8-K
RAYMOND JAMES FINANCIAL INC (RJF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
January 25, 2023
Date of Report (date of earliest event reported)
RAYMOND JAMES FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
| Florida | 1-9109 | 59-1517485 | |
|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (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 or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock | RJF PrA | 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 is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).
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.
☐
Item 2.02 Results of Operations and Financial Condition
On January 25, 2023, Raymond James Financial, Inc. (the “Company”) issued a press release disclosing its results for the fiscal first quarter ended December 31, 2022. A copy of this press release is attached to this Current Report as Exhibit 99.1 and incorporated by reference herein. In addition, a copy of the Company’s Financial Supplement and Earnings Presentation for the fiscal first quarter ended December 31, 2022 are attached as Exhibits 99.2 and 99.3, respectively, to this Current Report and are incorporated by reference herein.
The information in this Current Report, including any exhibits hereto, is being “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing of the Company with the Securities and Exchange Commission, whether made before or after the date hereof, regardless of any general incorporation language in such filings (unless the Company specifically states that the information or exhibit in this particular report is incorporated by reference).
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following are filed as exhibits to this report:
Exhibit No.
99.1 Press release, datedJanuary25, 2023, issued by Raymond James Financial, Inc.
99.2 Financial Supplement Fiscal FirstQuarter2023of Raymond James Financial, Inc.
99.3 Earnings Presentation Fiscal FirstQuarter2023of Raymond James Financial, Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RAYMOND JAMES FINANCIAL, INC. | ||
|---|---|---|
| Date: January 25, 2023 | By: | /s/ Paul M. Shoukry |
| Paul M. Shoukry | ||
| Chief Financial Officer |
Document
| January 25, 2023 | FOR IMMEDIATE RELEASE |
|---|---|
| Media Contact: Steve Hollister, 727.567.2824 | |
| Investor Contact: Kristina Waugh, 727.567.7654 | |
| raymondjames.com/news-and-media/press-releases |
RAYMOND JAMES FINANCIAL REPORTS FIRST QUARTER OF
FISCAL 2023 RESULTS
•Domestic Private Client Group net new assets(1) of $23.2 billion for the fiscal first quarter, 9.8% annualized growth rate from beginning of period assets
•Quarterly net revenues of $2.79 billion, flat compared to the prior year’s fiscal first quarter and down 2% compared to the preceding quarter
•Record quarterly net income available to common shareholders of $507 million, or $2.30 per diluted share, and quarterly adjusted net income available to common shareholders of $505 million(2), or $2.29 per diluted share(2)
•Client assets under administration of $1.17 trillion and financial assets under management of $185.9 billion
•Record net loans in the Bank segment of $44.1 billion, up 69% over December 2021 and 2% over September 2022
•Net interest income and Raymond James Bank Deposit Program (“RJBDP”) fees from third-party banks of $723 million during the quarter, up 253% over the prior year’s fiscal first quarter and 19% over the preceding quarter
•Annualized return on common equity for the quarter of 21.3% and annualized adjusted return on tangible common equity for the quarter of 26.1%(2)
ST. PETERSBURG, Fla. – Raymond James Financial, Inc. (NYSE: RJF) today reported net revenues of $2.79 billion and net income available to common shareholders of $507 million, or $2.30 per diluted share, for the fiscal first quarter ended December 31, 2022. Excluding expenses related to acquisitions and the favorable impact of an insurance settlement received during the quarter, quarterly adjusted net income available to common shareholders was $505 million(2), or $2.29 per diluted share(2).
Quarterly net revenues were flat compared to the prior year’s fiscal first quarter and down 2% compared to the preceding quarter, largely driven by the benefit of higher short-term interest rates on net interest income and RJBDP fees from third-party banks, offset by lower investment banking revenues and asset management and related administrative fees.
Record quarterly net income available to common shareholders increased 14% over the prior year’s fiscal first quarter largely due to higher net interest income and RJBDP fees from third-party banks. Annualized return on common equity for the fiscal first quarter was 21.3% and annualized adjusted return on tangible common equity was 26.1%(2).
“During a volatile and challenging market environment, we generated record quarterly earnings as the benefit of higher interest rates more than offset the decline in capital markets results,” said Chair and CEO Paul Reilly. “Once again, our results highlight the value of having diverse and complementary businesses. While the economic outlook remains uncertain, we are well positioned with strong capital ratios and a flexible balance sheet.”
Please refer to the footnotes at the end of this press release for additional information.
1
Segment Results
Private Client Group
•Domestic Private Client Group net new assets(1) of $23.2 billion for the fiscal first quarter, 9.8% annualized growth rate from beginning of period assets
•Record quarterly net revenues of $2.06 billion, up 12% over the prior year’s fiscal first quarter and 4% over the preceding quarter
•Record quarterly pre-tax income of $434 million, up 123% over the prior year’s fiscal first quarter and 17% over the preceding quarter
•Private Client Group assets under administration of $1.11 trillion, down 7% compared to December 2021 and up 7% over September 2022
•Private Client Group assets in fee-based accounts of $633.1 billion, down 7% compared to December 2021 and up 8% over September 2022
•Private Client Group financial advisors of 8,699 increased 235 over December 2021 and 18 over September 2022
•Clients’ domestic cash sweep balances of $60.4 billion, down 18% compared to December 2021 and 10% compared to September 2022
Growth in quarterly net revenues and pre-tax income was driven primarily by the increases in RJBDP fees and net interest income which more than offset the market-driven declines in asset management and related administrative fees and brokerage revenues.
Total clients’ domestic cash sweep balances ended the quarter at $60.4 billion, down 18% compared to December 2021 and 10% compared to September 2022. The sequential decline reflects continued cash sorting activity given the higher short-term interest rate environment. These balances do not include any high-yield savings deposits or money market fund balances. Reflecting higher short-term interest rates, the average yield on RJBDP third-party bank balances was 2.72% in the fiscal first quarter, an increase of 244 basis points over the prior year period and 87 basis points over the preceding quarter.
“With our continued focus on retaining, supporting and attracting high-quality financial advisors, we generated strong domestic net new assets of approximately $23 billion(1) during the quarter, an annualized growth rate of 9.8%,” said Reilly. “Recruiting activity remains strong across all of our affiliation options, driven by our advisor and client-focused culture and leading technology and product offerings.”
Capital Markets
•Quarterly net revenues of $295 million, down 52% compared to the prior year’s fiscal first quarter and 26% compared to the preceding quarter
•Quarterly pre-tax loss of $16 million
•Quarterly investment banking revenues of $133 million, down 68% compared to the prior year’s fiscal first quarter and 36% compared to the preceding quarter
The decline in quarterly net revenues and pre-tax income was largely attributable to lower investment banking revenues. Fixed income brokerage revenues declined from the prior-year quarter as the favorable impact of revenues from our July 1, 2022 acquisition of SumRidge Partners was more than offset by decreased activity from depository clients.
“Capital markets activity slowed considerably from record-setting results a year ago, driven by continued market volatility and macroeconomic uncertainties,” said Reilly. “Although the investment banking pipeline is healthy, we expect the current headwinds will continue negatively impacting the timing of closings.”
Please refer to the footnotes at the end of this press release for additional information.
2
Asset Management
•Quarterly net revenues of $207 million, down 12% compared to the prior year’s fiscal first quarter and 4% compared to the preceding quarter
•Quarterly pre-tax income of $80 million, down 25% compared to the prior year’s fiscal first quarter and 4% compared to the preceding quarter
•Financial assets under management of $185.9 billion, down 9% compared to December 2021 and up 7% over September 2022
The decline of quarterly net revenues and pre-tax income compared to the prior-year quarter was largely attributable to lower financial assets under management, as net inflows into fee-based accounts in the Private Client Group were offset by fixed income and equity market declines.
Bank
•Record quarterly net revenues of $508 million, up 178% over the prior year’s fiscal first quarter and 19% over the preceding quarter
•Quarterly pre-tax income of $136 million, up 33% over the prior year’s fiscal first quarter and 11% over the preceding quarter
•Bank segment net interest margin (“NIM”) of 3.36% for the quarter, up 144 basis points over the prior year’s fiscal first quarter and 45 basis points over the preceding quarter
•Record net loans of $44.1 billion, up 69% over December 2021 and 2% over September 2022
Growth in quarterly net revenues and pre-tax income was primarily due to NIM expansion, along with higher assets. The Bank segment’s NIM increased 45 basis points during the quarter to 3.36%, reflecting higher short-term interest rates and the relatively high concentration of floating-rate assets. Net loans grew 2% over the preceding quarter primarily driven by higher corporate loans and residential mortgages. The bank loan loss provision for credit losses of $14 million in the quarter reflects changes to macroeconomic assumptions, in contrast to the bank loan benefit for credit losses in the prior-year quarter. The credit quality of the loan portfolio remains strong, with criticized loans as a percent of total loans held for investment ending the quarter at 1.01%, down from 2.75% at December 2021 and 1.14% at September 2022. Bank loan allowance for credit losses as a percent of total loans held for investment was 0.92%, and bank loan allowance for credit losses on corporate loans as a percent of corporate loans held for investment was 1.64%.
Other
The Other segment includes the receipt of a $32 million insurance settlement related to a previously settled litigation matter. The effective tax rate for the quarter was 21.9%, reflecting a tax benefit recognized for share-based compensation that vested during the period.
In December, the Board of Directors increased the quarterly cash dividend on common shares 24% to $0.42 per share and authorized common stock repurchases of up to $1.5 billion, replacing the previous authorization of $1 billion. During the fiscal first quarter, the firm repurchased 1.29 million shares of common stock for $138 million at an average price of $106 per share. As of January 25, 2023, $1.4 billion remained available under the Board’s approved common stock repurchase authorization. At the end of the quarter, the total capital ratio was 21.5%(3) and the tier 1 leverage ratio was 11.3%(3), both well above the regulatory requirements.
A conference call to discuss the results will take place today, Wednesday, January 25, at 5:00 p.m. ET. The live audio webcast, and the presentation which management will review on the call, will be available at www.raymondjames.com/investor-relations/financial-information/quarterly-earnings. For a listen-only connection to the conference call, please dial: 800-954-0647 (conference code: 22025784). An audio replay of the call will be available at the same location until April 28, 2023.
Please refer to the footnotes at the end of this press release for additional information.
3
About Raymond James Financial, Inc.
Raymond James Financial, Inc. (NYSE: RJF) is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. The company has approximately 8,700 financial advisors. Total client assets are $1.17 trillion. Public since 1983, the firm is listed on the New York Stock Exchange under the symbol RJF. Additional information is available at www.raymondjames.com.
Forward-Looking Statements
Certain statements made in this press release may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions, demand for and pricing of our products, acquisitions, divestitures, anticipated results of litigation, regulatory developments, and general economic conditions. In addition, words such as “expects,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, is intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the “SEC”) from time to time, including our most recent Annual Report on Form 10-K, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.
Please refer to the footnotes at the end of this press release for additional information.
4
| RAYMOND JAMES FINANCIAL, INC.<br><br>Fiscal First Quarter of 2023 | Selected Financial Highlights<br>(Unaudited) |
|---|
Summary results of operations
| ($ in millions, except per share amounts) | Three months ended | % change from | ||||||
|---|---|---|---|---|---|---|---|---|
| December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | ||||
| Net revenues | $ | 2,786 | $ | 2,781 | $ | 2,831 | —% | (2)% |
| Pre-tax income | $ | 652 | $ | 558 | $ | 616 | 17% | 6% |
| Net income available to common shareholders | $ | 507 | $ | 446 | $ | 437 | 14% | 16% |
| Earnings per common share: (4) | ||||||||
| Basic | $ | 2.36 | $ | 2.16 | $ | 2.03 | 9% | 16% |
| Diluted | $ | 2.30 | $ | 2.10 | $ | 1.98 | 10% | 16% |
| Non-GAAP measures: (2) | ||||||||
| Adjusted pre-tax income | $ | 649 | $ | 579 | $ | 646 | 12% | —% |
| Adjusted net income available to common shareholders | $ | 505 | $ | 462 | $ | 459 | 9% | 10% |
| Adjusted earnings per common share – basic (4) | $ | 2.35 | $ | 2.23 | $ | 2.13 | 5% | 10% |
| Adjusted earnings per common share – diluted (4) | $ | 2.29 | $ | 2.17 | $ | 2.08 | 6% | 10% |
| Other selected financial highlights | Three months ended | |||||||
| --- | --- | --- | --- | --- | --- | --- | ||
| December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | ||||||
| Return on common equity (5) | 21.3 | % | 21.2 | % | 18.7 | % | ||
| Adjusted return on common equity (2) (5) | 21.2 | % | 21.9 | % | 19.6 | % | ||
| Adjusted return on tangible common equity (2) (5) | 26.1 | % | 24.3 | % | 24.1 | % | ||
| Pre-tax margin (6) | 23.4 | % | 20.1 | % | 21.8 | % | ||
| Adjusted pre-tax margin (2) (6) | 23.3 | % | 20.8 | % | 22.8 | % | ||
| Total compensation ratio (7) | 62.3 | % | 67.7 | % | 62.1 | % | ||
| Adjusted total compensation ratio (2) (7) | 61.7 | % | 67.3 | % | 61.5 | % | ||
| Effective tax rate | 21.9 | % | 20.1 | % | 28.7 | % |
Please refer to the footnotes at the end of this press release for additional information.
5
RAYMOND JAMES FINANCIAL, INC.
Fiscal First Quarter of 2023
| Consolidated Statements of Income <br>(Unaudited) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Three months ended | % change from | |||||||
| in millions, except per share amounts | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Revenues: | ||||||||
| Asset management and related administrative fees | $ | 1,242 | $ | 1,382 | $ | 1,290 | (10)% | (4)% |
| Brokerage revenues: | ||||||||
| Securities commissions | 352 | 425 | 357 | (17)% | (1)% | |||
| Principal transactions | 132 | 133 | 124 | (1)% | 6% | |||
| Total brokerage revenues | 484 | 558 | 481 | (13)% | 1% | |||
| Account and service fees | 289 | 177 | 266 | 63% | 9% | |||
| Investment banking | 141 | 425 | 217 | (67)% | (35)% | |||
| Interest income | 827 | 225 | 667 | 268% | 24% | |||
| Other | 44 | 51 | 80 | (14)% | (45)% | |||
| Total revenues | 3,027 | 2,818 | 3,001 | 7% | 1% | |||
| Interest expense | (241) | (37) | (170) | 551% | 42% | |||
| Net revenues | 2,786 | 2,781 | 2,831 | —% | (2)% | |||
| Non-interest expenses: | ||||||||
| Compensation, commissions and benefits (8) | 1,736 | 1,884 | 1,759 | (8)% | (1)% | |||
| Non-compensation expenses: | ||||||||
| Communications and information processing | 139 | 112 | 138 | 24% | 1% | |||
| Occupancy and equipment | 66 | 59 | 66 | 12% | —% | |||
| Business development | 56 | 35 | 59 | 60% | (5)% | |||
| Investment sub-advisory fees | 34 | 38 | 36 | (11)% | (6)% | |||
| Professional fees | 32 | 28 | 38 | 14% | (16)% | |||
| Bank loan provision/(benefit) for credit losses | 14 | (11) | 34 | NM | (59)% | |||
| Other (9) | 57 | 78 | 85 | (27)% | (33)% | |||
| Total non-compensation expenses | 398 | 339 | 456 | 17% | (13)% | |||
| Total non-interest expenses | 2,134 | 2,223 | 2,215 | (4)% | (4)% | |||
| Pre-tax income | 652 | 558 | 616 | 17% | 6% | |||
| Provision for income taxes | 143 | 112 | 177 | 28% | (19)% | |||
| Net income | 509 | 446 | 439 | 14% | 16% | |||
| Preferred stock dividends | 2 | — | 2 | NM | —% | |||
| Net income available to common shareholders | $ | 507 | $ | 446 | $ | 437 | 14% | 16% |
| Earnings per common share – basic (4) | $ | 2.36 | $ | 2.16 | $ | 2.03 | 9% | 16% |
| Earnings per common share – diluted (4) | $ | 2.30 | $ | 2.10 | $ | 1.98 | 10% | 16% |
| Weighted-average common shares outstanding – basic | 214.7 | 206.3 | 215.0 | 4% | —% | |||
| Weighted-average common and common equivalent shares outstanding – diluted | 220.4 | 212.4 | 220.6 | 4% | —% |
Please refer to the footnotes at the end of this press release for additional information.
6
| RAYMOND JAMES FINANCIAL, INC. | Consolidated Selected Key Metrics | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | As of | % change from | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| $ in millions, except per share amounts | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | ||||||||||
| Total assets | $ | 77,047 | $ | 68,461 | $ | 80,951 | 13% | (5)% | |||||||
| Total common equity attributable to Raymond James Financial, Inc. | $ | 9,736 | $ | 8,600 | $ | 9,338 | 13% | 4% | |||||||
| Book value per share (10) | $ | 45.28 | $ | 41.45 | $ | 43.41 | 9% | 4% | |||||||
| Tangible book value per share (2) (10) | $ | 36.87 | $ | 37.55 | $ | 35.02 | (2)% | 5% | |||||||
| Capital ratios: | |||||||||||||||
| Tier 1 leverage | 11.3 | % | (3) | 12.1 | % | 10.3 | % | ||||||||
| Tier 1 capital | 20.3 | % | (3) | 25.9 | % | 19.2 | % | ||||||||
| Common equity tier 1 | 20.0 | % | (3) | 25.9 | % | 19.0 | % | ||||||||
| Total capital | 21.5 | % | (3) | 27.0 | % | 20.4 | % | ||||||||
| Client asset metrics ($ in billions) | As of | % change from | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||||||||||
| Client assets under administration | $ | 1,169.7 | $ | 1,257.8 | $ | 1,093.1 | (7)% | 7% | |||||||
| Private Client Group assets under administration | $ | 1,114.3 | $ | 1,199.8 | $ | 1,039.0 | (7)% | 7% | |||||||
| Private Client Group assets in fee-based accounts | $ | 633.1 | $ | 677.8 | $ | 586.0 | (7)% | 8% | |||||||
| Financial assets under management | $ | 185.9 | $ | 203.2 | $ | 173.8 | (9)% | 7% | |||||||
| Net new assets metrics (1) ($ in millions) | Three months ended | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||||||||||||
| Domestic Private Client Group net new assets | $ | 23,226 | $ | 36,101 | $ | 20,184 | |||||||||
| Domestic Private Client Group net new assets growth — annualized | 9.8 | % | 13.7 | % | 8.3 | % | |||||||||
| Clients’ domestic cash sweep balances<br><br>($ in millions) | As of | % change from | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||||||||||
| Raymond James Bank Deposit<br><br>Program (“RJBDP”): (11) | |||||||||||||||
| Bank segment (11) | $ | 39,098 | $ | 33,097 | $ | 38,705 | 18% | 1% | |||||||
| Third-party banks | 18,231 | 24,316 | 21,964 | (25)% | (17)% | ||||||||||
| Subtotal RJBDP | 57,329 | 57,413 | 60,669 | —% | (6)% | ||||||||||
| Client Interest Program | 3,053 | 16,065 | 6,445 | (81)% | (53)% | ||||||||||
| Total clients’ domestic cash sweep balances | $ | 60,382 | $ | 73,478 | $ | 67,114 | (18)% | (10)% | |||||||
| Three months ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||
| December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||||||||||||
| Average yield on RJBDP - third-party banks (12) | 2.72 | % | 0.28 | % | 1.85 | % | |||||||||
| Private Client Group financial advisors | As of | % change from | |||||||||||||
| --- | --- | --- | --- | --- | --- | ||||||||||
| December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||||||||||
| Employees | 3,631 | 3,447 | 3,638 | 5% | —% | ||||||||||
| Independent contractors | 5,068 | 5,017 | 5,043 | 1% | —% | ||||||||||
| Total advisors | 8,699 | 8,464 | 8,681 | 3% | —% |
Please refer to the footnotes at the end of this press release for additional information.
7
| RAYMOND JAMES FINANCIAL, INC. | Consolidated Net Interest |
|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) |
The following tables present our consolidated average interest-earning asset and interest-bearing liability balances, interest income and expense and the related rates.
| CONSOLIDATED NET INTEREST | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended | ||||||||||||||||||
| December 31, 2022 | December 31, 2021 | September 30, 2022 | ||||||||||||||||
| $ in millions | Average<br>balance | Interest | Annualized<br>average<br>rate | Average<br>balance | Interest | Annualized<br>average<br>rate | Average<br>balance | Interest | Annualized<br>average<br>rate | |||||||||
| INTEREST-EARNING ASSETS | ||||||||||||||||||
| Bank segment | ||||||||||||||||||
| Cash and cash equivalents | $ | 2,325 | $ | 22 | 3.72 | % | $ | 2,145 | $ | 1 | 0.17 | % | $ | 2,177 | $ | 13 | 2.35 | % |
| Available-for-sale securities | 11,050 | 53 | 1.92 | % | 8,511 | 22 | 1.02 | % | 11,241 | 52 | 1.84 | % | ||||||
| Loans held for sale and investment: (13) | ||||||||||||||||||
| Loans held for investment: | ||||||||||||||||||
| Securities-based loans (14) | 15,038 | 226 | 5.87 | % | 6,289 | 35 | 2.20 | % | 15,290 | 172 | 4.42 | % | ||||||
| Commercial and industrial loans | 11,176 | 169 | 5.91 | % | 8,581 | 55 | 2.49 | % | 10,986 | 128 | 4.52 | % | ||||||
| Commercial real estate loans | 6,798 | 110 | 6.35 | % | 2,941 | 20 | 2.67 | % | 6,368 | 82 | 5.00 | % | ||||||
| Real estate investment trust loans | 1,628 | 24 | 5.87 | % | 1,133 | 7 | 2.56 | % | 1,519 | 17 | 4.57 | % | ||||||
| Residential mortgage loans | 7,626 | 57 | 2.99 | % | 5,451 | 37 | 2.68 | % | 7,119 | 51 | 2.88 | % | ||||||
| Tax-exempt loans (15) | 1,594 | 10 | 3.06 | % | 1,297 | 8 | 3.19 | % | 1,503 | 10 | 3.06 | % | ||||||
| Loans held for sale | 189 | 3 | 5.39 | % | 239 | 2 | 2.94 | % | 188 | 1 | 4.22 | % | ||||||
| Total loans held for sale and investment | 44,049 | 599 | 5.35 | % | 25,931 | 164 | 2.52 | % | 42,973 | 461 | 4.23 | % | ||||||
| All other interest-earning assets | 143 | 2 | 5.29 | % | 169 | — | 1.85 | % | 126 | 1 | 4.92 | % | ||||||
| Interest-earning assets — Bank segment | $ | 57,567 | $ | 676 | 4.63 | % | $ | 36,756 | $ | 187 | 2.03 | % | $ | 56,517 | $ | 527 | 3.69 | % |
| All other segments | ||||||||||||||||||
| Cash and cash equivalents | $ | 3,436 | $ | 33 | 3.78 | % | $ | 3,931 | $ | 2 | 0.18 | % | $ | 3,339 | $ | 19 | 2.24 | % |
| Assets segregated for regulatory purposes and restricted cash | 6,237 | 50 | 3.17 | % | 13,011 | 4 | 0.12 | % | 12,332 | 57 | 1.88 | % | ||||||
| Trading assets — debt securities | 1,080 | 14 | 5.10 | % | 544 | 4 | 2.95 | % | 1,117 | 14 | 4.97 | % | ||||||
| Brokerage client receivables | 2,398 | 41 | 6.70 | % | 2,484 | 21 | 3.35 | % | 2,517 | 34 | 5.24 | % | ||||||
| All other interest-earning assets | 2,001 | 13 | 2.58 | % | 1,663 | 7 | 1.57 | % | 1,989 | 16 | 2.91 | % | ||||||
| Interest-earning assets — all other segments | $ | 15,152 | $ | 151 | 3.93 | % | $ | 21,633 | $ | 38 | 0.69 | % | $ | 21,294 | $ | 140 | 2.61 | % |
| Total interest-earning assets | $ | 72,719 | $ | 827 | 4.48 | % | $ | 58,389 | $ | 225 | 1.53 | % | $ | 77,811 | $ | 667 | 3.40 | % |
| INTEREST-BEARING LIABILITIES | ||||||||||||||||||
| Bank Segment | ||||||||||||||||||
| Bank deposits: | ||||||||||||||||||
| Money market and savings accounts | $ | 45,165 | $ | 121 | 1.06 | % | $ | 31,960 | $ | 1 | 0.01 | % | $ | 44,392 | $ | 68 | 0.61 | % |
| Interest-bearing checking accounts | 5,149 | 47 | 3.59 | % | 187 | 1 | 1.62 | % | 5,477 | 30 | 2.18 | % | ||||||
| Certificates of deposit | 1,225 | 8 | 2.48 | % | 843 | 4 | 1.87 | % | 1,061 | 5 | 1.51 | % | ||||||
| Total bank deposits (16) | 51,539 | 176 | 1.35 | % | 32,990 | 6 | 0.07 | % | 50,930 | 103 | 0.80 | % | ||||||
| FHLB advances and all other interest-bearing liabilities | 1,397 | 9 | 2.61 | % | 863 | 4 | 2.21 | % | 1,226 | 7 | 2.34 | % | ||||||
| Interest-bearing liabilities — Bank segment | $ | 52,936 | $ | 185 | 1.38 | % | $ | 33,853 | $ | 10 | 0.12 | % | $ | 52,156 | $ | 110 | 0.84 | % |
| All other segments | ||||||||||||||||||
| Trading liabilities — debt securities | $ | 778 | $ | 10 | 5.07 | % | $ | 206 | $ | 1 | 1.43 | % | $ | 754 | $ | 9 | 4.84 | % |
| Brokerage client payables | 5,597 | 17 | 1.17 | % | 14,300 | 1 | 0.03 | % | 11,901 | 20 | 0.65 | % | ||||||
| Senior notes payable | 2,038 | 23 | 4.44 | % | 2,037 | 23 | 4.44 | % | 2,038 | 24 | 4.44 | % | ||||||
| All other interest-bearing liabilities (16) | 245 | 6 | 3.65 | % | 185 | 2 | 3.84 | % | 159 | 7 | 4.49 | % | ||||||
| Interest-bearing liabilities — all other segments | $ | 8,658 | $ | 56 | 2.36 | % | $ | 16,728 | $ | 27 | 0.62 | % | $ | 14,852 | $ | 60 | 1.60 | % |
| Total interest-bearing liabilities | $ | 61,594 | $ | 241 | 1.52 | % | $ | 50,581 | $ | 37 | 0.28 | % | $ | 67,008 | $ | 170 | 1.01 | % |
| Firmwide net interest income | $ | 586 | $ | 188 | $ | 497 | ||||||||||||
| Net interest margin (net yield on interest-earning assets) | ||||||||||||||||||
| Bank segment | 3.36 | % | 1.92 | % | 2.91 | % | ||||||||||||
| Firmwide | 3.19 | % | 1.29 | % | 2.53 | % |
Please refer to the footnotes at the end of this press release for additional information.
8
| RAYMOND JAMES FINANCIAL, INC. | Segment Results | |||||||
|---|---|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | |||||||
| Three months ended | % change from | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Net revenues: | ||||||||
| Private Client Group | $ | 2,063 | $ | 1,839 | $ | 1,991 | 12% | 4% |
| Capital Markets | 295 | 614 | 399 | (52)% | (26)% | |||
| Asset Management | 207 | 236 | 216 | (12)% | (4)% | |||
| Bank | 508 | 183 | 428 | 178% | 19% | |||
| Other (17) | 9 | (15) | 4 | NM | 125% | |||
| Intersegment eliminations | (296) | (76) | (207) | NM | NM | |||
| Total net revenues | $ | 2,786 | $ | 2,781 | $ | 2,831 | —% | (2)% |
| Pre-tax income/(loss): | ||||||||
| Private Client Group | $ | 434 | $ | 195 | $ | 371 | 123% | 17% |
| Capital Markets | (16) | 201 | 66 | NM | NM | |||
| Asset Management | 80 | 107 | 83 | (25)% | (4)% | |||
| Bank | 136 | 102 | 123 | 33% | 11% | |||
| Other (9) (17) | 18 | (47) | (27) | NM | NM | |||
| Pre-tax income | $ | 652 | $ | 558 | $ | 616 | 17% | 6% |
Please refer to the footnotes at the end of this press release for additional information.
9
| RAYMOND JAMES FINANCIAL, INC. | Segment Results | |||||||
|---|---|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | |||||||
| Private Client Group | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three months ended | % change from | |||||||
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Revenues: | ||||||||
| Asset management and related administrative fees | $ | 1,053 | $ | 1,162 | $ | 1,089 | (9)% | (3)% |
| Brokerage revenues: | ||||||||
| Mutual and other fund products | 128 | 171 | 134 | (25)% | (4)% | |||
| Insurance and annuity products | 104 | 111 | 108 | (6)% | (4)% | |||
| Equities, ETFs and fixed income products | 113 | 115 | 107 | (2)% | 6% | |||
| Total brokerage revenues | 345 | 397 | 349 | (13)% | (1)% | |||
| Account and service fees: | ||||||||
| Mutual fund and annuity service fees | 98 | 114 | 103 | (14)% | (5)% | |||
| RJBDP fees: (11) | ||||||||
| Bank segment (11) | 268 | 50 | 179 | 436% | 50% | |||
| Third-party banks | 137 | 17 | 109 | 706% | 26% | |||
| Client account and other fees | 60 | 49 | 59 | 22% | 2% | |||
| Total account and service fees | 563 | 230 | 450 | 145% | 25% | |||
| Investment banking | 9 | 13 | 10 | (31)% | (10)% | |||
| Interest income | 109 | 33 | 111 | 230% | (2)% | |||
| All other | 6 | 7 | 8 | (14)% | (25)% | |||
| Total revenues | 2,085 | 1,842 | 2,017 | 13% | 3% | |||
| Interest expense | (22) | (3) | (26) | 633% | (15)% | |||
| Net revenues | 2,063 | 1,839 | 1,991 | 12% | 4% | |||
| Non-interest expenses: | ||||||||
| Financial advisor compensation and benefits | 1,075 | 1,187 | 1,091 | (9)% | (1)% | |||
| Administrative compensation and benefits | 342 | 283 | 321 | 21% | 7% | |||
| Total compensation, commissions and benefits | 1,417 | 1,470 | 1,412 | (4)% | —% | |||
| Non-compensation expenses | 212 | 174 | 208 | 22% | 2% | |||
| Total non-interest expenses | 1,629 | 1,644 | 1,620 | (1)% | 1% | |||
| Pre-tax income | $ | 434 | $ | 195 | $ | 371 | 123% | 17% |
Please refer to the footnotes at the end of this press release for additional information.
10
| RAYMOND JAMES FINANCIAL, INC. | Segment Results | |||||||
|---|---|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | |||||||
| Capital Markets | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three months ended | % change from | |||||||
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Revenues: | ||||||||
| Brokerage revenues: | ||||||||
| Fixed income | $ | 100 | $ | 120 | $ | 96 | (17)% | 4% |
| Equity | 34 | 39 | 30 | (13)% | 13% | |||
| Total brokerage revenues | 134 | 159 | 126 | (16)% | 6% | |||
| Investment banking: | ||||||||
| Merger & acquisition and advisory | 102 | 271 | 152 | (62)% | (33)% | |||
| Equity underwriting | 15 | 97 | 25 | (85)% | (40)% | |||
| Debt underwriting | 16 | 44 | 30 | (64)% | (47)% | |||
| Total investment banking | 133 | 412 | 207 | (68)% | (36)% | |||
| Interest income | 23 | 5 | 20 | 360% | 15% | |||
| Affordable housing investments business revenues | 24 | 35 | 56 | (31)% | (57)% | |||
| All other | 4 | 5 | 9 | (20)% | (56)% | |||
| Total revenues | 318 | 616 | 418 | (48)% | (24)% | |||
| Interest expense | (23) | (2) | (19) | 1,050% | 21% | |||
| Net revenues | 295 | 614 | 399 | (52)% | (26)% | |||
| Non-interest expenses: | ||||||||
| Compensation, commissions and benefits | 213 | 331 | 238 | (36)% | (11)% | |||
| Non-compensation expenses | 98 | 82 | 95 | 20% | 3% | |||
| Total non-interest expenses | 311 | 413 | 333 | (25)% | (7)% | |||
| Pre-tax income/(loss) | $ | (16) | $ | 201 | $ | 66 | NM | NM |
Please refer to the footnotes at the end of this press release for additional information.
11
| RAYMOND JAMES FINANCIAL, INC. | Segment Results | |||||||
|---|---|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | |||||||
| Asset Management | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three months ended | % change from | |||||||
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Revenues: | ||||||||
| Asset management and related administrative fees: | ||||||||
| Managed programs | $ | 134 | $ | 151 | $ | 140 | (11)% | (4)% |
| Administration and other | 63 | 76 | 69 | (17)% | (9)% | |||
| Total asset management and related administrative fees | 197 | 227 | 209 | (13)% | (6)% | |||
| Account and service fees | 5 | 6 | 5 | (17)% | —% | |||
| All other | 5 | 3 | 2 | 67% | 150% | |||
| Net revenues | 207 | 236 | 216 | (12)% | (4)% | |||
| Non-interest expenses: | ||||||||
| Compensation, commissions and benefits | 47 | 46 | 52 | 2% | (10)% | |||
| Non-compensation expenses | 80 | 83 | 81 | (4)% | (1)% | |||
| Total non-interest expenses | 127 | 129 | 133 | (2)% | (5)% | |||
| Pre-tax income | $ | 80 | $ | 107 | $ | 83 | (25)% | (4)% |
| Bank | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three months ended | % change from | |||||||
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Revenues: | ||||||||
| Interest income | $ | 676 | $ | 187 | $ | 527 | 261% | 28% |
| Interest expense | (185) | (10) | (110) | 1,750% | 68% | |||
| Net interest income | 491 | 177 | 417 | 177% | 18% | |||
| All other | 17 | 6 | 11 | 183% | 55% | |||
| Net revenues | 508 | 183 | 428 | 178% | 19% | |||
| Non-interest expenses: | ||||||||
| Compensation and benefits | 40 | 13 | 36 | 208% | 11% | |||
| Non-compensation expenses: | ||||||||
| Bank loan provision/(benefit) for credit losses | 14 | (11) | 34 | NM | (59)% | |||
| RJBDP fees to Private Client Group (11) | 268 | 50 | 179 | 436% | 50% | |||
| All other | 50 | 29 | 56 | 72% | (11)% | |||
| Total non-compensation expenses | 332 | 68 | 269 | 388% | 23% | |||
| Total non-interest expenses | 372 | 81 | 305 | 359% | 22% | |||
| Pre-tax income | $ | 136 | $ | 102 | $ | 123 | 33% | 11% |
Please refer to the footnotes at the end of this press release for additional information.
12
| RAYMOND JAMES FINANCIAL, INC. | Segment Results | |||||||
|---|---|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | |||||||
| Other (17) | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three months ended | % change from | |||||||
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Revenues: | ||||||||
| Interest income | $ | 30 | $ | 1 | $ | 15 | 2,900% | 100% |
| Net gains on private equity investments | 2 | 5 | 9 | (60)% | (78)% | |||
| All other | 1 | 2 | 2 | (50)% | (50)% | |||
| Total revenues | 33 | 8 | 26 | 313% | 27% | |||
| Interest expense | (24) | (23) | (22) | 4% | 9% | |||
| Net revenues | 9 | (15) | 4 | NM | 125% | |||
| Non-interest expenses: | ||||||||
| Compensation and other | 23 | 32 | 31 | (28)% | (26)% | |||
| Insurance settlement received (9) | (32) | — | — | NM | NM | |||
| Total non-interest expenses | (9) | 32 | 31 | NM | NM | |||
| Pre-tax income/(loss) | $ | 18 | $ | (47) | $ | (27) | NM | NM |
Please refer to the footnotes at the end of this press release for additional information.
13
| RAYMOND JAMES FINANCIAL, INC. | Bank Segment Selected Key Metrics |
|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) |
Bank Segment
Our Bank segment includes Raymond James Bank and TriState Capital Bank.
| As of | % change from | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | ||||||
| Total assets | $ | 57,623 | $ | 37,789 | $ | 56,737 | 52% | 2% | |||
| Bank loans, net: | |||||||||||
| Raymond James Bank | $ | 31,690 | $ | 26,132 | $ | 31,109 | 21% | 2% | |||
| TriState Capital Bank | 12,376 | — | 12,130 | NM | 2% | ||||||
| Total bank loans, net | $ | 44,066 | $ | 26,132 | $ | 43,239 | 69% | 2% | |||
| Bank loan allowance for credit losses | $ | 408 | $ | 308 | $ | 396 | 32% | 3% | |||
| Bank loan allowance for credit losses as a % of total loans held for investment | 0.92 | % | 1.18 | % | 0.91 | % | |||||
| Bank loan allowance for credit losses on corporate loans as a % of corporate loans held for investment (18) | 1.64 | % | 2.13 | % | 1.73 | % | |||||
| Total nonperforming assets | $ | 61 | $ | 74 | $ | 74 | (18)% | (18)% | |||
| Nonperforming assets as a % of total assets | 0.11 | % | 0.20 | % | 0.13 | % | |||||
| Total criticized loans | $ | 447 | $ | 735 | $ | 496 | (39)% | (10)% | |||
| Criticized loans as a % of loans held for investment | 1.01 | % | 2.75 | % | 1.14 | % | |||||
| Three months ended | % change from | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | ||||||
| Bank loan provision/(benefit) for credit losses | $ | 14 | $ | (11) | $ | 34 | NM | (59)% | |||
| Net charge-offs | $ | 2 | $ | 1 | $ | 14 | 100% | (86)% |
Please refer to the footnotes at the end of this press release for additional information.
14
| RAYMOND JAMES FINANCIAL, INC. | Non-GAAP Financial Measures |
|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) |
Reconciliation of non-GAAP financial measures to GAAP financial measures
We utilize certain non-GAAP financial measures as additional measures to aid in, and enhance, the understanding of our financial results and related measures. These non-GAAP financial measures have been separately identified in this document. We believe certain of these non-GAAP financial measures provide useful information to management and investors by excluding certain material items that may not be indicative of our core operating results. We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a comparison of current- and prior-period results. Beginning with our fiscal third quarter of 2022, certain of our non-GAAP financial measures have been adjusted for additional expenses directly related to our acquisitions that we believe are not indicative of our core operating results, such as those related to amortization of identifiable intangible assets arising from acquisitions and acquisition-related retention. Prior periods have been conformed to the current period presentation. We believe that return on tangible common equity and tangible book value per share are meaningful to investors as they facilitate comparisons of our results to the results of other companies. In the following tables, the tax effect of non-GAAP adjustments reflects the statutory rate associated with each non-GAAP item. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other companies. The following tables provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures.
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Net income available to common shareholders | $ | 507 | $ | 446 | $ | 437 |
| Non-GAAP adjustments: | ||||||
| Expenses directly related to acquisitions included in the following financial statement line items: | ||||||
| Compensation, commissions and benefits — Acquisition-related retention (8) | 18 | 11 | 17 | |||
| Professional fees | — | 2 | 1 | |||
| Other | ||||||
| Amortization of identifiable intangible assets (19) | 11 | 8 | 11 | |||
| All other acquisition-related expenses | — | — | 1 | |||
| Total “Other” expense | 11 | 8 | 12 | |||
| Total expenses related to acquisitions | 29 | 21 | 30 | |||
| Other — Insurance settlement received (9) | (32) | — | — | |||
| Pre-tax impact of non-GAAP adjustments | (3) | 21 | 30 | |||
| Tax effect of non-GAAP adjustments | 1 | (5) | (8) | |||
| Total non-GAAP adjustments, net of tax | (2) | 16 | 22 | |||
| Adjusted net income available to common shareholders (2) | $ | 505 | $ | 462 | $ | 459 |
| Pre-tax income | $ | 652 | $ | 558 | $ | 616 |
| Pre-tax impact of non-GAAP adjustments (as detailed above) | (3) | 21 | 30 | |||
| Adjusted pre-tax income (2) | $ | 649 | $ | 579 | $ | 646 |
| Compensation, commissions and benefits expense | $ | 1,736 | $ | 1,884 | $ | 1,759 |
| Less: Acquisition-related retention (as detailed above) | 18 | 11 | 17 | |||
| Adjusted “Compensation, commissions and benefits” expense (2) | $ | 1,718 | $ | 1,873 | $ | 1,742 |
Please refer to the footnotes at the end of this press release for additional information.
15
| RAYMOND JAMES FINANCIAL, INC. | Non-GAAP Financial Measures | |||||
|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | |||||
| Reconciliation of non-GAAP financial measures to GAAP financial measures | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| (Continued from previous page) | ||||||
| Three months ended | ||||||
| December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | ||||
| Pre-tax margin (6) | 23.4 | % | 20.1 | % | 21.8 | % |
| Impact of non-GAAP adjustments on pre-tax margin: | ||||||
| Compensation, commissions and benefits — Acquisition-related retention (8) | 0.6 | % | 0.4 | % | 0.6 | % |
| Professional fees | — | % | — | % | — | % |
| Other: | ||||||
| Amortization of identifiable intangible assets (19) | 0.4 | % | 0.3 | % | 0.4 | % |
| All other acquisition-related expenses | — | % | — | % | — | % |
| Total “Other” expense | 0.4 | % | 0.3 | % | 0.4 | % |
| Total expenses related to acquisitions | 1.0 | % | 0.7 | % | 1.0 | % |
| Other — Insurance settlement received (9) | (1.1) | % | — | % | — | % |
| Total non-GAAP adjustments | (0.1) | % | 0.7 | % | 1.0 | % |
| Adjusted pre-tax margin (2) (6) | 23.3 | % | 20.8 | % | 22.8 | % |
| Total compensation ratio (7) | 62.3 | % | 67.7 | % | 62.1 | % |
| Less the impact of non-GAAP adjustments on compensation ratio: | ||||||
| Acquisition-related retention (8) | 0.6 | % | 0.4 | % | 0.6 | % |
| Adjusted total compensation ratio (2) (7) | 61.7 | % | 67.3 | % | 61.5 | % |
Please refer to the footnotes at the end of this press release for additional information.
16
| RAYMOND JAMES FINANCIAL, INC. | Non-GAAP Financial Measures | |||||
|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | |||||
| Reconciliation of non-GAAP financial measures to GAAP financial measures | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| (Continued from previous page) | ||||||
| Three months ended | ||||||
| Earnings per common share (4) | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Basic | $ | 2.36 | $ | 2.16 | $ | 2.03 |
| Impact of non-GAAP adjustments on basic earnings per common share: | ||||||
| Compensation, commissions and benefits — Acquisition-related retention (8) | 0.08 | 0.04 | 0.08 | |||
| Professional fees | — | 0.01 | — | |||
| Other: | ||||||
| Amortization of identifiable intangible assets (19) | 0.06 | 0.04 | 0.05 | |||
| All other acquisition-related expenses | — | — | 0.01 | |||
| Total “Other” expense | 0.06 | 0.04 | 0.06 | |||
| Total expenses related to acquisitions | 0.14 | 0.09 | 0.14 | |||
| Other — Insurance settlement received (9) | (0.15) | — | — | |||
| Tax effect of non-GAAP adjustments | — | (0.02) | (0.04) | |||
| Total non-GAAP adjustments, net of tax | (0.01) | 0.07 | 0.10 | |||
| Adjusted basic (2) | $ | 2.35 | $ | 2.23 | $ | 2.13 |
| Diluted | $ | 2.30 | $ | 2.10 | $ | 1.98 |
| Impact of non-GAAP adjustments on diluted earnings per common share: | ||||||
| Compensation, commissions and benefits — Acquisition-related retention (8) | 0.08 | 0.05 | 0.08 | |||
| Professional fees | — | 0.01 | — | |||
| Other: | ||||||
| Amortization of identifiable intangible assets (19) | 0.06 | 0.03 | 0.05 | |||
| All other acquisition-related expenses | — | — | 0.01 | |||
| Total “Other” expense | 0.06 | 0.03 | 0.06 | |||
| Total expenses related to acquisitions | 0.14 | 0.09 | 0.14 | |||
| Other — Insurance settlement received (9) | (0.15) | — | — | |||
| Tax effect of non-GAAP adjustments | — | (0.02) | (0.04) | |||
| Total non-GAAP adjustments, net of tax | (0.01) | 0.07 | 0.10 | |||
| Adjusted diluted (2) | $ | 2.29 | $ | 2.17 | $ | 2.08 |
Please refer to the footnotes at the end of this press release for additional information.
17
| RAYMOND JAMES FINANCIAL, INC. | Non-GAAP Financial Measures |
|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) |
Reconciliation of non-GAAP financial measures to GAAP financial measures
(Continued from previous page)
| Book value per share | As of | |||||
|---|---|---|---|---|---|---|
| $ in millions, except per share amounts | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Total common equity attributable to Raymond James Financial, Inc. | $ | 9,736 | $ | 8,600 | $ | 9,338 |
| Less non-GAAP adjustments: | ||||||
| Goodwill and identifiable intangible assets, net | 1,938 | 874 | 1,931 | |||
| Deferred tax liabilities related to goodwill and identifiable intangible assets, net | (129) | (65) | (126) | |||
| Tangible common equity attributable to Raymond James Financial, Inc. | $ | 7,927 | $ | 7,791 | $ | 7,533 |
| Common shares outstanding | 215.0 | 207.5 | 215.1 | |||
| Book value per share (10) | $ | 45.28 | $ | 41.45 | $ | 43.41 |
| Tangible book value per share (2) (10) | $ | 36.87 | $ | 37.55 | $ | 35.02 |
| Return on common equity | Three months ended | |||||
| --- | --- | --- | --- | --- | --- | --- |
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | |||
| Average common equity (20) | $ | 9,537 | $ | 8,423 | $ | 9,367 |
| Impact of non-GAAP adjustments on average common equity: | ||||||
| Compensation, commissions and benefits — Acquisition-related retention (8) | 9 | 6 | 9 | |||
| Professional fees | — | 1 | 1 | |||
| Other: | ||||||
| Amortization of identifiable intangible assets (19) | 5 | 4 | 5 | |||
| All other acquisition-related expenses | — | — | — | |||
| Total “Other” expense | 5 | 4 | 5 | |||
| Total expenses related to acquisitions | 14 | 11 | 15 | |||
| Other — Insurance settlement received (9) | (16) | — | — | |||
| Tax effect of non-GAAP adjustments | 1 | (3) | (4) | |||
| Total non-GAAP adjustments, net of tax | (1) | 8 | 11 | |||
| Adjusted average common equity (2) (20) | $ | 9,536 | $ | 8,431 | $ | 9,378 |
Please refer to the footnotes at the end of this press release for additional information.
18
| RAYMOND JAMES FINANCIAL, INC. | Non-GAAP Financial Measures | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Fiscal First Quarter of 2023 | (Unaudited) | ||||||||
| Reconciliation of non-GAAP financial measures to GAAP financial measures | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (Continued from previous page) | |||||||||
| Three months ended | |||||||||
| $ in millions | December 31,<br>2022 | December 31,<br>2021 | September 30,<br>2022 | ||||||
| Average common equity (20) | $ | 9,537 | $ | 8,423 | $ | 9,367 | |||
| Less: | |||||||||
| Average goodwill and identifiable intangible assets, net | 1,935 | 878 | 1,871 | ||||||
| Average deferred tax liabilities related to goodwill and identifiable intangible assets, net | (128) | (64) | (127) | ||||||
| Average tangible common equity (2) (20) | $ | 7,730 | $ | 7,609 | $ | 7,623 | |||
| Impact of non-GAAP adjustments on average tangible common equity: | |||||||||
| Compensation, commissions and benefits — Acquisition-related retention (8) | 9 | 6 | 9 | ||||||
| Professional fees | — | 1 | 1 | ||||||
| Other: | |||||||||
| Amortization of identifiable intangible assets (19) | 5 | 4 | 5 | ||||||
| All other acquisition-related expenses | — | — | — | ||||||
| Total “Other” expense | 5 | 4 | 5 | ||||||
| Total expenses related to acquisitions | 14 | 11 | 15 | ||||||
| Other — Insurance settlement received (9) | (16) | — | — | ||||||
| Tax effect of non-GAAP adjustments | 1 | (3) | (4) | ||||||
| Total non-GAAP adjustments, net of tax | (1) | 8 | 11 | ||||||
| Adjusted average tangible common equity (2) (20) | $ | 7,729 | $ | 7,617 | $ | 7,634 | |||
| Return on common equity (5) | 21.3 | % | 21.2 | % | 18.7 | % | |||
| Adjusted return on common equity (2) (5) | 21.2 | % | 21.9 | % | 19.6 | % | |||
| Return on tangible common equity (2) (5) | 26.2 | % | 23.4 | % | 22.9 | % | |||
| Adjusted return on tangible common equity (2) (5) | 26.1 | % | 24.3 | % | 24.1 | % |
Please refer to the footnotes at the end of this press release for additional information.
19
RAYMOND JAMES FINANCIAL, INC.
Fiscal First Quarter of 2023 Footnotes
| (1) | Domestic Private Client Group net new assets represents domestic Private Client Group client inflows, including dividends and interest, less domestic Private Client Group client outflows, including commissions, advisory fees and other fees. The Domestic Private Client Group net new asset growth — annualized percentage is based on the beginning Domestic Private Client Group AUA balance for the indicated period. |
|---|---|
| (2) | These are non-GAAP financial measures. See the schedules on the previous pages for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. |
| (3) | Estimated. |
| (4) | Earnings per common share is computed by dividing net income available to common shareholders (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period or, in the case of adjusted earnings per common share, computed by dividing adjusted net income available to common shareholders (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period. The allocations of earnings and dividends to participating securities were $1 million for each of the three months ended December 31, 2022, September 30, 2022, and December 31, 2021. |
| (5) | Return on common equity is computed by dividing annualized net income available to common shareholders by average common equity for each respective period or, in the case of return on tangible common equity, computed by dividing annualized net income available to common shareholders by average tangible common equity for each respective period. Adjusted return on common equity is computed by dividing annualized adjusted net income available to common shareholders by adjusted average common equity for each respective period, or in the case of adjusted return on tangible common equity, computed by dividing annualized adjusted net income available to common shareholders by adjusted average tangible common equity for each respective period. Tangible common equity is defined as total common equity attributable to Raymond James Financial, Inc. less goodwill and intangible assets, net of related deferred taxes. |
| (6) | Pre-tax margin is computed by dividing pre-tax income by net revenues for each respective period or, in the case of adjusted pre-tax margin, computed by dividing adjusted pre-tax income by net revenues for each respective period. |
| (7) | Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period. Adjusted total compensation ratio is computed by dividing adjusted compensation, commissions and benefits expense by net revenues for each respective period. |
| (8) | Includes acquisition-related compensation expenses arising from equity and cash-based retention awards issued in conjunction with acquisitions in prior years. Such retention awards are generally contingent upon the post-closing continuation of service of certain associates who joined the firm as part of such acquisitions and are expensed over the requisite service period. |
| (9) | The three months ended December 31, 2022 included the favorable impact of a $32 million insurance settlement received during the quarter related to a previously settled litigation matter. This item has been reflected as an offset to Other expenses within our Other segment. In the computation of our non-GAAP financial measures, we have reversed the favorable impact of this item on adjusted pre-tax income and adjusted net income available to common shareholders. See the schedules on the previous pages for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. |
| (10) | Book value per share is computed by dividing total common equity attributable to Raymond James Financial, Inc. by the number of common shares outstanding at the end of each respective period or, in the case of tangible book value per share, computed by dividing tangible common equity by the number of common shares outstanding at the end of each respective period. |
| (11) | We earn fees from RJBDP, a multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into interest-bearing deposit accounts at Raymond James Bank and TriState Capital Bank, which are included in our Bank segment, as well as various third-party banks. Fees earned by the Private Client Group on deposits held by our Bank segment are eliminated in consolidation. |
| (12) | Average yield on RJBDP - third-party banks is computed by dividing annualized RJBDP fees - third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balances at third-party banks. |
| (13) | Loans are presented net of unamortized discounts, unearned income, and deferred loan fees and costs. |
| (14) | Securities-based loans included loans collateralized by the borrower’s marketable securities at advance rates consistent with industry standards and, to a lesser extent, the cash surrender value of life insurance policies. |
| (15) | The average yield is presented on a tax-equivalent basis for each respective period. |
| (16) | The average balance, interest expense, and average rate for “Total bank deposits” included amounts associated with affiliate deposits. Such amounts are eliminated in consolidation and are offset in “All other interest-bearing liabilities” under “All other segments”. |
| (17) | The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, certain acquisition-related expenses, and certain corporate overhead costs of RJF, including the interest costs on certain of our public debt. |
| (18) | Corporate loans included commercial and industrial loans, commercial real estate loans, and real estate investment trust loans. |
| (19) | Amortization of identifiable intangible assets, which was included in “Other” expense, includes amortization of identifiable intangible assets arising from our acquisitions. |
RAYMOND JAMES FINANCIAL, INC.
Fiscal First Quarter of 2023 Footnotes
| (20) | Average common equity is computed by adding the total common equity attributable to Raymond James Financial, Inc. as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two. Adjusted average common equity is computed by adjusting for the impact on average common equity of the non-GAAP adjustments, as applicable for each respective period. Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period. |
|---|
21
rjf1231q123supplement
5 Quarterly Financial Supplement First quarter of fiscal 2023 results
TABLE OF CONTENTS PAGE Consolidated Statements of Income (Unaudited) 3 Consolidated Selected Key Metrics (Unaudited) 4 Segment Results Private Client Group (Unaudited) 6 Capital Markets (Unaudited) 7 Asset Management (Unaudited) 8 Bank (Unaudited) 9 Other (Unaudited) 10 Bank Segment Selected Key Metrics (Unaudited) 11 Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited) 12 Footnotes 18 RAYMOND JAMES FINANCIAL, INC.
Three months ended % change from $ in millions, except per share amounts December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Revenues: Asset management and related administrative fees $ 1,382 $ 1,464 $ 1,427 $ 1,290 $ 1,242 (10) % (4) % Brokerage revenues: Securities commissions 425 422 385 357 352 (17) % (1) % Principal transactions 133 142 128 124 132 (1) % 6 % Total brokerage revenues 558 564 513 481 484 (13) % 1 % Account and service fees 177 179 211 266 289 63 % 9 % Investment banking 425 235 223 217 141 (67) % (35) % Interest income 225 242 374 667 827 268 % 24 % Other 51 27 30 80 44 (14) % (45) % Total revenues 2,818 2,711 2,778 3,001 3,027 7 % 1 % Interest expense (37) (38) (60) (170) (241) 551 % 42 % Net revenues 2,781 2,673 2,718 2,831 2,786 — % (2) % Non-interest expenses: Compensation, commissions and benefits (1) 1,884 1,852 1,834 1,759 1,736 (8) % (1) % Non-compensation expenses: Communications and information processing 112 127 129 138 139 24 % 1 % Occupancy and equipment 59 62 65 66 66 12 % — % Business development 35 34 58 59 56 60 % (5) % Investment sub-advisory fees 38 40 38 36 34 (11) % (6) % Professional fees 28 27 38 38 32 14 % (16) % Bank loan provision/(benefit) for credit losses (11) 21 56 34 14 NM (59) % Other (2) 78 77 85 85 57 (27) % (33) % Total non-compensation expenses 339 388 469 456 398 17 % (13) % Total non-interest expenses 2,223 2,240 2,303 2,215 2,134 (4) % (4) % Pre-tax income 558 433 415 616 652 17 % 6 % Provision for income taxes 112 110 114 177 143 28 % (19) % Net income 446 323 301 439 509 14 % 16 % Preferred stock dividends — — 2 2 2 NM — % Net income available to common shareholders $ 446 $ 323 $ 299 $ 437 $ 507 14 % 16 % Earnings per common share – basic (3) $ 2.16 $ 1.56 $ 1.41 $ 2.03 $ 2.36 9 % 16 % Earnings per common share – diluted (3) $ 2.10 $ 1.52 $ 1.38 $ 1.98 $ 2.30 10 % 16 % Weighted-average common shares outstanding – basic 206.3 207.7 210.7 215.0 214.7 4 % — % Weighted-average common and common equivalent shares outstanding – diluted 212.4 213.0 215.7 220.6 220.4 4 % — % RAYMOND JAMES FINANCIAL, INC. Consolidated Statements of Income (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 3
As of % change from $ in millions, except per share amounts December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Total assets $ 68,461 $ 73,101 $ 86,111 $ 80,951 $ 77,047 13 % (5) % Total common equity attributable to Raymond James Financial, Inc. $ 8,600 $ 8,602 $ 9,395 $ 9,338 $ 9,736 13 % 4 % Book value per share (4) $ 41.45 $ 41.38 $ 43.60 $ 43.41 $ 45.28 9 % 4 % Tangible book value per share (4) (5) $ 37.55 $ 36.46 $ 35.79 $ 35.02 $ 36.87 (2) % 5 % Capital ratios: Tier 1 leverage 12.1 % 11.1 % 10.8 % 10.3 % 11.3 % (6) Tier 1 capital 25.9 % 23.9 % 20.2 % 19.2 % 20.3 % (6) Common equity tier 1 25.9 % 23.9 % 20.0 % 19.0 % 20.0 % (6) Total capital 27.0 % 25.0 % 21.5 % 20.4 % 21.5 % (6) Three months ended % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Adjusted pre-tax income (5) $ 579 $ 464 $ 480 $ 646 $ 649 12 % — % Adjusted net income available to common shareholders (5) $ 462 $ 346 $ 348 $ 459 $ 505 9 % 10 % Adjusted earnings per common share – basic (3) (5) $ 2.23 $ 1.67 $ 1.65 $ 2.13 $ 2.35 5 % 10 % Adjusted earnings per common share – diluted (3) (5) $ 2.17 $ 1.62 $ 1.61 $ 2.08 $ 2.29 6 % 10 % Return on common equity (7) 21.2 % 15.0 % 13.3 % 18.7 % 21.3 % Adjusted return on common equity (5) (7) 21.9 % 16.1 % 15.4 % 19.6 % 21.2 % Adjusted return on tangible common equity (5) (7) 24.3 % 18.0 % 18.1 % 24.1 % 26.1 % Pre-tax margin (8) 20.1 % 16.2 % 15.3 % 21.8 % 23.4 % Adjusted pre-tax margin (5) (8) 20.8 % 17.4 % 17.7 % 22.8 % 23.3 % Total compensation ratio (9) 67.7 % 69.3 % 67.5 % 62.1 % 62.3 % Adjusted total compensation ratio (5) (9) 67.3 % 68.8 % 66.8 % 61.5 % 61.7 % Effective tax rate 20.1 % 25.4 % 27.5 % 28.7 % 21.9 % RAYMOND JAMES FINANCIAL, INC. Consolidated Selected Key Metrics (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 4
As of % change from December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Client asset metrics ($ in billions): Client assets under administration $ 1,257.8 $ 1,256.1 $ 1,125.3 $ 1,093.1 $ 1,169.7 (7) % 7 % Private Client Group assets under administration $ 1,199.8 $ 1,198.3 $ 1,068.8 $ 1,039.0 $ 1,114.3 (7) % 7 % Private Client Group assets in fee-based accounts $ 677.8 $ 678.0 $ 606.7 $ 586.0 $ 633.1 (7) % 8 % Financial assets under management $ 203.2 $ 193.7 $ 182.4 $ 173.8 $ 185.9 (9) % 7 % Net new assets metrics (10) ($ in millions) Three months ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Domestic Private Client Group net new assets $ 36,101 $ 24,093 $ 14,663 $ 20,184 $ 23,226 Domestic Private Client Group net new assets growth — annualized 13.7 % 8.6 % 5.4 % 8.3 % 9.8 % As of % change from December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Clients' domestic cash sweep balances ($ in millions): Raymond James Bank Deposit Program (“RJBDP”): (11) Bank segment (11) $ 33,097 $ 33,570 $ 36,646 $ 38,705 $ 39,098 18 % 1 % Third-party banks 24,316 25,887 25,478 21,964 18,231 (25) % (17) % Subtotal RJBDP 57,413 59,457 62,124 60,669 57,329 — % (6) % Client Interest Program 16,065 17,013 13,717 6,445 3,053 (81) % (53) % Total clients’ domestic cash sweep balances $ 73,478 $ 76,470 $ 75,841 $ 67,114 $ 60,382 (18) % (10) % Three months ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Average yield on RJBDP - third-party banks (12) 0.28 % 0.32 % 0.88 % 1.85 % 2.72 % As of % change from December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Private Client Group financial advisors: Employees 3,447 3,601 3,615 3,638 3,631 5 % — % Independent contractors 5,017 5,129 5,001 5,043 5,068 1 % — % Total advisors 8,464 8,730 8,616 8,681 8,699 3 % — % RAYMOND JAMES FINANCIAL, INC. Consolidated Selected Key Metrics (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 5
Three months ended % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Revenues: Asset management and related administrative fees $ 1,162 $ 1,245 $ 1,214 $ 1,089 $ 1,053 (9) % (3) % Brokerage revenues: Mutual and other fund products 171 166 149 134 128 (25) % (4) % Insurance and annuity products 111 110 109 108 104 (6) % (4) % Equities, ETFs, and fixed income products 115 121 115 107 113 (2) % 6 % Total brokerage revenues 397 397 373 349 345 (13) % (1) % Account and service fees: Mutual fund and annuity service fees 114 109 102 103 98 (14) % (5) % RJBDP fees: (11) Bank segment (11) 50 49 79 179 268 436 % 50 % Third-party banks 17 20 56 109 137 706 % 26 % Client account and other fees 49 53 59 59 60 22 % 2 % Total account and service fees 230 231 296 450 563 145 % 25 % Investment banking 13 9 6 10 9 (31) % (10) % Interest income 33 37 68 111 109 230 % (2) % All other 7 6 11 8 6 (14) % (25) % Total revenues 1,842 1,925 1,968 2,017 2,085 13 % 3 % Interest expense (3) (3) (10) (26) (22) 633 % (15) % Net revenues 1,839 1,922 1,958 1,991 2,063 12 % 4 % Non-interest expenses: Financial advisor compensation and benefits 1,187 1,231 1,187 1,091 1,075 (9) % (1) % Administrative compensation and benefits 283 289 306 321 342 21 % 7 % Total compensation, commissions and benefits 1,470 1,520 1,493 1,412 1,417 (4) % — % Non-compensation expenses 174 189 214 208 212 22 % 2 % Total non-interest expenses 1,644 1,709 1,707 1,620 1,629 (1) % 1 % Pre-tax income $ 195 $ 213 $ 251 $ 371 $ 434 123 % 17 % RAYMOND JAMES FINANCIAL, INC. Segment Results - Private Client Group (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 6
Three months ended % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Revenues: Brokerage revenues: Fixed income $ 120 $ 125 $ 107 $ 96 $ 100 (17) % 4 % Equity 39 41 32 30 34 (13) % 13 % Total brokerage revenues 159 166 139 126 134 (16) % 6 % Investment banking: Merger & acquisition and advisory 271 139 147 152 102 (62) % (33) % Equity underwriting 97 52 36 25 15 (85) % (40) % Debt underwriting 44 35 34 30 16 (64) % (47) % Total investment banking 412 226 217 207 133 (68) % (36) % Interest income 5 5 6 20 23 360 % 15 % Affordable housing investments business revenues 35 15 21 56 24 (31) % (57) % All other 5 4 3 9 4 (20) % (56) % Total revenues 616 416 386 418 318 (48) % (24) % Interest expense (2) (3) (3) (19) (23) 1,050 % 21 % Net revenues 614 413 383 399 295 (52) % (26) % Non-interest expenses: Compensation, commissions and benefits 331 253 243 238 213 (36) % (11) % Non-compensation expenses 82 73 79 95 98 20 % 3 % Total non-interest expenses 413 326 322 333 311 (25) % (7) % Pre-tax income/(loss) $ 201 $ 87 $ 61 $ 66 $ (16) NM NM RAYMOND JAMES FINANCIAL, INC. Segment Results - Capital Markets (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 7
Three months ended % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Revenues: Asset management and related administrative fees: Managed programs $ 151 $ 149 $ 145 $ 140 $ 134 (11) % (4) % Administration and other 76 77 75 69 63 (17) % (9) % Total asset management and related administrative fees 227 226 220 209 197 (13) % (6) % Account and service fees 6 6 5 5 5 (17) % — % All other 3 2 3 2 5 67 % 150 % Net revenues 236 234 228 216 207 (12) % (4) % Non-interest expenses: Compensation, commissions and benefits 46 47 49 52 47 2 % (10) % Non-compensation expenses 83 84 86 81 80 (4) % (1) % Total non-interest expenses 129 131 135 133 127 (2) % (5) % Pre-tax income $ 107 $ 103 $ 93 $ 83 $ 80 (25) % (4) % RAYMOND JAMES FINANCIAL, INC. Segment Results - Asset Management (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 8
Three months ended % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Revenues: Interest income $ 187 $ 199 $ 296 $ 527 $ 676 261 % 28 % Interest expense (10) (10) (26) (110) (185) 1,750 % 68 % Net interest income 177 189 270 417 491 177 % 18 % All other 6 8 6 11 17 183 % 55 % Net revenues 183 197 276 428 508 178 % 19 % Non-interest expenses: Compensation and benefits 13 14 21 36 40 208 % 11 % Non-compensation expenses: Bank loan provision/(benefit) for credit losses (11) 21 56 34 14 NM (59) % RJBDP fees to Private Client Group (11) 50 49 79 179 268 436 % 50 % All other 29 30 46 56 50 72 % (11) % Total non-compensation expenses 68 100 181 269 332 388 % 23 % Total non-interest expenses 81 114 202 305 372 359 % 22 % Pre-tax income $ 102 $ 83 $ 74 $ 123 $ 136 33 % 11 % RAYMOND JAMES FINANCIAL, INC. Segment Results - Bank (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 9
Three months ended % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Revenues: Interest income $ 1 $ 3 $ 6 $ 15 $ 30 2,900 % 100 % Net gains/(losses) on private equity investments 5 (2) (3) 9 2 (60) % (78) % All other 2 5 — 2 1 (50) % (50) % Total revenues 8 6 3 26 33 313 % 27 % Interest expense (23) (24) (24) (22) (24) 4 % 9 % Net revenues (15) (18) (21) 4 9 NM 125 % Non-interest expenses: Compensation and other 32 35 43 31 23 (28) % (26) % Insurance settlement received (2) — — — — (32) (28) % (26) % Total non-interest expenses 32 35 43 31 (9) NM NM Pre-tax income/(loss) $ (47) $ (53) $ (64) $ (27) $ 18 NM NM RAYMOND JAMES FINANCIAL, INC. Segment Results - Other (13) (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 10
Our Bank segment includes Raymond James Bank and TriState Capital Bank. Bank Segment As of % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Total assets $ 37,789 $ 38,167 $ 55,562 $ 56,737 $ 57,623 52 % 2 % Bank loans, net: Raymond James Bank $ 26,132 $ 27,883 $ 30,053 $ 31,109 $ 31,690 21 % 2 % TriState Capital Bank — — 11,790 12,130 12,376 NM 2 % Total bank loans, net $ 26,132 $ 27,883 $ 41,843 $ 43,239 $ 44,066 69 % 2 % Bank loan allowance for credit losses $ 308 $ 328 $ 377 $ 396 $ 408 32 % 3 % Bank loan allowance for credit losses as a % of total loans held for investment 1.18 % 1.17 % 0.90 % 0.91 % 0.92 % Bank loan allowance for credit losses on corporate loans as a % of corporate loans held for investment (14) 2.13 % 2.11 % 1.73 % 1.73 % 1.64 % Total nonperforming assets $ 74 $ 104 $ 92 $ 74 $ 61 (18) % (18) % Nonperforming assets as a % of total assets 0.20 % 0.27 % 0.17 % 0.13 % 0.11 % Total criticized loans $ 735 $ 735 $ 687 $ 496 $ 447 (39) % (10) % Criticized loans as a % of loans held for investment 2.75 % 2.63 % 1.63 % 1.14 % 1.01 % As of % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Securities-based loans (15) $ 6,563 $ 6,904 $ 15,312 $ 15,297 $ 14,885 127 % (3) % Commercial and industrial loans 8,608 9,067 10,897 11,173 11,405 32 % 2 % Commercial real estate loans 2,992 3,321 6,354 6,549 6,929 132 % 6 % Real estate investment trust loans 1,189 1,408 1,416 1,592 1,680 41 % 6 % Residential mortgage loans 5,568 5,945 6,728 7,386 7,818 40 % 6 % Tax-exempt loans 1,290 1,287 1,347 1,501 1,667 29 % 11 % Total loans held for investment 26,210 27,932 42,054 43,498 44,384 69 % 2 % Held for sale loans 230 279 166 137 90 (61) % (34) % Total loans held for sale and investment 26,440 28,211 42,220 43,635 44,474 68 % 2 % Allowance for credit losses (308) (328) (377) (396) (408) 32 % 3 % Bank loans, net $ 26,132 $ 27,883 $ 41,843 $ 43,239 $ 44,066 69 % 2 % Three months ended % change from $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 December 31, 2021 September 30, 2022 Bank loan provision/(benefit) for credit losses $ (11) $ 21 $ 56 $ 34 $ 14 NM (59) % Net charge-offs $ 1 $ 1 $ 10 $ 14 $ 2 100 % (86) % Net interest margin (net yield on interest-earning assets) 1.92 % 2.01 % 2.41 % 2.91 % 3.36 % RAYMOND JAMES FINANCIAL, INC. Bank Segment Selected Key Metrics (Unaudited) Please refer to the footnotes at the end of this supplement for additional information. 11
Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited) We utilize certain non-GAAP financial measures as additional measures to aid in, and enhance, the understanding of our financial results and related measures. These non-GAAP financial measures have been separately identified in this document. We believe certain of these non-GAAP financial measures provide useful information to management and investors by excluding certain material items that may not be indicative of our core operating results. We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a comparison of current- and prior-period results. Beginning with our fiscal third quarter of 2022, certain of our non-GAAP financial measures have been adjusted for additional expenses directly related to our acquisitions that we believe are not indicative of our core operating results, such as those related to amortization of identifiable intangible assets arising from acquisitions and acquisition-related retention. Prior periods have been conformed to the current period presentation. We believe that return on tangible common equity and tangible book value per share are meaningful to investors as they facilitate comparisons of our results to the results of other companies. In the following tables, the tax effect of non-GAAP adjustments reflects the statutory rate associated with each non-GAAP item. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other companies. The following tables provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures for those periods which include non-GAAP adjustments. Three months ended $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Net income available to common shareholders $ 446 $ 323 $ 299 $ 437 $ 507 Non-GAAP adjustments: Expenses directly related to acquisitions included in the following financial statement line items: Compensation, commissions and benefits — Acquisition-related retention (1) 11 14 18 17 18 Professional fees 2 5 4 1 — Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans — — 26 — — Other Amortization of identifiable intangible assets (16) 8 6 8 11 11 Initial provision for credit losses on acquired lending commitments — — 5 — — All other acquisition-related expenses — 6 4 1 — Total “Other” expense 8 12 17 12 11 Total expenses related to acquisitions 21 31 65 30 29 Other — Insurance settlement received (2) — — — — (32) Pre-tax impact of non-GAAP adjustments 21 31 65 30 (3) Tax effect of non-GAAP adjustments (5) (8) (16) (8) 1 Total non-GAAP adjustments, net of tax 16 23 49 22 (2) Adjusted net income available to common shareholders (5) $ 462 $ 346 $ 348 $ 459 $ 505 Pre-tax income $ 558 $ 433 $ 415 $ 616 $ 652 Pre-tax impact of non-GAAP adjustments (as detailed above) 21 31 65 30 (3) Adjusted pre-tax income (5) $ 579 $ 464 $ 480 $ 646 $ 649 Compensation, commissions and benefits expense $ 1,884 $ 1,852 $ 1,834 $ 1,759 $ 1,736 Less: Acquisition-related retention (as detailed above) 11 14 18 17 18 Adjusted “Compensation, commissions and benefits” expense (5) $ 1,873 $ 1,838 $ 1,816 $ 1,742 $ 1,718 RAYMOND JAMES FINANCIAL, INC. Please refer to the footnotes at the end of this supplement for additional information. 12
Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited) (Continued from previous page) Three months ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Pre-tax margin (8) 20.1 % 16.2 % 15.3 % 21.8 % 23.4 % Impact of non-GAAP adjustments on pre-tax margin: Compensation, commissions and benefits — Acquisition-related retention (1) 0.4 % 0.5 % 0.7 % 0.6 % 0.6 % Professional fees — % 0.2 % 0.1 % — % — % Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans — % — % 1.0 % — % — % Other: Amortization of identifiable intangible assets (16) 0.3 % 0.2 % 0.3 % 0.4 % 0.4 % Initial provision for credit losses on acquired lending commitments — % — % 0.2 % — % — % All other acquisition-related expenses — % 0.3 % 0.1 % — % — % Total “Other” expense 0.3 % 0.5 % 0.6 % 0.4 % 0.4 % Total expenses related to acquisitions 0.7 % 1.2 % 2.4 % 1.0 % 1.0 % Other — Insurance settlement received (2) — % — % — % — % (1.1) % Total non-GAAP adjustments 0.7 % 1.2 % 2.4 % 1.0 % (0.1) % Adjusted pre-tax margin (5) (8) 20.8 % 17.4 % 17.7 % 22.8 % 23.3 % Total compensation ratio (9) 67.7 % 69.3 % 67.5 % 62.1 % 62.3 % Less the impact of non-GAAP adjustments on compensation ratio: Acquisition-related retention (1) 0.4 % 0.5 % 0.7 % 0.6 % 0.6 % Adjusted total compensation ratio (5) (9) 67.3 % 68.8 % 66.8 % 61.5 % 61.7 % RAYMOND JAMES FINANCIAL, INC. Please refer to the footnotes at the end of this supplement for additional information. 13
Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited) (Continued from previous page) Three months ended Earnings per common share (3) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Basic $ 2.16 $ 1.56 $ 1.41 $ 2.03 $ 2.36 Impact of non-GAAP adjustments on basic earnings per common share: Compensation, commissions and benefits — Acquisition-related retention (1) 0.04 0.07 0.09 0.08 0.08 Professional fees 0.01 0.02 0.02 — — Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans — — 0.12 — — Other: Amortization of identifiable intangible assets (16) 0.04 0.03 0.04 0.05 0.06 Initial provision for credit losses on acquired lending commitments — — 0.02 — — All other acquisition-related expenses — 0.03 0.02 0.01 — Total “Other” expense 0.04 0.06 0.08 0.06 0.06 Total expenses related to acquisitions 0.09 0.15 0.31 0.14 0.14 Other — Insurance settlement received (2) — — — — (0.15) Tax effect of non-GAAP adjustments (0.02) (0.04) (0.07) (0.04) — Total non-GAAP adjustments, net of tax 0.07 0.11 0.24 0.10 (0.01) Adjusted basic (5) $ 2.23 $ 1.67 $ 1.65 $ 2.13 $ 2.35 RAYMOND JAMES FINANCIAL, INC. Please refer to the footnotes at the end of this supplement for additional information. 14
Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited) (Continued from previous page) Three months ended Earnings per common share (3) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Diluted $ 2.10 $ 1.52 $ 1.38 $ 1.98 $ 2.30 Impact of non-GAAP adjustments on diluted earnings per common share: Compensation, commissions and benefits — Acquisition-related retention (1) 0.05 0.06 0.08 0.08 0.08 Professional fees 0.01 0.02 0.02 — — Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans — — 0.12 — — Other: Amortization of identifiable intangible assets (16) 0.03 0.03 0.04 0.05 0.06 Initial provision for credit losses on acquired lending commitments — — 0.02 — — All other acquisition-related expenses — 0.03 0.02 0.01 — Total “Other” expense 0.03 0.06 0.08 0.06 0.06 Total expenses related to acquisitions 0.09 0.14 0.30 0.14 0.14 Other — Insurance settlement received (2) — — — — (0.15) Tax effect of non-GAAP adjustments (0.02) (0.04) (0.07) (0.04) — Total non-GAAP adjustments, net of tax 0.07 0.10 0.23 0.10 (0.01) Adjusted diluted (5) $ 2.17 $ 1.62 $ 1.61 $ 2.08 $ 2.29 Book value per share As of $ in millions, except per share amounts December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Total common equity attributable to Raymond James Financial, Inc. $ 8,600 $ 8,602 $ 9,395 $ 9,338 $ 9,736 Less non-GAAP adjustments: Goodwill and identifiable intangible assets, net 874 1,110 1,810 1,931 1,938 Deferred tax liabilities related to goodwill and identifiable intangible assets, net (65) (88) (128) (126) (129) Tangible common equity attributable to Raymond James Financial, Inc. (5) $ 7,791 $ 7,580 $ 7,713 $ 7,533 $ 7,927 Common shares outstanding 207.5 207.9 215.5 215.1 215.0 Book value per share (4) $ 41.45 $ 41.38 $ 43.60 $ 43.41 $ 45.28 Tangible book value per share (4) (5) $ 37.55 $ 36.46 $ 35.79 $ 35.02 $ 36.87 RAYMOND JAMES FINANCIAL, INC. Please refer to the footnotes at the end of this supplement for additional information. 15
Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited) (Continued from previous page) Return on common equity Three months ended $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Average common equity (17) $ 8,423 $ 8,601 $ 8,999 $ 9,367 $ 9,537 Impact of non-GAAP adjustments on average common equity: Compensation, commissions and benefits — Acquisition-related retention (1) 6 7 9 9 9 Professional fees 1 3 2 1 — Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans — — 13 — — Other: Amortization of identifiable intangible assets (16) 4 3 4 5 5 Initial provision for credit losses on acquired lending commitments — — 3 — — All other acquisition-related expenses — 3 2 — — Total “Other” expense 4 6 9 5 5 Total expenses related to acquisitions 11 16 33 15 14 Other — Insurance settlement received (2) — — — — (16) Tax effect of non-GAAP adjustments (3) (4) (8) (4) 1 Total non-GAAP adjustments, net of tax 8 12 25 11 (1) Adjusted average common equity (5) (17) $ 8,431 $ 8,613 $ 9,024 $ 9,378 $ 9,536 RAYMOND JAMES FINANCIAL, INC. Please refer to the footnotes at the end of this supplement for additional information. 16
Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited) (Continued from previous page) Return on tangible common equity Three months ended $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Average common equity (17) $ 8,423 $ 8,601 $ 8,999 $ 9,367 $ 9,537 Less: Average goodwill and identifiable intangible assets, net 878 992 1,460 1,871 1,935 Average deferred tax liabilities related to goodwill and identifiable intangible assets, net (64) (77) (108) (127) (128) Average tangible common equity (5) (17) $ 7,609 $ 7,686 $ 7,647 $ 7,623 $ 7,730 Impact of non-GAAP adjustments on average tangible common equity: Compensation, commissions and benefits — Acquisition-related retention (1) 6 7 9 9 9 Professional fees 1 3 2 1 — Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans — — 13 — — Other: Amortization of identifiable intangible assets (16) 4 3 4 5 5 Initial provision for credit losses on acquired lending commitments — — 3 — — All other acquisition-related expenses — 3 2 — — Total “Other” expense 4 6 9 5 5 Total expenses related to acquisitions 11 16 33 15 14 Other — Insurance settlement received (2) — — — — (16) Tax effect of non-GAAP adjustments (3) (4) (8) (4) 1 Total non-GAAP adjustments, net of tax 8 12 25 11 (1) Adjusted average tangible common equity (5) (17) $ 7,617 $ 7,698 $ 7,672 $ 7,634 $ 7,729 Return on equity (7) 21.2 % 15.0 % 13.3 % 18.7 % 21.3 % Adjusted return on equity (5) (7) 21.9 % 16.1 % 15.4 % 19.6 % 21.2 % Return on tangible common equity (5) (7) 23.4 % 16.8 % 15.6 % 22.9 % 26.2 % Adjusted return on tangible common equity (5) (7) 24.3 % 18.0 % 18.1 % 24.1 % 26.1 % RAYMOND JAMES FINANCIAL, INC. Please refer to the footnotes at the end of this supplement for additional information. 17
Footnotes (1) Includes acquisition-related compensation expenses arising from equity and cash-based retention awards issued in conjunction with acquisitions in prior years. Such retention awards are generally contingent upon the post-closing continuation of service of certain associates who joined the firm as part of such acquisitions and are expensed over the requisite service period. (2) The three months ended December 31, 2022 included the favorable impact of a $32 million insurance settlement received during the quarter related to a previously settled litigation matter. This item has been reflected as an offset to Other expenses within our Other segment. In the computation of our non-GAAP financial measures, we have reversed the favorable impact of this item on adjusted pre-tax income and adjusted net income available to common shareholders. See the schedules on the previous pages for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. (3) Earnings per common share is computed by dividing net income available to common shareholders (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period or, in the case of adjusted earnings per common share, computed by dividing adjusted net income available to common shareholders (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period. The allocations of earnings and dividends to participating securities were $1 million for each of the three months ended December 31, 2021, June 30, 2022, September 30, 2022, and December 31, 2022 and $0 for the three months ended March 31, 2022. (4) Book value per share is computed by dividing total common equity attributable to Raymond James Financial, Inc. by the number of common shares outstanding at the end of each respective period or, in the case of tangible book value per share, computed by dividing tangible common equity by the number of common shares outstanding at the end of each respective period. (5) These are non-GAAP financial measures. See the schedules on the previous pages for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. (6) Estimated. (7) Return on common equity is computed by dividing annualized net income available to common shareholders by average common equity for each respective period or, in the case of return on tangible common equity, computed by dividing annualized net income available to common shareholders by average tangible common equity for each respective period. Adjusted return on common equity is computed by dividing annualized adjusted net income available to common shareholders by adjusted average common equity for each respective period, or in the case of adjusted return on tangible common equity, computed by dividing annualized adjusted net income available to common shareholders by adjusted average tangible common equity for each respective period. Tangible common equity is defined as total common equity attributable to Raymond James Financial, Inc. less goodwill and intangible assets, net of related deferred taxes. (8) Pre-tax margin is computed by dividing pre-tax income by net revenues for each respective period or, in the case of adjusted pre-tax margin, computed by dividing adjusted pre-tax income by net revenues for each respective period. (9) Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period. Adjusted total compensation ratio is computed by dividing adjusted compensation, commissions and benefits expense by net revenues for each respective period. (10) Domestic Private Client Group net new assets represents domestic Private Client Group client inflows, including dividends and interest, less domestic Private Client Group client outflows, including commissions, advisory fees and other fees. The Domestic Private Client Group net new asset growth — annualized percentage is based on the beginning Domestic Private Client Group AUA balance for the indicated period. (11) We earn fees from RJBDP, a multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into interest-bearing deposit accounts at Raymond James Bank and TriState Capital Bank, which are included in our Bank segment, as well as various third-party banks. Fees earned by the Private Client Group on deposits held by our Bank segment are eliminated in consolidation. (12) Average yield on RJBDP - third-party banks is computed by dividing annualized RJBDP fees - third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balances at third-party banks. (13) The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, certain acquisition-related expenses, and certain corporate overhead costs of RJF, including the interest costs on certain of our public debt. (14) Corporate loans included commercial and industrial loans, commercial real estate loans, and real estate investment trust loans. (15) Securities-based loans included loans collateralized by the borrower’s marketable securities at advance rates consistent with industry standards and, to a lesser extent, the cash surrender value of life insurance policies. (16) Amortization of identifiable intangible assets, which was included in “Other” expense, includes amortization of identifiable intangible assets arising from our acquisitions. (17) Average common equity is computed by adding the total common equity attributable to Raymond James Financial, Inc. as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two. Adjusted average common equity is computed by adjusting for the impact on average common equity of the non-GAAP adjustments, as applicable for each respective period. Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period. RAYMOND JAMES FINANCIAL, INC. 18
rjf1231q123presentation
Fiscal 1Q23 Results January 25, 2023
Forward-looking statements Certain statements made in this presentation and the associated conference call may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions, demand for and pricing of our products, acquisitions, divestitures, anticipated results of litigation, regulatory developments, and general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, is intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the “SEC”) from time to time, including our most recent Annual Report on Form 10-K, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise. 2
Overview of Results Paul Reilly Chair & CEO, Raymond James Financial 3
Fiscal 1Q23 highlights 4 *These are non-GAAP measures. See the schedules in the Appendix of this presentation for a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures and for more information on these measures. Certain non-GAAP financial measures have been adjusted for additional expenses directly related to our acquisitions that we believe are not indicative of our core operating results, such as those related to amortization of identifiable intangible assets arising from acquisitions and acquisition-related retention. Prior periods have been conformed to the current period presentation. $ in millions, except per share amounts 1Q23 vs. 1Q22 vs. 4Q22 As reported: Net revenues $ 2,786 —% (2)% Net income available to common shareholders RECORD $ 507 14% 16% Earnings per common share - diluted RECORD $ 2.30 10% 16% 1Q22 4Q22 Return on common equity 21.3 % 21.2% 18.7% vs. 1Q22 vs. 4Q22 Non-GAAP measures*: Adjusted net income available to common shareholders RECORD $ 505 9% 10% Adjusted earnings per common share - diluted RECORD $ 2.29 6% 10% 1Q22 4Q22 Adjusted return on common equity 21.2 % 21.9% 19.6% Adjusted return on tangible common equity 26.1 % 24.3% 24.1%
Fiscal 1Q23 key metrics 5 $ in billions 1Q23 vs. 1Q22 vs. 4Q22 Client assets under administration $ 1,169.7 (7)% 7% Private Client Group (PCG) assets under administration $ 1,114.3 (7)% 7% PCG assets in fee-based accounts $ 633.1 (7)% 8% Financial assets under management $ 185.9 (9)% 7% Domestic PCG net new assets* $ 23.2 NM NM Total clients' domestic cash sweep balances $ 60.4 (18)% (10)% PCG financial advisors 8,699 3% —% Bank loans, net: Raymond James Bank RECORD $ 31.7 21% 2% TriState Capital Bank** RECORD $ 12.4 NM 2% Total bank loans, net RECORD $ 44.1 69% 2% *Domestic Private Client Group net new assets represents domestic Private Client Group client inflows, including dividends and interest, less domestic Private Client Group client outflows, including commissions, advisory fees and other fees. **Acquired on June 1, 2022.
Note: Segments do not total consolidated results because of the Other segment and intersegment eliminations not shown. Starting in 3Q22, the Bank Segment results include Raymond James Bank and TriState Capital Bank. Fiscal 1Q23 segment results 6 $ in millions 1Q23 vs. 1Q22 vs. 4Q22 Net revenues: Private Client Group RECORD $ 2,063 12% 4% Capital Markets $ 295 (52)% (26)% Asset Management $ 207 (12)% (4)% Bank RECORD $ 508 178% 19% Consolidated net revenues $ 2,786 —% (2)% Pre-tax income: Private Client Group RECORD $ 434 123% 17% Capital Markets $ (16) NM NM Asset Management $ 80 (25)% (4)% Bank $ 136 33% 11% Consolidated pre-tax income RECORD $ 652 17% 6%
Financial Review Paul Shoukry Chief Financial Officer, Raymond James Financial 7
Consolidated net revenues 8 $ in millions 1Q23 vs. 1Q22 vs. 4Q22 Asset management and related administrative fees $ 1,242 (10)% (4)% Brokerage revenues 484 (13)% 1% Account and service fees 289 63% 9% Investment banking 141 (67)% (35)% Interest income 827 268% 24% Other 44 (14)% (45)% Total revenues 3,027 7% 1% Interest expense (241) 551% 42% Net revenues $ 2,786 —% (2)%
Domestic cash sweep balances 9 C lie nt s' D om es tic C as h S w ee p B al an ce s ($ B ) C ash S w eep B alances as a % of D om estic P C G A U A CLIENTS' DOMESTIC CASH SWEEP BALANCES AS A % OF DOMESTIC PCG ASSETS UNDER ADMINISTRATION (AUA) 33.1 33.6 36.6 38.7 39.1 24.3 25.9 25.5 22.0 18.2 16.1 17.0 13.7 6.4 3.1 73.5 76.5 75.8 67.1 60.4 6.5% 7.0% 7.8% 7.0% 5.9% RJBDP - Bank Segment* RJBDP - Third-Party Banks* Client Interest Program 1Q22 2Q22 3Q22 4Q22 1Q23 Note: May not total due to rounding. *Raymond James Bank Deposit Program (RJBDP) is a multi-bank sweep program in which clients' cash deposits in their brokerage accounts are swept into interest-bearing deposit accounts at our Bank segment, which includes Raymond James Bank and TriState Capital Bank, as well as various third-party banks. Year-over-year change: (18)% Sequential change: (10)%
Net interest income & RJBDP fees (third-party banks) 10 Note: Starting in 3Q22, the Bank Segment results include Raymond James Bank and TriState Capital Bank. *As reported in Account and Service Fees in the PCG segment. **Computed by dividing annualized RJBDP Fees (Third-Party Banks), which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balances at third-party banks. $ IN MILLIONS 205 224 370 606 723 188 204 314 497 586 Firmwide Net Interest Income RJBDP Fees (Third-Party Banks)* 1Q22 2Q22 3Q22 4Q22 1Q23 NET INTEREST MARGIN (NIM) 1.92% 2.01% 2.41% 2.91% 3.36% 1.29% 1.25% 1.77% 2.53% 3.19% Firmwide NIM Bank Segment NIM 1Q22 2Q22 3Q22 4Q22 1Q23 AVERAGE YIELD ON RJBDP (THIRD-PARTY BANKS)** 0.28% 0.32% 0.88% 1.85% 2.72% 1Q22 2Q22 3Q22 4Q22 1Q23 Year-over-year change: 253% Sequential change: 19% 17 137 20 56 109
Consolidated expenses 11 $ in millions 1Q23 vs. 1Q22 vs. 4Q22 Compensation, commissions and benefits $ 1,736 (8)% (1)% Non-compensation expenses: Communications and information processing 139 24% 1% Occupancy and equipment 66 12% —% Business development 56 60% (5)% Investment sub-advisory fees 34 (11)% (6)% Professional fees 32 14% (16)% Bank loan provision/(benefit) for credit losses 14 NM (59)% Other* 57 (27)% (33)% Total non-compensation expenses 398 17% (13)% Total non-interest expenses $ 2,134 (4)% (4)% Note: See the schedules in the Appendix of this presentation for a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures and for more information on these measures. *The three months ended December 31, 2022 included the favorable impact of a $32 million insurance settlement received during the quarter related to a previously settled litigation matter. In the computation of our non-GAAP financial measures, we have reversed the favorable impact of this item on adjusted pre-tax income and adjusted net income available to common shareholders. **Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period. Adjusted total compensation ratio is computed by dividing adjusted compensation, commissions and benefits expense by net revenues for each respective period. ***These are non-GAAP financial measures. TOTAL NON-COMPENSATION EXPENSES $ IN MILLIONS 339 388 469 456 398 1Q22 2Q22 3Q22 4Q22 1Q23 TOTAL COMPENSATION RATIO** 67.7% 69.3% 67.5% 62.1% 62.3% 67.3% 68.8% 66.8% 61.5% 61.7% Adjusted Total Compensation Ratio*** Total Compensation Ratio 1Q22 2Q22 3Q22 4Q22 1Q23 *
* This is a non-GAAP measure. See the schedules in the Appendix of this presentation for a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures and for more information on these measures. Consolidated pre-tax margin 12 20.1% 16.2% 15.3% 23.4% 20.8% 17.4% 17.7% 22.8% 23.3% Pre-Tax Margin (GAAP) Pre-Tax Margin (Adjusted)* 1Q22 2Q22 3Q22 4Q22 1Q23 21.8%
Other financial information 13 *This amount includes cash on hand at the parent, as well as parent cash loaned to Raymond James & Associates ("RJ&A"), which RJ&A has invested on behalf of RJF in cash and cash equivalents or otherwise deployed in its normal business activities. **This is a non-GAAP measure. See the schedules in the Appendix of this presentation for a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures and for more information on these measures. ***Estimated. $ in millions, except per share amounts 1Q23 vs. 1Q22 vs. 4Q22 Total assets $ 77,047 13% (5)% RJF corporate cash* $ 2,014 43% 5% Total common equity attributable to RJF $ 9,736 13% 4% Book value per share $ 45.28 9% 4% Tangible book value per share** $ 36.87 (2)% 5% Weighted-average common and common equivalent shares outstanding – diluted 220.4 4% — 1Q22 4Q22 Tier 1 leverage ratio*** 11.3 % 12.1% 10.3% Tier 1 capital ratio*** 20.3 % 25.9% 19.2% Common equity tier 1 ratio*** 20.0 % 25.9% 19.0% Total capital ratio*** 21.5 % 27.0% 20.4% Effective tax rate 21.9 % 20.1% 28.7%
$654M of dividends paid and share repurchases over the past 5 quarters Capital management 14 DIVIDENDS PAID AND SHARE REPURCHASES $ IN MILLIONS 60 71 171 135 217 — — 100 62 138 60 71 71 73 79 Share Repurchases* Dividends Paid** 1Q22 2Q22 3Q22 4Q22 1Q23 Number of Shares Repurchased* (thousands) — — 1,136 600 1,292 Average Share Price of Shares Repurchased* — — $87.98 $104.07 $106.46 *Under the Board of Directors common stock repurchase authorization. **Reflects dividends paid to holders of common shares. ***Indicates amount remaining as of 12/31/22 under the Board of Directors $1.5 billion common stock repurchase authorization approved on December 1, 2022. $1.4B remains under current common stock repurchase authorization***
Bank segment key credit trends 15 $ in millions 1Q23 vs. 1Q22 vs. 4Q22 Bank loan provision/(benefit) for credit losses $ 14 NM (59)% Net charge-offs $ 2 100% (86)% 1Q22 4Q22 Nonperforming assets as a % of total assets 0.11 % 0.20% 0.13% Bank loan allowance for credit losses as a % of loans held for investment 0.92 % 1.18% 0.91% Bank loan allowance for credit losses on corporate loans as a % of corporate loans held for investment* 1.64 % 2.13% 1.73% Criticized loans as a % of loans held for investment 1.01 % 2.75% 1.14% Note: Our Bank segment includes Raymond James Bank and TriState Capital Bank. *Corporate loans include commercial and industrial loans, commercial real estate loans, and real estate investment trust loans.
Outlook 16
Appendix 17
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) 18 We utilize certain non-GAAP financial measures as additional measures to aid in, and enhance, the understanding of our financial results and related measures. These non- GAAP financial measures have been separately identified in this document. We believe certain of these non-GAAP financial measures provides useful information to management and investors by excluding certain material items that may not be indicative of our core operating results. We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a comparison of current- and prior-period results. Beginning with our fiscal third quarter of 2022, certain of our non-GAAP financial measures have been adjusted for additional expenses directly related to our acquisitions that we believe are not indicative of our core operating results, such as those related to amortization of identifiable intangible assets arising from acquisitions and acquisition-related retention. Prior periods have been conformed to the current period presentation. We believe that return on tangible common equity and tangible book value per share are meaningful to investors as they facilitate comparisons of our results to the results of other companies. In the following tables, the tax effect of non-GAAP adjustments reflects the statutory rate associated with each non-GAAP item. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other companies. The following tables provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures. Note: Please refer to the footnotes on slide 27 for additional information. continued on next slide
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) Note: Please refer to the footnotes on slide 27 for additional information. continued on next slide19 Three months ended $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Net income available to common shareholders: $ 446 $ 323 $ 299 $ 437 $ 507 Non-GAAP adjustments: Expenses directly related to acquisitions included in the following financial statement line items: Compensation, commissions and benefits — Acquisition-related retention (1) 11 14 18 17 18 Professional fees 2 5 4 1 — Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans — — 26 — — Other: Amortization of identifiable intangible assets (2) 8 6 8 11 11 Initial provision for credit losses on acquired lending commitments — — 5 — — All other acquisition-related expenses — 6 4 1 — Total “Other” expense 8 12 17 12 11 Total expenses related to acquisitions 21 31 65 30 29 Other — Insurance settlement received (3) — — — — (32) Pre-tax impact of non-GAAP adjustments 21 31 65 30 (3) Tax effect of non-GAAP adjustments (5) (8) (16) (8) 1 Total non-GAAP adjustments, net of tax 16 23 49 22 (2) Adjusted net income attributable to common shareholders (4) $ 462 $ 346 $ 348 $ 459 $ 505 Pre-tax income $ 558 $ 433 $ 415 $ 616 $ 652 Pre-tax impact of non-GAAP adjustments (as detailed above) 21 31 65 30 (3) Adjusted pre-tax income (4) $ 579 $ 464 $ 480 $ 646 $ 649
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) Three months ended $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Pre-tax margin (5) 20.1 % 16.2 % 15.3 % 21.8 % 23.4 % Impact of non-GAAP adjustments on pre-tax margin: Compensation, commissions and benefits — Acquisition-related retention (1) 0.4 % 0.5 % 0.7 % 0.6 % 0.6 % Professional fees — % 0.2 % 0.1 % — % — % Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans — % — % 1.0 % — % — % Other: Amortization of identifiable intangible assets (2) 0.3 % 0.2 % 0.3 % 0.4 % 0.4 % Initial provision for credit losses on acquired lending commitments — % — % 0.2 % — % — % All other acquisition-related expenses — % 0.3 % 0.1 % — % — % Total “Other” expense 0.3 % 0.5 % 0.6 % 0.4 % 0.4 % Total expenses related to acquisitions 0.7 % 1.2 % 2.4 % 1.0 % 1.0 % Other — Insurance settlement received (3) — % — % — % — % (1.1) % Total non-GAAP adjustments, net of tax 0.7 % 1.2 % 2.4 % 1.0 % (0.1) % Adjusted pre-tax margin (4) (5) 20.8 % 17.4 % 17.7 % 22.8 % 23.3 % Note: Please refer to the footnotes on slide 27 for additional information. continued on next slide20
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) 21 Note: Please refer to the footnotes on slide 27 for additional information. continued on next slide Three months ended December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Total compensation ratio (6) 67.7 % 69.3 % 67.5 % 62.1 % 62.3 % Less the impact of non-GAAP adjustments on compensation ratio: Acquisition-related retention (1) 0.4 % 0.5 % 0.7 % 0.6 % 0.6 % Adjusted total compensation ratio (4) (6) 67.3 % 68.8 % 66.8 % 61.5 % 61.7 % Three months ended $ in millions December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Compensation, commissions and benefits expense 1,884 $ 1,852 $ 1,834 1,759 1,736 Acquisition-related retention (1) 11 14 18 17 18 Adjusted compensation, commissions and benefits expense (4) $ 1,873 $ 1,838 $ 1,816 $ 1,742 $ 1,718
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) 22 Note: Please refer to the footnotes on slide 27 for additional information. Three months ended Earnings per common share (7) December 31, 2021 September 30, 2022 December 31, 2022 Basic $ 2.16 $ 2.03 2.36 Impact of non-GAAP adjustments on basic earnings per common share: Compensation, commissions and benefits — acquisition-related retention (1) 0.04 0.08 0.08 Professional fees 0.01 — — Other: Amortization of identifiable intangible assets (2) 0.04 0.05 0.06 All other acquisition-related expenses — 0.01 — Total “Other” expense 0.04 0.06 0.06 Total expenses related to acquisitions 0.09 0.14 0.14 Other — Insurance settlement received (3) — — (0.15) Tax effect of non-GAAP adjustments (0.02) (0.04) — Total non-GAAP adjustments, net of tax 0.07 0.10 (0.01) Adjusted basic (4) $ 2.23 $ 2.13 $ 2.35 continued on next slide
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) 23 Note: Please refer to the footnotes on slide 27 for additional information. continued on next slide Three months ended Earnings per common share (7) December 31, 2021 September 30, 2022 December 31, 2022 Diluted $ 2.10 $ 1.98 2.30 Impact of non-GAAP adjustments on diluted earnings per common share: Compensation, commissions and benefits — acquisition-related retention (1) 0.05 0.08 0.08 Professional fees 0.01 — — Other: Amortization of identifiable intangible assets (2) 0.03 0.05 0.06 All other acquisition-related expenses — 0.01 — Total “Other” expense 0.03 0.06 0.06 Total expenses related to acquisitions 0.09 0.14 0.14 Other — Insurance settlement received (3) — — (0.15) Tax effect of non-GAAP adjustments (0.02) (0.04) — Total non-GAAP adjustments, net of tax 0.07 0.10 (0.01) Adjusted diluted (4) $ 2.17 $ 2.08 $ 2.29
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) 24 Note: Please refer to the footnotes on slide 27 for additional information. continued on next slide Book value per share As of $ in millions, except per share amounts December 31, 2021 September 30, 2022 December 31, 2022 Total common equity attributable to Raymond James Financial, Inc. $ 8,600 $ 9,338 $ 9,736 Less non-GAAP adjustments: Goodwill and identifiable intangible assets, net 874 1,931 1,938 Deferred tax liabilities related to goodwill and identifiable intangible assets, net (65) (126) (129) Tangible common equity attributable to Raymond James Financial, Inc. $ 7,791 $ 7,533 $ 7,927 Common shares outstanding 207.5 215.1 215.0 Book value per share (8) $ 41.45 $ 43.41 $ 45.28 Tangible book value per share (4) (8) $ 37.55 $ 35.02 $ 36.87
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) 25 Note: Please refer to the footnotes on slide 27 for additional information. Return on common equity Three months ended $ in millions December 31, 2021 September 30, 2022 December 31, 2022 Average common equity (9) $ 8,423 $ 9,367 $ 9,537 Impact of non-GAAP adjustments on average common equity: Compensation, commissions and benefits — acquisition-related retention (1) 6 9 9 Professional fees 1 1 — Other: Amortization of identifiable intangible assets (2) 4 5 5 Total “Other” expense 4 5 5 Total expenses related to acquisitions 11 15 14 Other — Insurance settlement received (3) — — (16) Tax effect of non-GAAP adjustments (3) (4) 1 Total non-GAAP adjustments, net of tax $ 8 $ 11 $ (1) Adjusted average common equity (4) (9) $ 8,431 $ 9,378 $ 9,536 continued on next slide
Reconciliation of non-GAAP financial measures to GAAP financial measures (unaudited) 26 Note: Please refer to the footnotes on slide 27 for additional information. Return on equity Three months ended $ in millions December 31, 2021 September 30, 2022 December 31, 2022 Average common equity (9) $ 8,423 $ 9,367 $ 9,537 Less: Average goodwill and identifiable intangible assets, net 878 1,871 1,935 Average deferred tax liabilities related to goodwill and identifiable intangible assets, net (64) (127) (128) Total non-GAAP adjustment 814 1,744 1,807 Average tangible common equity (4) (9) $ 7,609 $ 7,623 $ 7,730 Impact on non-GAAP adjustments on average tangible common equity: Compensation, commissions and benefits — Acquisition-related retention (1) 6 9 9 Professional fees 1 1 — Other: Amortization of identifiable intangible assets (2) 4 5 5 Total “Other” expense 4 5 5 Total expenses related to acquisitions 11 15 14 Other — Insurance settlement received (3) — — (16) Tax effect of non-GAAP adjustments (3) (4) 1 Total non-GAAP adjustments, net of tax $ 8 $ 11 $ (1) Adjusted average tangible common equity (4) (9) $ 7,617 $ 7,634 $ 7,729 Return on common equity (4) (10) 21.2 % 18.7 % 21.3 % Adjusted return on common equity (4) (10) 21.9 % 19.6 % 21.2 % Return on tangible common equity (4) (10) 23.4 % 22.9 % 26.2 % Adjusted return on tangible common equity (4) (10) 24.3 % 24.1 % 26.1 %
Footnotes 27 (1) Includes acquisition-related compensation expenses arising from equity and cash-based retention awards issued in conjunction with acquisitions in prior years. Such retention awards are generally contingent upon the post-closing continuation of service of certain associates who joined the firm as part of such acquisitions and are expensed over the requisite service period. (2) Amortization of identifiable intangible assets, which was included in “Other” expense, includes amortization of identifiable intangible assets arising from our acquisitions. (3) The three months ended December 31, 2022 included the favorable impact of a $32 million insurance settlement received during the quarter related to a previously settled litigation matter. This item has been reflected as an offset to Other expenses within our Other segment. In the computation of our non-GAAP financial measures, we have reversed the favorable impact of this item on adjusted pre-tax income and adjusted net income available to common shareholders. See the schedules on the previous pages for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. (4) These are non-GAAP financial measures. See the schedules on the previous pages for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. (5) Pre-tax margin is computed by dividing pre-tax income by net revenues for each respective period or, in the case of adjusted pre-tax margin, computed by dividing adjusted pre-tax income by net revenues for each respective period. (6) Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period. Adjusted total compensation ratio is computed by dividing adjusted compensation, commissions and benefits expense by net revenues for each respective period. (7) Earnings per common share is computed by dividing net income available to common shareholders (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period or, in the case of adjusted earnings per common share, computed by dividing adjusted net income available to common shareholders (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period. The allocations of earnings and dividends to participating securities were $1 million for each of the three months ended December 31, 2022, September 30, 2022, and December 31, 2021. (8) Book value per share is computed by dividing total common equity attributable to Raymond James Financial, Inc. by the number of common shares outstanding at the end of each respective period or, in the case of tangible book value per share, computed by dividing tangible common equity by the number of common shares outstanding at the end of each respective period. (9) Average common equity is computed by adding the total common equity attributable to Raymond James Financial, Inc. as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two. Adjusted average common equity is computed by adjusting for the impact on average common equity of the non-GAAP adjustments, as applicable for each respective period. Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period. (10) Return on common equity is computed by dividing annualized net income available to common shareholders by average common equity for each respective period or, in the case of return on tangible common equity, computed by dividing annualized net income available to common shareholders by average tangible common equity for each respective period. Adjusted return on common equity is computed by dividing annualized adjusted net income available to common shareholders by adjusted average common equity for each respective period, or in the case of adjusted return on tangible common equity, computed by dividing annualized adjusted net income available to common shareholders by adjusted average tangible common equity for each respective period. Tangible common equity is defined as total common equity attributable to Raymond James Financial, Inc. less goodwill and intangible assets, net of related deferred taxes.