What changed in this filing

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Item 1. Financial Statements

2022-05-09 compared with 2022-02-08 · 465 added, 241 removed, 1319 unchanged (35% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

$ in millions, except per share amounts December 31, 2021 September 30, 2021

$ in millions, except per share amounts March 31, 2022 September 30, 2021

Cash and cash equivalents $ 5,715 $ 7,201

35 unchanged sentences

$ .01 par value;

350,000,000 shares authorized;

239,160,005 and 239,062,254 shares issued as of December 31, 2021 and September 30, 2021, respectively, and 207,465,632 and 205,738,821 shares outstanding as of December 31, 2021 and September 30, 2021, respectively

650,000,000 shares authorized, 239,295,583 shares issued, and 207,897,379 shares outstanding as of March 31, 2022;

350,000,000 shares authorized, 239,062,254 shares issued, and 205,738,821 shares outstanding as of September 30, 2021

Additional paid-in capital 2,093 2,088

1 unchanged sentence

Treasury stock, at cost;

31,694,373 and 33,323,433 common shares as of December 31, 2021 and September 30, 2021, respectively

31,398,204 and 33,323,433 common shares as of March 31, 2022 and September 30, 2021, respectively

( 1,360 ) ( 1,437 )

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

in millions, except per share amounts 2022 2021 2022 2021

6 unchanged sentences

Investment banking

235 242 660 503

Interest income

242 200 467 403

Total revenues

2,711 2,409 5,529 4,669

Interest expense

( 38 ) ( 37 ) ( 75 ) ( 75 )

2,673 2,372 5,454 4,594

Non-interest expenses:

Compensation, commissions and benefits

1,852 1,648 3,736 3,148

Non-compensation expenses:

Communications and information processing

127 107 239 206

Occupancy and equipment

62 57 121 114

Business development

3 unchanged sentences

Acquisition-related expenses 11 — 17 2

71 69 145 139

Total non-compensation expenses 388 277 727 600

1 unchanged sentence

Pre-tax income

433 447 991 846

Provision for income taxes

110 92 222 179

$ 323 $ 355 $ 769 $ 667

Earnings per common share – basic

3 unchanged sentences

Weighted-average common shares outstanding – basic

207.7 206.7 207.0 206.0

Weighted-average common and common equivalent shares outstanding – diluted

213.0 211.8 212.6 210.6

$ 323 $ 355 $ 769 $ 667

Other comprehensive income/(loss), net of tax:

3 unchanged sentences

Cash flow hedges

Total other comprehensive income/(loss), net of tax ( 46 ) 6

Total other comprehensive loss, net of tax ( 302 ) ( 55 ) ( 348 ) ( 49 )

Total comprehensive income $ 21 $ 300 $ 421 $ 618

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions, except per share amounts 2022 2021 2022 2021

1 unchanged sentence

Balance beginning of period

$ 2 $ 2 $ 2 $ 2

Share issuances

2 unchanged sentences

Balance beginning of period

1,996 2,088 2,007

Employee stock purchases

Vesting of restricted stock units and exercise of stock options, net of forfeitures ( 105 )

Restricted stock unit and stock option expense 64

Distributions due to vesting of restricted stock units and exercise of stock options, net of forfeitures ( 17 )

( 7 ) ( 122 ) ( 66 )

Share-based compensation amortization 41

Balance end of period

2,093 2,028 2,093 2,028

Retained earnings:

Balance beginning of period

6,702 7,633 6,484

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

3 unchanged sentences

Balance end of period

8,256 7,004 8,256 7,004

Treasury stock:

3 unchanged sentences

— ( 61 ) ( 10 ) ( 79 )

Vesting of restricted stock units and exercise of stock options, net of forfeitures 74 54

Reissuances due to vesting of restricted stock units and exercise of stock options 13 11 87 65

Balance end of period

2 unchanged sentences

Balance beginning of period

( 87 ) 17 ( 41 ) 11

Other comprehensive income/(loss), net of tax ( 302 ) ( 55 ) ( 348 ) ( 49 )

Balance end of period

( 389 ) ( 38 ) ( 389 ) ( 38 )

Total equity attributable to Raymond James Financial, Inc.

2 unchanged sentences

Balance beginning of period

Net income attributable to noncontrolling interests 2 13

Other ( 8 ) —

$ 52 $ 75 $ 58 $ 62

Net income/(loss) attributable to noncontrolling interests ( 2 ) ( 1 ) — 12

Deconsolidations and sales ( 43 ) ( 29 ) ( 51 ) ( 29 )

Balance end of period

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended December 31,

Six months ended March 31,

$ in millions 2022 2021

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by/(used in) operating activities:

Depreciation and amortization 69 64

Deferred income taxes 14 18

Deferred income taxes, net 12 27

Premium and discount amortization on available-for-sale securities and net (gain)/loss on other investments 24 14

1 unchanged sentence

Share-based compensation expense 109 74

Unrealized gain on company-owned life insurance policies, net of expenses ( 38 ) ( 83 )

Other ( 1 ) 22

Unrealized (gain)/loss on company-owned life insurance policies, net of expenses 19 ( 117 )

Net change in:

18 unchanged sentences

Proceeds from sales of available-for-sale securities

Business acquisitions, net of cash acquired — ( 218 )

Cash and cash equivalents acquired in business acquisitions, including those segregated for regulatory purposes, net of cash paid for acquisitions 1,671 ( 245 )

Additions to property and equipment

1 unchanged sentence

Investment in note receivable ( 125 ) —

Purchases of other investments, net ( 80 ) ( 4 )

Other investing activities, net ( 71 ) ( 7 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended December 31,

Six months ended March 31,

$ in millions 2022 2021

4 unchanged sentences

Exercise of stock options and employee stock purchases 32 32

Proceeds from Federal Home Loan Bank advances 850 —

Repayments of Federal Home Loan Bank advances and other borrowed funds ( 852 ) ( 28 )

18 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

March 31, 2022

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

11 unchanged sentences

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

During our fiscal fourth quarter of 2021, our Board approved a three-for-two stock split, effected in the form of a 50 % stock dividend, paid on September 21, 2021.

During our fiscal fourth quarter of 2021, our Board of Directors approved a three-for-two stock split, effected in the form of a 50 % stock dividend and paid on September 21, 2021.

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

During our fiscal second quarter of 2022, we amended our Restated Articles of Incorporation, as filed with the Secretary of State of Florida on November 25, 2008, to increase the number of authorized shares of capital stock from 360 million shares to 660 million shares, consisting of 650 million shares of common stock, par value of $ 0.01 per share, and 10 million shares of preferred stock, par value of $ 0.10 per share.

The Amended and Restated Articles of Incorporation, which were filed with the Secretary of State of Florida on February 28, 2022, were approved by our Board of Directors and our shareholders on December 1, 2021 and February 24, 2022, respectively.

Accounting estimates and assumptions

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

NOTE 2 – UPDATE OF SIGNIFICANT ACCOUNTING POLICIES

A summary of our significant accounting policies is included in Note 2 of our 2021 Form 10-K.

There have been no significant changes in our significant accounting policies since September 30, 2021.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 2 – UPDATE OF SIGNIFICANT ACCOUNTING POLICIES

A summary of our significant accounting policies is included in Note 2 of our 2021 Form 10-K.

There have been no significant changes in our significant accounting policies since September 30, 2021.

NOTE 3 – ACQUISITIONS

1 unchanged sentence

Charles Stanley

On January 21, 2022, we completed our acquisition of all of the outstanding share capital of United Kingdom (“U.K.”)-based Charles Stanley Group PLC (“Charles Stanley”) at a price of £ 5.15 per share, or £ 274 million ($ 372 million as of January 21, 2022).

As of December 31, 2021, we had segregated $ 385 million in cash to fund the acquisition on the closing date, which was included in “Assets segregated for regulatory purposes and restricted cash” on our Condensed Consolidated Statements of Financial Condition.

On January 21, 2022, we completed our acquisition of all of the outstanding share capital of United Kingdom (“U.K.”)-based Charles Stanley Group PLC (“Charles Stanley”) at a price of £ 5.15 per Charles Stanley share outstanding, or £ 277 million ($ 376 million as of January 21, 2022).

The acquisition enables us to accelerate our financial planning, investment advisory and securities transaction services growth in the U.K.

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

Charles Stanley will be integrated into our PCG segment and its results of operations will be included in our results prospectively from the closing date of January 21, 2022.

Charles Stanley has been integrated into our PCG segment and its results of operations have been included in our results prospectively from the closing date of January 21, 2022.

Upon closing, the Charles Stanley acquisition resulted in the addition of £ 121 million of goodwill and £ 63 million of identifiable intangible assets, or $ 164 million and $ 85 million, respectively, as of January 21, 2022.

The goodwill associated with this acquisition primarily represents synergies from combining Charles Stanley and our existing businesses.

The identifiable intangible assets primarily relate to client relationships and a trade name and have a weighted-average useful life of 12 years.

In the event that new information regarding facts and circumstances which existed at the acquisition date becomes available, we may have adjustments to the initially measured goodwill balance.

On the closing date, the Charles Stanley acquisition also resulted in the addition of $ 2.0 billion of cash and cash equivalents, of which $ 1.9 billion was segregated for regulatory purposes and was offset by corresponding brokerage client payables.

TriState Capital

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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 Stock”) pursuant to which the Series C Convertible Preferred Stock 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 (“Series A Preferred Stock”) and Series B Non-Cumulative Perpetual Preferred Stock (“Series B 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 later in fiscal 2022.

As of April 30, 2022, we had received approval to complete the transaction from the Board of Governors of the Federal Reserve System, the Pennsylvania Department of Banking and Securities, and the Financial Industry Regulatory Authority (“FINRA”), and TriState Capital received approval to complete the transaction from its shareholders.

Subject to additional applicable closing conditions, we currently expect the transaction to close in our fiscal third quarter of 2022.

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

1 unchanged sentence

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

On December 15, 2021, we loaned TriState Capital $ 125 million under an unsecured fixed-to-floating rate note (the “Note”).

3 unchanged sentences

On and after December 15, 2022, the Note is redeemable on any interest payment date at 100 % of the principal amount thereof, plus accrued and unpaid interest to the redemption date.

As of December 31, 2021, the outstanding Note balance of $ 125 million and the related accrued interest was included in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.

As of March 31, 2022, the outstanding Note balance of $ 125 million and the related accrued interest were included in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.

SumRidge Partners

On March 28, 2022, we announced we had reached an agreement to acquire SumRidge Partners, LLC (“SumRidge Partners”), a technology-driven fixed income market maker specializing in investment-grade and high-yield corporate bonds, municipal bonds, and institutional preferred securities.

The transaction, which is subject to certain regulatory and other closing conditions, is currently expected to close in our fiscal fourth quarter of 2022.

The acquisition of SumRidge Partners will add an institutional market-making operation, as well as additional trading technologies and risk management tools to our existing fixed income operations.

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

SumRidge Partners will operate within our Capital Markets segment upon completion of the acquisition.

Acquisition-related expenses

Certain acquisition and integration costs associated with these acquisitions and acquisitions completed in our prior fiscal year were included in “Acquisition-related expenses” on our Condensed Consolidated Statements of Income and Comprehensive Income.

Such costs primarily included legal and other professional fees and amortization expense related to identifiable intangible assets with short useful lives associated with our fiscal 2021 acquisitions of Financo LLC (“Financo”) and Cebile Capital (“Cebile”).

Certain acquisition and integration costs associated with the aforementioned acquisitions, as well as acquisitions completed in our prior fiscal year were included in “Acquisition-related expenses” on our Condensed Consolidated Statements of Income and Comprehensive Income.

Such costs primarily included legal and other professional fees, amortization expense related to those identifiable intangible assets with short useful lives associated with our fiscal 2021 acquisitions of Financo LLC (“Financo”) and Cebile Capital (“Cebile”), and other costs incurred to effect our business combinations.

The following table details our acquisition-related expenses.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions 2022 2021 2022 2021

Acquisition-related expenses:

Legal fees $ 2 $ 1

Legal and other professional fees $ 5 $ — $ 7 $ 2

Identifiable intangible asset amortization — — 4 —

Other professional fees — 1

Other 6 — 6 —

Total Acquisition-related expenses $ 11 $ — $ 17 $ 2

9 unchanged sentences

$ in millions Level 1 Level 2 Level 3 Netting

adjustments Balance as of December 31, 2021

adjustments Balance as of March 31, 2022

Assets at fair value on a recurring basis:

17 unchanged sentences

Interest rate - other 61 108 — ( 110 ) 59

Other — — 1 — 1

Total derivative assets 61 232 — ( 110 ) 183

10 unchanged sentences

Trading liabilities:

Municipal and provincial obligations $ 1 $ — $ — $ — $ 1

Corporate obligations — 3 — — 3

2 unchanged sentences

Equity securities 15 — — — 15

Other — — 1 — 1

Total trading liabilities 182 3 1 — 186

61 unchanged sentences

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.

These assets do not include U.S.

Treasuries with maturities of less than 3 months as of our date of purchase with a fair value of $ 650 million at March 31, 2022 and $ 3.55 billion at September 30, 2021 which were considered cash equivalents.

These assets are classified as Level 1.

(2) Our available-for-sale securities primarily consist of agency MBS and agency CMOs.

See Note 5 for further information.

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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 on our Condensed Consolidated Statements of Income and Comprehensive Income.

Three months ended December 31, 2021

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

Three months ended March 31, 2022

Level 3 instruments at fair value

Financial assets Financial liabilities

Trading assets Derivative assets Other investments Derivative liabilities

Trading assets Derivative assets Other investments Trading liabilities

$ in millions Other Other Private equity investments All other Other

1 unchanged sentence

$ 2 $ 1 $ 75 $ 23 $ —

Total gains included in earnings 2 1 — — 1

Total gains/(losses) included in earnings — ( 1 ) — — ( 1 )

Purchases and contributions

Sales, distributions, and deconsolidations ( 18 ) — ( 40 ) — —

Into Level 3 — — — — —

Out of Level 3 — — ( 12 ) — —

Fair value end of period

$ 13 $ — $ 23 $ 30 $ ( 1 )

Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period

$ ( 1 ) $ ( 1 ) $ — $ — $ ( 1 )

Six months ended March 31, 2022

Level 3 instruments at fair value

Financial assets Financial liabilities

Trading assets Other investments Trading liabilities Derivative liabilities

$ in millions Other Private equity investments All other Other Other

Fair value beginning of period

$ 14 $ 75 $ 23 $ — $ ( 1 )

Total gains/(losses) included in earnings

2 — — ( 1 ) 1

Purchases and contributions

Sales, distributions, and deconsolidations ( 57 ) ( 40 ) — — —

Into Level 3 — — — — —

Out of Level 3 — ( 12 ) — — —

Fair value end of period

$ 13 $ 23 $ 30 $ ( 1 ) $ —

Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period

$ ( 1 ) $ — $ — $ ( 1 ) $ —

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Three months ended March 31, 2021

Level 3 instruments at fair value

Financial assets Financial liabilities

Trading assets Other investments Trading liabilities Derivative liabilities

$ in millions Other Private equity investments All other Other Other

Fair value beginning of period

$ 3 $ 52 $ 22 $ — $ ( 1 )

Total gains/(losses) included in earnings

( 2 ) — 1 ( 1 ) ( 3 )

Purchases and contributions

Sales and distributions

6 unchanged sentences

$ — $ — $ 1 $ ( 1 ) $ ( 3 )

Three months ended December 31, 2020

Six months ended March 31, 2021

Level 3 instruments at fair value

Financial assets Financial liabilities

Trading assets Other investments Derivative liabilities

$ in millions Other Private equity investments All other Other

Trading assets Other investments Trading liabilities Derivative liabilities

$ in millions Other Private equity investments All other Other Other

Fair value beginning of period

1 unchanged sentence

Total gains/(losses) included in earnings

— 15 1 ( 1 ) 1

Purchases and contributions

Sales and distributions

( 23 ) — — — —

Into Level 3 — — — — —

4 unchanged sentences

$ — $ 15 $ 1 $ ( 1 ) $ 1

As of December 31, 2021, 28 % of our assets and less than 1 % of our liabilities were measured at fair value on a recurring basis.

As of March 31, 2022, 28 % of our assets and less than 1 % of our liabilities were measured at fair value on a recurring basis.

In comparison, as of September 30, 2021, 19 % of our assets and less than 1 % 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 primarily due to a significant increase in assets segregated for regulatory purposes, driven by a significant increase in client cash balances.

As of both December 31, 2021 and September 30, 2021, Level 3 assets represented less than 1 % of our assets measured at fair value on a recurring basis.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Quantitative information about level 3 fair value measurements

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.

Weighted averages are calculated by weighting each input by the relative fair value of the related financial instrument.

Certain investments are valued initially at transaction price and updated as other investment-specific events take place which indicate that a change in the carrying values of these investments is appropriate.

Other investment-specific events include such events as our periodic review, significant transactions occur or new developments become known.

Recurring measurements

$ in millions

Fair value at December 31, 2021

Valuation technique(s) Unobservable input Range

(weighted-average)

Other investments - private equity investments (not measured at NAV)

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

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

Terminal year 2023 - 2035 (2024)

Fair value at September 30, 2021

Other investments - private equity investments (not measured at NAV)

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

Terminal EBITDA multiple 10.0 x

Terminal year 2023 - 2035 (2024)

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.

Increases in the discount rate would have resulted in a lower fair value measurement.

Increases in the terminal EBITDA multiple would have resulted in a higher fair value measurement.

Increases in the terminal year are dependent upon each investment’s strategy, but generally result in a lower fair value measurement.

As of both March 31, 2022 and September 30, 2021, Level 3 assets represented less than 1 % of our assets measured at fair value on a recurring basis.

Investments in private equity measured at net asset value per share

1 unchanged sentence

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.

Our private equity portfolio as of December 31, 2021 included various direct investments, as well as investments in third-party private equity funds.

The portfolio is primarily invested in a broad range of strategies including leveraged buyouts, growth capital, distressed capital, venture capital and mezzanine capital.

Our private equity portfolio as of March 31, 2022 included investments in third-party funds, as well as various direct investments.

Our third-party fund portfolio is primarily invested in a broad range of strategies including leveraged buyouts, growth capital, distressed capital, venture capital and mezzanine capital.

Due to the closed-end nature of certain of our fund investments, such investments cannot be redeemed directly with the funds.

5 unchanged sentences

$ in millions Recorded value Unfunded commitment

December 31, 2021

March 31, 2022

Private equity investments measured at NAV $ 95 $ 27

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Total private equity investments (1)

Of the total private equity investments, the portions we owned were $ 115 million and $ 120 million as of December 31, 2021 and September 30, 2021, respectively.

The portions of the private equity investments we did not own were $ 42 million and $ 49 million as of December 31, 2021 and September 30, 2021, respectively, and were included as a component of noncontrolling interests on our Condensed Consolidated Statements of Financial Condition.

(1) Of the total private equity investments, the portion we owned was $ 120 million, while the portion that we did not own was $ 49 million and was included as a component of noncontrolling interests on our Condensed Consolidated Statements of Financial Condition.

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

As a result of such holding limitations, we exited or restructured certain of our private equity investments during the first half of our fiscal 2022, which resulted in a decline in private equity investments not measured at NAV compared to September 30, 2021 and a decline in noncontrolling interests on our Condensed Consolidated Statements of Financial Condition related to the portion of such investments we did not own.

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 Board of Governors of the Federal Reserve System (“the Fed”) to continue to hold the majority of our covered fund investments until July 2022.

We have received approval from the Board of Governors of the Federal Reserve System (“the Fed”) to continue to hold the majority of our covered fund investments until July 2022, totaling $ 4 million as of March 31, 2022.

As a result of our holding period limitations, we have continued to exit or restructure certain of our private equity investments and will continue to do so during the remainder of fiscal 2022 in accordance with our regulatory deadlines.

5 unchanged sentences

(weighted-average)

December 31, 2021

March 31, 2022

Residential mortgage loans $ 3 $ 10 $ 13 Collateral or discounted cash flow (1)

17 unchanged sentences

Many, but not all, of the financial instruments we hold were recorded at fair value on the Condensed 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 on the Condensed Consolidated Statements of Financial Condition at December 31, 2021 and September 30, 2021.

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

1 unchanged sentence

$ in millions Level 2 Level 3 Total estimated fair value Carrying amount

December 31, 2021

March 31, 2022

Financial assets:

18 unchanged sentences

unrealized losses Fair value

December 31, 2021

March 31, 2022

Agency residential MBS $ 5,629 $ 4 $ ( 276 ) $ 5,357

$ 5,537 $ 32 $ ( 49 ) $ 5,520

Agency commercial MBS 1,414 — ( 114 ) 1,300

1,324 4 ( 37 ) 1,291

1,750 4 ( 33 ) 1,721

Other securities

Agency CMOs 1,757 — ( 119 ) 1,638

Treasuries 214 — ( 1 ) 213

Other agency obligations 313 — ( 6 ) 307

Total available-for-sale securities $ 9,327 $ 4 $ ( 516 ) $ 8,815

$ 8,626 $ 40 $ ( 119 ) $ 8,547

September 30, 2021

Agency residential MBS $ 5,168 $ 46 $ ( 25 ) $ 5,189

$ 5,168 $ 46 $ ( 25 ) $ 5,189

Agency commercial MBS 1,285 7 ( 28 ) 1,264

1,285 7 ( 28 ) 1,264

1,854 9 ( 16 ) 1,847

Other securities

Agency CMOs 1,854 9 ( 16 ) 1,847

Treasuries 15 — — 15

Total available-for-sale securities $ 8,322 $ 62 $ ( 69 ) $ 8,315

$ 8,322 $ 62 $ ( 69 ) $ 8,315

The amortized costs and fair values in the preceding table exclude $ 14 million of accrued interest on available-for-sale securities as of both December 31, 2021 and September 30, 2021, which was included in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.

The amortized costs and fair values in the preceding table exclude $ 15 million and $ 14 million of accrued interest on available-for-sale securities as of March 31, 2022 and September 30, 2021, respectively, which was included in “Other receivables, net” on our Condensed 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 a result, as of December 31, 2021, the weighted-average life of our available-for-sale securities portfolio was approximately four years .

December 31, 2021

As a result, as of March 31, 2022, the weighted-average life of our available-for-sale securities portfolio was approximately four years .

March 31, 2022

$ in millions Within one year After one but

15 unchanged sentences

$ — $ 7 $ 38 $ 1,593 $ 1,638

Other securities

Amortized cost

2 unchanged sentences

$ — $ 210 $ 3 $ — $ 213

Other agency obligations

Amortized cost

$ — $ 313 $ — $ — $ 313

Carrying value

$ — $ 307 $ — $ — $ 307

Total available-for-sale securities

13 unchanged sentences

fair value Unrealized

December 31, 2021

March 31, 2022

Agency residential MBS

3 unchanged sentences

1,172 ( 76 ) 443 ( 43 ) 1,615 ( 119 )

Other securities

Treasuries 168 ( 1 ) — — 168 ( 1 )

Other agency obligations 307 ( 6 ) — — 307 ( 6 )

$ 6,190 $ ( 312 ) $ 2,195 $ ( 204 ) $ 8,385 $ ( 516 )

5 unchanged sentences

918 ( 12 ) 231 ( 4 ) 1,149 ( 16 )

Other securities

Treasuries 3 — — — 3 —

$ 4,721 $ ( 50 ) $ 602 $ ( 19 ) $ 5,323 $ ( 69 )

1 unchanged sentence

government or its agencies.

At December 31, 2021, of the 392 available-for-sale securities in an unrealized loss position, 315 were in a continuous unrealized loss position for less than 12 months and 77 securities were in a continuous unrealized loss position for greater than 12 months.

At March 31, 2022, of the 650 available-for-sale securities in an unrealized loss position, 517 were in a continuous unrealized loss position for less than 12 months and 133 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 December 31, 2021, based on our assessment of this portfolio, we did not recognize an allowance for credit losses on our available-for-sale securities.

At December 31, 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 $ 5.47 billion and $ 2.93 billion, respectively, which also approximated the fair values of the securities.

At March 31, 2022, based on our assessment of this portfolio, we did not recognize an allowance for credit losses on our available-for-sale securities.

At March 31, 2022, debt securities we held in excess of ten percent of our equity included those issued by the Federal National

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements (Unaudited)

During the three months ended December 31, 2021, there were no sales of available-for-sale securities.

During the three months ended December 31, 2020, we received proceeds of $ 519 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 Condensed Consolidated Statements of Income and Comprehensive Income.

Home Mortgage Association and Federal Home Loan Mortgage Corporation with amortized costs of $ 5.54 billion and $ 3.07 billion, respectively, and fair values of $ 5.23 billion and $ 2.88 billion, respectively.

There were no sales of available-for-sale securities during the three and six months ended March 31, 2022 and the three months ended March 31, 2021.

During the six months ended March 31, 2021, we received proceeds of $ 519 million, resulting in insignificant gains, from sales of agency MBS and agency CMO available-for-sale securities.

The gains that resulted from the sales were included in “Other” revenues on our Condensed Consolidated Statements of Income and Comprehensive Income.

NOTE 6 – DERIVATIVE ASSETS AND DERIVATIVE LIABILITIES

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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 Condensed 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.

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

$ in millions Derivative assets Derivative liabilities Notional amount Derivative assets Derivative liabilities Notional amount

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Derivatives designated as hedging instruments

Interest rate — — 850 — — 850

Interest rate - other 1 — 850 — — 850

Foreign exchange

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See Note 17 for additional information.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions 2022 2021 2022 2021

2 unchanged sentences

Total gains/(losses) in AOCI, net of taxes $ 20 $ 9 $ 28 $ ( 15 )

There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for each of the three months ended December 31, 2021 and 2020.

There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for each of the three and six months ended March 31, 2022 and 2021.

We expect to reclassify $ 1 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 6 years.

The maximum length of time over which forecasted transactions are or will be hedged is six years .

The following table details the gains/(losses) on derivatives not designated as hedging instruments recognized on the Condensed Consolidated Statements of Income and Comprehensive Income.

$ in millions Three months ended December 31,

$ in millions Three months ended March 31, Six months ended March 31,

Location of gain/(loss) 2022 2021 2022 2021

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Risks associated with our derivatives and related risk mitigation

We are exposed to credit losses in the event of nonperformance by the counterparties to derivatives that are not cleared through a clearing organization.

We are exposed to credit losses primarily 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 continue to monitor their credit standings on an ongoing basis.

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 December 31, 2021 and September 30, 2021.

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 March 31, 2022 and September 30, 2021.

We are not exposed to market risk on these derivatives due to the pass-through transaction structure described in Note 2 of our 2021 Form 10-K.

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If our debt were to fall below investment-grade, the counterparties to the derivative instruments could terminate the derivative 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 $ 14 million as of December 31, 2021 and was insignificant as of September 30, 2021.

The aggregate fair value of all derivative instruments with such credit-risk-related contingent features that were in a liability position was $ 11 million as of March 31, 2022 and was insignificant as of September 30, 2021.

RAYMOND JAMES FINANCIAL, INC.

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$ in millions Reverse repurchase agreements Securities borrowed Total Repurchase agreements Securities loaned Total

December 31, 2021

March 31, 2022

Gross amounts of recognized assets/liabilities $ 221 $ 350 $ 571 $ 140 $ 285 $ 425

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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 Condensed Consolidated Statements of Financial Condition.

Collateral received and pledged

We receive cash and securities as collateral, primarily in connection with reverse repurchase agreements, securities borrowing agreements, derivative transactions and client margin loans.

The collateral we receive reduces our credit exposure to individual counterparties.

In many cases, we are permitted to deliver or repledge financial instruments we have received as collateral to satisfy our collateral requirements under our repurchase agreements, securities lending agreements or other secured borrowings, to satisfy deposit requirements with clearing organizations, or to otherwise meet either our or our clients’ settlement requirements.

RAYMOND JAMES FINANCIAL, INC.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents financial instruments at fair value that we received as collateral, were not included on our Condensed Consolidated Statements of Financial Condition, and that were available to be delivered or repledged, along with the balances of such instruments that were delivered or repledged, to satisfy one of our purposes previously described.

$ in millions December 31, 2021 September 30, 2021

Collateral we received that was available to be delivered or repledged $ 3,548 $ 3,429

Collateral that we delivered or repledged $ 821 $ 830

Encumbered assets

We pledge certain of our assets to collateralize either repurchase agreements or other secured borrowings, maintain lines of credit, or to satisfy our collateral or settlement requirements with counterparties or clearing organizations who may or may not have the right to deliver or repledge such instruments.

The following table presents information about our assets that have been pledged for one of the purposes previously described.

$ in millions December 31, 2021 September 30, 2021

Had the right to deliver or repledge $ 333 $ 368

Did not have the right to deliver or repledge $ 65 $ 65

Bank loans, net pledged at the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank of Atlanta $ 5,747 $ 5,716

Repurchase agreements, repurchase-to-maturity transactions and securities loaned accounted for as secured borrowings

Repurchase agreements and securities loaned accounted for as secured borrowings

The following table presents the remaining contractual maturity of repurchase agreements and securities lending transactions accounted for as secured borrowings.

$ in millions Overnight and continuous Up to 30 days 30-90 days Greater than 90 days Total

December 31, 2021

March 31, 2022

Repurchase agreements:

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Total collateralized financings $ 277 $ — $ — $ — $ 277

As of both December 31, 2021 and September 30, 2021, we did not have any “repurchase-to-maturity” agreements, which are repurchase agreements where a security is transferred under an agreement to repurchase and the maturity date of the repurchase agreement matches the maturity date of the underlying security.

Collateral received and pledged

We receive cash and securities as collateral, primarily in connection with reverse repurchase agreements, securities borrowing agreements, derivative transactions and client margin loans.

The collateral we receive reduces our credit exposure to individual counterparties.

$ in millions March 31, 2022 September 30, 2021

Collateral we received that was available to be delivered or repledged $ 3,734 $ 3,429

Collateral that we delivered or repledged $ 1,045 $ 830

Encumbered assets

The following table presents information about our assets that have been pledged for one of the purposes previously described.

$ in millions March 31, 2022 September 30, 2021

Had the right to deliver or repledge $ 275 $ 368

Did not have the right to deliver or repledge $ 89 $ 65

Bank loans, net pledged at the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank of Atlanta (“FRB”) $ 6,033 $ 5,716

RAYMOND JAMES FINANCIAL, INC.

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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.

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

$ in millions Balance % Balance %

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Accrued interest receivable on bank loans $ 55 $ 48

The allowance for credit losses was 1.18 % and 1.27 % of the held for investment loan portfolio as of December 31, 2021 and September 30, 2021, respectively.

The allowance for credit losses was 1.17 % and 1.27 % of the held for investment loan portfolio as of March 31, 2022 and September 30, 2021, respectively.

Accrued interest receivables presented in the preceding table are reported in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.

At December 31, 2021, the FHLB had a blanket lien on Raymond James Bank’s residential mortgage loan portfolio as security for the repayment of certain borrowings.

At March 31, 2022, 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 of our 2021 Form 10-K for more information regarding borrowings from the FHLB.

Held for sale loans

Raymond James Bank originated or purchased $ 968 million and $ 582 million of loans held for sale during the three months ended December 31, 2021 and 2020, respectively.

Raymond James Bank originated or purchased $ 999 million and $ 1.97 billion of loans held for sale during the three and six months ended March 31, 2022, respectively, and $ 528 million and $ 1.11 billion during the three and six months ended March 31, 2021, respectively.

The majority of these loans were purchases of the guaranteed portions of Small Business Administration (“SBA”) loans intended for resale in the secondary market as individual SBA loans or as securitized pools of SBA loans.

Proceeds from the sales of these held for sale loans amounted to $ 338 million and $ 188 million during the three months ended December 31, 2021 and 2020, respectively.

Net gains resulting from such sales were insignificant for each of the three months ended December 31, 2021 and 2020.

Proceeds from the sales of these held for sale loans amounted to $ 339 million and $ 677 million during the three and six months ended March 31, 2022, respectively, and $ 207 million and $ 395 million during the three and six months ended March 31, 2021, respectively.

Net gains resulting from such sales were insignificant in all periods during the three and six months ended March 31, 2022 and 2021.

RAYMOND JAMES FINANCIAL, INC.

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$ in millions C&I loans Residential mortgage loans Total

Three months ended December 31, 2021

Three months ended March 31, 2022

Purchases $ 441 $ 223 $ 664

Sales $ 61 $ — $ 61

Three months ended December 31, 2020

Six months ended March 31, 2022

Purchases $ 780 $ 407 $ 1,187

Sales $ 112 $ — $ 112

Three months ended March 31, 2021

Purchases $ 538 $ 114 $ 652

Sales $ 95 $ — $ 95

Six months ended March 31, 2021

Purchases $ 660 $ 160 $ 820

Sales $ 100 $ — $ 100

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.

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$ in millions 30-89 days and accruing 90 days or more and accruing Total past due and accruing Nonaccrual with allowance Nonaccrual with no allowance Current and accruing Total loans held for investment

December 31, 2021

March 31, 2022

C&I loans $ — $ — $ — $ 57 $ — $ 9,010 $ 9,067

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Total loans held for investment $ 2 $ — $ 2 $ 41 $ 33 $ 25,093 $ 25,169

The preceding table includes $ 59 million and $ 61 million at December 31, 2021 and September 30, 2021, respectively, of nonaccrual loans which were current pursuant to their contractual terms.

The table also includes troubled debt restructurings (“TDRs”) of $ 12 million for CRE loans and $ 13 million for residential first mortgage loans at both December 31, 2021 and September 30, 2021.

Other real estate owned, included in “Other assets” on our Condensed Consolidated Statements of Financial Condition, was insignificant at both December 31, 2021 and September 30, 2021.

The preceding table includes $ 92 million and $ 61 million at March 31, 2022 and September 30, 2021, respectively, of nonaccrual loans which were current pursuant to their contractual terms.

The table also includes troubled debt restructurings (“TDRs”) of $ 12 million for both CRE loans and residential first mortgage loans at March 31, 2022, and $ 12 million and $ 13 million, respectively, at September 30, 2021.

Other real estate owned, included in “Other assets” on our Condensed Consolidated Statements of Financial Condition, was insignificant at both March 31, 2022 and September 30, 2021.

RAYMOND JAMES FINANCIAL, INC.

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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.

We had $ 20 million of collateral-dependent CRE loans at both December 31, 2021 and September 30, 2021, which were fully collateralized by retail and industrial real estate.

We had $ 7 million and $ 5 million of collateral-dependent residential loans at December 31, 2021 and September 30, 2021, respectively, 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 December 31, 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 at both December 31, 2021 and September 30, 2021.

At March 31, 2022, we had $ 31 million of collateral-dependent CRE loans which were fully collateralized by retail, industrial, and healthcare real estate.

At September 30, 2021, we had $ 20 million of collateral-dependent CRE loans which were fully collateralized by retail and industrial real estate.

We had $ 7 million and $ 5 million of collateral-dependent residential loans at March 31, 2022 and September 30, 2021, respectively, which were fully collateralized by single family homes.

The recorded investment in mortgage loans secured by one-to-four family residential properties for which formal foreclosure proceedings were in process was $ 6 million and $ 4 million at March 31, 2022 and September 30, 2021, respectively.

Credit quality indicators

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The following tables present our held for investment bank loan portfolio by credit quality indicator.

December 31, 2021

Loans classified as special mention, substandard or doubtful are all considered to be “criticized” loans.

March 31, 2022

Loans by origination fiscal year

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Total SBL and other $ 3 $ 45 $ 12 $ — $ — $ — $ 6,046 $ 6,106

Loans classified as special mention, substandard or doubtful are all considered to be “criticized” loans.

We also monitor the credit quality of the residential mortgage loan portfolio utilizing Fair Isaac Corporation (“FICO”) scores and loan-to-value (“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.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

We also monitor the credit quality of the residential mortgage loan portfolio utilizing Fair Isaac Corporation (“FICO”) scores and loan-to-value (“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.

The following table presents the held for investment residential mortgage loan portfolio by FICO score and by LTV ratio at origination.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Below 600 $ 67 $ 67

7 unchanged sentences

Total $ 5,945 $ 5,318

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Allowance for credit losses

1 unchanged sentence

$ in millions C&I loans CRE loans REIT loans Tax-exempt loans Residential mortgage loans SBL and other Total

Three months ended December 31, 2021

Three months ended March 31, 2022

Balance at beginning of period

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$ 195 $ 71 $ 25 $ 2 $ 32 $ 3 $ 328

Three months ended December 31, 2020

Six months ended March 31, 2022

Balance at beginning of period

$ 191 $ 66 $ 22 $ 2 $ 35 $ 4 $ 320

Impact of current expected credit loss (“CECL”) adoption 19 ( 11 ) ( 9 ) ( 12 ) 24 ( 2 ) 9

Provision/(benefit) for credit losses 7 5 3 — ( 4 ) ( 1 ) 10

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Net (charge-offs)/recoveries

( 3 ) — — — 1 — ( 2 )

Foreign exchange translation adjustment

2 unchanged sentences

$ 195 $ 71 $ 25 $ 2 $ 32 $ 3 $ 328

The allowance for credit losses on held for investment bank loans decreased $ 12 million to $ 308 million during three months ended December 31, 2021, largely attributable to improvement in credit quality in the C&I bank loan portfolio and continued improvement in macroeconomic inputs to our CECL model, which positively impacted most loan portfolios, 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 Condensed Consolidated Statements of Financial Condition, was $ 12 million and $ 13 million at December 31, 2021 and September 30, 2021, respectively.

Three months ended March 31, 2021

Balance at beginning of period

$ 198 $ 112 $ 30 $ 2 $ 33 $ 3 $ 378

Provision/(benefit) for credit losses 7 ( 39 ) 6 — ( 7 ) 1 ( 32 )

Net (charge-offs)/recoveries:

Charge-offs ( 2 ) — — — — — ( 2 )

Recoveries — — — — — — —

Net (charge-offs)/recoveries ( 2 ) — — — — — ( 2 )

Foreign exchange translation adjustment

— 1 — — — — 1

Balance at end of period

$ 203 $ 74 $ 36 $ 2 $ 26 $ 4 $ 345

Six months ended March 31, 2021

Balance at beginning of period

$ 200 $ 81 $ 36 $ 14 $ 18 $ 5 $ 354

Impact of CECL adoption 19 ( 11 ) ( 9 ) ( 12 ) 24 ( 2 ) 9

Provision/(benefit) for credit losses ( 15 ) 3 9 — ( 16 ) 1 ( 18 )

Net (charge-offs)/recoveries:

Charge-offs ( 2 ) — — — — — ( 2 )

Recoveries — — — — — — —

Net (charge-offs)/recoveries

( 2 ) — — — — — ( 2 )

Foreign exchange translation adjustment

1 1 — — — — 2

Balance at end of period

$ 203 $ 74 $ 36 $ 2 $ 26 $ 4 $ 345

The allowance for credit losses on held for investment bank loans increased $ 20 million and $ 8 million during the three and six months ended March 31, 2022, respectively, primarily due to loan growth.

The allowance for credit losses on unfunded lending commitments, which is included in “Other payables” on our Condensed Consolidated Statements of Financial Condition, was $ 12 million at both March 31, 2022 and December 31, 2021 and $ 13 million at September 30, 2021.

RAYMOND JAMES FINANCIAL, INC.

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The following table presents the balances for our loans to financial advisors and the related accrued interest receivable.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Currently affiliated with the firm (1)

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$ in millions Aggregate assets Aggregate liabilities

December 31, 2021

Private Equity Interests

March 31, 2022

Restricted Stock Trust Fund

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Total $ 192 $ 71

During the six months ended March 31, 2022, due to regulatory holding period limitations we exited or restructured our Private Equity Interests which were previously consolidated.

See Note 4 for further information.

RAYMOND JAMES FINANCIAL, INC.

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Intercompany balances are eliminated in consolidation and not reflected in the following table.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Cash and cash equivalents and assets segregated for regulatory purposes and restricted cash $ 6 $ 10

2 unchanged sentences

Other payables $ 27 $ 45

Other borrowings 2 —

Total liabilities

6 unchanged sentences

The aggregate assets, liabilities, and our exposure to loss from those VIEs in which we hold a variable interest, but as to which we have concluded we are not the primary beneficiary, are provided in the following table.

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

$ in millions Aggregate

8 unchanged sentences

Total $ 14,385 $ 2,646 $ 142 $ 14,869 $ 2,482 $ 163

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 11 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

Our goodwill and identifiable intangible assets result from various acquisitions.

During the six months ended March 31, 2022, we acquired Charles Stanley, which resulted in goodwill and identifiable intangible assets.

See Note 3 for additional information on this acquisition and the related goodwill and identifiable intangible assets.

See Notes 2 and 11 of our 2021 Form 10-K for additional information about our goodwill and intangible assets, including the related accounting policies.

We perform goodwill and indefinite-lived intangible asset impairment testing on an annual basis or when an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value or indicate that the asset is impaired.

We performed our latest annual impairment testing for our goodwill and indefinite-lived intangible assets as of our January 1, 2022 evaluation date, evaluating balances as of December 31, 2021.

In that testing, we performed a qualitative impairment assessment for each of our reporting units that had goodwill, as well as for our indefinite-lived intangible assets.

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, labor markets, interest rates, and housing markets.

We also consider regulatory changes, reporting unit specific 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 this annual impairment testing, and as a result of the recent market uncertainty due to the potential indirect effects of the Russian invasion of Ukraine (“the Ukraine conflict”), we performed an evaluation to determine whether the impacts resulting from the Ukraine conflict were indicators triggering additional impairment tests as of March 31, 2022.

As a result of our assessments, we concluded that the fair value of our reporting units had not more likely than not been reduced below their respective carrying values and that the negative impact of the Ukraine conflict on our fiscal second quarter of 2022 was not a triggering event to perform a quantitative test.

NOTE 12 - OTHER ASSETS

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See Note 2 of our 2021 Form 10-K for a discussion of the accounting polices related to certain of these components.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Investments in company-owned life insurance policies $ 973 $ 952

2 unchanged sentences

Prepaid expenses 147 127

Investments in FHLB and Federal Reserve Bank stock 72 72

Investments in FHLB and FRB stock 72 72

All other 207 161

7 unchanged sentences

See Note 2 and 14 of our 2021 Form 10-K for additional information related to our leases, including a discussion of our accounting policies.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

ROU assets (included in Other assets) $ 441 $ 446

Lease liabilities (included in Other payables) $ 446 $ 450

Lease liabilities as of December 31, 2021 excluded $ 34 million of minimum lease payments related to lease arrangements that were signed but not yet commenced.

These leases are estimated to commence between fiscal year 2022 and 2023 with lease terms ranging from four to 11 years.

Lease liabilities as of March 31, 2022 excluded $ 49 million of minimum lease payments related to lease arrangements that were signed but not yet commenced.

These leases are estimated to commence between dates later in fiscal year 2022 and fiscal year 2025 with lease terms ranging from one to 11 years.

Lease expense

The following table details the components of lease expense, which is included in “Occupancy and equipment” expense on our Condensed Consolidated Statements of Income and Comprehensive Income.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions 2022 2021 2022 2021

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The calculation of the weighted-average rates were based on the actual deposit balances and rates at each respective period end.

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

$ in millions Balance Weighted-average rate Balance Weighted-average rate

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Total bank deposits $ 34,685 0.06 % $ 32,495 0.07 %

Total bank deposits in the preceding table exclude affiliate deposits of $ 302 million and $ 301 million at December 31, 2021 and September 30, 2021, respectively.

As of December 31, 2021, these affiliate deposits included $ 229 million and $ 73 million held in deposit accounts at Raymond James Bank on behalf of RJF and Raymond James Trust Company of New Hampshire, respectively.

Total bank deposits in the preceding table exclude affiliate deposits of $ 409 million and $ 301 million at March 31, 2022 and September 30, 2021, respectively.

As of March 31, 2022, these affiliate deposits included $ 255 million, $ 89 million, and $ 65 million held in deposit accounts at Raymond James Bank on behalf of RJF, Raymond James Trust Company of New Hampshire, and Raymond James Capital Services, respectively.

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 Raymond James & Associates, Inc.

These balances are held in Federal Deposit Insurance Corporation (“FDIC”)-insured bank accounts through the Raymond James Bank Deposit Program (“RJBDP”).

The aggregate amount of individual time deposit account balances that exceeded the FDIC insurance limit at December 31, 2021 was approximately $ 43 million.

The aggregate amount of individual time deposit account balances that exceeded the FDIC insurance limit at March 31, 2022 was approximately $ 43 million.

RAYMOND JAMES FINANCIAL, INC.

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The following table sets forth the scheduled maturities of certificates of deposit.

December 31, 2021 September 30, 2021

March 31, 2022 September 30, 2021

$ in millions Denominations

12 unchanged sentences

Over two through three years

18 160 37 166

Over three through four years

2 unchanged sentences

Interest expense on deposits, excluding interest expense related to affiliate deposits, is summarized in the following table.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions 2022 2021 2022 2021

2 unchanged sentences

Total interest expense on deposits

$ 5 $ 6 $ 11 $ 12

NOTE 15 – INCOME TAXES

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Effective tax rate

Our effective income tax rate of 20.1 % for the three months ended December 31, 2021 was lower than the 21.7 % effective tax rate for fiscal 2021.

The decrease in the effective income tax rate was primarily due to a large tax benefit recognized during the fiscal first quarter related to share-based compensation that vested during the period, partially offset by lower valuation gains associated with our company-owned life insurance policies which are not subject to tax.

Our effective income tax rate of 22.4 % for the six months ended March 31, 2022 was higher than the 21.7 % effective tax rate for our fiscal year 2021.

The higher effective income tax rate for the six months ended March 31, 2022 primarily resulted from the negative impact of nondeductible valuation losses associated with our company-owned life insurance policies that were recognized during the current year-to-date period compared to fiscal year 2021 which had non-taxable gains, partially offset by the impact of a larger current year tax benefit related to share-based compensation that vested during the year.

Uncertain tax positions

Although management cannot predict with any degree of certainty the timing of ultimate resolution of matters under review by various taxing jurisdictions, it is reasonably possible that our uncertain tax position liability balance may decrease within the next 12 months by up to $ 13 million as a result of the expiration of statutes of limitations and the completion of tax authorities’ examinations.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 16 – COMMITMENTS, CONTINGENCIES AND GUARANTEES

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In the normal course of business, we enter into commitments for debt and equity underwritings.

As of December 31, 2021, we had no open underwriting commitments.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of March 31, 2022, we had seven 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.

Lending commitments and other credit-related financial instruments

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The following table presents Raymond James Bank’s commitments to extend credit and other credit-related off-balance sheet financial instruments outstanding.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Open-end consumer lines of credit (primarily SBL)

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Investment commitments

We had unfunded commitments to various investments, including private equity investments and certain Raymond James Bank investments, of $ 25 million as of December 31, 2021.

We had unfunded commitments to various investments, including private equity investments and certain Raymond James Bank investments, of $ 30 million as of March 31, 2022.

Other commitments

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RJAHI typically sells investments in project partnerships to LIHTC funds within 90 days of their acquisition.

Until such investments are sold to LIHTC funds, RJAHI is responsible for funding investment commitments to such partnerships.

As of December 31, 2021, RJAHI had committed approximately $ 97 million to project partnerships that had not yet been sold to LIHTC funds.

Because we expect to sell these project partnerships to LIHTC funds and the equity funding events arise over future periods, the contractual commitments are not expected to materially impact our future liquidity requirements.

RJAHI may also make short-term loans or advances to project partnerships and LIHTC funds.

Until such investments are sold to LIHTC funds, RJAHI is responsible for funding investment

RAYMOND JAMES FINANCIAL, INC.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

As a part of our fixed income public finance operations, we enter into forward commitments to purchase agency MBS.

At December 31, 2021, we had $ 140 million of principal amount of outstanding forward MBS purchase commitments, which were expected to be purchased within 90 days following commitment.

In order to hedge the market interest rate risk to which we would otherwise be exposed between the date of the commitment and the date of sale of the MBS, we enter into TBAs with investors for generic MBS at specific rates and prices to be delivered on settlement dates in the future.

We may be subject to loss if the timing of, or the actual amount of, the MBS differs significantly from the term and notional amount of the TBAs to which we entered.

These TBAs and related purchase commitments are accounted for at fair value.

As of December 31, 2021, the fair value of the TBAs and the estimated fair value of the purchase commitments were insignificant.

For information regarding our acquisition commitments associated with our recent purchase of Charles Stanley and intended acquisition of TriState Capital, see Note 3 of this Form 10-Q.

commitments to such partnerships.

As of March 31, 2022, RJAHI had committed approximately $ 189 million to project partnerships that had not yet been sold to LIHTC funds.

RJAHI may also make short-term loans or advances to project partnerships and LIHTC funds.

For information regarding our acquisition commitments associated with our announced acquisitions of TriState Capital and SumRidge Partners see Note 3 of this Form 10-Q.

For information regarding our lease commitments see Note 13 of this Form 10-Q and for information on the maturities of our lease liabilities see Note 14 of our 2021 Form 10-K.

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There are certain matters for which we are unable to estimate the upper end of the range of reasonably possible loss.

With respect to legal and regulatory matters for which management has been able to estimate a range of reasonably possible loss as of December 31, 2021, we estimated the upper end of the range of reasonably possible aggregate loss to be approximately $ 90 million in excess of the aggregate accruals for such matters.

With respect to legal and regulatory matters for which management has been able to estimate a range of reasonably possible loss as of March 31, 2022, we estimated the upper end of the range of reasonably possible aggregate loss to be approximately $ 85 million in excess of the aggregate accruals for such matters.

Refer to Note 2 of our 2021 Form 10-K for a discussion of our criteria for recognizing liabilities for contingencies.

7 unchanged sentences

net investment hedges and currency translations Available- for-sale securities Cash flow hedges Total

Three months ended December 31, 2021

Three months ended March 31, 2022

AOCI as of beginning of period $ 80 $ ( 89 ) $ ( 9 ) $ ( 60 ) $ ( 18 ) $ ( 87 )

5 unchanged sentences

AOCI as of end of period $ 71 $ ( 91 ) $ ( 20 ) $ ( 380 ) $ 11 $ ( 389 )

Three months ended December 31, 2020

Six months ended March 31, 2022

AOCI as of beginning of period $ 81 $ ( 90 ) $ ( 9 ) $ ( 5 ) $ ( 27 ) $ ( 41 )

5 unchanged sentences

AOCI as of end of period $ 71 $ ( 91 ) $ ( 20 ) $ ( 380 ) $ 11 $ ( 389 )

Reclassifications from AOCI to net income, excluding taxes, for the three months ended December 31, 2021 were recorded in “Interest expense” on the Condensed Consolidated Statements of Income and Comprehensive Income.

Reclassifications from AOCI to net income, excluding taxes, for the three months ended December 31, 2020 were primarily recorded in “Other” revenue and “Interest expense” on the Condensed Consolidated Statements of Income and Comprehensive Income.

Three months ended March 31, 2021

AOCI as of beginning of period $ 86 $ ( 93 ) $ ( 7 ) $ 72 $ ( 48 ) $ 17

OCI before reclassifications and taxes ( 13 ) 12 ( 1 ) ( 102 ) 22 ( 81 )

Amounts reclassified from AOCI, before tax — — — — 4 4

Pre-tax net OCI ( 13 ) 12 ( 1 ) ( 102 ) 26 ( 77 )

Income tax effect 3 — 3 26 ( 7 ) 22

OCI for the period, net of tax ( 10 ) 12 2 ( 76 ) 19 ( 55 )

AOCI as of end of period $ 76 $ ( 81 ) $ ( 5 ) $ ( 4 ) $ ( 29 ) $ ( 38 )

Six months ended March 31, 2021

AOCI as of beginning of period $ 115 $ ( 140 ) $ ( 25 ) $ 89 $ ( 53 ) $ 11

OCI before reclassifications and taxes ( 51 ) 57 6 ( 120 ) 25 ( 89 )

Amounts reclassified from AOCI, before tax — 2 2 ( 5 ) 8 5

Pre-tax net OCI ( 51 ) 59 8 ( 125 ) 33 ( 84 )

Income tax effect 12 — 12 32 ( 9 ) 35

OCI for the period, net of tax ( 39 ) 59 20 ( 93 ) 24 ( 49 )

AOCI as of end of period $ 76 $ ( 81 ) $ ( 5 ) $ ( 4 ) $ ( 29 ) $ ( 38 )

Reclassifications from AOCI to net income, excluding taxes, for the three and six months ended March 31, 2022 were recorded in “Interest expense” on the Condensed Consolidated Statements of Income and Comprehensive Income.

Reclassifications from AOCI to net income, excluding taxes, for the three and six months ended March 31, 2021 were primarily recorded in “Other” revenues and “Interest expense” on the Condensed Consolidated Statements of Income and Comprehensive Income.

Our net investment hedges and cash flow hedges relate to our derivatives associated with Raymond James Bank’s business operations.

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See Note 23 of this Form 10-Q for additional information on our segment results.

Three months ended December 31, 2021

Three months ended March 31, 2022

$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total

21 unchanged sentences

All other (1)

6 1 — 8 ( 3 ) 12

Total other 6 16 — 8 ( 3 ) 27

9 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

Three months ended December 31, 2020

Three months ended March 31, 2021

$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total

21 unchanged sentences

All other (1)

Total other 8 25 — 5 6 44

Total non-interest revenues 1,620 430 209 5 ( 55 ) 2,209

Interest income (1)

30 5 — 165 — 200

Total revenues 1,650 435 209 170 ( 55 ) 2,409

Interest expense ( 3 ) ( 2 ) — ( 10 ) ( 22 ) ( 37 )

Net revenues $ 1,647 $ 433 $ 209 $ 160 $ ( 77 ) $ 2,372

(1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Six months ended March 31, 2022

$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total

Asset management and related administrative fees $ 2,407 $ 2 $ 453 $ — $ ( 16 ) $ 2,846

Brokerage revenues:

Securities commissions:

Mutual and other fund products 337 4 4 — ( 1 ) 344

Insurance and annuity products 221 — — — — 221

Equities, ETFs and fixed income products 209 73 — — — 282

Subtotal securities commissions 767 77 4 — ( 1 ) 847

Principal transactions (1)

27 248 — — — 275

Total brokerage revenues 794 325 4 — ( 1 ) 1,122

Account and service fees:

Mutual fund and annuity service fees 223 — — — ( 1 ) 222

RJBDP fees 136 — — — ( 99 ) 37

Client account and other fees 102 4 12 — ( 21 ) 97

Total account and service fees 461 4 12 — ( 121 ) 356

Investment banking:

Merger & acquisition and advisory — 410 — — — 410

Equity underwriting 22 149 — — — 171

Debt underwriting — 79 — — — 79

Total investment banking 22 638 — — — 660

Tax credit fund revenues — 50 — — — 50

All other (1)

13 3 1 14 ( 3 ) 28

Total other 13 53 1 14 ( 3 ) 78

6 unchanged sentences

(1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.

At December 31, 2021 and September 30, 2021, net receivables related to contracts with customers were $ 343 million and $ 416 million, respectively.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements (Unaudited)

Six months ended March 31, 2021

$ in millions Private Client Group Capital Markets Asset Management Raymond James Bank Other and intersegment eliminations Total

Asset management and related administrative fees $ 1,864 $ 2 $ 389 $ — $ ( 15 ) $ 2,240

Brokerage revenues:

Securities commissions:

Mutual and other fund products 331 3 5 — ( 2 ) 337

Insurance and annuity products 207 — — — — 207

Equities, ETFs and fixed income products 203 77 — — — 280

Subtotal securities commissions 741 80 5 — ( 2 ) 824

Principal transactions (1)

25 269 — 1 — 295

Total brokerage revenues 766 349 5 1 ( 2 ) 1,119

Account and service fees:

Mutual fund and annuity service fees 193 — — — — 193

RJBDP fees 127 1 — — ( 88 ) 40

Client account and other fees 74 4 9 — ( 16 ) 71

Total account and service fees 394 5 9 — ( 104 ) 304

Investment banking:

Merger & acquisition and advisory — 271 — — — 271

Equity underwriting 22 127 — — — 149

Debt underwriting — 83 — — — 83

Total investment banking 22 481 — — — 503

Tax credit fund revenues — 40 — — — 40

All other (1)

13 4 1 14 28 60

Total other 13 44 1 14 28 100

Total non-interest revenues 3,059 881 404 15 ( 93 ) 4,266

Interest income (1)

60 8 — 333 2 403

Total revenues 3,119 889 404 348 ( 91 ) 4,669

Interest expense ( 5 ) ( 4 ) — ( 21 ) ( 45 ) ( 75 )

Net revenues $ 3,114 $ 885 $ 404 $ 327 $ ( 136 ) $ 4,594

(1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.

At March 31, 2022 and September 30, 2021, net receivables related to contracts with customers were $ 378 million and $ 416 million, respectively.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 19 – INTEREST INCOME AND INTEREST EXPENSE

The following table details the components of interest income and interest expense.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions 2022 2021 2022 2021

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Bank loans, net of unearned income and deferred expenses

171 142 335 287

All other 15 11 26 21

Total interest income

$ 242 $ 200 $ 467 $ 403

Interest expense:

Bank deposits

$ 5 $ 6 $ 11 $ 12

Brokerage client payables

11 unchanged sentences

however, we are also permitted to issue new shares.

Annual share-based compensation awards are primarily issued during our fiscal first quarter of each year.

The majority of our share-based compensation awards are issued during the fiscal first quarter of each year.

Our share-based compensation accounting policies are described in Note 2 of our 2021 Form 10-K.

Other information related to our share-based awards is presented in Note 23 of our 2021 Form 10-K.

During the three months ended December 31, 2021, we granted approximately 2.3 million RSUs with a weighted-average grant-date fair value of $ 96.99 , compared with approximately 2.0 million RSUs granted during the three months ended December 31, 2020 with a weighted-average grant-date fair value of $ 60.85 (as adjusted for the September 21, 2021 three-for-two stock split).

For the three months ended December 31, 2021, total compensation expense related to RSUs was $ 63 million, compared with $ 41 million for the three months ended December 31, 2020.

As of December 31, 2021, there were $ 336 million of total pre-tax compensation costs not yet recognized (net of estimated forfeitures) related to RSUs, including those granted during the three months ended December 31, 2021.

During the three and six months ended March 31, 2022, we granted approximately 550 thousand and 2.9 million RSUs, respectively, with a weighted-average grant-date fair value of $ 107.06 and $ 98.86 , respectively, compared with approximately 225 thousand and 2.3 million RSUs granted during the three and six months ended March 31, 2021 with a weighted-average grant-date fair value of $ 77.82 and $ 62.42 , respectively (as adjusted for the September 21, 2021 three-for-two stock split described in Note 1 of this Form 10-Q).

For the three and six months ended March 31, 2022, total share-based compensation amortization related to RSUs was $ 41 million and $ 105 million, respectively, compared with $ 30 million and $ 72 million for the three and six months ended March 31, 2021, respectively.

As of March 31, 2022, there were $ 348 million of total pre-tax compensation costs not yet recognized (net of estimated forfeitures) related to RSUs, including those granted during the six months ended March 31, 2022.

These costs are expected to be recognized over a weighted-average period of 3.2 years.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 21 – REGULATORY CAPITAL REQUIREMENTS

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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.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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.

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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 December 31, 2021, both RJF’s and Raymond James Bank’s capital levels exceeded the capital conservation buffer requirement and were each categorized as “well-capitalized.”

As of March 31, 2022, both RJF’s and Raymond James Bank’s capital levels exceeded the capital conservation buffer requirement and were each categorized as “well-capitalized.”

For further discussion of regulatory capital requirements applicable to certain of our businesses and subsidiaries, see Note 24 of our 2021 Form 10-K.

4 unchanged sentences

$ in millions Amount Ratio Amount Ratio Amount Ratio

RJF as of December 31, 2021:

RJF as of March 31, 2022:

CET1 $ 7,921 23.9 % $ 1,492 4.5 % $ 2,155 6.5 %

8 unchanged sentences

Tier 1 leverage $ 7,428 12.6 % $ 2,363 4.0 % $ 2,954 5.0 %

As of December 31, 2021, RJF’s regulatory capital increase compared to September 30, 2021 was driven by positive earnings, net of dividends paid during our fiscal first quarter.

RJF’s Tier 1 and Total capital ratios increased compared to September 30, 2021, resulting from the increase in regulatory capital, partially offset by an increase in risk-weighted assets driven by increases in our loan portfolio and cash and cash equivalents.

RJF’s Tier 1 leverage ratio at December 31, 2021 decreased compared to September 30, 2021 due to increased average assets, driven by higher assets segregated for regulatory purposes and cash and cash equivalents, primarily resulting from an increase in client cash in the Client Interest Program (“CIP”), as well as growth in available-for-sale securities and loans.

As of March 31, 2022, RJF’s regulatory capital increase compared to September 30, 2021 was driven by an increase in equity, due to positive earnings net of dividends, partially offset by an increase in goodwill and intangible assets arising from the Charles Stanley acquisition (See Note 3 for further information).

RJF’s Tier 1 and Total capital ratios decreased compared to September 30, 2021, resulting from an increase in risk-weighted assets, partially offset by the increase in regulatory capital.

The increase in risk-weighted assets was primarily driven by increases in our bank loan portfolio and an increase in assets segregated for regulatory purposes and restricted cash arising from the acquisition of Charles Stanley.

RJF’s Tier 1 leverage ratio as of March 31, 2022 decreased compared to September 30, 2021 due to increased average assets, driven by the growth in assets segregated for regulatory purposes and restricted cash, bank loans, and available-for-sale securities.

The increase in average assets was partially offset by the increase in regulatory capital.

7 unchanged sentences

$ in millions Amount Ratio Amount Ratio Amount Ratio

Raymond James Bank as of December 31, 2021:

Raymond James Bank as of March 31, 2022:

CET1 $ 2,752 12.6 % $ 981 4.5 % $ 1,417 6.5 %

9 unchanged sentences

Tier 1 leverage $ 2,626 7.4 % $ 1,411 4.0 % $ 1,763 5.0 %

As of December 31, 2021, Raymond James Bank’s Tier 1 capital and Total capital ratios decreased compared to September 30, 2021, due to higher risk-weighted assets, primarily due to increased loans and available-for-sale securities, which were funded by increased client cash balances in the RJBDP swept to Raymond James Bank.

The increase in risk-weighted assets was partially offset by higher regulatory capital.

Raymond James Bank’s Tier 1 leverage ratio at December 31, 2021 decreased compared to September 30, 2021, due to increased average assets, driven by growth in loans, cash and available-for-sale securities.

As of March 31, 2022, Raymond James Bank’s regulatory capital increased compared to September 30, 2021, driven by an increase in equity due to positive earnings, offset by dividends paid to RJF.

Raymond James Bank’s Tier 1 capital and Total capital ratios decreased compared to September 30, 2021, due to an increase in risk-weighted assets, primarily resulting from increases in our bank loan portfolio and available-for-sale securities, partially offset by the increase in regulatory capital.

Raymond James Bank’s Tier 1 leverage ratio as of March 31, 2022 decreased compared to September 30, 2021, driven by growth in bank loans and available-for-sale securities.

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.

The following table presents the net capital position of RJ&A.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Raymond James & Associates, Inc.

7 unchanged sentences

$ 1,212 $ 1,979

As of December 31, 2021, all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.

The decrease in RJ&A’s net capital and excess net capital as of March 31, 2022 as compared to September 30, 2021 reflected the impact of significant dividends from RJ&A to RJF during the six months ended March 31, 2022.

As of March 31, 2022, all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.

RAYMOND JAMES FINANCIAL, INC.

2 unchanged sentences

NOTE 22 – EARNINGS PER SHARE

During our fiscal fourth quarter of 2021 the Board of Directors 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.

All share, earnings per share, and dividends per share information has been retroactively adjusted to reflect the September 21, 2021 three-for-two stock split described in Note 1 of this Form-Q.

The following table presents the computation of basic and diluted earnings per common share.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

in millions, except per share amounts 2022 2021 2022 2021

Income for basic earnings per common share:

$ 323 $ 355 $ 769 $ 667

Less allocation of earnings and dividends to participating securities

— — ( 1 ) ( 1 )

Net income attributable to RJF common shareholders

$ 323 $ 355 $ 768 $ 666

Income for diluted earnings per common share:

$ 323 $ 355 $ 769 $ 667

Less allocation of earnings and dividends to participating securities

— — ( 1 ) ( 1 )

Net income attributable to RJF common shareholders

$ 323 $ 355 $ 768 $ 666

Common shares:

Average common shares in basic computation

207.7 206.7 207.0 206.0

Dilutive effect of outstanding stock options and certain RSUs

5.3 5.1 5.6 4.6

Average common and common equivalent shares used in diluted computation 213.0 211.8 212.6 210.6

3 unchanged sentences

Stock options and certain RSUs excluded from weighted-average diluted common shares because their effect would be antidilutive

— 0.2 0.5 0.3

The allocation of earnings and dividends to participating securities in the preceding table represents dividends paid during the period 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 each of the three months ended December 31, 2021 and 2020.

Participating securities and related dividends paid on these participating securities were insignificant for each of the three and six months ended March 31, 2022 and 2021.

Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed.

Dividends per common share declared and paid are detailed in the following table for each respective period.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

2022 2021 2022 2021

Dividends per common share - declared $ 0.34 $ 0.26 $ 0.68 $ 0.52

11 unchanged sentences

The following table presents information concerning operations in these segments.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions 2022 2021 2022 2021

2 unchanged sentences

Capital Markets

413 433 1,027 885

Asset Management

234 209 470 404

Raymond James Bank 197 160 380 327

( 18 ) ( 12 ) ( 33 ) ( 8 )

Intersegment eliminations

4 unchanged sentences

Capital Markets

87 105 288 234

Asset Management

103 87 210 170

Raymond James Bank 83 111 185 182

1 unchanged sentence

Total pre-tax income

$ 433 $ 447 $ 991 $ 846

No individual client accounted for more than ten percent of revenues in any of the periods presented.

The following table presents our net interest income on a segment basis.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions 2022 2021 2022 2021

1 unchanged sentence

Private Client Group

$ 34 $ 27 $ 64 $ 55

Capital Markets

3 unchanged sentences

The following table presents our total assets on a segment basis.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Total assets:

6 unchanged sentences

Total $ 73,101 $ 61,891

(1) The March 31, 2022 balance reflects the assets of Charles Stanley which was acquired on January 21, 2022.

See Note 3 of this Form 10-Q for further discussion.

RAYMOND JAMES FINANCIAL, INC.

2 unchanged sentences

The following table presents goodwill, which was included in our total assets, on a segment basis.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Private Client Group (1)

2 unchanged sentences

Total $ 818 $ 660

(1) As of March 31, 2022, this balance includes £ 121 million, or $ 159 million, of goodwill arising from our acquisition of Charles Stanley on January 21, 2022.

See Note 3 of this Form 10-Q for further discussion.

We have operations in the U.S., Canada and Europe.

1 unchanged sentence

The following table presents our net revenues and pre-tax income classified by major geographic area in which they were earned.

Three months ended December 31,

Three months ended March 31, Six months ended March 31,

$ in millions 2022 2021 2022 2021

2 unchanged sentences

Canada 129 130 266 235

Europe 114 48 169 86

Total $ 2,673 $ 2,372 $ 5,454 $ 4,594

Pre-tax income:

$ 406 $ 415 $ 937 $ 812

Canada 14 25 32 26

Europe 13 7 22 8

Total $ 433 $ 447 $ 991 $ 846

The following table presents our total assets by major geographic area in which they were held.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Total assets:

1 unchanged sentence

Canada 4,059 3,724

Europe 202 215

Total $ 73,101 $ 61,891

(1) The March 31, 2022 balance reflects the assets of Charles Stanley which was acquired on January 21, 2022.

See Note 3 of this Form 10-Q for further discussion.

The following table presents goodwill, which was included in our total assets, classified by major geographic area in which it was held.

$ in millions December 31, 2021 September 30, 2021

$ in millions March 31, 2022 September 30, 2021

Total $ 818 $ 660

(1) As of March 31, 2022, this balance includes £ 121 million, or $ 159 million, of goodwill arising from our acquisition of Charles Stanley on January 21, 2022.

See Note 3 of this Form 10-Q for further discussion.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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-Q

Item 1. Financial Statements