What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-02-03 compared with 2022-08-08 · 537 added, 759 removed, 772 unchanged (63% of the section changed)

9 unchanged sentences

Asset Management

Certain statistical disclosures by bank holding companies 81

Statement of financial condition analysis 65

9 unchanged sentences

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

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

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

Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements.

We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the SEC from time to time, including our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov.

We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the SEC from time to time, including our most recent Annual Report on Form 10-K and Current Reports on Form 8-K, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov.

We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.

8 unchanged sentences

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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.

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

For our fiscal first quarter of 2023, we generated net revenues of $2.79 billion, flat compared with the prior-year quarter, while pre-tax income of $652 million increased 17%.

Our net income available to common shareholders of $507 million increased 14%, and our earnings per diluted share were $2.30, reflecting a 10% increase.

Our annualized return on common equity (“ROCE”) for the quarter was 21.3%, compared with 21.2% for the prior-year quarter, and our annualized return on tangible common equity (“ROTCE”) was 26.2% (1) , compared with 23.4% (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.

The three months ended December 31, 2022 included the favorable impact of a $32 million insurance settlement received during the quarter related to a previously settled litigation matter.

Excluding the favorable impact of the insurance settlement received, as well as expenses related to acquisitions completed in prior years, such as compensation related to retention awards and amortization of identifiable intangible assets, our adjusted net income available to common shareholders was $505 million (1) , 9% higher than adjusted net income for the prior-year quarter, and our adjusted earnings per diluted share were $2.29 (1) , 6% higher than adjusted earnings per diluted share for the prior-year quarter.

Adjusted annualized ROCE for the quarter was 21.2% (1) and adjusted annualized ROTCE was 26.1% (1) , compared with adjusted annualized ROCE of 21.9% (1) and adjusted annualized ROTCE of 24.3% (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.

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.

(1) ROTCE, adjusted net income available to common shareholders, adjusted earnings per diluted share, adjusted annualized ROCE, 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 measures, and for other important disclosures.

2 unchanged sentences

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.

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.

Quarterly net revenues were flat compared with the prior-year quarter as the benefit of higher short-term interest rates on net interest income and RJBDP fees from third-party banks, as well as incremental revenues from our prior-year acquisitions of TriState Capital, Charles Stanley Group PLC (“Charles Stanley”), and SumRidge Partners, LLC (“SumRidge Partners”) were offset by lower investment banking revenues due to a challenging market environment during the current quarter, and a decrease in asset management and related administrative fees, as a result of lower fee-based assets at the beginning of the current quarter compared with the prior-year quarter.

Brokerage revenues also declined compared with the prior-year quarter primarily due to decreased activity from depository clients, as well as lower asset-based trailing revenues in the PCG segment.

Compensation, commissions and benefits expense decreased 8%, primarily attributable to the decrease in compensable revenues compared with the prior-year quarter, partially offset by incremental compensation expenses related to the aforementioned acquisitions.

Our compensation ratio, or the ratio of compensation, commissions and benefits expense to net revenues, was 62.3%, compared with 67.7% for the prior-year quarter.

Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 61.7% (1) , compared with 67.3% (1) for the prior-year quarter.

The decline in the compensation ratio primarily resulted from changes in our revenue mix due to higher net interest income and RJBDP fees from third-party banks, which have little associated direct compensation.

Non-compensation expenses increased 17%, due to incremental expenses from the aforementioned acquisitions, as well as increases in the bank loan provision for credit losses, business development expenses and communications and information processing expenses.

The bank loan provision for credit losses was $14 million for the current-year quarter, compared with a benefit of $11 million for the prior-year quarter.

Partially offsetting these increases was the aforementioned favorable insurance settlement received.

Our effective income tax rate was 21.9% for our fiscal first quarter of 2023, an increase compared with the 20.1% effective income tax rate for the prior-year quarter, a modest increase, as both periods included similar levels of non-taxable gains associated with our company-owned life insurance policies, as well as excess tax benefits on share-based compensation.

As of December 31, 2022, our Tier 1 leverage ratio of 11.3% and Total capital ratio of 21.6% were both more than double the regulatory requirement to be considered well-capitalized.

We also continue to have substantial liquidity with $2.0 billion (2) of cash at the parent as of December 31, 2022, which includes cash the parent loans to RJ&A to invest on its behalf.

We believe our funding and capital position provide us the opportunity to continue to grow our balance sheet prudently.

In December, the Board of Directors increased the quarterly cash dividend on common shares to $0.42 per share and authorized common stock repurchases of up to $1.5 billion.

During the three months ended December 31, 2022, we repurchased 1.29 million shares of our common stock for $138 million at an average price of $106 per share under the Board of Directors’ common stock repurchase authorization.

After the effect of those repurchases, $1.4 billion remained under such authorization.

We currently expect to continue to repurchase our common stock in fiscal 2023 to offset the shares issued with the acquisition of TriState Capital in fiscal 2022, as well as to offset dilution from share-based compensation;

however, we will continue to monitor market conditions and other capital needs as we consider these repurchases.

We remain well-positioned entering our fiscal second quarter of 2023.

We expect our fiscal second quarter results to positively benefit from the realization of a full quarter impact of the increases in the Fed’s short-term benchmark interest rate of 75-basis points in November 2022 and 50-basis points in December 2022, as well as the 25-basis points increase in February 2023.

With clients’ domestic cash sweep balances of $60.4 billion as of December 31, 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;

however, we anticipate further declines in client cash balances during the second quarter as clients continue to move their cash from our cash sweep program into higher-yielding investment alternatives which could partially offset the otherwise positive impact on our results from the increase in interest rates.

Asset management and related administrative fees will be positively impacted by the 8% increase in PCG fee-based assets as of December 31, 2022, and we anticipate this to result in a benefit approximating 5%-6% compared to the first quarter level.

In addition, our recruiting pipelines remain solid across our affiliation options and we continue to see solid retention of existing advisors.

However, we 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 continue to experience headwinds for brokerage revenues and investment banking revenues, despite our healthy investment banking pipelines.

Net loan growth should result in additional provisions for credit losses and future economic deterioration could result in increased bank loan provisions for credit losses 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, and as we continue to make investments in our people and technology to support our growth.

(1) Adjusted compensation ratio is a non-GAAP financial measure.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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.

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.

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

RAYMOND JAMES FINANCIAL, INC.

3 unchanged sentences

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

These non-GAAP financial measures have been separately identified in this document.

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

We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a 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.

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

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

Prior periods have been conformed to the current period presentation.

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

We believe that return on tangible common equity is meaningful to investors as it facilitates comparisons of our results to the results of other companies.

In the following tables, the tax effect of non-GAAP adjustments reflects the statutory rate associated with each non-GAAP item.

1 unchanged sentence

In addition, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other companies.

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

Three months ended Nine months ended

$ in millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

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

Three months ended

$ in millions December 31,

2022 December 31,

Net income available to common shareholders $ 507 $ 446

1 unchanged sentence

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

Compensation, commissions and benefits — Acquisition-related retention

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

Other — Amortization of identifiable intangible assets

Total expenses related to acquisitions 29 21

Losses on extinguishment of debt — 98 — 98

Other — Insurance settlement received

Pre-tax impact of non-GAAP adjustments (3) 21

3 unchanged sentences

Compensation, commissions and benefits expense $ 1,736 $ 1,884

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

Acquisition-related retention (as detailed above) 18 11

Adjusted “Compensation, commissions and benefits” expense $ 1,718 $ 1,873

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,

Three months ended

2022 December 31,

Total compensation ratio 62.3 % 67.7 %

1 unchanged sentence

Acquisition-related retention 0.6 % 0.4 %

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 61.7 % 67.3 %

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Three months ended

Earnings per common share December 31,

2022 December 31,

Diluted earnings per common share $ 2.30 $ 2.10

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

Compensation, commissions and benefits — Acquisition-related retention

Professional fees — 0.01

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

0.12 — 0.12 —

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

Other — Amortization of identifiable intangible assets

Total expenses related to acquisitions 0.14 0.09

Losses on extinguishment of debt — 0.46 — 0.46

Other — Insurance settlement received

Tax effect of non-GAAP adjustments — (0.02)

1 unchanged sentence

Adjusted diluted earnings per common share $ 2.29 $ 2.17

Return on common equity Three months ended Nine months ended

$ in millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Return on common equity Three months ended

$ in millions December 31,

2022 December 31,

Average common equity $ 9,537 $ 8,423

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

Compensation, commissions and benefits — Acquisition-related retention

Professional fees — 1

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

Other — Amortization of identifiable intangible assets

Total expenses related to acquisitions 14 11

Losses on extinguishment of debt — 49 — 25

Other — Insurance settlement received

Tax effect of non-GAAP adjustments 1 (3)

1 unchanged sentence

Adjusted average common equity $ 9,536 $ 8,431

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Three months ended Nine months ended

$ in millions June 30,

2022 June 30,

2021 June 30,

2022 June 30,

Three months ended

$ in millions December 31,

2022 December 31,

Average common equity $ 9,537 $ 8,423

Average goodwill and identifiable intangible assets, net 1,935 878

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

Average deferred tax liabilities related to goodwill and identifiable intangible assets, net (128) (64)

Average tangible common equity $ 7,730 $ 7,609

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

Compensation, commissions and benefits — Acquisition-related retention

Professional fees — 1

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

Other — Amortization of identifiable intangible assets

Total expenses related to acquisitions 14 11

Losses on extinguishment of debt — 49 — 25

Other — Insurance settlement received

Tax effect of non-GAAP adjustments 1 (3)

5 unchanged sentences

Adjusted return on tangible common equity 26.1 % 24.3 %

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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.

Tangible common equity is computed by subtracting goodwill and identifiable intangible assets, net, along with the associated deferred tax liabilities, from total common equity attributable to RJF.

Average common equity 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.

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.

1 unchanged sentence

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.

AND SUBSIDIARIES

Management’s Discussion and Analysis

We currently operate through the following five segments:

Capital Markets;

Asset Management;

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

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

$ in millions 2022 2021 % change 2022 2021 % change

Total company

$ 2,718 $ 2,471 10 % $ 8,172 $ 7,065 16 %

Pre-tax income

$ 415 $ 385 8 % $ 1,406 $ 1,231 14 %

Private Client Group

Net revenues $ 1,958 $ 1,696 15 % $ 5,719 $ 4,810 19 %

Pre-tax income $ 251 $ 195 29 % $ 659 $ 527 25 %

Capital Markets

Net revenues $ 383 $ 446 (14) % $ 1,410 $ 1,331 6 %

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

Asset Management

Net revenues $ 228 $ 225 1 % $ 698 $ 629 11 %

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

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

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

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

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

Intersegment eliminations

Net revenues $ (106) $ (67) (58) % $ (257) $ (195) (32) %

Adjusted ROCE 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 ROTCE, 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.

2 unchanged sentences

NET INTEREST ANALYSIS

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.

Largely in response to inflationary pressures, the Fed rapidly increased its benchmark short-term interest rates, commencing in March 2022 and continuing into our fiscal first quarter of 2023, including a 75-basis point increase in November 2022, a 50-basis point increase in December 2022, and a 25-basis point increase in February 2023.

The Fed indicated that it intends to closely monitor short-term interest rates throughout the remainder of 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

Fed Funds Target Rate Schedule

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

March 31 2020 March 16, 2020 (100) 0.00% - 0.25%

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.

September 30, 2022 September 22, 2022 75 3.00% - 3.25%

December 31, 2022 November 3, 2022 75 3.75% - 4.00%

December 31, 2022 December 15, 2022 50 4.25% - 4.50%

Rate changes subsequent to December 31, 2022

March 31, 2023 February 1, 2023 25 4.50% - 4.75%

Increases in short-term interest rates positively impacted our net interest income during our fiscal first quarter 2023, 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.

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 in 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.

Changes to the regulatory landscape governing the fees the firm earns on client assets, including cash sweep balances, could negatively impact our earnings.

In addition, our pace of loan growth may continue to fluctuate over time in response to changes in interest rates.

As a result of our diverse funding sources, strong loan growth and high concentration of floating-rate assets, we benefited from the increases in short-term interest rates in our fiscal first quarter 2023 and believe we are well-positioned for our net interest earnings and RJBDP fees to continue to be favorably impacted by the recent increases in short-term interest rates, as well as any further fiscal 2023 increases.

However, we also expect this benefit to be offset to some degree by declines in domestic client cash sweep balances as clients invest a portion of these cash balances in higher-yielding investment alternatives.

In addition, our domestic client cash sweep balances represent a relatively low-cost funding source.

The favorable impact we experience from further increases in short-term interest rates may be partially offset to the extent we pursue diversified funding sources other than our domestic client cash sweep balances, as those funding sources are typically more expensive than our domestic client cash sweep balances.

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.

3 unchanged sentences

Management’s Discussion and Analysis

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

Three months ended June 30,

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

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

Three months ended December 31,

$ in millions Average

2 unchanged sentences

Interest-earning assets:

Cash and cash equivalents $ 5,548 $ 10 0.76 % $ 5,644 $ 3 0.20 %

Assets segregated for regulatory purposes and restricted cash 17,337 28 0.63 % 9,016 3 0.16 %

Available-for-sale securities

9,972 37 1.47 % 8,041 20 0.96 %

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

Loans held for sale and investment:

Loans held for investment:

9,606 76 3.14 % 7,936 50 2.51 %

4,338 36 3.30 % 2,748 18 2.59 %

REIT loans 1,379 11 3.20 % 1,327 9 2.53 %

Tax-exempt loans

1,329 8 3.16 % 1,294 9 3.33 %

Residential mortgage loans

6,334 44 2.77 % 5,126 34 2.70 %

SBL and other

9,854 78 3.09 % 5,208 29 2.22 %

Loans held for sale

222 2 3.08 % 142 1 2.92 %

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 %

Total interest-earning assets $ 71,091 $ 374 2.11 % $ 51,133 $ 205 1.60 %

Interest-bearing liabilities:

Bank deposits:

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

842 3 1.58 % 883 4 1.91 %

Total bank deposits 39,843 20 0.21 % 29,791 5 0.08 %

Brokerage client payables 16,892 3 0.08 % 10,486 1 0.03 %

Other borrowings 1,045 6 2.06 % 860 4 2.19 %

Senior notes payable 2,037 23 4.44 % 2,211 25 4.49 %

All other interest-bearing liabilities 1,025 8 2.39 % 602 5 1.12 %

Total interest-bearing liabilities

$ 60,842 $ 60 0.40 % $ 43,950 $ 40 0.34 %

Net interest income

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

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.

Any payments received for corporate nonaccrual loans are applied entirely to principal.

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 June 30, 2022 and 2021.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates.

The following table shows the effect that these factors had on the interest earned on our interest-earning assets and the interest incurred on our interest-bearing liabilities.

The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average yield/cost.

Similarly, the effect of rate changes is calculated by multiplying the change in average yield/cost by the previous period’s volume.

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

Three months ended June 30,

2022 compared to 2021

Increase/(decrease) due to

$ in millions Volume Rate Total

Interest income:

Interest-earning assets:

Bank segment:

Cash and cash equivalents $ 2,325 $ 22 3.72 % $ 2,145 $ 1 0.17 %

Assets segregated for regulatory purposes and restricted cash 4 21 25

Available-for-sale securities 11,050 53 1.92 % 8,511 22 1.02 %

Brokerage client receivables 2 3 5

Loans held for sale and investment:

Loans held for investment:

SBL 15,038 226 5.87 % 6,289 35 2.20 %

C&I loans 11,176 169 5.91 % 8,581 55 2.49 %

1 unchanged sentence

REIT loans 1,628 24 5.87 % 1,133 7 2.56 %

Tax-exempt loans — (1) (1)

Residential mortgage loans 7,626 57 2.99 % 5,451 37 2.68 %

SBL and other 27 22 49

Tax-exempt loans (3)

1,594 10 3.06 % 1,297 8 3.19 %

Loans held for sale 189 3 5.39 % 239 2 2.94 %

1 unchanged sentence

All other interest-earning assets 143 2 5.29 % 169 — 1.85 %

Total interest-earning assets $ 72 $ 97 $ 169

Interest expense:

Interest-bearing liabilities:

Bank deposits:

Savings and money market accounts $ 2 $ 9 $ 11

Interest-bearing checking accounts 10 (5) 5

Certificates of deposit — (1) (1)

Total bank deposits 12 3 15

Brokerage client payables — 2 2

Other borrowings 2 — 2

Senior notes payable (2) — (2)

All other interest-bearing liabilities 1 2 3

Total interest-bearing liabilities $ 13 $ 7 $ 20

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.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

Nine months ended June 30,

$ in millions Average

balance Interest Annualized

Interest-earning assets:

Interest-earning assets — Bank segment $ 57,567 $ 676 4.63 % $ 36,756 $ 187 2.03 %

All other segments:

Cash and cash equivalents $ 3,436 $ 33 3.78 % $ 3,931 $ 2 0.18 %

Assets segregated for regulatory purposes and restricted cash 6,237 50 3.17 % 13,011 4 0.12 %

Available-for-sale securities 9,116 84 1.23 % 7,837 64 1.08 %

Trading assets — debt securities 1,080 14 5.10 % 544 4 2.95 %

Brokerage client receivables 2,398 41 6.70 % 2,484 21 3.35 %

Loans held for sale and investment:

Loans held for investment:

C&I loans 8,989 185 2.72 % 7,670 149 2.57 %

CRE loans 3,476 76 2.90 % 2,665 52 2.57 %

REIT loans 1,278 27 2.76 % 1,290 25 2.49 %

Tax-exempt loans 1,305 25 3.18 % 1,253 25 3.34 %

Residential mortgage loans 5,850 119 2.72 % 5,044 103 2.73 %

SBL and other 7,630 152 2.62 % 4,709 80 2.24 %

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

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

All other interest-earning assets 2,001 13 2.58 % 1,663 7 1.57 %

Interest-earning assets — all other segments $ 15,152 $ 151 3.93 % $ 21,633 $ 38 0.69 %

Total interest-earning assets $ 72,719 $ 827 4.48 % $ 58,389 $ 225 1.53 %

Interest-bearing liabilities:

Bank segment:

Bank deposits:

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

Money market and savings accounts $ 45,165 $ 121 1.06 % $ 31,960 $ 1 0.01 %

Interest-bearing checking accounts 5,149 47 3.59 % 187 1 1.62 %

Certificates of deposit 1,225 8 2.48 % 843 4 1.87 %

806 10 1.76 % 911 13 1.90 %

Total bank deposits (4)

Brokerage client payables

51,539 176 1.35 % 32,990 6 0.07 %

Other borrowings 919 15 2.13 % 863 14 2.20 %

FHLB advances and all other interest-bearing liabilities 1,397 9 2.61 % 863 4 2.21 %

Interest-bearing liabilities — Bank segment $ 52,936 $ 185 1.38 % $ 33,853 $ 10 0.12 %

All other segments:

Trading liabilities — debt securities $ 778 $ 10 5.07 % $ 206 $ 1 1.43 %

Brokerage client payables 5,597 17 1.17 % 14,300 1 0.03 %

Senior notes payable 2,038 23 4.44 % 2,037 23 4.44 %

All other interest-bearing liabilities 245 6 3.65 % 185 2 3.84 %

Interest-bearing liabilities — all other segments $ 8,658 $ 56 2.36 % $ 16,728 $ 27 0.62 %

Total interest-bearing liabilities $ 61,594 $ 241 1.52 % $ 50,581 $ 37 0.28 %

Net interest income $ 706 $ 493

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

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.

Firmwide net interest income $ 586 $ 188

Net interest margin (net yield on interest-earning assets)

Bank segment 3.36 % 1.92 %

Firmwide 3.19 % 1.29 %

(1) Loans are presented net of unamortized purchase discounts or premiums, unearned income, and deferred origination fees and costs.

(2) Nonaccrual loans are included in the average loan balances.

Any payments received for corporate nonaccrual loans are applied entirely to principal.

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 nine months ended June 30, 2022 and 2021.

(3) 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 years presented.

(4) The average balance, interest expense, and average rate for “Total bank deposits” included amounts associated with affiliate deposits.

Such amounts are eliminated in consolidation and are offset in “All other interest-bearing liabilities” under “All other segments”.

RAYMOND JAMES FINANCIAL, INC.

3 unchanged sentences

The following table shows the effect that these factors had on the interest earned on our interest-earning assets and the interest incurred on our interest-bearing liabilities.

The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average yield/cost.

Similarly, the effect of rate changes is calculated by multiplying the change in average yield/cost by the previous period’s volume.

The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average rate.

Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous period’s volume.

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

Nine months ended June 30,

Three months ended December 31,

2022 compared to 2021

1 unchanged sentence

$ in millions Volume Rate Total

Interest income:

Interest-earning assets:

Interest income

Bank segment:

Cash and cash equivalents $ — $ 21 $ 21

Assets segregated for regulatory purposes and restricted cash 11 17 28

Available-for-sale securities 8 23 31

Brokerage client receivables 8 2 10

Loans held for sale and investment:

Loans held for investment:

SBL 87 104 191

C&I loans 21 93 114

1 unchanged sentence

REIT loans 4 13 17

Tax-exempt loans 2 (2) —

Residential mortgage loans 16 4 20

SBL and other 50 22 72

Tax-exempt loans 4 (2) 2

Loans held for sale (3) 4 1

1 unchanged sentence

All other interest-earning assets (1) 3 2

Interest-earning assets — Bank segment $ 180 $ 309 $ 489

All other segments:

Cash and cash equivalents $ (2) $ 33 $ 31

Assets segregated for regulatory purposes and restricted cash (15) 61 46

Trading assets — debt securities 6 4 10

Brokerage client receivables (5) 25 20

All other interest-earning assets 1 5 6

Interest-earning assets — all other segments $ (15) $ 128 $ 113

Total interest-earning assets $ 165 $ 437 $ 602

Interest expense:

Interest-bearing liabilities:

Interest expense

Bank segment:

Bank deposits:

Savings and money market accounts $ 1 $ 10 $ 11

Money market and savings accounts $ — $ 120 $ 120

Interest-bearing checking accounts 44 2 46

1 unchanged sentence

Total bank deposits 46 124 170

FHLB advances and all other interest-bearing liabilities 4 1 5

Interest-bearing liabilities — Bank segment $ 50 $ 125 $ 175

All other segments:

Trading liabilities — debt securities 5 4 9

Brokerage client payables (5) 21 16

Other borrowings 2 (1) 1

Senior notes payable (2) (2) (4)

All other interest-bearing liabilities 2 2 4

Interest-bearing liabilities — all other segments $ 2 $ 27 $ 29

Total interest-bearing liabilities $ 52 $ 152 $ 204

Change in net interest income $ 132 $ 81 $ 213

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

Change in firmwide net interest income $ 113 $ 285 $ 398

RAYMOND JAMES FINANCIAL, INC.

4 unchanged sentences

Operating results

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

$ in millions 2022 2021 % change 2022 2021 % change

Three months ended December 31,

$ in millions 2022 2021 % change

Asset management and related administrative fees

14 unchanged sentences

Client account and other fees

59 39 51 % 161 113 42 %

Total account and service fees 563 230 145 %

Investment banking

6 11 (45) % 28 33 (15) %

Interest income

68 31 119 % 138 91 52 %

11 7 57 % 24 20 20 %

Total revenues 2,085 1,842 13 %

10 unchanged sentences

Communications and information processing

86 70 23 % 241 201 20 %

Occupancy and equipment

50 45 11 % 146 133 10 %

Business development

39 19 105 % 91 50 82 %

Professional fees

19 10 90 % 41 33 24 %

20 24 (17) % 58 53 9 %

Total non-compensation expenses

214 168 27 % 577 470 23 %

Total non-interest expenses 1,629 1,644 (1) %

5 unchanged sentences

PCG client asset balances

$ in billions June 30,

2022 March 31,

$ in billions December 31,

2022 September 30,

2021 June 30,

2021 March 31,

2022 December 31,

2021 September 30,

5 unchanged sentences

56.8 % 56.4 % 56.5 % 56.2 %

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

(1) Includes assets associated with firms affiliated with us through our Registered Investment Advisor and Custody Services (“RCS”) division of $115.6 billion as of December 31, 2022, $108.5 billion as of September 30, 2022, $101.6 billion as of December 31, 2021, and $92.7 billion as of September 30, 2021.

Of these amounts, $96.6 billion as of December 31, 2022, $89.9 billion as of September 30, 2022, $85.5 billion as of December 31, 2021, and $77.2 billion as of September 30, 2021 were fee-based assets.

Based on the nature of the services provided to such firms, revenues related to these assets are included in “Account and service fees.”

(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”).

These assets are included in our financial assets under management as disclosed in the “Selected key metrics” section of our “Management’s Discussion and Analysis - Results of Operations - Asset Management.”

PCG net new assets

Three months ended

$ in millions December 31,

2022 September 30,

2022 December 31,

Domestic Private Client Group net new assets (1)

$ 23,226 $ 20,184 $ 36,101

Domestic Private Client Group net new assets growth - annualized (2)

9.8 % 8.3 % 13.7 %

(1) Domestic Private Client Group net new assets represents domestic Private Client Group client inflows, including dividends and interest, less domestic Private Client Group client outflows, including commissions, advisory fees and other fees.

(2) The Domestic Private Client Group net new asset growth - annualized percentage is based on the beginning Domestic Private Client Group AUA balance for the indicated period.

PCG AUA and PCG assets in fee-based accounts increased 7% and 8%, respectively, as of December 31, 2022 compared with September 30, 2022, primarily due to equity market appreciation and strong net inflows of client assets during the quarter.

We expect that the increase in fee-based accounts, compared with the preceding beginning of the quarter level, will positively impact our asset management and related administrative fees for our fiscal second quarter of 2023.

Compared with December 31, 2021, PCG AUA declined 7%, primarily due to declines in the equity market since such time, offset by the favorable impacts of our recruiting as well as our January 21, 2022 acquisition of Charles Stanley.

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.

Fee-based accounts within our PCG segment are comprised of a wide array of products and programs that we offer our clients.

8 unchanged sentences

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.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Financial advisors

2022 March 31,

2022 September 30,

2022 December 31,

2021 September 30,

2021 June 30,

Employees 3,631 3,638 3,447 3,461

2 unchanged sentences

Total advisors 8,699 8,681 8,464 8,482

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;

The number of financial advisors as of December 31, 2022 increased slightly compared to September 30, 2022, as the impacts of new recruits and trainees that were moved into production roles were partially offset by financial advisors who left the firm, including planned retirements where assets are generally retained at the firm pursuant to advisor succession plans.

The recruiting pipeline remains solid across our affiliation options;

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

We expect to continue to experience transfers to our RCS division in fiscal 2023;

however, consistent with our experience in fiscal 2022, we do not expect these financial advisor 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 are included in PCG AUA.

Clients’ domestic cash sweep balances

$ in millions June 30,

2022 March 31,

$ in millions December 31,

2022 September 30,

2022 December 31,

2021 September 30,

2021 June 30,

Bank segment $ 39,098 $ 38,705 $ 33,097 $ 31,410

4 unchanged sentences

$ 60,382 $ 67,114 $ 73,478 $ 66,668

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

2022 2021 2022 2021

Three months ended December 31,

Average yield on RJBDP - third-party banks

3 unchanged sentences

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.

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

The impact of this policy on our segment results in the current market environment is that the PCG segment revenues will reflect fee revenues derived from the yield from third-party banks in the program and the Bank segment RJBDP servicing costs reflect such market rate for the deposits.

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 consolidation.

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 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

The average yield on RJBDP - third-party banks increased from the prior-year quarter as a result of the combined 300-basis point increase in the Fed’s short-term benchmark interest rate during our fiscal 2022, as well as the 75-basis point increase in November 2022 and, to a lesser extent, the 50-basis point increase in December 2022.

These increases in short-term interest rates more than offset the decline in average RJBDP balances due to a continued decline in client cash balances.

We expect our fiscal second quarter of 2023 results to be favorably impacted by the recent increases in short-term rates;

however, RJBDP fees are expected to be negatively impacted by the continued decrease of RJBDP balances with third-party banks, as well as two fewer billable days in our fiscal second quarter of 2023 compared with our fiscal first quarter.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

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

Client cash balances declined $6.7 billion, or 10%, compared with September 30, 2022, including a $3.4 billion, or 53%, decrease in cash balances in the CIP, as a result of continued cash sorting activity given the higher short-term interest rate environment.

We expect this trend to continue, as clients continue to move cash from lower-yielding bank deposits to higher-yielding investment products.

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

Net revenues of $2.06 billion increased 12% and pre-tax income of $434 million increased 123%.

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 $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.

Asset management and related administrative fees decreased $109 million, or 9%, primarily due to lower assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter due to declines in the equity market, partially offset by incremental revenues arising in the current quarter from our January 21, 2022 acquisition of Charles Stanley.

Brokerage revenues decreased $52 million, or 13%, primarily due to lower trailing revenues from mutual fund and annuity products primarily resulting from market-driven declines in asset values for products for which we receive trails, partially offset by incremental revenues arising from Charles Stanley.

Account and service fees increased $333 million, or 145%, 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.

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

Mutual fund service fees decreased primarily due to market-driven declines in average mutual fund assets.

Net interest income increased $57 million, or 190%, due to the increase in short-term interest rates applicable to our cash, segregated cash, and client margin account balances.

Compensation-related expenses decreased $53 million, or 4%, primarily due to lower asset management and related administrative fees and brokerage revenues, partially offset by incremental expenses arising from Charles Stanley and an increase in compensation costs to support our growth.

Non-compensation expenses increased $38 million, or 22%, driven by incremental expenses resulting from Charles Stanley, higher communications and information processing expenses, primarily due to ongoing enhancements of our technology platforms, and an increase in travel and event-related expenses compared with the relatively low levels in the prior-year quarter.

RAYMOND JAMES FINANCIAL, INC.

4 unchanged sentences

Operating results

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

$ in millions 2022 2021 % change 2022 2021 % change

Three months ended December 31,

$ in millions 2022 2021 % change

Brokerage revenues:

7 unchanged sentences

Equity underwriting

36 69 (48) % 185 196 (6) %

Debt underwriting

34 43 (21) % 113 126 (10) %

Total investment banking 133 412 (68) %

Interest income

6 4 50 % 16 12 33 %

Tax credit fund revenues

21 17 24 % 71 57 25 %

3 3 — % 12 14 (14) %

Affordable housing investments business revenues 24 35 (31) %

Total revenues 318 616 (48) %

7 unchanged sentences

Communications and information processing

22 22 — % 66 61 8 %

Occupancy and equipment

10 9 11 % 29 27 7 %

Business development

12 8 50 % 29 23 26 %

Professional fees

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

25 24 4 % 79 66 20 %

Total non-compensation expenses

79 75 5 % 234 215 9 %

Total non-interest expenses 311 413 (25) %

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

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.

Pre-tax income/(loss) $ (16) $ 201 NM

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

Net revenues of $295 million decreased 52% and the pre-tax loss was $16 million compared with pre-tax income of $201 million in the prior-year quarter.

Investment banking revenues decreased $279 million, or 68%, compared with a strong prior-year quarter as activity levels were negatively impacted in the current quarter by very different market conditions compared with the prior-year quarter, including a notable increase in macroeconomic uncertainties in the current period.

Our investment banking pipeline remains healthy and, in part, reflects the investments we have made over the past several years;

however, continued market uncertainty could continue to delay, or ultimately prevent, the closing of transactions, which could negatively impact our results.

Brokerage revenues decreased $25 million, or 16%, primarily due to a decrease in fixed income brokerage revenues resulting from decreased activity from depository institution clients, partially offset by incremental revenues from SumRidge Partners, which was acquired on July 1, 2022.

We expect our fixed income brokerage revenues to continue to be negatively impacted by challenging market conditions driven by higher interest rates which have resulted in a decline in cash balances at many of our depository institution clients which decreases their immediate demand for our products and services.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

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.

Affordable housing investment business revenues decreased $11 million, or 31%, primarily due to gains on the sales of certain properties during the prior-year quarter which did not recur in the current quarter.

Compensation-related expenses decreased $118 million, or 36%, due to lower revenues, partially offset by incremental compensation expenses due to the acquisition of SumRidge Partners, higher salaries, including due to inflationary and market compensation pressures, and higher share-based compensation amortization resulting from production related awards granted in prior periods.

Non-compensation expenses increased $16 million, or 20%, primarily attributable to incremental expenses associated with SumRidge Partners and an increase in business development expenses resulting from increased travel and event-related expenses.

RESULTS OF OPERATIONS – ASSET MANAGEMENT

1 unchanged sentence

Operating results

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

$ in millions 2022 2021 % change 2022 2021 % change

Three months ended December 31,

$ in millions 2022 2021 % change

Asset management and related administrative fees:

4 unchanged sentences

Account and service fees

5 4 25 % 17 13 31 %

All other 5 3 67 %

2 unchanged sentences

Compensation, commissions and benefits

49 43 14 % 142 138 3 %

Non-compensation expenses:

Communications and information processing

13 12 8 % 39 35 11 %

Investment sub-advisory fees

38 33 15 % 114 91 25 %

35 32 9 % 100 90 11 %

Total non-compensation expenses 80 83 (4) %

1 unchanged sentence

Pre-tax income $ 80 $ 107 (25) %

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Selected key metrics

1 unchanged sentence

Management fees recorded in our Asset Management segment are generally calculated as a percentage of the value of our fee-billable financial assets under management (“AUM”).

These AUM include the portion of fee-based AUA in our PCG segment that is invested in programs overseen by our Asset Management segment (included in the “AMS” line of the following table), as well as retail accounts managed on behalf of third-party institutions, institutional accounts and proprietary mutual funds that we manage (collectively included in the “Carillon Tower Advisers” line of the following table).

These AUM include the portion of fee-based AUA in our PCG segment that is invested in programs overseen by our Asset Management segment (included in the “AMS” line of the following table), as well as retail accounts managed on behalf of third-party institutions, institutional accounts and mutual funds that we manage (collectively included in the “Raymond James Investment Management” line of the following table).

Revenues related to fee-based AUA in our PCG segment are shared by the PCG and Asset Management segments, the amount of which depends on whether or not clients are invested in assets that are in managed programs overseen by our Asset Management segment and the administrative services provided (see our “Management’s Discussion and Analysis - Results of Operations - Private Client Group” for more information).

Our AUM in AMS are impacted by market fluctuations and net inflows or outflows of assets, including transfers between fee-based accounts and transaction-based accounts within our PCG segment.

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, including the impact of acquisitions.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

Our AUM in Raymond James Investment Management are impacted by market and investment performance and net inflows or outflows of assets.

Fees for our managed programs are generally collected quarterly.

Approximately 70% of these fees are based on balances as of the beginning of the quarter, approximately 10% are based on balances as of the end of the quarter, and approximately 20% are based on average daily balances throughout the quarter.

Approximately 65% of these fees are based on balances as of the beginning of the quarter (primarily in AMS), approximately 15% are based on balances as of the end of the quarter, and approximately 20% are based on average daily balances throughout the quarter.

Financial assets under management

$ in billions June 30,

2022 March 31,

$ in billions December 31,

2022 September 30,

2021 June 30,

2021 March 31,

2022 December 31,

2021 September 30,

$ 129.5 $ 119.8 $ 145.0 $ 134.4

Carillon Tower Advisers 67.2 64.0 67.8 69.2 66.6 59.5

Raymond James Investment Management 67.4 64.2 68.9 67.8

Subtotal financial assets under management 196.9 184.0 213.9 202.2

3 unchanged sentences

Activity (including activity in assets managed for affiliated entities)

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

Three months ended December 31,

$ in billions 2022 2021

Financial assets under management at beginning of period $ 184.0 $ 202.2

Carillon Tower Advisers:

Acquisition of Chartwell Investment Partners (1)

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

Raymond James Investment Management - net inflows/(outflows) 0.5 (0.4)

AMS - net inflows 1.0 3.5

Net market appreciation/(depreciation) in asset values (23.0) 9.0 (26.9) 28.7

Net market appreciation in asset values 11.4 8.6

Financial assets under management at end of period $ 196.9 $ 213.9

(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.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Carillon Tower Advisers

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, 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 June 30, 2022 Average fee rate

Raymond James Investment Management

Assets managed by Raymond James Investment Management include assets managed by our subsidiaries:

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

The following table presents Raymond James Investment Management’s 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.

As of December 31, 2022

$ in billions AUM Average fee rate

Equity $ 24.0 0.56 %

2 unchanged sentences

Total financial assets under management $ 67.4 0.34 %

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Non-discretionary asset-based programs

1 unchanged sentence

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 June 30,

2022 March 31,

$ in billions December 31,

2022 September 30,

2021 June 30,

2021 March 31,

2022 December 31,

2021 September 30,

Total assets $ 355.6 $ 329.2 $ 392.4 $ 365.3

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.

The increase in assets as of December 31, 2022 compared with September 30, 2022 was largely due to equity market appreciation and continued growth in the PCG segment.

Compared to December 31, 2021, PCG fee-based AUA declined 7%, primarily due to declines in the equity market since such time, partially offset by the favorable impact of our June 1, 2022 acquisition of Chartwell.

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 June 30,

2022 March 31,

Raymond James Trust

The following table includes assets held in asset-based programs in Raymond James Trust, N.A.

(including those managed for affiliated entities).

$ in billions December 31,

2022 September 30,

2021 June 30,

2021 March 31,

2022 December 31,

2021 September 30,

Total assets $ 7.8 $ 7.3 $ 8.8 $ 8.1

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.

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

Net revenues of $207 million decreased 12% and pre-tax income of $80 million decreased 25%.

Asset management and related administrative fees decreased $30 million, or 13%, driven by a lower beginning balance of assets in non-discretionary asset-based programs and financial assets under management at AMS, as well as lower average financial assets under management at Raymond James Investment Management, in each case primarily due to market-driven depreciation in asset values.

We expect the increase in financial assets under management and assets in non-discretionary asset-based programs as of December 31, 2022 compared with September 30, 2022, which occurred due to equity market appreciation and net inflows during the quarter, to positively affect our fiscal second quarter of 2023, 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 increased $1 million, or 2%.

Non-compensation expenses decreased $3 million, or 4%, primarily due to lower investment sub-advisory fees, resulting from the decrease in the beginning balance of assets under management in sub-advised programs.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

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

1 unchanged sentence

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 June 30, Nine months ended June 30,

$ in millions 2022 2021 % change 2022 2021 % change

Three months ended December 31,

$ in millions 2022 2021 % change

Interest income $ 676 $ 187 261 %

5 unchanged sentences

Compensation and benefits

21 13 62 % 48 38 26 %

Non-compensation expenses:

Bank loan provision/(benefit) for credit losses 56 (19) NM 66 (37) NM

Bank loan provision/(benefit) for credit losses 14 (11) NM

RJBDP fees to PCG

79 47 68 % 178 134 33 %

46 24 92 % 105 75 40 %

Total non-compensation expenses 332 68 388 %

1 unchanged sentence

Pre-tax income $ 136 $ 102 33 %

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.

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

Net revenues of $508 million increased 178% and pre-tax income of $136 million increased 33%.

Net interest income increased $314 million, or 177%, primarily due to the increase in short-term interest rates and higher average interest-earning assets at Raymond James Bank, as well as incremental net interest income from the June 1, 2022 acquisition of TriState Capital Bank.

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

The net interest margin increased to 3.36% 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.

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.

We anticipate that the Bank segment net interest income for our fiscal second quarter of 2023 will benefit from the Fed’s short-term interest rate increases enacted during our fiscal first quarter and in February 2023.

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.

The bank loan provision for credit losses was $14 million for the current quarter, compared with a benefit for credit losses of $11 million for the prior-year quarter.

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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 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 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.

The current quarter provision primarily reflects the impact of a weaker macroeconomic outlook, primarily on the residential mortgage portfolio, and the impact of loan growth during the quarter.

The prior-year quarter benefit was largely attributable to improvement in credit quality in the C&I bank loan portfolio and improvement in macroeconomic inputs to our CECL model at that time, which positively impacted most loan portfolios, partially offset by provisions for credit losses related to loan growth.

Compensation expenses increased $27 million, or 208%, primarily due to incremental expenses of TriState Capital Bank.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Non-compensation expenses, excluding the bank loan provision/(benefit) for credit losses, increased $239 million, or 303%, primarily due to an increase in RJBDP fees paid to PCG and incremental expenses of TriState Capital Bank.

RJBDP fees to PCG increased $218 million, or 436%, due to an increase in the market-based servicing fee incurred by the Bank segment for the administrative services provided by the PCG segment for such deposit balances, as well as an increase in client cash balances swept to our Bank segment as part of the RJBDP.

As described in “Management’s Discussion and Analysis - Results of Operations - Private Client Group”, our Bank segment incurs servicing fee expense, reflected as revenues in our PCG segment, for the administrative services provided related to our clients’ deposits that are swept to our Bank segment as part of the RJBDP.

As the yield from third-party banks in the RJBDP program continues to rise, the rate the Bank segment incurs on RJBDP deposits will also increase as it reflects a market rate for such deposits.

These Bank segment fees and the revenues earned by the PCG segment are eliminated in consolidation.

RESULTS OF OPERATIONS – OTHER

2 unchanged sentences

Operating results

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

$ in millions 2022 2021 % change 2022 2021 % change

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

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

Three months ended December 31,

$ in millions 2022 2021 % change

Interest income $ 30 $ 1 2,900 %

Net gains on private equity investments 2 5 (60) %

All other 1 2 (50) %

3 unchanged sentences

Non-interest expenses:

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

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 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.

Compensation and other 23 32 (28) %

Insurance settlement received (32) — NM

Total non-interest expenses (9) 32 NM

Pre-tax income/(loss) $ 18 $ (47) NM

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

Pre-tax income was $18 million compared with a pre-tax loss of $47 million for the prior-year quarter.

Net revenues increased $24 million primarily due to an increase in interest income earned as a result of higher short-term interest rates applicable to our corporate cash balances.

Non-interest expenses decreased $41 million, primarily due to a $32 million insurance settlement received during the quarter related to a previously settled litigation matter, which was reflected as an offset to Other expenses, and to a lesser extent a decrease in compensation and other expenses.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

CERTAIN STATISTICAL DISCLOSURES BY BANK HOLDING COMPANIES

We are required to provide certain statistical disclosures as a bank holding company under the SEC’s Industry Guide 3.

The following table provides certain of those disclosures.

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

2022 2021 2022 2021

Return on assets 1.5% 2.2% 2.0% 2.4%

Return on equity 13.3% 15.9% 16.3% 17.4%

Average equity to average assets 11.3% 13.6% 12.0% 14.0%

Dividend payout ratio 24.6% 17.9% 20.4% 16.9%

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 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 four.

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

1 unchanged sentence

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.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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.

Total assets of $77.05 billion as of December 31, 2022 were $3.90 billion, or 5%, less than our total assets as of September 30, 2022.

Assets segregated for regulatory purposes and restricted cash decreased $3.37 billion, primarily due to a decrease in client cash balances, which resulted in a decline in client cash held in our CIP and a corresponding decline in segregated assets.

Collateralized agreements, other receivables, and brokerage client receivables also decreased compared with September 30, 2022.

Partially offsetting these decreases was an increase in bank loans, net of $827 million, primarily related to increases in corporate and residential mortgage loans, partially offset by a decline in securities-based loans.

As of December 31, 2022, our total liabilities of $67.22 billion were $4.30 billion, or 6%, less than our total liabilities as of September 30, 2022.

Brokerage client payables decreased $3.72 billion, related to the aforementioned decrease in client cash balances as of December 31, 2022.

Accrued compensation, commissions, and benefits decreased $506 million due to the payment of prior-year bonuses and collateralized financings decreased $272 million.

These decreases were partially offset by an increase in bank deposits of $622 million.

LIQUIDITY AND CAPITAL RESOURCES

13 unchanged sentences

The objective of our liquidity management framework is to support the successful execution of our business strategies while ensuring ongoing and sufficient liquidity.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Our capital planning and capital risk management processes are governed by the Capital Planning Committee (“CPC”), a senior management committee that provides oversight on our capital planning and ensures that our strategic planning and risk management processes are integrated into the capital planning process.

5 unchanged sentences

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.

Capital structure

Common equity (i.e., common stock, additional paid-in capital, and retained earnings) is the primary component of our capital structure.

Common equity allows for the absorption of losses on an ongoing basis and for the conservation of resources during stress periods, as it provides us with discretion on the amount and timing of dividends and other capital actions.

Information about our common equity is included in the Condensed Consolidated Statements of Financial Condition, the Condensed Consolidated Statements of Changes in Shareholders’ Equity, and Note 16 of this Form 10-Q.

Under regulatory capital rules applicable to us as a bank holding company, we are required to maintain minimum leverage ratios (defined as tier 1 capital divided by adjusted average assets), as well as minimum ratios of tier 1 capital, CET1, and total capital to risk-weighted assets.

These capital ratios incorporate quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under the regulatory capital rules and are subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

We calculate these ratios in order to assess compliance with both regulatory requirements and internal capital policies.

In order to maintain our ability to take certain capital actions, including dividends and common equity repurchases, and to make bonus payments, we must hold a capital conservation buffer above our minimum risk-based capital requirements.

See Note 20 for further information about our regulatory capital and related capital ratios.

The following table presents the components of RJF’s regulatory capital used to calculate the aforementioned regulatory capital ratios.

$ in millions

December 31, 2022 September 30, 2022

Common equity tier 1 capital/Tier 1 capital

Common stock and related additional paid-in capital $ 2,977 $ 2,989

Retained earnings

Treasury stock

(1,604) (1,512)

Accumulated other comprehensive loss

Goodwill and identifiable intangible assets, net of related deferred tax liabilities (1,809) (1,805)

Other adjustments 801 847

Common equity tier 1 capital 8,728 8,380

Additional tier 1 capital (preferred equity of $120, net of $4 of other items)

Tier 1 capital 8,844 8,480

Tier 2 capital

Tier 2 capital instruments plus related surplus 100 100

Qualifying allowances for credit losses 463 451

Tier 2 capital 563 551

Total capital $ 9,407 $ 9,031

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

The following table presents RJF’s risk-weighted assets by exposure type used to calculate the aforementioned regulatory capital ratios.

$ in millions

December 31, 2022 September 30, 2022

On-balance sheet assets:

Corporate exposures

$ 20,549 $ 20,147

Exposures to sovereign and government-sponsored entities (1)

Exposures to depository institutions, foreign banks, and credit unions 2,389 3,003

Exposures to public-sector entities 749 696

Residential mortgage exposures

Statutory multifamily mortgage exposures 70 71

High volatility commercial real estate exposures

Past due loans

Equity exposures

Securitization exposures 150 129

Other assets 7,125 7,325

Off-balance sheet:

Standby letters of credit 65 62

Commitments with original maturity of one year or less 85 98

Commitments with original maturity greater than one year 2,547 2,437

Over-the-counter derivatives

Other off-balance sheet items 221 423

Market risk-weighted assets

Total standardized risk-weighted assets $ 43,628 $ 44,176

(1) RJF’s exposure is predominantly to the U.S.

government and its agencies.

Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) was $6.18 billion at December 31, 2022, essentially unchanged from September 30, 2022, as investments in bank loans, the payment of prior-year bonuses, repayments of certain FHLB borrowings and common stock repurchases during the quarter were offset by the impacts of positive net income, a decline in receivables, and an increase in bank deposits due to an increase in client cash swept to our Bank segment through the RJBDP.

Sources of liquidity

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.

Approximately $2.01 billion of our total December 31, 2022 cash and cash equivalents included cash held at the parent company, which included cash loaned to RJ&A.

As of December 31, 2022, RJF had loaned $1.36 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 June 30, 2022

Raymond James Bank 1,118

$ in millions December 31, 2022

TriState Capital Bank 975

Raymond James Bank 783

Raymond James Ltd.

(“RJ Ltd.”) 690

Charles Stanley Group Limited 115

Raymond James Capital Services, LLC 226

Raymond James Financial Services, Inc.

Carillon Tower Advisers 77

Charles Stanley Group Limited 122

Raymond James Trust Company of New Hampshire 93

Raymond James Investment Management 89

Other subsidiaries 314

Total cash and cash equivalents $ 6,177

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 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.

AND SUBSIDIARIES

Management’s Discussion and Analysis

RJF maintained depository accounts at Raymond James Bank and TriState Capital Bank totaling $272 million as of December 31, 2022.

The portion of this total that was available on demand without restrictions, which amounted to $232 million as of December 31, 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 cash and cash equivalents balances at our non-U.S.

subsidiaries, including RJ Ltd., as of December 31, 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 company from subsidiaries, as described in the following section.

Liquidity available from subsidiaries

Liquidity is principally available to RJF, the parent company, from RJ&A and Raymond James Bank.

Liquidity is principally available to RJF from RJ&A and Raymond James Bank.

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.

3 unchanged sentences

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 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.

At December 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.

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.

2 unchanged sentences

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.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

Borrowings and financing arrangements

3 unchanged sentences

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 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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

December 31, 2022

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

10 unchanged sentences

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 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 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 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 2022 Form 10-K.

Uncommitted financing arrangements

Our uncommitted financing arrangements are in the form of secured lines of credit, secured bilateral or tri-party repurchase agreements, or unsecured lines of credit.

Our arrangements with third-party lenders are generally utilized to finance a portion of our fixed income securities or for cash management purposes.

Our arrangements with third-party lenders are generally utilized to finance a portion of our fixed income securities held by RJ&A or for cash management purposes.

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 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).

As of December 31, 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 June 30, 2022

The following table presents our borrowings on uncommitted financing arrangements, 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 December 31, 2022

Outstanding borrowing amount:

2 unchanged sentences

Total outstanding borrowing amount

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

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.

10 unchanged sentences

during the quarter End of period

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

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

December 31, 2022 $ 245 $ 257 $ 150 $ 288 $ 306 $ 156

1 unchanged sentence

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

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

December 31, 2021 $ 247 $ 258 $ 203 $ 306 $ 305 $ 204

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Other borrowings and collateralized financings

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 had $1.05 billion in FHLB borrowings outstanding at December 31, 2022, comprised of floating-rate and fixed-rate advances.

See Note 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding the maturities and interest rates on our FHLB borrowings.

The interest rates on our floating-rate advances are generally based on a secured overnight financing rate (“SOFR”).

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

At December 31, 2022, we had pledged $8.36 billion of bank loans, net with the FHLB as security for the repayment of these borrowings and had an additional $5.17 billion in immediate credit available based on collateral pledged.

As of December 31, 2022, with the pledge of additional collateral, we had additional credit availability from certain FHLB member banks.

See Notes 6 and 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding bank loans, net pledged with the FHLB and these borrowings.

A portion of our fixed income transactions are cleared and executed through a third-party clearing organization, which provides financing for the purchase of trading instruments to support such transactions.

The amount of financing is based on the amount of trading inventory financed, as well as any deposits held at the clearing organization.

Amounts outstanding under this financing arrangement are collateralized by a portion of our trading inventory and accrue interest based on market rates.

While we had borrowings outstanding as of December 31, 2022, the clearing organization is under no contractual obligation to lend to us under this arrangement.

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

1 unchanged sentence

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.

See Note 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding bank loans, net pledged with the FRB.

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.

See Note 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 16 of our 2022 Form 10-K 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 $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.

We account for each of these types of transactions as collateralized agreements and financings, with the outstanding balance of $44 million as of December 31, 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 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 2 of our 2022 Form 10-K 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.

At December 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 2022 Form 10-K for additional information on senior notes payable.

Credit ratings

Our issuer, senior long-term debt, and preferred stock credit ratings as of the most current report are detailed in the following table.

Credit Rating

Rating Agency Fitch Ratings, Inc.

Moody’s Standard & Poor’s Ratings Services

Issuer and senior long term debt A- A3 BBB+

Preferred stock BB+ Baa3 (hyb) Not rated

Outlook Stable Stable Positive

Our current credit 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

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Credit ratings

Our issuer and senior long-term debt ratings as of the most current report are detailed in the following table.

Rating Agency Rating Outlook

Fitch Ratings, Inc.

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.

management, capital structure, overall risk management, business diversification and market share, and competitive position in the markets in which we operate.

Deterioration in any of these factors could impact our credit ratings.

11 unchanged sentences

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 $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.

Those policies against which we could readily borrow had a cash surrender value of $811 million as of December 31, 2022, comprised of $513 million related to employee-directed plans and $298 million related to company-directed plans, and we were able to borrow up to 90%, or $730 million, of the December 31, 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 June 30, 2022.

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

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.

2 unchanged sentences

See Note 15 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.

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” of our 2022 Form 10-K.

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

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.

As of December 31, 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 December 31, 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.

1 unchanged sentence

See Note 20 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 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.

We continue to evaluate the effect of the alternative reference rate transition and at this time, given current economic conditions, we expect minimal financial impact.

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.

AND SUBSIDIARIES

Management’s Discussion and Analysis

CRITICAL ACCOUNTING ESTIMATES

The condensed consolidated financial statements are prepared in accordance with GAAP, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during any reporting period in our condensed consolidated financial statements.

The condensed consolidated financial statements are prepared in accordance with GAAP, which require us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses for the reporting period.

Management has established detailed policies and control procedures intended to ensure the appropriateness of such estimates and assumptions and their consistent application from period to period.

4 unchanged sentences

We believe that of our accounting estimates and assumptions, those described in the following sections involve a high degree of judgment and complexity.

Valuation of financial instruments

The use of fair value to measure financial instruments, with related gains or losses recognized on our Condensed Consolidated Statements of Income and Comprehensive Income, is fundamental to our financial statements and our risk management processes.

See Note 2 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K for a discussion of our fair value accounting policies regarding financial instruments and financial instrument liabilities.

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.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Loss provisions

2 unchanged sentences

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 2022 Form 10-K.

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.

In addition, refer to Note 15 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding legal and regulatory matters contingencies as of December 31, 2022.

Allowance for credit losses

We evaluate certain of our financial assets, including bank loans, to estimate an allowance for credit losses based on expected credit losses over a financial asset’s lifetime.

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

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

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

3 unchanged sentences

In such an event, any losses in excess of our allowance would result in a decrease in our net income, as well as a decrease in the level of regulatory capital.

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 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.

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

After testing the reasonableness of a variety of economic forecast scenarios, each model is run using a single forecast scenario selected for each model.

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

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

To demonstrate the sensitivity of credit loss estimates on our bank loan portfolio to macroeconomic forecasts, we compared our modeled estimates under the base case economic scenario used to estimate the allowance for credit losses as of December 31, 2022, to what our estimate would have been under a downside case scenario and an upside scenario, without considering any offsetting effects in the qualitative component of our allowance for credit losses as of December 31, 2022.

As of December 31, 2022, use of the downside case scenario would have resulted in an increase of approximately $170 million in the quantitative portion of our allowance for credit losses on bank loans, while the use of the upside case would have resulted in a reduction of approximately $35 million in the quantitative portion of our allowance for credit losses on bank loans at December 31, 2022.

These hypothetical outcomes reflect the relative sensitivity of the modeled portion of our allowance estimate to macroeconomic forecasted scenarios but do not consider any potential impact qualitative adjustments could have on the allowance for credit losses in such environments.

Qualitative adjustments could either increase or decrease modeled loss estimates calculated using an alternative economic scenario assumption.

Further, such sensitivity calculations do not necessarily reflect the nature and extent of future changes in the related allowance for a number of reasons including:

(1) management’s predictions of future economic trends and relationships among the scenarios may differ from actual events;

and (2) management’s application of subjective measures to modeled results through the qualitative portion of the allowance for credit losses when appropriate.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

downside case scenario utilized in this hypothetical sensitivity analysis assumes a moderate recession.

To the extent macroeconomic conditions worsen beyond those assumed in this downside case scenario, we could incur provisions for credit losses significantly in excess of those estimated in this analysis.

See Note 2 of the Notes to Consolidated Financial Statements of our 2022 Form 10-K for information regarding our methodologies and assumptions used in estimating the allowance for credit losses.

See Note 7 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 December 31, 2022.

RECENT ACCOUNTING DEVELOPMENTS

2 unchanged sentences

This new guidance is effective for our fiscal year beginning on October 1, 2023 and will be applied on a prospective basis.

Although permitted, we do not currently plan to early adopt.

Although permitted, we do not plan to early adopt.

We do not expect the adoption of this new guidance to have a material impact on our financial position and results of operations.

12 unchanged sentences

The third line of risk management, Internal Audit, independently reviews activities conducted by the previous lines of risk management to assess their management and mitigation of risk, providing additional assurance to the Board of Directors and senior management, with a view toward enhancing our oversight, management, and mitigation of risk.

Our legal department provides legal advice and guidance to each of these three lines of risk management.

Market risk is our risk of loss resulting from the impact of changes in market prices on our trading inventory, derivatives, and investment positions.

We have exposure to market risk primarily through our broker-dealer trading operations and our banking operations.

Our broker-dealer subsidiaries, primarily RJ&A, trade debt obligations and equity securities and maintain trading inventories to ensure availability of securities and to facilitate client transactions.

Through our broker-dealer subsidiaries, we trade debt obligations and equity securities and maintain trading inventories to ensure availability of securities to facilitate client transactions.

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

4 unchanged sentences

Foreign exchange risk results from changes in spot prices, forward prices, and volatility of foreign exchange rates.

See Note 2 of the Notes to Consolidated Financial Statements of our 2021 Form 10-K and Notes 4, 5 and 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for fair value and other information regarding our trading inventories, available-for-sale securities and derivative instruments.

We regularly enter into underwriting commitments and, as a result, we may be subject to market risk on any unsold shares issued in the offerings to which we are committed.

Risk exposure is controlled by limiting our participation, the transaction size or through the syndication process.

See Note 2 of the Notes to Consolidated Financial Statements of our 2022 Form 10-K and Notes 3, 4, and 5 of the Notes to Condensed Consolidated

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Financial Statements of this Form 10-Q for fair value and other information regarding our trading inventories, available-for-sale securities, and derivative instruments.

We regularly enter into underwriting commitments and, as a result, we may be subject to market risk on any unsold shares issued in the offerings to which we are committed.

Risk exposure is controlled by limiting our participation, the transaction size, or through the syndication process.

The Market Risk Management department is responsible for measuring, monitoring, and reporting market risks associated with the firm’s trading and derivative portfolios.

9 unchanged sentences

For derivative positions, which are primarily comprised of interest rate swaps, we have established limits based on a number of factors, including interest rate, foreign exchange spot and forward rates, spread, ratio, basis, and volatility risk.

Derivative exposures are also monitored both for the total portfolio and by maturity periods.

Trading positions and derivatives are monitored against these limits through daily reports that are distributed to senior management.

26 unchanged sentences

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.

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,

Three months ended December 31, 2022 Period-end VaR Three months ended December 31,

$ in millions High Low December 31,

2022 September 30,

1 unchanged sentence

Daily VaR $ 3 $ 2 $ 3 $ 3 Average daily VaR $ 2 $ 1

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.

Average daily VaR was higher during the three months ended December 31, 2022 compared with the three months ended December 31, 2021 due to the impact increased market volatility in December 2022, as well as the addition of the SumRidge Partners trading inventory.

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.

1 unchanged sentence

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 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.

During the three months ended December 31, 2022, our regulatory-defined daily losses in our trading portfolios did not exceed our predicted VaR.

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

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.

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

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

3 unchanged sentences

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 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.

For further information regarding this hedging strategy, see Note 2 of the Notes to Consolidated Financial Statements of our 2022 Form 10-K and Notes 12 and 13 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.

4 unchanged sentences

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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.

2 unchanged sentences

On a quarterly basis, we test expected model results to actual performance.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

8 unchanged sentences

-100 $1,981 (9)%

(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.

-200 $1,823 (16)%

(1) Our 0-basis point scenario was based on interest rates as of December 31, 2022 and did not include the impact of the Fed’s February 1, 2023 increase in its benchmark short-term rate.

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 June 30, 2022, including contractual principal repayments.

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

Maturities are generally determined based upon contractual terms;

however, rollovers or extensions that are included for the purposes of measuring the allowance for credit losses are reflected in maturities in the following table.

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.

$ in millions One year or less > One year – five years > Five years Total

$ in millions One year or less > One year – five years > Five years - fifteen years > Fifteen years Total

SBL $ 14,405 $ 354 $ 125 $ 1 $ 14,885

C&I loans 941 7,320 3,106 38 11,405

1 unchanged sentence

REIT loans 129 1,413 138 — 1,680

Tax-exempt loans 4 136 1,207 1,347

Residential mortgage loans 17 31 214 7,556 7,818

SBL and other 15,044 258 10 15,312

Tax-exempt loans 167 260 1,240 — 1,667

Total loans held for investment 16,592 13,490 6,684 7,618 44,384

1 unchanged sentence

Total loans held for sale and investment $ 16,593 $ 13,490 $ 6,717 $ 7,674 $ 44,474

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.

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 December 31, 2022.

Interest rate type

$ in millions Fixed Adjustable Total

SBL $ 5 $ 475 $ 480

C&I loans 779 9,685 10,464

1 unchanged sentence

REIT loans — 1,551 1,551

Tax-exempt loans 1,343 — 1,343

Residential mortgage loans 232 7,569

SBL and other 1 267 268

Tax-exempt loans 1,500 — 1,500

Total loans held for investment 2,857 24,935 27,792

1 unchanged sentence

Total loans held for sale and investment $ 2,859 $ 25,022 $ 27,881

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 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.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Contractual loan terms for SBL, C&I loans, CRE loans, REIT loans, 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.

In our available-for-sale securities portfolio, we hold primarily fixed-rate agency-backed MBS, agency-backed CMOs, and U.S.

Treasuries, 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 December 31, 2022, our available-for-sale securities portfolio had a fair value of $9.79 billion with a weighted-average yield of 1.94%.

The effective duration of our available-for-sale securities portfolio as of December 31, 2022 was approximately 3.74, where duration is defined as the approximate percentage change in price for a 100-basis point change in rates.

See Note 4 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information on our available-for-sale securities portfolio.

Equity price risk

7 unchanged sentences

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 $1.53 billion and $1.29 billion at June 30, 2022 and September 30, 2021, respectively, when converted to the U.S.

For example, our bank loan portfolio includes loans which are denominated in Canadian dollars, totaling $1.52 billion and $1.51 billion at December 31, 2022 and September 30, 2022, 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.

4 unchanged sentences

See Note 2 of the Notes to Consolidated Financial Statements of our 2022 Form 10-K and Note 5 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding these derivatives.

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

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

of CAD $395 million and in our investment in Charles Stanley of £274 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 June 30, 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.

See Note 16 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding our components of OCI.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Transactions and resulting balances denominated in a currency other than the U.S.

8 unchanged sentences

See further discussion of our credit risk, including how we manage such risk, in “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk” of our 2022 Form 10-K.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Brokerage activities

We are engaged in various trading and brokerage activities in which our counterparties primarily include broker-dealers, banks and other financial institutions.

We are engaged in various trading and brokerage activities in which our counterparties primarily include broker-dealers, banks, exchanges, clearing organizations, and other financial institutions.

We are exposed to risk that these counterparties may not fulfill their obligations.

11 unchanged sentences

If this occurs, we may have to liquidate the position at a loss.

Further information about our determination of the allowance for credit losses associated with certain of our brokerage lending activities is described in Note 2 of the Notes to the Consolidated Financial Statements of our 2021 Form 10-K.

See Note 2 of the Notes to the Consolidated Financial Statements of our 2022 Form 10-K for further information about our determination of the allowance for credit losses associated with certain of our brokerage lending activities.

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

4 unchanged sentences

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.

The strategy also includes diversification on a geographic, industry and client level, regular credit examinations and management reviews of all corporate and tax-exempt loans as well as individual delinquent residential loans.

The credit risk management process also includes an annual independent review of the credit risk monitoring process that performs assessments of compliance with credit policies, risk ratings, and other critical credit information.

We seek to identify potential problem loans early, record any necessary risk rating changes and charge-offs promptly, and maintain appropriate reserve levels for expected losses.

We utilize a comprehensive credit risk rating system to measure the credit quality of individual corporate and tax-exempt loans and related unfunded lending commitments, including the probability of default and/or loss given default of each corporate and tax-exempt loan and commitment outstanding.

For our SBL and residential mortgage loans, we utilize the credit risk rating system used by bank regulators in measuring the credit quality of each homogeneous class of loans.

In evaluating credit risk, we consider trends in loan performance, the level of allowance coverage relative to similar banking institutions, industry or client concentrations, the loan portfolio composition and macroeconomic factors (both current and forecasted).

The strategy also includes diversification across loan types, geographic location, industry and client level, regular credit examinations and management reviews of all corporate and tax-exempt loans as well as individual delinquent residential loans.

The credit risk management process also includes annual independent reviews of the credit risk monitoring process that performs assessments of compliance with credit policies, risk ratings, and other critical credit information.

We seek to identify potential problem loans early, record any necessary risk rating changes and charge-offs promptly, and maintain appropriate

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

reserve levels for expected losses.

We utilize a thorough credit risk rating system to measure the credit quality of individual corporate and tax-exempt loans and related unfunded lending commitments.

For our residential mortgage loans and substantially all of our SBL, we utilize the credit risk rating system used by bank regulators in measuring the credit quality of each homogeneous class of loans.

In evaluating credit risk, we consider trends in loan performance, historical experience through various economic cycles, industry or client concentrations, the loan portfolio composition and macroeconomic factors (both current and forecasted).

These factors have a potentially negative impact on loan performance and net charge-offs.

While our bank loan portfolio is diversified, a significant downturn in the overall economy, deterioration in real estate values or a significant issue within any sector or sectors where we have a concentration will generally result in large provisions for credit losses and/or charge-offs.

We determine the allowance required for specific loan grades based on relative risk characteristics of the loan portfolio.

We determine the allowance required for specific loan pools based on relative risk characteristics of the loan portfolio.

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 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.

Our allowance for credit losses methodology is described in Note 2 of the Notes to the Consolidated Financial Statements of our 2022 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.

See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk” of our 2022 Form 10-K for further information about the risk characteristics relevant to each portfolio segment.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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 on an annualized basis by loan portfolio segment.

Three months ended June 30, Nine Months Ended June 30,

2022 2021 2022 2021

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

Three months ended December 31,

$ in millions Net loan

(charge-off)/recovery

amount % of avg.

loans Net loan

(charge-off)/recovery

amount % of avg.

loans Net loan

(charge-off)/recovery

amount % of avg.

amount Annualized

loans Net loan

(charge-off)/recovery

amount % of avg.

amount Annualized

C&I loans $ (4) 0.14 % $ (2) 0.09 %

1 unchanged sentence

Residential mortgage loans — — % 1 0.07 %

— — % — — % 1 0.02 % — — %

Total loans held for sale and investment $ (2) 0.02 % $ (1) 0.02 %

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.

June 30, 2022 September 30, 2021

$ in millions Nonperforming

loan balance Allowance for

credit losses

balance Nonperforming

loan balance Allowance for

credit losses

C&I loans $ 46 $ 207 $ 39 $ 191

CRE loans 29 93 20 66

REIT loans — 23 — 22

Tax-exempt loans — 2 — 2

Residential mortgage loans 15 48 15 35

SBL and other

Total nonperforming loans held for investment (1)

$ 90 $ 377 $ 74 $ 320

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.

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 our Bank segment’s total assets.

$ in millions June 30, 2022 September 30, 2021

Total nonperforming assets $ 92 $ 74

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.

The level of nonperforming assets is another indicator of potential future credit losses.

Nonperforming assets are comprised of both nonperforming loans and other real estate owned.

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

The following table presents the balance of nonperforming loans, nonperforming assets, and related key credit ratios.

$ in millions December 31, 2022 September 30, 2022

Nonperforming loans (1)

Nonperforming assets $ 61 $ 74

Nonperforming loans as a % of total loans held for sale and investment 0.14 % 0.17 %

Allowance for credit losses as a % of nonperforming loans 669 % 535 %

Nonperforming assets as a % of Bank segment total assets 0.11 % 0.13 %

(1) Nonperforming loans at December 31, 2022 and September 30, 2022 included $39 million and $63 million of loans, respectively, which were current pursuant to their contractual terms.

The nonperforming loan balances in the preceding table excluded $7 million as of both December 31, 2022 and September 30, 2022, of residential troubled debt restructurings which were returned to accrual status in accordance with our policy.

Although our nonperforming assets as a percentage of our Bank segment’s assets remained low as of December 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 would depend on future developments that are highly uncertain.

See further explanation of our bank loan portfolio segments, allowance for credit losses, and the credit loss provision in Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and “Management’s Discussion and Analysis - Results of Operations - Bank” of this Form 10-Q and Note 2 of the Notes to the Consolidated Financial Statements of our 2022 Form 10-K.

RAYMOND JAMES FINANCIAL, INC.

6 unchanged sentences

There are various other factors included in these processes, depending on the loan portfolio.

Residential mortgage and SBL and other loan portfolios

The collateral securing our SBL and other portfolio is monitored on a recurring basis, with marketable collateral monitored on a daily basis.

There were no significant changes to those processes during the three months ended December 31, 2022.

SBL and residential mortgage loan portfolios

Substantially all collateral securing our SBL portfolio is monitored on a daily basis.

Collateral adjustments, as triggered by our monitoring procedures, are made by the borrower as necessary to ensure our loans are adequately secured, resulting in minimizing our credit risk.

Collateral calls have been minimal relative to our SBL and other portfolio with no losses incurred to date.

Collateral calls have been minimal relative to our SBL portfolio with no losses incurred to date.

We track and review many factors to monitor credit risk in our residential mortgage loan portfolio.

3 unchanged sentences

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.

Amount of delinquent residential loans Delinquent residential loans as a percentage of outstanding residential mortgage loan balances

Amount of delinquent residential mortgage loans Delinquent residential mortgage loans as a percentage of outstanding residential mortgage loan balances

$ in millions 30-89 days 90 days or more Total 30-89 days 90 days or more Total

June 30, 2022 $ 2 $ 6 $ 8 0.03 % 0.09 % 0.12 %

December 31, 2022 $ 5 $ 6 $ 11 0.06 % 0.08 % 0.14 %

September 30, 2022 $ 6 $ 6 $ 12 0.08 % 0.08 % 0.16 %

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.

Our December 31, 2022 percentage compares favorably to the national average for over 30 day delinquencies of 1.98%, as most recently reported by the Fed.

Credit risk is also managed by diversifying the residential mortgage portfolio.

1 unchanged sentence

The following table details the geographic concentrations (top five states) of our one-to-four family residential mortgage loans.

June 30, 2022

December 31, 2022

Loans outstanding as a % of

1 unchanged sentence

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 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.

The occurrence of a natural disaster or severe weather event in any of these states, for example wildfires in California and hurricanes in Florida, could result in additional credit loss provisions and/or charge-offs on our loans in such states and therefore negatively impact our net income and regulatory capital in any given period.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

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 December 31, 2022 and September 30, 2022, these loans totaled $2.63 billion and $2.55 billion, respectively, or approximately 34% and 35% 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 December 31, 2022, begins amortizing is six years.

Corporate and tax-exempt loans

Credit risk in our corporate and tax-exempt bank loan portfolios is monitored on an individual loan basis.

The majority of our tax-exempt bank loan portfolio is comprised of loans to investment-grade borrowers.

Credit risk in our corporate and tax-exempt loan portfolios is monitored on an individual loan basis.

The majority of our tax-exempt loan portfolio is comprised of loans to investment-grade borrowers.

Credit risk is managed by diversifying the corporate bank loan portfolio.

1 unchanged sentence

The following table details the industry concentrations (top five categories) of our corporate bank loans.

June 30, 2022

December 31, 2022

Loans outstanding as a % of

3 unchanged sentences

Industrial warehouse 8% 4%

Office real estate 6% 3%

Loan fund 7% 3%

Office real estate 6% 3%

Consumer products and services 5% 2%

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, recent macroeconomic developments and the Ukraine conflict have further exacerbated supply chain stresses and inflation concerns.

Certain sectors continue to be impacted by supply chain disruptions and changes in consumer behavior.

In addition, macroeconomic uncertainty has further exacerbated supply chain stresses and inflation concerns.

Further, the Fed’s measures to control inflation, including through increases in short-term interest rates, have had an impact on consumer behavior and are likely to continue to do so in the near-term.

These and related factors could negatively impact our borrowers, particularly those in consumer-facing or supply-dependent industries.

In addition, we continue to monitor our exposure to office real estate where trends have changed as a result of the COVID-19 pandemic.

In addition, we continue to monitor our exposure to office real estate where trends have changed following the COVID-19 pandemic.

Liquidity risk

5 unchanged sentences

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 nine months ended June 30, 2022.

We did not incur any significant losses related to such operational challenges during the three months ended December 31, 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 2022 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.

1 unchanged sentence

Management’s Discussion and Analysis

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 2022 Form 10-K for information regarding how we utilize models throughout the firm and how we manage model risk.

Compliance risk

4 unchanged sentences

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