rjf-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
			THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
			THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from						to

Commission File Number: 1-9109

RAYMOND JAMES FINANCIAL, INC.

(Exact name of registrant as specified in its charter)


Florida						59-1517485
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

880 Carillon Parkway, St. Petersburg, Florida 33716

(Address of principal executive offices) (Zip Code)

(727) 567-1000

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	RJF	New York Stock Exchange
Depositary Shares, Each Representing a 1/40th Interest in a Share of 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock	RJF PrB	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

208,841,543 shares of common stock as of August 2, 2023

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES


INDEX
		PAGE
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Financial Condition (Unaudited)	3
	Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)	4
	Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)
	Note 1 - Organization and basis of presentation	8
	Note 2 - Update of significant accounting policies	8

	Note 3 - Fair value	9
	Note 4 - Available-for-sale securities	15
	Note 5 - Derivative assets and derivative liabilities	18
	Note 6 - Collateralized agreements and financings	20
	Note 7 - Bank loans, net	23
	Note 8 - Loans to financial advisors, net	30
	Note 9 - Variable interest entities	31
	Note 10 - Goodwill and identifiable intangible assets, net	32
	Note 11 - Other assets	32
	Note 12 - Leases	33
	Note 13 - Bank deposits	33
	Note 14 - Other borrowings	34


	Note 15 - Income taxes	35
	Note 16 - Commitments, contingencies and guarantees	35
	Note 17 - Shareholders’ equity	38
	Note 18 - Revenues	41
	Note 19 - Interest income and interest expense	45
	Note 20 - Share-based compensation	45
	Note 21 - Regulatory capital requirements	46
	Note 22 - Earnings per share	49
	Note 23 - Segment information	50
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	96
Item 4.	Controls and Procedures	96
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	96
Item 1A.	Risk Factors	96
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	97
Item 3.	Defaults Upon Senior Securities	97
Item 4.	Mine Safety Disclosures	97
Item 5.	Other Information	97
Item 6.	Exhibits	98
	Signatures	99

Index

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)


$ in millions, except per share amounts	June 30, 2023		September 30, 2022
Assets:
Cash and cash equivalents	$	8,375	$	6,178
Assets segregated for regulatory purposes and restricted cash	3,839		8,481
Collateralized agreements	410		704
Financial instruments, at fair value:
Trading assets ($980 and $1,188 pledged as collateral)	1,156		1,270
Available-for-sale securities ($23 and $74 pledged as collateral)	9,566		9,885
Derivative assets	229		188
Other investments ($6 and $14 pledged as collateral)	306		292
Brokerage client receivables, net	2,364		2,934
Other receivables, net	1,612		1,615
Bank loans, net	43,345		43,239
Loans to financial advisors, net	1,122		1,152
Deferred income taxes, net	612		630
Goodwill and identifiable intangible assets, net	1,928		1,931
Other assets	2,769		2,452
Total assets	$	77,633	$	80,951

Liabilities and shareholders’ equity:
Bank deposits	$	53,768	$	51,357
Collateralized financings	181		466
Financial instrument liabilities, at fair value:
Trading liabilities	768		836
Derivative liabilities	393		530
Brokerage client payables	6,035		11,446
Accrued compensation, commissions and benefits	1,700		1,787
Other payables	1,727		1,768
Other borrowings	1,100		1,291
Senior notes payable	2,039		2,038
Total liabilities	67,711		71,519
Commitments and contingencies (see Note 16)
Shareholders’ equity
Preferred stock	79		120
Common stock; $.01 par value; 650,000,000 shares authorized; 248,561,711 shares issued and 208,498,326 shares outstanding as of June 30, 2023; 248,018,564 shares issued and 215,122,523 shares outstanding as of September 30, 2022	2		2
Additional paid-in capital	3,099		2,987
Retained earnings	9,870		8,843
Treasury stock, at cost; 40,063,385 and 32,896,041 common shares as of June 30, 2023 and September 30, 2022, respectively	(2,259)		(1,512)
Accumulated other comprehensive loss	(842)		(982)
Total equity attributable to Raymond James Financial, Inc.	9,949		9,458
Noncontrolling interests	(27)		(26)
Total shareholders’ equity	9,922		9,432
Total liabilities and shareholders’ equity	$	77,633	$	80,951

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Index

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)


	Three months ended June 30,				Nine months ended June 30,
in millions, except per share amounts	2023		2022		2023		2022
Revenues:
Asset management and related administrative fees	$	1,373	$	1,427	$	3,917	$	4,273
Brokerage revenues:
Securities commissions	356		385		1,077		1,232
Principal transactions	105		128		364		403
Total brokerage revenues	461		513		1,441		1,635
Account and service fees	264		211		811		567
Investment banking	151		223		446		883
Interest income	987		374		2,729		841
Other	57		30		133		108
Total revenues	3,293		2,778		9,477		8,307
Interest expense	(386)		(60)		(911)		(135)
Net revenues	2,907		2,718		8,566		8,172
Non-interest expenses:
Compensation, commissions and benefits	1,851		1,834		5,407		5,570
Non-compensation expenses:
Communications and information processing	149		129		441		368
Occupancy and equipment	68		65		202		186
Business development	66		58		176		127
Investment sub-advisory fees	40		38		110		116
Professional fees	35		38		105		93
Bank loan provision for credit losses	54		56		96		66


Other	158		85		334		240
Total non-compensation expenses	570		469		1,464		1,196
Total non-interest expenses	2,421		2,303		6,871		6,766
Pre-tax income	486		415		1,695		1,406
Provision for income taxes	117		114		390		336
Net income	369		301		1,305		1,070
Preferred stock dividends	—		2		4		2
Net income available to common shareholders	$	369	$	299	$	1,301	$	1,068

Earnings per common share – basic	$	1.75	$	1.41	$	6.09	$	5.12
Earnings per common share – diluted	$	1.71	$	1.38	$	5.95	$	4.99
Weighted-average common shares outstanding – basic	210.1		210.7		213.0		208.1
Weighted-average common and common equivalent shares outstanding – diluted	214.8		215.7		218.0		213.5

Net income	$	369	$	301	$	1,305	$	1,070
Other comprehensive income/(loss), net of tax:
Available-for-sale securities	(76)		(157)		68		(532)
Currency translations, net of the impact of net investment hedges	20		(40)		73		(51)
Cash flow hedges	12		10		(1)		48
Total other comprehensive income/(loss), net of tax	(44)		(187)		140		(535)
Total comprehensive income	$	325	$	114	$	1,445	$	535

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Index

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


	Three months ended June 30,				Nine months ended June 30,
$ in millions, except per share amounts	2023		2022		2023		2022
Preferred stock:
Balance beginning of period	$	120	$	—	$	120	$	—

Preferred stock issued for TriState Capital Holdings, Inc. (“TriState Capital”) acquisition	—		120		—		120
Redemption of preferred stock	(41)		—		(41)		—
Balance end of period	79		120		79		120

Common stock, par value $.01 per share:
Balance beginning of period	2		2		2		2
Share issuances	—		—		—		—
Balance end of period	2		2		2		2

Additional paid-in capital:
Balance beginning of period	3,035		2,093		2,987		2,088
Common stock issued for TriState Capital acquisition	—		778		—		778
Restricted stock awards issued for TriState Capital acquisition	—		28		—		28
Employee stock purchases	13		13		35		35
Distributions due to vesting of restricted stock units and exercise of stock options, net of forfeitures	—		(3)		(110)		(125)
Share-based compensation amortization	51		39		187		144

Balance end of period	3,099		2,948		3,099		2,948

Retained earnings:
Balance beginning of period	9,590		8,256		8,843		7,633
Net income	369		301		1,305		1,070
Common and preferred stock cash dividends declared (see Note 17)	(89)		(79)		(278)		(225)



Balance end of period	9,870		8,478		9,870		8,478

Treasury stock:
Balance beginning of period	(1,954)		(1,360)		(1,512)		(1,437)
Purchases/surrenders	(305)		(100)		(810)		(110)
Reissuances due to vesting of restricted stock units and exercise of stock options	—		3		63		90
Balance end of period	(2,259)		(1,457)		(2,259)		(1,457)

Accumulated other comprehensive loss:
Balance beginning of period	(798)		(389)		(982)		(41)
Other comprehensive income/(loss), net of tax	(44)		(187)		140		(535)

Balance end of period	(842)		(576)		(842)		(576)
Total equity attributable to Raymond James Financial, Inc.	$	9,949	$	9,515	$	9,949	$	9,515

Noncontrolling interests:
Balance beginning of period	$	(26)	$	7	$