What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-08 compared with 2022-05-09 · 545 added, 415 removed, 986 unchanged (49% of the section changed)

9 unchanged sentences

Asset Management

Raymond James Bank 67

Certain statistical disclosures by bank holding companies 81

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Certain statements made in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions, demand for and pricing of our products, acquisitions (including our announced acquisitions of TriState Capital and SumRidge Partners), divestitures, anticipated results of litigation, regulatory developments, and general economic conditions.

In addition, words such as “believes,” “expects,” “anticipates,” “plans,” “estimates,” “projects,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions, demand for and pricing of our products, acquisitions (including our announced acquisition of SumRidge Partners), divestitures, anticipated results of litigation, regulatory developments, and general economic conditions.

In addition, words such as “expects,” “anticipates,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions.

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These factors also impact the level of investment banking activity and asset valuations, which ultimately affect our business results.

EXECUTIVE OVERVIEW

Quarter ended March 31, 2022 compared with the quarter ended March 31, 2021

For our fiscal second quarter of 2022, we generated net revenues of $2.67 billion, an increase of 13% compared with the prior-year quarter, while pre-tax income of $433 million decreased 3%.

The decrease in pre-tax income was primarily due to a provision for loan losses in the current-year quarter compared with a benefit in the prior-year quarter.

Our net income of $323 million decreased 9%, and our earnings per diluted share were $1.52, reflecting a 10% decrease.

Our annualized return on equity (“ROE”) for the quarter was 15.0%, compared with 19.0% for the prior-year quarter, and our annualized return on tangible common equity (“ROTCE”) was 16.8% (1) , compared with 21.2% (1) for the prior-year quarter.

Excluding acquisition-related expenses of $11 million, our adjusted net income was $331 million (1) and our adjusted earnings per diluted share were $1.55 (1) .

Adjusted annualized ROE for the quarter was 15.4% (1) and adjusted annualized ROTCE was 17.2% (1) .

(1) ROTCE, adjusted net income, adjusted earnings per diluted share, adjusted annualized ROE, and adjusted annualized ROTCE are non-GAAP financial measures.

Please see the “Reconciliation of non-GAAP financial measures to GAAP financial measures” in this MD&A for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure, and for other important disclosures.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

The increase in net revenues compared with the prior-year quarter was driven by significantly higher asset management and related administrative fees, largely attributable to strong growth in PCG assets in fee-based accounts compared with the prior-year quarter and, to a lesser extent, incremental revenues resulting from our acquisition of Charles Stanley which was completed on January 21, 2022.

Net interest income also increased, primarily due to strong asset growth and a higher net interest margin at Raymond James Bank.

Compensation, commissions and benefits expense increased 12%, primarily resulting from higher revenues compared with the prior-year quarter and, to a lesser extent, incremental compensation expense due to the Charles Stanley acquisition and an increase in compensation costs to support our growth.

EXECUTIVE OVERVIEW

Quarter ended June 30, 2022 compared with the quarter ended June 30, 2021

For our fiscal third quarter of 2022, we generated net revenues of $2.72 billion, an increase of 10% compared with the prior-year quarter, and pre-tax income of $415 million increased 8%.

Our net income available to common shareholders of $299 million decreased 3%, and our earnings per diluted share were $1.38, reflecting a 5% decrease.

Our annualized return on common equity (“ROCE”) for the quarter was 13.3%, compared with 15.9% for the prior-year quarter, and our annualized return on tangible common equity (“ROTCE”) was 15.6% (1) , compared with 17.7% (1) for the prior-year quarter.

On June 1, 2022, we completed our acquisition of all the outstanding shares of TriState Capital, and its results of operations have been included in our results prospectively from the closing date of June 1, 2022.

During the quarter, we incurred $65 million of expenses related to our TriState Capital acquisition and other current and prior-year acquisitions, comprised of acquisition-related compensation expenses largely related to retention awards, initial provisions for credit losses on acquired loans and unfunded lending commitments of $26 million and $5 million, respectively, amortization of identifiable intangible assets arising from acquisitions, and other costs incurred to effect our acquisitions, including legal expenses and other professional fees.

Excluding these acquisition-related expenses, our adjusted net income available to common shareholders was $348 million (1) , 13% lower than adjusted net income for the prior-year quarter, and our adjusted earnings per diluted share were $1.61 (1) , 14% lower than adjusted earnings per diluted share for the prior-year quarter.

Adjusted annualized ROCE for the quarter was 15.4% (1) and adjusted annualized ROTCE was 18.1% (1) , compared with adjusted annualized ROCE of 20.5% (1) and adjusted annualized ROTCE of 22.9% (1) for the prior-year quarter.

The increase in net revenues compared with the prior-year quarter was driven by the benefit of higher short-term interest rates on both RJBDP fees from third-party banks and net interest income and higher asset management and related administrative fees, largely attributable to strong growth in PCG assets in fee-based accounts compared with the prior-year quarter.

In addition, the current-year quarter includes incremental revenues from our acquisitions of TriState Capital, which was completed on June 1, 2022, and Charles Stanley, which was completed on January 21, 2022.

These increases more than offset the declines in investment banking and brokerage revenues resulting from the challenging market environment during the current quarter.

Compensation, commissions and benefits expense increased 10%, primarily resulting from higher revenues compared with the prior-year quarter and, to a lesser extent, incremental compensation expense due to the Charles Stanley and TriState Capital acquisitions, a special bonus payable to certain eligible associates to assist them with inflationary cost pressures, which aggregated to $13 million, as well as other increases in compensation costs to support our growth.

Our compensation ratio, or the ratio of compensation, commissions and benefits expense to net revenues, was 67.5%, compared with 67.2% for the prior-year quarter.

Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 66.8% (1) , compared with 66.7% (1) for the prior-year quarter.

Non-compensation expenses increased 10%, primarily due to a $75 million increase in the bank loan provision for credit losses, resulting from a provision of $56 million for the current-year quarter compared with a benefit of $19 million for the prior-year quarter.

Communications and information processing expenses increased as a result of incremental expense of Charles Stanley, as well as continued investments in technology to support our growth.

Business development expenses also increased from the very low prior-year quarter level, primarily due to an increase in travel and event-related expenses.

Our effective income tax rate was 25.4% for our fiscal second quarter of 2022, an increase compared with a 20.6% effective income tax rate for the prior-year quarter, primarily due to the unfavorable impact of nondeductible valuation losses associated with our corporate-owned life insurance portfolio during the current quarter compared with nontaxable valuation gains in the prior-year quarter.

As of March 31, 2022, our total capital ratio of 25.0% and tier 1 leverage ratio of 11.1% were both more than double the regulatory requirement to be considered well-capitalized.

We also continue to have substantial liquidity with $2.2 billion (1) of cash at the parent as of March 31, 2022, which includes cash loaned to RJ&A.

We expect to continue to be opportunistic in deploying our capital in fiscal 2022, through a combination of organic growth and acquisitions, as evidenced by our acquisition of Charles Stanley completed on January 21, 2022, as well as our announced acquisitions of TriState Capital and SumRidge Partners, which we currently expect to close in our fiscal third and fourth quarters of 2022, respectively.

Although our Board of Directors authorized share repurchases of up to $1 billion in December 2021, we do not expect to repurchase our common shares until after the TriState Capital acquisition is completed.

As a result, as of the date this report was filed, $1 billion remained available under the share repurchase authorization.

We remain well-positioned entering our fiscal third quarter, with client assets under administration of $1.26 trillion as of March 31, 2022, as well as strong financial advisor recruiting activity and solid retention of existing advisors.

In addition, we expect our fiscal third quarter results to be positively impacted by a full quarter’s impact of the 25-basis point increase in the Fed’s short-term benchmark interest rate enacted in March 2022, as well as a partial quarter’s impact of the 50-basis point increase enacted in May 2022.

With clients’ domestic cash sweep balances of $76.5 billion as of March 31, 2022 and our high concentration of floating rate assets, we also believe we are well-positioned for further increases in short-term interest rates, which we expect to positively impact our net interest income and our RJBDP fees from third-party banks.

However, we also expect to continue to face geopolitical and macroeconomic uncertainties which may continue to have a negative impact on equity and fixed income markets.

The higher provision for credit losses in the current-year quarter was due to the aforementioned initial provision for credit losses on loans associated with our acquisition of TriState Capital Bank, as well as growth in bank loans at Raymond James Bank and a weaker macroeconomic outlook.

Business development expenses also increased from the very low prior-year quarter level, primarily due to advisor recognition events and conferences, as well as an increase in business travel during the current period as travel restrictions have eased.

Communications and information processing expenses increased as a result of incremental expenses of TriState Capital and Charles Stanley, as well as continued investments in technology to support our growth.

Offsetting these increases, during the prior-year quarter we completed a $750 million, 30-year senior notes offering at 3.75%, and incurred $98 million of losses on extinguishment of debt from the early-redemption of certain of our senior notes which did not recur in the current period.

Our effective income tax rate was 27.5% for our fiscal third quarter of 2022, an increase compared with a 20.3% effective income tax rate for the prior-year quarter, primarily due to the unfavorable impact of nondeductible valuation losses associated with our company-owned life insurance portfolio during the current quarter compared with nontaxable valuation gains in the prior-year quarter.

(1) ROTCE, adjusted net income available to common shareholders, adjusted earnings per diluted share, adjusted annualized ROCE, adjusted annualized ROTCE, and adjusted compensation ratio are non-GAAP financial measures.

Beginning with our fiscal third quarter of 2022, certain non-GAAP financial measures have been adjusted for additional expenses directly related to our acquisitions that we believe are not indicative of our core operating results, such as those related to amortization of identifiable intangible assets arising from acquisitions and acquisition-related retention.

Prior periods have been conformed to the current presentation.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

As of June 30, 2022, our Tier 1 leverage ratio of 10.8% and Total capital ratio of 21.5% were both more than double the regulatory requirement to be considered well-capitalized.

We also continue to have substantial liquidity with $2.0 billion (1) of cash at the parent as of June 30, 2022, which includes cash loaned to RJ&A.

We believe our funding and capital position provide us the opportunity to continue to grow our balance sheet prudently and we expect to continue to be opportunistic in deploying our capital.

Subsequent to the closing of TriState Capital in our fiscal third quarter of 2022, we repurchased 1.14 million shares of our common stock for $100 million at an average price of $88.

After the effect of those repurchases, $900 million remained under our Board of Directors’ share repurchase authorization.

We remain well-positioned entering our fiscal fourth quarter.

We expect our fiscal fourth quarter results to be further positively impacted by the full quarter’s impact of the 50-basis point and 75-basis point increases in the Fed’s short-term benchmark interest rate enacted in May and June 2022, respectively, as well as two months’ impact of the 75-basis point increase enacted at the end of July 2022.

With clients’ domestic cash sweep balances of $75.8 billion as of June 30, 2022 and our high concentration of floating-rate assets, we also believe we are well-positioned for any further increases in short-term interest rates, which we expect to positively impact our net interest income and our RJBDP fees from third-party banks.

In addition, we expect our fiscal fourth quarter results to be positively impacted by two incremental months of TriState Capital’s results as well as the results of SumRidge Partners, which was acquired on July 1, 2022.

However, we also expect to continue to face macroeconomic uncertainties which may continue to have a negative impact on equity and fixed income markets.

As a result, we may experience volatility in asset management fees and brokerage revenues, as well as investment banking revenues, despite our robust investment banking pipelines.

Our fiscal third quarter asset management and related administrative fee revenues will be negatively impacted by the decrease in fee-based asset balances (excluding the impact of Charles Stanley) and financial assets under management as of March 31, 2022.

Net loan growth should result in additional provisions for credit losses in future periods and/or future market deterioration could result in increased bank loan provisions in future periods.

In addition, although we have been focused on the management of expenses, we expect that expenses will continue to increase in fiscal 2022, as business and event-related travel should continue to increase and as we continue to make investments in our people and technology to support our growth.

In addition, asset management and related administrative fees will be negatively impacted by the 11% decrease in PCG fee-based assets as of June 30, 2022 and lower financial assets under management;

however, our recruiting pipelines remain strong and we continue to see solid retention of existing advisors.

Net loan growth should result in additional provisions for credit losses and future market deterioration could result in increased bank loan provisions in future periods.

In addition, although we remain focused on the management of expenses, we expect that expenses will continue to increase in part as a result of inflationary pressures on our costs, as business and event-related travel restrictions have eased, and as we continue to make investments in our people and technology to support our growth.

Nine months ended June 30, 2022 compared with the nine months ended June 30, 2021

For the nine months ended June 30, 2022, we generated net revenues of $8.17 billion, an increase of 16% compared with the prior-year period, and pre-tax income of $1.41 billion, an increase of 14%.

Our net income available to common shareholders of $1.07 billion was 10% higher than the prior-year period and our earnings per diluted share were $4.99, reflecting an 8% increase.

Our annualized ROCE was 16.3%, compared with 17.4% for the prior-year period, and our annualized ROTCE was 18.7% (2) , compared with 19.3% (2) for the prior-year period.

Excluding $117 million of expenses related to acquisitions, our adjusted net income available to common shareholders was $1.16 billion (2) , an increase of 6% compared with the prior-year period, and our adjusted earnings per diluted share were $5.41 (2) , an increase of 5%.

Adjusted annualized ROCE for the year-to-date period was 17.6% (2) , compared with 19.3% (2) in the prior-year period, and adjusted annualized ROTCE was 20.1% (2) , compared with 21.4% (2) in the prior-year period.

The significant increase in net revenues compared with the prior-year period was primarily driven by higher asset management and related administrative fees, primarily attributable to higher PCG client assets in fee-based accounts and incremental revenues from our Charles Stanley acquisition, the benefit of higher short-term interest rates on both RJBDP fees from third-party banks and net interest income, strong investment banking revenues, particularly in our fiscal first quarter, and one month of incremental revenues from our acquisition of TriState Capital.

Compensation, commissions and benefits expense increased 16%, primarily attributable to the growth in revenues and pre-tax income compared with the prior-year period, as well as our current-year acquisitions of Charles Stanley and TriState Capital.

Our compensation ratio was 68.2%, compared with 68.1% for the prior-year period.

Excluding $43 million of acquisition-related compensation expenses, our adjusted compensation ratio was 67.6% (2) , flat compared with the adjusted compensation ratio for the prior-year period.

(1) For additional information, please see the “Liquidity and capital resources - Sources of liquidity” section in this MD&A.

(2) ROTCE, adjusted net income available to common shareholders, adjusted earnings per diluted share, adjusted annualized ROCE, adjusted annualized ROTCE, and adjusted compensation ratio are non-GAAP financial measures.

Prior periods have been conformed to the current presentation.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Six months ended March 31, 2022 compared with the six months ended March 31, 2021

For the six months ended March 31, 2022, we generated net revenues of $5.45 billion, an increase of 19% compared with the prior-year period, and pre-tax income of $991 million, an increase of 17%.

Our net income of $769 million was 15% higher than the prior-year period and our earnings per diluted share were $3.61, reflecting a 14% increase.

Our annualized ROE was 18.1%, unchanged from the prior-year period, and our annualized ROTCE was 20.2% (1) , compared with 20.1% (1) for the prior-year period.

Excluding acquisition-related expenses of $17 million, our adjusted net income was $782 million (1) and our adjusted earnings per diluted share were $3.67 (1) .

Adjusted annualized ROE for the year-to-date period was 18.4% (1) and adjusted annualized ROTCE was 20.6% (1) .

The significant increase in net revenues compared with the prior-year period was primarily driven by higher asset management and related administrative fees, primarily attributable to higher PCG client assets in fee-based accounts and incremental revenues from our Charles Stanley acquisition which was completed in January 2022, as well as strong investment banking revenues, particularly in our fiscal first quarter.

Compensation, commissions and benefits expense increased 19%, primarily attributable to the growth in revenues and pre-tax income compared with the prior-year period.

Our compensation ratio was 68.5%, unchanged from the prior-year period.

Non-compensation expenses increased 21%, primarily due to increases in communications and information processing and business development expenses, as well as higher investment sub-advisory fees.

Non-compensation expenses increased 17%, primarily due to increases in the bank loan provision for credit losses, business development and communications and information processing expenses, as well as higher investment sub-advisory fees.

In addition, the current-year period included incremental expenses from our acquisitions of Charles Stanley and TriState Capital.

The bank loan provision for credit losses increased $103 million to a provision of $66 million for the current-year period, compared with a benefit of $37 million for the prior-year period.

Our effective income tax rate was 22.4% for the six months ended March 31, 2022, an increase from 21.2% for the prior-year period.

The increase in the effective tax rate from the prior-year period was primarily due to the negative impact of nondeductible valuation losses associated with our corporate-owned life insurance portfolio during the current-year period compared with nontaxable valuation gains for the prior-year period, partially offset by a larger tax benefit recognized during the current-year period related to share-based compensation that vested during the period.

In December 2021, our Board of Directors increased the quarterly dividend 31% to $0.34 per share and authorized share repurchases of up to $1 billion, which replaced the previous authorization.

(1) ROTCE, adjusted net income, adjusted earnings per diluted share, adjusted annualized ROE, and adjusted annualized ROTCE are non-GAAP financial measures.

Offsetting these increases was the aforementioned $98 million decrease in losses on extinguishment of debt.

Our effective income tax rate was 23.9% for the nine months ended June 30, 2022, an increase from 20.9% for the prior-year period.

The increase in the effective tax rate from the prior-year period was primarily due to the negative impact of nondeductible valuation losses associated with our company-owned life insurance portfolio during the current-year period compared with nontaxable valuation gains for the prior-year period, partially offset by a larger tax benefit recognized during the current-year period related to share-based compensation that vested during the period.

RAYMOND JAMES FINANCIAL, INC.

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We utilize certain non-GAAP financial measures as additional measures to aid in, and enhance, the understanding of our financial results and related measures.

These non-GAAP financial measures include adjusted net income, adjusted earnings per diluted share, adjusted ROE, ROTCE, and adjusted ROTCE.

We believe certain of these non-GAAP financial measures provide useful information to management and investors by excluding certain material items that may not be indicative of our core operating results.

We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a meaningful comparison of current- and prior-period results.

Certain of our non-GAAP financial measures have been adjusted for additional expenses directly related to our acquisitions that we believe are not indicative of our core operating results, such as those related to amortization of identifiable intangible assets arising from acquisitions and acquisition-related retention.

Prior periods have been conformed to the current period presentation.

We believe that ROTCE is meaningful to investors as this measure facilitates comparison of our results to the results of other companies.

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The following tables provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures for the periods indicated.

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

$ in millions, except per share amounts 2022 2022 2021

$ 323 $ 769 $ 667

Three months ended Nine months ended

$ in millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Net income available to common shareholders $ 299 $ 307 $ 1,068 $ 974

Non-GAAP adjustments :

Acquisition-related expenses 11 17 2

Expenses directly related to acquisitions included in the following financial statement line items:

Compensation, commissions and benefits:

Acquisition-related retention 16 13 41 35

Other acquisition-related compensation 2 — 2 —

Total “Compensation, commissions and benefits” expense 18 13 43 35

Professional fees

Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans

Amortization of identifiable intangible assets 8 7 22 14

Initial provision for credit losses on acquired lending commitments 5 — 5 —

All other acquisition-related expenses

Total “Other” expense 17 7 37 15

Total expenses related to acquisitions 65 24 117 55

Losses on extinguishment of debt — 98 — 98

Pre-tax impact of non-GAAP adjustments 65 122 117 153

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Total non-GAAP adjustments, net of tax 49 92 88 116

Adjusted net income

Adjusted net income available to common shareholders $ 348 $ 399 $ 1,156 $ 1,090

Compensation, commissions and benefits expense $ 1,834 $ 1,661 $ 5,570 $ 4,809

Total compensation-related acquisition expenses (as detailed above) 18 13 43 35

Adjusted “Compensation, commissions and benefits” expense $ 1,816 $ 1,648 $ 5,527 $ 4,774

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Three months ended Nine months ended

2022 June 30,

2021 June 30,

2022 June 30,

Total compensation ratio 67.5 % 67.2 % 68.2 % 68.1 %

Less the impact of non-GAAP adjustments on compensation ratio :

Acquisition-related retention 0.6 % 0.5 % 0.5 % 0.5 %

Other acquisition-related compensation 0.1 % — % 0.1 % — %

Total “Compensation, commissions and benefits” expenses related to acquisitions 0.7 % 0.5 % 0.6 % 0.5 %

Adjusted total compensation ratio 66.8 % 66.7 % 67.6 % 67.6 %

Diluted earnings per common share $ 1.38 $ 1.45 $ 4.99 $ 4.61

Impact of non-GAAP adjustments on diluted earnings per common share:

Compensation, commissions and benefits:

Acquisition-related retention 0.07 0.06 0.19 0.17

Other acquisition-related compensation 0.01 — 0.01 —

Total “Compensation, commissions and benefits” expense 0.08 0.06 0.20 0.17

Professional fees 0.02 0.02 0.05 0.02

Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans

0.12 — 0.12 —

Earnings per common share - diluted $ 1.52 $ 3.61 $ 3.16

Non-GAAP adjustments:

Acquisition-related expenses 0.05 0.08 0.01

Pre-tax impact of non-GAAP adjustments 0.05 0.08 0.01

Amortization of identifiable intangible assets 0.04 0.03 0.11 0.07

Initial provision for credit losses on acquired lending commitments 0.02 — 0.02 —

All other acquisition-related expenses 0.02 — 0.05 0.01

Total “Other” expense 0.08 0.03 0.18 0.08

Total expenses related to acquisitions 0.30 0.11 0.55 0.27

Losses on extinguishment of debt — 0.46 — 0.46

Tax effect of non-GAAP adjustments (0.07) (0.14) (0.13) (0.18)

Total non-GAAP adjustments, net of tax 0.23 0.43 0.42 0.55

Adjusted earnings per common share - diluted $ 1.55 $ 3.67 $ 3.17

Adjusted diluted earnings per common share $ 1.61 $ 1.88 $ 5.41 $ 5.16

Return on common equity Three months ended Nine months ended

$ in millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Average common equity $ 8,999 $ 7,728 $ 8,711 $ 7,483

Impact of non-GAAP adjustments on average common equity :

Compensation, commissions and benefits:

Acquisition-related retention 8 6 19 16

Other acquisition-related compensation 1 — 1 —

Total “Compensation, commissions and benefits” expense 9 6 20 16

Professional fees 2 2 5 2

Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans

Amortization of identifiable intangible assets 4 4 11 6

Initial provision for credit losses on acquired lending commitments 3 — 1 —

All other acquisition-related expenses 2 — 4 1

Total “Other” expense 9 4 16 7

Total expenses related to acquisitions 33 12 48 25

Losses on extinguishment of debt — 49 — 25

Tax effect of non-GAAP adjustments (8) (15) (12) (12)

Total non-GAAP adjustments, net of tax 25 46 36 38

Adjusted average common equity $ 9,024 $ 7,774 $ 8,747 $ 7,521

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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

$ in millions 2022 2021 2022 2021

Annualized return on equity

Average equity $ 8,601 $ 7,478 $ 8,482 $ 7,356

Impact on average equity of non-GAAP adjustments:

Acquisition-related expenses 6 NA 8 1

Pre-tax impact of non-GAAP adjustments 6 NA 8 1

Tax effect of non-GAAP adjustments (2) NA (2) —

Total non-GAAP adjustments, net of tax 4 NA 6 1

Adjusted average equity $ 8,605 NA $ 8,488 $ 7,357

Average equity $ 8,601 $ 7,478 $ 8,482 $ 7,356

Three months ended Nine months ended

$ in millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Average common equity $ 8,999 $ 7,728 $ 8,711 $ 7,483

Average goodwill and identifiable intangible assets, net 1,460 865 1,169 791

Average deferred tax liabilities, net (77) (56) (72) (49)

Deferred tax liabilities related to goodwill and identifiable intangible assets, net (108) (56) (86) (51)

Average tangible common equity $ 7,647 $ 6,919 $ 7,628 $ 6,743

Impact on average tangible common equity of non-GAAP adjustments:

Acquisition-related expenses 6 NA 8 1

Pre-tax impact of non-GAAP adjustments 6 NA 8 1

Tax effect of non-GAAP adjustments (2) NA (2) —

Total non-GAAP adjustments, net of tax 4 NA 6 1

Adjusted average tangible common equity $ 7,690 NA $ 7,605 $ 6,639

Return on equity 15.0 % 19.0 % 18.1 % 18.1 %

Adjusted annualized return on equity

15.4 % NA 18.4 % 18.2 %

Impact of non-GAAP adjustments on average tangible common equity:

Compensation, commissions and benefits:

Acquisition-related retention 8 6 19 16

Other acquisition-related compensation 1 — 1 —

Total “Compensation, commissions and benefits” expense 9 6 20 16

Professional fees 2 2 5 2

Bank loan provision/(benefit) for credit losses — Initial provision for credit losses on acquired loans

Amortization of identifiable intangible assets 4 4 11 6

Initial provision for credit losses on acquired lending commitments 3 — 1 —

All other acquisition-related expenses 2 — 4 1

Total “Other” expense 9 4 16 7

Total expenses related to acquisitions 33 12 48 25

Losses on extinguishment of debt — 49 — 25

Tax effect of non-GAAP adjustments (8) (15) (12) (12)

Total non-GAAP adjustments, net of tax 25 46 36 38

Adjusted average tangible common equity $ 7,672 $ 6,965 $ 7,664 $ 6,781

Return on common equity 13.3 % 15.9 % 16.3 % 17.4 %

Adjusted return on common equity 15.4 % 20.5 % 17.6 % 19.3 %

Return on tangible common equity 15.6 % 17.7 % 18.7 % 19.3 %

Adjusted annualized return on tangible common equity

17.2 % NA 20.6 % 20.2 %

Average equity for the quarter-to-date period is computed by adding the total equity attributable to RJF as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two.

Average equity for the year-to-date period is computed by adding the total equity attributable to RJF as of each quarter-end date during the indicated year-to-date period to the beginning of the year total, and dividing by three, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated year-to-date period to the beginning of the year total, and dividing by three.

Adjusted average equity is computed by adjusting for the impact on average equity of the non-GAAP adjustments, as applicable for each respective period.

Adjusted return on tangible common equity 18.1 % 22.9 % 20.1 % 21.4 %

Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period.

Adjusted total compensation ratio is computed by dividing adjusted compensation, commissions and benefits expense by net revenues for each respective period.

Average common equity for the quarter-to-date period is computed by adding the total common equity attributable to RJF as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two.

Average common equity for the year-to-date period is computed by adding the total common equity attributable to RJF as of each quarter-end date during the indicated year-to-date period to the beginning of the year total, and dividing by four, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated year-to-date period to the beginning of the year total, and dividing by four.

Adjusted average common equity is computed by adjusting for the impact on average common equity of the non-GAAP adjustments, as applicable for each respective period.

Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period.

ROE is computed by dividing annualized net income for the period indicated by average equity for each respective period or, in the case of ROTCE, computed by dividing annualized net income by average tangible common equity for each respective period.

Adjusted return on equity is computed by dividing annualized adjusted net income by adjusted average equity for each respective period, or in the case of adjusted return on tangible common equity, computed by dividing annualized adjusted net income by adjusted average tangible common equity for each respective period.

ROCE is computed by dividing annualized net income available to common shareholders for the period indicated by average common equity for each respective period or, in the case of ROTCE, computed by dividing annualized net income available to common shareholders by average tangible common equity for each respective period.

Adjusted return on common equity is computed by dividing annualized adjusted net income available to common shareholders by adjusted average common equity for each respective period, or in the case of adjusted return on tangible common equity, computed by dividing annualized adjusted net income available to common shareholders by adjusted average tangible common equity for each respective period.

RAYMOND JAMES FINANCIAL, INC.

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Asset Management;

Raymond James Bank;

The following table presents our consolidated and segment net revenues and pre-tax income/(loss) for the periods indicated.

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

Three months ended June 30, Nine months ended June 30,

$ in millions 2022 2021 % change 2022 2021 % change

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Pre-tax income $ 93 $ 105 (11) % $ 303 $ 275 10 %

Raymond James Bank

Net revenues $ 276 $ 169 63 % $ 656 $ 496 32 %

Pre-tax income $ 74 $ 104 (29) % $ 259 $ 286 (9) %

Net revenues $ (18) $ (12) (50) % $ (33) $ (8) (313) %

Net revenues $ (21) $ 2 NM $ (54) $ (6) (800) %

Pre-tax loss $ (64) $ (134) 52 % $ (164) $ (206) 20 %

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NET INTEREST ANALYSIS

In March 2020, in response to macroeconomic concerns resulting from the COVID-19 pandemic, the Fed decreased its benchmark short-term interest rate to a range of 0-0.25%.

These near-zero short-term interest rates negatively impacted our net interest income over the past two years, as well as the fee income we earn from third-party banks on client cash balances swept to such banks as part of the RJBDP (included in account and service fees) which are also sensitive to changes in interest rates.

In response to inflationary pressures and given the improved economic and employment conditions since the beginning of the COVID-19 pandemic, the Fed increased its benchmark short-term interest rate by 25 basis points in March 2022 and an additional 50 basis points in May 2022 and has indicated that it intends to further increase short-term interest rates through the remainder of our fiscal 2022.

Given the relationship between our interest-sensitive assets and liabilities (primarily held in our PCG, Raymond James Bank and Other segments) and the nature of fees we earn from third-party banks on the RJBDP, increases in short-term interest rates generally result in an increase in our net earnings, although the magnitude of the impact to our net interest margin depends on the yields on interest-earning assets relative to the cost of interest-bearing liabilities, including deposit rates paid to clients on their cash balances.

As a result, we believe we are well-positioned for our net interest earnings to be favorably impacted by any additional increase in short-term rates that may arise.

Based on our high concentration of floating-rate assets that are funded from clients’ domestic cash sweep balances, we estimate (based on static balances as of March 31, 2022) that an instantaneous 100-basis point increase in short-term interest rates would result in incremental pre-tax income of nearly $600 million annually, with approximately 65% reflected as net interest income and approximately 35% as account and service fees.

The realization of such amounts is dependent upon a number of key assumptions and actual results may differ materially from our estimates.

Notably, of this 100-basis point instantaneous increase assumption, 75 basis points has already occurred with the recent interest rate actions by the Fed in March and May of 2022.

These assumptions do not incorporate any impact from our announced acquisition of TriState Capital, currently anticipated to close by the end of our fiscal third quarter, which we would expect to further increase our incremental net interest income based on their relatively high concentration of floating-rate interest-earning assets.

Refer to the discussion of our net interest income within the “Management’s Discussion and Analysis - Results of Operations” of our PCG, Raymond James Bank, and Other segments, where applicable.

Largely in response to inflationary pressures and, to a lesser extent, given the improved economic and employment conditions since the beginning of the COVID-19 pandemic, the Fed has rapidly increased its benchmark short-term interest rates, from the near-zero interest rates at the beginning of March 2022 to a range of 2.25% to 2.50% in late July 2022.

The Fed indicated that it intends to closely monitor short-term interest rates through the remainder of our fiscal 2022 and into our fiscal 2023.

The following table details the Fed’s recent short-term interest rate activity.

Fiscal quarter ended Date of interest rate action Increase in interest rates (in basis points) Fed funds target rate

March 31, 2022 March 17, 2022 25 0.25% - 0.50%

June 30, 2022 May 5, 2022 50 0.75% - 1.00%

June 30, 2022 June 16, 2022 75 1.50% - 1.75%

Rate changes subsequent to June 30, 2022

September 30, 2022 July 28, 2022 75 2.25% - 2.50%

These increases in short-term interest rates in March, May and June of 2022 positively impacted our net interest income during our fiscal third quarter of 2022, as well as the fee income we earn from third-party banks on client cash balances swept to such banks as part of the RJBDP (included in account and service fees), which are also sensitive to changes in interest rates.

We expect our fiscal fourth quarter of 2022 results to further benefit from a full quarter’s impact of the May and June 2022 interest rate increases, as well as two months of the 75-basis point increase in July 2022.

Given the relationship between our interest-sensitive assets and liabilities (primarily held in our PCG, Bank and Other segments) and the nature of fees we earn from third-party banks on the RJBDP, increases in short-term interest rates generally result in an increase in our net earnings, although the magnitude of the impact to our net interest margin depends on the yields on interest-earning assets relative to the cost of interest-bearing liabilities, including deposit rates paid to clients on their cash balances.

As a result, we believe we are well-positioned for our net interest earnings to be favorably impacted by the recent, as well as any additional, increases in short-term rates.

Refer to the discussion of our net interest income within the “Management’s Discussion and Analysis - Results of Operations” of our PCG, Bank, and Other segments, where applicable.

Also refer to “Management’s Discussion and Analysis - Results of Operations - Private Client Group - Clients’ domestic cash sweep balances” for further information on the RJBDP.

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The following table presents our consolidated average interest-earning asset and interest-bearing liability balances, interest income and expense and the related yields and rates.

Quarter ended March 31, 2022 compared with the quarter ended March 31, 2021

Three months ended March 31,

Quarter ended June 30, 2022 compared with the quarter ended June 30, 2021

Three months ended June 30,

$ in millions Average

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Brokerage client receivables 2,555 24 3.87 % 2,363 19 3.33 %

Bank loans, net of unearned income and deferred expenses:

Loans held for sale and investment:

Loans held for investment:

10 unchanged sentences

222 2 3.08 % 142 1 2.92 %

Total bank loans, net

27,337 171 2.53 % 22,561 142 2.56 %

Total loans held for sale and investment 33,062 255 3.08 % 23,781 150 2.54 %

All other interest-earning assets 2,617 20 3.19 % 2,288 10 1.51 %

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Bank deposits:

Savings, money market and NOW accounts

$ 33,097 $ 2 0.02 % $ 27,662 $ 2 0.02 %

Savings and money market accounts $ 36,875 $ 11 0.12 % $ 28,744 $ — 0.01 %

Interest-bearing checking accounts 2,126 6 1.15 % 164 1 1.83 %

Certificates of deposit

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Firmwide net interest margin (net yield on interest-earning assets) 1.77 % 1.31 %

Raymond James Bank net interest margin 2.01 % 1.94 %

Bank segment net interest margin 2.41 % 1.92 %

(1) Loans are presented net of unamortized discounts, unearned income, and deferred loan fees and costs.

Nonaccrual loans are included in the average loan balances in the preceding table.

1 unchanged sentence

Interest income on residential mortgage nonaccrual loans is recognized on a cash basis.

The yield on tax-exempt loans in the preceding table is presented on a taxable-equivalent basis utilizing the applicable federal statutory rates for each of the three months ended March 31, 2022 and 2021.

RAYMOND JAMES FINANCIAL, INC.

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Changes attributable to both volume and rate have been allocated proportionately.

Three months ended March 31,

Three months ended June 30,

2022 compared to 2021

7 unchanged sentences

Brokerage client receivables 2 3 5

Bank loans, net of unearned income and deferred expenses:

Loans held for sale and investment:

Loans held for investment:

6 unchanged sentences

Loans held for sale 1 — 1

Total bank loans, net 30 (1) 29

Total loans held for sale and investment 59 46 105

All other interest-earning assets 2 8 10

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Bank deposits:

Savings, money market and NOW accounts $ — $ — $ —

Savings and money market accounts $ 2 $ 9 $ 11

Interest-bearing checking accounts 10 (5) 5

Certificates of deposit — (1) (1)

6 unchanged sentences

Change in net interest income $ 59 $ 90 $ 149

(1) Loans are presented net of unamortized discounts, unearned income, and deferred loan fees and costs.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Six months ended March 31, 2022 compared with the six months ended March 31, 2021

Six months ended March 31,

Nine months ended June 30, 2022 compared with the nine months ended June 30, 2021

Nine months ended June 30,

$ in millions Average

6 unchanged sentences

Brokerage client receivables 2,533 66 3.50 % 2,222 56 3.38 %

Bank loans, net of unearned income and deferred expenses:

Loans held for sale and investment:

Loans held for investment:

6 unchanged sentences

Loans held for sale 243 6 2.98 % 153 3 2.54 %

Total bank loans, net 26,627 335 2.53 % 22,286 287 2.59 %

Total loans held for sale and investment 28,771 590 2.74 % 22,784 437 2.57 %

All other interest-earning assets 2,472 46 2.52 % 2,264 31 1.79 %

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Bank deposits:

Savings, money market and NOW accounts

$ 32,489 $ 4 0.02 % $ 27,144 $ 3 0.02 %

Savings and money market accounts $ 33,807 $ 13 0.05 % $ 27,573 $ 2 0.01 %

Interest-bearing checking accounts 833 8 1.21 % 159 2 1.88 %

Certificates of deposit

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Firmwide net interest margin (net yield on interest-earning assets) 1.46 % 1.35 %

Raymond James Bank net interest margin 1.97 % 1.98 %

Bank segment net interest margin 2.14 % 1.96 %

(1) Loans are presented net of unamortized discounts, unearned income, and deferred loan fees and costs.

Nonaccrual loans are included in the average loan balances in the preceding table.

1 unchanged sentence

Interest income on residential mortgage nonaccrual loans is recognized on a cash basis.

The yield on tax-exempt loans in the preceding table is presented on a tax-equivalent basis utilizing the applicable federal statutory rates for each of the six months ended March 31, 2022 and 2021.

The yield on tax-exempt loans in the preceding table is presented on a tax-equivalent basis utilizing the applicable federal statutory rates for each of the nine months ended June 30, 2022 and 2021.

RAYMOND JAMES FINANCIAL, INC.

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Changes attributable to both volume and rate have been allocated proportionately.

Six months ended March 31,

Nine months ended June 30,

2022 compared to 2021

7 unchanged sentences

Brokerage client receivables 8 2 10

Bank loans, net of unearned income and deferred expenses:

Loans held for sale and investment:

Loans held for investment:

6 unchanged sentences

Loans held for sale 2 1 3

Total bank loans, net 54 (6) 48

Total loans held for sale and investment 113 40 153

All other interest-earning assets 3 12 15

3 unchanged sentences

Bank deposits:

Savings, money market and NOW accounts $ 1 $ — $ 1

Savings and money market accounts $ 1 $ 10 $ 11

Interest-bearing checking accounts 12 (6) 6

Certificates of deposit (2) (1) (3)

6 unchanged sentences

Change in net interest income $ 132 $ 81 $ 213

(1) Loans are presented net of unamortized discounts, unearned income, and deferred loan fees and costs.

RAYMOND JAMES FINANCIAL, INC.

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Operating results

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

Three months ended June 30, Nine months ended June 30,

$ in millions 2022 2021 % change 2022 2021 % change

12 unchanged sentences

102 105 (3) % 325 298 9 %

Bank segment 79 47 68 % 178 134 33 %

Third-party banks 56 18 211 % 93 58 60 %

Raymond James Bank 49 44 11 % 99 87 14 %

Client account and other fees

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PCG client asset balances

$ in billions March 31,

2022 December 31,

$ in billions June 30,

2022 March 31,

2022 September 30,

2021 June 30,

2021 March 31,

2021 December 31,

2021 September 30,

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(1) These metrics include the impact from the acquisition of Charles Stanley, which was completed on January 21, 2022.

As of March 31, 2022, the impact on AUA was $33 billion and the impact on Assets in fee-based accounts was $21 billion.

(2) A portion of our “Assets in fee-based accounts” is invested in “managed programs” overseen by our Asset Management segment, specifically our Asset Management Services division of RJ&A (“AMS”).

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Fees received from such accounts are based on the value of client assets in fee-based accounts and vary based on the specific account types in which the client invests and the level of assets in the client relationship.

As fees for substantially all of such accounts are billed based on balances as of the beginning of the quarter, revenues from fee-based accounts may not be immediately affected by changes in asset values, but rather the impacts are seen in the following quarter.

PCG AUA was essentially flat compared with December 31, 2021 as the positive impacts of strong net inflows of client assets during our fiscal second quarter and the Charles Stanley acquisition were offset by a decline in equity markets.

Excluding the impact of the Charles Stanley acquisition, PCG AUA and assets in fee-based accounts each declined approximately 3% compared with December 31, 2021, which will negatively impact our asset management and related administrative fees for our fiscal third quarter of 2022.

As fees for the majority of such accounts are billed based on balances as of the beginning of the quarter, revenues from fee-based accounts may not be immediately affected by changes in asset values, but rather the impacts are seen in the following quarter.

PCG AUA decreased compared with March 31, 2022 and September 30, 2021, as the positive impacts of strong net inflows of client assets and, when compared to September 2021, the Charles Stanley acquisition, were offset by a decline in equity markets.

PCG AUA and assets in fee-based accounts each declined 11% compared with March 31, 2022, which will negatively impact our asset management and related administrative fees for our fiscal fourth quarter of 2022.

PCG assets in fee-based accounts continued to be a significant percentage of overall PCG AUA due to many clients’ preference for fee-based alternatives versus transaction-based accounts and, as a result, a significant portion of our PCG revenues is more directly impacted by market movements.

Financial advisors

2022 March 31,

2022 December 31,

2021 September 30,

2021 March 31,

2021 June 30,

Employees 3,615 3,601 3,447 3,461 3,423

Independent contractors

Total advisors (1)

5,001 5,129 5,017 5,021 4,990

(1) This metric includes the impact from the acquisition of Charles Stanley, which was completed on January 21, 2022.

As of March 31, 2022, the impact on financial advisors was the addition of 200 advisors.

The number of financial advisors as of March 31, 2022 increased compared to December 31, 2021 and September 30, 2021, as a result of the Charles Stanley acquisition, strong recruiting and strong retention of existing advisors.

The recruiting pipeline remains robust across our affiliation options despite a competitive recruiting environment.

Advisors in our Registered Investment Advisor & Custody Services division are not included in our financial advisor metric although their client assets, which were $99.2 billion as of March 31, 2022, are included in PCG AUA.

Total advisors 8,616 8,730 8,464 8,482 8,413

The number of financial advisors as of June 30, 2022 decreased compared to March 31, 2022, as the impacts of strong recruiting and strong retention of existing advisors were offset by the transfer of 188 advisors previously affiliated as independent contractors to our Registered Investment Advisor & Custody Services (“RCS”) division (including one firm with 166 financial advisors).

We do not expect these transfers to significantly impact our results of operations.

Advisors in our RCS division are not included in our financial advisor metric although their client assets, which were $109.7 billion as of June 30, 2022, $99.2 billion as of March 31, 2022 and $92.7 billion as of September 30, 2021, are included in PCG AUA.

The recruiting pipeline remains robust across our affiliation options;

however the timing of financial advisors joining the firm may be impacted by market uncertainty.

RAYMOND JAMES FINANCIAL, INC.

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Clients’ domestic cash sweep balances

$ in millions March 31,

$ in millions June 30,

2022 March 31,

2022 December 31,

2021 September 30,

2021 March 31,

Raymond James Bank $ 33,570 $ 33,097 $ 31,410 $ 28,174

2021 June 30,

Bank segment $ 36,646 $ 33,570 $ 33,097 $ 31,410 $ 29,253

Third-party banks 25,478 25,887 24,316 24,496 25,080

3 unchanged sentences

$ 75,841 $ 76,470 $ 73,478 $ 66,668 $ 62,943

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

Three months ended June 30, Nine months ended June 30,

2022 2021 2022 2021

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0.88 % 0.29 % 0.50 % 0.30 %

A significant portion of our domestic clients’ cash is included in the RJBDP, a multi-bank sweep program in which clients’ cash deposits in their accounts are swept into interest-bearing deposit accounts at Raymond James Bank and various third-party banks.

We earn servicing fees for the administrative services we provide related to our clients’ deposits that are swept to such banks as part of the RJBDP.

The amounts from third-party banks are variable in nature and fluctuate based on client cash balances in the program, as well as the level of short-term interest rates and the interest paid to clients by the third-party banks on balances in the RJBDP.

Our PCG segment earns servicing fees for the administrative services we provide related to our clients’ deposits that are swept to such banks as part of the RJBDP.

These servicing fees are variable in nature and fluctuate based on client cash balances in the program, as well as the level of short-term interest rates and the interest paid to clients on balances in the RJBDP.

Under our current intersegment policies, the PCG segment receives the greater of a base servicing fee or a net yield equivalent to the yield that the firm would otherwise receive from third-party banks in the RJBDP.

This is a different intersegment policy than that which was in place in prior years, during the last interest rate cycle.

The result of this change is that the PCG segment revenues will reflect increased fee revenues as the yield from third-party banks in the program continues to rise, and the Bank segment RJBDP servicing costs reflect the market rate.

The fees that the PCG segment earns from the Bank segment, as well as the servicing costs incurred on the deposits in the Bank segment, are eliminated in the computation of our consolidated results.

The “Average yield on RJBDP - third party banks” in the preceding table is computed by dividing annualized RJBDP fees from third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balance at third-party banks.

The average yield on RJBDP - third-party banks increased only slightly from the prior-year quarter, as the 25-basis point increase in short-term interest rates in March 2022 occurred late in the current quarter.

Although the Fed has indicated that it intends to continue to increase its benchmark short-term interest rate throughout the remainder of our fiscal 2022, as evidenced by the 50-basis point increase in May 2022, the amount of this increase that we will realize is impacted by other factors, including the timing and magnitude of the amount of such rate increases paid to clients as well as the demand for our deposit sweep balances from third-party banks that participate in the RJBDP.

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

The fees from the Raymond James Bank segment are eliminated in consolidation.

PCG segment results can be impacted by changes in the allocation of client cash balances between RJBDP balances with Raymond James Bank, RJBDP balances with third-party banks and our CIP, as the PCG segment typically earns different amounts from each of the three client cash destinations, depending on multiple factors.

Client cash balances continued to increase as of March 31, 2022.

The growing cash balances combined with limited capacity at third-party banks that participate in the RJBDP has resulted in a significant increase in cash balances held in our CIP, also resulting in a significant increase in our assets segregated for regulatory purposes balance presented on our Condensed Consolidated Statements of Financial Condition.

The average yield on RJBDP - third-party banks increased from the prior-year quarter as a result of the 25-basis point increase in the Federal Reserve’s short-term benchmark interest rate in March 2022, the 50-basis point increase in May 2022 and, to a lesser extent, the 75-basis point increase toward the end of our fiscal third quarter in June 2022.

Based on these interest rate increases, as well as the additional 75-basis point increase announced by the Fed in late July 2022, we expect our average yield on RJBDP from third-party banks to approximate 1.7% for our fiscal fourth quarter of 2022.

However, actual yields may be impacted by other factors, including interest rates paid to clients and the demand for our deposit sweep balances from third-party banks that participate in the RJBDP.

Although client cash balances remained elevated as of June 30, 2022, balances declined compared with March 31, 2022 and have continued to decline modestly after the quarter-end during the month of July 2022.

In addition, more client cash was allocated to Raymond James Bank through the RJBDP, resulting in a reduction in cash allocated to our CIP and a corresponding decrease in our assets segregated for regulatory purposes balance presented on our Condensed Consolidated Statements of Financial Condition.

PCG segment results can be impacted by not only changes in the level of client cash balances, but also by the allocation of client cash balances between RJBDP and our CIP, as the PCG segment may earn different amounts from each of these client cash destinations, depending on multiple factors.

Quarter ended June 30, 2022 compared with the quarter ended June 30, 2021

Net revenues of $1.96 billion increased 15% and pre-tax income of $251 million increased 29%.

Asset management and related administrative fees increased $164 million, or 16%, primarily due to higher assets in fee-based accounts at the beginning of the current quarter, as well as incremental revenues related to the Charles Stanley acquisition.

Brokerage revenues decreased $17 million, or 4%, primarily due to a decline in trailing placement fees from mutual and other fund products and annuity products resulting from lower asset values.

Account and service fees increased $87 million, or 42%, primarily due to higher RJBDP fees from both third-party banks and our Bank segment resulting from significantly higher short-term interest rates compared with the prior-year quarter and higher

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Quarter ended March 31, 2022 compared with the quarter ended March 31, 2021

Net revenues of $1.92 billion increased $275 million, or 17%, and pre-tax income of $213 million increased $21 million, or 11%.

Asset management and related administrative fees increased $266 million, or 27%, primarily due to higher assets in fee-based accounts at the beginning of the current quarter, as well as incremental revenues related to Charles Stanley since the January 2022 acquisition date.

Brokerage revenues decreased $16 million, or 4%, due to a decline in trailing placement fees from mutual and other fund products.

Account and service fees increased $27 million, or 13%, primarily due to an increase in mutual fund service fees resulting from higher average mutual fund assets, as well as incremental client account and other fees resulting from our acquisition of Charles Stanley and higher RJBDP fees from Raymond James Bank due to an increase in the number of accounts swept to Raymond James Bank as part of the RJBDP.

Compensation-related expenses increased $220 million, or 17%, primarily due to higher revenues, our acquisition of Charles Stanley, and an increase in compensation costs to support our growth.

Non-compensation expenses increased $34 million, or 22%, due to incremental expenses resulting from the acquisition of Charles Stanley, higher communications and information processing expenses primarily due to ongoing enhancements of our technology platforms, and increases in travel and event-related expenses compared with the low levels incurred in the prior-year quarter.

Six months ended March 31, 2022 compared with the six months ended March 31, 2021

Net revenues of $3.76 billion increased $647 million, or 21%, and pre-tax income of $408 million increased $76 million, or 23%.

Asset management and related administrative fees increased $543 million, or 29%, primarily due to higher assets in fee-based accounts at the beginning of each of the current-year quarterly billing periods compared with the prior-year quarterly billing periods and, to a lesser extent, the acquisition of Charles Stanley.

Brokerage revenues increased $28 million, or 4%, primarily due to higher revenues from insurance and annuity products and mutual fund products, resulting from higher average asset values, as well as incremental revenues from the Charles Stanley acquisition.

Account and service fees increased $67 million, or 17%, primarily due to an increase in mutual fund service fees resulting from higher average mutual fund assets, as well as incremental client account and other fees resulting from our acquisitions of NWPS Holdings, Inc.

at the end of our fiscal first quarter of 2021 and Charles Stanley in our fiscal second quarter of 2022.

RJBDP fees from Raymond James Bank also increased due to an increase in the number of accounts swept to Raymond James Bank as part of the RJBDP.

client cash balances in the RJBDP.

Client account and other fees also increased primarily as a result of incremental revenues arising from our acquisition of Charles Stanley.

Net interest income increased $29 million, or 100%, primarily due to the increase in short-term interest rates.

Compensation-related expenses increased $160 million, or 12%, primarily due to higher revenues, incremental expenses arising from our acquisition of Charles Stanley, the majority of the aforementioned special bonus payable to certain eligible associates to assist with inflationary cost pressures, and other increases in compensation costs to support our growth.

Non-compensation expenses increased $46 million, or 27%.

Business development expenses increased significantly from the low levels incurred in the prior-year quarter as a result of advisor recognition events and conferences, as well as an increase in business travel as travel restrictions have eased.

Communications and information processing expenses also increased, primarily due to ongoing enhancements of our technology platforms and incremental expenses resulting from the acquisition of Charles Stanley.

Nine months ended June 30, 2022 compared with the nine months ended June 30, 2021

Net revenues of $5.72 billion increased 19% and pre-tax income of $659 million increased 25%.

Asset management and related administrative fees increased $707 million, or 24%, primarily due to higher assets in fee-based accounts at the beginning of each of the current-year quarterly billing periods compared with the prior-year quarterly billing periods and, to a lesser extent, incremental revenues arising from the acquisition of Charles Stanley.

Account and service fees increased $154 million, or 26%, primarily due to an increase in RJBDP fees from both third-party banks and our Bank segment due to the increase in short-term rates during the current-year period, as well as higher client cash balances in the RJBDP.

Client account and other fees also increased, resulting from incremental revenues from our acquisitions of NWPS Holdings, Inc.

at the end of our fiscal first quarter of 2021 and Charles Stanley in our fiscal second quarter of 2022, as well as higher account maintenance fees resulting from an increase in the fee per account effective during the current fiscal-year period.

Mutual fund service fees increased due to higher average mutual fund assets.

Net interest income increased $38 million, or 45%, primarily due to the increase in short-term interest rates during the current-year period.

Compensation-related expenses increased $670 million, or 18%, primarily due to higher revenues, incremental expenses resulting from our acquisition of Charles Stanley, and an increase in compensation costs to support our growth.

Non-compensation expenses increased $61 million, or 20%, due to increases in travel and event-related expenses compared with the low levels incurred in the prior-year, higher communications and information processing expenses primarily due to ongoing enhancements of our technology platforms, and incremental expenses resulting from our acquisition of Charles Stanley.

Non-compensation expenses increased $107 million, or 23%, due to increases in travel and event-related expenses compared with the low levels incurred in the prior-year period, higher communications and information processing expenses primarily due to ongoing enhancements of our technology platforms, increasing occupancy rates, and incremental expenses resulting from our acquisition of Charles Stanley.

RAYMOND JAMES FINANCIAL, INC.

4 unchanged sentences

Operating results

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

Three months ended June 30, Nine months ended June 30,

$ in millions 2022 2021 % change 2022 2021 % change

33 unchanged sentences

10 12 (17) % 31 38 (18) %

Acquisition-related expenses — — — % 4 — NM

25 24 4 % 79 66 20 %

3 unchanged sentences

Pre-tax income $ 61 $ 115 (47) % $ 349 $ 349 — %

Quarter ended March 31, 2022 compared with the quarter ended March 31, 2021

Net revenues of $413 million decreased $20 million, or 5%, and pre-tax income of $87 million decreased $18 million, or 17%.

Brokerage revenues decreased $10 million, or 6%, due to a decrease in fixed income brokerage revenues resulting from a more challenging trading environment compared with a strong prior-year quarter.

We expect fixed income brokerage revenues to be volatile over the next few quarters given high levels of interest rate uncertainty.

However, we expect our fixed income brokerage revenues to benefit from our announced acquisition of SumRidge Partners, which we expect to close in the fiscal fourth quarter of 2022.

Investment banking revenues were flat compared with the prior-year quarter.

Merger & acquisition and advisory revenues increased compared with the prior-year quarter.

This increase was offset by a decrease in equity underwriting revenues, primarily due to a decline in market activity during the current quarter as a result of market uncertainty and geopolitical concerns.

Quarter ended June 30, 2022 compared with the quarter ended June 30, 2021

Net revenues of $383 million decreased 14% and pre-tax income of $61 million decreased 47%.

Brokerage revenues decreased $21 million, or 13%, primarily due to a decrease in fixed income brokerage revenues resulting from a more challenging market environment compared with a strong prior-year quarter.

We expect our fixed income brokerage revenues for our fiscal fourth quarter of 2022 to benefit from our acquisition of SumRidge Partners, which closed on July 1, 2022.

Investment banking revenues decreased $48 million, or 18%, primarily due to a decline in merger & acquisition and advisory revenues compared with a strong prior-year quarter.

Merger & acquisition activity and underwriting activity during the current quarter continued to be negatively impacted by a challenging market environment resulting from macroeconomic uncertainty and geopolitical concerns.

Our investment banking pipeline remains strong and, in part, reflects the investments we have made over the past several years, including our fiscal 2021 acquisitions of Financo and Cebile;

however, continued market uncertainty could delay, or ultimately prevent, the closing of transactions, which could negatively impact our results for the remainder of fiscal 2022.

Compensation-related expenses decreased $13 million, or 5%, due to the impact of lower revenues.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Compensation-related expenses decreased $6 million, or 2%, primarily due to the impact of lower revenues.

Non-compensation expenses increased $4 million, or 6%, including an increase in business development expenses over relatively low prior-year levels.

Six months ended March 31, 2022 compared with the six months ended March 31, 2021

Net revenues of $1.03 billion increased $142 million, or 16%, and pre-tax income of $288 million increased $54 million, or 23%.

Investment banking revenues increased $157 million, or 33%, due to a significant increase in merger & acquisition and advisory revenues and, to a lesser extent, equity underwriting revenues.

The significant increase in merger & acquisition and advisory revenues reflected higher levels of client activity, especially in the fiscal first quarter of 2022.

The increase in equity underwriting was primarily due to higher revenues from private placements, partially offset by a decline in public offerings.

Brokerage revenues decreased $24 million, or 7%, primarily due to a decrease in fixed income brokerage revenues, which remained solid but were lower than the prior-year period as a result of challenging trading conditions compared with a strong prior-year period, due to a more volatile interest rate environment in fiscal 2022.

Compensation-related expenses increased $73 million, or 14%, primarily due to the increase in revenues, as well as an increase in compensation costs to support our growth.

Non-compensation expenses increased $15 million, or 11%, and included $4 million of acquisition-related expenses, comprised of the amortization of intangible assets with short useful lives which arose from the Financo and Cebile acquisitions.

Non-compensation expenses increased $4 million, or 5%, primarily attributable to an increase in business development expenses resulting from increased travel and conference-related expenses as travel restrictions have eased.

Nine months ended June 30, 2022 compared with the nine months ended June 30, 2021

Net revenues of $1.41 billion increased 6% and pre-tax income of $349 million was flat compared with the prior-year period.

Investment banking revenues increased $109 million, or 15%, due to a significant increase in merger & acquisition and advisory revenues, which reflected high levels of client activity in the fiscal first quarter of 2022.

Debt and equity underwritings decreased compared with the prior-year period and were negatively impacted by market uncertainty during our fiscal second and third quarters of 2022.

Brokerage revenues decreased $45 million, or 9%, due to a decrease in fixed income brokerage revenues, which remained solid but were lower than the prior-year period as a result of challenging trading conditions compared with a strong prior-year period.

Compensation-related expenses increased $60 million, or 8%, primarily due to the increase in revenues, as well as higher compensation costs to support our growth.

Non-compensation expenses increased $19 million, or 9%, primarily due to increased travel and event-related expenses, as well as an increase in expenses to support our growth, partially offset by lower investment banking deal expenses due to lower underwriting revenues compared with the prior-year period.

RESULTS OF OPERATIONS – ASSET MANAGEMENT

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Operating results

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

Three months ended June 30, Nine months ended June 30,

$ in millions 2022 2021 % change 2022 2021 % change

30 unchanged sentences

Revenues earned by Carillon Tower Advisers for retail accounts managed on behalf of third-party institutions, institutional accounts and our proprietary mutual funds are recorded entirely in the Asset Management segment.

Our AUM in Carillon Tower Advisers are impacted by market and investment performance and net inflows or outflows of assets.

Our AUM in Carillon Tower Advisers are impacted by market and investment performance and net inflows or outflows of assets, including the impact of acquisitions.

Fees for our managed programs are generally collected quarterly.

1 unchanged sentence

Financial assets under management

$ in billions March 31,

2022 December 31,

$ in billions June 30,

2022 March 31,

2022 September 30,

2021 June 30,

2021 March 31,

2021 December 31,

2021 September 30,

6 unchanged sentences

Activity (including activity in assets managed for affiliated entities)

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

Three months ended June 30, Nine months ended June 30,

$ in billions 2022 2021 2022 2021

Financial assets under management at beginning of period $ 204.1 $ 187.8 $ 202.2 $ 161.7

Carillon Tower Advisers - net inflows/(outflows) (0.8) 1.4 (1.2) 1.1

Carillon Tower Advisers:

Acquisition of Chartwell Investment Partners (1)

Other - net inflows/(outflows) 0.3 (0.3) (0.9) 0.8

AMS - net inflows 1.4 4.5 8.4 9.8

1 unchanged sentence

Financial assets under management at end of period $ 192.6 $ 201.0 $ 192.6 $ 201.0

(1) Represents June 1, 2022 assets under management of Chartwell Investment Partners, a registered investment advisor acquired as part of the TriState Capital acquisition.

See Note 3 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information about this acquisition.

See “Management’s Discussion and Analysis - Results of Operations - Private Client Group” for further information about our retail client assets, including those fee-based assets invested in programs managed by AMS.

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Assets managed by Carillon Tower Advisers include assets managed by its subsidiaries and affiliates:

Eagle Asset Management, Scout Investments, Reams Asset Management (a division of Scout Investments), ClariVest Asset Management and Cougar Global Investments.

Eagle Asset Management, Scout Investments, Reams Asset Management (a division of Scout Investments), ClariVest Asset Management, Cougar Global Investments, and Chartwell Investment Partners, which was acquired on June 1, 2022 in connection with our acquisition of TriState Capital.

The following table presents Carillon Tower Advisers’ AUM by objective, excluding assets for which it does not exercise discretion, as well as the approximate average client fee rate earned on such assets.

$ in billions March 31, 2022 Average fee rate

$ in billions June 30, 2022 Average fee rate

Equity $ 24.4 0.56 %

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The vast majority of these assets are also included in our PCG segment fee-based AUA (as disclosed in “Assets in fee-based accounts” in the “Selected key metrics - PCG client asset balances” section of our “Management’s Discussion and Analysis - Results of Operations - Private Client Group”).

$ in billions March 31,

2022 December 31,

$ in billions June 30,

2022 March 31,

2022 September 30,

2021 June 30,

2021 March 31,

2021 December 31,

2021 September 30,

Total assets $ 339.7 $ 379.7 $ 365.3 $ 361.5 $ 334.2 $ 280.6

The decrease in assets as of March 31, 2022 compared to December 31, 2021 was largely due to a decline in equity markets during the quarter.

The decrease in assets as of June 30, 2022 compared to March 31, 2022 was largely due to a decline in equity markets during the quarter.

Administrative fees associated with these programs are predominantly based on balances at the beginning of the quarter.

The following table includes assets held in asset-based programs in RJ Trust (including those managed for affiliated entities).

$ in billions March 31,

2022 December 31,

$ in billions June 30,

2022 March 31,

2022 September 30,

2021 June 30,

2021 March 31,

2021 December 31,

2021 September 30,

Total assets $ 7.6 $ 8.4 $ 8.1 $ 8.1 $ 7.8 $ 7.1

Quarter ended March 31, 2022 compared with the quarter ended March 31, 2021

Net revenues of $234 million increased $25 million, or 12%, and pre-tax income of $103 million increased $16 million, or 18%.

Asset management and related administrative fees increased $25 million, or 12%, driven by higher average financial assets under management and a higher beginning balance of assets in non-discretionary asset-based programs.

The increase in average financial assets under management resulted from both equity market appreciation since the prior-year quarter and net inflows at AMS, partially offset by net outflows at Carillon Tower Advisers, which continued to be negatively impacted by the industry shift from actively managed investment strategies to passive investment strategies.

We expect the declines in financial assets under management and assets in non-discretionary asset-based programs compared with December 31, 2021 to negatively affect our fiscal third quarter net revenues as the majority of our asset management and related administrative fees are billed based on balances as of the beginning of the quarter.

Compensation expenses decreased $3 million, or 6%, and non-compensation expenses increased $12 million, or 17%.

The increase in non-compensation expenses was primarily due to higher investment sub-advisory fees, which resulted from the increase in AUM in sub-advised programs.

Six months ended March 31, 2022 compared with the six months ended March 31, 2021

Net revenues of $470 million increased $66 million, or 16%, and pre-tax income of $210 million increased $40 million, or 24%.

Asset management and related administrative fees increased $64 million, or 16%, driven by higher average financial assets under management and higher assets in non-discretionary asset-based programs at the beginning of each of the current-year quarterly billing periods compared with the prior-year quarterly billing periods.

Quarter ended June 30, 2022 compared with the quarter ended June 30, 2021

Net revenues of $228 million increased 1% while pre-tax income of $93 million decreased 11%.

Asset management and related administrative fees increased $2 million, or 1%, driven by a higher beginning balance of assets in non-discretionary asset-based programs and financial assets under management at AMS, partially offset by lower average financial assets under management at Carillon Tower Advisers.

We expect the declines in financial assets under management and assets in non-discretionary asset-based programs during the quarter, which occurred due to the decline in equity markets, to negatively affect our fiscal fourth quarter revenues, as the majority of our asset management and related administrative fees are billed based on balances as of the beginning of the quarter.

Despite positive net inflows at Carillon Tower Advisers during the quarter and the positive impact of acquiring Chartwell (as of June 1, 2022), Carillon Tower Advisers continues to be challenged by the industry shift from actively managed investment strategies to passive investment strategies.

Compensation expenses increased $6 million, or 14%, resulting from increased costs to support our growth, as well as one month of incremental compensation expenses related to Chartwell.

Non-compensation expenses increased $9 million, or 12%, primarily due to higher investment sub-advisory fees, resulting from the increase in assets under management in sub-advised programs.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Compensation expenses decreased $2 million, or 2%.

Non-compensation expenses increased $28 million, or 20%, largely due to higher investment sub-advisory fees, resulting from the increase in AUM in sub-advised programs.

RESULTS OF OPERATIONS – RAYMOND JAMES BANK

For an overview of our Raymond James Bank segment operations, as well as a description of the key factors impacting our Raymond James Bank segment results of operations, refer to the information presented in “Item 1 - Business” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2021 Form 10-K.

Nine months ended June 30, 2022 compared with the nine months ended June 30, 2021

Net revenues of $698 million increased 11% and pre-tax income of $303 million increased 10%.

Asset management and related administrative fees increased $66 million, or 11%, driven by higher financial assets under management and higher assets in non-discretionary asset-based programs at the beginning of each of the current-year quarterly billing periods compared with the prior-year quarterly billing periods.

Compensation expenses increased $4 million, or 3%, and non-compensation expenses increased $37 million, or 17%.

The increase in non-compensation expenses was largely due to higher investment sub-advisory fees, resulting from the increase in assets under management in sub-advised programs.

RESULTS OF OPERATIONS – BANK

For an overview of our Bank segment operations, as well as a description of the key factors impacting our Bank segment results of operations, refer to the information presented in “Item 1 - Business” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2021 Form 10-K.

Our Bank segment results include the results of TriState Capital Bank since the acquisition date of June 1, 2022.

See Note 3 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding this acquisition.

Operating results

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

Three months ended June 30, Nine months ended June 30,

$ in millions 2022 2021 % change 2022 2021 % change

15 unchanged sentences

Pre-tax income $ 74 $ 104 (29) % $ 259 $ 286 (9) %

Quarter ended March 31, 2022 compared with the quarter ended March 31, 2021

Net revenues of $197 million increased $37 million, or 23%, while pre-tax income of $83 million decreased $28 million, or 25%.

Net interest income increased $34 million, or 22%, largely due to higher average interest-earning assets.

Quarter ended June 30, 2022 compared with the quarter ended June 30, 2021

Net revenues of $276 million increased 63%, while pre-tax income of $74 million decreased 29%.

Net interest income increased $109 million, or 68%, due to the increase in short-term interest rates, higher average interest-earning assets, as well as one month of incremental net interest income from the acquisition of TriState Capital Bank.

The increase in average interest-earning assets was primarily driven by growth in securities-based loans and residential mortgage loans to PCG clients, as well as increases in average corporate loans and available-for-sale securities.

The net interest margin increased to 2.01% from 1.94% for the prior-year quarter, primarily due to growth in higher-yielding assets.

We anticipate that the net interest margin for our fiscal third quarter of 2022 will be positively impacted by the Fed’s short-term interest rate increases enacted in both March and May of 2022.

In addition, given that a significant portion of our interest-earning assets are sensitive to changes in market interest rates, we expect our net interest earnings to also be favorably impacted by any additional increases in short-term interest rates that may occur over the remainder of our fiscal 2022.

The net interest margin increased to 2.41% from 1.92% for the prior-year quarter.

We anticipate that the Bank segment net interest margin for our fiscal fourth quarter of 2022 will approximate 2.7% and will be positively impacted by the Fed’s short-term interest rate increases enacted during our fiscal third quarter and in late July 2022.

We anticipate the Bank segment’s net interest income to benefit from a full quarter’s impact of TriState Capital Bank results.

The bank loan provision for credit losses was $56 million for the current quarter, compared with a benefit for credit losses of $19 million for the prior-year quarter.

The current quarter provision was largely attributable to loan growth.

The prior-year quarter benefit primarily reflected favorable changes in macroeconomic inputs to our model during the quarter.

RJBDP fees to PCG increased $5 million, or 11%, due to an increase in the number of accounts swept to Raymond James Bank as part of the RJBDP.

These fees eliminate in consolidation.

The current quarter provision includes the initial provision for credit losses of $26

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Six months ended March 31, 2022 compared with the six months ended March 31, 2021

Net revenues of $380 million increased $53 million, or 16%, and pre-tax income of $185 million increased $3 million, or 2%.

Net interest income increased $54 million, or 17%, due to higher average interest-earning assets.

million recorded on non-PCD loans acquired as part of the TriState Capital acquisition, as well as the impact of both loan growth at Raymond James Bank and a weaker macroeconomic outlook.

The prior-year quarter benefit primarily reflected an improved economic forecast, as well as improved credit ratings within our corporate loan portfolio.

Compensation expenses increased $8 million, or 62%, primarily due to incremental expenses from the acquisition of TriState Capital.

Non-compensation expenses, excluding the bank loan provision/(benefit) for credit losses, increased $54 million, or 76%, primarily due to an increase in RJBDP fees paid to PCG, incremental expenses associated with TriState Capital (including a $5 million initial provision for credit losses on TriState Capital’s unfunded lending commitments), and a provision for credit losses on unfunded lending commitments unrelated to the acquisition compared with a benefit for the prior-year quarter.

RJBDP fees to PCG increased $32 million, or 68%, primarily due to an increase in short-term interest rates as well as an increase in client cash swept to Raymond James Bank as part of the RJBDP.

Under our current intersegment policies, the Bank segment incurs the higher of a base servicing fee to PCG on RJBDP deposits it receives in this program, or a net yield equivalent to the yield that the firm would otherwise receive from third-party banks in the RJBDP.

This is a different intersegment policy than that which was in place in prior years, during the last interest rate cycle.

The result of this intersegment change is that the Bank segment expense to PCG for servicing these cash deposits will increase as rates rise, reflecting a market rate, with the PCG segment receiving increased fee revenues.

The servicing fee that the Bank segment incurs on these RJBDP cash sweep deposits, as well as the fee revenues in the PCG segment, are eliminated in the computation of our consolidated results.

Nine months ended June 30, 2022 compared with the nine months ended June 30, 2021

Net revenues of $656 million increased 32%, while pre-tax income of $259 million decreased 9%.

Net interest income increased $163 million, or 34%, due to the increase in short-term interest rates, higher average interest-earning assets, as well as one month of incremental net interest income from the acquisition of TriState Capital Bank.

The increase in average interest-earning assets was primarily driven by significant growth in securities-based loans and residential mortgage loans to PCG clients, as well as higher average corporate loans and available-for-sale securities.

The net interest margin decreased to 1.97% from 1.98% for the prior-year period, primarily due to lower average short-term interest rates, as well as higher balances of agency-backed available-for-sale securities, which on average have a lower yield than loans.

The net interest margin increased to 2.14% from 1.96% for the prior-year period.

The bank loan provision for credit losses was $66 million for the current-year period, compared with a benefit for credit losses of $37 million for the prior-year period.

The current-year period provision primarily reflected the impact of loan growth.

The prior year benefit was largely attributable to favorable changes in inputs to our model, reflecting improvements in certain forecasted macroeconomic inputs.

RJBDP fees to PCG increased $12 million, or 14%, due to an increase in the number of accounts swept to Raymond James Bank as part of the RJBDP.

These fees are eliminated in consolidation.

The current-year period provision includes the aforementioned initial provision for credit losses of $26 million recorded on non-PCD loans acquired as part of the TriState Capital acquisition, as well as the impact of both loan growth at Raymond James Bank and a weaker macroeconomic outlook.

The prior year benefit was largely attributable to improved economic forecasts utilized in our model at that time, including improved outlooks on unemployment and gross domestic product, which favorably impacted most of our loan portfolios at that time, as well as improved credit ratings within our corporate loan portfolio.

Non-compensation expenses, excluding the bank loan provision/(benefit) for credit losses, increased $74 million, or 35%, primarily due to an increase in RJBDP fees paid to PCG, one month of incremental expenses associated with TriState Capital (including a $5 million initial provision for credit losses on TriState Capital’s unfunded lending commitments), and a provision for credit losses on unfunded lending commitments unrelated to the acquisition compared with a benefit for the prior-year period.

RJBDP fees to PCG increased $44 million, or 33%, due to an increase in short-term interest rates as well as an increase in client cash swept to Raymond James Bank as part of the RJBDP.

These fees are eliminated in the computation of our consolidated results.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

RESULTS OF OPERATIONS – OTHER

This segment includes our private equity investments, interest income on certain corporate cash balances, certain acquisition-related expenses, and certain corporate overhead costs of RJF that are not allocated to other segments, including the interest costs on our public debt.

This segment includes our private equity investments, interest income on certain corporate cash balances, certain costs incurred in acquisition activities, and certain corporate overhead costs of RJF that are not allocated to other segments, including the interest costs on our public debt.

For an overview of our Other segment operations, refer to the information presented in “Item 1 - Business” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2021 Form 10-K.

Operating results

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

Three months ended June 30, Nine months ended June 30,

$ in millions 2022 2021 % change 2022 2021 % change

Interest income $ 3 $ 3 — % $ 4 $ 6 (33) %

Interest income $ 6 $ — NM $ 10 $ 6 67 %

Gains/(losses) on private equity investments (3) 24 NM — 56 (100) %

2 unchanged sentences

Interest expense (24) (26) (8) % (71) (75) (5) %

Net revenues (18) (12) (50) % (33) (8) (313) %

Net revenues (21) 2 NM (54) (6) (800) %

Non-interest expenses:

Compensation and all other 43 38 13 % 110 102 8 %

Acquisition-related expenses 11 — NM 13 2 550 %

Losses on extinguishment of debt — 98 (100) % — 98 (100) %

Total non-interest expenses 43 136 (68) % 110 200 (45) %

Pre-tax loss $ (64) $ (134) 52 % $ (164) $ (206) 20 %

Quarter ended March 31, 2022 compared with the quarter ended March 31, 2021

The pre-tax loss of $53 million was $5 million larger than the loss in the prior-year quarter.

Net revenues decreased $6 million, as the current quarter included a net $2 million of losses related to our private equity investments compared with $8 million of gains in the prior-year quarter.

Non-interest expenses decreased $1 million, primarily due to a decrease in compensation expense and lower amounts attributable to noncontrolling interests due to private equity losses in the current quarter compared with gains in the prior-year quarter.

Offsetting these declines were $11 million of acquisition-related expenses in the current quarter, which primarily included professional expenses and other costs incurred to effect our acquisition of Charles Stanley, which was completed in January 2022, and our announced acquisitions of TriState Capital and SumRidge Partners.

Quarter ended June 30, 2022 compared with the quarter ended June 30, 2021

The pre-tax loss of $64 million was $70 million lower than the loss in the prior-year quarter.

Net revenues decreased $23 million due to a net loss of $3 million related to our private equity investments compared with $24 million of gains in the prior-year quarter, partially offset by the impact of higher interest income largely due to higher short-term interest rates.

Non-interest expenses decreased $93 million, primarily due to $98 million of losses on extinguishment of debt in the prior-year quarter related to the early-redemption our $250 million of 5.625% senior notes due 2024 and our $500 million of 3.625% senior notes due 2026.

Offsetting this decrease was an increase in costs incurred in acquisition activities in the current quarter, which primarily included legal and other professional expenses and other costs incurred to effect our acquisition of TriState Capital, which was completed on June 1, 2022, and to a lesser extent expenses associated with our acquisitions of Charles Stanley and SumRidge Partners, which were completed in January 2022 and July 2022, respectively.

Nine months ended June 30, 2022 compared with the nine months ended June 30, 2021

The pre-tax loss of $164 million was $42 million lower than the loss in the prior-year period.

Net revenues decreased $48 million, primarily due to lower private equity gains compared with the prior-year period.

The prior-year period included $56 million of private equity valuation gains, of which $20 million were attributable to noncontrolling interests and were offset within other expenses, whereas the current year private equity results net to an insignificant amount.

Offsetting the negative impact of the lower private equity valuation gains, interest income increased compared with the prior-year period, largely due to the increase in short-term interest rates, and interest expense decreased due to lower interest expense on senior notes payable compared with the prior-year period.

Non-interest expenses decreased $90 million, or 45%, primarily due to the aforementioned losses on extinguishment of debt recorded in the prior-year period, as well as the decrease in amounts attributable to noncontrolling interests.

These decreases were partially offset by an increase in costs incurred in acquisition activities, primarily associated with our current-year acquisitions of Charles Stanley and TriState Capital, as well as our July 1, 2022 acquisition of SumRidge Partners.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Six months ended March 31, 2022 compared with the six months ended March 31, 2021

The pre-tax loss of $100 million was $28 million larger than the loss in the prior-year period.

Net revenues decreased $25 million, primarily due to lower private equity gains compared with the prior-year period.

The current-year period included $3 million of private equity valuation gains, of which an insignificant amount was attributable to noncontrolling interests, compared with $32 million of private equity valuation gains for the prior-year period, of which $10 million were attributable to noncontrolling interests and were offset within other expenses.

Non-interest expenses increased $3 million, or 5%, primarily due to an increase in acquisition-related expenses, partially offset by lower private equity gains attributable to noncontrolling interests.

The $13 million of acquisition-related expenses in the current-year period primarily included the aforementioned expenses associated with our acquisition of Charles Stanley, as well as our announced acquisitions of TriState Capital and SumRidge Partners.

CERTAIN STATISTICAL DISCLOSURES BY BANK HOLDING COMPANIES

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The following table provides certain of those disclosures.

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

Three months ended June 30, Nine months ended June 30,

2022 2021 2022 2021

3 unchanged sentences

Dividend payout ratio 24.6% 17.9% 20.4% 16.9%

Return on assets is computed by dividing annualized net income for the period indicated by average assets for each respective period.

Return on assets is computed by dividing annualized net income available to common shareholders for the period indicated by average assets for each respective period.

Average assets for the quarter is computed by adding total assets as of the date indicated to the prior quarter-end total and dividing by two.

Average assets for the year-to-date period is computed by adding total assets as of each quarter-end date during the year-to-date period to the beginning of the year total and dividing by three.

Return on equity is computed by dividing annualized net income for the period indicated by average equity for each respective period.

Average assets for the year-to-date period is computed by adding total assets as of each quarter-end date during the year-to-date period to the beginning of the year total and dividing by four.

Return on equity is computed by dividing annualized net income available to common shareholders for the period indicated by average common equity for each respective period.

Average equity for the quarter is computed by adding total equity attributable to RJF as of the date indicated to the prior quarter-end total and dividing by two.

Average equity for the year-to-date period is computed by adding total equity attributable to RJF as of each quarter-end date during the year-to-date period to the beginning of the year total and dividing by three.

Average equity to average assets is computed by dividing average equity by average assets, as calculated in accordance with the previous explanations.

Average equity to average assets is computed by dividing average common equity by average assets, as calculated in accordance with the previous explanations.

Dividend payout ratio is computed by dividing dividends declared per common share during the period by earnings per diluted common share for the period.

Refer to the “Net interest analysis” and “Risk management - Credit risk” sections of this MD&A and to the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for the other required disclosures.

STATEMENT OF FINANCIAL CONDITION ANALYSIS

The assets on our Condensed Consolidated Statements of Financial Condition consisted primarily of cash and cash equivalents, assets segregated for regulatory purposes and restricted cash (primarily segregated for the benefit of clients), receivables including bank loans, financial instruments held either for trading purposes or as investments, goodwill and identifiable intangible assets, and other assets.

A significant portion of our assets were liquid in nature, providing us with flexibility in financing our business.

Total assets of $86.11 billion as of June 30, 2022 were $24.22 billion, or 39%, greater than our total assets as of September 30, 2021.

Our acquisition of TriState Capital during fiscal year 2022 brought a significant amount of assets and liabilities onto our balance sheet.

The significant impacts on our June 30, 2022 assets which are directly attributable to this acquisition include an $11.79 billion increase in bank loans, net, a $1.56 billion increase in available-for-sale securities, and a $725 million increase in goodwill and intangible assets resulting from the acquisition.

Assets segregated for regulatory purposes and restricted cash increased $4.90 billion, primarily due to an increase in client cash balances and the addition of $2.30 billion of segregated cash balances resulting from the Charles Stanley acquisition.

The acquisition of Charles Stanley also contributed $221 million to the increase in goodwill and identifiable intangible assets as of June 30, 2022 compared with September 30, 2021.

Bank loans, net also increased due to $5.06 billion in loan growth exclusive of the loans acquired on the closing date of TriState Capital, consisting of increases in corporate, residential, and securities-based loans.

Available-for-sale securities also increased $589 million exclusive of the portfolio acquired from TriState Capital on the closing date.

Partially offsetting these increases was a decrease in cash and cash equivalents of $1.24 billion, partially a result of our acquisitions, as well as $100 million of RJF share repurchases.

See Note 3 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information on our acquisitions.

As of June 30, 2022, our total liabilities of $76.62 billion were $23.03 billion, or 43%, greater than our total liabilities as of September 30, 2021.

The increase in total liabilities was primarily due to an increase in bank deposits of $17.39 billion, which

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

STATEMENT OF FINANCIAL CONDITION ANALYSIS

A significant portion of our assets were liquid in nature, providing us with flexibility in financing our business.

Total assets of $73.10 billion as of March 31, 2022 were $11.21 billion, or 18%, greater than our total assets as of September 30, 2021.

The increase in assets was primarily due to an $8.18 billion increase in assets segregated for regulatory purposes and restricted cash, primarily due to a significant increase in client cash balances and the addition of $2.34 billion of segregated cash balances resulting from the Charles Stanley acquisition.

The acquisition of Charles Stanley also contributed to the $338 million increase in brokerage client receivables and drove the $228 million increase in goodwill and identifiable intangible assets compared with September 30, 2021 (see Note 3 for further information).

Bank loans, net increased by $2.89 billion, primarily due to an increase in securities-based loans and residential mortgage loans to PCG clients, as well as an increase in corporate loans.

Available-for-sale securities increased $500 million.

Partially offsetting these increases was a decrease in cash and cash equivalents of $1.49 billion.

As of March 31, 2022, our total liabilities of $64.49 billion were $10.90 billion, or 20%, greater than our total liabilities as of September 30, 2021.

The increase in total liabilities was primarily related to the significant increase in client cash balances as of March 31, 2022, which resulted in a $8.71 billion increase in brokerage client payables, primarily due to an increase in client cash held in our CIP, and a $2.19 billion increase in bank deposits resulting from higher RJBDP balances held at Raymond James Bank.

The increase in brokerage client payables also reflected an incremental $2.60 billion of client payables resulting from the Charles Stanley acquisition.

includes $12.79 billion as a result of our acquisition of TriState Capital, as well as an increase in bank deposits unrelated to the acquisition of $4.56 billion.

Brokerage client payables increased $5.06 billion, related to the increase in client cash balances as of June 30, 2022, primarily due to an increase in client cash held in our CIP of $2.96 billion, as well as the acquisition of Charles Stanley, which resulted in an increase of $2.41 billion.

Other borrowings increased $495 million, primarily reflecting the additional FHLB borrowings and subordinated note of TriState Capital.

Partially offsetting these increases was a decrease in accrued compensation, commissions, and benefits.

LIQUIDITY AND CAPITAL RESOURCES

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to analyze potential and emerging risks to capital;

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

oversee our annual firmwide capital stress test;

to oversee our annual firmwide capital stress test;

and to propose capital actions to the Board of Directors, such as declaring dividends, repurchasing securities, and raising capital.

To ensure that we have sufficient capital to absorb unanticipated losses, the firm adheres to capital risk appetite statements and tolerances set in excess of regulatory minimums, which are established by the CPC and approved by the Board of Directors.

We conduct enterprise-wide capital stress testing to ensure that we maintain adequate capital to adhere to our established tolerances under multiple scenarios, including stressed scenarios.

Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) decreased $1.49 billion to $5.72 billion during the six months ended March 31, 2022, primarily due to the purchase of U.S.

Treasuries, which were largely segregated for regulatory purposes as of March 31, 2022, as well as investments in bank loans and available-for-sale securities.

In addition, on January 21, 2022, we completed our acquisition of Charles Stanley for £277 million ($376 million as of January 21, 2022).

We conduct enterprise-wide capital stress testing to ensure that we maintain adequate capital to adhere to our established tolerances under multiple scenarios, including a stressed scenario.

Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) decreased $1.24 billion to $5.96 billion during the nine months ended June 30, 2022, primarily due to the purchase of U.S.

Treasuries, which were largely segregated for regulatory purposes as of June 30, 2022, as well as investments in bank loans and available-for-sale securities.

In addition, we completed our acquisitions of Charles Stanley for cash consideration of £277 million ($376 million as of January 21, 2022) and TriState Capital, which included cash consideration of $484 million (including a $125 million note issued to TriState Capital prior to the acquisition) during the nine months ended June 30, 2022.

Offsetting these cash outflows was the impact of positive net income during the period, as well as a significant increase in client cash balances which increased our brokerage client payables and bank deposits.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Sources of liquidity

Approximately $2.23 billion of our total March 31, 2022 cash and cash equivalents included cash held at the parent company, which included cash loaned to RJ&A.

These amounts include the impact of significant dividends from RJ&A during the three months ended March 31, 2022, as well as dividends from RJF’s other subsidiaries.

As of March 31, 2022, RJF had loaned $1.67 billion to RJ&A (such amount is included in the RJ&A cash balance in the following table), which RJ&A has invested on behalf of RJF in cash and cash equivalents or otherwise deployed in its normal business activities.

Approximately $2.03 billion of our total June 30, 2022 cash and cash equivalents included cash held at the parent company, which included cash loaned to RJ&A.

These amounts include the impact of significant dividends from RJ&A during the nine months ended June 30, 2022, as well as dividends from RJF’s other subsidiaries.

As of June 30, 2022, RJF had loaned $1.47 billion to RJ&A (such amount is included in the RJ&A cash balance in the following table), which RJ&A has invested on behalf of RJF in cash and cash equivalents or otherwise deployed in its normal business activities.

The following table presents our holdings of cash and cash equivalents.

$ in millions March 31, 2022

$ in millions June 30, 2022

Raymond James Bank 1,118

TriState Capital Bank 461

Raymond James Ltd.

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Total cash and cash equivalents $ 5,958

RJF maintained depository accounts at Raymond James Bank with a balance of $255 million as of March 31, 2022.

The portion of this total that was available on demand without restrictions, which amounted to $178 million as of March 31, 2022, is reflected in the RJF cash balance and excluded from the Raymond James Bank cash balance in the preceding table.

RJF maintained depository accounts at Raymond James Bank with a balance of $256 million as of June 30, 2022.

The portion of this total that was available on demand without restrictions, which amounted to $178 million as of June 30, 2022, is reflected in the RJF cash balance and excluded from Raymond James Bank’s cash balance in the preceding table.

A large portion of the RJ Ltd.

cash and cash equivalents balance as of March 31, 2022 was held to meet regulatory requirements and was not available for use by the parent.

cash and cash equivalents balance as of June 30, 2022 was held to meet regulatory requirements and was not available for use by the parent.

In addition to the cash balances described, we have various other potential sources of cash available to the parent from subsidiaries, as described in the following section.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Liquidity available from subsidiaries

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Certain of our broker-dealer subsidiaries are subject to the requirements of the Uniform Net Capital Rule (Rule 15c3-1) under the Securities and Exchange Act of 1934.

As a member firm of FINRA, RJ&A is subject to FINRA’s capital requirements, which are substantially the same as Rule 15c3-1.

As a member firm of the Financial Industry Regulatory Authority (“FINRA”), RJ&A is subject to FINRA’s capital requirements, which are substantially the same as Rule 15c3-1.

Rule 15c3-1 provides for an “alternative net capital requirement,” which RJ&A has elected.

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In addition, covenants in RJ&A’s committed financing facilities require its net capital to be a minimum of 10% of aggregate debit items.

At March 31, 2022, RJ&A significantly exceeded the minimum regulatory requirements, the covenants in its financing arrangements pertaining to net capital, as well as its internally-targeted net capital tolerances despite significant dividends to RJF during our fiscal second quarter of 2022.

At June 30, 2022, RJ&A significantly exceeded the minimum regulatory requirements, the covenants in its financing arrangements pertaining to net capital, as well as its internally-targeted net capital tolerances despite significant dividends to RJF during the nine months ended June 30, 2022.

FINRA may impose certain restrictions, such as restricting withdrawals of equity capital, if a member firm were to fall below a certain threshold or fail to meet minimum net capital requirements which may result in RJ&A limiting dividends it would otherwise remit to RJF.

We evaluate regulatory requirements, loan covenants and certain internal tolerances when determining the amount of liquidity available to RJF from RJ&A.

Raymond James Bank may pay dividends to RJF without prior approval of its regulator as long as the dividends do not exceed the sum of Raymond James Bank’s current calendar year and the previous two calendar years’ retained net income, and Raymond James Bank maintains its targeted regulatory capital ratios.

Dividends from Raymond James Bank may be limited to the extent that capital is needed to support its balance sheet growth.

Raymond James Bank may pay dividends to RJF without prior approval of its regulator as long as the dividends do not exceed the sum of its current calendar year and the previous two calendar years’ retained net income, and it maintains its targeted regulatory capital ratios.

Dividends may be limited to the extent that capital is needed to support balance sheet growth.

Although we have liquidity available to us from our other subsidiaries, the available amounts are not as significant as those previously described and, in certain instances, may be subject to regulatory requirements.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Borrowings and financing arrangements

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Our ability to borrow is dependent upon compliance with the conditions in our various loan agreements and, in the case of secured borrowings, collateral eligibility requirements.

Our committed financing arrangements consist of a tri-party repurchase agreement (i.e., securities sold under agreements to repurchase) and, in the case of our $500 million revolving credit facility agreement (the “Credit Facility”), an unsecured line of credit.

Our committed financing arrangements primarily consist of a tri-party repurchase agreement (i.e., securities sold under agreements to repurchase) and, in the case of our $500 million revolving credit facility agreement (the “Credit Facility”), an unsecured line of credit.

The required market value of the collateral associated with the tri-party repurchase agreement ranges from 105% to 125% of the amount financed.

The following table presents our committed financing arrangements with third-party lenders, which we generally utilize to finance a portion of our fixed income trading instruments, and the outstanding balances related thereto.

March 31, 2022

The following table presents our most significant committed financing arrangements with third-party lenders, which we generally utilize to finance a portion of our fixed income trading instruments, and the outstanding balances related thereto.

June 30, 2022

$ in millions RJ&A RJF Total Total number of arrangements

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RJ&A may borrow up to $500 million under the Credit Facility, depending on the amount of outstanding borrowings by RJF.

The variable rate facility fee on our Credit Facility, which is applied to the committed amount, decreased to 0.150% per annum as of March 31, 2022 from 0.175% per annum as of September 30, 2021, as a result of Moody’s Investor Services (“Moody’s”) upgrade of our credit ratings in February 2022.

The variable rate facility fee on our Credit Facility, which is applied to the committed amount, decreased to 0.150% per annum as of June 30, 2022 from 0.175% per annum as of September 30, 2021, as a result of Moody’s Investor Services (“Moody’s”) upgrade of our credit ratings in February 2022.

For additional details on our issuer and senior long-term debt ratings see our credit ratings table within this section below.

For additional details on our committed unsecured financing arrangement, see our discussion of the Credit Facility in Note 16 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

For additional details on our committed unsecured financing arrangement, see our discussion of the Credit Facility in Note 15 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 16 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K.

Uncommitted financing arrangements

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Our uncommitted secured financing arrangements generally require us to post collateral in excess of the amount borrowed and are generally collateralized by RJ&A-owned securities or by securities that we have received as collateral under reverse repurchase agreements (i.e., securities purchased under agreements to resell).

As of March 31, 2022, we had outstanding borrowings under two uncommitted secured borrowing arrangements out of a total of 12 uncommitted financing arrangements (eight uncommitted secured and four uncommitted unsecured).

As of June 30, 2022, we had outstanding borrowings under one uncommitted secured borrowing arrangement out of a total of 12 uncommitted financing arrangements (eight uncommitted secured and four uncommitted unsecured).

However, lenders are under no contractual obligation to lend to us under uncommitted credit facilities.

The following table presents our borrowings on uncommitted financing arrangements, all of which were in the form of repurchase agreements in RJ&A and were included in “Collateralized financings” on our Condensed Consolidated Statements of Financial Condition.

$ in millions March 31, 2022

$ in millions June 30, 2022

Outstanding borrowing amount:

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Total outstanding borrowing amount

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

The average daily balance outstanding during the five most recent quarters, the maximum month-end balance outstanding during the quarter and the period-end balances for repurchase agreements and reverse repurchase agreements are detailed in the following table.

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during the quarter End of period

June 30, 2022 $ 203 $ 276 $ 100 $ 238 $ 300 $ 168

March 31, 2022 $ 271 $ 334 $ 140 $ 211 $ 304 $ 221

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June 30, 2021 $ 194 $ 185 $ 185 $ 283 $ 339 $ 289

March 31, 2021 $ 226 $ 260 $ 222 $ 242 $ 280 $ 224

Other borrowings and collateralized financings

We had $850 million in FHLB borrowings outstanding at March 31, 2022, comprised of floating-rate advances which mature in December 2023.

The interest rates on the floating-rate advances reset quarterly and transitioned to a Secured Overnight Financing Rate (“SOFR”) -based rate in December 2021.

We use interest rate swaps to manage the risk of increases in interest rates associated with these floating-rate advances by converting the balances subject to variable interest rates to a fixed interest rate.

These FHLB borrowings were secured by a blanket lien on Raymond James Bank’s residential mortgage loan portfolio.

Raymond James Bank had an additional $3.58 billion in immediate credit available from the FHLB as of March 31, 2022 and, with the pledge of additional eligible collateral to the FHLB, total available credit of 30% of total assets.

See Note 16 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K for additional information regarding these borrowings.

Raymond James Bank is eligible to participate in the Federal Reserve’s discount window program;

We had $1.25 billion in FHLB borrowings outstanding at June 30, 2022, comprised of floating-rate and fixed-rate advances.

As of June 30, 2022, our FHLB borrowings consisted of $850 million of floating-rate advances at interest rates which reset daily and mature in December 2023, $200 million of overnight floating-rate advances, which are available for borrowing through May 2023 at interest rates which reset daily, and $200 million of fixed-rate advances which mature in September 2022.

As of September 30, 2021 all of the FHLB borrowings were floating-rate advances.

The interest rates on our floating-rate advances are generally based on SOFR.

We use interest rate swaps to manage the risk of increases in interest rates associated with the majority of these floating-rate advances by converting the balances subject to variable interest rates to a fixed interest rate.

At June 30, 2022, we had pledged $7.34 billion of residential mortgages and CRE loans with the FHLB as security for the repayment of these borrowings and had an additional $4.57 billion in immediate credit available based on collateral pledged.

As of June 30, 2022, with the pledge of additional collateral, we had additional credit availability from certain FHLB member banks.

See Note 15 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 16 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K for additional information regarding these borrowings.

We are eligible to participate in the Federal Reserve’s discount window program;

however, we do not view borrowings from the Federal Reserve as a primary source of funding.

The credit available in this program is subject to periodic review, may be terminated or reduced at the discretion of the Federal Reserve, and is secured by pledged C&I loans.

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

The credit available in this program is subject to periodic review, may be terminated or reduced at the discretion of the Federal Reserve, and is secured by certain pledged C&I loans.

As part of the acquisition of TriState Capital, we assumed, as of the closing date, TriState Capital’s subordinated notes due 2030, with an aggregate principal amount of $98 million.

The subordinated notes incur interest at a fixed rate of 5.75% until May 2025 and thereafter at a variable interest rate based on LIBOR, or an appropriate alternative reference rate.

We may redeem up to $60 million of these subordinated notes beginning in May 2025 and $38 million beginning in August 2025 at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest thereon to the redemption date.

See Note 15 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding these borrowings.

We may act as an intermediary between broker-dealers and other financial institutions whereby we borrow securities from one broker-dealer and then lend them to another.

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

We account for each of these types of transactions as collateralized agreements and financings, with the outstanding balance of $285 million as of March 31, 2022 related to the securities loaned included in “Collateralized financings” on our Condensed Consolidated Statements of Financial Condition of this Form 10-Q.

We account for each of these types of transactions as collateralized agreements and financings, with the outstanding balance of $337 million as of June 30, 2022 related to the securities loaned included in “Collateralized financings” on our Condensed Consolidated Statements of Financial Condition of this Form 10-Q.

See Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for more information on our collateralized agreements and financings.

Senior notes payable

At June 30, 2022, we had aggregate outstanding senior notes payable of $2.04 billion which, exclusive of any unaccreted premiums or discounts and debt issuance costs, was comprised of $500 million par 4.65% senior notes due 2030, $800 million par 4.95% senior notes due 2046, and $750 million par 3.75% senior notes due 2051.

See Note 16 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 17 of the Notes to the Consolidated Financial Statements of our 2021 Form 10-K for additional information on senior notes payable.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Senior notes payable

At March 31, 2022, we had aggregate outstanding senior notes payable of $2.04 billion, which, exclusive of any unaccreted premiums or discounts and debt issuance costs, was comprised of $500 million par 4.65% senior notes due 2030, $800 million par 4.95% senior notes due 2046, and $750 million par 3.75% senior notes due 2051.

See Note 17 of the Notes to the Consolidated Financial Statements of our 2021 Form 10-K for additional information.

Credit ratings

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Fitch Ratings, Inc.

Standard & Poor’s Ratings Services (2)

BBB+ Positive

(1) In February 2022, Moody’s upgraded our senior debt and issuer credit rating to A3 from Baa1, which had a favorable impact on the interest rate and facility fee associated with our Credit Facility.

(2) In March 2022, Standard & Poor’s Rating Services revised their outlook to positive and affirmed our BBB+ issuer credit rating.

Moody’s A3 Stable

Standard & Poor’s Ratings Services BBB+ Positive

Our current long-term debt ratings depend upon a number of factors, including industry dynamics, operating and economic environment, operating results, operating margins, earnings trends and volatility, balance sheet composition, liquidity and liquidity management, capital structure, overall risk management, business diversification and market share, and competitive position in the markets in which we operate.

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Of the company-owned life insurance policies which fund these plans, certain policies could be used as a source of liquidity for the firm.

Those policies against which we could readily borrow had a cash surrender value of $859 million as of March 31, 2022, comprised of $538 million related to employee-directed plans and $321 million related to company-directed plans, and we were able to borrow up to 90%, or $773 million, of the March 31, 2022 total without restriction.

Those policies against which we could readily borrow had a cash surrender value of $751 million as of June 30, 2022, comprised of $472 million related to employee-directed plans and $279 million related to company-directed plans, and we were able to borrow up to 90%, or $676 million, of the June 30, 2022 total without restriction.

To effect any such borrowing, the underlying investments would be converted to money market investments, therefore requiring us to take market risk related to the employee-directed plans.

There were no borrowings outstanding against any of these policies as of March 31, 2022.

There were no borrowings outstanding against any of these policies as of June 30, 2022.

On May 12, 2021, we filed a “universal” shelf registration statement with the SEC pursuant to which we can issue debt, equity and other capital instruments if and when necessary or perceived by us to be opportune.

Subject to certain conditions, this registration statement will be effective through May 12, 2024.

On October 20, 2021, we announced we had entered into a definitive agreement to acquire TriState Capital in a combination cash and stock transaction, valued at approximately $1.1 billion.

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

We have entered into an

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

agreement with the sole holder of the TriState Capital 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 Preferred Stock and Series B Preferred Stock will remain outstanding and will be converted into equivalent shares of preferred stock of RJF.

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 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.

See Note 3 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information.

On March 28, 2022, we announced we had reached an agreement to acquire 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.

See Note 3 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information.

As of the date of this report, we have utilized approximately $300 million of cash at the parent company to fund acquisitions during our fiscal fourth quarter of 2022.

As part of our ongoing operations, we also enter into contractual arrangements that may require future cash payments, including certificates of deposit, lease obligations and other contractual arrangements, such as for software and various services.

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See Note 18 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Refer to the discussion of the regulatory environment in which we operate and the impact on our operations of certain rules and regulations in “Item 1 - Business - Regulation” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Regulatory” of our 2021 Form 10-K.

RJF and many of its subsidiaries are each subject to various regulatory capital requirements.

As of March 31, 2022, all of our active regulated domestic and international subsidiaries had net capital in excess of minimum requirements.

In addition, RJF and Raymond James Bank were categorized as “well-capitalized” as of March 31, 2022.

As of June 30, 2022, all of our active regulated domestic and international subsidiaries had net capital in excess of minimum requirements.

In addition, RJF, Raymond James Bank, and TriState Capital Bank were categorized as “well-capitalized” as of June 30, 2022.

The maintenance of certain risk-based and other regulatory capital levels could influence various capital allocation decisions impacting one or more of our businesses.

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See Note 23 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information on regulatory capital requirements.

Banking supervision and regulation

As part of the acquisition of TriState Capital on June 1, 2022, we acquired a new, separately chartered depository institution, TriState Capital Bank.

TriState Capital Bank is a FDIC-insured non-member bank that is primarily supervised by both the FDIC and the Pennsylvania Department of Banking and Securities.

TriState Capital Bank is also subject to supervision by Consumer Financial Protection Bureau.

Alternative reference rate transition

Central banks and regulators in the U.S.

and other jurisdictions are working to implement the transition to suitable replacements for the London Interbank Offered Rate (“LIBOR”).

and other jurisdictions are working to implement the transition to suitable replacements for the LIBOR .

In December 2021, our FHLB borrowings and SBL converted from LIBOR-based interest rates to SOFR-based interest rates, resulting in an insignificant impact on interest income, interest expense, and cash flows.

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Refer to “Item 1 - Business - Regulation” of our 2021 Form 10-K f or additional information regarding the alternative reference rate transition and our planned response.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

CRITICAL ACCOUNTING ESTIMATES

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See Note 4 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information on our financial instruments at fair value.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Loss provisions

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For a description of the significant estimates and judgments associated with establishing such accruals, see the “Contingent liabilities” section of Note 2 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K.

In addition, refer to Note 16 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding legal and regulatory matter contingencies as of March 31, 2022.

In addition, refer to Note 18 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding legal and regulatory matter contingencies as of June 30, 2022.

Allowance for credit losses

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See Note 2 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K for information regarding our methodologies and assumptions used in estimating the allowance for credit losses.

See Note 8 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding our allowance for credit losses related to bank loans as of March 31, 2022.

See Note 8 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding our allowance for credit losses related to bank loans as of June 30, 2022, including the impact to our allowance for credit losses resulting from our acquisition of TriState Capital, as well as further information regarding the methodologies and assumptions used in estimated the allowance for credit losses for loans at TriState Capital Bank.

Business combinations

We generally account for our acquisitions as business combinations under GAAP, using the acquisition method of accounting, whereby the assets acquired, including separately identifiable intangible assets, and liabilities assumed are recorded at their acquisition-date estimated fair values.

Any excess purchase consideration over the acquisition-date fair values of the net assets acquired is recorded as goodwill.

The acquisition method requires us to make significant estimates and assumptions in determining the fair value of assets acquired and liabilities assumed.

Significant judgment is required in estimating the fair value of identifiable intangible assets and in assigning the useful lives of the definite-lived identifiable intangible assets, which impact the periods over which amortization of those assets are recognized.

Accordingly, we typically obtain the assistance of third-party valuation specialists.

The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management, but are inherently uncertain as they pertain to forward-looking views of our businesses, client behavior, and market conditions.

We consider the income, market and cost approaches and place reliance on the approach or approaches deemed most appropriate to estimate the fair value of intangible assets.

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

Unanticipated market or macroeconomic events and circumstances may occur that could affect the accuracy or validity of the estimates and assumptions.

Refer to Note 3 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for more information on our valuation methods and the results of applying the acquisition method of accounting, including the estimated fair values of the assets acquired and liabilities assumed and, where relevant, the estimated remaining useful lives.

Our ongoing accounting for goodwill and intangible assets acquired requires us to make significant estimates and assumptions as we exercise judgement to evaluate these assets for impairment.

Our processes and accounting policies for evaluating impairments are further described in Note 2 of the Notes to Consolidated Financial Statements of our 2021 Form 10‑K.

RAYMOND JAMES FINANCIAL, INC.

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Inventory levels may fluctuate daily as a result of client demand.

We also hold investments primarily in agency-backed MBS and agency-backed CMOs within Raymond James Bank’s available-for-sale securities portfolio, and from time-to-time may hold SBA loan securitizations not yet transferred.

We also hold investments within our available-for-sale securities portfolio, and from time-to-time may hold SBA loan securitizations not yet transferred.

Our primary market risks relate to interest rates, equity prices, and foreign exchange rates.

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The following table sets forth the high, low, period-end and average daily one-day VaR for all of our trading portfolios, including fixed income and equity instruments, and for our derivatives for the periods and dates indicated.

Six months ended March 31, 2022 Period-end VaR Three months ended March 31, Six months ended March 31,

$ in millions High Low March 31,

Nine months ended June 30, 2022 Period-end VaR Three months ended June 30, Nine months ended June 30,

$ in millions High Low June 30,

2022 September 30,

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Daily VaR $ 2 $ 1 $ 2 $ 1 Average daily VaR $ 1 $ 2 $ 1 $ 5

Average daily VaR was lower during the three and six months ended March 31, 2022 compared with the three and six months ended March 31, 2021 due to the impact of scenarios of elevated volatility as a result of the COVID-19 pandemic (which commenced in March 2020) on our VaR model during the prior-year period.

Average daily VaR was lower during the nine months ended June 30, 2022 compared with the nine months ended June 30, 2021 due to the impact of scenarios of elevated volatility as a result of the COVID-19 pandemic (which commenced in March 2020) on our VaR model during the prior-year period.

The Fed’s MRR requires us to perform daily back-testing procedures for our VaR model, whereby we compare each day’s projected VaR to its regulatory-defined daily trading losses, which exclude fees, commissions, reserves, net interest income and intraday trading.

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Based on these daily “ex ante” versus “ex post” comparisons, we determine whether the number of times that regulatory-defined daily trading losses exceed VaR is consistent with our expectations at a 99% confidence level.

During the three and six months ended March 31, 2022, our regulatory-defined daily loss in our trading portfolios exceeded our predicted VaR on five occasions as a result of heightened market volatility during our fiscal second quarter.

During the three and nine months ended June 30, 2022, our regulatory-defined daily losses in our trading portfolios exceeded our predicted VaR on four and nine occasions, respectively, due to the volatility and market uncertainty related to the Fed’s short-term interest rate increases.

Separately, RJF provides additional market risk disclosures to comply with the MRR, including 10-day VaR and 10-day Stressed VaR, which are available on our website at https://www.raymondjames.com/investor-relations/financial-information/filings-and-reports within “Other Reports and Information.”

Banking operations

Raymond James Bank maintains an interest-earning asset portfolio that is comprised of cash, C&I loans, commercial and residential real estate loans, REIT loans, tax-exempt loans and SBL and other loans, as well as agency-backed securities held in the available-for-sale securities portfolio (primarily MBS and CMOs), and SBA loan securitizations.

Our Bank segment maintains an interest-earning asset portfolio that is comprised of cash, C&I loans, commercial and residential real estate loans, REIT loans, tax-exempt loans, and SBL loans, as well as securities held in the available-for-sale securities portfolio, and SBA loan securitizations.

These interest-earning assets are primarily funded by client deposits.

Based on its current asset portfolio, Raymond James Bank is subject to interest rate risk.

Raymond James Bank analyzes interest rate risk based on forecasted net interest income, which is the net amount of interest received and interest paid, and the net portfolio valuation, both across a range of interest rate scenarios.

One of the objectives of Raymond James Bank’s Asset and Liability Committee is to manage the sensitivity of net interest income to changes in market interest rates.

This committee uses several measures to monitor and limit Raymond James Bank’s interest rate risk, including scenario analysis and economic value of equity.

Based on the current asset portfolio, our banking operations are subject to interest rate risk.

We analyze interest rate risk based on forecasted net interest income, which is the net amount of interest received and interest paid, and the net portfolio valuation, both across a range of interest rate scenarios.

One of the objectives of the Asset and Liability Committee is to manage the sensitivity of net interest income to changes in market interest rates.

This committee uses several measures to monitor and limit interest rate risk in our banking operations, including scenario analysis and economic value of equity.

The methods used to measure this sensitivity are described in “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Market risk” of our 2021 Form 10-K.

We utilize a hedging strategy using interest rate swaps as a result of Raymond James Bank’s asset and liability management process.

For further information regarding this hedging strategy, see Note 2 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K.

To ensure that Raymond James Bank remains within its tolerances established for net interest income, a sensitivity analysis of net interest income to interest rate conditions is estimated under a variety of scenarios.

We utilize a hedging strategy using interest rate swaps in our banking operations as a result of our asset and liability management process.

For further information regarding this hedging strategy, see Note 2 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K and Note 15 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q.

To ensure that we remain within the tolerances established for net interest income, a sensitivity analysis of net interest income to interest rate conditions is estimated under a variety of scenarios.

We use simulation models and estimation techniques to assess the sensitivity of net interest income to movements in interest rates.

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Various interest rate scenarios are modeled in order to determine the effect those scenarios may have on net interest income.

The following table is an analysis of Raymond James Bank’s estimated net interest income over a 12-month period based on instantaneous shifts in interest rates (expressed in basis points) using our previously described asset/liability model, which assumes a dynamic balance sheet and that interest rates do not decline below zero.

The following table is an analysis of our banking operations’ estimated net interest income over a 12-month period based on instantaneous shifts in interest rates (expressed in basis points) using our previously described asset/liability model, which assumes a dynamic balance sheet and that interest rates do not decline below zero.

While not presented, additional rate scenarios are performed, including interest rate ramps and yield curve shifts that may more realistically mimic the speed of potential interest rate movements.

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Management’s Discussion and Analysis

Additionally, any changes made to key assumptions in the model are documented and approved by Raymond James Bank’s Asset and Liability Committee.

Additionally, any changes made to key assumptions in the model are documented and approved by the Asset and Liability Committee.

Instantaneous

changes in rate Net interest income

changes in rate (1)

Net interest income

($ in millions)

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-100 $1,519 (10)%

(1) Our 0-basis point scenario was based on interest rates as of June 30, 2022 and did not include the impact of the Fed’s July 2022 increase in short-term interest rates.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net interest analysis” of this Form 10-Q for a discussion of the impact changes in short-term interest rates could have on the consolidated firm’s operations.

The following table shows the contractual maturities of our bank loan portfolio at March 31, 2022, including contractual principal repayments.

The following table shows the contractual maturities of our bank loan portfolio at June 30, 2022, including contractual principal repayments.

This table does not include any estimates of prepayments, which could shorten the average loan lives and cause the actual timing of the loan repayments to differ significantly from those shown in the table.

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Held for sale loans — — 166 166

Total loans $ 8,072 $ 9,688 $ 10,451 $ 28,211

The following table shows the distribution of the recorded investment of those bank loans that mature in more than one year between fixed and adjustable interest rate loans at March 31, 2022.

Total loans held for sale and investment $ 17,078 $ 13,896 $ 11,246 $ 42,220

The following table shows the distribution of the recorded investment of those bank loans that mature in more than one year between fixed and adjustable interest rate loans at June 30, 2022.

Interest rate type

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Held for sale loans 1 165 166

Total loans $ 2,016 $ 18,123 $ 20,139

Contractual loan terms for C&I, CRE, REIT and residential mortgage loans may include an interest rate floor, cap and/or fixed interest rates for a certain period of time, which would impact the timing of the interest rate reset for the respective loan.

See the discussion within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk - Risk monitoring process” section of this Form 10-Q for additional information regarding Raymond James Bank’s interest-only residential mortgage loan portfolio.

Total loans held for sale and investment $ 2,588 $ 22,554 $ 25,142

Contractual loan terms for C&I, CRE, REIT, residential mortgage, and SBL loans may include an interest rate floor, cap and/or fixed interest rates for a certain period of time, which would impact the timing of the interest rate reset for the respective loan.

See the discussion within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk - Risk monitoring process” section of this Form 10-Q for additional information regarding our interest-only residential mortgage loan portfolio.

In our available-for-sale securities portfolio, we hold primarily fixed-rate agency-backed MBS and agency-backed CMOs which are carried at fair value on our Condensed Consolidated Statements of Financial Condition, with changes in the fair value of the portfolio recorded through OCI on our Condensed Consolidated Statements of Income and Comprehensive Income.

At March 31, 2022, our available-for-sale securities portfolio had a fair value of $8.82 billion with a weighted-average yield of 1.30% and a weighted-average life of approximately four years.

At June 30, 2022, our available-for-sale securities portfolio had a fair value of $10.46 billion with a weighted-average yield of 1.76%.

The effective duration of our available-for-sale securities portfolio as of June 30, 2022 was approximately 3.98, where duration is defined as the approximate percentage change in price for a 100-basis point change in rates.

See Note 5 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information.

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We are subject to foreign exchange risk due to our investments in foreign subsidiaries as well as transactions and resulting balances denominated in a currency other than the U.S.

For example, our bank loan portfolio includes loans which are denominated in Canadian dollars, totaling $1.38 billion and $1.29 billion at March 31, 2022 and September 30, 2021, respectively, when converted to the U.S.

A majority of such loans are held by Raymond James Bank’s Canadian subsidiary, which is discussed in the following sections.

For example, our bank loan portfolio includes loans which are denominated in Canadian dollars, totaling $1.53 billion and $1.29 billion at June 30, 2022 and September 30, 2021, respectively, when converted to the U.S.

A majority of such loans are held in a Canadian subsidiary of Raymond James Bank, which is discussed in the following sections.

Investments in foreign subsidiaries

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See Note 2 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K and Note 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding these derivatives.

At March 31, 2022, we had foreign exchange risk in our investment in RJ Ltd.

At June 30, 2022, we had foreign exchange risk in our investment in RJ Ltd.

of CAD $366 million and in our investment in Charles Stanley of £277 million, which were not hedged.

All of our other investments in subsidiaries located in Europe are not hedged and we do not believe we had material foreign exchange risk either individually, or in the aggregate, pertaining to these subsidiaries as of March 31, 2022.

Foreign exchange gains/losses related to our foreign investments are primarily reflected in OCI on our Condensed Consolidated Statements of Income and Comprehensive Income.

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Banking activities

Raymond James Bank has a substantial loan portfolio.

Our Bank segment has a substantial loan portfolio.

Our strategy for credit risk management related to bank loans includes well-defined credit policies, uniform underwriting criteria, and ongoing risk monitoring and review processes for all credit exposures.

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On an ongoing basis, we evaluate our methods for determining the allowance for each class of loans and make enhancements we consider appropriate.

Our allowance for credit losses methodology is described in Note 2 of the Notes to the Consolidated Financial Statements of our 2021 Form 10-K.

Our allowance for credit losses methodology is described in Note 8 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 2 of the Notes to the Consolidated Financial Statements of our 2021 Form 10-K.

As our bank loan portfolio is segregated into six portfolio segments, likewise, the allowance for credit losses is segregated by these same segments.

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Management’s Discussion and Analysis

Our allowance for credit losses as a percentage of total bank loans held for investment was 1.17% and 1.27% at March 31, 2022 and September 30, 2021, respectively.

The bank loan provision for credit losses for the three and six months ended March 31, 2022 was $21 million and $10 million, respectively, compared to a benefit for credit losses of $32 million and $18 million for the three and six months ended March 31, 2021, respectively.

See further explanation of the credit loss provision in “Management’s Discussion and Analysis - Results of Operations - Raymond James Bank” of this Form 10-Q and Note 8 in the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information about our allowance for credit losses.

Our allowance for credit losses as a percentage of total bank loans held for investment was 0.90% and 1.27% at June 30, 2022 and September 30, 2021, respectively.

The bank loan provision for credit losses for the three and nine months ended June 30, 2022 was $56 million and $66 million, respectively, compared to a benefit for credit losses of $19 million and $37 million for the three and nine months ended June 30, 2021, respectively.

See further explanation of the credit loss provision in “Management’s Discussion and Analysis - Results of Operations - Bank” of this Form 10-Q and Note 8 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information about our allowance for credit losses.

The level of charge-off activity is a factor that is considered in evaluating the potential severity of future credit losses.

The following table presents net loan (charge-offs)/recoveries and the percentage of net loan (charge-offs)/recoveries to the average outstanding loan balances by loan portfolio segment.

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

The following table presents net loan (charge-offs)/recoveries and the percentage of net loan (charge-offs)/recoveries to the average outstanding loan balances on an annualized basis by loan portfolio segment.

Three months ended June 30, Nine Months Ended June 30,

2022 2021 2022 2021

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C&I loans $ (11) 0.46 % $ (1) 0.05 % $ (14) 0.21 % $ (3) 0.05 %

CRE loans 1 0.09 % (3) 0.44 % 1 0.04 % (3) 0.15 %

Residential mortgage loans

— — % — — % 1 0.02 % — — %

Total $ (1) 0.01 % $ (2) 0.04 % $ (2) 0.02 % $ (2) 0.02 %

Total loans held for sale and investment $ (10) 0.12 % $ (4) 0.07 % $ (12) 0.06 % $ (6) 0.04 %

The level of nonperforming loans is another indicator of potential future credit losses.

The following table presents the nonperforming loans balance and total allowance for credit losses for the periods presented.

March 31, 2022 September 30, 2021

June 30, 2022 September 30, 2021

$ in millions Nonperforming

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$ 90 $ 377 $ 74 $ 320

Total nonperforming loans as a % of total bank loans 0.37 % 0.29 %

(1) Total nonperforming loans held for investment at March 31, 2022 and September 30, 2021 included $92 million and $61 million of nonperforming loans, respectively, which were current pursuant to their contractual terms.

The nonperforming loan balances in the preceding table exclude $7 million and $8 million as of March 31, 2022 and September 30, 2021, respectively, of residential TDRs which were returned to accrual status in accordance with our policy.

The following table presents total nonperforming assets, including the nonperforming loans in the preceding table and, when applicable, other real estate acquired in the settlement of residential mortgages, as a percentage of Raymond James Bank’s total assets.

$ in millions March 31, 2022 September 30, 2021

Total nonperforming loans as a % of total loans held for sale and investment 0.21 % 0.29 %

(1) Total nonperforming loans held for investment at June 30, 2022 and September 30, 2021 included $78 million and $61 million of nonperforming loans, respectively, which were current pursuant to their contractual terms.

The nonperforming loan balances in the preceding table exclude $7 million and $8 million as of June 30, 2022 and September 30, 2021, respectively, of residential TDRs which were returned to accrual status in accordance with our policy.

$ in millions June 30, 2022 September 30, 2021

Total nonperforming assets $ 92 $ 74

Total nonperforming assets as a % of Raymond James Bank’s total assets 0.27 % 0.20 %

Although our nonperforming assets as a percentage of Raymond James Bank’s assets remained low as of March 31, 2022, any prolonged period of market deterioration could result in an increase in our nonperforming assets, an increase in our allowance for credit losses and/or an increase in net charge-offs in future periods, although the extent will depend on future developments that are highly uncertain.

Total nonperforming assets as a % of the Bank Segment’s total assets 0.17 % 0.20 %

Although our nonperforming assets as a percentage of the Bank segment’s assets remained low as of June 30, 2022, any prolonged period of market deterioration could result in an increase in our nonperforming assets, an increase in our allowance for credit losses and/or an increase in net charge-offs in future periods, although the extent will depend on future developments that are highly uncertain.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

In accordance with the Coronavirus Aid, Relief, and Economic Security Act and the Consolidated Appropriations Act, 2021, we did not apply TDR classification to any COVID-19 related loan modifications performed from March 1, 2020 through December 31, 2021 to borrowers who were current as of December 31, 2019.

The expiration of these provisions on January 1, 2022, did not have a significant impact on our results of operations or our credit metrics, including delinquencies or nonaccrual loans.

Loan underwriting policies

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loan performance trends, loan product parameters and qualification requirements, borrower credit scores, level of documentation, loan purpose, geographic concentrations, average loan size, risk rating and LTV ratios.

See Note 8 in the Notes to the Condensed Consolidated Financial Statements of this Form 10-Q for additional information about our residential mortgage loan portfolio.

See Note 8 of the Notes to the Condensed Consolidated Financial Statements of this Form 10-Q for additional information about our residential mortgage loan portfolio.

The following table presents a summary of delinquent residential mortgage loans, the vast majority of which are first mortgage loans, which are comprised of loans which are two or more payments past due as well as loans in the process of foreclosure.

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$ in millions 30-89 days 90 days or more Total 30-89 days 90 days or more Total

March 31, 2022 $ 1 $ 8 $ 9 0.02 % 0.13 % 0.15 %

June 30, 2022 $ 2 $ 6 $ 8 0.03 % 0.09 % 0.12 %

September 30, 2021 $ 4 $ 6 $ 10 0.08 % 0.11 % 0.19 %

Our March 31, 2022 percentage compares favorably to the national average for over 30 day delinquencies of 2.57%, as most recently reported by the Fed.

Our June 30, 2022 percentage compares favorably to the national average for over 30 day delinquencies of 2.33%, as most recently reported by the Fed.

Credit risk is also managed by diversifying the residential mortgage portfolio.

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The following table details the geographic concentrations (top five states) of our one-to-four family residential mortgage loans.

March 31, 2022

Loans outstanding as a % of total residential mortgage loans Loans outstanding as a % of total bank loans

CA 26.4% 5.6%

FL 17.2% 3.6%

June 30, 2022

Loans outstanding as a % of

total residential mortgage loans held for sale and investment Loans outstanding as a % of

total loans held for sale and investment

Loans where borrowers may be subject to payment increases include adjustable-rate mortgage loans with terms that initially require payment of interest only.

Payments may increase significantly when the interest-only period ends and the loan principal begins to amortize.

At March 31, 2022 and September 30, 2021, these loans totaled $2.23 billion and $1.97 billion, respectively, or approximately 38% and 37% of the residential mortgage portfolio, respectively.

The weighted-average number of years before the remainder of the loans, which were still in their interest-only period at March 31, 2022, begins amortizing is seven years.

At June 30, 2022 and September 30, 2021, these loans totaled $2.43 billion and $1.97 billion, respectively, or approximately 36% and 37% of the residential mortgage portfolio, respectively.

The weighted-average number of years before the remainder of the loans, which were still in their interest-only period at June 30, 2022, begins amortizing is seven years.

RAYMOND JAMES FINANCIAL, INC.

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The following table details the industry concentrations (top five categories) of our corporate bank loans.

March 31, 2022

Loans outstanding as a % of total corporate bank loans Loans outstanding as a % of total bank loans

June 30, 2022

Loans outstanding as a % of

total corporate bank loans held for sale and investment Loans outstanding as a % of

total loans held for sale and investment

Multi-family 9% 4%

Industrial warehouse 8% 4%

Office real estate 6% 3%

Automotive/transportation 6.3% 3.1%

Loan fund 6% 3%

Consumer products and services 5% 2%

Industrial warehouse 5.7% 2.8%

While the impacts of the COVID-19 pandemic appear to be waning, certain sectors continue to be impacted by supply chain disruptions and changes in consumer behavior.

In addition, the Ukraine conflict has further exacerbated supply chain stresses and inflation concerns.

In addition, recent macroeconomic developments and the Ukraine conflict have further exacerbated supply chain stresses and inflation concerns.

These and related factors could negatively impact our borrowers, particularly those in consumer-facing or supply-dependent industries.

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See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Operational risk” of our 2021 Form 10-K for a discussion of our operational risk and certain of our risk mitigation processes.

In response to the COVID-19 pandemic, we activated and successfully executed on our business continuity protocols.

Throughout the COVID-19 pandemic and in developing our plans to return to the office, we have endeavored to protect the health and well-being of our associates and our clients while ensuring the continuity of business operations for our clients.

During the fiscal second quarter of 2022, we implemented our return to office strategy, which included more work location flexibility for our associates.

We continue to monitor conditions and comply with all applicable laws, regulations, and Centers for Disease Control and Prevention guidelines, as applicable.

Periods of severe market volatility can result in a significantly higher level of transactions on specific days, which may present operational challenges from time to time that may result in losses.

These losses can result from, but are not limited to, trade errors, failed transaction settlements, late collateral calls to borrowers and counterparties, or interruptions to our system processing.

We did not incur any significant losses related to such operational challenges during the six months ended March 31, 2022.

We did not incur any significant losses related to such operational challenges during the nine months ended June 30, 2022.

As more fully described in the discussion of our business technology risks included in various risk factors presented in “Item 1A - Risk Factors” of our 2021 Form 10-K, despite our implementation of protective measures and endeavoring to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable to human error, natural disasters, power loss, cyber-attacks and other information security breaches, and other events that could have an impact on the security and stability of our operations.

Model risk refers to the possibility of unintended business outcomes arising from the design, implementation or use of models.

See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Model risk” of our 2021 Form 10-K for information regarding how we utilize models throughout the firm and how we manage model risk.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Model risk refers to the possibility of unintended business outcomes arising from the design, implementation or use of models.

Compliance risk

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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 2. Management’s Discussion and Analysis