the years ended September 30, 2021, 2020 and 2019, respectively. The majority of these loans were purchases of the guaranteed portions of SBA loans intended for resale in the secondary market as individual SBA loans or as securitized pools of SBA loans. Proceeds from the sale of held for sale loans amounted to $973 million, $776 million and $800 million for the years ended September 30, 2021, 2020 and 2019, respectively. Net gains resulting from such sales were insignificant in each of the years ended September 30, 2021, 2020 and 2019.

The following table presents purchases and sales of loans held for investment by portfolio segment.


$ in millions	C&I loans		CRE loans		Residential mortgage loans		Total
Year ended September 30, 2021
Purchases	$	1,528	$	—	$	524	$	2,052
Sales	$	297	$	—	$	—	$	297
Year ended September 30, 2020
Purchases	$	589	$	5	$	402	$	996
Sales	$	598	$	27	$	2	$	627
Year ended September 30, 2019
Purchases	$	1,046	$	42	$	400	$	1,488
Sales	$	126	$	—	$	—	$	126

Sales in the preceding table represent the recorded investment (i.e., net of charge-offs and discounts or premiums) of loans held for investment that were transferred to loans held for sale and subsequently sold to a third party during the respective period. As more fully described in Note 2, corporate loan sales generally occur as part of our credit management activities.


$ 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
September 30, 2021
C&I loans	$	—	$	—	$	—	$	39	$	—	$	8,401	$	8,440
CRE loans	—		—		—		—		20		2,852		2,872
REIT loans	—		—		—		—		—		1,112		1,112
Tax-exempt loans	—		—		—		—		—		1,321		1,321
Residential mortgage loans	2		—		2		2		13		5,301		5,318
SBL and other	—		—		—		—		—		6,106		6,106
Total loans held for investment	$	2	$	—	$	2	$	41	$	33	$	25,093	$	25,169

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

The preceding table includes $61 million and $15 million at September 30, 2021 and 2020, respectively, of nonaccrual loans which were current pursuant to their contractual terms. The table also includes CRE and residential first mortgage loan TDRs of $12 million and $13 million, respectively, at September 30, 2021, and $6 million and $15 million, respectively, at September 30, 2020.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the underlying collateral. At September 30, 2021, we had $20 million of collateral-dependent CRE loans, which were fully collateralized by retail and industrial real estate, and $5 million of collateral-dependent residential loans, which were fully collateralized by single family homes. Collateral-dependent loans do not include loans to borrowers who have been granted forbearance as result of the COVID-19 pandemic or loans for which the borrower had requested a loan modification, where the request had been initiated but had not been approved or completed as of September 30, 2021. Such loans may be considered collateral-dependent after the forbearance period expires. The recorded investment in mortgage loans secured by one-to-four family residential properties for which formal foreclosure proceedings were in process was $4 million and $6 million at September 30, 2021 and 2020, respectively.

The credit quality of our bank loan portfolio is summarized monthly by management using internal risk ratings, which align with the standard asset classification system utilized by bank regulators. These classifications are divided into three groups: Not Classified (Pass), Special Mention, and Classified or Adverse Rating (Substandard, Doubtful and Loss). These terms are defined as follows:

Pass – Loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less costs to acquire and sell, of any underlying collateral in a timely manner.

Special Mention – Loans which have potential weaknesses that deserve management’s close attention. These loans are not adversely classified and do not expose us to sufficient risk to warrant an adverse classification.

Substandard – Loans which are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans with this classification are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans which have all the weaknesses inherent in loans classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently-known facts, conditions and values.

Loss – Loans which are considered by management to be uncollectible and of such little value that their continuance on our books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted. We do not have any loan balances within this classification because, in accordance with our accounting policy, loans, or a portion thereof considered to be uncollectible are charged-off prior to the assignment of this classification.


	September 30, 2021														September 30, 2020
	Loans by origination year
$ in millions	2021		2020		2019		2018		2017		Prior		Revolving loans		Total		Total
C&I loans
Risk rating:
Pass	$	999	$	1,273	$	1,180	$	1,408	$	935	$	1,633	$	739	$	8,167	$	6,939
Special mention	—		—		41		—		26		54		1		122		235
Substandard	—		—		24		84		—		28		—		136		247
Doubtful	—		—		15		—		—		—		—		15		—
Total C&I loans	$	999	$	1,273	$	1,260	$	1,492	$	961	$	1,715	$	740	$	8,440	$	7,421


CRE loans
Risk rating:
Pass	$	533	$	459	$	442	$	652	$	223	$	174	$	62	$	2,545	$	2,141
Special mention	—		45		58		36		—		—		—		139		213
Substandard	—		—		32		98		8		50		—		188		135
Doubtful	—		—		—		—		—		—		—		—		—
Total CRE loans	$	533	$	504	$	532	$	786	$	231	$	224	$	62	$	2,872	$	2,489


REIT loans
Risk rating:
Pass	$	235	$	95	$	75	$	60	$	46	$	167	$	237	$	915	$	1,138
Special mention	—		—		13		11		33		106		6		169		43
Substandard	—		—		21		—		4		—		3		28		29
Doubtful	—		—		—		—		—		—		—		—		—
Total REIT loans	$	235	$	95	$	109	$	71	$	83	$	273	$	246	$	1,112	$	1,210


Tax-exempt loans
Risk rating:
Pass	$	158	$	57	$	124	$	204	$	272	$	506	$	—	$	1,321	$	1,259
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total tax-exempt loans	$	158	$	57	$	124	$	204	$	272	$	506	$	—	$	1,321	$	1,259


Residential mortgage loans
Risk rating:
Pass	$	1,861	$	1,266	$	640	$	386	$	451	$	666	$	20	$	5,290	$	4,944
Special mention	—		—		—		—		—		5		—		5		6
Substandard	—		—		—		1		2		20		—		23		23
Doubtful	—		—		—		—		—		—		—		—		—
Total residential mortgage loans	$	1,861	$	1,266	$	640	$	387	$	453	$	691	$	20	$	5,318	$	4,973


SBL and other
Risk rating:
Pass	$	3	$	45	$	12	$	—	$	—	$	—	$	6,046	$	6,106	$	4,087
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total SBL and other	$	3	$	45	$	12	$	—	$	—	$	—	$	6,046	$	6,106	$	4,087

We also monitor the credit quality of the residential mortgage loan portfolio utilizing FICO scores and LTV ratios. A FICO score measures a borrower’s creditworthiness by considering factors such as payment and credit history. LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan.


$ in millions	September 30, 2021		September 30, 2020
FICO score:
Below 600	$	67	$	67
600 - 699	416		363
700 - 799	3,772		3,463
800 +	1,058		1,076
FICO score not available	5		4
Total	$	5,318	$	4,973

LTV ratio:
Below 80%	$	4,123	$	3,852
80%+	1,195		1,121
Total	$	5,318	$	4,973


$ in millions	C&I loans		CRE loans		REIT loans		Tax-exempt loans		Residential mortgage loans		SBL and other		Total
Year ended September 30, 2021
Balance at beginning of year	$	200	$	81	$	36	$	14	$	18	$	5	$	354
Impact of CECL adoption	19		(11)		(9)		(12)		24		(2)		9
Provision/(benefit) for credit losses	(25)		5		(5)		—		(8)		1		(32)
Net (charge-offs)/recoveries:
Charge-offs	(4)		(10)		—		—		—		—		(14)
Recoveries	—		—		—		—		1		—		1
Net (charge-offs)/recoveries	(4)		(10)		—		—		1		—		(13)
Foreign exchange translation adjustment	1		1		—		—		—		—		2
Balance at end of year	$	191	$	66	$	22	$	2	$	35	$	4	$	320

Year ended September 30, 2020
Balance at beginning of year	$	139	$	34	$	15	$	9	$	16	$	5	$	218
Provision/(benefit) for credit losses	157		48		23		5		—		—		233
Net (charge-offs)/recoveries:
Charge-offs	(96)		(2)		(2)		—		—		—		(100)
Recoveries	—		—		—		—		2		—		2
Net (charge-offs)/recoveries	(96)		(2)		(2)		—		2		—		(98)
Foreign exchange translation adjustment	—		1		—		—		—		—		1
Balance at end of year	$	200	$	81	$	36	$	14	$	18	$	5	$	354

The allowance for credit losses on held for investment bank loans decreased $43 million to $320 million since the adoption of CECL on October 1, 2020, largely attributable to improved forecasts for certain macroeconomic inputs to our CECL model since our adoption date, including improved outlooks on unemployment, gross domestic product and property price indices, as well as improved credit ratings within our corporate loan portfolio, partially offset by provisions for credit losses related to loan growth.

The allowance for credit losses on unfunded lending commitments, which is included in “Other payables” on our Consolidated Statements of Financial Condition, was $13 million and $12 million at September 30, 2021 and 2020, respectively. The increase in the allowance for credit losses on unfunded lending commitments as of September 30, 2021 compared with September 30, 2020 was due to the adoption impact of CECL of $8 million, partially offset by improved forecasts for certain macroeconomic inputs to our CECL model and lower unfunded exposure in the CRE portfolio.

Loans to financial advisors are primarily comprised of loans originated as a part of our recruiting activities. See Note 2 for a discussion of our accounting policies related to loans to financial advisors and the related allowance for credit losses. The following table presents the balances for our loans to financial advisors and the related accrued interest receivable.


	September 30,
$ in millions	2021		2020
Currently affiliated with the firm (1)	$	1,074	$	1,001
No longer affiliated with the firm (2)	10		15
Total loans to financial advisors	1,084		1,016
Allowance for credit losses	(27)		(4)
Loans to financial advisors, net	$	1,057	$	1,012
Accrued interest receivable on loans to financial advisors	$	4	$	4

The allowance for credit losses was 2.49% of the loan portfolio as of September 30, 2021 and was determined using the CECL methodology, which we adopted on October 1, 2020. The allowance for credit losses as of September 30, 2020 was determined under the incurred loss methodology and has not been restated. The increase in the allowance from September 30, 2020 to September 30, 2021 was primarily due to the impact of the October 1, 2020 CECL adoption, which resulted in an increase in our allowance for credit losses of $25 million. See Note 2 for further information on the CECL adoption.