Raymond James Bank

This year was the most successful in Raymond James Bank’s nearly 25-year history, as we generated record net revenues and pre-tax income, resulting in return on equity of 15.7%.

We attribute much of this year’s success, as well as our longterm performance, to our unique business model, wherein a portion of the firm’s Private Client Group clients’ cash balances serves as the funding for the bank’s loan portfolio, which grew by 12% in 2017 to a record $17 billion.

Steven M. Raney
Steven M. Raney, President and CEO, Raymond James Bank

This loan portfolio serves as a strong connecting point for multiple businesses within Raymond James, as well as a source of cross-border cooperation. Approximately 70% of all lending is to corporate and institutional clients, many of whom have relationships with our Capital Markets business, and close to 10% of the loan book is in Canada.

However, 2017 results are largely attributable to a continued strong partnership with the Private Client Group (PCG). For example, the addition of Alex. Brown advisors was an impetus to develop a Private Wealth Mortgage channel for the highnet- worth clients of all PCG clients. This new “white-glove” experience was responsible for almost half of the record $981 million in new residential mortgages for the year, and should be an ongoing source of growth as we proactively promote it to more advisors and their qualified clients.

Similarly, Alex. Brown advisors and the many other advisors who joined the firm from other “bank-owned” brokerage companies in recent years are well-accustomed to offering securities-based lending (SBL) and cash management solutions as services to their clients. As a result of acquisition and recruiting activity, as well as investments in our platform and ongoing education of advisors, we reached a record $2.4 billion in SBL balances in 2017, and the number of new accounts with a Capital Access cash management feature that provides debit card, checkwriting, online bill pay and mobile banking capabilities increased almost 40% year-over-year.

Financial Advisor Penetration for Mortgage & SBL 5-Year Trend

Finally, while our prudent underwriting approach keeps our overall risk profile highly conservative, an overall trend toward improving credit quality still resulted in a decrease in criticized loans, as well as reduced loan loss provision expenses for the year.

As we look ahead to the coming year and beyond, we see significant opportunity to enhance existing solutions and expand the services we offer, while also continuing to benefit from higher short-term interest rates. Even as we do so, neither our intentional integration with Raymond James’ other businesses nor our conservative riskmanagement approach will change. We are confident this will translate into Raymond James Bank continuing to be a reliable and beneficial contributor to the firm overall.