REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Sep. 30, 2021

Regulatory Capital Requirement [Abstract]

RJF, as a bank holding company and financial holding company, Raymond James Bank, our broker-dealer subsidiaries and our trust 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 under the Bank Holding Company Act of 1956, as amended (the “BHC Act”) that has made an election to be a financial holding company, RJF is subject to supervision, examination and regulation by the Fed. We are subject to the Fed’s capital rules which establish an integrated regulatory capital framework and implement, in the U.S., the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act. We apply the standardized approach for calculating risk-weighted assets and are also subject to the market risk provisions of the Fed’s capital rules (“market risk rule”).

Under these rules, minimum requirements are established for both the quantity and quality of capital held by banking organizations. RJF and Raymond James Bank are required to maintain minimum ratios of common equity tier 1 (“CET1”), tier 1 capital and total capital to risk-weighted assets, as well as minimum leverage ratios (defined as tier 1 capital divided by adjusted average assets). These capital ratios incorporate quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under the regulatory capital rules and are subject to qualitative judgments by the regulators about components, risk-weightings, and other factors. RJF and Raymond James Bank each calculate these ratios 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 September 30, 2021, both RJF’s and Raymond James Bank’s capital levels exceeded the capital conservation buffer requirement and were each categorized as “well-capitalized.”

To meet requirements for capital adequacy 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 September 30, 2021:
CET1	$	7,428	25.0	%	$	1,337	4.5	%	$	1,932	6.5	%
Tier 1 capital	$	7,428	25.0	%	$	1,783	6.0	%	$	2,377	8.0	%
Total capital	$	7,780	26.2	%	$	2,377	8.0	%	$	2,972	10.0	%
Tier 1 leverage	$	7,428	12.6	%	$	2,363	4.0	%	$	2,954	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 September 30, 2021, RJF’s regulatory capital increase was driven by an increase in equity, due to positive earnings net of dividends and share repurchases, partially offset by an increase in goodwill and identifiable intangible assets arising from our fiscal 2021 acquisitions. See Note 3 for additional information regarding our acquisitions. RJF’s Tier 1 and Total capital ratios increased compared to September 30, 2020, resulting from the increase in regulatory capital, partially offset by an increase in risk-weighted assets. The increase in risk-weighted assets was driven by increases in our loan portfolio, assets segregated for regulatory purposes and restricted cash and available-for-sale securities. RJF’s Tier 1 leverage ratio at September 30, 2021 decreased compared to September 30, 2020, due to increased average assets, driven by higher assets segregated for regulatory purposes and restricted cash due to an increase in client cash in the Client Interest Program (“CIP”), as well as growth in loans and available-for-sale securities. The increase in average assets was partially offset by the increase in regulatory capital.

To meet the requirements for capital adequacy or to be categorized as “well-capitalized,” Raymond James 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
Raymond James Bank as of September 30, 2021:
CET1	$	2,626	13.4	%	$	883	4.5	%	$	1,275	6.5	%
Tier 1 capital	$	2,626	13.4	%	$	1,177	6.0	%	$	1,569	8.0	%
Total capital	$	2,873	14.6	%	$	1,569	8.0	%	$	1,962	10.0	%
Tier 1 leverage	$	2,626	7.4	%	$	1,411	4.0	%	$	1,763	5.0	%

Raymond James Bank 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	%

As of September 30, 2021, Raymond James Bank’s Tier 1 and Total capital ratios increased compared to September 30, 2020 due to positive earnings, partially offset by higher risk-weighted assets, primarily resulting from increases in our loan portfolio and available-for-sale securities. Raymond James Bank’s Tier 1 leverage ratio at September 30, 2021 decreased compared to September 30, 2020, due to increased average assets, driven by the growth in loans and available-for-sale securities.

Our intention is to maintain Raymond James Bank’s “well-capitalized” status. In the unlikely event that Raymond James Bank failed to maintain its “well-capitalized” status, the consequences could include a requirement to obtain a waiver from the FDIC prior to acceptance, renewal, or rollover of brokered deposits and result in higher FDIC premiums, but would not significantly impact our operations.

Raymond James Bank may pay dividends to RJF without prior approval of its regulator as long as the dividend does not exceed the sum of Raymond James Bank’s current calendar year and the previous two calendar years’ retained net income, and

Raymond James Bank maintains its targeted regulatory capital ratios. Dividends from Raymond James Bank may be limited to the extent that capital is needed to support its balance sheet growth.

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. As a member firm of the Financial Industry Regulatory Authority (“FINRA”), RJ&A is subject to FINRA’s capital requirements, which are substantially the same as Rule 15c3-1. Rule 15c3-1 provides for an “alternative net capital requirement,” which RJ&A has elected. Regulations require that minimum net capital, as defined, be equal to the greater of $1.5 million or 2% of aggregate debit items arising from client balances. FINRA may impose certain restrictions, such as restricting withdrawals of equity capital, if a member firm were to fall below a certain threshold or fail to meet minimum net capital requirements. As of September 30, 2021, RJ&A had excess net capital available to remit dividends to RJF, some of which may be remitted without prior regulatory approval and the remainder may be remitted in conformity with all required regulatory rules or approvals. The following table presents the net capital position of RJ&A.


	September 30,
$ in millions	2021			2020

Raymond James & Associates, Inc.:
(Alternative Method elected)
Net capital as a percent of aggregate debit items	72.1		%	48.0		%
Net capital	$	2,035		$	1,245
Less: required net capital	(56)			(52)
Excess net capital	$	1,979		$	1,193

As of September 30, 2021, all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.

RJF expects to continue paying cash dividends. However, the payment and rate of dividends on our common stock are subject to several factors including our operating results, financial and regulatory requirements or restrictions, and the availability of funds from our subsidiaries, including our broker-dealer and bank subsidiaries, which may also be subject to restrictions under regulatory capital rules. The availability of funds from subsidiaries may also be subject to restrictions contained in loan covenants of certain broker-dealer loan agreements and restrictions by bank regulators on dividends to the parent from Raymond James Bank.