What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-11-23 compared with 2020-11-24 · 992 added, 893 removed, 2028 unchanged (48% of the section changed)

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Note 2 - Summary of significant accounting policies 86

Note 3 - Acquisitions 104

Note 4 - Fair value 106

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Note 8 - Bank loans, net 117

Note 9 - Loans to financial advisors, net 123

Note 10 - Variable interest entities 123

Note 9 - Property and equipment, net 122

Note 11 - Goodwill and identifiable intangible assets, net 125

Note 12 - Other assets 127

Note 13 - Property and equipment, net 127

Note 14 - Leases 128

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Note 27 - Condensed financial information (parent company only) 148

Supplementary data 150

Report of Independent Registered Public Accounting Firm

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of the allowance for loan losses related to both the commercial and industrial (C&I) and the commercial real estate (CRE) loan portfolios that are collectively evaluated for impairment

As discussed in Notes 2 and 7 to the consolidated financial statements, the Company’s allowance for loan losses related to loans collectively evaluated for impairment (ALL) was based on quantitative historical loss rates adjusted by an estimate of the loss emergence period.

The Company also adjusted the quantitative historical loss rates by considering qualitative factors that cause the estimated losses to differ from quantitatively calculated amounts.

The Company recorded a total allowance for loan losses of $354 million as of September 30, 2020.

Of that amount, the ALL for C&I loans was $200 million or 56% of the total allowance, and the ALL for CRE loans was $117 million or 33% of the total allowance.

We identified the assessment of the ALL related to the C&I and CRE loan portfolios as a critical audit matter because it required a significant degree of subjective auditor judgment and specialized industry skills and knowledge.

There was subjectivity in performing procedures over key factors and assumptions used by the Company, including selection of proxy data used to develop loss rates and the evaluation of loss emergence periods.

There were also subjective judgments and specialized skills and knowledge needed to assess loan characteristics, such as loan risk ratings, and to evaluate the development and application of the ALL methodology and the use of qualitative factors.

Assessment of the allowance for credit losses related to the commercial and industrial (C&I), real estate investment trust (REIT) and the commercial real estate (CRE) portfolio segments that are collectively evaluated for impairment

As discussed in Note 2 and Note 8 to the consolidated financial statements, the Company’s allowance for credit losses on Bank loans was $320 million as of September 30, 2021, a portion of which related to the allowance for credit losses (ACL) on C&I, REIT and CRE portfolio segments evaluated on a collective basis (the collective ACL).

The Company estimates the collective ACL using a current expected credit losses methodology which is based on relevant information about historical losses, current conditions, and reasonable and supportable forecasts of economic conditions that affect the collectability of loan balances.

The collective ACL is a product of multiplying the Company’s estimates of probability of default (PD), loss given default (LGD) and exposure at default.

The Company uses third-party historical information

combined with macroeconomic variables over the reasonable and supportable forecast periods based on a single economic forecast scenario to estimate the PDs and LGDs.

After the reasonable and supportable forecast periods, for C&I and REIT portfolio segments, the Company reverts to historical loss information over a one-year period using a straight-line reversion approach.

For the CRE portfolio segment, the Company incorporates a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the assets.

The estimated PDs and LGDs are applied to estimated exposure at default considering the contractual loan term adjusted for expected prepayments to estimate expected losses.

Adjustments are made to the collective ACL to reflect certain qualitative factors that are not incorporated into the quantitative models and related estimate.

We identified the assessment of the September 30, 2021 collective ACL on Bank loans related to the C&I, REIT and CRE portfolio segments as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment due to significant measurement uncertainty.

Specifically, the assessment encompassed the evaluation of the September 30, 2021 collective ACL methodology, including the methods and models used to estimate the PDs and LGDs and their significant assumptions.

Such significant assumptions included portfolio segmentation, risk ratings, the selection of the single economic forecast scenario and macroeconomic variables, the reasonable and supportable forecast periods and the reversion periods, and third-party historical information.

The assessment also included the evaluation of the qualitative factors by portfolio segment.

The assessment also included an evaluation of the conceptual soundness and performance of the PD and LGD models.

In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the measurement of the ALL for the C&I and CRE loan portfolios.

This included controls related to the (1) development and approval of the ALL methodology, (2) determination and calculation of key factors and assumptions as well as qualitative factors, and (3) analysis of the ALL results, trends, and ratios.

We evaluated the relevance of the historical proxy data used to develop loss rates by comparing the Company’s C&I loan portfolio characteristics to the historical proxy data characteristics.

In addition, we tested the CRE loss estimates by comparing them to loss data from independently determined industry peer groups.

We evaluated the loss emergence period by testing the loss triggering and confirmation dates for a selection of loans.

We assessed how the underlying assumptions used by the Company incorporated accurate metrics and other information and were applied in accordance with the qualitative framework.

In addition, we involved credit risk professionals with specialized industry skills and knowledge, who assisted in testing the Company’s process, including:

• evaluating the Company’s ALL methodology to determine if it is sufficiently structured, transparent, and repeatable to produce an estimate that is compliant with U.S.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the September 30, 2021 collective ACL estimate on Bank loans related to the C&I, REIT and CRE portfolio segments, including controls over the:

• development of the collective ACL methodology on Bank loans related to the C&I, REIT and CRE portfolio segments

• development of the PD and LGD models

• identification and determination of the significant assumptions used in the PD and LGD models

• development of the qualitative methodology and factors

• performance monitoring of the PD and LGD models

• analysis of the collective ACL on Bank loans related to the C&I, REIT and CRE portfolio segments results, trends, and ratios.

We evaluated the Company’s process to develop the September 30, 2021 collective ACL estimate on Bank loans related to the C&I, REIT and CRE portfolio segments by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions.

In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s collective ACL methodology for compliance with U.S.

generally accepted accounting principles

• performing credit file reviews on a selection of loans to assess loan characteristics, such as loan risk ratings, and

• evaluating the conceptual soundness of the qualitative framework to determine if it identified the relevant incremental risks not captured by the quantitative estimate.

• evaluating judgments made by the Company relative to the development and performance testing of the PD and LGD models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices

• assessing the conceptual soundness and performance of the PD and LGD models by inspecting the model documentation to determine whether the models are suitable for their intended use

• evaluating the selection of the economic forecast scenario and underlying macroeconomic variables by comparing it to the Company’s business environment and relevant industry practices

• evaluating the length of the reasonable and supportable forecast periods and the reversion periods by comparing them to specific portfolio segment risk characteristics and trends

• determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practices

• evaluating the relevance of third-party historical information by comparing to specific portfolio segment risk characteristics

• performing credit file reviews on a selection of loans to assess loan characteristics or risk ratings by evaluating the financial performance of the borrower, sources of repayment, and any relevant guarantees or underlying collateral and

• evaluating the methodology used to develop the qualitative factors and the effect of those factors on the allowance for credit losses on Bank loans compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying quantitative models.

We also assessed the sufficiency of the audit evidence obtained related to the September 30, 2021 collective ACL estimate on Bank loans related to the C&I, REIT and CRE portfolio segments by evaluating the:

• cumulative results of the audit procedures

• qualitative aspects of the Company’s accounting practices and

• potential bias in the accounting estimate.

We have served as the Company’s auditor since 2001.

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Cash and cash equivalents $ 7,201 $ 5,390

Cash and cash equivalents segregated pursuant to regulations 4,244 2,014

Assets segregated for regulatory purposes and restricted cash ( $ 2,100 and $ 0 at fair value)

Collateralized agreements 480 422

Financial instruments, at fair value:

Trading instruments ( $ 265 and $ 535 pledged as collateral)

Trading assets ( $ 326 and $ 265 pledged as collateral)

Available-for-sale securities ( $ 20 and $ 23 pledged as collateral)

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Loans to financial advisors, net 1,057 1,012

Property and equipment, net

Deferred income taxes, net

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Financial instrument liabilities, at fair value:

Trading instruments 240 296

Trading liabilities 176 240

Derivative liabilities 228 393

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Investment banking

1,143 650 596

Interest income

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Professional fees

Bank loan loss provision

Bank loan provision/(benefit) for credit losses ( 32 ) 233 22

Losses on extinguishment of debt 98 — —

Acquisition and disposition-related expenses

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Share issuances — — —

Issuance of shares for stock split 1 — —

Other ( 1 ) — —

Balance end of year

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Employee stock purchases

Exercise of stock options and vesting of restricted stock units, net of forfeitures

Vesting of restricted stock units and exercise of stock options, net of forfeitures ( 77 ) ( 80 ) 21

Restricted stock, stock option and restricted stock unit expense 126 113 107

Acquisition of noncontrolling interest and other

Issuance of shares for stock split ( 1 ) — —

Balance end of year

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6,484 5,874 5,032

Cumulative adjustments for changes in accounting principles ( 35 ) — 4

Net income attributable to Raymond James Financial, Inc.

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Exercise of stock options and vesting of restricted stock units, net of forfeitures

93 ( 4 ) ( 12 )

Balance end of year

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$ 62 $ 62 $ 84

Net loss attributable to noncontrolling interests

( 26 ) ( 14 ) ( 6 )

Capital contributions

Distributions and other

Net income/(loss) attributable to noncontrolling interests 23 ( 26 ) ( 14 )

( 27 ) 26 ( 8 )

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Deferred income taxes ( 37 ) ( 39 ) ( 23 )

Premium and discount amortization on available-for-sale securities and loss on other investments 57 14 21

Provisions for loan losses, legal and regulatory proceedings and bad debts 257 59 55

Premium and discount amortization on available-for-sale securities and net gain/loss on other investments 15 57 14

Provisions/(benefits) for credit losses and legal and regulatory proceedings ( 20 ) 257 59

Share-based compensation expense 132 120 112

Unrealized gain on company-owned life insurance policies, net of expenses ( 150 ) ( 46 ) ( 10 )

Losses on extinguishment of debt 98 — —

Goodwill impairment — — 19

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Net change in:

Assets segregated for regulatory purposes excluding cash and cash equivalents ( 2,100 ) — —

Collateralized agreements, net of collateralized financings ( 29 ) ( 55 ) ( 101 )

Loans provided to financial advisors, net of repayments ( 90 ) ( 49 ) ( 79 )

Brokerage client receivables and other accounts receivable, net 127 682 ( 491 )

Brokerage client receivables and other receivables, net ( 420 ) 127 682

Trading instruments, net ( 141 ) 150 41

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Other assets 16 ( 13 ) ( 71 )

Brokerage client payables and other accounts payable 2,486 ( 1,231 ) 346

Brokerage client payables and other payables 7,284 2,486 ( 1,231 )

Accrued compensation, commissions and benefits 416 70 80

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Cash flows from investing activities:

Additions to property and equipment

( 124 ) ( 138 ) ( 134 )

Increase in bank loans, net

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( 266 ) ( 5 ) ( 5 )

Additions to property and equipment

( 74 ) ( 124 ) ( 138 )

Other investing activities, net

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(continued from previous page)

Year ended September 30,

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Cash flows from financing activities:

Proceeds from borrowings on the RJF Credit Facility — 300 300

Repayment of borrowings on the RJF Credit Facility — ( 300 ) ( 300 )

Repayments of short-term borrowings, net — — ( 610 )

Proceeds from Federal Home Loan Bank advances 850 850 850

Repayments of Federal Home Loan Bank advances and other borrowed funds ( 855 ) ( 855 ) ( 855 )

Proceeds from senior notes issuances, net of debt issuance costs paid 494 — —

Acquisition-related contingent consideration paid, net — — ( 7 )

Exercise of stock options and employee stock purchases 62 65 63

Increase in bank deposits 5,694 4,520 2,339

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Dividends on common stock ( 218 ) ( 205 ) ( 191 )

Acquisitions of and distributions to noncontrolling interests, net ( 1 ) ( 57 ) ( 18 )

Exercise of stock options and employee stock purchases 53 62 65

Proceeds from senior notes issuances, net of debt issuance costs paid 737 494 —

Extinguishment of senior notes payable ( 844 ) — —

Proceeds from Federal Home Loan Bank advances — 850 850

Repayments of Federal Home Loan Bank advances and other borrowed funds ( 31 ) ( 855 ) ( 855 )

Proceeds from borrowings on the RJF Credit Facility — — 300

Repayment of borrowings on the RJF Credit Facility — — ( 300 )

Other financing, net ( 9 ) ( 1 ) ( 57 )

Net cash provided by financing activities 5,254 4,593 1,373

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Effect of exchange rate changes on cash 76 1 ( 23 )

Net increase/(decrease) in cash and cash equivalents and cash and cash equivalents segregated pursuant to regulations

3,663 30 ( 1,205 )

Cash and cash equivalents and cash and cash equivalents segregated pursuant to regulations at beginning of year

5,971 5,941 7,146

Cash and cash equivalents and cash and cash equivalents segregated pursuant to regulations at end of year

$ 9,634 $ 5,971 $ 5,941

Net increase in cash and cash equivalents, including those segregated for regulatory purposes and restricted cash 6,815 3,663 30

Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at beginning of year 9,634 5,971 5,941

Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of year $ 16,449 $ 9,634 $ 5,971

Cash and cash equivalents $ 7,201 $ 5,390 $ 3,957

Cash and cash equivalents segregated pursuant to regulations 4,244 2,014 2,441

Total cash and cash equivalents and cash and cash equivalents segregated pursuant to regulations at end of year $ 9,634 $ 5,971 $ 5,941

Cash and cash equivalents segregated for regulatory purposes and restricted cash 9,248 4,244 2,014

Total cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of year $ 16,449 $ 9,634 $ 5,971

Supplemental disclosures of cash flow information:

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Cash paid for income taxes, net $ 437 $ 246 $ 390

Cash outflows for lease liabilities $ 110 $ 101 N/A

Non-cash right-of-use assets recorded for new and modified leases $ 168 $ 74 N/A

See accompanying Notes to Consolidated Financial Statements.

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Raymond James Financial, Inc.

(“RJF,” the “firm” or the “Company”) is a financial holding company which, together with its subsidiaries, is engaged in various financial services activities, including providing investment management services to retail and institutional clients, the underwriting, distribution, trading and brokerage of equity and debt securities, and the sale of mutual funds and other investment products.

(“RJF” or the “firm”) is a financial holding company which, together with its subsidiaries, is engaged in various financial services activities, including providing investment management services to retail and institutional clients, merger & acquisition and advisory services, the underwriting, distribution, trading and brokerage of equity and debt securities, and the sale of mutual funds and other investment products.

The firm also provides corporate and retail banking services, and trust services.

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All material intercompany balances and transactions have been eliminated in consolidation.

Effective April 2019, we increased our ownership of ClariVest Asset Management LLC (“ClariVest”) from 45 % to 100 % making ClariVest a wholly-owned subsidiary of Eagle Asset Management.

ClariVest has been included in our consolidated financial statements since our initial investment of the 45 % interest as we concluded we were required to consolidate as defined by the accounting guidance.

The increase in ownership was accounted for as a shareholders’ equity transaction.

On August 24, 2021, our Board approved a three-for-two stock split, effected in the form of a 50 % stock dividend, paid on September 21, 2021.

All share and per share information has been retroactively adjusted to reflect this stock split.

Accounting estimates and assumptions

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Certain prior-period amounts have been reclassified to conform to the current year’s presentation.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent accounting developments

Accounting guidance recently adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance related to the measurement of credit losses on financial instruments (“ASU 2016-13”), which replaces the incurred credit loss and other models with the current expected credit loss (“CECL”) model.

The guidance involves several aspects of the accounting for credit losses related to certain financial instruments, including assets measured at amortized cost, available-for-sale debt securities and certain off-balance-sheet commitments.

The new guidance, and subsequent updates, broadens the information that an entity must consider in developing its estimated credit losses expected to occur over the remaining life of in-scope financial assets.

The measurement of expected credit losses includes historical experience, current conditions and reasonable and supportable economic forecasts.

This new guidance was effective for our fiscal year beginning on October 1, 2020 and was adopted under a modified retrospective approach.

The impact of adoption of this new standard resulted in an increase in our allowance for credit losses of $ 42 million (including $ 25 million related to loans to financial advisors, $ 9 million related to funded bank loans and $ 8 million related to unfunded lending commitments) and a corresponding reduction in the beginning balance of retained earnings of

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

$ 35 million, net of tax.

Prior-period amounts were calculated under the incurred loss model and have not been restated.

See Notes 8 and 9 for further information related to bank loans and loans to financial advisors and the related allowances for credit losses.

Our significant accounting policies described below have been updated for adoption of this guidance where applicable.

Significant Accounting Policies

Recognition of non-interest revenues

Revenue from contracts with customers is recognized when promised goods or services are delivered to our customers in an amount we expect to receive in exchange for those goods or services (i.e., the transaction price).

Revenue from contracts with customers is recognized when promised services are delivered to our customers in an amount we expect to receive in exchange for those services (i.e., the transaction price).

Contracts with customers can include multiple services, which are accounted for as separate “performance obligations” if they are determined to be distinct.

Our performance obligations to our customers are generally satisfied when we transfer the promised good or service to our customer, either at a point in time or over time.

Revenue from a performance obligation transferred at a point in time is recognized at the time that the customer obtains control over the promised good or service.

Revenue from our performance obligations satisfied over time is recognized in a manner that depicts our performance in transferring control of the good or service, which is generally measured based on time elapsed, as our customers receive the benefit of our services as they are provided.

Our performance obligations to our customers are generally satisfied when we transfer the promised service to our customer, either at a point in time or over time.

Revenue from a performance obligation transferred at a point in time is recognized at the time that the customer obtains control over the promised service.

Revenue from our performance obligations satisfied over time is recognized in a manner that depicts our performance in transferring control of the service, which is generally measured based on time elapsed, as our customers receive the benefit of our services as they are provided.

Payment for the majority of our services is considered to be variable consideration, as the amount of revenue we expect to receive is subject to factors outside of our control, including market conditions.

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Accordingly, we present the related revenues gross of the related costs.

We have elected the practical expedient allowed by the accounting guidance to not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less.

See Note 21 for additional information on our revenues.

Asset management and related administrative fees

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Upfront commissions received are generally based on a fixed rate applied, as a percentage, to amounts invested or the value of the contract at the time of sale and are generally recognized at the time of sale.

Trailing commissions are generally based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract.

Trailing commissions are generally received monthly or quarterly while our client holds the investment or holds the contract.

As these trailing commissions are based on factors outside of our control, including market movements and client behavior (i.e., how long clients hold their investment, insurance policy or annuity contract), such revenue is recognized when it is probable that a significant reversal will not occur.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

Trailing commissions are generally based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract.

Trailing commissions are generally received monthly or quarterly while our client holds the investment or holds the contract.

Equities, ETFs and fixed income products

We earn commissions for executing and clearing transactions for customers, primarily in listed and over-the-counter (“OTC”) equity securities, including exchange-traded funds (“ETFs”), and options.

We earn commissions for executing and clearing transactions for customers, primarily in listed and OTC equity securities, including exchange-traded funds (“ETFs”), and options.

Such revenues primarily arise from transactions for retail clients in our PCG segment, as well as services related to sales and trading activities transacted on an agency basis in our Capital Markets segment.

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Principal transactions

Principal transactions include revenues from customers’ purchases and sales of financial instruments, including fixed income and equity securities and derivatives, in which we transact on a principal basis.

Principal transactions include revenues from clients’ purchases and sales of financial instruments, including fixed income and equity securities and derivatives, in which we transact on a principal basis.

To facilitate such transactions, we carry inventories of financial instruments.

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We earn servicing fees for providing sales and marketing support to product partners and for supporting the availability and distribution of their products on our platforms.

We also earn servicing fees from such partners for accounting and administrative services provided to such partners.

These fees, which are received monthly or quarterly, are generally based on the market value of assets or number of positions in such programs or, in certain cases, are a fixed annual fee, and are recognized over time as the services are performed.

We also earn servicing fees for accounting and administrative services provided to such partners.

These fees, which are received monthly or quarterly, are generally based on the market value of the related assets or a fixed annual fee or, in certain cases, the number of positions in such programs, and are recognized over time as the services are performed.

We earn servicing fees from various banks for administrative services we provide related to our clients’ deposits that are swept to such banks as part of the Raymond James Bank Deposit Program (“RJBDP”), our multi-bank sweep program.

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The fees are earned over time as the related administrative services are performed and are received monthly.

Our PCG segment also earns servicing fees from RJ Bank, which are based on the number of accounts that are swept to RJ Bank.

These fees are eliminated in consolidation.

Our PCG segment also earns servicing fees from Raymond James Bank, which are based on the number of accounts that are swept to Raymond James Bank.

These fees, and the offsetting expense in the Raymond James Bank segment, are eliminated in consolidation.

Investment banking

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Fees from merger & acquisition and advisory assignments are generally recognized at the time the services related to the transaction are completed under the terms of the engagement.

Fees for merger & acquisition and advisory services are typically received upfront, as non-refundable retainer fees, or as a success fee upon completion of a transaction.

Fees for merger & acquisition and advisory services are typically received upfront, as non-refundable retainer fees, and/or upon completion of a transaction as a success fee.

Expenses related to investment banking transactions are generally deferred until the related revenue is recognized or the assignment is otherwise concluded.

Such expenses are included in “Professional fees” on our Consolidated Statements of Income and Comprehensive Income.

See Note 19 in the accompanying Notes to the Consolidated Financial Statements for additional information on our revenue streams.

Cash and cash equivalents

Our cash equivalents include money market funds or highly liquid investments with original maturities of 3 months or less, other than those used for trading purposes.

Our cash equivalents include money market funds or highly liquid investments with maturities of 3 months or less as of our date of purchase, other than those used for trading purposes.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

Cash and cash equivalents segregated pursuant to regulations

Assets segregated for regulatory purposes and restricted cash

In accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, Raymond James & Associates, Inc.

(“RJ&A”), as a broker-dealer carrying client accounts, is subject to requirements to maintain cash or qualified securities in a segregated reserve account for the exclusive benefit of its clients.

The amounts included in “Cash and cash equivalents segregated pursuant to regulations” on our Consolidated Statements of Financial Condition represent the amounts of cash and cash equivalents, which includes highly liquid investments with original maturities of 3 months or less, on deposit in our segregated reserve accounts for regulatory purposes as of each respective period-end.

From time to time, we may also segregate highly liquid securities, such as U.S.

Treasuries, which have original maturities of greater than 3 months.

Such securities are carried at fair value on our Consolidated Statements of Financial Condition.

(“RJ&A”), as a broker-dealer carrying client accounts, is subject to requirements to maintain cash or qualified securities on deposit in a segregated reserve account for the exclusive benefit of its clients.

Such amounts are included in “Assets segregated for regulatory purposes and restricted cash” on our Consolidated Statements of Financial Condition as of each respective period end.

These amounts include cash and cash equivalents, which represent highly liquid investments with maturities of 3 months or less as of our date of purchase (amounts as of September 30, 2021 included $ 3.55 billion of U.S.

Treasuries with maturities of 3 months or less as of our date of purchase), and highly liquid securities, such as U.S.

Treasuries, which have maturities of greater than 3 months as of our date of purchase and are carried at fair value on our Consolidated Statements of Financial Condition ($ 2.10 billion as of September 30, 2021).

We may also from time-to-time be required to restrict cash for other corporate purposes, including cash contractually required to fund acquisition commitments (see Note 3 for further discussion).

In addition, Raymond James Ltd.

(“RJ Ltd.”) is required to hold client Registered Retirement Savings Plan funds in trust.

(“RJ Ltd.”) holds client Registered Retirement Savings Plan funds in trust in accordance with Canadian retirement plan regulations.

Collateralized agreements and financings

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Additionally, we sell securities under agreements to repurchase (“repurchase agreements”).

Both reverse repurchase agreements and repurchase agreements are accounted for as collateralized financings and are carried at contractual amounts plus accrued interest.

Reverse repurchase agreements and repurchase agreements are accounted for as collateralized agreements and collateralized financings, respectively, and are carried at contractual amounts plus accrued interest.

We receive collateral with a fair value that is typically equal to or in excess of the principal amount loaned under reverse repurchase agreements to mitigate credit exposure.

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Securities borrowed and securities loaned

We act as an intermediary between broker-dealers and other financial institutions whereby we borrow securities from one broker-dealer and then either lend them to another broker-dealer or use them to cover short positions.

Where permitted, we have also loaned, to broker-dealers and other financial institutions, securities owned by the firm, our clients, or others we have received as collateral.

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GAAP provides for the following three levels to be used to classify our fair value measurements.

Level 1 - Financial instruments included in Level 1 are highly liquid instruments valued using unadjusted quoted prices in active markets for identical assets or liabilities.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

Level 1 - Financial instruments included in Level 1 are highly liquid instruments valued using unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 - Financial instruments reported in Level 2 include those that have pricing inputs that are other than unadjusted quoted prices in active markets, but which are either directly or indirectly observable as of the reporting date (i.e., prices for similar instruments).

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The level within the fair value hierarchy, specific valuation techniques, and other significant accounting policies pertaining to financial instruments at fair value on our Consolidated Statements of Financial Condition are described as follows.

Trading instruments and trading instruments sold but not yet purchased

Trading instruments and trading instruments sold but not yet purchased are comprised primarily of the financial instruments held by our broker-dealer subsidiaries and include debt securities, equity securities, brokered certificates of deposit, and other securities.

These instruments are recorded at fair value with realized and unrealized gains and losses reflected in current period net income.

When available, we use quoted prices in active markets to determine the fair value of our trading instruments.

Trading assets and trading liabilities

Trading assets and trading liabilities are comprised primarily of the financial instruments held by our broker-dealer subsidiaries and include debt securities, equity securities, brokered certificates of deposit, and other financial instruments.

Trading assets and trading liabilities are recorded at fair value with realized and unrealized gains and losses reflected in current period net income.

When available, we use quoted prices in active markets to determine the fair value of our trading assets and trading liabilities.

Such instruments are classified within Level 1 of the fair value hierarchy.

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Matrix pricing generally utilizes spread-based models periodically re-calibrated to observable inputs such as market trades or to dealer price bids in similar securities in order to derive the fair value of the instruments.

Valuation techniques may also rely on other observable inputs such as yield curves, interest rates and expected principal repayments and default probabilities.

Valuation techniques may also rely on other observable inputs such as yield curves, interest rates and expected principal prepayments and default probabilities.

We utilize prices from third-party pricing services to corroborate our estimates of fair value.

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Securities valued using these techniques are classified within Level 2 of the fair value hierarchy.

We offset our long and short positions for identical securities recorded at fair value as part of our trading instruments (long positions) and trading instruments sold but not yet purchased (short positions).

Available-for-sale securities

Available-for-sale securities are generally held by RJ Bank and classified at the date of purchase.

They are comprised primarily of agency mortgage-backed securities (“MBS”) and agency collateralized mortgage obligations (“CMOs”), which are guaranteed by the U.S.

government or its agencies.

Available-for-sale securities owned by RJ Bank are used as part of its

We offset our long and short positions for identical securities recorded at fair value as part of our trading assets (long positions) and trading liabilities (short positions).

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

interest rate risk and liquidity management strategies and may be sold in response to changes in interest rates, changes in prepayment risks, or other factors.

Interest on available-for-sale securities is recognized in interest income on an accrual basis.

Discounts are accreted and premiums are amortized as an adjustment to yield over the estimated average life of the security.

Realized gains and losses on sales of available-for-sale securities are recognized using the specific identification method and reflected in “Other” revenue in the period sold.

Unrealized gains or losses on available-for-sale securities, except for those that are deemed to be other-than-temporarily-impaired, are recorded through other comprehensive income/(loss) (“OCI”) and are thereafter presented in equity as a component of accumulated other comprehensive income (“AOCI”) on our Consolidated Statements of Financial Condition.

For any available-for-sale securities in an unrealized loss position at a reporting period end, we make an assessment whether such securities are impaired on an other-than-temporary basis.

The following factors are considered in order to determine whether an impairment is other-than-temporary:

our intention to sell the security, our assessment of whether it is more likely than not that we will be required to sell the security before the recovery of its amortized cost basis, and whether the evidence indicating that we will recover the amortized cost basis of a security in full outweighs evidence to the contrary.

Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to period-end, recent events specific to the issuer or industry and forecasted performance of the security.

Due to the guarantee of the full payment of principal and interest by the U.S.

government or its agencies, as well as our ability and intent to hold these securities, we do not consider our agency available-for-sale securities to be other-than-temporarily-impaired.

The fair value of our available-for-sale securities is determined by obtaining prices primarily based on valuation models from third-party pricing services.

The third-party pricing services provide comparable price evaluations utilizing observable market data for similar securities, which includes observable data comprised of benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data including market research publications, and loan performance experience.

Available-for-sale securities

Available-for-sale securities are generally held by Raymond James Bank and are classified at the date of purchase.

They are comprised primarily of agency mortgage-backed securities (“MBS”) and agency collateralized mortgage obligations (“CMOs”), which a re guaranteed by the U.S.

government or its agencies.

Available-for-sale securities owned by Raymond James Bank are used as part of its interest rate risk and liquidity management strategies and may be sold in response to changes in interest rates, changes in prepayment risks, or other factors.

The fair values of our available-for-sale securities are determined by obtaining prices from third-party pricing services, which are primarily based on valuation models.

The third-party pricing services provide comparable price evaluations utilizing observable market data for similar securities.

Such observable market data is comprised of benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data (including market research publications), and loan performance experience.

We utilize other third-party pricing services to corroborate the pricing information obtained from the primary pricing service.

Securities valued using valuation techniques that rely on observable market data are classified within Level 2 of the fair value hierarchy.

Interest on available-for-sale securities is recognized in interest income on an accrual basis, with the related accrued interest not yet received reflected in “Other receivables” on our Consolidated Statements of Financial Condition.

Discounts are accreted and premiums are amortized as an adjustment to yield over the estimated average life of the security.

Realized gains and losses on sales of available-for-sale securities are recognized using the specific identification method and reflected in “Other” revenue in the period sold.

Unrealized gains or losses due to market factors on available-for-sale securities are recorded through other comprehensive income/(loss) (“OCI”), net of applicable taxes, and are thereafter presented in equity as a component of accumulated other comprehensive income (“AOCI”) on our Consolidated Statements of Financial Condition.

As a result of our October 1, 2020 adoption of the CECL model (see “Recent accounting developments” above), credit losses on available-for-sale securities are limited to the difference between the security’s amortized cost basis and its fair value and are recognized through an allowance for credit losses rather than as a direct reduction in amortized cost basis.

Given that our available-for-sale securities portfolio is comprised of government agency-backed securities for which payments of both principal and interest are guaranteed, and based on the lack of historical credit losses, we expect zero credit losses on this portfolio and the related accrued interest receivable.

On a quarterly basis, we reassess our expectation of zero credit losses, giving consideration to any relevant changes in the available-for-sale securities portfolio.

Derivative assets and derivative liabilities

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Such payments are referred to as “variation margin” and are considered to be settlement of the related derivatives.

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Fixed income business operations

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The fair values of these interest rate derivatives are obtained from internal pricing models that consider current market trading levels and the contractual prices for the underlying financial instruments, as well as time value, yield curve and other volatility factors underlying the positions.

Since our model inputs can be observed in liquid markets and the models do not require significant judgment, such derivatives

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are classified within Level 2 of the fair value hierarchy.

Since our model inputs can be observed in liquid markets and the models do not require significant judgment, such derivatives are classified within Level 2 of the fair value hierarchy.

We corroborate the output of our internal pricing models by preparing an independent calculation using a third-party model.

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The revenue from these transactions is included within “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

RJ Bank derivatives

Raymond James Bank derivatives

Foreign-exchange derivatives

We enter into three-month forward foreign exchange contracts primarily to hedge the risks related to RJ Bank’s investment in its Canadian subsidiary, as well as its risk resulting from transactions denominated in currencies other than the U.S.

We enter into three-month forward foreign exchange contracts primarily to hedge the risks related to Raymond James Bank’s investment in its Canadian subsidiary, as well as its risk resulting from transactions denominated in currencies other than the U.S.

The majority of these derivatives are designated as net investment hedges.

The gain or loss related to RJ Bank’s designated net investment hedges is recorded, net of tax, in shareholders’ equity as part of the cumulative translation adjustment component of AOCI with such balance impacting “Other” revenues in the event the net investment is sold or substantially liquidated.

Gains and losses on the undesignated derivative instruments are recorded in earnings on our Consolidated Statements of Income and Comprehensive Income.

The gain or loss related to these designated net investment hedges is recorded, net of tax, in shareholders’ equity as part of the cumulative translation adjustment component of AOCI with such balance impacting “Other” revenues in the event the net investment is sold or substantially liquidated.

Gains and losses on undesignated derivative instruments are recorded in earnings on our Consolidated Statements of Income and Comprehensive Income.

Hedge effectiveness is assessed at each reporting period using a method that is based on changes in forward rates and measured using the hypothetical derivatives method.

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The fair value of our forward foreign exchange contracts is determined by obtaining valuations from a third-party pricing service or model.

These valuations are based on observable inputs such as spot rates, foreign exchange rates and both U.S.

These valuations are based on observable inputs such as spot rates, forward foreign exchange rates and both U.S.

and foreign interest rate curves.

We validate the observable inputs utilized in the third-party valuation model by preparing an independent calculation using a secondary third-party valuation model.

We validate the observable inputs utilized in the third-party valuation model by preparing an independent calculation using a secondary valuation model.

These forward foreign exchange contracts are classified within Level 2 of the fair value hierarchy.

Interest rate derivatives

The cash flows associated with certain assets held by RJ Bank provide interest income at fixed interest rates.

The cash flows associated with certain assets held by Raymond James Bank provide interest income at fixed interest rates.

Therefore, the value of these assets, absent any risk mitigation, is subject to fluctuation based upon changes in market rates of interest over time.

RJ Bank enters into floating-rate advances from the Federal Home Loan Bank (“FHLB”) to, in part, fund these assets and then enters into interest rate contracts which swap variable interest payments on this debt for fixed interest payments.

These interest rate swaps are designated as cash flow hedges and effectively fix RJ Bank’s cost of funds associated with these assets to mitigate a portion of the market risk.

The gain or loss on RJ Bank’s cash flow hedges is recorded, net of tax, in shareholders’ equity as part of the cash flow hedge component of AOCI and subsequently reclassified to earnings when the hedged transaction affects earnings, specifically upon the incurrence of interest expense on the hedged borrowings.

Raymond James Bank enters into floating-rate advances from the Federal Home Loan Bank (“FHLB”) to, in part, fund these assets and then enters into interest rate contracts which swap variable interest payments on this debt for fixed interest payments.

These interest rate swaps are designated as cash flow hedges and effectively fix Raymond James Bank’s cost of funds associated with these assets to mitigate a portion of the market risk.

The gain or loss on Raymond James Bank’s

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cash flow hedges is recorded, net of tax, in shareholders’ equity as part of the cash flow hedge component of AOCI and subsequently reclassified to earnings when the hedged transaction affects earnings, specifically upon the incurrence of interest expense on the hedged borrowings.

Hedge effectiveness is assessed at inception and at each reporting period utilizing regression analysis.

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These third-party valuations are based on observable inputs such as time value and yield curves.

We validate these observable inputs by preparing an independent calculation using a secondary third-party model.

We validate these observable inputs by preparing an independent calculation using a secondary model.

Cash flows from hedging activities are included in the same category as the items being hedged.

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We classify these derivatives within Level 2 of the fair value hierarchy.

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Other investments

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Treasury securities, and term deposits are categorized within Level 1 of the fair value hierarchy.

Private equity investments

Private equity investments consist of direct investments, investments in third-party private equity funds and various legacy private equity funds which we sponsor.

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The fair value of private equity investments are determined utilizing either the net asset value (“NAV”) of the fund as a practical expedient or Level 3 valuation techniques.

We utilize NAV or its equivalent as a practical expedient to determine the fair value of our private equity investments when:

(1) the fund does not have a readily determinable fair value;

(2) the NAV of the fund is calculated in a manner consistent with the measurement principles of investment-company accounting, including measurement of the underlying investments at fair value;

and (3) it is not probable that we will sell the investment at an amount other than NAV.

The NAV is calculated based on our proportionate share of the net assets of the fund as provided by the fund manager.

The portion of our private equity investment portfolio that is not valued at NAV is valued initially at the transaction price until significant transactions or developments indicate that a change in the carrying values of these investments is appropriate.

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Brokerage client receivables, net

Brokerage client receivables include receivables from the clients of our broker-dealer and asset management subsidiaries.

The receivables from broker-dealer clients are principally for amounts due on cash and margin transactions and are generally collateralized by securities owned by the clients.

The receivables from asset management clients are primarily for accrued asset management fees.

Brokerage client receivables are reported at their outstanding principal balance, net of any allowance for doubtful accounts.

An allowance is established when collectability is not reasonably assured.

When the receivable from a brokerage client is considered to be impaired, the amount of the impairment is generally measured based on the fair value of the securities acting as collateral, which is based on current prices from independent sources such as listed market prices or broker-dealer price quotations.

Our allowance for doubtful accounts was insignificant at both September 30, 2020 and 2019.

Securities beneficially owned by customers, including those that collateralize margin or other similar transactions, are not reflected on our Consolidated Statements of Financial Condition (see Note 6 for additional information regarding this collateral).

Brokerage client receivables include receivables from the clients of our broker-dealer subsidiaries and are principally for amounts due on cash and margin transactions.

Such receivables are generally collateralized by securities owned by the clients.

Brokerage client receivables are reported at their outstanding principal balance, net of any allowance for credit losses.

See the “Allowance for credit losses” section below for the application of the practical expedient under CECL for financial assets secured by collateral.

Securities beneficially owned by clients, including those that collateralize margin or other similar transactions, are not reflected on our Consolidated Statements of Financial Condition (see Note 7 for additional information regarding this collateral).

Other receivables, net

Other receivables primarily include receivables from brokers, dealers and clearing organizations, accrued interest receivables and accrued fees from product sponsors.

Receivables from brokers, dealers and clearing organizations primarily consist of cash deposits placed with clearing organizations, including initial margin, receivables related to sales of securities which have traded, but not yet settled, and amounts receivable for securities failed to deliver.

We present “Other receivables” on our Consolidated Statements of Financial Condition, net of any allowance.

Other receivables primarily include receivables from brokers, dealers and clearing organizations, accrued fees from product sponsors, and accrued interest receivables.

Receivables from brokers, dealers and clearing organizations primarily consist of deposits placed with clearing organizations, which includes initial margin, and receivables related to sales of securities which have traded but not yet settled including amounts receivable for securities failed to deliver.

We present “Other receivables, net” on our Consolidated Statements of Financial Condition, net of any allowance for credit losses.

However, these receivables generally have minimal credit risk due to the low probability of clearing organization default and the short-term nature of receivables related to securities settlements and therefore, the allowance for credit losses on such receivables is not significant.

Any allowance for credit losses for other receivables is estimated using assumptions based on historical experience, current facts and other factors.

We update these estimates through periodic evaluations against actual trends experienced.

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Notes to Consolidated Financial Statements

As permitted under the CECL guidance, we include accrued interest receivables related to our financial assets in “Other receivables, net” on the Consolidated Statements of Financial Condition instead of with the related financial instrument.

We reverse any uncollectible accrued interest against interest income when the related financial asset is moved to nonaccrual status.

Given that we write off uncollectible amounts in a timely manner, we do not recognize an allowance for credit losses against accrued interest receivable.

Bank loans, net

Loans held for investment

Bank loans are comprised of loans originated or purchased by RJ Bank and include commercial and industrial (“C&I”) loans, tax-exempt loans, commercial and residential real estate loans, securities-based loans (“SBL”) and other loans.

The loans which we have the intent and the ability to hold until maturity or payoff are recorded at their unpaid principal balance plus any premium paid in connection with the purchase of the loan, less the allowance for loan losses and any discounts received in connection with the purchase of the loan and net of deferred fees and costs on originated loans.

Loan origination fees and direct costs, as well as premiums and discounts on loans that are not revolving, are capitalized and recognized in interest income using the interest method.

Bank loans are comprised of loans originated or purchased by Raymond James Bank and include commercial and industrial (“C&I”) loans, real estate investment trust loans (“REIT”), tax-exempt loans, commercial and residential real estate loans, securities-based loans (“SBL”) and other loans.

The loans which we have the intent and the ability to hold until maturity or payoff are recorded at their unpaid principal balance plus any premium paid in connection with the purchase of the loan, less the allowance for credit losses and any discounts received in connection with the purchase of the loan and net of deferred fees and costs on originated loans.

Loan origination fees and direct costs, as well as premiums and discounts on loans that are not revolving, are capitalized and recognized in interest income using the effective interest method.

For revolving loans, the straight-line method is used based on the contractual term.

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We segregate our loan portfolio into six loan portfolio segments:

C&I, commercial real estate (“CRE”), CRE construction, tax-exempt, residential mortgage, and SBL and other.

These portfolio segments also serve as the portfolio loan classes for purposes of credit analysis, except for residential mortgage loans which are further disaggregated into residential first mortgage and residential home equity classes.

C&I, commercial real estate (“CRE”) (primarily loans that are secured by income-producing properties and CRE construction loans), REIT (loans made to businesses that own or finance income-producing real estate), tax-exempt, residential mortgage, and SBL and other.

These portfolio segments also serve as the portfolio loan classes for purposes of credit analysis.

See the “Allowance for credit losses” section below for information on our allowance policies.

Loans held for sale

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These nonrecurring fair value measurements are classified within Level 2 of the fair value hierarchy.

We purchase the guaranteed portions of SBA loans and account for these loans in accordance with the policy for loans held for sale.

We purchase t he guaranteed portions of SBA loans and account f or these loans in accordance with the policy for loans held for sale.

We then aggregate SBA loans with similar characteristics into pools for securitization and sell these pools in the secondary market.

Individual loans may be sold prior to securitization.

The determination of the fair value of the SBA loans depends upon their intended disposition.

The fair value of the SBA loans to be individually sold are determined based upon their committed sales price.

The fair value of the loans to be aggregated into pools for securitization, which are committed to be sold, are determined based upon third-party price quotes.

The fair value of all other SBA loans are determined using a third-party pricing service.

The prices for the SBA loans, other than those committed to be individually sold, are validated by comparing the third-party price quote or the third-party pricing service prices, as applicable, for a sample of loans to observable market trades obtained from external sources.

Once the SBA loans are securitized into a pool, the respective securities are classified as trading instruments and are carried at fair value based on our intention to sell the securitizations within the near term.

Any changes in the fair value of the securitized pools as well as any realized gains or losses earned thereon are reflected in “Principal transactions” on our Consolidated Statements of Income and Comprehensive Income.

Individual SBA loans may be sold prior to securitization.

The fair values of the SBA loans are determined based upon their committed sales price, third-party price quotes, or are determined using a third-party pricing service.

Once the SBA loans are securitized into a pool, the respective securities are classified as trading instruments and are carried at fair value based on our intention to sell the securitizations.

Sales of the securitizations are accounted for as of settlement date, which is the date we have surrendered control over the transferred assets.

We do not retain any interest in the securitizations once they are sold.

The fair value for SBA loan securitizations is determined by utilizing observable prices obtained from a third-party pricing service, which provides comparable price evaluations utilizing observable market data for similar securities.

We substantiate the prices obtained from the third-party pricing service by comparing such prices for a sample of securities to observable market trades obtained from external sources.

The instruments valued using these observable inputs are typically classified within Level 2 of the fair value hierarchy.

Corporate loans, which include C&I, CRE, CRE construction, and tax-exempt loans are designated as held for investment upon inception and recognized in loans receivable.

Corporate loans, which include C&I, CRE and REIT loans, and tax-exempt loans are designated as held for investment upon inception and recognized in loans receivable.

If we subsequently designate a corporate or tax-exempt loan as held for sale, which generally occurs as part of our credit management activities, we then write down the carrying value of the loan with a partial charge-off, if necessary, to carry it at the lower of cost or estimated fair value.

Gains and losses on sales of residential mortgage loans held for sale, SBA loans that are not part of a securitized pool, and corporate loans transferred from the held for investment portfolio, are included as a component of “Other” revenues on our Consolidated Statements of Income and Comprehensive Income, while interest collected on these assets is included in “Interest income.” Net unrealized losses are recognized through a valuation allowance by charges to income as a component of “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

Gains and losses on sales of residential mortgage loans held for sale, SBA loans that are not part of a securitized pool, and corporate loans transferred from the held for investment portfolio, are included as a component of “Other” revenues on our Consolidated Statements of Income and Comprehensive Income, while interest collected on these assets is included in “Interest income.” Net unrealized losses are a component of “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

Unfunded lending commitments

We have outstanding at any time a significant number of commitments to extend credit and other credit-related off-balance-sheet financial instruments such as revolving lines of credit, standby letters of credit and loan purchases.

Our policy is

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Notes to Consolidated Financial Statements

Off-balance sheet loan commitments

We have outstanding at any time a significant number of commitments to extend credit and other credit-related off-balance sheet financial instruments such as revolving lines of credit, standby letters of credit and loan purchases.

Our policy is generally to require customers to provide collateral at the time of closing.

generally to require customers to provide collateral at the time of closing.

The amount of collateral obtained, if it is deemed necessary upon extension of credit, is based on our credit evaluation of the borrower.

Collateral held varies but may include assets such as marketable securities, accounts receivable, inventory, real estate, and income-producing commercial properties.

In the normal course of business, RJ Bank issues or participates in the issuance of standby letters of credit whereby it provides an irrevocable guarantee of payment in the event the letter of credit is drawn down by the beneficiary.

In the normal course of business, Raymond James Bank issues or participates in the issuance of standby letters of credit whereby it provides an irrevocable guarantee of payment in the event the letter of credit is drawn down by the beneficiary.

These standby letters of credit generally expire in one year or less.

In the event that a letter of credit is drawn down, RJ Bank would pursue repayment from the party under the existing borrowing relationship or would liquidate collateral, or both.

In the event that a letter of credit is drawn down, Raymond James Bank would pursue repayment from the party under the existing borrowing relationship or would liquidate collateral, or both.

The proceeds from repayment or liquidation of collateral are expected to satisfy the amounts drawn down under the existing letters of credit.

The potential credit loss associated with these off-balance sheet loan commitments is accrued and reflected in “Other payables” on our Consolidated Statements of Financial Condition.

Refer to the allowance for loan losses and reserve for unfunded lending commitments section that follows for a discussion of the reserve calculation methodology and Note 17 for further information about these commitments.

The allowance for potential credit losses associated with these unfunded lending commitments is included in “Other payables” on our Consolidated Statements of Financial Condition.

Refer to the “Allowance for credit losses” section that follows for a discussion of the reserve calculation methodology and Note 19 for further information about these commitments.

We recognize the revenue associated with corporate syndicated standby letters of credit, which is generally received quarterly, on a cash basis, the effect of which does not differ significantly from recognizing the revenue in the period the fee is earned.

Unused corporate line fees are accounted for on an accrual basis.

Unused corporate line of credit fees are accounted for on an accrual basis.

Nonperforming assets

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Nonperforming loans include those loans which have been placed on nonaccrual status and any accruing loans which are 90 days or more past due and in the process of collection.

Loans which have been restructured in a manner that grant a concession to a borrower experiencing financial difficulties we would not otherwise consider are deemed to be a troubled debt restructuring (“TDR”).

Loans which have been restructured in a manner that grants a concession that would not normally be granted to a borrower experiencing financial difficulties are deemed to be troubled debt restructurings (“TDRs”).

Loans structured as TDRs which are currently placed on nonaccrual status are considered nonperforming loans.

Loans of all classes are placed on nonaccrual status when we determine that full payment of all contractual principal and interest is in doubt or the loan is past due 90 days or more as to contractual interest or principal unless the loan, in our opinion, is well-secured and in the process of collection.

When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is written-off against interest income and accretion of the net deferred loan origination fees cease.

Interest is recognized using the cash method for residential (first mortgage and home equity) loans and SBL and other loans, and the cost recovery method for corporate and tax-exempt loans thereafter until the loan qualifies for return to accrual status.

Loans (including first mortgage and home equity residential mortgage TDRs) are returned to an accrual status when the loans have been brought contractually current with the original or amended terms and have been maintained on a current basis for a reasonable period, generally six months .

Corporate loan TDRs have generally been partially charged off and therefore, remain on nonaccrual status until the loan is fully resolved.

Other real estate acquired in the settlement of loans, including through, or in lieu of, loan foreclosure, is initially recorded at the lower of cost or fair value less estimated selling costs through a charge to the allowance for loan losses, thus establishing a new cost basis.

Subsequent to foreclosure, valuations are periodically performed and the assets are carried at the lower of the carrying amount or fair value, as determined by a current appraisal or valuation less estimated costs to sell, and are classified as “Other assets” on our Consolidated Statements of Financial Condition.

When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is written-off against interest income and accretion of the net deferred loan origination fees ceases.

Interest is recognized using the cash method for residential mortgage loans and SBL and other loans, and the cost recovery method for corporate and tax-exempt loans thereafter until the loan qualifies for return to accrual status.

Most loans (including residential mortgage TDRs) are returned to an accrual status when the loans have been brought contractually current with the original or amended terms and have been maintained on a current basis for a reasonable period, generally six months .

However, corporate loan TDRs have generally been partially charged off and therefore, remain on nonaccrual status until the loan is fully repaid or sold.

Subsequent to foreclosure, valuations are periodically performed and the assets are carried at the lower of the carrying amount or fair value, as determined by a current appraisal or valuation less estimated costs to sell, and are included in “Other assets” on our Consolidated Statements of Financial Condition.

These nonrecurring fair value measurements are classified within Level 2 of the fair value hierarchy.

Impaired loans

Loans in all classes are considered to be impaired when, based on current information and events, it is probable that we will be unable to collect the scheduled payments of principal and interest on a loan when due according to the contractual terms of the loan agreement.

Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.

We determine the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

For individual loans identified as impaired, impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate and taking into consideration the factors described in the following section in relation to the evaluation of the allowance for loan losses, except that as a practical expedient, we

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measure impairment based on the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent.

Impaired loans include all corporate nonaccrual loans, all residential mortgage nonaccrual loans for which a charge-off had previously been recorded, and all loans which have been modified in TDRs.

Interest income on impaired loans is recognized consistently with the recognition policy of nonaccrual loans.

Allowance for loan losses and reserve for unfunded lending commitments

We maintain an allowance for loan losses to provide for probable losses inherent in our loan portfolio based on ongoing evaluations of the portfolio, the related risk characteristics, and the overall economic and environmental conditions affecting the loan portfolio.

Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed.

Subsequent recoveries, if any, are credited to the allowance.

We have developed policies and procedures for assessing the adequacy of the allowance for loan losses that reflect the assessment of risk considering all available information.

In developing this assessment, we rely on estimates and exercise judgment in evaluating credit risk.

The evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

Depending on changes in circumstances, future assessments of credit risk may yield materially different results from the prior estimates, which may require an increase or a decrease in the allowance for loan losses.

Estimates that are particularly susceptible to change that may have an impact on the amount of the allowance include:

• the selection of proxy data used to calculate loss factors;

• the evaluation of loss emergence and historical loss experience periods;

• our evaluation of the risk profile of loan portfolio segments, including internal risk ratings;

• the value of underlying collateral, which impacts loss severity and certain cash flow assumptions;

• our selection and evaluation of qualitative factors, which reflect the imprecision that is inherent in the estimation of probable loan losses.

The allowance for loan losses is comprised of two components:

allowances calculated based on formulas for homogeneous classes of loans collectively evaluated for impairment, which are re-evaluated quarterly and adjusted based on our analysis of certain qualitative factors, and specific allowances assigned to certain classified loans individually evaluated for impairment.

These homogeneous classes are a result of management’s disaggregation of the loan portfolio and are comprised of the previously mentioned classes:

C&I, CRE, CRE construction, tax-exempt, residential first mortgage, residential home equity, and SBL and other.

An annual analysis of the loss emergence period estimate, which is the average length of time between the event that triggers a loss and the confirmation and/or charge-off of that loss, is performed for all loan classes.

The analysis is utilized in establishing the allowance for each of the classes of loans through the application of an adjustment to the calculated allowance percentage for the respective loan grade.

The loans within the corporate and tax-exempt loan classes are assigned to an internal loan grade based upon the respective loan’s credit characteristics.

The loans within the residential first mortgage, residential home equity, and SBL and other classes are assigned loan grades equivalent to the loan classifications utilized by bank regulators, dependent on their respective likelihood of loss.

For all loan classes except for CRE loans, we assign each loan grade an allowance percentage based on the estimated incurred loss associated with that grade.

The allowance for loan losses for all non-impaired loans within those loan classes is then calculated based on the allowance percentage assigned to the respective loan’s class and grade factoring in the respective loss emergence period.

For the CRE loan class, the allowance for loan losses is calculated based on the allowance percentage assigned to each loan.

The allowance for loan losses for all impaired loans and those nonaccrual residential first mortgage loans that have been evaluated for a charge-off are based on an individual evaluation of impairment as previously described in the impaired loans section.

The quantitative factors taken into consideration when assigning loan grades and allowance percentages to loans within the corporate and tax-exempt loan classes include:

estimates of borrower default probabilities and collateral type, past loss history, Shared National Credit (“SNC”) reviews and examination results from bank regulators.

Loan grades for individual C&I and tax-exempt loans are derived from analyzing two aspects of the risk profile in a particular loan:

the obligor rating and the facility (collateral) rating.

The obligor rating relates to a borrower’s probability of default and the facility rating is utilized to estimate the anticipated loss given default.

These two ratings, which are based on historical long-term industry loss rates (proxy data) as we have limited loss history, are considered in combination with certain adjustments for the loss emergence period to derive the final C&I and tax-exempt loan grades and allowance percentages.

The allowance for loans within the CRE

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and CRE construction loan portfolios is based on loan-level probability of default and loss given default estimates in combination with certain adjustments for a loss emergence period.

The quantitative loss rates for corporate and tax-exempt loans are supplemented by considering qualitative factors that may cause estimated losses to differ from quantitatively calculated amounts.

These qualitative factors are intended to address developing trends, and include, but are not limited to:

trends in delinquencies;

changes in geographic distribution;

changes in the value of the underlying collateral for collateral-dependent loans;

lending policies;

loan review process;

local, regional, national and international economic conditions;

legal and regulatory requirements;

and concentrations of credit risk.

Historical loan loss rates, which are based on our historical loss data over a period of time, are utilized when assigning the allowance percentages for residential first mortgage loans and residential home equity loans.

We currently utilize a look back period for residential first mortgage and home equity loans reflecting the current housing cycle that includes the last downturn.

The SBL portfolio is not yet seasoned enough to exhibit a loss trend.

As a result, the allowance is determined judgmentally by management, primarily utilizing peer benchmarking data and qualitative factors.

For residential first mortgage loan, residential home equity loan and SBL classes, the qualitative factors considered to supplement the quantitative analysis include, but are not limited to:

loan performance trends, loan product parameters and qualification requirements, borrower credit scores at origination, occupancy (i.e., owner occupied, second home or investment property), documentation level, loan purpose, geographic concentrations, average loan size, loan policy exceptions, loan-to-value (“LTV”) ratios, as well as the factors previously noted that are utilized for corporate loans.

We reserve for losses inherent in our unfunded lending commitments using a methodology similar to that used for loans in the respective portfolio segment, based upon loan grade and expected funding probabilities for fully binding commitments.

This will result in some reserve variability over different periods depending upon the mix of the loan portfolio at the time and funding expectations.

All unfunded lending commitments associated with a class of impaired loans are analyzed in conjunction with the impaired allowance process previously described.

Loan charge-off policies

Bank loan charge-off policies

Corporate and tax-exempt loans are monitored on an individual basis, and loan grades are reviewed at least quarterly to ensure they reflect the loan’s current credit risk.

When we determine that it is likely that a corporate or tax-exempt loan will not be collected in full, the loan is evaluated for potential impairment.

When we determine that it is likely that a corporate or tax-exempt loan will not be collected in full, the loan is evaluated for a potential write down of the carrying value.

After consideration of the borrower’s ability to restructure the loan, alternative sources of repayment, and other factors affecting the borrower’s ability to repay the debt, the portion of the loan deemed to be a confirmed loss, if any, is charged-off.

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For C&I and tax-exempt loans, we evaluate all sources of repayment to arrive at the amount considered to be a loss and charged-off.

Corporate banking and credit risk managers also meet regularly to review criticized loans (loans that are rated special mention or worse as defined by bank regulators, see Note 7 for further discussion).

Corporate banking and credit risk managers also meet regularly to review criticized loans (i.e., loans that are rated special mention or worse as defined by bank regulators, see Note 8 for further discussion).

Additional charge-offs are taken when the value of the collateral changes or there is an adverse change in the expected cash flows.

The majority of our corporate loan portfolio is comprised of participations in either SNCs or other large syndicated loans in the U.S.

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The majority of our corporate loan portfolio is comprised of participations in either Shared National Credits (“SNCs”) or other large syndicated loans in the U.S.

The SNCs are U.S.

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The agent bank’s regulator reviews a portion of SNC loans on a semi-annual basis and provides a synopsis of each loan’s regulatory classification, including loans that are designated for nonaccrual status and directed charge-offs.

We must be at least as critical with nonaccrual designations, directed charge-offs, and classifications, potentially impacting our allowance for loan losses and charge-offs.

Corporate loans are subject to our internal review procedures and regulatory review by the Office of the Comptroller of the Currency (“OCC”) and the Board of Governors of the Federal Reserve System (“the Fed”) as part of the Bank’s regulatory examinations.

We are at least as critical with nonaccrual designations, directed charge-offs, and classifications, potentially impacting our allowance for credit losses and charge-offs.

Corporate loans are subject to our internal review procedures and regulatory review by the Florida Office of Financial Regulation (“OFR”) and the Board of Governors of the Federal Reserve System (“the Fed”) as part of the Bank’s regulatory examinations.

Every residential mortgage loan over 60 days past due is reviewed to determine loan status, collection strategy and charge-off recommendations.

Charge-offs are typically considered on residential mortgage loans once the loans are delinquent 90 days or more and then generally taken before the loan is 120 days past due.

A charge-off is taken against the allowance for loan losses for the difference between the loan amount and the amount that we estimate will ultimately be collected, based on the value of the underlying collateral less estimated costs to sell.

We predominantly use broker price opinions (“BPO”) for these valuations.

A charge-off is taken against the allowance for credit losses for the difference between the loan amount and the amount that we estimate will ultimately be collected, based on the value of the underlying collateral less estimated costs to sell.

We predominantly use broker price opinions for these valuations.

If a loan remains in pre-foreclosure status for more than nine months , an updated valuation is obtained to determine if further charge-offs are necessary.

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Loans to financial advisors, net

We offer loans to financial advisors and certain other key revenue producers, primarily for recruiting, transitional cost assistance, and retention purposes.

These loans are generally repaid over a five to nine year period with interest recognized as earned and are contingent upon affiliation with us.

We offer loans to financial advisors for recruiting and retention purposes.

The decision to extend credit to a financial advisor or other key revenue producer is generally based on their ability to generate future revenues.

Loans offered are generally repaid over a five to ten year period, with interest recognized as earned and are contingent upon affiliation with us (i.e., whether the advisor is actively affiliated with us or has terminated affiliation with us).

These loans are not assignable by the financial advisor and may only be assigned by us to a successor in interest.

There is no fee income associated with these loans.

In the event that the financial advisor is no longer affiliated with us, any unpaid balance of such loan becomes immediately due and payable to us.

In determining the allowance for doubtful accounts related to former employees or independent contractors, management primarily considers our historical collection experience as well as other factors including amounts due at termination, the reasons for the terminated relationship, and the former financial advisor’s overall financial position.

When the review of these factors indicates that further collection activity is highly unlikely, the outstanding balance of such loan is written-off and the corresponding allowance is reduced.

Further, the aging of this receivable balance is not a determinative factor in computing our allowance for doubtful accounts, as concerns regarding the recoverability of these loans primarily arise in the event that the financial advisor is no longer affiliated with us.

We present the outstanding balance of loans to financial advisors on our Consolidated Statements of Financial Condition, net of the allowance for doubtful accounts.

Our allowance for doubtful accounts was approximately $ 4 million and $ 9 million at September 30, 2020 and 2019, respectively.

Property and equipment, net

Property and equipment on our Consolidated Statements of Financial Condition are stated at cost less accumulated depreciation and amortization.

Property and equipment primarily consists of software, buildings and leasehold improvements, and furniture.

Software includes both purchased software and internally developed software including development in progress.

Buildings primarily consists of owned facilities.

Leasehold improvements are generally costs associated with interior office space.

Equipment primarily consists of communications and technology hardware.

Depreciation of assets (other than land) is primarily calculated using the straight-line method over the estimated useful lives of the assets outlined in the following table.

Asset type Estimated useful life

Buildings, building components and land improvements 10 to 40 years

Furniture, fixtures and equipment 3 to 5 years

Software 2 to 10 years

Leasehold improvements Lesser of useful life or lease term

Costs for significant internally developed software projects are capitalized when the costs relate to development of new applications or modification of existing internal-use software that results in additional functionality.

Internally developed software project costs related to preliminary-project and post-project activities are expensed as incurred.

Additions, improvements and expenditures that extend the useful life of an asset are capitalized.

Expenditures for repairs and maintenance, as well as all maintenance costs associated with software applications, are charged to operations in the period incurred.

Depreciation expense associated with property and equipment is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income.

Amortization expense associated with computer software is included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income.

Gains and losses on disposals of property and equipment are reflected in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income in the period incurred.

Intangible assets, net

In the event that the financial advisor is no longer affiliated with us, any unpaid balance of such loan becomes immediately due and payable to us and generally does not continue to accrue interest.

Based upon the nature of these financing receivables, affiliation status is the primary credit risk factor within this portfolio.

We present the outstanding balance of loans to financial advisors on our Consolidated Statements of Financial Condition, net of the allowance for credit losses.

Refer to the allowance for credit losses section that follows for further information related to our allowance for credit losses on our loans to financial advisors.

See Note 9 for additional information on our loans to financial advisors.

Loans for financial advisors who are actively affiliated with us are considered past due once they are 30 days or more delinquent as to the payment of contractual interest or principal.

Such loans are placed on nonaccrual status when we determine that full payment of contractual principal and interest is in doubt, or the loan is past due 180 days or more as to contractual interest or principal.

When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is written-off against interest income.

Interest is recognized using the cash method for these loans thereafter until the loan qualifies for return to accrual status.

Loans are returned to an accrual status when the loans have been brought contractually current with the original terms and have been maintained on a current basis for a reasonable period, generally six months.

When we determine that it is likely a loan will not be collected in full, the loan is evaluated for a potential write down of the carrying value.

After consideration of the borrower’s ability to restructure the loan, sources of repayment, and other factors affecting the borrower’s ability to repay the debt, the portion of the loan deemed a confirmed loss, if any, is charged-off.

A charge-off is taken against the allowance for credit losses for the difference between the amortized cost and the amount we estimate will ultimately be collected.

Additional charge-offs are taken if there is an adverse change in the expected cash flows.

Allowance for credit losses

We evaluate our held for investment bank loans, unfunded lending commitments, loans to financial advisors and certain other financial assets to estimate an allowance for credit losses over the remaining life of the financial instrument.

The remaining life of our financial assets is determined by considering contractual terms and expected prepayments, among other factors.

We use multiple methodologies in estimating an allowance for credit losses and our approaches differ by type of financial asset and the risk characteristics within each financial asset type.

Our estimates are based on ongoing evaluations of the portfolio, the related credit risk characteristics, and the overall economic and environmental conditions affecting the financial assets.

For certain of our financial assets with collateral maintenance provisions (e.g., collateralized agreements, margin loans and SBL), we apply the practical expedient allowed under the CECL guidance in estimating an allowance for credit losses.

We reasonably expect that borrowers (or counterparties, as applicable) will replenish the collateral as required.

As a result, we estimate zero credit losses to the extent that the fair value equals or exceeds the related carrying value of the financial asset.

When the fair value of the collateral securing the financial asset is less than the carrying value, qualitative factors such as historical experience

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(adjusted for current risk characteristics and economic conditions) as well as reasonable and supportable forecasts are considered in estimating the allowance for credit losses on the unsecured portion of the financial asset.

Credit losses are charged-off against the allowance when we believe the uncollectibility of the financial asset is confirmed.

Subsequent recoveries, if any, are credited to the allowance once received.

A credit loss expense, or benefit, is recorded in earnings in an amount necessary to adjust the allowance for credit losses to our estimate as of the end of each reporting period.

Our provision or benefit for credit losses for outstanding bank loans is included in “Bank loan provision/(benefit) for credit losses” on our Consolidated Statements of Income and Comprehensive Income and our provision or benefit for credit losses for all other financing receivables, including loans to financial advisors, and unfunded lending commitments is included in “Other” expense.

We generally estimate the allowance for credit losses on our loan portfolios using credit risk models which incorporate relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable economic forecasts.

After testing the reasonableness of a variety of economic forecast scenarios, we select a single forecast scenario for use in our models.

Our forecasts incorporate assumptions related to macroeconomic indicators including, but not limited to, U.S.

gross domestic product, equity market indices, unemployment rates, and commercial real estate and residential home price indices.

At the conclusion of our reasonable and supportable forecast period, which currently ranges from two to three years depending on the model and macroeconomic variables, we use a straight-line reversion approach over a one-year period to revert to historical loss information for C&I, REIT and tax-exempt loans.

For CRE and residential mortgage loans, we incorporate a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the assets.

The development of the forecast used for CRE and residential mortgage loans incorporates an assumption that each macroeconomic variable will revert to a long-term expectation starting in years two to three of the forecast and largely completing within the first five years of the forecast.

We assess the length of the reasonable and supportable forecast period and the reversion period, our reversion approach, our economic forecasts and our methodology for estimating the historical loss information on a quarterly basis.

The allowance for credit losses on loans is generally evaluated and measured on a collective basis, typically by loan portfolio segment, due to similar risk characteristics.

When a loan does not share similar risk characteristics with other loans, the loan is evaluated for credit losses on an individual basis.

Various risk characteristics are considered when determining whether the loan should be collectively evaluated including, but not limited to, financial asset type, internal risk ratings, collateral type, industry of the borrower, and historical or expected credit loss patterns.

The allowance for credit losses on collectively evaluated loans is comprised of two components:

(a) a quantitative allowance;

and (b) a qualitative allowance, which is based on an analysis of model limitations and other factors not considered by the quantitative models.

There are several factors considered in estimating the quantitative allowance for credit losses on collectively evaluated loans which generally include, but are not limited to, the internal risk rating, historical loss experience (including adjustments due to current risk characteristics and economic conditions), prepayments, borrower-controlled extensions, and expected recoveries.

We use third-party data for historical information on collectively evaluated corporate loans (C&I, CRE and REIT loans) and residential mortgage loans.

The qualitative portion of our allowance for credit losses includes certain factors that are not incorporated into the quantitative estimate and would generally require adjustments to the allowance for credit losses.

These qualitative factors are intended to address developing trends related to each portfolio segment and would generally include, but are not limited to:

changes in lending policies and procedures, including changes in underwriting standards and collection;

our loan review process;

volume and severity of delinquent loans;

changes in the nature, volume and terms of loans;

credit concentrations;

changes in the value of underlying collateral;

changes in legal and regulatory environments;

and local, regional, national and international economic conditions.

Held for investment bank loans

The allowance for credit losses for the C&I, CRE, REIT, tax-exempt and residential mortgage portfolio segments is estimated using credit risk models that project a probability of default (“PD”), which is then multiplied by the loss given default (“LGD”) and the estimated exposure at default (“EAD”) at the loan-level for every period remaining in the loan’s expected life, including the maturity period.

Historical information, combined with macroeconomic variables, are used in estimating the PD, LGD and EAD.

Our credit risk models consider several factors when estimating the expected credit losses which may include, but are not limited to, financial performance and position, estimated prepayments, geographic location, industry or sector type, debt

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type, loan size, capital structure, initial risk levels and the economic outlook.

Additional factors considered by the residential mortgage model include Fair Isaac Corporation (“FICO”) scores and loan-to-value (“LTV”) ratios.

We generally use one of two methods to measure the allowance for credit losses on individually evaluated loans.

A discounted cash flow approach is used to estimate the allowance for credit losses on certain nonaccrual corporate loans and all TDRs that are not collateral-dependent.

For collateral-dependent loans and for instances where foreclosure is probable, we use an approach that considers the fair value of the collateral less selling costs when measuring the allowance for credit losses.

A loan is collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the collateral.

See Note 8 for further information about our bank loans, including credit quality indicators considered in developing the allowance for credit losses.

Unfunded lending commitments

We estimate credit losses on unfunded lending commitments using a methodology consistent with that used in the corresponding bank loan portfolio segment and also based on the expected funding probabilities for fully binding commitments.

As a result, the allowance for credit losses for unfunded lending commitments will vary depending upon the mix of lending commitments and future funding expectations.

All classes of individually evaluated unfunded lending commitments are analyzed in conjunction with the specific allowance process previously described.

Loans to financial advisors

The allowance for credit losses on loans to financial advisors is estimated using credit risk models that incorporate average annual loan-level loss rates and estimated prepayments based on historical data.

The qualitative component of our estimate considers internal and external factors that are not incorporated into the quantitative estimate such as the reasonable and supportable forecast period.

In estimating an allowance for credit losses on our individually-evaluated loans to financial advisors, we generally take into account the affiliation status of the financial advisor (i.e., whether the advisor is actively affiliated with us or has terminated affiliation with us), the borrower’s ability to restructure the loan, sources of repayment, and other factors affecting the borrower’s ability to repay the debt.

Identifiable intangible assets, net

Certain identifiable intangible assets we acquire such as customer relationships, trade names and non-compete agreements, are amortized over their estimated useful lives on a straight-line basis and are evaluated for potential impairment whenever events or changes in circumstances suggest that the carrying value of an asset or asset group may not be fully recoverable.

Amortization expense associated with such intangible assets is included in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income.

We also hold indefinite-lived intangible assets, which are not amortized under GAAP.

Rather, these assets are subject to an evaluation of potential impairment on an annual basis to determine whether the estimated fair value is in excess of its carrying value, or between annual dates, if events or circumstances indicate there may be impairment.

Amortization expense associated with certain identifiable intangible assets with short useful lives is included in “Acquisition and disposition-related expenses” on our Consolidated Statements of Income and Comprehensive Income, while amortization expense related to our remaining identifiable intangible assets is included in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income.

We also hold indefinite-lived identifiable intangible assets, which are not amortized.

Rather, these assets are subject to an evaluation of potential impairment on an annual basis to determine whether the estimated fair value is in excess of its carrying value, or between annual impairment evaluation dates, if events or circumstances indicate there may be impairment.

In the course of our evaluation of the potential impairment of such indefinite-lived assets, we may elect either a qualitative or a quantitative assessment.

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However, if we conclude otherwise, we then perform a quantitative impairment analysis.

We have elected January 1 as our annual impairment evaluation date,

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evaluating balances as of December 31.

We have elected January 1 as our annual impairment evaluation date, evaluating balances as of December 31.

See Note 11 for additional information regarding the outcome of our impairment assessment.

Goodwill represents the cost of acquired businesses in excess of the fair value of the related net assets acquired.

Indefinite-life intangible assets such as goodwill are not amortized, but rather evaluated for impairment at least annually, or between annual dates whenever events or circumstances indicate potential impairment exists.

Indefinite-lived intangible assets such as goodwill are not amortized, but rather evaluated for impairment at least annually, or between annual impairment evaluation dates whenever events or circumstances indicate potential impairment exists.

Impairment exists when the carrying value of a reporting unit, which is generally at the level of or one level below our business segments, exceeds its respective fair value.

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In the course of our evaluation of the potential impairment to goodwill, we may elect either a qualitative or a quantitative assessment.

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If we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then performing a quantitative impairment analysis is not required.

However, if we conclude otherwise, then we perform a quantitative impairment analysis.

If we either elect not to perform a qualitative assessment, or we elect to perform a qualitative assessment but are unable to qualitatively conclude that no impairment has occurred, then we perform a quantitative evaluation.

However, if we conclude otherwise, we then perform a quantitative impairment analysis.

If we elect not to perform a qualitative assessment, we perform a quantitative evaluation.

In our quantitative assessment, we estimate the fair value of the reporting unit with which the goodwill is associated and compare it to the carrying value.

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See Note 11 for additional information regarding the outcome of our goodwill impairment assessments.

Other assets is primarily comprised of investments in company-owned life insurance, right-of-use assets (“ROU assets”) associated with leases, prepaid expenses, FHLB stock, FRB stock, and investments in real estate partnerships held by consolidated VIEs.

Other assets is primarily comprised of investments in company-owned life insurance, property and equipment, net, right-of-use assets (“ROU assets”) associated with leases, prepaid expenses, FHLB stock, Federal Reserve Bank (“FRB”) stock, and investments in real estate partnerships held by consolidated VIEs.

See Note 12 for further information.

We maintain investments in company-owned life insurance policies utilized to fund certain non-qualified deferred compensation plans and other employee benefit plans (see Note 21 for information on the non-qualified deferred compensation plans).

The life insurance policies are recorded at cash surrender value as determined by the insurer.

We maintain investments in company-owned life insurance policies utilized to indirectly fund certain non-qualified deferred compensation plans and other employee benefit plans (see Note 23 for information on the non-qualified deferred compensation plans).

These life insurance policies are recorded at cash surrender value as determined by the insurer.

Ownership of FHLB and FRB stock is a requirement for all banks seeking membership into and access to the services provided by these banking systems.

These shares are accounted for at amortized cost.

These investments are carried at cost.

Raymond James Tax Credit Funds, Inc.

(“RJTCF”), a wholly-owned subsidiary of RJF, or one of its affiliates, is the managing member or general partner in Low-Income Housing Tax Credit (“LIHTC”) funds, some of which require consolidation.

These funds invest in housing project limited partnerships or limited liability companies (“LLCs”) which purchase and develop affordable housing properties qualifying for federal and state low-income housing tax credits.

(“RJTCF”), a wholly-owned subsidiary of RJF, or one of its affiliates, is the managing member or general partner in Low-Income Housing Tax Credit (“LIHTC”) funds and other funds of a similar nature, some of which require consolidation.

These funds invest in housing project limited partnerships or limited liability companies (“LLCs”) which purchase and develop affordable housing properties generally qualifying for federal and state low-income housing tax credits.

The investments in project partnerships of all of the LIHTC fund VIEs which require consolidation are included in “Other assets” on our Consolidated Statements of Financial Condition.

On October 1, 2019, we adopted new accounting guidance related to the accounting for leases.

Under the new guidance, we recognize assets and liabilities on the balance sheet related to the rights and obligations created by lease agreements with terms greater than 12 months, regardless of whether they are classified as finance or operating leases.

Accordingly, on the date of adoption, we recognized ROU assets and lease liabilities in “Other assets” and “Other payables,” respectively, on our Consolidated Statement of Financial Condition.

We have operating leases for the premises we occupy in many of our U.S.

and foreign locations, including our employee-based branch office operations.

At inception, we determine if an arrangement to utilize a building or piece of equipment is a lease

Property and equipment, net

Property and equipment are stated at cost less accumulated depreciation and software amortization.

Property and equipment primarily consists of software, buildings, certain leasehold improvements, and furniture.

Software includes both purchased software and internally developed software, including certain projects where development is in progress.

Buildings primarily consists of owned facilities.

Leasehold improvements are generally costs associated with lessee-owned interior office space improvements.

Equipment primarily consists of communications and technology hardware.

Depreciation of assets (other than land) is primarily calculated using the straight-line method over the estimated useful lives of the assets, within ranges outlined in the following table.

Asset type Estimated useful life

Buildings, building components and land improvements 15 to 40 years

Furniture, fixtures and equipment 3 to 5 years

Software 2 to 10 years

Leasehold improvements (lessee-owned) Lesser of useful life or lease term

Internally developed software project costs related to preliminary-project and post-project activities are expensed as incurred.

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Notes to Consolidated Financial Statements

and, if so, the appropriate lease classification.

Additions, improvements and expenditures that extend the useful life of an asset are capitalized.

Expenditures for repairs and maintenance, as well as all maintenance costs associated with software applications, are expensed in the period incurred.

Depreciation expense associated with property and equipment is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income.

Amortization expense associated with computer software is included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income.

Gains and losses on disposals of property and equipment are included in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income in the period incurred.

We have operating leases for the premises we occupy in many of our U.S.

and foreign locations, including our employee-based branch office operations.

At inception, we determine if an arrangement to utilize a building or piece of equipment is a lease and, if so, the appropriate lease classification.

Substantially all of our leases are operating leases.

If the arrangement is determined to be a lease, we recognize an ROU asset and a corresponding lease liability on our Consolidated Statements of Financial Condition.

If the arrangement is determined to be a lease, we recognize an ROU asset in “Other assets” and a corresponding lease liability in “Other payables” on our Consolidated Statements of Financial Condition.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

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Our lease terms include any noncancelable periods and may reflect periods covered by options to extend or terminate when it is reasonably certain that we will exercise those options.

We record our lease ROU assets at the amount of the lease liability plus any prepaid rent and initial direct costs, less any lease incentives and accrued rent.

We record our lease ROU assets at the amount of the lease liability plus any prepaid rent, amounts paid for lessor-owned leasehold improvements, and initial direct costs, less any lease incentives and accrued rent.

We record lease liabilities at commencement date based on the present value of lease payments over the lease term, which is discounted using our commencement date incremental borrowing rate, or at the imputed rate within the lease, as appropriate.

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Each legal proceeding or significant regulatory matter is reviewed in each accounting period and the liability balance is adjusted as deemed appropriate by management.

Any change in the liability amount is recorded in our consolidated financial statements and is recognized in net income in that period.

Any change in the liability amount is recorded through “Other” expense on our Consolidated Statements of Income and Comprehensive Income in that period.

The actual costs of resolving legal matters or regulatory proceedings may be substantially higher or lower than the recorded liability amounts for such matters.

We expense our cost of defense related to such matters in the period they are incurred.

Our costs of defense related to such matters are expensed in the period they are incurred.

Such defense costs are primarily related to external legal fees which are included within “Professional fees” on our Consolidated Statements of Income and Comprehensive Income.

See Note 19 for additional information.

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Share-based compensation

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We maintain various deferred compensation plans for the benefit of certain employees and independent contractors that provide a return to the participant based upon the performance of various referenced investments.

For the Voluntary Deferred Compensation Plan (the “VDCP”), Long Term Incentive Plan (“LTIP”), and certain other plans, we purchase and hold company-owned life insurance policies on the lives of certain current and former participants to earn a competitive rate of return for participants and to provide a source of funds available to satisfy our obligations under the plan.

For the Voluntary Deferred Compensation Plan (“VDCP”), Long-Term Incentive Plan (“LTIP”), and certain other plans, we purchase and hold company-owned life insurance policies on the lives of certain current and former participants to earn a competitive rate of return for participants and to provide a source of funds available to satisfy our obligations under the plan.

See Note 12 for information regarding the carrying value of such policies.

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See Note 23 for additional information.

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Foreign currency translation

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See Note 10 for further information on our VIEs.

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Determination of the primary beneficiary of a VIE

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In such instances, we consolidate the Private Equity Interests VIE.

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Restricted Stock Trust Fund

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RJTCF is the managing member or general partner in a number of LIHTC funds having one or more investor members or limited partners.

These LIHTC funds are organized as LLCs or limited partnerships for the purpose of investing in a number of project partnerships, which are limited partnerships or LLCs that purchase and develop low-income housing properties qualifying for tax credits and/or provide a mechanism for banks and other institutions to meet their Community Reinvestment Act obligations throughout the U.S.

These LIHTC funds are organized as LLCs or limited partnerships for the purpose of investing in a number of project partnerships, which are limited partnerships or LLCs that purchase and develop, or hold, low-income housing properties qualifying for tax credits and/or provide a mechanism for banks and other institutions to meet their Community Reinvestment Act obligations throughout the U.S.

Our determination of the primary beneficiary of each tax credit fund in which RJTCF has a variable interest requires judgment and is based on an analysis of all relevant facts and circumstances, including:

(1) an assessment of the characteristics of RJTCF’s variable interest and other involvement it has with the tax credit fund, including involvement of related parties and any de facto agents, as well as the involvement of other variable interest holders, namely, limited partners or investor members, and (2) the tax credit funds’ purpose and design, including the risks that the tax credit fund was designed to create and pass through to its variable interest holders.

In the design of tax credit fund VIEs, the overriding premise is that the investor members invest solely for tax attributes associated with the portfolio of low-income housing properties held by the fund, while RJTCF, as the managing member or general partner of the fund, is responsible for overseeing the fund’s operations.

RJTCF sponsors two general types of tax credit funds that generally do not meet VIE consolidation criteria.

The types of funds include single investor funds and multi-investor funds.

(1) an assessment of the characteristics of RJTCF’s variable interest and other involvement it has with the tax credit fund, including involvement of related parties and any de facto agents, as well as the involvement of other variable interest holders, namely, limited partners or investor members, and (2) the tax credit fund’s purpose and design, including the risks that the tax credit fund was designed to create and pass through to its variable interest holders.

In the design of most tax credit fund VIEs, the investor members invest solely for tax attributes associated with the portfolio of low-income housing properties held by the fund.

However, the tax credit fund VIEs which invest and hold LIHTC project partnerships that have already delivered most of the tax credits to their investors hold the projects to monetize anticipated future tax benefits for which the project may ultimately qualify.

In both instances, RJTCF, as the managing member or general partner of the fund, is responsible for overseeing the fund’s operations.

RJTCF sponsors two general types of tax credit funds designed to deliver tax benefits to the investors.

Generally, neither type meets the VIE consolidation criteria.

These types of funds include single investor funds and multi-investor funds.

RJTCF does not typically provide guarantees related to the delivery or funding of tax credits or other tax attributes to the investor members or limited partners of tax credit funds.

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RJTCF earns fees from the fund for its services in organizing the fund, identifying and acquiring the project partnership investments and ongoing asset management, and receives a share of any residuals arising from sale of project partnerships upon the termination of the fund.

In single investor funds, RJTCF has concluded that the one single investor member or limited partner in such funds, in nearly all instances, has significant participating rights over the activities that most significantly impact the economics of the fund.

In single investor funds that deliver tax benefits, RJTCF has concluded that the one single investor member or limited partner in such funds, in nearly all instances, has significant participating rights over the activities that most significantly impact the

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economics of the fund.

Therefore RJTCF, as managing member or general partner of such funds, is not the one party with power over such activities and resultantly is not deemed to be the primary beneficiary of such single investor funds and, in nearly all cases, these funds are not consolidated.

In multi-investor funds, RJTCF has concluded that since the participating rights over the activities that most significantly impact the economics of the fund are not held by one single investor member or limited partner, RJTCF is deemed to have the power over such activities.

In multi-investor funds that deliver tax benefits, RJTCF has concluded that since the participating rights over the activities that most significantly impact the economics of the fund are not held by one single investor member or limited partner, RJTCF is deemed to have the power over such activities.

RJTCF then assesses whether its projected benefits to be received from the multi-investor funds, primarily its share of any residuals upon the termination of the fund, are potentially significant to the fund.

As such residuals received upon termination are not expected to be significant to the funds, in nearly all cases, these funds are not consolidated.

LIHTC funds designed to hold projects to monetize future tax benefits for which the project may qualify are also sponsored by RJTCF in either single investor or multi-investor form.

In single investor form, the limited partner has significant participating rights over the activities that most significantly impact the economics of the fund, and therefore RJTCF is not the primary beneficiary of such funds and such funds are not consolidated.

In multi-investor form, RJTCF has concluded it meets both the power and benefits criteria for such funds since participating rights are not held by any one single investor, and thus RJTCF is deemed to have the power over such activities.

In such instances, since RJTCF has benefit opportunities in the fund that could potentially be significant, such fund is consolidated.

Direct investments in LIHTC project partnerships

RJ Bank is the investor member of a LIHTC fund which we have determined to be a VIE, and in which a subsidiary of RJTCF is the managing member.

We have determined that RJ Bank is the primary beneficiary of this VIE and therefore, we consolidate the fund.

All LIHTC funds which we consolidate are investor members in certain LIHTC project partnerships.

Raymond James Bank is the investor member of a LIHTC fund that delivers tax benefits which we have determined to be a VIE, and in which a subsidiary of RJTCF is the managing member.

We have determined that Raymond James Bank is the primary beneficiary of this VIE and therefore, we consolidate the fund.

These LIHTC funds which we consolidate are investor members in certain LIHTC project partnerships.

Since unrelated third parties are the managing members of the investee project partnerships, we have determined that consolidation of these project partnerships is not required and the funds account for their project partnership investments under the equity method.

The carrying value of the funds’ project partnership investments are included in “Other assets” on our Consolidated Statements of Financial Condition.

The federal tax credits that result from these investments reduce our tax expense in the year they are received.

Any losses on such equity method investments are included in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income.

The federal tax credits that result from these investments reduce our provision for income taxes in the year they are received.

Our financial statements include the operations of an acquired business starting from the completion of the acquisition.

Acquisitions are generally recorded as a business combination, whereby the assets acquired and liabilities assumed are recorded on the date of acquisition at their respective estimated fair values, including any identifiable intangible assets.

Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

Significant judgment is required in estimating the fair value of certain acquired assets and liabilities.

The fair value estimates are based on available historical information, and, in part, on inputs that are unobservable, including future expectations and assumptions.

Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates and profitability), the underlying demand, the economic barriers to entry and the discount rate applied to the cash flows.

To estimate the fair value of identifiable intangible assets we consider the income, market and cost approaches and place reliance on the approach or approaches deemed most indicative of value.

Depending on the timing of an acquisition, the estimated fair values of the assets acquired and liabilities assumed may be considered provisional and based on information available at the time the financial statements are prepared, providing a reasonable basis for estimating the fair values.

Provisional estimates may be adjusted upon the availability of new information regarding facts and circumstances which existed at the acquisition date.

Our policy is to finalize the valuation of assets and liabilities as soon as practicable, but not later than one year from the acquisition date.

Any adjustments to the initial estimates of the fair values of the acquired assets and liabilities assumed are recorded as adjustments to the respective assets and liabilities.

Determining the useful life of an intangible asset also requires judgment.

With the exception of certain customer relationships, the majority of our acquired intangible assets (e.g., customer relationships, trade names and non-compete agreements) are expected to have determinable useful lives.

We estimate the useful lives of these intangible assets based on a number of factors including competitive environment, market share, trademark, brand history, underlying demand, and operating plans.

Finite-lived intangible assets are amortized over their estimated useful life.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

Recent accounting developments

Accounting guidance recently adopted

Lease accounting - In February 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance related to the accounting for leases ( ASU 2016-02 ).

We adopted this guidance as of October 1, 2019 using the alternative modified retrospective approach, with no adjustments to prior periods presented.

In addition, we elected the practical expedients permitted under the transition guidance which, among other things, allowed us to carry forward historical lease classification determinations.

On the adoption date, we recognized ROU assets and lease liabilities of $ 333 million and $ 357 million, respectively.

The adoption had no effect on our results of operations or cash flows.

The impact of the adoption on our regulatory capital measures was insignificant.

Refer to the lease section of this footnote and to Note 12 for further information.

Reference rate reform - In March 2020, the FASB issued guidance to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR (ASU 2020-04).

The guidance simplifies the accounting for modifying contracts (including those in hedging relationships) that refer to LIBOR and other interbank offered rates.

In addition, the guidance allows for changes to the critical terms of a hedging relationship affected by reference rate reform without having to dedesignate the relationship.

The guidance was effective upon issuance and generally can be applied through December 31, 2022.

We have elected certain expedients for cash flow hedges to assert that the hedged forecasted transaction remains probable, regardless of any expected modification in terms related to reference rate reform.

The expedients elected did not impact our financial position or results of operations.

Acquisition-related expenses

Acquisition-related expenses associated with certain acquisitions are separately reported on our Consolidated Statements of Income and Comprehensive Income and include certain incremental expenses arising from our acquisitions.

These costs do not represent recurring operating costs within the fully integrated combined organization.

See Note 3 for additional information regarding the nature of these expenses.

NOTE 3 – ACQUISITIONS

Acquisitions completed or announced during the twelve months ended September 30, 2021

In December 2020, we completed our acquisition of all of the outstanding shares of NWPS Holdings, Inc.

and its wholly-owned subsidiaries (collectively “NWPS”), doing business as NWPS and Northwest Plan Services.

As an independent provider of retirement plan administration, consulting, actuarial and administration services, the addition of NWPS expands our retirement services offerings, which now include retirement plan administration services, to advisors and clients.

For purposes of certain acquisition-related financial reporting requirements, the NWPS acquisition was not considered a material acquisition.

NWPS has been integrated into our PCG segment and its results of operations have been included in our results prospectively from the closing date of December 24, 2020.

During the twelve months ended September 30, 2021, the NWPS acquisition resulted in the addition of $ 139 million of goodwill and $ 96 million of identifiable intangible assets.

The goodwill associated with this acquisition primarily represents synergies from combining NWPS with our existing businesses.

The identifiable intangible assets primarily relate to client relationships and have a weighted-average useful life of 24.8 years.

In March 2021, we completed our acquisition of all of the outstanding ownership interests of Financo, LLC and its subsidiaries (collectively “Financo”), an investment bank focused on the consumer sector.

The addition of Financo expands our investment banking capabilities in the consumer and retail space, both domestically and internationally.

For purposes of certain acquisition-related financial reporting requirements, the Financo acquisition was not considered a material acquisition.

Financo has been integrated into our Capital Markets segment and its results of operations have been included in our results prospectively from the closing date of March 30, 2021.

During the twelve months ended September 30, 2021, the Financo acquisition resulted in the addition of $ 30 million of goodwill and $ 9 million of identifiable intangible assets.

The goodwill associated with this acquisition primarily represents synergies from combining Financo with our existing businesses and is generally deductible for tax purposes over 15 years.

The identifiable intangible assets primarily relate to client relationships and have a weighted-average useful life of 9 months.

In September 2021, we completed our acquisition of all of the outstanding ownership interests of Cebile Capital (“Cebile”), a private fund placement agent and secondary market advisor to private equity firms.

The addition of Cebile deepens our investment banking relationships with the private equity community and expands our related service offerings.

For purposes of certain acquisition-related financial reporting requirements, the Cebile acquisition was not considered a material acquisition.

Cebile has been integrated into our Capital Markets segment and its results of operations have been included in our results prospectively from the closing date of September 1, 2021.

During the twelve months ended September 30, 2021, the Cebile acquisition resulted in the addition of $ 24 million of goodwill and $ 4 million of identifiable intangible assets.

The goodwill associated with this acquisition primarily represents synergies from combining Cebile with our existing businesses.

The identifiable intangible assets primarily relate to client relationships and have a weighted-average useful life of 2.5 years.

Due to the timing of the close of this acquisition, certain information is not yet available and the amounts of goodwill and intangible assets are considered provisional.

We believe the information currently available provides a reasonable basis for estimating the fair value of these assets.

However, these provisional estimates may be adjusted upon the availability of new information regarding facts and circumstances which existed at the acquisition date.

We expect to finalize this valuation in our fiscal first quarter of 2022.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

See Notes 2 and 11 for additional information about our goodwill and identifiable intangible assets, including the related accounting policies.

Acquisition announcements

Charles Stanley

On July 29, 2021, we announced our firm intention to make an offer for the entire issued and to be issued share capital of United Kingdom (“U.K.”)-based Charles Stanley Group PLC (“Charles Stanley”) at a price of £ 5.15 per share, or approximately £ 279 million ($ 387 million as of July 28, 2021).

Under the terms of the intended offer, a loan note alternative will be available to Charles Stanley shareholders which will enable eligible Charles Stanley shareholders to elect to receive a loan note in lieu of part or all of the cash consideration to which they would otherwise be entitled under the terms of the offer.

The initial interest rate for the loan note alternative for the first year is 0.1 %.

The note bears interest at a variable rate which resets annually, calculated as the Bank of England’s base rate plus a differential defined in the loan note, with the interest rate not to exceed 1.5 % in any period.

The transaction, which is subject to U.K.

Financial Conduct Authority approval, is expected to close in the first half of fiscal 2022.

We have segregated $ 400 million in cash to fund the acquisition on the closing date, which is included in “Assets segregated for regulatory purposes and restricted cash” on our Consolidated Statements of Financial Condition as of September 30, 2021.

The acquisition would provide us the opportunity to accelerate growth in the U.K.

and, through Charles Stanley’s multiple affiliation options, give us the ability to offer wealth management affiliation choices consistent with our model in the U.S.

For purposes of certain acquisition-related financial reporting requirements, the Charles Stanley acquisition will not be considered a material acquisition.

Charles Stanley will operate within our PCG segment upon completion of the acquisition.

TriState Capital

On October 20, 2021, we announced we had entered into a definitive agreement to acquire TriState Capital Holdings, Inc.

(“TriState Capital”) in a combination cash and stock transaction, valued at approximately $ 1.1 billion.

Under the terms of the agreement, TriState Capital common stockholders will receive $ 6.00 cash and 0.25 RJF shares for each share of TriState Capital common stock, which represents per share consideration of $ 31.09 based on the closing price of RJF common stock on October 19, 2021.

We have entered into an agreement with the sole holder of the TriState Capital Series C Perpetual Non-Cumulative Convertible Non-Voting Preferred Stock (“Series C Convertible Preferred”) pursuant to which the Series C Convertible Preferred will be converted to common shares at the prescribed exchange ratio and cashed out at $ 30 per share.

The TriState Capital Series A Non-Cumulative Perpetual Preferred Stock and Series B Non-Cumulative Perpetual Preferred Stock will remain outstanding and will be converted into equivalent preferred stock of RJF.

The transaction, which is subject to customary closing conditions, including regulatory approvals and approval by TriState Capital shareholders, is expected to close in fiscal 2022.

We currently have the ability to utilize our cash on hand to fund the acquisition.

TriState Capital offers private banking, commercial banking, and investment management products and services.

TriState Capital will continue to operate as a separately branded firm and as an independently-charted bank subsidiary upon closing of the acquisition.

Acquisition and disposition-related expenses

Certain acquisition and integration costs associated with these acquisitions were included in “Acquisition and disposition-related expenses” during fiscal 2021 on our Consolidated Statements of Income and Comprehensive Income.

Such costs primarily included legal and other professional fees and, with respect to Financo and Cebile, amortization expense related to identifiable intangible assets with short useful lives.

The following table details our acquisition and disposition-related expenses.

Year ended September 30,

$ in millions 2021 2020 2019

Acquisition-related expenses:

Legal $ 7 $ — $ —

Identifiable intangible amortization 6 — —

Other professional fees 6 — —

Total Acquisition-related expenses 19 — —

Disposition-related expenses (1)

Total Acquisition and disposition-related expenses $ 19 $ 7 $ 15

(1) The twelve months ended September 30, 2020 included a $ 7 million loss in our Capital Markets segment related to the sale of our interests in certain entities that operated predominantly in France.

The twelve months ended September 30, 2019 included a $ 15 million loss in our Capital Markets segment on the sale of our operations related to research, sales and trading of European equities.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 4 – FAIR VALUE

Our “Financial instruments owned” and “Financial instrument liabilities” on our Consolidated Statements of Financial Condition are recorded at fair value under GAAP.

Our “Financial instruments” and “Financial instrument liabilities” on our Consolidated Statements of Financial Condition are recorded at fair value.

For further information about such instruments and our significant accounting policies related to fair value, see Note 2.

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$ in millions Level 1 Level 2 Level 3 Netting

adjustments Balance as of

September 30,

adjustments Balance as of September 30, 2021

Assets at fair value on a recurring basis:

Trading instruments

Assets segregated for regulatory purposes (1)

$ 2,100 $ — $ — $ — $ 2,100

Trading assets:

Municipal and provincial obligations

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15 94 — — 109

Agency MBS and agency CMOs — 130 — — 130

Non-agency CMOs and asset-backed securities (“ABS”)

Agency MBS, CMOs and asset-backed securities (“ABS”) — 211 — — 211

Non-agency CMOs and ABS — 14 — — 14

Total debt securities

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Brokered certificates of deposit

Total trading instruments

40 461 12 — 513

Total trading assets 39 557 14 — 610

Available-for-sale securities (2)

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16 128 — ( 87 ) 57

Foreign exchange

Total derivative assets

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All other investments:

195 1 22 — 218

Government and agency obligations (3)

Other 77 2 23 — 102

Total all other investments 163 2 23 — 188

2,333 9,185 112 ( 87 ) 11,543

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Liabilities at fair value on a recurring basis:

Trading instruments sold but not yet purchased

Trading liabilities:

Municipal and provincial obligations

3 unchanged sentences

137 — — — 137

Non-agency CMOs and ABS — 2 — — 2

Total debt securities

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Equity securities

Total trading instruments sold but not yet purchased

233 7 — — 240

Total trading liabilities 167 9 — — 176

Derivative liabilities:

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16 106 — ( 88 ) 34

Foreign exchange

Total derivative liabilities

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Total liabilities at fair value on a recurring basis $ 183 $ 308 $ 1 $ ( 88 ) $ 404

(1) Substantially all of our available-for-sale securities consist of agency MBS and agency CMOs.

See Note 4 for further information.

RAYMOND JAMES FINANCIAL, INC.

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$ in millions Level 1 Level 2 Level 3 Netting

adjustments Balance as of

September 30,

adjustments Balance as of September 30, 2020

Assets at fair value on a recurring basis:

Trading instruments

Trading assets:

Municipal and provincial obligations

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Government and agency obligations

13 131 — — 144

Agency MBS and agency CMOs — 130 — — 130

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Brokered certificates of deposit

Total trading instruments

32 673 3 — 708

Total trading assets 40 461 12 — 513

Available-for-sale securities (2)

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All other investments:

Government and agency obligations (3)

103 — — — 103

Other 92 1 22 — 115

Total all other investments 195 1 22 — 218

267 8,653 71 ( 135 ) 8,856

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Liabilities at fair value on a recurring basis:

Trading instruments sold but not yet purchased

Corporate obligations

Trading liabilities:

Municipal and provincial obligations

$ 1 $ — $ — $ — $ 1

Corporate obligations

Government and agency obligations

136 — — — 136

Non-agency CMOs and ABS

Total debt securities

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Equity securities

Total trading instruments sold but not yet purchased

275 20 1 — 296

Total trading liabilities 233 7 — — 240

Derivative liabilities:

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$ 249 $ 491 $ 5 $ ( 112 ) $ 633

(1) These assets consist of U.S.

Treasuries with maturities greater than 3 months as of our date of purchase.

(2) Substantially all of our available-for-sale securities consist of agency MBS and agency CMOs.

See Note 5 for further information.

(3) These assets are comprised of U.S.

Treasuries primarily purchased to meet certain deposit requirements with clearing organizations.

RAYMOND JAMES FINANCIAL, INC.

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The realized and unrealized gains and losses in the tables may include changes in fair value that were attributable to both observable and unobservable inputs.

In the following tables, gains/(losses) on trading instruments are reported in “Principal transactions” and gains/(losses) on other investments are reported in “Other” revenues.

In the following tables, gains/(losses) on trading instruments are reported in “Principal transactions” and gains/(losses) on other investments are reported in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

Year ended September 30, 2021

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Financial assets Financial

Trading instruments Other investments Trading instruments Derivative liabilities

$ in millions Other Private equity

investments All other Other Other

Trading assets Derivative assets Other investments Derivative liabilities

$ in millions Other Other Private equity

investments All other Other

Fair value beginning of year

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$ — $ — $ 37 $ 1 $ ( 1 )

The net unrealized gains included in earnings on our Level 3 private equity investments for the year ended September 30, 2021 primarily reflected the impact of continued improvement in market conditions and an improved outlook for certain of our investments.

Of these gains, $ 24 million were attributable to noncontrolling interests, which are reflected as an offset in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income.

Year ended September 30, 2020

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Financial assets Financial

Trading instruments Other investments Trading instruments

Trading assets Other investments Trading liabilities Derivative liabilities

$ in millions Other Private equity

investments All other Other

investments All other Other Other

Fair value beginning of year

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$ ( 1 ) $ ( 29 ) $ ( 2 ) $ — $ ( 5 )

The net unrealized losses on our Level 3 private equity investments for the year ended September 30, 2020 were primarily driven by the negative impact of the coronavirus (“COVID-19”) pandemic on the valuation of certain of our investments.

Of these losses, approximately $ 20 million were attributable to noncontrolling interests, which are reflected as an offset in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income.

As of September 30, 2020, 19 % of our assets and 2 % of our liabilities were measured at fair value on a recurring basis.

In comparison, as of September 30, 2019, 12 % of our assets and 2 % of our liabilities were measured at fair value on a recurring basis.

The increase in assets measured at fair value on a recurring basis as a percentage of total assets was due to a significant increase in our available-for-sale securities during fiscal 2020.

As of September 30, 2020 and 2019, Level 3 assets represented 1 % and 2 %, respectively, of our assets measured at fair value on a recurring basis.

The net unrealized losses on our Level 3 private equity investments for the year ended September 30, 2020 were primarily driven by the then anticipated negative impact of the coronavirus (“COVID-19”) pandemic on certain of our investments.

Of these losses, $ 20 million were attributable to noncontrolling interests, which are reflected as an offset in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

As of September 30, 2021, 19 % of our assets and 1 % of our liabilities were measured at fair value on a recurring basis.

In comparison, as of September 30, 2020, 19 % of our assets and 2 % of our liabilities were measured at fair value on a recurring basis.

As of both September 30, 2021 and 2020, Level 3 assets represented less than 1 % of our assets measured at fair value on a recurring basis.

Quantitative information about level 3 fair value measurements

The following tables present the valuation techniques and significant unobservable inputs used in the valuation of certain of our private equity investments classified as level 3.

The following table presents the valuation techniques and significant unobservable inputs used in the valuation of certain of our private equity investments classified as level 3.

These inputs represent those that a market participant would take into account when pricing these instruments.

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$ 75 Discounted cash flow, transaction price or other investment-specific events Discount rate 25 %

Terminal earnings before interest, tax, depreciation and amortization (“EBITDA”) multiple 9.0 x

Terminal earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiple 10.0 x

Terminal year 2023 - 2035 (2024)

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Terminal year 2021 - 2042 (2023)

Qualitative disclosure about unobservable inputs

For our recurring fair value measurements categorized within Level 3 of the fair value hierarchy, the sensitivity of the fair value measurement to changes in significant unobservable inputs and interrelationships between those unobservable inputs are described in the following section.

Private equity investments

Qualitative information about unobservable inputs

The significant unobservable inputs used in the fair value measurement of private equity investments generally relate to the financial performance of the investment entity and the market’s required return on investments from entities in industries in which we hold investments.

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Investments in private equity measured at net asset value per share

As more fully described in Note 2, as a practical expedient, we utilize NAV or its equivalent to determine the recorded value of a portion of our private equity investments portfolio.

As a practical expedient, we utilize NAV or its equivalent to determine the recorded value of a portion of our private equity investments portfolio.

We utilize NAV when the fund investment does not have a readily determinable fair value and the NAV of the fund is calculated in a manner consistent with the measurement principles of investment company accounting, including measurement of the investments at fair value.

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The portions of the private equity investments we did not own were $ 49 million and $ 26 million as of September 30, 2021 and 2020, respectively, and were included as a component of noncontrolling interests on our Consolidated Statements of Financial Condition.

Many of our proprietary private equity fund investments meet the definition of prohibited covered funds as defined by the Volcker Rule enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”).

As a financial holding company, we are subject to holding period limitations for our merchant banking activities.

Additionally, many of our private equity fund investments meet the definition of prohibited covered funds as defined by the Volcker Rule enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).

We have received approval from the Fed to continue to hold the majority of our covered fund investments until July 2022.

As a result, we will be required to exit or restructure certain of our private equity investments during fiscal 2022.

Financial instruments measured at fair value on a nonrecurring basis

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September 30, 2021

Bank loans, net:

Impaired loans:

residential $ 4 $ 13 $ 17 Discounted cash flow Prepayment rate 7 yrs.

Impaired loans:

corporate $ — $ 15 $ 15 Collateral or discounted cash flow (1)

Residential mortgage loans $ 3 $ 11 $ 14 Collateral or discounted cash flow (1)

Prepayment rate 7 yrs.

Corporate loans $ — $ 49 $ 49 Collateral or discounted cash flow (1)

Not meaningful (1)

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Loans held for sale $ 29 $ — $ 29 N/A N/A N/A

Other assets:

other real estate owned $ 1 $ — $ 1 N/A N/A N/A

September 30, 2020

Bank loans, net:

Impaired loans:

residential $ 7 $ 14 $ 21 Discounted cash flow Prepayment rate 7 yrs.

Impaired loans:

corporate $ — $ 21 $ 21 Collateral or discounted cash flow (1)

Residential mortgage loans $ 4 $ 13 $ 17 Collateral or discounted cash flow (1)

Prepayment rate 7 yrs.

Corporate loans $ — $ 15 $ 15 Collateral or discounted cash flow (1)

Not meaningful (1)

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other real estate owned $ 1 $ — $ 1 N/A N/A N/A

(1) The valuation techniques used for the corporate loans are based on collateral value less selling costs for the collateral dependent loans and discounted cash flows for impaired loans that are not collateral dependent.

(1) The valuation techniques used to estimate the fair values are based on collateral value less selling costs for the collateral-dependent loans and discounted cash flows for loans that are not collateral-dependent.

RAYMOND JAMES FINANCIAL, INC.

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Many, but not all, of the financial instruments we hold were recorded at fair value on the Consolidated Statements of Financial Condition.

The following table presents the estimated fair value and fair value hierarchy of financial assets and liabilities that are not recorded at fair value in accordance with GAAP on the Consolidated Statements of Financial Condition at September 30, 2020 and 2019.

The following table presents the estimated fair value and fair value hierarchy of financial assets and liabilities that are not recorded at fair value on the Consolidated Statements of Financial Condition at September 30, 2021 and 2020.

This table excludes financial instruments that are carried at amounts which approximate fair value.

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Short-term financial instruments:

The carrying value of short-term financial instruments, including cash and cash equivalents, cash and cash equivalents segregated pursuant to regulations, and the majority of collateralized agreements and collateralized financings, are recorded at amounts that approximate the fair value of these instruments.

The carrying value of short-term financial instruments, such as cash and cash equivalents, including amounts segregated for regulatory purposes and restricted cash, and the majority of collateralized agreements and collateralized financings, are recorded at amounts that approximate the fair value of these instruments.

These financial instruments generally expose us to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market rates.

Under the fair value hierarchy, cash and cash equivalents and cash and cash equivalents segregated pursuant to regulations are classified as Level 1 and collateralized agreements and financings are classified as Level 2.

Under the fair value hierarchy, cash and cash equivalents, including amounts segregated for regulatory purposes and restricted cash, are classified as Level 1 and collateralized agreements and financings are classified as Level 2.

Bank loans, net:

These financial instruments are primarily comprised of loans originated or purchased by RJ Bank and include C&I loans, commercial and residential real estate loans, tax-exempt loans, SBL and other loans intended to be held until maturity or payoff.

These financial instruments are primarily comprised of loans originated or purchased by Raymond James Bank and include C&I loans, commercial and residential real estate loans, tax-exempt loans, SBL and other loans intended to be held until maturity or payoff.

These financial instruments are primarily recorded at amounts that result from the application of the methodologies for loans held for investment summarized in Note 2.

Certain bank loans are held for sale, which are carried at the lower of cost or market value.

A portion of these loans held for sale, as well as any impaired loans held for investment, are recorded at fair value as nonrecurring fair value measurements and therefore are excluded from the preceding table.

A portion of these loans held for sale, as well as certain held for investment loans which have been written-down, are recorded at fair value as nonrecurring fair value measurements and therefore are excluded from the preceding table.

The fair values for both variable and fixed-rate loans held for investment are estimated using a discounted cash flow analysis based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality, which includes our estimate of future credit losses expected to be incurred.

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Receivables and other assets:

Brokerage client receivables, other receivables, and certain other assets are recorded at amounts that approximate fair value and are classified as Level 2 and 3 under the fair value hierarchy.

Brokerage client receivables, other receivables, and certain other assets are recorded at amounts that approximate fair value and are classified as Levels 2 and 3 under the fair value hierarchy.

As specified under GAAP, the FHLB and FRB stock are recorded at cost, which we have determined to approximate their estimated fair value, and are classified as Level 2 under the fair value hierarchy.

Loans to financial advisors, net:

These financial instruments are primarily comprised of loans provided to financial advisors and certain key revenue producers, primarily for recruiting, transitional cost assistance, and retention purposes.

These financial instruments are primarily comprised of loans to financial advisors, primarily for recruiting and retention purposes.

Loans to financial advisors, net are recorded at amounts that approximate fair value and are classified as Level 2 under the fair value hierarchy.

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Other borrowings:

Other borrowings is primarily comprised of RJ Bank’s borrowings from the FHLB.

Substantially all of such borrowings reflect terms that approximate current market rates for similar loans and therefore, their carrying value approximates fair value.

Other borrowings is primarily comprised of Raymond James Bank’s borrowings from the FHLB, which reflect terms that approximate current market rates for similar loans and therefore, their carrying value approximates fair value.

Our other borrowings are classified as Level 2 under the fair value hierarchy.

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NOTE 5 – AVAILABLE-FOR-SALE SECURITIES

Available-for-sale securities are primarily comprised of agency MBS and agency CMOs owned by RJ Bank.

Refer to Note 2 for a discussion of our available-for-sale securities accounting policies, including the fair value determination process.

Available-for-sale securities are primarily comprised of agency MBS and agency CMOs owned by Raymond James Bank.

As of October 1, 2020, we adopted new accounting guidance related to the measurement of credit losses on financial instruments, including available-for-sale securities.

Refer to Note 2 for further information about this guidance and a discussion of our available-for-sale securities.

The following table details the amortized costs and fair values of our available-for-sale securities.

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948 22 ( 1 ) 969

2,504 27 ( 1 ) 2,530

Other securities

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$ 7,531 $ 124 $ ( 5 ) $ 7,650

The amortized costs and fair values in the preceding table exclude $ 14 million and $ 15 million of accrued interest on available-for-sale securities as of September 30, 2021 and September 30, 2020, respectively, which was included in “Other receivables, net” on our Consolidated Statements of Financial Condition.

See Note 4 for additional information regarding the fair value of available-for-sale securities.

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Since our MBS and CMO available-for-sale securities are backed by mortgages, actual maturities may differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment penalties.

As of September 30, 2020, the duration of our available-for-sale securities portfolio was approximately three years .

As a result, as of September 30, 2021, the weighted-average life of our available-for-sale securities portfolio was approximately four years .

September 30, 2021

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918 ( 12 ) 231 ( 4 ) 1,149 ( 16 )

Other securities

$ 4,721 $ ( 50 ) $ 602 $ ( 19 ) $ 5,323 $ ( 69 )

5 unchanged sentences

410 ( 1 ) — — 410 ( 1 )

Other securities

$ 1,553 $ ( 5 ) $ — $ — $ 1,553 $ ( 5 )

1 unchanged sentence

government or its agencies.

At September 30, 2020, of the 83 available-for-sale securities in an unrealized loss position, all were in a continuous unrealized loss position for less than 12 months.

At September 30, 2020, debt securities we held in excess of ten percent of our equity included Federal National Home Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) which had an amortized cost of $ 4.84 billion and $ 2.40 billion, respectively, and a fair value of $ 4.92 billion and $ 2.43 billion, respectively.

For the year ended September 30, 2020, we received proceeds of $ 222 million, resulting in an insignificant gain, from the sales of agency MBS and agency CMO available-for-sale securities.

The gain that resulted from the sales was included in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

There were no sales of agency MBS or CMO available-for-sale securities for the years ended September 30, 2019 and 2018.

At September 30, 2021, of the 276 available-for-sale securities in an unrealized loss position, 239 were in a continuous unrealized loss position for less than 12 months and 37 securities were in a continuous unrealized loss position for greater than 12 months.

We do not consider unrealized losses associated with these securities to be credit losses due to the guarantee of the full payment of principal and interest, and the fact that we have the ability and intent to hold these securities.

In addition, unrealized losses related to these available-for-sale securities are generally due to changes in market interest rates.

At September 30, 2021, based on our assessment of this portfolio, we did not recognize an allowance for credit losses on our available-for-sale securities.

At September 30, 2021, debt securities we held in excess of ten percent of our equity included those issued by the Federal National Home Mortgage Association and Federal Home Loan Mortgage Corporation with amortized costs of $ 5.17 billion and $ 2.90 billion, respectively, which also approximated the fair values of the securities.

We received proceeds of $ 969 million and $ 222 million, respectively, from the sales of available-for-sale securities for the years ended September 30, 2021 and 2020, respectively.

These sales resulted in insignificant gains for both periods, which were included in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

There were no sales of available-for-sale securities for the year ended September 30, 2019.

RAYMOND JAMES FINANCIAL, INC.

6 unchanged sentences

Derivative balances included on our financial statements

The following table presents the gross fair value and notional amount of derivatives by product type, the amounts of counterparty and cash collateral netting on our Consolidated Statements of Financial Condition, as well as collateral posted and received under credit support agreements that do not meet the criteria for netting under GAAP.

The following table presents the gross fair values and notional amounts of derivatives by product type, the amounts of counterparty and cash collateral netting on our Consolidated Statements of Financial Condition, as well as collateral posted and received under credit support agreements that do not meet the criteria for netting under GAAP.

September 30, 2021 September 30, 2020

37 unchanged sentences

Foreign exchange (net investment hedges) ( 34 ) 5 22

Total gains/(losses) in AOCI, net of taxes $ ( 29 ) $ ( 39 ) $ 61

Total gains/(losses) included in AOCI, net of taxes $ ( 8 ) $ ( 29 ) $ ( 39 )

There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for any of the years ended September 30, 2021, 2020 or 2019.

We expect to reclassify $ 16 million of interest expense out of AOCI and into earnings within the next 12 months.

The maximum length of time over which forecasted transactions are or will be hedged is seven years .

The maximum length of time over which forecasted transactions are or will be hedged is six years .

RAYMOND JAMES FINANCIAL, INC.

11 unchanged sentences

Risks associated with our derivatives and related risk mitigation

We are exposed to credit losses in the event of nonperformance by our counterparties to derivatives that are not cleared through a clearing organization.

We are exposed to credit losses in the event of nonperformance by the counterparties to derivatives that are not cleared through a clearing organization.

Where we are subject to credit exposure, we perform a credit evaluation of counterparties prior to entering into derivative transactions and we monitor their credit standings.

We may require initial margin or collateral from counterparties in the form of cash deposits or other marketable securities to support certain of these obligations as established by the credit threshold specified by the agreement and/or as a result of monitoring the credit standing of the counterparties.

Our only exposure to credit risk in the matched book derivatives operations is related to our uncollected derivative transaction fee revenues, which were insignificant as of both September 30, 2020 and 2019.

We are not exposed to market risk on these derivatives due to the pass-through transaction structure previously described in Note 2.

We may require initial margin or collateral from counterparties in the form of cash or other marketable securities to support certain of these obligations as established by the credit threshold specified by the agreement and/or as a result of monitoring the credit standing of the counterparties.

Our only exposure to credit risk on matched book derivatives is related to our uncollected derivative transaction fee revenues, which were insignificant as of both September 30, 2021 and 2020.

We are not exposed to market risk on these derivatives due to the pass-through transaction structure described in Note 2.

Interest rate and foreign exchange risk

2 unchanged sentences

On a daily basis, we monitor our risk exposure on our derivatives based on established limits with respect to a number of factors, including interest rate, foreign exchange spot and forward rates, spread, ratio, basis and volatility risks, both for the total portfolio and by maturity period.

Derivatives with credit-risk-related contingent features

Certain of our derivative contracts contain provisions that require our debt to maintain an investment-grade rating from one or more of the major credit rating agencies.

If our debt were to fall below investment-grade, the counterparties to the derivative instruments could terminate and request immediate payment or demand immediate and ongoing overnight collateralization on our derivative instruments in liability positions.

The aggregate fair value of all derivative instruments with such credit-risk-related contingent features that were in a liability position was insignificant as of both September 30, 2020 and 2019.

RAYMOND JAMES FINANCIAL, INC.

6 unchanged sentences

The significant accounting policies governing our collateralized agreements and financings are described in Note 2.

For financial statement purposes, we do not offset our reverse repurchase agreements, repurchase agreements, securities borrowing and securities lending transactions because the conditions for netting as specified by GAAP are not met.

Our reverse repurchase agreements, repurchase agreements, securities borrowing and securities lending transactions are governed by master agreements that are widely used by counterparties and that may allow for net settlements of payments in the normal course, as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the parties to the transaction.

For financial statement purposes, we do not offset our reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned because the conditions for netting as specified by GAAP are not met.

Although not offset on the Consolidated Statements of Financial Condition, these transactions are included in the following table.

6 unchanged sentences

Gross amounts not offset on the Consolidated Statements of Financial Condition ( 279 ) ( 195 ) ( 474 ) ( 205 ) ( 68 ) ( 273 )

Net amount $ — $ 6 $ 6 $ — $ 6 $ 6

Net amounts $ — $ 6 $ 6 $ — $ 4 $ 4

September 30, 2020

3 unchanged sentences

Gross amounts not offset on the Consolidated Statements of Financial Condition ( 207 ) ( 209 ) ( 416 ) ( 165 ) ( 79 ) ( 244 )

Net amount $ — $ 5 $ 5 $ — $ 12 $ 12

Net amounts $ — $ 6 $ 6 $ — $ 6 $ 6

The total amount of collateral received under reverse repurchase agreements and the total amount of collateral posted under repurchase agreements exceeds the carrying value of these agreements on our Consolidated Statements of Financial Condition.

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Did not have the right to deliver or repledge $ 65 $ 65

Bank loans, net pledged at FHLB and the FRB $ 5,367 $ 4,653

Bank loans, net pledged at FHLB and the Federal Reserve Bank of Atlanta $ 5,716 $ 5,367

Repurchase agreements, repurchase-to-maturity transactions and securities loaned accounted for as secured borrowings

21 unchanged sentences

NOTE 8 – BANK LOANS, NET

Bank client receivables are comprised of loans originated or purchased by RJ Bank and include C&I loans, tax-exempt loans, commercial and residential real estate loans, SBL and other loans.

These receivables are collateralized by first and, to a lesser extent, second mortgages on residential or other real property, other assets of the borrower, a pledge of revenue or are unsecured.

See Note 2 for a discussion of accounting policies related to bank loans and allowances for losses.

Bank client receivables are comprised of loans originated or purchased by Raymond James Bank and include C&I loans, REIT loans, tax-exempt loans, commercial and residential real estate loans, and SBL and other loans.

These receivables are collateralized by first and, to a lesser extent, second mortgages on residential or other real property, other assets of the borrower, a pledge of revenue, securities or are unsecured.

See Note 2 for a discussion of accounting policies related to bank loans.

As of October 1, 2020, we adopted new accounting guidance related to the measurement of credit losses on financial instruments.

See Note 2 for further information about this guidance and a discussion of our accounting policies related to our allowance for credit losses.

We segregate our loan portfolio into six loan portfolio segments:

C&I, CRE, CRE construction, tax-exempt, residential mortgage, and SBL and other.

C&I, CRE, REIT, tax-exempt, residential mortgage, and SBL and other.

Upon adoption, we redefined certain of our portfolio segments to align with the new methodology applied in determining the allowance for credit losses.

Prior-period loan portfolio segment balances have been revised to conform to the current presentation.

Loan balances in the following tables are presented at amortized cost (outstanding principal balance net of unearned income and deferred expenses, which include purchase premiums, purchase discounts and net deferred origination fees and costs), except for certain held for sale loans recorded at fair value.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

The following tables present the balances for both the held for sale and held for investment loan portfolios, as well as the associated percentage of each portfolio segment in RJ Bank’s total loan portfolio.

“Loans held for sale, net” and “Total loans held for investment, net” in the following tables are presented net of unearned income and deferred expenses, which include purchase premiums, purchase discounts and net deferred origination fees and costs.

are presented on our Consolidated Statements of Financial Condition at amortized cost (or fair value where applicable) less the allowance for credit losses.

The following table presents the balances for both the held for sale and held for investment loan portfolios, as well as the associated percentage of each portfolio segment in Raymond James Bank’s total loan portfolio.

September 30,

2021 2020 2019 2018 2017

$ in millions Balance % Balance % Balance %

Loans held for investment:

$ in millions Balance % Balance % Balance % Balance % Balance %

C&I loans $ 8,440 33 % $ 7,421 34 % $ 8,056 38 % $ 7,741 39 % $ 7,339 43 %

CRE construction loans 177 1 % 185 1 % 151 1 %

CRE loans 2,872 11 % 2,489 12 % 2,507 12 % 2,309 12 % 1,859 11 %

Tax-exempt loans 1,259 6 % 1,241 6 % 1,227 6 %

Residential mortgage loans 4,947 23 % 4,454 21 % 3,757 19 %

SBL and other 4,085 19 % 3,349 16 % 3,033 15 %

Total loans held for investment

21,452 20,979 19,578

Net unearned income and deferred expenses ( 13 ) ( 12 ) ( 21 )

Total loans held for investment, net

21,439 20,967 19,557

Loans held for sale, net

110 1 % 142 1 % 164 1 %

Total loans held for sale and investment

21,549 100 % 21,109 100 % 19,721 100 %

Allowance for loan losses

( 354 ) ( 218 ) ( 203 )

Bank loans, net

$ 21,195 $ 20,891 $ 19,518

September 30,

$ in millions Balance % Balance %

Loans held for investment:

C&I loans $ 7,386 43 % $ 7,470 48 %

CRE construction loans

113 1 % 123 1 %

3,106 18 % 2,554 17 %

REIT loans 1,112 5 % 1,210 5 % 1,333 6 % 1,470 8 % 1,361 8 %

Tax-exempt loans 1,321 5 % 1,259 6 % 1,241 6 % 1,227 6 % 1,018 6 %

1,018 6 % 741 5 %

Residential mortgage loans 5,318 21 % 4,973 23 % 4,479 21 % 3,775 19 % 3,162 18 %

3,149 18 % 2,442 16 %

SBL and other 6,106 24 % 4,087 19 % 3,351 16 % 3,035 15 % 2,388 14 %

2,386 14 % 1,905 12 %

Total loans held for investment 25,169 99 % 21,439 99 % 20,967 99 % 19,557 99 % 17,127 100 %

17,158 15,235

Net unearned income and deferred expenses ( 31 ) ( 41 )

Total loans held for investment, net

17,127 15,194

Loans held for sale, net

Held for sale loans 145 1 % 110 1 % 142 1 % 164 1 % 70 — %

Total loans held for sale and investment 25,314 100 % 21,549 100 % 21,109 100 % 19,721 100 % 17,197 100 %

17,197 100 % 15,408 100 %

Allowance for loan losses

( 190 ) ( 197 )

Allowance for credit losses ( 320 ) ( 354 ) ( 218 ) ( 203 ) ( 190 )

Bank loans, net

$ 24,994 $ 21,195 $ 20,891 $ 19,518 $ 17,007

At September 30, 2020, the FHLB had a blanket lien on RJ Bank’s residential mortgage loan portfolio as security for the repayment of certain borrowings.

Accrued interest receivable on bank loans $ 48 $ 45 $ 53 $ 52 $ 37

The allowance for credit losses was 1.27 % of the held for investment loan portfolio as of September 30, 2021 and was determined using the CECL methodology, which we adopted on October 1, 2020.

Prior periods have not been restated and were calculated under the incurred loss methodology, which differs from the CECL methodology in that it was based on historical loss experience and did not include an estimate of credit losses using a reasonable and supportable forecast period.

Accrued interest receivables presented in the preceding table are reported in “Other receivables, net” on our Consolidated Statements of Financial Condition.

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

See Note 16 for more information regarding borrowings from the FHLB.

Loans held for sale

RJ Bank originated or purchased $ 1.79 billion, $ 2.33 billion and $ 1.69 billion of loans held for sale during the years ended September 30, 2020, 2019 and 2018, respectively.

Proceeds from the sale of these held for sale loans amounted to $ 776 million, $ 800 million and $ 606 million for the years ended September 30, 2020, 2019 and 2018, respectively.

Held for sale loans

Raymond James Bank originated or purchased $ 2.15 billion, $ 1.79 billion and $ 2.33 billion of loans held for sale during the years ended September 30, 2021, 2020 and 2019, respectively.

The majority of these loans were purchases of the guaranteed portions of SBA loans intended for resale in the secondary market as individual SBA loans or as securitized pools of SBA loans.

Proceeds from the sale of held for sale loans amounted to $ 973 million, $ 776 million and $ 800 million for the years ended September 30, 2021, 2020 and 2019, respectively.

Net gains resulting from such sales were insignificant in each of the years ended September 30, 2021, 2020 and 2019.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Purchases and sales of loans held for investment

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

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

$ in millions C&I loans CRE loans Residential mortgage loans Total

8 unchanged sentences

Sales $ 126 $ — $ — $ 126

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Sales in the preceding table represent the recorded investment (i.e., net of charge-offs and discounts or premiums) of loans held for investment that were transferred to loans held for sale and subsequently sold to a third party during the respective period.

1 unchanged sentence

Aging analysis of loans held for investment

The following table presents an analysis of the payment status of loans held for investment.

Amounts in the table exclude any net unearned income and deferred expenses.

The following table presents information on delinquency status of our loans held for investment.

$ in millions 30-89

days and accruing 90 days

or more and accruing Total past due and accruing Nonaccrual Current and accruing Total loans held for

or more and accruing Total past due and accruing Nonaccrual with allowance Nonaccrual with no allowance Current and accruing Total loans held for

September 30, 2021

$ — $ — $ — $ 39 $ — $ 8,401 $ 8,440

CRE construction loans

— — — — 177 177

— — — 14 3,520 3,534

CRE loans — — — — 20 2,852 2,872

REIT loans — — — — — 1,112 1,112

Tax-exempt loans

1 unchanged sentence

Residential mortgage loans 2 — 2 2 13 5,301 5,318

First mortgage loans

— — — 14 4,911 4,925

Home equity loans/lines

— — — — 22 22

SBL and other

4 unchanged sentences

C&I loans $ — $ — $ — $ 2 $ — $ 7,419 $ 7,421

CRE construction loans — — — — 185 185

CRE loans — — — — 14 2,475 2,489

REIT loans — — — — — 1,210 1,210

Tax-exempt loans — — — — — 1,259 1,259

Residential mortgage loans — — — 3 11 4,959 4,973

First mortgage loans 2 — 2 16 4,409 4,427

Home equity loans/lines — — — — 27 27

SBL and other — — — — — 4,087 4,087

1 unchanged sentence

The preceding table includes $ 61 million and $ 15 million at September 30, 2021 and 2020, respectively, of nonaccrual loans which were current pursuant to their contractual terms.

Other real estate owned, included in “Other assets” on our Consolidated Statements of Financial Condition, was $ 2 million and $ 3 million at September 30, 2020 and 2019.

The table also includes CRE and residential first mortgage loan TDRs of $ 12 million and $ 13 million, respectively, at September 30, 2021, and $ 6 million and $ 15 million, respectively, at September 30, 2020.

Other real estate owned, included in “Other assets” on our Consolidated Statements of Financial Condition, was insignificant at September 30, 2021 and 2020.

Collateral-dependent loans

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the underlying collateral.

At September 30, 2021, we had $ 20 million of collateral-dependent CRE loans, which were fully collateralized by retail and industrial real estate, and $ 5 million of collateral-dependent residential loans, which were fully collateralized by single family homes.

Collateral-dependent loans do not include loans to borrowers who have been granted forbearance as result of the COVID-19 pandemic or loans for which the borrower had requested a loan modification, where the request had been initiated but had not been approved or completed as of September 30, 2021.

Such loans may be considered collateral-dependent after the forbearance period expires.

The recorded investment in mortgage loans secured by one-to-four family residential properties for which formal foreclosure proceedings were in process was $ 4 million and $ 6 million at September 30, 2021 and 2020, respectively.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Impaired loans and troubled debt restructurings

The following table provides a summary of RJ Bank’s impaired loans.

September 30,

$ in millions Gross

investment Unpaid

balance Allowance

for losses Gross

investment Unpaid

balance Allowance

Impaired loans with allowance for loan losses:

$ 2 $ 2 $ — $ 19 $ 20 $ 6

Residential - first mortgage loans

8 10 1 11 13 1

Total 10 12 1 30 33 7

Impaired loans without allowance for loan losses:

13 21 — 8 13 —

Residential - first mortgage loans

10 14 — 11 17 —

23 35 — 19 30 —

Total impaired loans

$ 33 $ 47 $ 1 $ 49 $ 63 $ 7

Impaired loan balances with allowances for loan losses have had reserves established based upon management’s analysis.

There is no allowance required when the discounted cash flow, collateral value or market value of a loan equals or exceeds the carrying value.

These are generally loans in process of foreclosure that have already been adjusted to fair value.

The preceding table includes TDRs of $ 6 million and $ 15 million related to CRE and residential first mortgage loans, respectively, at September 30, 2020 and $ 19 million, $ 8 million and $ 18 million related to C&I, CRE and residential first mortgage loans, respectively, at September 30, 2019.

The average balance of the total impaired loans was as follows.

Year ended September 30,

$ in millions 2020 2019 2018

Residential - first mortgage loans

Total average impaired loan balance $ 35 $ 49 $ 37

Credit quality indicators

The credit quality of RJ Bank’s loan portfolio is summarized monthly by management using the standard asset classification system utilized by bank regulators for the SBL and residential mortgage loan portfolios and internal risk ratings, which correspond to the same standard asset classifications for the corporate loan portfolios.

The credit quality of our bank loan portfolio is summarized monthly by management using internal risk ratings, which align with the standard asset classification system utilized by bank regulators.

These classifications are divided into three groups:

2 unchanged sentences

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Special Mention – Loans which have potential weaknesses that deserve management’s close attention.

These loans are not adversely classified and do not expose RJ Bank to sufficient risk to warrant an adverse classification.

These loans are not adversely classified and do not expose us to sufficient risk to warrant an adverse classification.

Substandard – Loans which are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any.

Loans with this classification are characterized by the distinct possibility that RJ Bank will sustain some loss if the deficiencies are not corrected.

Loans with this classification are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

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

Loss – Loans which are considered by management to be uncollectible and of such little value that their continuance on our books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted.

We do not have any

We do not have any loan balances within this classification because, in accordance with our accounting policy, loans, or a portion thereof considered to be uncollectible are charged-off prior to the assignment of this classification.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

bank loan balances within this classification because, in accordance with our accounting policy, loans, or a portion thereof considered to be uncollectible, are charged-off prior to the assignment of this classification.

The following table presents the credit quality of RJ Bank’s held for investment loan portfolio.

$ in millions Pass Special mention Substandard Doubtful Total

September 30, 2020

C&I loans $ 6,966 $ 236 $ 248 $ — $ 7,450

CRE construction loans 177 — — — 177

CRE loans 3,113 256 165 — 3,534

Tax-exempt loans 1,259 — — — 1,259

Residential mortgage loans:

First mortgage loans 4,897 6 22 — 4,925

Home equity loans/lines 22 — — — 22

SBL and other 4,085 — — — 4,085

Total loans held for investment $ 20,519 $ 498 $ 435 $ — $ 21,452

September 30, 2019

C&I loans $ 7,870 $ 152 $ 76 $ — $ 8,098

CRE construction loans 185 — — — 185

CRE loans 3,630 — 22 — 3,652

The following tables present our held for investment bank loan portfolio by credit quality indicator.

September 30, 2021 September 30, 2020

Loans by origination year

$ in millions 2021 2020 2019 2018 2017 Prior Revolving loans Total Total

Pass $ 999 $ 1,273 $ 1,180 $ 1,408 $ 935 $ 1,633 $ 739 $ 8,167 $ 6,939

Special mention — — 41 — 26 54 1 122 235

Substandard — — 24 84 — 28 — 136 247

Doubtful — — 15 — — — — 15 —

Total C&I loans $ 999 $ 1,273 $ 1,260 $ 1,492 $ 961 $ 1,715 $ 740 $ 8,440 $ 7,421

Pass $ 533 $ 459 $ 442 $ 652 $ 223 $ 174 $ 62 $ 2,545 $ 2,141

Special mention — 45 58 36 — — — 139 213

Substandard — — 32 98 8 50 — 188 135

Doubtful — — — — — — — — —

Total CRE loans $ 533 $ 504 $ 532 $ 786 $ 231 $ 224 $ 62 $ 2,872 $ 2,489

Pass $ 235 $ 95 $ 75 $ 60 $ 46 $ 167 $ 237 $ 915 $ 1,138

Special mention — — 13 11 33 106 6 169 43

Substandard — — 21 — 4 — 3 28 29

Doubtful — — — — — — — — —

Total REIT loans $ 235 $ 95 $ 109 $ 71 $ 83 $ 273 $ 246 $ 1,112 $ 1,210

Tax-exempt loans

Pass $ 158 $ 57 $ 124 $ 204 $ 272 $ 506 $ — $ 1,321 $ 1,259

Special mention — — — — — — — — —

Substandard — — — — — — — — —

Doubtful — — — — — — — — —

Total tax-exempt loans $ 158 $ 57 $ 124 $ 204 $ 272 $ 506 $ — $ 1,321 $ 1,259

Residential mortgage loans

First mortgage loans 4,392 10 25 — 4,427

Home equity loans/lines 27 — — — 27

Pass $ 1,861 $ 1,266 $ 640 $ 386 $ 451 $ 666 $ 20 $ 5,290 $ 4,944

Special mention — — — — — 5 — 5 6

Substandard — — — 1 2 20 — 23 23

Doubtful — — — — — — — — —

Total residential mortgage loans $ 1,861 $ 1,266 $ 640 $ 387 $ 453 $ 691 $ 20 $ 5,318 $ 4,973

SBL and other

Total loans held for investment $ 20,694 $ 162 $ 123 $ — $ 20,979

Pass $ 3 $ 45 $ 12 $ — $ — $ — $ 6,046 $ 6,106 $ 4,087

Special mention — — — — — — — — —

Substandard — — — — — — — — —

Doubtful — — — — — — — — —

Total SBL and other $ 3 $ 45 $ 12 $ — $ — $ — $ 6,046 $ 6,106 $ 4,087

Loans classified as special mention, substandard or doubtful are all considered to be “criticized” loans.

Allowance for loan losses and reserve for unfunded lending commitments

The following table presents changes in the allowance for loan losses of RJ Bank by portfolio segment.

Loans held for investment

$ in millions C&I loans CRE

loans CRE loans Tax-exempt loans Residential

We also monitor the credit quality of the residential mortgage loan portfolio utilizing FICO scores and LTV ratios.

A FICO score measures a borrower’s creditworthiness by considering factors such as payment and credit history.

LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the held for investment residential mortgage loan portfolio by FICO score and by LTV ratio at origination.

$ in millions September 30, 2021 September 30, 2020

Below 600 $ 67 $ 67

600 - 699 416 363

700 - 799 3,772 3,463

800 + 1,058 1,076

FICO score not available 5 4

Total $ 5,318 $ 4,973

Below 80% $ 4,123 $ 3,852

80%+ 1,195 1,121

Total $ 5,318 $ 4,973

Allowance for credit losses

The following table presents changes in the allowance for credit losses on held for investment bank loans by portfolio segment.

$ in millions C&I loans CRE loans REIT loans Tax-exempt loans Residential

loans SBL and other Total

1 unchanged sentence

Balance at beginning of year $ 200 $ 81 $ 36 $ 14 $ 18 $ 5 $ 354

$ 139 $ 3 $ 46 $ 9 $ 16 $ 5 $ 218

Provision for loan losses 157 — 71 5 — — 233

Impact of CECL adoption 19 ( 11 ) ( 9 ) ( 12 ) 24 ( 2 ) 9

Provision/(benefit) for credit losses ( 25 ) 5 ( 5 ) — ( 8 ) 1 ( 32 )

Net (charge-offs)/recoveries:

Charge-offs ( 4 ) ( 10 ) — — — — ( 14 )

( 96 ) — ( 4 ) — — — ( 100 )

Recoveries — — — — 1 — 1

8 unchanged sentences

$ 139 $ 34 $ 15 $ 9 $ 16 $ 5 $ 218

Provision/(benefit) for loan losses

19 — 4 — ( 2 ) 1 22

Provision/(benefit) for credit losses 157 48 23 5 — — 233

Net (charge-offs)/recoveries:

Charge-offs ( 96 ) ( 2 ) ( 2 ) — — — ( 100 )

( 2 ) — ( 5 ) — ( 1 ) — ( 8 )

Recoveries — — — — 2 — 2

5 unchanged sentences

$ 200 $ 81 $ 36 $ 14 $ 18 $ 5 $ 354

(1) Charge-offs related to loan sales amounted to $ 87 million and $ 2 million for the years ended September 30, 2020 and 2019, respectively.

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

The allowance for credit losses on unfunded lending commitments, which is included in “Other payables” on our Consolidated Statements of Financial Condition, was $ 13 million and $ 12 million at September 30, 2021 and 2020, respectively.

The increase in the allowance for credit losses on unfunded lending commitments as of September 30, 2021 compared with September 30, 2020 was due to the adoption impact of CECL of $ 8 million, partially offset by improved forecasts for certain macroeconomic inputs to our CECL model and lower unfunded exposure in the CRE portfolio.

See Note 2 for further information about the adoption of CECL and the impact to the allowance for credit losses.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

The following table presents, by loan portfolio segment, RJ Bank’s recorded investment (excluding any net unearned income and deferred expenses) and the related allowance for loan losses.

Loans held for investment

Allowance for loan losses Recorded investment

$ in millions Individually evaluated for impairment Collectively evaluated for impairment Total Individually evaluated for impairment Collectively evaluated for impairment Total

September 30, 2020

C&I loans $ — $ 200 $ 200 $ 2 $ 7,448 $ 7,450

CRE construction loans — 3 3 — 177 177

CRE loans — 114 114 14 3,520 3,534

Tax-exempt loans — 14 14 — 1,259 1,259

Residential mortgage loans 1 17 18 25 4,922 4,947

SBL and other — 5 5 — 4,085 4,085

Total $ 1 $ 353 $ 354 $ 41 $ 21,411 $ 21,452

NOTE 9 – LOANS TO FINANCIAL ADVISORS, NET

Loans to financial advisors are primarily comprised of loans originated as a part of our recruiting activities.

See Note 2 for a discussion of our accounting policies related to loans to financial advisors and the related allowance for credit losses.

The following table presents the balances for our loans to financial advisors and the related accrued interest receivable.

September 30,

C&I loans $ 6 $ 133 $ 139 $ 19 $ 8,079 $ 8,098

CRE construction loans — 3 3 — 185 185

CRE loans — 46 46 8 3,644 3,652

Tax-exempt loans — 9 9 — 1,241 1,241

Residential mortgage loans 1 15 16 28 4,426 4,454

SBL and other — 5 5 — 3,349 3,349

Total $ 7 $ 211 $ 218 $ 55 $ 20,924 $ 20,979

The reserve for unfunded lending commitments, which is included in “Other payables” on our Consolidated Statements of Financial Condition, was $ 12 million and $ 9 million at September 30, 2020 and 2019, respectively.

$ in millions 2021 2020

Currently affiliated with the firm (1)

$ 1,074 $ 1,001

No longer affiliated with the firm (2)

Total loans to financial advisors 1,084 1,016

Allowance for credit losses ( 27 ) ( 4 )

Loans to financial advisors, net $ 1,057 $ 1,012

Accrued interest receivable on loans to financial advisors $ 4 $ 4

(1) These loans were predominantly current.

(2) These loans were predominantly past due for a period of 180 days or more.

Accrued interest receivables presented in the preceding table are reported in “Other receivables, net” on the Consolidated Statements of Financial Condition.

The allowance for credit losses was 2.49 % of the loan portfolio as of September 30, 2021 and was determined using the CECL methodology, which we adopted on October 1, 2020.

The allowance for credit losses as of September 30, 2020 was determined under the incurred loss methodology and has not been restated.

The increase in the allowance from September 30, 2020 to September 30, 2021 was primarily due to the impact of the October 1, 2020 CECL adoption, which resulted in an increase in our allowance for credit losses of $ 25 million.

See Note 2 for further information on the CECL adoption.

NOTE 10 – VARIABLE INTEREST ENTITIES

23 unchanged sentences

$ in millions 2021 2020

Cash, cash equivalents and cash segregated pursuant to regulations

Cash and cash equivalents and assets segregated for regulatory purposes and restricted cash $ 10 $ 9

Other investments

19 unchanged sentences

Total $ 14,869 $ 2,482 $ 163 $ 14,481 $ 2,225 $ 139

NOTE 9 - PROPERTY AND EQUIPMENT, NET

The following table presents the components of our property and equipment, net as of the dates indicated.

September 30,

$ in millions 2020 2019

Land $ 29 $ 29

Software, including development in progress 565 490

Buildings, building components, leasehold and land improvements 406 391

Furniture, fixtures and equipment 294 278

Total property and equipment 1,294 1,188

Accumulated depreciation and amortization ( 759 ) ( 661 )

Total property and equipment, net $ 535 $ 527

Depreciation expense associated with property and equipment was $ 52 million, $ 48 million, and $ 41 million for the years ended September 30, 2020, 2019, and 2018, respectively, and is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income.

Amortization expense associated with computer software was $ 54 million, $ 49 million, and $ 44 million for the years ended September 30, 2020, 2019, and 2018, respectively, and is included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income.

We also incur software licensing fees, which are also included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income.

RAYMOND JAMES FINANCIAL, INC.

16 unchanged sentences

Goodwill as of beginning of year $ 277 $ 120 $ 69 $ 466

Additions 139 54 — 193

Foreign currency translations 1 — — 1

3 unchanged sentences

Foreign currency translations 2 — — 2

Impairment — ( 19 ) — ( 19 )

Goodwill as of end of year $ 277 $ 120 $ 69 $ 466

The addition to goodwill during the year ended September 30, 2019 arose from our acquisition of Silver Lane Advisors LLC (“Silver Lane”) and primarily represents synergies from combining this entity with our existing business.

The goodwill associated with Silver Lane is deductible for tax purposes over 15 years.

The impairment to goodwill during the year ended September 30, 2019 represents a $ 19 million impairment charge related to our Canadian Capital Markets business.

The additions to goodwill during the year ended September 30, 2021 arose from our acquisitions of NWPS in the Private Client Group segment and Financo and Cebile in the Capital Markets segment.

See Note 3 for additional discussion of these acquisitions.

Qualitative assessments

1 unchanged sentence

We performed our latest annual goodwill impairment testing as of our January 1, 2021 evaluation date, evaluating balances as of December 31, 2020.

In that testing, we performed a qualitative assessment for each of our reporting units that had goodwill.

In that testing, we performed a qualitative impairment assessment for each of our reporting units that had goodwill.

Based upon the outcome of our qualitative assessments, no impairment was identified.

Our qualitative assessments consider macroeconomic indicators, such as trends in equity and fixed income markets, gross domestic product, unemployment rates, and interest rates.

Our qualitative assessments consider macroeconomic indicators, such as trends in equity and fixed income markets, gross domestic product, unemployment rates, interest rates, and housing markets.

We also consider regulatory changes, reporting unit results, and changes in key personnel and strategy.

Changes in these indicators, and our ability to respond to such changes, may trigger the need for impairment testing at a point other than our annual assessment date.

Subsequent to our annual goodwill impairment testing, the COVID-19 pandemic broadly impacted the operating environment and caused deterioration in market conditions, particularly toward the end of our fiscal second quarter.

However, the operating environment toward the end of our fiscal year continued to recover and market conditions generally improved.

We performed an evaluation to determine whether the economic impacts resulting from the pandemic were indicators requiring us to perform an impairment test as of September 30, 2020.

Multiple factors, including performance, macroeconomic, and fair value indicators, were assessed with respect to each of our reporting units to determine whether it was more likely than not that the estimated fair value of any of these reporting units was less than its carrying value.

As a result of our review, we concluded that it was more likely than not that the estimated fair values of our reporting units exceeded their respective carrying values and that the impact of the COVID-19 pandemic through the end of our fiscal year 2020 was not a triggering event to perform a quantitative assessment as of a date other than our annual evaluation date.

No events have occurred since our annual assessment date that would cause us to update this impairment testing.

RAYMOND JAMES FINANCIAL, INC.

9 unchanged sentences

$ 31 $ 13 $ 90 $ 134

Additions 96 13 — 109

Amortization expense ( 7 ) ( 9 ) ( 5 ) ( 21 )

7 unchanged sentences

$ 31 $ 13 $ 90 $ 134

The addition of intangible assets during the year ended September 30, 2019 was attributable to the acquisition of Silver Lane.

The additions of identifiable intangible assets during the year ended September 30, 2021 arose from our acquisitions of NWPS in the Private Client Group segment and Financo and Cebile in the Capital Markets segment.

See Note 3 for additional discussion of these acquisitions.

The following table summarizes our identifiable intangible assets by type.

11 unchanged sentences

Qualitative assessments

As described in Note 2, we perform impairment testing for our non-amortizing customer relationship intangible asset on an annual basis or when an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value.

We performed our latest annual impairment test as of our January 1, 2020 evaluation date, evaluating balances as of December 31, 2019.

In that testing, we performed a qualitative assessment for our non-amortizing customer relationship intangible asset.

As described in Note 2, we perform impairment testing for our non-amortizing customer relationships intangible asset on an annual basis or when an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value.

We performed our latest annual impairment testing as of our January 1, 2021 evaluation date, evaluating the balance as of December 31, 2020.

In that testing, we performed a qualitative assessment for our non-amortizing customer relationships intangible asset.

Based upon the outcome of our qualitative assessment, no impairment was identified.

Subsequent to our annual impairment testing of our non-amortizing customer relationship intangible asset, we performed an evaluation to determine whether the economic impacts resulting from the COVID-19 pandemic were indicators requiring us to perform an impairment test as of September 30, 2020.

In performing our assessment, we considered multiple factors, including macroeconomic and market conditions, performance, and relevant entity-specific events, among others, to determine whether it was more likely than not that the estimated fair value of the asset was less than its carrying value.

As a result of our review, we concluded that it was more likely than not that the fair value of the non-amortizing customer relationship intangible asset exceeded its carrying value and that the impact of the COVID-19 pandemic through the end of our fiscal year 2020 was not a triggering event to perform a quantitative assessment as of a date other than our annual evaluation date.

No events have occurred since such assessment that would cause us to update this impairment testing.

RAYMOND JAMES FINANCIAL, INC.

3 unchanged sentences

The following table details the components of other assets.

See Note 2 for a discussion of the accounting polices related to these components.

See Note 2 for a discussion of the accounting polices related to certain of these components.

September 30,

1 unchanged sentence

Investments in company-owned life insurance policies $ 952 $ 773

Property and equipment, net 499 535

Lease ROU assets 446 321

Investments in real estate partnerships held by consolidated variable interest entities 164 75

Prepaid expenses 127 123

Investment in FHLB stock 52 52

Investment in FRB stock 25 25

Investments in FHLB and FRB stock 72 77

All other 161 231

1 unchanged sentence

As of September 30, 2021, the cumulative face value of our company-owned life insurance policies was $ 2.04 billion.

On October 1, 2019, we adopted new accounting guidance related to leases.

See Notes 2 and 12 for further information about this guidance and for a discussion of our accounting policies related to leases.

See Note 13 for further information regarding our property and equipment and Note 14 for further information regarding our leases.

NOTE 13 - PROPERTY AND EQUIPMENT, NET

The following table presents the components of our property and equipment, net as of the dates indicated.

September 30,

$ in millions Gross

carrying value Accumulated

depreciation/

amortization Property and

equipment, net Gross

carrying value Accumulated depreciation/

amortization Property and

equipment, net

Land $ 29 $ — $ 29 $ 29 $ — $ 29

Software, including development in progress 606 ( 362 ) 244 565 ( 302 ) 263

Buildings, building components, leasehold and land improvements 397 ( 225 ) 172 406 ( 215 ) 191

Furniture, fixtures and equipment 321 ( 267 ) 54 294 ( 242 ) 52

Total $ 1,353 $ ( 854 ) $ 499 $ 1,294 $ ( 759 ) $ 535

Depreciation expense associated with property and equipment was $ 51 million, $ 52 million, and $ 48 million for the years ended September 30, 2021, 2020, and 2019, respectively, and is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income.

Amortization expense associated with computer software was $ 62 million, $ 54 million, and $ 49 million for the years ended September 30, 2021, 2020, and 2019, respectively, and is included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income.

We also incur software licensing fees, which are also included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 14 - LEASES

On October 1, 2019, we adopted new accounting guidance related to the accounting for leases.

See Note 2 for further information about this guidance and for a discussion of our accounting policies related to leases.

As of September 30, 2020, our lease commitments resulted in ROU assets of $ 321 million and lease liabilities of $ 345 million, which were included in “Other assets” and “Other payables,” respectively, on our Consolidated Statements of Financial Condition.

The weighted-average remaining lease term and discount-rate for our leases was five years and 3.86 %, respectively, as of September 30, 2020.

The following table presents balances related to our leases on our Consolidated Statements of Financial Condition.

See Note 2 for a discussion of our accounting policies related to leases.

$ in millions September 30, 2021 September 30, 2020

ROU assets (included in Other assets) $ 446 $ 321

Lease liabilities (included in Other payables) $ 450 $ 345

The weighted-average remaining lease term and discount rate for our leases is presented in the following table.

September 30, 2021 September 30, 2020

Weighted-average remaining lease term 6.7 years 5.0 years

Weighted-average discount rate 3.45 % 3.86 %

Lease expense

Lease expense is recognized on a straight-line basis over the lease term if the ROU asset has not been impaired or abandoned.

The following table details the components of lease expense, which is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income.

$ in millions Year ended September 30, 2020

Year ended September 30,

$ in millions 2021 2020

Lease costs $ 110 $ 98

Variable lease costs $ 27 $ 26

Variable lease costs in the preceding table includes payments for common area maintenance charges and other variable costs that are not reflected in the measurement of ROU assets and lease liabilities.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Variable lease costs in the preceding table include payments for common area maintenance charges and other variable costs that are not reflected in the measurement of ROU assets and lease liabilities.

Lease liabilities

The maturities of lease liabilities as of September 30, 2020 are presented in the following table.

Fiscal year ended September 30, $ in millions

The maturities by fiscal year of our lease liabilities as of September 30, 2021 are presented in the following table.

$ in millions

Thereafter 136

3 unchanged sentences

Lease payments in the preceding table exclude $ 20 million of legally binding minimum lease payments for leases signed but not yet commenced.

These leases are estimated to commence between fiscal year 2021 and 2022 with lease terms ranging from five years to 11 years.

Statement of cash flows supplemental information

$ in millions Year ended September 30, 2020

Cash outflows - lease liabilities $ 101

Non-cash - ROU assets recorded for new and modified leases $ 74

Minimum future lease commitments (under previous GAAP)

As of the date of adoption, our undiscounted minimum annual rental commitments were materially unchanged from the disclosure in Note 17 of our 2019 Form 10-K, which is included in the following table.

Fiscal year ended September 30, $ in millions

Thereafter 127

These leases are estimated to commence between fiscal year 2022 and 2023 with lease terms ranging from three to seven years .

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 15 – BANK DEPOSITS

Bank deposits include savings and money market accounts, certificates of deposit with RJ Bank, Negotiable Order of Withdrawal (“NOW”) accounts and demand deposits.

Bank deposits include savings and money market accounts, certificates of deposit with Raymond James Bank, Negotiable Order of Withdrawal (“NOW”) accounts and demand deposits.

The following table presents a summary of bank deposits, as well as the weighted-average interest rates on such deposits.

10 unchanged sentences

$ 32,495 0.07 % $ 26,801 0.09 %

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Total bank deposits in the preceding table exclude affiliate deposits of $ 185 million and $ 163 million at September 30, 2020 and 2019, respectively, all of which were held in a deposit account at RJ Bank on behalf of RJF.

Total bank deposits in the preceding table exclude affiliate deposits of $ 301 million and $ 185 million at September 30, 2021 and 2020, respectively.

As of September 30, 2021, these affiliate deposits included $ 229 million and $ 72 million held in deposit accounts at Raymond James Bank on behalf of RJF and Raymond James Trust Company of New Hampshire, respectively.

As of September 30, 2020, these affiliate deposits were held by Raymond James Bank on behalf of RJF.

See Note 27 for additional information.

Savings and money market accounts in the preceding table consist primarily of deposits that are cash balances swept to RJ Bank from the client investment accounts maintained at RJ&A.

These balances are held in Federal Deposit Insurance Corporation (“FDIC”)-insured bank accounts through the RJBDP.

The aggregate amount of individual time deposit account balances that exceeded the FDIC insurance limit at September 30, 2020 was $ 23 million.

Savings and money market accounts in the preceding table consist primarily of deposits that are cash balances swept to Raymond James Bank from the client investment accounts maintained at RJ&A.

These balances are held in FDIC-insured bank accounts through the RJBDP.

The aggregate amount of individual time deposit account balances that exceeded the FDIC insurance limit at September 30, 2021 was approximately $ 42 million.

The following table sets forth the scheduled maturities of certificates of deposit.

12 unchanged sentences

Over one through two years

93 170 43 206

Over two through three years

37 166 67 170

Over three through four years

8 unchanged sentences

$ 23 $ 41 $ 132

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 16 – OTHER BORROWINGS

6 unchanged sentences

FHLB advances

Borrowings from the FHLB as of September 30, 2020 and 2019 were comprised of both floating and fixed-rate advances.

As of September 30, 2020 and 2019, the floating-rate advances totaled $ 850 million.

Borrowings from the FHLB were comprised of floating-rate advances of $ 850 million as of September 30, 2021, and floating and fixed-rate advances of $ 850 million and $ 25 million, respectively, as of September 30, 2020.

The fixed-rate advance, which incurred interest at 3.4 %, matured and was repaid in October 2020.

The interest rates on the floating-rate advances, which mature in December 2022, reset quarterly and are generally based on LIBOR.

1 unchanged sentence

Refer to Note 2 for information regarding these interest rate swaps, which are accounted for as hedging instruments.

As of both September 30, 2020 and 2019, the fixed-rate advance totaled $ 25 million and incurred interest at a fixed rate of 3.4 %.

This advance matured and was repaid in October 2020.

The weighted-average interest rate on our floating-rate FHLB advances was 0.26 % and 0.45 % as of September 30, 2021 and September 30, 2020, respectively.

The interest rates on the FHLB borrowings will transition to a Secured Overnight Financing Rate (“SOFR”)-based rate in December 2021.

All of the advances were secured by a blanket lien granted to the FHLB on our residential mortgage loan portfolio.

The weighted-average interest rate on these FHLB advances as of September 30, 2020 and 2019 was 0.45 % and 2.17 %, respectively.

Secured and unsecured financing arrangements

On February 19, 2019, RJF and RJ&A entered into an unsecured revolving credit facility agreement (the “Credit Facility”).

The Credit Facility has a maturity date of February 2024 and the lenders include a number of financial institutions.

This committed unsecured borrowing facility provides for maximum borrowings of up to $ 500 million, with a sublimit of $ 300

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

million for RJF.

In February 2019, RJF and RJ&A entered into an unsecured revolving credit facility agreement (the “Credit Facility”) with a syndicate of lenders.

In April 2021, we amended our Credit Facility, extending the term from February 2024 to April 2026 and incorporating a lower cost of borrowing under the Credit Facility and certain favorable covenant modifications.

This committed unsecured borrowing facility provides for maximum borrowings of up to $ 500 million, with a sublimit of $ 300 million for RJF.

RJ&A may borrow up to $ 500 million under the Credit Facility, depending on the amount of outstanding borrowings of RJF.

The interest rates on borrowings under the Credit Facility are variable and based on LIBOR, as adjusted for RJF’s credit rating.

The interest rates on borrowings under the Credit Facility are variable and were based on LIBOR as of September 30, 2021, as adjusted for RJF’s credit rating;

however, the administrative agent has the right to select a commercially available alternative reference rate to LIBOR if adequate and reasonable means do not exist for ascertaining LIBOR.

There were no borrowings outstanding on the Credit Facility as of September 30, 2021.

3 unchanged sentences

Borrowings during the year were generally day-to-day and there were no borrowings outstanding on these arrangements as of September 30, 2021.

The interest rates for these arrangements are variable and are based on the Fed Funds rate, LIBOR, a lender’s prime rate, or the Canadian prime rate, as applicable.

The interest rates for these arrangements are variable and are based on a daily bank quoted rate, which may reference LIBOR, the Fed Funds rate, a lender’s prime rate, the Canadian prime rate, or another commercially available rate, as applicable.

We also have other collateralized financings included in “Collateralized financings” on our Consolidated Statements of Financial Condition.

5 unchanged sentences

These mortgage loans bear a fixed interest rate of 5.7 % with repayment terms of monthly interest and principal debt service and have a January 2023 maturity.

Our other borrowings as of September 30, 2020, mature as follows based on their contractual terms.

Fiscal year ended September 30, $ in millions

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 17 – SENIOR NOTES PAYABLE

6 unchanged sentences

5.625 % senior notes, due 2024

3.625 % senior notes, due 2026

Total principal amount 2,050 2,050

Unaccreted premium/(discount)

Unaccreted premiums/(discounts) 5 10

Unamortized debt issuance costs

2 unchanged sentences

$ 2,037 $ 2,045

In March 2012, we sold in a registered underwritten public offering $ 250 million in aggregate principal amount of 5.625 % senior notes due April 2024.

Interest on these senior notes is payable semi-annually.

We may redeem some or all of these senior notes at any time prior to their maturity, at a redemption price equal to the greater of (i) 100 % of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S.

Treasury rate, plus 50 basis points, plus accrued and unpaid interest thereon to the redemption date.

In July 2016, we sold in a registered underwritten public offering $ 500 million in aggregate principal amount of 3.625 % senior notes due September 2026.

Interest on these senior notes is payable semi-annually.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

discounted to the redemption date at a discount rate equal to a designated U.S.

Treasury rate, plus 35 basis points, plus accrued and unpaid interest thereon to the redemption date.

In March 2020, we sold in a registered underwritten public offering $ 500 million in aggregate principal amount of 4.65 % senior notes due April 2030.

In March 2020, we sold $ 500 million in aggregate principal amount of 4.65 % senior notes due April 2030 in a registered underwritten public offering.

Interest on these senior notes is payable semi-annually.

3 unchanged sentences

plus, in each case, accrued and unpaid interest thereon to the redemption date.

In July 2016, we sold in a registered underwritten public offering $ 300 million in aggregate principal amount of 4.95 % senior notes due July 2046.

In July 2016, we sold $ 300 million in aggregate principal amount of 4.95 % senior notes due July 2046 in a registered underwritten public offering.

In May 2017, we reopened the offering and sold, in a registered underwritten public offering, an additional $ 500 million in aggregate principal amount of 4.95 % senior notes due July 2046.

These additional senior notes were consolidated, formed into a single series, and are fully fungible with the $ 300 million in aggregate principal amount 4.95 % senior notes issued in July 2016.

These additional senior notes were consolidated, formed into a single series, and are fully fungible with the $ 300 million in aggregate principal amount of 4.95 % senior notes issued in July 2016.

Interest on these senior notes is payable semi-annually.

1 unchanged sentence

Treasury rate, plus 45 basis points, plus accrued and unpaid interest thereon to the redemption date.

In April 2021, we sold $ 750 million in aggregate principal amount of 3.75 % senior notes due April 2051 in a registered underwritten public offering.

Interest on these senior notes is payable semi-annually.

We may redeem some or all of these senior notes at any time prior to October 1, 2050, at a redemption price equal to the greater of (i) 100 % of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S.

Treasury rate, plus 20 basis points;

and on or after October 1, 2050, at 100 % of the principal amount of the notes redeemed;

plus, in each case, accrued and unpaid interest thereon to the redemption date.

Tender offers and redemptions of certain senior notes

Concurrently with the launch of our offering of $ 750 million in aggregate principal amount of 3.75 % senior notes due April 2051 described above, we commenced cash tender offers (the “Tender Offers”) for any and all of our then outstanding 5.625 % senior notes due 2024 and 3.625 % senior notes due 2026 (the “Pre-existing Notes”).

Pursuant to the Tender Offers, in April 2021 we repurchased an aggregate of $ 332 million outstanding Pre-existing Notes for an aggregate purchase price of $ 373 million.

In addition, in April 2021 we issued notices of redemption to holders of the Pre-existing Notes pursuant to the indentures governing such notes, to redeem any Pre-existing Notes that remained outstanding following the closing of the Tender Offers.

In May 2021 we redeemed the remaining outstanding balance of the Pre-existing Notes of $ 418 million for an aggregate redemption price of $ 473 million.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

These repurchases and redemptions of the Pre-existing Notes were funded with the net proceeds from our 3.75 % senior notes due April 2051 and cash on hand, and resulted in a loss of $ 98 million which was comprised of make-whole premiums, unamortized debt issuance costs which were accelerated, and certain legal and professional fees.

This loss was presented in “Losses on extinguishment of debt” on our Consolidated Statements of Income and Comprehensive Income for our fiscal year ended September 30, 2021.

NOTE 18 – INCOME TAXES

4 unchanged sentences

Net income $ 388 $ 234 $ 341

$ 234 $ 341 $ 454

Equity, arising from available-for-sale securities recorded through OCI ( 32 ) 23 27

2 unchanged sentences

Total provision for income taxes $ 354 $ 247 $ 352

(1) Our provision for income taxes for the year ended September 30, 2018 included $ 105 million related to the enactment of the Tax Cuts and Jobs Act (“Tax Act”) in December 2017, primarily due to the remeasurement of U.S.

deferred tax assets at a lower enacted federal corporate tax rate.

The following table details our provision/(benefit) for income taxes included in net income for each respective period.

7 unchanged sentences

State and local ( 6 ) ( 3 ) ( 1 )

Foreign ( 3 ) — —

Total deferred ( 37 ) ( 39 ) ( 23 )

Total provision for income taxes $ 388 $ 234 $ 341

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

A reconciliation of the U.S.

3 unchanged sentences

Provision calculated at statutory rate 21.0 % 21.0 % 21.0 %

Impact of Tax Act — 0.1 % 8.1 %

State income tax, net of federal benefit 3.3 % 3.6 % 3.6 %

Excess tax benefits related to share-based compensation

( 0.6 ) % ( 0.4 ) % ( 0.9 ) %

Gains on company-owned life insurance policies which are not subject to tax ( 1.8 ) % ( 1.0 ) % ( 0.1 ) %

1 unchanged sentence

( 0.7 ) % ( 1.1 ) % ( 0.9 ) %

Excess tax benefits related to share-based compensation

( 0.2 ) % ( 0.6 ) % ( 0.4 ) %

Other, net 0.1 % 0.3 % 1.6 %

1 unchanged sentence

21.7 % 22.2 % 24.8 %

federal statutory tax rate for the year ended September 30, 2018 of 24.5 % reflected a blended federal statutory rate of 35.0 % for our first fiscal quarter and 21.0 % for the remaining three fiscal quarters as a result of the Tax Act.

The following table presents our U.S.

5 unchanged sentences

Pre-tax income $ 1,791 $ 1,052 $ 1,375

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The cumulative effects of temporary differences that give rise to significant portions of the deferred tax asset/(liability) items are detailed in the following table.

3 unchanged sentences

Deferred compensation $ 287 $ 229

Allowances for loan losses and reserves for unfunded commitments 89 56

Allowances for credit losses 81 89

Unrealized loss associated with foreign currency translations 3 8

Unrealized loss associated with available-for-sale securities 2 —

Unrealized loss associated with cash flow hedges 9 18

8 unchanged sentences

Unrealized gain associated with available-for-sale securities — ( 30 )

Other ( 2 ) —

Total deferred tax liabilities ( 265 ) ( 225 )

Net deferred tax assets $ 305 $ 262

We had a net deferred tax asset at both September 30, 2020 and 2019.

We believe that the realization of the net deferred tax asset of $ 262 million is more likely than not based on expectations of future taxable income.

As of September 30, 2020, we considered nearly all undistributed earnings of non-U.S.

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements.

Deferred income tax assets are subject to a valuation allowance if, in management’s opinion, it is more likely than not that these benefits will not be realized.

Our deferred income taxes principally relate to deferred compensation, allowances for credit losses and other accrued expenses.

Substantially all of our deferred tax assets relate to U.S.

federal and state taxing jurisdictions.

As of September 30, 2021, the deferred tax assets aggregated to $ 570 million.

We continue to believe that the realization of our deferred tax assets is more likely than not based on expectations of future taxable income.

As of September 30, 2021, we considered substantially all undistributed earnings of non-U.S.

subsidiaries to be permanently reinvested.

Therefore, we have not provided for any U.S.

Due to the fact that the Tax Cut and Jobs Act (“TCJA”) enacted on December 22, 2017 reduces our incremental tax cost of repatriating offshore earnings, we have not provided for any U.S.

deferred income taxes related to such subsidiaries.

As of September 30, 2020, we had approximately $ 311 million of cumulative undistributed earnings attributable to foreign subsidiaries, most of which were subject to U.S.

tax under the transition tax on foreign earnings under the Tax Act.

The TCJA instituted a territorial system of international taxation.

Under the system, dividends received by a U.S.

corporation from its 10%-or-greater-owned foreign subsidiaries are generally exempt from U.S.

tax if attributable to non-U.S.

source earnings, but are subject to tax on “Global intangible low-taxed income” which is applicable regardless of whether the income is repatriated.

As of September 30, 2021, we had approximately $ 331 million of cumulative undistributed earnings attributable to foreign subsidiaries.

Because the time and manner of repatriation is uncertain, we cannot determine the impact of local taxes, withholding taxes and foreign tax credits associated with the future repatriation of such earnings, and therefore, cannot quantify the tax liability that would be payable in the event all such foreign earnings are repatriated.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2021, the current tax receivable, which is included in “Other receivables” on our Consolidated Statements of Financial Condition, was $ 12 million, and the current tax payable, which is included in “Other payables,” was $ 51 million.

2 unchanged sentences

We recognize the accrual of interest and penalties related to income tax matters in interest expense and other expense, respectively.

As of September 30, 2020 and 2019, accrued interest and penalties were approximately $ 8 million and $ 6 million, respectively.

As of September 30, 2021 and 2020, accrued interest and penalties were $ 7 million and $ 8 million, respectively.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the aggregate changes in the balances for uncertain tax positions.

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The total amount of uncertain tax positions that, if recognized, would impact the effective tax rate (the items included in the preceding table after considering the federal tax benefit associated with any state tax provisions) was $ 31 million, $ 40 million, and $ 38 million at September 30, 2021, 2020 and 2019, respectively.

We anticipate that the uncertain tax position liability balance will decrease by approximately $ 8 million over the next 12 months due to the expiration of statutes of limitations on federal and state tax returns and settlements of positions with the IRS.

We anticipate that the uncertain tax position liability balance will decrease by approximately $ 10 million over the next 12 months due to expiration of statutes of limitations of federal and state tax returns and settlements of positions with the Internal Revenue Service.

federal income tax returns as well as returns with various state, local and foreign jurisdictions.

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Commitments and contingencies

Loan and underwriting commitments

Underwriting commitments

In the normal course of business, we enter into commitments for debt and equity underwritings.

As of September 30, 2020, we had six such open underwriting commitments, of which all but one were subsequently settled in open market transactions and none of which resulted in a significant loss.

We offer loans to prospective financial advisors and certain key revenue producers primarily for recruiting, transitional cost assistance, and retention purposes (see Note 2 for a discussion of our accounting policies governing these transactions).

These offers are contingent upon certain events occurring, including the individuals joining us and meeting certain conditions outlined in their offer.

Our unfunded loan commitments related to such offers were $ 15 million as of September 30, 2020.

Commitments to extend credit and other credit-related financial instruments

RJ Bank has outstanding, at any time, a significant number of commitments to extend credit and other credit-related off-balance sheet financial instruments, such as standby letters of credit and loan purchases, which then extend over varying periods of time.

As of September 30, 2021, we had three such open underwriting commitments, which were subsequently settled in open market transactions and did not result in significant losses.

Lending commitments and other credit-related financial instruments

Raymond James Bank has outstanding, at any time, a significant number of commitments to extend credit and other credit-related off-balance-sheet financial instruments, such as standby letters of credit and loan purchases, which then extend over varying periods of time.

These arrangements are subject to strict underwriting assessments and each customer’s credit worthiness is evaluated on a case-by-case basis.

Fixed-rate commitments are also subject to market risk resulting from fluctuations in interest rates and our exposure is limited to the replacement value of those commitments.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents RJ Bank’s commitments to extend credit and other credit-related off-balance sheet financial instruments outstanding.

Fixed-rate commitments are subject to market risk resulting from fluctuations in interest rates and our exposure is limited to the replacement value of those commitments.

The following table presents Raymond James Bank’s commitments to extend credit and other credit-related off-balance sheet financial instruments outstanding.

September 30,

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$ 2,075 $ 1,482

Unfunded loan commitments

Unfunded lending commitments $ 548 $ 532

Standby letters of credit

Open-end consumer lines of credit primarily represent the unfunded amounts of RJ Bank loans to consumers that are secured by marketable securities at advance rates consistent with industry standards.

Open-end consumer lines of credit primarily represent the unfunded amounts of bank loans to consumers that are secured by marketable securities at advance rates consistent with industry standards.

The proceeds from repayment or, if necessary, the liquidation of collateral, which is monitored daily, are expected to satisfy the amounts drawn against these existing lines of credit.

These lines of credit are primarily uncommitted, as we reserve the right to not make any advances or may terminate these lines at any time.

Because many of our lending commitments expire without being funded in whole or in part, the contractual amounts are not estimates of our actual future credit exposure or future liquidity requirements.

We maintain a reserve to provide for potential losses related to the unfunded lending commitments.

See Note 7 for further discussion of this reserve for unfunded lending commitments.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Because many of Raymond James Bank’s lending commitments expire without being funded in whole or in part, the contractual amounts are not estimates of our actual future credit exposure or future liquidity requirements.

The allowance for credit losses calculated under CECL provides for potential losses related to the unfunded lending commitments.

See Notes 2 and 8 for further discussion of this allowance for credit losses related to unfunded lending commitments.

RJ&A enters into margin lending arrangements which allow customers to borrow against the value of qualifying securities.

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Collateral levels and established credit terms are monitored daily and we require customers to deposit additional collateral or reduce balances as necessary.

We offer loans to prospective financial advisors for recruiting and retention purposes (see Notes 2 and 9 for further discussion of our loans to financial advisors).

These offers are contingent upon certain events occurring, including the individuals joining us and meeting certain other conditions outlined in their offer.

We had unfunded commitments of $ 21 million for loans to financial advisors who have met such conditions as of September 30, 2021.

Investment commitments

We had unfunded commitments to various investments, including private equity investments and certain RJ Bank investments, of $ 36 million as of September 30, 2020.

We had unfunded commitments to various investments, including private equity investments and certain Raymond James Bank investments, of $ 36 million as of September 30, 2021.

Other commitments

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As a part of our fixed income public finance operations, we enter into forward commitments to purchase agency MBS.

See Note 2 for further discussion of these activities.

At September 30, 2021, we had $ 198 million of principal amount of outstanding forward MBS purchase commitments, which were expected to be purchased within 90 days following commitment.

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As of September 30, 2021, the fair value of the TBA securities and the estimated fair value of the purchase commitments were insignificant.

For information regarding our acquisition commitments associated with our intended acquisitions of Charles Stanley and TriState Capital, see Note 3.

For information regarding our lease commitments, including the maturities of our lease liabilities, see Note 14.

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We have purchased excess SIPC coverage through various syndicates of Lloyd’s of London.

For RJ&A, our clearing broker-dealer, the additional protection currently

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

provided has an aggregate firm limit of $ 750 million for cash and securities, including a sub-limit of $ 1.9 million per client for cash above basic SIPC.

For RJ&A, our clearing broker-dealer, the additional protection currently provided has an aggregate firm limit of $ 750 million for cash and securities, including a sub-limit of $ 1.9 million per client for cash above basic SIPC.

Account protection applies when a SIPC member fails financially and is unable to meet its obligations to clients.

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The debt, which matures in 2022, is secured by substantially all of the assets of the borrower.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Legal and regulatory matter contingencies

In addition to any matters that may be specifically described in the following sections, in the normal course of our business, we have been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with our activities as a diversified financial services institution.

In the normal course of our business, we have been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with our activities as a diversified financial services institution.

RJF and certain of its subsidiaries are subject to regular reviews and inspections by regulatory authorities and self-regulatory organizations.

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Refer to Note 2 for a discussion of our criteria for recognizing liabilities for contingencies.

We may from time to time include in any descriptions of individual matters herein certain quantitative information about the plaintiff’s claim against us as alleged in the plaintiff’s pleadings or other public filings.

Although this information may provide insight into the potential magnitude of a matter, it does not represent our estimate of reasonably possible loss or our judgment as to any currently appropriate accrual related thereto.

RAYMOND JAMES FINANCIAL, INC.

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$ 110 $ ( 135 ) $ ( 25 ) $ 21 $ ( 19 ) $ ( 23 )

Cumulative effect of adoption of ASU 2016-01

OCI before reclassifications and taxes

7 ( 5 ) 2 94 ( 51 ) 45

Amounts reclassified from AOCI, before tax

— — — ( 3 ) 5 2

Pre-tax net OCI

7 ( 5 ) 2 91 ( 46 ) 47

Income tax effect

( 2 ) — ( 2 ) ( 23 ) 12 ( 13 )

OCI for the year, net of tax 5 ( 5 ) — 68 ( 34 ) 34

AOCI as of end of year

$ 115 $ ( 140 ) $ ( 25 ) $ 89 $ ( 53 ) $ 11

Year ended September 30, 2019

AOCI as of beginning of year

$ 88 $ ( 111 ) $ ( 23 ) $ ( 46 ) $ 42 $ ( 27 )

Cumulative effect of adoption of ASU 2016-01 — — — ( 4 ) — ( 4 )

OCI before reclassifications and taxes

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$ 110 $ ( 135 ) $ ( 25 ) $ 21 $ ( 19 ) $ ( 23 )

Reclassifications from AOCI to net income, excluding taxes, for the years ended September 30, 2021 and 2020 were primarily recorded in “Other” revenue and “Interest expense” on the Consolidated Statements of Income and Comprehensive Income.

Reclassifications from AOCI to net income, excluding taxes, for the year ended September 30, 2019 were recorded in “Interest expense” on the Consolidated Statements of Income and Comprehensive Income.

As of October 1, 2018, we adopted accounting guidance (ASU 2016-01) that generally requires changes in the fair value of equity securities to be recorded in net income.

Accordingly, as of the date of adoption, we reclassified a cumulative unrealized gain on such securities, net of tax, from AOCI to retained earnings.

Reclassifications from AOCI to net income, excluding taxes, for the year ended September 30, 2020 were recorded in “Other” revenue and “Interest expense” on the Consolidated Statements of Income and Comprehensive Income.

Our net investment hedges and cash flow hedges relate to our derivatives associated with RJ Bank’s business operations.

Our net investment hedges and cash flow hedges relate to our derivatives associated with Raymond James Bank’s business operations.

See Notes 2 and 6 for additional information on these derivatives.

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Year ended September 30, 2021

$ in millions Private Client Group Capital Markets Asset Management RJ Bank Other and intersegment eliminations Total

$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total

Asset management and related administrative fees $ 4,056 $ 4 $ 837 $ — $ ( 29 ) $ 4,868

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Total brokerage revenues 1,546 660 10 — ( 4 ) 2,212

Account and services fees:

Account and service fees:

Mutual fund and annuity service fees 408 — — — ( 2 ) 406

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Year ended September 30, 2020

$ in millions Private Client Group Capital Markets Asset Management RJ Bank Other and intersegment eliminations Total

$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total

Asset management and related administrative fees $ 3,162 $ 7 $ 688 $ — $ ( 23 ) $ 3,834

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Total brokerage revenues 1,383 571 8 1 ( 7 ) 1,956

Account and services fees:

Account and service fees:

Mutual fund and annuity service fees 348 — 1 — ( 1 ) 348

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Year ended September 30, 2019

$ in millions Private Client Group Capital Markets Asset Management RJ Bank Other and intersegment eliminations Total

$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total

Asset management and related administrative fees $ 2,820 $ 6 $ 645 $ — $ ( 20 ) $ 3,451

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Total brokerage revenues 1,389 414 10 — ( 6 ) 1,807

Account and services fees:

Account and service fees:

Mutual fund and annuity service fees 334 — 2 — ( 10 ) 326

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Interest income:

Assets segregated pursuant to regulations $ 28 $ 59 $ 53

Trading instruments

Cash and cash equivalents $ 12 $ 41 $ 83

Assets segregated for regulatory purposes and restricted cash 15 28 59

Available-for-sale securities 85 83 69

Brokerage client receivables 77 84 122

Bank loans, net of unearned income and deferred expenses 593 702 871

Loans to financial advisors

Corporate cash and all other

All other 41 62 77

Total interest income

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Bank deposits 23 41 132

Trading instruments sold but not yet purchased

Brokerage client payables

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Senior notes payable

All other 9 21 36

Total interest expense

Net interest income 673 822 998

Bank loan loss provision ( 233 ) ( 22 ) ( 20 )

Net interest income after bank loan loss provision $ 589 $ 976 $ 822

Bank loan (provision)/benefit for credit losses 32 ( 233 ) ( 22 )

Net interest income after bank loan (provision)/benefit for credit losses $ 705 $ 589 $ 976

Interest expense related to bank deposits in the preceding table excludes interest expense associated with affiliate deposits, which has been eliminated in consolidation.

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Our share-based compensation accounting policies are described in Note 2.

Stock options granted and outstanding to our employees and independent contractors as of September 30, 2020 and the related expense for the years ended September 30, 2020, 2019 and 2018 were insignificant, as we generally ceased issuing stock options in our fiscal third quarter of 2019 and have instead issued RSUs.

Cash received from stock option exercises during the year ended September 30, 2020 was $ 28 million.

We may grant awards under the 2012 Plan in connection with initial employment or under various retention programs for individuals who are responsible for contributing to our management, growth, and/or profitability.

We had stock options outstanding as of September 30, 2021 which had been issued to our employees and independent contractors.

As of our fiscal first quarter 2017, we no longer issue stock options to our employees and instead issue RSUs.

We issue stock options to our independent contractors in limited quantities.

Stock options granted to our independent contractors, as well as the related expense for the years ended September 30, 2021, 2020 and 2019 were insignificant.

Cash received from stock options exercised by our employees and independent contractors during the year ended September 30, 2021 was $ 23 million.

We may grant RSU awards under the 2012 Plan in connection with initial employment or under various retention programs for individuals who are responsible for contributing to our management, growth, and/or profitability.

Through our Canadian subsidiary, we established the Restricted Stock Trust Fund, which we funded to enable the trust fund to acquire our common stock in the open market to be used to settle RSUs granted as a retention vehicle for certain employees of our Canadian subsidiaries.

We may also grant awards to officers and certain other employees in lieu of cash for 10 % to 50 % of annual bonus amounts in excess of $ 250,000 .

Under the plan, the awards are generally restricted for a three - to five -year period, during which time the awards are forfeitable in the event of termination other than for death, disability or retirement.

Under the plan, the awards are generally restricted for a three - to five-year period, during which time the awards are generally forfeitable in the event of termination other than for death, disability or retirement.

We grant RSUs annually to non-employee members of our Board of Directors.

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grant date fair value

(per share) (1)

Non-vested as of beginning of year 7.9 $ 53.43

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Non-vested as of end of year 8.2 $ 56.61

(1) During our fiscal fourth quarter of 2021 the Board of Directors approved a 3-for-2 stock split, effected in the form of a 50 % stock dividend, paid on September 21, 2021.

All share and per share information has been retroactively adjusted to reflect this stock split.

The following table presents expense and income tax benefits related to our RSUs granted to our employees and members of our Board of Directors for the periods indicated.

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$ in millions, except per unit award amounts (1)

2021 2020 2019

Weighted-average grant date fair value per unit award $ 63.86 $ 58.20 $ 51.15

Total fair value of shares and unit awards vested $ 83 $ 63 $ 51

Total fair value of shares and RSU awards vested $ 87 $ 83 $ 63

(1) During our fiscal fourth quarter of 2021 the Board of Directors approved a 3-for-2 stock split, effected in the form of a 50 % stock dividend, paid on September 21, 2021.

All share and per share information has been retroactively adjusted to reflect this stock split.

Employee stock purchase plan

Under the 2003 Employee Stock Purchase Plan, we are authorized to issue up to 7.4 million shares of common stock to our full-time employees, nearly all of whom are eligible to participate.

Under the 2003 Employee Stock Purchase Plan, we are authorized to issue up to 13.1 million shares of common stock to eligible employees.

Under the terms of the plan, share purchases in any calendar year are limited to the lesser of 1,000 shares or shares with a fair value of $ 25,000 .

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Employee other compensation

Our profit sharing plan and employee stock ownership plan (“ESOP”) provide certain death, disability or retirement benefits for all employees who meet certain service requirements.

The plans are noncontributory.

Our contributions, if any, are determined annually by our Board of Directors on a discretionary basis and are recognized as compensation expense throughout the year.

Benefits become fully vested after five years of qualified service, at 65, or if a participant separates from service due to death or disability.

Our profit sharing plan and employee stock ownership plan (“ESOP”) are qualified plans that provide certain death, disability or retirement benefits for all employees who meet certain service requirements.

The plans are noncontributory and our contributions, if any, are determined annually by our Board of Directors, or a committee thereof, on a discretionary basis and are recognized as compensation expense throughout the year.

Benefits become fully vested after five years of qualified service, age 65, or if a participant separates from service due to death or disability.

All shares owned by the ESOP are included in earnings per share calculations.

Cash dividends paid to the ESOP are reflected as a reduction of retained earnings.

The number of shares of our common stock held by the ESOP at September 30, 2020 and 2019 was 4.7 million and 4.6 million, respectively.

The number of shares of our common stock held by the ESOP at September 30, 2021 and 2020 was 6.7 million and 7.0 million (as adjusted for the stock split), respectively.

The market value of our common stock held by the ESOP at September 30, 2021 was $ 622 million, of which $ 7 million was unearned (not yet vested) by ESOP plan participants.

We also offer a plan pursuant to section 401(k) of the Internal Revenue Code, which is a qualified plan that may provide for a discretionary contribution or a matching contribution each year.

Matching contributions are 75 % of the first $ 1,000 and 25 % of the next $ 1,000 of eligible compensation deferred by each participant annually.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

Our LTIP is a non-qualified deferred compensation plan that provides benefits to employees who meet certain compensation or production requirements.

We also offer a plan pursuant to section 401(k) of the Internal Revenue Code, which is a qualified plan that may provide for a discretionary contribution or a matching contribution each year.

Matching contributions are 75 % of the first $ 1,000 and 25 % of the next $ 1,000 of eligible compensation deferred by each participant annually.

Our LTIP is a non-qualified deferred compensation plan that provides benefits to certain employees who meet certain compensation or production requirements.

We have purchased and hold life insurance on the lives of certain current and former employee participants to earn a competitive rate of return for participants and to provide the primary source of funds available to satisfy our obligations under this plan.

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Contributions to the qualified plans and the LTIP are approved annually by the Board of Directors or a committee thereof.

We have the VDCP, a non-qualified and voluntary opportunity for certain highly compensated employees to defer compensation.

Eligible participants may elect to defer a percentage or specific dollar amount of their compensation into the VDCP.

The VDCP is a non-qualified deferred compensation plan for certain employees, in which eligible participants may elect to defer a percentage or specific dollar amount of their compensation.

Company-owned life insurance is the primary source of funding for this plan.

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We offer non-qualified deferred compensation plans that provide benefits to our independent contractor financial advisors who meet certain production requirements.

Company-owned life insurance is the primary source of funding for this plan.

Company-owned life insurance is the primary source of funding for these plans.

The contributions are made in amounts approved annually by management.

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Company-owned life insurance is the primary source of funding for this plan.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 24 – REGULATORY CAPITAL REQUIREMENTS

RJF, as a bank holding company and financial holding company, RJ Bank, Raymond James Trust, N.A.

(“RJ Trust”) and our broker-dealer subsidiaries are subject to capital requirements by various regulatory authorities.

RJF, as a bank holding company and financial holding company, Raymond James Bank, our broker-dealer subsidiaries and our trust subsidiaries are subject to capital requirements by various regulatory authorities.

Capital levels of each entity are monitored to ensure compliance with our various regulatory capital requirements.

Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions, by regulators that, if undertaken, could have a direct material effect on our financial results.

As a bank holding company, RJF is subject to the risk-based capital requirements of the Fed.

These risk-based capital requirements are expressed as capital ratios that compare measures of regulatory capital to risk-weighted assets, which incorporates quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under regulatory guidelines.

RJF’s and RJ Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

RJF and RJ Bank are required to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), Tier 1 capital to average assets (as defined), and under rules defined under the Basel III capital framework, Common equity Tier 1 capital (“CET1”) to risk-weighted assets.

RJF and RJ Bank each calculate these ratios under the Basel III standardized approach in order to assess compliance with both regulatory requirements and their internal capital policies.

As a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”) that has made an election to be a financial holding company, RJF is subject to supervision, examination and regulation by the Fed.

We are subject to the Fed’s capital rules which establish an integrated regulatory capital framework and implement, in the U.S., the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act.

We apply the standardized approach for calculating risk-weighted assets and are also subject to the market risk provisions of the Fed’s capital rules (“market risk rule”).

Under these rules, minimum requirements are established for both the quantity and quality of capital held by banking organizations.

RJF and Raymond James Bank are required to maintain minimum ratios of common equity tier 1 (“CET1”), tier 1 capital and total capital to risk-weighted assets, as well as minimum leverage ratios (defined as tier 1 capital divided by adjusted average assets).

These capital ratios incorporate quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under the regulatory capital rules and are subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

RJF and Raymond James Bank each calculate these ratios in order to assess compliance with both regulatory requirements and their internal capital policies.

In order to maintain our ability to take certain capital actions, including dividends and common equity repurchases, and to make bonus payments, we must hold a capital conservation buffer above our minimum risk-based capital requirements.

As of September 30, 2020, both RJF’s and RJ Bank’s capital levels exceeded the capital conservation buffer requirement and were each categorized as “well-capitalized.”

To meet requirements for capital adequacy purposes or to be categorized as “well-capitalized,” RJF must maintain minimum CET1, Tier 1 capital, Total capital and Tier 1 leverage amounts and ratios as set forth in the following table.

As of September 30, 2021, both RJF’s and Raymond James Bank’s capital levels exceeded the capital conservation buffer requirement and were each categorized as “well-capitalized.”

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

To meet requirements for capital adequacy or to be categorized as “well-capitalized,” RJF must maintain minimum CET1, Tier 1 capital, Total capital and Tier 1 leverage amounts and ratios as set forth in the following table.

Actual Requirement for capital

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Tier 1 leverage $ 6,490 14.2 % $ 1,824 4.0 % $ 2,280 5.0 %

RJF’s Tier 1 and Total capital ratios at September 30, 2020 decreased compared to September 30, 2019, due to an increase in risk-weighted assets, partially offset by an increase in equity.

The increase in risk-weighted assets was primarily due to growth in cash and cash equivalents segregated pursuant to regulations, available-for-sale securities held at RJ Bank and the residential loan portfolio, as well as the impact of higher market volatility on our market risk-weighted assets, partially offset by a decrease in the C&I loan portfolio.

The increase in equity reflected positive earnings during the year, net of share repurchases and dividends.

RJF’s Tier 1 leverage ratio at September 30, 2020 decreased compared to September 30, 2019, due to growth of average assets, primarily cash, cash and cash equivalents segregated pursuant to regulations and available-for-sale securities held at RJ Bank, partially offset by the aforementioned change in equity.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

To meet the requirements for capital adequacy or to be categorized as “well-capitalized,” RJ Bank must maintain CET1, Tier 1 capital, Total capital and Tier 1 leverage amounts and ratios as set forth in the following table.

As of September 30, 2021, RJF’s regulatory capital increase was driven by an increase in equity, due to positive earnings net of dividends and share repurchases, partially offset by an increase in goodwill and identifiable intangible assets arising from our fiscal 2021 acquisitions.

See Note 3 for additional information regarding our acquisitions.

RJF’s Tier 1 and Total capital ratios increased compared to September 30, 2020, resulting from the increase in regulatory capital, partially offset by an increase in risk-weighted assets.

The increase in risk-weighted assets was driven by increases in our loan portfolio, assets segregated for regulatory purposes and restricted cash and available-for-sale securities.

RJF’s Tier 1 leverage ratio at September 30, 2021 decreased compared to September 30, 2020, due to increased average assets, driven by higher assets segregated for regulatory purposes and restricted cash due to an increase in client cash in the Client Interest Program (“CIP”), as well as growth in loans and available-for-sale securities.

The increase in average assets was partially offset by the increase in regulatory capital.

To meet the requirements for capital adequacy or to be categorized as “well-capitalized,” Raymond James Bank must maintain CET1, Tier 1 capital, Total capital and Tier 1 leverage amounts and ratios as set forth in the following table.

Actual Requirement for capital

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$ in millions Amount Ratio Amount Ratio Amount Ratio

RJ Bank as of September 30, 2020:

Raymond James Bank as of September 30, 2021:

CET1 $ 2,626 13.4 % $ 883 4.5 % $ 1,275 6.5 %

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Tier 1 leverage $ 2,626 7.4 % $ 1,411 4.0 % $ 1,763 5.0 %

RJ Bank as of September 30, 2019:

Raymond James Bank as of September 30, 2020:

CET1 $ 2,279 13.0 % $ 788 4.5 % $ 1,138 6.5 %

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Tier 1 leverage $ 2,279 7.7 % $ 1,183 4.0 % $ 1,479 5.0 %

RJ Bank’s Tier 1 capital and Total capital ratios at September 30, 2020 decreased compared to September 30, 2019, primarily due to the growth in available-for-sale securities and residential loans, net of decreases in C&I loans.

RJ Bank’s Tier 1 leverage ratio at September 30, 2020 decreased compared to September 30, 2019, due to the growth in average assets, primarily related to available-for-sale securities.

Our intention is to maintain RJ Bank’s “well-capitalized” status.

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

RJ Bank may pay dividends to RJF without prior approval of its regulator as long as the dividend does not exceed the sum of RJ Bank’s current calendar year and the previous two calendar years’ retained net income, and RJ Bank maintains its targeted regulatory capital ratios.

Dividends from RJ Bank may be limited to the extent that capital is needed to support its balance sheet growth.

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

Raymond James Bank’s Tier 1 leverage ratio at September 30, 2021 decreased compared to September 30, 2020, due to increased average assets, driven by the growth in loans and available-for-sale securities.

Our intention is to maintain Raymond James Bank’s “well-capitalized” status.

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

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Raymond James Bank maintains its targeted regulatory capital ratios.

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

Certain of our broker-dealer subsidiaries are subject to the requirements of the Uniform Net Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934.

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FINRA may impose certain restrictions, such as restricting withdrawals of equity capital, if a member firm were to fall below a certain threshold or fail to meet minimum net capital requirements.

As of September 30, 2021, RJ&A had excess net capital available to remit dividends to RJF, some of which may be remitted without prior regulatory approval and the remainder may be remitted in conformity with all required regulatory rules or approvals.

The following table presents the net capital position of RJ&A.

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$ 1,979 $ 1,193

As of September 30, 2020, RJ Trust, RJFS, RJ Ltd.

and all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.

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

RJF expects to continue paying cash dividends.

However, the payment and rate of dividends on our common stock are subject to several factors including our operating results, financial and regulatory requirements or restrictions, and the availability of funds from our subsidiaries, including our broker-dealer and bank subsidiaries, which may also be subject to restrictions under regulatory capital rules.

The availability of funds from subsidiaries may also be subject to restrictions contained in loan covenants of certain broker-dealer loan agreements and restrictions by bank regulators on dividends to the parent from RJ Bank.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 25 – EARNINGS PER SHARE

During our fiscal fourth quarter of 2021 the Board of Directors approved a 3-for-2 stock split, effected in the form of a 50 % stock dividend, paid on September 21, 2021.

All share and per share information has been retroactively adjusted to reflect this stock split.

The following table presents the computation of basic and diluted earnings per common share.

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Dilutive effect of outstanding stock options and certain RSUs

Average common shares used in diluted computation

140.2 144.0 148.8

Average common and common equivalent shares used in diluted computation 211.2 210.3 216.0

Earnings per common share:

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Stock options and certain RSUs excluded from weighted-average diluted common shares because their effect would be antidilutive

The allocation of earnings and dividends to participating securities in the preceding table represents dividends paid during the year to participating securities plus an allocation of undistributed earnings to participating securities.

Participating securities represent unvested restricted stock and certain RSUs.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Consolidated Financial Statements

The allocation of earnings and dividends to participating securities in the preceding table represents dividends paid during the year to participating securities, consisting of certain RSUs, plus an allocation of undistributed earnings to such participating securities.

Participating securities and related dividends paid on these participating securities were insignificant for the years ended September 30, 2021, 2020 and 2019.

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Dividends per common share - declared

$ 1.04 $ 0.99 $ 0.91

Dividends per common share - paid

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

$ 1.03 $ 0.97 $ 0.88

NOTE 26 – SEGMENT INFORMATION

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Asset Management;

Raymond James Bank;

The segments are determined based upon factors such as the services provided and the distribution channels served and are consistent with how we assess performance and determine how to allocate our resources.

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Intersegment revenues, expenses, receivables and payables are eliminated upon consolidation.

The PCG segment provides financial planning, investment advisory and securities transaction services through a branch office network throughout the U.S., Canada and the United Kingdom.

The PCG segment includes revenues from securities transaction services, including the sale of equities, mutual funds, fixed income products, and insurance and annuity products to retail clients.

In addition, this segment includes revenues from investment advisory services for which we charge either a fee computed as a percentage of assets in a client’s account or a flat period fee.

The PCG segment provides financial planning, investment advisory and securities transaction services in the U.S., Canada and the U.K.

for which we generally charge either asset-based fees or sales commissions.

The PCG segment also earns revenues for distribution and related support services performed related to mutual funds, fixed and variable annuities and insurance products.

The segment includes servicing fee revenues from mutual fund and annuity companies whose products we distribute and from banks to which we sweep clients’ cash in the RJBDP, our multi-bank sweep program.

The segment also includes net interest earnings primarily on client margin loans and cash balances.

Our Capital Markets segment conducts institutional sales, securities trading, equity research, investment banking and the syndication and management of investments that qualify for tax credits.

The segment also includes net interest earnings primarily on client margin loans, cash balances, and assets segregated for regulatory purposes, net of interest paid to clients on cash balances in the CIP.

Our Capital Markets segment conducts investment banking, institutional sales, securities trading, equity research, and the syndication and management of investments in low-income housing funds.

We primarily conduct these activities in the U.S., Canada and Europe.

1 unchanged sentence

This segment oversees a portion of our fee-based assets under administration for our PCG clients through our Asset Management Services division and through RJ Trust.

This segment also provides asset management services through Carillon Tower Advisers and affiliates (collectively, “Carillon Tower Advisers”) for certain retail accounts managed on behalf of third-party institutions, institutional accounts and proprietary mutual funds that we manage.

RJ Bank provides various types of loans, including corporate loans, tax-exempt loans, residential loans, SBL and other loans.

RJ Bank is active in corporate loan syndications and participations and also provides FDIC-insured deposit accounts, including to clients of our broker-dealer subsidiaries.

RJ Bank generates net interest income principally through the interest income earned on loans and an investment portfolio of securities, which is offset by the interest expense it pays on client deposits and on its borrowings.

The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, and certain corporate overhead costs of RJF that are not allocated to operating segments, including the interest costs on our public debt.

The Other segment also includes expenses related to our reduction in workforce during the fiscal fourth quarter of 2020.

This segment also provides asset management services through Carillon Tower Advisers for certain retail accounts managed on behalf of third-party institutions, institutional accounts and proprietary mutual funds that we manage.

Raymond James Bank provides various types of loans, including corporate loans, tax-exempt loans, residential loans, SBL and other loans.

Raymond James Bank is active in corporate loan syndications and participations and also provides FDIC-insured deposit accounts, including to clients of our broker-dealer subsidiaries.

Raymond James Bank generates net interest income principally through the interest income earned on loans and an investment portfolio of available-for-sale securities, which is offset by the interest expense it pays on client deposits and on its borrowings.

The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, acquisition-related expenses, and certain corporate overhead costs of RJF that are not allocated to operating segments, including the interest costs on our public debt and any losses on the extinguishment of such debt.

The Other segment also includes expenses related to our reduction in workforce, which occurred in fiscal 2020 in response to the economic environment at that time.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

The following tables present information concerning operations in these segments.

The following table presents information concerning operations in these segments.

Year ended September 30,

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Asset Management

Raymond James Bank 672 765 846

( 8 ) ( 82 ) 5

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Asset Management

( 192 ) ( 82 ) ( 83 )

Raymond James Bank 367 196 515

Other ( 246 ) ( 192 ) ( 82 )

Total pre-tax income

$ 1,791 $ 1,052 $ 1,375

(1) The year ended September 30, 2020 includes a $ 7 million loss related to the pending disposition of our interests in certain entities that operate predominantly in France.

The year ended September 30, 2019 includes a $ 15 million loss on the sale of our operations related to research, sales and trading of European equities, as well as a $ 19 million goodwill impairment charge related to our Canadian Capital Markets business.

(2) The year ended September 30, 2020 includes reduction in workforce expenses of $ 46 million associated with position eliminations that occurred in our fiscal fourth quarter of 2020 in response to the economic environment.

These expenses primarily consist of severance and related payroll expenses, as well as expenses related to company-paid benefits.

No individual client accounted for more than ten percent of revenues in any of the years presented.

The following table presents our net income on a segment basis.

The following table presents our net interest income on a segment basis.

Year ended September 30,

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Asset Management

Other and intersegment eliminations

( 58 ) ( 12 ) ( 33 )

Raymond James Bank 642 738 820

Other ( 88 ) ( 58 ) ( 12 )

Net interest income $ 673 $ 822 $ 998

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Asset Management

30,356 25,516

Raymond James Bank 36,154 30,356

Other 2,534 1,836

Total $ 61,891 $ 47,482

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents goodwill, which was included in our total assets, on a segment basis.

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Total $ 660 $ 466

(1) The September 30, 2021 balance includes $ 139 million of goodwill arising from our acquisition of NWPS in December 2020.

(2) The September 30, 2021 balance includes $ 30 million of goodwill arising from our acquisition of Financo in March 2021 and a provisional estimate of $ 24 million of goodwill arising from our acquisition of Cebile in September 2021.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We have operations in the U.S., Canada and Europe.

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Total $ 1,791 $ 1,052 $ 1,375

(1) The pre-tax loss in Europe for the year ended September 30, 2020 reflects a $ 7 million loss related to the pending disposition of our interests in certain entities that operate predominantly in France.

The pre-tax loss in Europe for the year ended September 30, 2019 reflects a $ 15 million loss on the sale of our operations related to research, sales and trading of European equities.

(1) The pre-tax loss in Europe for the year ended September 30, 2020 reflected a $ 7 million loss related to the disposition of our interests in certain entities that operated predominantly in France.

The pre-tax loss in Europe for the year ended September 30, 2019 reflected a $ 15 million loss on the sale of our operations related to research, sales and trading of European equities.

These losses were recorded in our Capital Markets segment.

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Total $ 660 $ 466

During the year ended September 30, 2019, we recognized an impairment charge of $ 19 million related to our Canadian Capital Markets business.

See Note 10 for a discussion of our goodwill impairment testing.

(1) The September 30, 2021 balance includes $ 139 million of goodwill arising from our acquisition of NWPS in December 2020, $ 30 million of goodwill arising from our acquisition of Financo in March 2021 and a provisional estimate of $ 17 million of goodwill arising from our acquisition of Cebile in September 2021.

(2) The September 30, 2021 balance includes a provisional estimate of $ 7 million of goodwill arising from our acquisition of Cebile in September 2021.

NOTE 27 – CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

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The primary source of operating cash available to the Parent is provided by dividends from its subsidiaries.

The broker-dealer subsidiaries of the Parent, including RJ&A our principal domestic broker-dealer, and certain other subsidiaries are required to maintain a minimum amount of net capital due to regulatory requirements.

RJ&A is further required by certain covenants in its borrowing agreements to maintain minimum net capital equal to 10 % of aggregate debit balances.

At September 30, 2021, each of these subsidiaries exceeded their minimum net capital requirements (see Note 24 for further information).

Of the Parent’s net assets as of September 30, 2021, approximately $ 210 million of its investment in RJ&A and RJFS was available for distribution to the Parent without further regulatory approvals, and approximately $ 4.30 billion of its investment in

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Notes to Consolidated Financial Statements

RJ&A, our principal domestic broker-dealer subsidiary of the Parent, is required by regulations to maintain a minimum amount of net capital.

Other broker-dealer, non-bank subsidiaries of the Parent are also required by regulations to maintain a minimum amount of net capital, but the net capital requirements of those other subsidiaries are much less significant.

RJ&A is further required by certain covenants in its borrowing agreements to maintain minimum net capital equal to 10 % of aggregate debit balances.

At September 30, 2020, each of these broker-dealer subsidiaries exceeded their minimum net capital requirements (see Note 22 for further information).

Net assets of approximately $ 3.30 billion as of September 30, 2020 were restricted under regulatory or other restrictions from being transferred from certain subsidiaries to the Parent without prior approval of the respective entities’ regulator.

Cash and cash equivalents of $ 2.16 billion and $ 1.35 billion as of September 30, 2020 and 2019, respectively, were held directly by RJF in depository accounts at third-party financial institutions, held in depository accounts at RJ Bank, or were otherwise invested by one of our subsidiaries on behalf of RJF.

The amount held in depository accounts at RJ Bank was $ 185 million as of September 30, 2020, of which $ 108 million was available on demand without restriction.

As of September 30, 2019, $ 163 million was held in depository accounts at RJ Bank, of which $ 107 million was available on demand without restriction.

Raymond James Bank, RJ&A, RJFS and RJ Ltd.

was restricted due to regulatory or other restrictions from distribution to the Parent without prior approval of the respective entity’s regulator.

Cash and cash equivalents of $ 1.16 billion and $ 2.16 billion as of September 30, 2021 and 2020, respectively, were held directly by RJF in depository accounts at third-party financial institutions, held in depository accounts at Raymond James Bank, or were otherwise invested by one of our subsidiaries on behalf of RJF.

The amount held in depository accounts at Raymond James Bank was $ 229 million as of September 30, 2021, of which $ 152 million was available on demand without restriction.

As of September 30, 2020, $ 185 million was held in depository accounts at Raymond James Bank, of which $ 108 million was available on demand without restriction.

The Parent cash balance does not include $ 400 million of cash set aside by RJF in a restricted account during the fiscal fourth quarter of 2021 to be used to fund our closing obligations associated with the pending acquisition of Charles Stanley.

This restricted cash is included in “Assets segregated for regulatory purposes and restricted cash.”

See Notes 16, 17, 19 and 24 for more information regarding borrowings, commitments, contingencies and guarantees, and regulatory capital requirements of the Parent and its subsidiaries.

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Cash and cash equivalents $ 527 $ 478

Assets segregated pursuant to regulations 78 57

Assets segregated for regulatory purposes and restricted cash ( $ 1 and $ 1 at fair value)

Intercompany receivables from subsidiaries (primarily non-bank subsidiaries) 877 1,903

2 unchanged sentences

Non-bank subsidiaries 5,703 4,306

Property and equipment, net 14 14

Goodwill and identifiable intangible assets, net 32 32

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Liabilities and equity:

Accrued compensation and benefits $ 596 $ 514

Accrued compensation, commissions and benefits $ 798 $ 596

Intercompany payables to subsidiaries:

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Total liabilities and equity $ 11,266 $ 9,930

Of the total intercompany receivable from non-bank subsidiaries, $ 1.70 billion and $ 827 million at September 30, 2020 and 2019, respectively, was invested in cash and cash equivalents by the subsidiary on behalf of the Parent.

Of the total intercompany receivable from non-bank subsidiaries, $ 649 million and $ 1.70 billion at September 30, 2021 and 2020, respectively, was invested in cash and cash equivalents by the subsidiary on behalf of the Parent.

RAYMOND JAMES FINANCIAL, INC.

13 unchanged sentences

Non-interest expenses:

Compensation and benefits (1)

Compensation, commissions and benefits (1)

Non-compensations expenses:

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Business development 19 18 20

Losses on extinguishment of debt 98 — —

Other 30 23 16

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Total non-interest expenses 220 95 94

Pre-tax income before equity in undistributed net income of subsidiaries

Pre-tax income/(loss) before equity in undistributed net income of subsidiaries ( 29 ) 626 711

Income tax benefit ( 99 ) ( 58 ) ( 31 )

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Equity in undistributed net income of subsidiaries ( 1,333 ) ( 134 ) ( 292 )

Losses on extinguishment of debt 98 — —

Other 94 102 100

Net change in:

Assets segregated pursuant to regulations — — ( 1 )

Intercompany receivables ( 14 ) 126 ( 51 )

2 unchanged sentences

Other payables 15 24 ( 1 )

Accrued compensation and benefits 73 34 66

Accrued compensation, commissions and benefits 202 73 34

Net cash provided by operating activities 264 917 785

4 unchanged sentences

Purchase of investments in company-owned life insurance policies, net ( 36 ) ( 55 ) ( 44 )

Net cash used in investing activities ( 1,037 ) ( 2 ) ( 259 )

Net cash provided by/(used in) investing activities 585 ( 1,037 ) ( 2 )

Cash flows from financing activities:

Proceeds from borrowing on the RJF Credit Facility — 300 300

Repayment of borrowings on the RJF Credit Facility — ( 300 ) ( 300 )

Proceeds from senior note issuances, net of debt issuance costs paid 494 — —

Exercise of stock options and employee stock purchases 62 65 63

Purchase of treasury stock ( 128 ) ( 272 ) ( 778 )

Dividends on common stock ( 218 ) ( 205 ) ( 191 )

Exercise of stock options and employee stock purchases 53 62 65

Proceeds from senior note issuances, net of debt issuance costs paid 737 494 —

Extinguishment of senior notes payable ( 844 ) — —

Proceeds from borrowing on the RJF Credit Facility — — 300

Repayment of borrowings on the RJF Credit Facility — — ( 300 )

Net cash provided by/(used in) financing activities ( 400 ) 79 ( 904 )

Net increase/(decrease) in cash and cash equivalents 449 ( 41 ) ( 121 )

Cash, cash equivalents, and cash segregated pursuant to regulations at beginning of year 596 717 568

Cash, cash equivalents, and cash segregated pursuant to regulations at end of year $ 555 $ 596 $ 717

Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at beginning of year 555 596 717

Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of year $ 1,004 $ 555 $ 596

Cash and cash equivalents $ 527 $ 478 $ 540

Cash segregated pursuant to regulations 77 56 22

Total cash, cash equivalents, and cash segregated pursuant to regulations at end of year $ 555 $ 596 $ 717

Cash and cash equivalents segregated for regulatory purposes and restricted cash 477 77 56

Total cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of year $ 1,004 $ 555 $ 596

Supplemental disclosures of cash flow information:

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AND SUBSIDIARIES

SUPPLEMENTARY DATA:

SELECTED QUARTERLY FINANCIAL DATA

Fiscal Year 2020

in millions, except per share amounts 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Net revenues $ 2,009 $ 2,068 $ 1,834 $ 2,079

Non-interest expenses $ 1,650 $ 1,829 $ 1,636 $ 1,823

Pre-tax income

$ 359 $ 239 $ 198 $ 256

Net income $ 268 $ 169 $ 172 $ 209

Earnings per common share - basic $ 1.93 $ 1.22 $ 1.25 $ 1.53

Earnings per common share - diluted $ 1.89 $ 1.20 $ 1.23 $ 1.50

Dividends per common share - declared $ 0.37 $ 0.37 $ 0.37 $ 0.37

Fiscal Year 2019

in millions, except per share amounts 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Net revenues $ 1,931 $ 1,859 $ 1,927 $ 2,023

Non-interest expenses $ 1,599 $ 1,512 $ 1,585 $ 1,669

Pre-tax income

$ 332 $ 347 $ 342 $ 354

Net income $ 249 $ 261 $ 259 $ 265

Earnings per common share - basic $ 1.73 $ 1.85 $ 1.84 $ 1.90

Earnings per common share - diluted $ 1.69 $ 1.81 $ 1.80 $ 1.86

Dividends per common share - declared $ 0.34 $ 0.34 $ 0.34 $ 0.34

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data