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Item 7. Management’s Discussion and Analysis

2024-11-26 compared with 2023-11-21 · 477 added, 382 removed, 1176 unchanged (42% of the section changed)

27 unchanged sentences

EXECUTIVE OVERVIEW

Summary results of operations

Year ended September 30, % change

$ in millions, except per share amounts 2024 2023 2022 2024 vs.

2023 2023 vs.

Net revenues $ 12,821 $ 11,619 $ 11,003 10 % 6 %

Compensation, commissions and benefits expense

$ 8,213 $ 7,299 $ 7,329 13 % — %

Non-compensation expenses

$ 1,965 $ 2,040 $ 1,652 (4) % 23 %

Pre-tax income $ 2,643 $ 2,280 $ 2,022 16 % 13 %

Net income available to common shareholders $ 2,063 $ 1,733 $ 1,505 19 % 15 %

Earnings per common share – basic $ 9.94 $ 8.16 $ 7.16 22 % 14 %

Earnings per common share – diluted $ 9.70 $ 7.97 $ 6.98 22 % 14 %

Non-GAAP measures:

Adjusted net income available to common shareholders (1)

$ 2,137 $ 1,806 $ 1,615 18 % 12 %

Adjusted earnings per common share - diluted (1)

$ 10.05 $ 8.30 $ 7.49 21 % 11 %

Year ended September 30,

Other selected financial highlights 2024 2023 2022

Return on common equity 18.9 % 17.7 % 17.0 %

Adjusted return on common equity (1)

19.6 % 18.4 % 18.2 %

Return on tangible common equity (1)

22.6 % 21.7 % 19.8 %

Adjusted return on tangible common equity (1)

23.3 % 22.5 % 21.1 %

Compensation ratio 64.1 % 62.8 % 66.6 %

Adjusted compensation ratio (1)

63.7 % 62.1 % 66.1 %

Effective income tax rate

21.8 % 23.7 % 25.4 %

(1) These 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.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Year ended September 30, 2024 compared with the year ended September 30, 2023

For the year ended September 30, 2023, we generated net revenues of $11.62 billion and pre-tax income of $2.28 billion, up 6% and 13% compared with the prior year.

Our net income available to common shareholders of $1.73 billion was 15% higher than the prior year and our earnings per diluted share of $7.97 reflected a 14% increase.

We generated strong net revenues and pre-tax income for the year ended September 30, 2024, which increased 10% and 16%, respectively, compared with the prior year.

Our net income available to common shareholders was 19% higher than the prior year and our earnings per diluted share increased 22%.

Our return on common equity (“ROCE”) was 18.9%, compared with 17.7% for the prior year, and our return on tangible common equity (“ROTCE”) was 22.6% (1) , compared with 21.7% (1) for the prior year.

The year ended September 30, 2023 included $98 million of net expenses related to acquisitions completed in prior years and the favorable impact of an insurance settlement received during the year related to a previously-settled legal matter.

Excluding these items, our adjusted net income available to common shareholders was $1.81 billion (1) , an increase of 12% compared with the prior year, and our adjusted earnings per diluted share were $8.30 (1) , an increase of 11%.

Adjusted ROCE for the year was 18.4% (1) , compared with 18.2% (1) in the prior year, and adjusted ROTCE was 22.5% (1) , compared with 21.1% (1) in the prior year.

The increase in net revenues compared with the prior year was driven by the benefit of significantly higher short-term interest rates in the current year on both net interest income and RJBDP fees from third-party banks, as well as incremental revenues arising from our prior-year acquisitions of Charles Stanley Group PLC (“Charles Stanley”), TriState Capital Holdings, Inc.

(“TriState Capital”), and SumRidge Partners.

These increases were offset by lower investment banking and brokerage revenues, primarily due to a more challenging market environment during the current year, and a decline in asset management and related administrative fees, primarily attributable to lower PCG client assets in fee-based accounts at the beginning of each of the current-year quarterly billing periods.

Compensation, commissions and benefits expense was flat with the prior year, as the impact of the decrease in compensable revenues compared with the prior year was offset by incremental expenses arising from our prior-year acquisitions of Charles Stanley, TriState Capital, and SumRidge Partners, as well as an increase in compensation costs to support our growth and annual salary increases.

Our compensation ratio was 62.8%, compared with 66.6% for the prior year.

Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 62.1% (1) , compared with 66.1% (1) for the prior year.

The decline in the compensation ratio from the prior year 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.

Adjusted net income available to common shareholders (1) for the year ended September 30, 2024, which excludes the impact of $97 million of expenses related to acquisitions completed in prior years, such as compensation expenses related to retention awards and amortization of identifiable intangible assets, increased 18% compared with adjusted net income available to common shareholders (1) for the prior year which, in addition to acquisition-related expenses, excluded the impact of a $32 million favorable insurance settlement related to a previously-settled legal matter.

Our adjusted earnings per diluted share (1) increased 21% compared with the prior year.

Adjusted ROCE was 19.6% (1) , compared with 18.4% (1) for the prior year, and adjusted ROTCE was 23.3% (1) , compared with 22.5% (1) in the prior year.

The increase in net revenues compared with the prior year was primarily due to higher asset management and related administrative fees, largely the result of higher PCG client assets in fee-based accounts at the beginning of each of the current-year billing periods compared with the prior-year billing periods.

Brokerage revenues also increased compared with the prior year largely due to an increase in client activity in the PCG segment and investment banking revenues increased primarily due to more favorable market conditions in the current year.

Offsetting these increases was a decrease in combined net interest income and RJBDP fees from third-party banks, as the favorable impacts of higher short-term interest rates and higher average interest-earning asset balances and RJBDP balances swept to third-party banks were more than offset by a significant increase in interest expense.

The increase in interest expense was primarily due to a shift in the mix of deposit balances at our Bank segment, as RJBDP balances swept to the Bank segment declined compared with the prior year and a significant portion was replaced with higher-cost ESP balances and certificate of deposit balances.

Compensation, commissions and benefits expense increased 13%, primarily due to an increase in compensable revenues, as well as an increase in compensation costs to support our growth and annual salary increases.

Our compensation ratio, or the ratio of compensation, commissions and benefits expense to net revenues, was 64.1%, compared with 62.8% for the prior year.

Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 63.7% (1) , compared with an adjusted compensation ratio of 62.1% (1) for the prior year.

The increase in the compensation ratio primarily resulted from changes in our revenue mix due to increases in compensable revenues compared with the prior year, as well as a decrease in combined net interest income and RJBDP fees from third-party banks, which have little associated direct compensation.

Non-compensation expenses decreased 4%, largely due to a significant decrease in expenses related to legal and regulatory matters, as the current year reflected net legal and regulatory matters reserve release while the prior year included elevated provisions for legal and regulatory matters, as well as a decrease in the bank loan provision for credit losses.

Partially offsetting these decreases in expenses, was the impact of higher communications and information processing expenses resulting from continued investments in technology to benefit our clients and advisors and to support our growth, the aforementioned $32 million insurance settlement received in the prior year related to a previously-settled legal matter that did not reoccur, higher investment sub-advisory fees resulting from growth in assets under management in sub-advised programs, and higher non-interest expenses related to deposits, including the impact of a FDIC special assessment in the current year.

Occupancy and equipment and business development expenses also increased compared with the prior year.

Our effective income tax rate was 21.8%, a decrease from 23.7% for the prior year, primarily due to the impact of a higher tax benefit recognized in the current year related to nontaxable valuation gains associated with our company-owned life insurance policies, as well as a change in the amount of nondeductible fines and penalties compared with the prior year.

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

3 unchanged sentences

Management’s Discussion and Analysis

Non-compensation expenses increased $388 million, or 23%.

This increase resulted from multiple items, including elevated provisions for legal and regulatory matters during the current year for a number of matters totaling approximately $175 million, a portion of which related to the SEC industry sweep on off-platform communications, as well as incremental expenses arising from our prior-year acquisitions of Charles Stanley, TriState Capital, and SumRidge Partners, and increases in communications and information processing expenses, business development expenses, and the bank loan provision for credit losses.

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

The bank loan provision for credit losses was $132 million for the current year, compared with a provision of $100 million for the prior year, which included an initial provision for credit losses of $26 million on loans acquired as part of the TriState Capital acquisition.

The bank loan provision for credit losses for the current year primarily reflected the impacts of a weakened macroeconomic outlook for certain loan portfolios, including a weakened outlook for commercial real estate prices compared with the prior year, charge-offs of certain loans, and loan downgrades during the year.

These increases were partially offset by the favorable impact of loan repayments and sales, which had a larger impact on the current fiscal year expense than provisions on new loans.

Our effective income tax rate was 23.7% for fiscal 2023, a decrease from 25.4% for the prior year.

The decrease in the effective tax rate from the prior year was primarily due to the impact on our provision for income taxes of nontaxable valuation gains associated with our company-owned life insurance policies in the current year compared with nondeductible valuation losses in the prior year, partially offset by an increase in our effective income tax rate arising from nondeductible fines and penalties.

In December 2022, 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 twelve months ended September 30, 2023, we repurchased 8.35 million shares of our common stock under the Board of Directors’ common stock repurchase authorization for $788 million at an average price of $94 per share.

After the effect of those repurchases, $750 million remained under our Board of Directors’ common stock repurchase authorization.

We currently expect to continue to repurchase our common stock in fiscal 2024 to offset the impact of shares issued with the acquisition of TriState Capital 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.

As of September 30, 2023, our tier 1 leverage ratio of 11.9% and Total capital ratio of 22.8% were both more than double the regulatory requirement to be considered well-capitalized.

We also continued to have substantial liquidity with $2.08 billion (1) of RJF corporate cash as of September 30, 2023, which includes parent cash loaned to RJ&A to invest on its behalf.

As of September 30, 2024, tier 1 leverage ratio was 12.8% and total capital ratio was 24.1%, both well above regulatory capital requirements.

We also continued to have substantial liquidity with $2.16 billion (1) of cash at the parent as of September 30, 2024.

We believe our capital and funding position provide us the opportunity to manage our balance sheet prudently and to continue to be opportunistic and invest in growth.

We also have access to significant sources of funding for our business activities should the need arise, including borrowings against the $750 million balance available on our revolving credit facility, which was renewed and increased from $500 million in April 2023, as well as nearly $9.3 billion of FHLB borrowing capacity in the Bank segment.

As we look ahead, in spite of our expectation for economic uncertainty in the near term, we believe we are well-positioned for long-term growth, with our strong capital position and total client assets under administration of $1.26 trillion.

Our financial advisor recruiting activity increased in the latter half of fiscal 2023, and our recruiting pipeline remains strong across our affiliation options.

We expect our fiscal first quarter of 2024 asset management and related administrative fee revenues to be negatively impacted by the 2% decrease in fee-based account balances from June 30, 2023 to September 30, 2023, as well as an estimated 5% decline in our combined net interest income and RJBDP fees from third-party banks, reflecting the impact from higher-cost diversified funding sources including our ESP, which was launched to PCG clients in March 2023.

While we have a healthy investment banking pipeline and saw improvement in investment banking activity in our fiscal fourth quarter of 2023, we anticipate that market uncertainty may continue to adversely impact the pace and timing of closings early in fiscal 2024, impacting our investment banking revenues.

We also expect to continue to experience headwinds for fixed income brokerage revenues due to the decline in cash balances at many of our depository institution clients.

Finally, although we have proactively taken steps to manage our credit risk in our loan portfolio, including selling approximately $670 million of par value of corporate loans during fiscal 2023, future economic deterioration or changes in our macroeconomic outlook could result in increased bank loan provisions for credit losses in future periods.

During the year ended September 30, 2024, we repurchased 7.7 million shares of our common stock under the Board of Directors’ common stock repurchase authorization for $900 million at an average price of $117 per share.

After the effect of those repurchases, $644 million remained under the Board’s authorization.

In total, we returned $1.3 billion of capital to shareholders through the combination of share repurchases and dividends in the fiscal year.

We expect to continue to repurchase our common stock to offset dilution from share-based compensation and to be opportunistic with incremental repurchases.

Given our capital and liquidity levels, we expect to maintain, or potentially increase, our share repurchase activity levels;

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

As we look ahead, we believe we are well-positioned for long-term growth, with our strong capital and liquidity position, total client assets under administration of $1.57 trillion and net bank loans of $46 billion.

We expect our fiscal first quarter of 2025 results to be favorably impacted by higher asset management and related administrative fees, which will benefit from the 7% increase in both PCG fee-based assets and financial assets under management from June 30, 2024 to September 30, 2024.

In addition, our financial advisor recruiting activity remains robust, including a strong recruiting pipeline.

We also have a healthy investment banking pipeline, and we expect investment banking revenues to benefit as the market environment becomes more constructive for transaction closings over the next few quarters.

Although the market is still challenging, we expect fixed income brokerage revenues to benefit from increased activity from depository institutions resulting from decreases in short-term interest rates and the yield curve steepening.

While the decline in short-term interest rates is expected to have a favorable impact on certain of our businesses, we anticipate our combined net interest income and RJBDP fees from third-party banks will decrease in our fiscal 2025 due to the 50-basis point and 25-basis point decreases in short-term interest rates enacted by the Fed in September 2024 and November 2024, respectively;

although the magnitude of such decline is largely dependent on the level of short-term interest rates, including any additional rate cuts in our fiscal 2025, our interest-earning asset levels, client cash balances, and other factors that may impact the current market environment.

While we maintain discipline in controlling our expenses, we continue to invest to support growth across our businesses which may increase expenses in future periods.

Corporate loan growth has remained muted in fiscal 2024, but we believe we are well-positioned to increase lending as new origination activity increases, which may increase provisions for credit losses in future periods.

In addition, although our current loan portfolio credit metrics are solid and we continue to proactively manage our credit risk in our loan portfolio, future economic deterioration or changes in the macroeconomic outlook could also result in increased bank loan provisions for credit losses in future periods.

Year ended September 30, 2023 compared with the year ended September 30, 2022

18 unchanged sentences

Non-GAAP adjustments :

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

Expenses directly related to acquisitions:

Compensation, commissions and benefits:

10 unchanged sentences

Total expenses related to acquisitions 97 130 147

Losses on extinguishment of debt

Other — Insurance settlement received

3 unchanged sentences

Adjusted net income available to common shareholders $ 2,137 $ 1,806 $ 1,615

Pre-tax income

$ 2,643 $ 2,280 2,022

Pre-tax impact of non-GAAP adjustments (as detailed above)

Adjusted pre-tax income

$ 2,740 $ 2,378 $ 2,169

Compensation, commissions and benefits expense $ 8,213 $ 7,299 $ 7,329

11 unchanged sentences

Year ended September 30,

$ in millions, except per share amounts

2024 2023 2022

1 unchanged sentence

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

Expenses directly related to acquisitions:

Compensation, commissions and benefits:

10 unchanged sentences

Total expenses related to acquisitions 0.46 0.60 0.68

Losses on extinguishment of debt

Other — Insurance settlement received

2 unchanged sentences

Adjusted diluted earnings per common share $ 10.05 $ 8.30 $ 7.49

$ in millions September 30,

2023 September 30,

2022 September 30,

Total common equity attributable to Raymond James Financial, Inc.

$ 10,135 $ 9,338 $ 8,245

Less non-GAAP adjustments :

Goodwill and identifiable intangible assets, net 1,907 1,931 882

Deferred tax liabilities related to goodwill and identifiable intangible assets, net (131) (126) (64)

Tangible common equity attributable to Raymond James Financial, Inc.

$ 8,359 $ 7,533 $ 7,427

Year ended September 30,

$ in millions 2023 2022 2021

Average common equity $ 10,893 $ 9,791 $ 8,836

Impact of non-GAAP adjustments on average common equity :

Expenses directly related to acquisitions:

Compensation, commissions and benefits:

10 unchanged sentences

Total expenses related to acquisitions 48 63 68

Losses on extinguishment of debt

Other — Insurance settlement received

6 unchanged sentences

Year ended September 30,

$ in millions 2023 2022 2021

2024 2023 2022

Average common equity $ 10,893 $ 9,791 $ 8,836

1 unchanged sentence

Average deferred tax liabilities related to goodwill and identifiable intangible assets, net (134) (129) (94)

(129) (94) (53)

Average tangible common equity $ 9,131 $ 7,992 $ 7,608

12 unchanged sentences

Total expenses related to acquisitions 48 63 68

Losses on extinguishment of debt

Other — Insurance settlement received

18 unchanged sentences

NET INTEREST ANALYSIS

Largely in response to inflationary pressures since the beginning of fiscal year 2022, the Fed rapidly and consistently increased its benchmark short-term interest rates commencing in March 2022 and continuing throughout our fiscal 2023.

Over this period, the Fed has increased the federal funds target rate from a range of 0.25% to 0.50% at March 31, 2022 to a range of 5.25% to 5.50% at September 30, 2023.

While the Fed has left its benchmark rate unchanged in its most recent meetings, it has indicated that it intends to closely monitor market conditions to determine whether they will increase short-term interest rates further in our fiscal 2024.

The following table details the Fed’s short-term interest rate activity over our fiscal 2022 and 2023.

Federal funds target rate schedule

Largely in response to inflationary pressures since the beginning of fiscal year 2022, the Fed rapidly and consistently increased its benchmark short-term interest rate commencing in March 2022 and continuing throughout our fiscal year 2023.

Since the beginning of our fiscal year 2023, the Fed increased the Fed funds target rate 225 basis points from a September 30, 2022 range of 3.00% to 3.25% to a range of 5.25% to 5.50% as of September 30, 2023, where it remained for the vast majority of our fiscal 2024.

Effective September 19, 2024, the Fed reduced the Fed funds target rate by 50 basis points to a range of 4.75% to 5.00% and enacted an additional 25-basis point decrease in November 2024 to a range of 4.50% to 4.75%.

The Fed has indicated that it intends to closely monitor market conditions to determine whether it will consider making additional downward adjustments to short-term interest rates in our fiscal 2025.

The following table details the Fed’s short-term interest rate activity since the beginning of our fiscal year 2023.

RJF fiscal quarter ended Effective date of interest rate action

Increase in interest rates

(in basis points) Federal funds target rate

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

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

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

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

Increase/(decrease)

in interest rates

(in basis points) Fed funds target rate

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

5 unchanged sentences

September 30, 2023 July 27, 2023 25 5.25% - 5.50%

September 30, 2024 September 19, 2024 (50) 4.75% - 5.00%

December 31, 2024 November 8, 2024 (25) 4.50% - 4.75%

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 client cash balances swept to such banks as part of the RJBDP (included in account and service fees), our financial results are sensitive to changes in interest rates.

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 income and 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.

Our domestic client cash sweep balances continue to represent a relatively low-cost funding source.

In fiscal 2023, we introduced the Enhanced Savings Program to our clients and increased our certificates of deposit balances as part of our strategy to diversify our funding sources, albeit at a higher relative cost than other alternatives.

As a result of our diverse funding sources and high concentration of floating-rate assets, we benefited from the increases in short-term interest rates during the second half of fiscal 2022 and continuing into our fiscal 2023, with combined net interest income and RJBDP fees from third-party banks increasing $1.47 billion, or 104%, compared with the prior year.

However, despite recent increases in short-term interest rates, our net interest income and net interest margin decreased during the second half of our fiscal 2023 compared with the first half of our fiscal 2023 due to a more rapid increase in deposit costs than in recent periods primarily due to growth in the Enhanced Savings Program.

Increases in short-term interest rates have historically resulted in an increase in our net earnings and we expect decreases in short-term interest rates to generally reduce our net earnings, although there may be offsetting favorable impacts.

As it relates to our net interest income, the magnitude of the effect of a decrease in interest rates depends on a number of factors impacting balances, asset yields, and the cost of funding.

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.

Decreases in short-term interest rates generally also result in a decrease to our RJBDP fees earned from third-party banks, although the magnitude of the impact may also be impacted by demand for cash balances by third-party banks and the rate paid to clients on their cash sweep balances.

Rates paid to clients on their cash balances are generally impacted by the level of short-term interest rates, as well as competitive industry dynamics and the demand for client cash.

Additionally, any future changes to regulatory rules or interpretations governing the fees the firm earns on cash sweep balances could also impact the rates we pay to clients on cash balances.

In recent fiscal years, we have sought to continue to meet client demand for higher yields on cash balances, without sacrificing the benefits of FDIC insurance on such balances, by introducing new deposit products leveraging our bank subsidiaries or through initiatives offered within the RJBDP.

Such programs include our ESP introduced to our clients in fiscal 2023 where such deposits are held by Raymond James Bank, offer enhanced rates to clients and, through a reciprocal deposit program, FDIC coverage of up to $50 million for certain accounts, as well as initiatives offered from time to time within the RJBDP program which may offer enhanced rates to clients on certain balances within the program.

These programs, while meeting client needs and diversifying our funding sources, have a higher relative cost than other alternatives therefore reducing our net interest margin and yields on RJBDP balances.

Net interest income and RJBDP fees from third-party banks

Year ended September 30, % change

$ in millions 2024 2023 2022 2024 vs.

2023 2023 vs.

Net interest income

$ 2,130 $ 2,375 $ 1,203 (10) % 97 %

RJBDP fees from third-party banks

607 498 202 22 % 147 %

Net interest income and RJBDP fees from third-party banks

$ 2,737 $ 2,873 $ 1,405 (5) % 104 %

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Year ended September 30, 2024 compared with the year ended September 30, 2023

Combined net interest income and RJBDP fees from third-party banks was $2.74 billion and $2.87 billion for the years ended September 30, 2024 and 2023, respectively.

The 5% decline compared with the prior year was driven by a decline in net interest income, as the benefits of higher short-term interest rates and higher average interest-earning asset balances were more than offset by a significant increase in interest expense.

However, the growth in the ESP balances compared with the prior year has allowed us to deploy a relatively higher portion of RJBDP balances to third-party banks instead of our Bank segment which, coupled with higher yields earned on such balances, resulted in an increase in RJBDP fees from third-party banks compared with the prior year.

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

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

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

Year ended September 30, 2023 compared with the year ended September 30, 2022

Refer to “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net Interest Analysis” of our 2023 Form 10-K for a discussion of our fiscal 2023 results compared to fiscal 2022.

RAYMOND JAMES FINANCIAL, INC.

48 unchanged sentences

All other interest-bearing liabilities (4)

1,157 45 4.03 % 620 26 3.78 % 328 20 2.48 %

Interest-bearing liabilities — all other segments $ 8,684 $ 264 3.06 % $ 9,262 $ 232 2.51 % $ 18,220 $ 149 0.82 %

72 unchanged sentences

Through our PCG segment, we provide financial planning, investment advisory, and securities transaction services for which we generally charge either asset-based fees (presented in “Asset management and related administrative fees”) or sales commissions (presented in “Brokerage revenues”).

We also earn revenues for distribution and related support services performed primarily related to mutual and other funds, as well as fixed and variable annuities and insurance products.

We also earn revenues for distribution and related support services performed related to mutual and other funds, fixed and variable annuities, and insurance products.

Asset management and related administrative fees and brokerage revenues in this segment are typically correlated with the level of PCG client AUA, including those in fee-based accounts, as well as the overall U.S.

3 unchanged sentences

We also earn servicing fees, such as omnibus and education and marketing support fees, from mutual fund, annuity, and exchange-traded product companies whose products we distribute.

Servicing fees earned from mutual fund and annuity companies are based on the level of assets, a flat fee or number of positions in such programs.

Servicing fees earned from such companies are based on the level of assets or number of positions in such programs or a flat fee.

Our PCG segment also earns fees from banks to which we sweep clients’ cash in the RJBDP, including both third-party banks and our Bank segment.

Such fees, which generally fluctuate based on average balances in the program and short-term interest rates, are included in “Account and service fees.” See “Clients’ domestic cash sweep balances” in the “Selected key metrics” section for further information about fees earned from the RJBDP.

Net interest income in the PCG segment is primarily generated by interest earnings on assets segregated for regulatory purposes and on margin loans provided to clients, less interest paid on client cash balances in the CIP.

Such fees, which generally fluctuate based on average balances in the program and the level of short-term interest rates, are included in “Account and service fees.” See “Clients’ domestic cash sweep balances” in the “Selected key metrics” section and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net interest analysis” of this Form 10-K for additional information about fees earned from the RJBDP.

Net interest income in the PCG segment is primarily generated by interest earnings on assets segregated for regulatory purposes, margin loans provided to clients, cash balances, and securities borrowing transactions, less interest paid on client cash balances in the CIP and securities lending transactions.

Amounts are impacted by client cash balances in the CIP and short-term interest rates.

Higher client cash balances generally lead to increased net interest income, depending on interest rate spreads realized in the CIP (i.e., between interest received on assets segregated for regulatory purposes and interest paid on CIP balances).

For more information on client cash balances, see “Clients’ domestic cash sweep balances” in the “Selected key metrics” section.

For additional information on client cash balances, see “Clients’ domestic cash sweep balances” in the “Selected key metrics” section.

For an overview of our PCG segment operations, refer to the information presented in “Item 1 - Business” of this Form 10-K.

45 unchanged sentences

PCG client asset balances

As of September 30,

$ in billions 2023 2022 2021

$ 1,201.2 $ 1,039.0 $ 1,115.4

As of September 30, % change

$ in billions 2024 2023 2022 2024 vs.

$ 1,507.0 $ 1,201.2 $ 1,039.0 25 % 16 %

1 unchanged sentence

$ 875.2 $ 683.2 $ 586.0 28 % 17 %

RCS assets in fee-based accounts (2)

$ 111.7 $ 89.9 $ 77.2

Percent of AUA in fee-based accounts

58.1 % 56.9 % 56.4 %

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

(2) Represents assets associated with firms affiliated with us through our RCS division which are included in AUA and assets in fee-based accounts.

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

(1) 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

As of September 30, 2024, 2023, and 2022, PCG AUA included assets associated with firms affiliated with us through our RCS division of $180.7 billion, $133.3 billion, and $108.5 billion, respectively, of which $153.1 billion, $111.7 billion, and $89.9 billion, respectively, were assets in fee-based accounts.

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

Domestic PCG net new assets

As of September 30,

$ in millions 2024 2023 2022

Domestic Private Client Group net new assets (1) (2)

Domestic PCG net new assets (1)

$ 60,709 $ 73,254 $ 95,041

Domestic Private Client Group net new assets growth (3)

Domestic PCG net new assets growth (2)

5.5 % 7.7 % 8.5 %

(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) This metric includes the impact of the departure of approximately $5 billion of assets under administration related to the portion of advisors previously associated through a single relationship in our independent contractors division whose affiliation with the firm ended in the fiscal third quarter of 2023.

(3) 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 as of September 30, 2023 increased 16% and 17%, respectively, compared with September 30, 2022, due to net equity market appreciation and strong net inflows of client assets during the year, primarily due to the favorable impact of our recruiting.

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

(2) The domestic PCG net new assets growth percentage is based on the beginning domestic PCG AUA balance for the indicated period.

PCG AUA and PCG assets in fee-based accounts as of September 30, 2024 increased 25% and 28%, respectively, compared with September 30, 2023, resulting from equity market appreciation and net new assets, due to the favorable impact of our advisor retention and recruiting.

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.

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The Asset Management segment receives a higher portion of the revenues related to accounts invested in managed programs, as compared to the portion received for non-managed programs, as it is performing portfolio management services in addition to administrative services.

The vast majority of the revenues we earn from fee-based accounts is recorded in “Asset management and related administrative fees” on our Consolidated Statements of Income and Comprehensive Income.

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

As fees for 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.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

The vast majority of the revenues we earn from fee-based accounts are recorded in “Asset management and related administrative fees” on our Consolidated Statements of Income and Comprehensive Income.

Financial advisors

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Total advisors 8,787 8,712 8,681

(1) Includes the impacts of the transfer of one firm with 166 financial advisors previously affiliated as independent contractors to our RCS division during our fiscal third quarter of 2022 and the departure of approximately 60 financial advisors, representing the portion of advisors previously associated through a single relationship in our independent contractors division whose affiliation with the firm ended in the fiscal third quarter of 2023.

The number of financial advisors as of September 30, 2023 increased compared to the prior year, as the number of new recruits and trainees that were moved into production roles exceeded the number of financial advisors who left the firm, including planned retirements where assets are generally retained at the firm pursuant to advisor succession plans.

We may experience transfers to our RCS division in fiscal 2024;

however, consistent with our experience in fiscal 2023, we would not expect these financial advisor transfers to significantly impact our results of operations.

The number of financial advisors as of September 30, 2024 increased compared to the prior year, as new recruits and trainees that were moved into production roles exceeded departures and planned retirements.

Generally, with planned retirements, assets are retained at the firm pursuant to advisor succession plans.

During the year ended September 30, 2024, we continued to experience net transfers to our RCS division.

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

We may continue to experience transfers to our RCS division;

however, consistent with our experience in recent fiscal years, we would not expect these financial advisor transfers to significantly impact our results of operations.

Clients’ domestic cash sweep balances and ESP balances

As of September 30,

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Total clients’ domestic cash sweep balances 43,857 42,833 67,114

14,018 13,592 —

Total clients’ domestic cash sweep and ESP balances

$ 57,875 $ 56,425 $ 67,114

(1) In March 2023, we launched our ESP, in which Private Client Group clients may deposit cash in a high-yield Raymond James Bank account.

These balances are reflected in Bank deposits on our Consolidated Statements of Financial Condition.

(1) In March 2023, we introduced our ESP, in which PCG clients may deposit cash in a high-yield Raymond James Bank account.

ESP balances held at Raymond James Bank as of the respective year end were included in “Bank deposits” on our Consolidated Statement of Financial Condition.

Year ended September 30,

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3.50 % 3.20 % 0.82 %

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

Such balances swept to third-party banks are not reflected on our Consolidated Statements of Financial Condition.

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

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

Balances swept to third-party banks are not reflected on our Consolidated Statements of Financial Condition.

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

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

Under our 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.

In the current interest-rate environment the PCG segment revenues throughout fiscal 2023 reflect RJBDP 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.

Under our intersegment policies, the PCG segment receives from our Bank segment 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.

In the current interest rate environment the PCG segment RJBDP fee revenues are 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.

In fiscal 2022, the PCG segment revenues reflected the base servicing fee until May 2022, when the yield from third-party banks first exceeded such level.

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 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 as a result of the significant increases in the Fed’s short-term benchmark interest rate, which began in March 2022.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Total clients’ domestic cash sweep and Enhanced Savings Program balances decreased 16% compared with September 30, 2022, as a result of client cash sorting activity, where clients deploy cash balances in their brokerage account to higher yielding alternatives, driven by the higher short-term interest rate environment throughout fiscal 2023, partially offset by the launch of the Enhanced Savings Program in March 2023, which resulted in $13.59 billion of client cash balances invested in the program as of September 30, 2023.

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

The average yield on RJBDP - third-party banks increased from the prior year largely as a result of the increases in the Fed’s short-term benchmark interest rate throughout fiscal 2023.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net interest analysis” of this Form 10-K for additional information.

Total clients’ domestic cash sweep and ESP balances increased 3% compared with September 30, 2023, with increases in both RJBDP balances and the ESP, which was introduced to clients in March 2023.

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 the RJBDP, the CIP, and the ESP, as the PCG segment may earn different amounts from each of these client cash destinations, depending on multiple factors.

For example, the ESP has provided us the flexibility to sweep more RJBDP balances to third-party banks and reduce the amount of RJBDP balances held in our Bank segment.

Year ended September 30, 2024 compared with the year ended September 30, 2023

Net revenues of $9.46 billion increased 9% and pre-tax income of $1.79 billion increased 1%.

Asset management and related administrative fees decreased $165 million, or 4%, primarily due to lower 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, partially offset by incremental revenues arising from the acquisition of Charles Stanley.

Brokerage revenues decreased $82 million, or 5%, 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, as well as lower sales of equity products, mutual and other fund products, variable annuities, and insurance products.

These decreases were partially offset by higher fixed annuity and fixed income product sales.

Account and service fees increased $1.03 billion, or 85%, primarily due to an increase in RJBDP fees from both our Bank segment and third-party banks resulting from significantly higher short-term interest rates compared with the prior year, partially offset by a decline in average RJBDP balances.

Net interest income increased $148 million, or 71%, primarily due to the significant increase in short-term interest rates applicable to our cash, segregated cash, and client margin account balances, partially offset by lower average balances.

Other revenues increased $16 million, or 50%, primarily due to a favorable arbitration award during the fiscal third quarter of 2023.

The benefit of this award was largely offset by associated compensation expenses and external legal fees incurred over the duration of the claim period, a portion of which was incurred during fiscal 2023.

Compensation-related expenses increased $32 million, or 1%, primarily due to an increase in compensation costs to support our growth, annual salary increases, and incremental expenses resulting from our acquisition of Charles Stanley, partially offset by lower commission expense resulting from lower compensable revenues, including asset management and related administrative fees and brokerage revenues.

Non-compensation expenses increased $179 million, or 23%, due to higher provisions for legal and regulatory matters, incremental expenses resulting from our acquisition of Charles Stanley, higher communications and information processing expenses primarily due to ongoing enhancements of our technology platforms, and increases in travel and event-related expenses compared with the low levels incurred in the prior year.

Asset management and related administrative fees increased $701 million, or 15%, 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 billing periods resulting from market appreciation and net new assets, due to the favorable impact of our advisor retention and recruiting.

Brokerage revenues increased $197 million, or 14%, primarily due to higher client activity in the current year.

Account and service fees decreased $81 million, or 4%, primarily due to a decrease in RJBDP fees resulting from lower average client cash sweep balances.

RJBDP fees paid to PCG from our Bank segment decreased due to a decline in balances allocated to our Bank segment which more than offset the impact of higher short-term interest rates, while RJBDP fees from third-party banks increased due to the aforementioned increase in short-term interest rates, as well as higher average balances swept to such banks.

Partially offsetting the decline in total RJBDP fees, mutual fund service fees increased, primarily from higher average mutual fund assets, and client account and other fees increased primarily due to business growth.

Net interest income increased $6 million, or 2%.

Other revenues decreased $21 million, or 44%, primarily due to a favorable arbitration award during the prior year, which did not reoccur in the current year.

Compensation-related expenses increased $773 million, or 13%, primarily due to higher commission expense resulting from higher compensable revenues, including asset management and related administrative fees and brokerage revenues, as well as an increase in compensation costs to support our growth and annual salary increases.

Non-compensation expenses increased $10 million, or 1%, compared with the prior year primarily due higher communications and information processing, occupancy and equipment, and business development expenses largely to support our growth.

These increases were partially offset by the favorable impact of a net legal and regulatory matters reserve release in the current year compared with elevated provisions for legal and regulatory matters in the prior year.

Year ended September 30, 2023 compared with the year ended September 30, 2022

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RESULTS OF OPERATIONS – CAPITAL MARKETS

Our Capital Markets segment conducts investment banking, institutional sales, securities trading, equity research, and the syndication and management of investments in low-income housing funds and funds of a similar nature, the majority of which qualify for tax credits.

We provide various investment banking services, including merger & acquisition advisory, and other advisory services, underwriting of public and private equity and debt financing for corporate clients, and public financing activities.

Revenues from investment banking activities are driven principally by our role in the transaction and the number and sizes of the transactions with which we are involved.

We earn brokerage revenues for the sale of both equity and fixed income products to institutional clients, as well as from our market-making activities in fixed income debt securities.

Our Capital Markets segment conducts investment banking, institutional sales and trading of financial instruments, equity research, and the syndication and management of investments in low-income housing funds and funds of a similar nature, the majority of which qualify for tax credits.

We provide various investment banking services, including merger & acquisition advisory, and other advisory services, underwriting and placement of public and private equity and debt securities for corporate clients, private capital fundraising, and public financing activities.

Revenues from investment banking activities are driven principally by our role in the transaction and the number and sizes of the transactions in which we are involved.

We earn brokerage revenues for the sale of both equity and fixed income products to institutional clients, as well as from our market-making activities in fixed income debt instruments.

Client activity is influenced by a combination of general market activity and our Capital Markets group’s ability to find attractive investment opportunities for clients.

In certain cases, we transact on a principal basis, which involves the purchase of securities from, and the sale of securities to, our clients as well as other dealers who may be purchasing or selling securities for their own account or acting on behalf of their clients.

In certain cases, we transact on a principal basis, which involves the purchase of financial instruments from, and the sale of financial instruments to, our clients as well as other dealers who may be purchasing or selling financial instruments for their own account or acting on behalf of their clients.

Profits and losses related to this activity are primarily derived from the spreads between bid and ask prices, as well as market trends for the individual securities during the period we hold them.

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Pre-tax income/(loss)

$ (91) $ 415 $ 532 NM (22) %

$ 67 $ (91) $ 415 NM NM

RAYMOND JAMES FINANCIAL, INC.

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Year ended September 30, 2024 compared with the year ended September 30, 2023

Net revenues of $1.21 billion decreased 33% and we generated a pre-tax loss of $91 million compared with pre-tax income of $415 million in the prior year.

Investment banking revenues decreased $449 million, or 42%, compared with a strong prior year, as activity levels were negatively impacted in the current year by macroeconomic uncertainties and significantly higher interest rates, which dampened capital markets activity across the industry.

Investment banking revenues improved during our fiscal fourth quarter compared to the first three quarters of 2023.

Brokerage revenues decreased $115 million, or 19%, primarily due to a decrease in fixed income brokerage revenues resulting from decreased activity from depository institution clients due to challenging market conditions, partially offset by incremental revenues from SumRidge Partners, which was acquired on July 1, 2022.

Compensation-related expenses decreased $163 million, or 15%, primarily due to the decrease in revenues, partially offset by incremental expenses associated with growth investments, including our acquisition of SumRidge Partners, higher salaries, in part due to inflationary and market compensation pressures, and higher share-based compensation amortization resulting from production-related awards granted in prior years which are amortized over the vesting period.

Non-compensation expenses increased $74 million, or 22%, primarily due to incremental expenses associated with SumRidge Partners, higher provisions for legal and regulatory matters in the current year, and increased travel and event-related expenses and professional fees.

Net revenues of $1.47 billion increased 21% and we generated pre-tax income of $67 million compared with a pre-tax loss of $91 million for the prior year.

Investment banking revenues increased $207 million, or 34%, primarily due to a higher volume of transactions closed as a result of more favorable investment banking market conditions in the current year compared to the prior year.

Brokerage revenues increased $35 million, or 7%, due to an increase in fixed income brokerage revenues primarily resulting from increased activity from depository institution clients, as well as an increase in equity brokerage revenues primarily due to higher levels of client activity.

Compensation-related expenses increased $100 million, or 11%, primarily due to the increase in revenues, as well as an increase in compensation costs to support our growth and annual salary increases.

Non-compensation expenses remained flat as higher communications and information processing expenses, occupancy and equipment expenses, and professional fees were offset by lower provisions for legal and regulatory matters.

Year ended September 30, 2023 compared with the year ended September 30, 2022

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Management’s Discussion and Analysis

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.

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(1) Represents the portion of 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”) that is invested in managed programs overseen by the Asset Management segment.

(2) Represents the portion of the AMS AUM that is managed by Raymond James Investment Management and, as a result, are included in both AMS and Raymond James Investment Management in the preceding table.

(2) Represents the portion of the AMS AUM that is managed by Raymond James Investment Management and, as a result, is included in both AMS and Raymond James Investment Management in the preceding table.

This amount is removed in the calculation of “Total financial assets under management.”

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Raymond James Investment Management:

Acquisition of Chartwell Investment Partners (“Chartwell’) (1)

Raymond James Investment Management - net inflows/(outflows)

Net inflows/(outflows)

(2.9) 2.2 (1.5)

Acquisition of Chartwell Investment Partners (“Chartwell”) (1)

AMS - net inflows 10.1 6.0 9.7

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

See Note 3 of the Notes to Consolidated Financial Statements of this Form 10-K 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.

See Note 3 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information about this acquisition.

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

RAYMOND JAMES FINANCIAL, INC.

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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, which was acquired on June 1, 2022 in connection with our acquisition of TriState Capital.

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

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.

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Non-discretionary asset-based programs

The following table includes assets held in certain non-discretionary asset-based programs for which the Asset Management segment does not exercise discretion but provides administrative support (including for affiliated entities).

The following table includes assets held in certain non-discretionary asset-based programs for which the Asset Management segment does not exercise discretion but provides other services such as administrative support (including for affiliated entities) and investment advice.

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”).

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Total assets $ 506.2 $ 391.1 $ 329.2

The increase in assets compared to the prior year was primarily due to equity market appreciation, successful financial advisor recruiting and retention, and the continued trend of clients moving to fee-based accounts from transaction-based accounts.

The increase in these assets compared to the prior year was primarily due to market appreciation, successful financial advisor retention and recruiting, and the continued trend of clients moving to fee-based accounts from transaction-based accounts.

Administrative fees associated with these programs are predominantly based on balances at the beginning of each quarterly billing period.

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Total assets $ 10.6 $ 8.5 $ 7.3

Fees earned on trust services are primarily reported within “Asset management and related administrative fees” on the Consolidated Statements of Income and Comprehensive Income.

Year ended September 30, 2024 compared with the year ended September 30, 2023

Net revenues of $885 million decreased 3% and pre-tax income of $351 million decreased 9%.

Asset management and related administrative fees decreased $36 million, or 4%, driven by lower assets in non-discretionary asset-based programs and financial assets under management at AMS at the beginning of each of the current-year quarterly billing periods compared with the prior-year quarterly billing periods, as well as lower average financial assets under management at Raymond James Investment Management (excluding Chartwell), in each case primarily due to market-driven depreciation in asset values.

These declines were partially offset by incremental revenues of Chartwell.

Compensation expenses increased $4 million, or 2%, and non-compensation expenses increased $2 million, or 1%, both primarily due to incremental expenses resulting from the Chartwell acquisition.

Year ended September 30, 2022 compared to the year ended September 30, 2021

Refer to “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2022 Form 10-K for a discussion of our fiscal 2022 results compared to fiscal 2021.

Net revenues of $1.03 billion increased 16% and pre-tax income of $421 million increased 20%.

Asset management and related administrative fees increased $137 million, or 16%, driven by higher financial assets under management and assets in non-discretionary asset-based programs at AMS, primarily due to market-driven appreciation in asset values and net inflows to PCG fee-based accounts.

Compensation expenses increased $25 million, or 13%, primarily due to higher revenues, as well as an increase in compensation costs to support our growth and annual cost increases, including salaries.

Non-compensation expenses increased $47 million, or 14%, largely due to higher investment sub-advisory fees, resulting from the increase in assets under management in sub-advised programs, as well as higher communications and information processing expenses.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Year ended September 30, 2023 compared to the year ended September 30, 2022

Refer to “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2023 Form 10-K for a discussion of our fiscal 2023 results compared to fiscal 2022.

RESULTS OF OPERATIONS – BANK

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Our Bank segment’s net interest income is affected by the levels of interest rates, interest-earning assets, and interest-bearing liabilities.

Higher interest-earning asset balances and higher interest rates generally lead to increased net interest income, depending upon spreads realized on interest-bearing liabilities.

For more information on average interest-earning asset and interest-bearing liability balances and the related interest income and expense, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net interest analysis” of this Form 10-K.

Depending upon interest costs incurred on interest-bearing liabilities, higher interest-earning asset balances and higher interest rates generally lead to increased net interest income, and conversely, decreases in short-term interest rates generally lead to lower net interest income.

For additional information on average interest-earning asset and interest-bearing liability balances and the related interest income and expense, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net interest analysis” of this Form 10-K.

For an overview of our Bank segment operations, refer to the information presented in “Item 1 - Business” of this Form 10-K.

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

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

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

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Non-compensation expenses:

Bank loan provision/(benefit) for credit losses 132 100 (32) 32 % NM

Bank loan provision for credit losses

45 132 100 (66) % 32 %

RJBDP fees to PCG

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Year ended September 30, 2024 compared with the year ended September 30, 2023

Net revenues of $2.01 billion increased 86%, while pre-tax income of $371 million decreased 3%.

Net interest income increased $904 million, or 86%, due to the significant increase in short-term interest rates and higher average interest-earning assets at Raymond James Bank, primarily bank loans, as well as incremental net interest income from the acquisition of TriState Capital Bank.

These increases were partially offset by an increase in interest expense as we pursue more diversified funding sources which have a higher relative cost, such as the Enhanced Savings Program launched to PCG clients in our second fiscal quarter of 2023 and additional offerings of certificates of deposit.

The net interest margin increased to 3.28% from 2.39% for the prior year.

All other revenues increased $25 million, or 81%, primarily due to incremental revenues from the TriState Capital Bank acquisition largely related to derivatives, valuation gains on certain company-owned life insurance policies compared with losses in the prior year, and higher foreign currency gains compared with the prior year.

The bank loan provision for credit losses was $132 million for the current year, compared with $100 million for the prior year.

These increases were partially offset by the favorable impact of loan repayments and sales, which had a larger impact on the current fiscal year expense than provisions on new loans.

The provision for credit losses for the prior year reflected the impact of loan growth at Raymond James Bank and a weaker

Net revenues of $1.72 billion decreased 15%, while pre-tax income of $380 million increased 2%.

Net interest income decreased $301 million, or 15%, primarily due to increased interest expense resulting from a higher-cost mix of deposits, as RJBDP balances declined and a significant portion was replaced with higher-cost ESP balances, which was introduced to clients in March 2023, and certificate of deposit balances.

The increase in interest expense was partially offset by an increase in interest income, primarily due to higher short-term interest rates and higher average interest-earning asset balances during the current year.

The Bank segment net interest margin decreased to 2.67% from 3.28% for the prior year.

The bank loan provision for credit losses was $45 million for the current year, a decrease of $87 million compared with $132 million for the prior year.

The bank loan provision for credit losses for the current year primarily reflected the impacts of loan growth, specific reserves, loan downgrades, and charge-offs in our C&I and CRE loan portfolios, partially offset by the favorable impacts of an improved economic forecast, loan repayments, and loan sales in the C&I loan portfolio.

The bank loan provision for credit losses for the prior year primarily reflected the impacts of a weakened macroeconomic outlook for certain loan portfolios, including a weakened outlook for commercial real estate prices compared with the preceding year, charge-offs

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

economic outlook at that time, as well as an initial provision for credit losses on loans acquired as part of the TriState Capital Bank acquisition.

Compensation expenses increased $93 million, or 111%, primarily due to incremental expenses of TriState Capital Bank and, to a lesser extent, increased headcount and annual salary increases.

Non-compensation expenses, excluding the bank loan provision for credit losses, increased $815 million, or 157%, primarily due to an increase in RJBDP and other fees paid to PCG, and incremental expenses associated with TriState Capital Bank.

RJBDP fees paid to PCG increased $736 million, or 206%, primarily due to a significant increase in short-term interest rates.

These Bank segment fees and the related revenues earned by the PCG segment are eliminated in consolidation (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Private Client Group” for further information about these servicing fees).

of certain loans, and loan downgrades during the year.

These negative impacts on the prior-year provision were partially offset by the favorable impacts of loan repayments and sales, which had a larger impact than provisions on new loans during the prior year.

Non-compensation expenses, excluding the bank loan provision for credit losses, decreased $222 million, or 17%, primarily due to a decrease in RJBDP fees paid to PCG.

RJBDP fees paid to PCG decreased $269 million, or 25%, primarily due to the aforementioned decline in RJBDP balances swept to the Bank segment, partially offset by an increase in rates applicable to such balances.

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

The decrease in RJBDP fees paid to PCG was partially offset by increases in expenses related to deposits, including an incremental FDIC special assessment enacted during the current year and expenses related to the ESP and certificate of deposit issuances during the current year, as well as higher communications and information processing expenses.

The FDIC special assessment resulted in $10 million of incremental expense for the year ended September 30, 2024.

Year ended September 30, 2023 compared to the year ended September 30, 2022

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RESULTS OF OPERATIONS – OTHER

This segment includes interest income on certain corporate cash balances, our private equity investments, which predominantly consist of investments in third-party funds, certain other corporate investing activity, and certain corporate overhead costs of RJF that are not allocated to other segments, including the interest costs on our public debt and any losses on extinguishment of such debt, certain provisions for legal and regulatory matters, and certain acquisition-related expenses.

This segment includes interest income on certain corporate cash balances, our private equity investments, which predominantly consist of investments in third-party funds, certain other corporate investing activity, and certain corporate overhead costs of RJF that are not allocated to other segments, including the interest costs on our public debt, certain provisions for legal and regulatory matters, and certain acquisition-related expenses.

For an overview of our Other segment operations, refer to the information presented in “Item 1 - Business” of this Form 10-K.

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Interest income $ 193 $ 147 $ 25 31 % 488 %

Net gains on private equity investments

6 9 74 (33) % (88) %

All other 6 9 18 (33) % (50) %

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Insurance settlement received — (32) — 100 % NM

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

All other 5 110 51 (95) % 116 %

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Year ended September 30, 2024 compared to the year ended September 30, 2023

The pre-tax loss of $114 million was $77 million lower than the loss in the prior year.

Net revenues increased $109 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 increased $32 million, or 23%, primarily due to a provision in the current year related to the SEC industry sweep on off-platform communications.

This increase was partially offset by a $32 million insurance settlement received during the current year related to a previously settled legal matter, which was reflected as an offset to Other expenses, and a $22 million decrease in acquisition-related expenses.

Pre-tax loss was $10 million compared with a pre-tax loss of $114 million in the prior year.

Net revenues increased $40 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 and, to a lesser extent, higher average corporate cash balances.

Non-interest expenses decreased $64 million, or 37%, primarily due to the positive impact of a net legal and regulatory matters reserve release in the current year compared with a provision for legal and regulatory matters in the prior year, partially offset by the impacts of a $32 million insurance settlement received during the prior year related to a previously-settled legal matter that did not reoccur in the current year and, to a lesser extent, higher compensation expenses in the current year.

Year ended September 30, 2023 compared to the year ended September 30, 2022

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Year ended September 30, 2022 compared to the year ended September 30, 2021

STATEMENT OF FINANCIAL CONDITION ANALYSIS

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

Total assets of $78.36 billion as of September 30, 2023 were $2.59 billion, or 3%, less than our total assets as of September 30, 2022.

Assets segregated for regulatory purposes and restricted cash decreased $5.25 billion, primarily due to a decrease in client cash sweep balances, which resulted in a decline in client cash held in our CIP and a corresponding decline in segregated assets.

The available-for-sale securities portfolio decreased $704 million as a result of our intention to utilize the cash generated from maturities in this portfolio as a source of funding for our business activities.

Partially offsetting these decreases was a $3.14 billion increase in cash and cash equivalents as we have increased the cash held in our Bank segment since September 30, 2022 as a result of market factors that have impacted the banking industry during fiscal 2023, providing us flexibility to meet the needs of our clients.

Bank loans, net increased $536 million primarily driven by an increase in residential mortgage loans and CRE loans, partially offset by a decrease in C&I loans and SBL.

As of September 30, 2023, our total liabilities of $68.17 billion were $3.35 billion, or 5%, less than our total liabilities as of September 30, 2022, primarily driven by a $6.0 billion decline in brokerage client payables, primarily related to the aforementioned decrease in CIP balances as of September 30, 2023.

This decrease was partially offset by an increase in bank deposits of $2.84 billion, primarily due to the launch of the ESP to PCG clients in March 2023, which raised $13.59 billion of deposits during the year ended September 30, 2023, enabling us to shift a portion of our client cash sweep balances in the RJBDP from being held as bank deposits in our Bank segment to third-party banks in our RJBDP, which do not impact our Consolidated Statements of Financial Condition.

The increase in deposits also allowed us to reduce our already modest level of borrowings from the FHLB by $190 million compared to September 30, 2022, despite the banking market conditions that arose during fiscal 2023.

Total assets of $82.99 billion as of September 30, 2024 were $4.63 billion, or 6%, greater than our total assets as of September 30, 2023.

Bank loans, net increased $2.22 billion primarily driven by increases in SBL and residential mortgage loans.

Cash and cash equivalents increased $1.69 billion primarily driven by an increase in cash held in our Bank segment, largely resulting from an increase in bank deposits during the year.

Other assets increased $564 million, partially due to valuation increases on our company-owned life insurance policies.

Collateralized agreements, trading assets, and other receivables, net also increased $331 million, $293 million, and $217 million, respectively.

These increases were partially offset by a $921 million decrease in available-for-sale securities primarily driven by net maturities.

As of September 30, 2024, our total liabilities of $71.33 billion were $3.15 billion, or 5%, greater than our total liabilities as of September 30, 2023, largely due to a $1.81 billion increase in bank deposits.

Collateralized financings also increased $601 million due to an increase in securities lending activity and repurchase agreements in support of our brokerage operations.

Accrued compensation, commissions, and benefits, brokerage client payables, and trading liabilities also increased $411 million, $378 million, and $260 million, respectively.

These increases were partially offset by a $266 million decrease in derivative liabilities.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and capital are essential to our business.

The primary goal of our liquidity management activities is to ensure adequate funding and liquidity to conduct our business over a range of economic and market environments, including times of broader industry or market liquidity stress events, such as those which occurred in the banking industry during fiscal 2023.

In times of market stress or uncertainty, we generally maintain higher levels of capital and liquidity, including increased cash levels in our Bank segment, to ensure we have adequate funding to support our business and meet our clients’ needs.

In times of market stress or uncertainty, we generally maintain higher levels of liquidity, including increased cash levels in our Bank segment, to ensure we have adequate funding to support our business and meet our clients’ needs.

We seek to manage capital levels to support execution of our business strategy, provide financial strength to our subsidiaries, and maintain sustained access to the capital markets, while at the same time meeting our regulatory capital requirements and conservative internal management targets.

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We have a contingency funding plan which would guide our actions if one or more of our businesses were to experience disruptions from normal funding and liquidity sources.

These actions include reallocating client cash balances in the RJBDP from third-party banks to our bank subsidiaries thereby bringing those deposits onto our Consolidated Statements of Financial Condition, increasing our FHLB borrowings at our bank subsidiaries, accessing committed and uncommitted lines of credit at the parent or certain operating subsidiaries, accessing capital markets, or in certain circumstances accessing certain borrowings from the Federal Reserve.

We also have the ability to create additional sources of funding by developing new products to meet the financial needs of our clients.

In March 2023 we launched the ESP by which PCG clients can deposit cash in a FDIC-insured high-yield Raymond James Bank account.

These actions include reallocating client cash balances in the RJBDP from third-party banks to our bank subsidiaries thereby bringing those deposits onto our Consolidated Statements of Financial Condition, increasing our FHLB borrowings or borrowing from the Federal Reserve’s discount window at our bank subsidiaries, accessing committed and uncommitted lines of credit at the parent or certain operating subsidiaries, or accessing capital markets.

We also have the ability to create additional sources of funding by developing new products to meet the financial needs of our clients, such as the ESP deposit offering which was introduced to PCG clients in fiscal 2023 and, from time to time, offering enhanced rates on certain RJBDP deposits.

With each of our deposit offerings, we work to obtain sufficient liquidity to support our business operations while also maintaining a high level of FDIC insurance coverage for our clients.

Our financing activities could also include bank borrowings, collateralized financing arrangements, or additional capital raising activities under our “universal” shelf registration statement.

We believe our existing assets, most of which are liquid in nature,

We believe our existing assets, most of which can be readily monetized, together with funds generated from operations and available from committed and uncommitted financing facilities, provide adequate funds for continuing operations at current levels of activity in the short-term.

We also believe that we will be able to continue to meet our long-term funding and liquidity requirements due to our strong financial position and ability to access capital from financial markets.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

together with funds generated from operations and available from committed and uncommitted financing facilities, provide adequate funds for continuing operations at current levels of activity in the short-term.

We also believe that we will be able to continue to meet our long-term funding and liquidity requirements due to our strong financial position and ability to access capital from financial markets.

Liquidity and capital management

Senior management establishes our liquidity and capital management frameworks.

Our liquidity and capital management frameworks are overseen by the RJF Asset and Liability Committee, a senior management committee that develops and executes strategies and policies to manage our liquidity risk and interest rate risk, as well as provides oversight over the firm’s investments.

Our liquidity and capital management frameworks are overseen by our Asset and Liability Committee, a senior management committee that develops and executes strategies and policies to manage our liquidity risk and interest rate risk, as well as provides oversight over the firm’s investments.

Our liquidity management framework is designed to ensure we have a sufficient amount of funding, even when funding markets experience stress.

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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.

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

Information about our common equity is included in the Consolidated Statements of Financial Condition, the Consolidated Statements of Changes in Shareholders’ Equity, and Note 20 of the Notes to Consolidated Financial Statements of this Form 10-K.

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, common equity tier 1 (“CET1”), and total capital to risk-weighted assets.

Under regulatory capital rules applicable to us as a bank holding company that has made an election to be a financial 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, common equity tier 1 (“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.

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

See Note 24 of the Notes to Consolidated Financial Statements of this Form 10-K for further information about our regulatory capital and related capital ratios.

See Note 24 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information about our regulatory capital and related capital ratios.

We have classified all of our investments in debt securities as available-for-sale and have not classified any of our investments in debt securities as held-to-maturity.

Accordingly, we account for our available-for-sale securities at fair value at each reporting date, with unrealized gains and losses, net of tax, included in accumulated other comprehensive income (“AOCI”).

Current Basel III rules permit us to make an election to exclude most components of AOCI when calculating CET1, tier 1 capital, and total capital.

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Management’s Discussion and Analysis

On July 27, 2023, U.S.

banking regulators issued proposed rules that, if enacted, would result in changes to regulations applicable to bank holding companies, including higher capital requirements and eliminating the AOCI opt-out election, which could reduce our regulatory capital ratios in the future.

Under the proposed rule, if enacted, there would be a three-year transition period for the elimination of the AOCI opt-out election.

We are evaluating these proposals, most of which would apply to us if our average total consolidated assets for four consecutive calendar quarters exceeded $100 billion, to assess their potential impact to our businesses and strategies.

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

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Retained earnings

11,894 10,213

Treasury stock

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Residential mortgage exposures

Statutory multifamily mortgage exposures 118 71

Statutory multi-family mortgage exposures

High volatility commercial real estate exposures

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Total standardized risk-weighted assets $ 45,625 $ 43,547

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

(1) Exposure is predominantly to the U.S.

government and its agencies.

Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) of $11.00 billion at September 30, 2024 increased $1.69 billion compared with September 30, 2023.

The increase in cash and cash equivalents primarily resulted from net income, an increase in bank deposits, net maturities of available-for-sale securities during the year, and proceeds from loan sales.

These increases were partially offset by investments in bank loans, common stock repurchases and dividends paid on our common and preferred stock.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) of $9.31 billion at September 30, 2023 increased $3.14 billion compared with September 30, 2022.

The increase in cash and cash equivalents primarily resulted from net income earned during the year, proceeds from loan sales, cash resulting from maturities within our available-for-sale securities portfolio, and an increase in bank deposits, as additional deposits from the launch of our ESP to PCG clients in March 2023 and additional offerings of certificates of deposit during the year more than offset a decline in RJBDP balances swept to our Bank segment.

These increases were partially offset by purchases of bank loans, cash used to fund common stock repurchases during the year of $788 million, as well as to pay dividends on our common and preferred stock, and purchases of available-for-sale securities.

Sources of liquidity

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$ in millions September 30, 2024

Raymond James Bank 2,536

TriState Capital Bank 3,572

Charles Stanley Group Limited 159

Raymond James Bank 2,633

Charles Stanley & Co.

Limited (“Charles Stanley”) 147

Raymond James Financial Services, Inc.

Raymond James Trust Company of New Hampshire 126

Raymond James Capital Services, LLC 126

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The portion of this total that was available on demand without restrictions, which amounted to $253 million as of September 30, 2024, is reflected in the RJF cash balance and excluded from Raymond James Bank’s cash balance in the preceding table.

Due to market volatility in the banking industry during fiscal 2023, we maintained a higher level of cash balances at Raymond James Bank and TriState Capital Bank as of September 30, 2023, a combined increase of $3.3 billion compared with September 30, 2022, as part of our liquidity management strategies.

As of September 30, 2023, a large portion of the cash and cash equivalents balances at our non-U.S subsidiaries, including RJ Ltd.

and Charles Stanley Group Limited, was held to meet regulatory requirements and was not available for use by the parent.

A large portion of the cash and cash equivalents balances at our non-U.S.

subsidiaries, including RJ Ltd.

and Charles Stanley, was held to meet regulatory requirements and was not available for use by the parent as of September 30, 2024.

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.

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Regulations require that minimum net capital, as defined, be equal to the greater of $1.5 million or 2% of aggregate debit items arising from client balances.

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 September 30, 2023, RJ&A significantly exceeded the

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Management’s Discussion and Analysis

minimum regulatory requirements, the covenants in its financing arrangements pertaining to net capital, as well as its internally-targeted net capital tolerances.

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

At September 30, 2024, 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.

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

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

Dividends may be limited to the extent that capital is needed to support balance sheet growth or as part of our liquidity and capital management activities.

Our bank subsidiaries may pay dividends to RJF without prior approval of their regulators as long as the dividends do not exceed the sum of their current calendar year and the previous two calendar years’ retained net income, and they maintain their targeted regulatory capital ratios, among other restrictions.

Dividends paid to RJF from our bank subsidiaries may be limited to the extent that capital is needed to support balance sheet growth or as part of our liquidity and capital management activities.

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.

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Management’s Discussion and Analysis

Borrowings and financing arrangements

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As of September 30, 2024, RJF and RJ&A had the ability to borrow under our $750 million Credit Facility, a committed unsecured line of credit.

however, we had no such borrowings outstanding under this facility as of September 30, 2023.

We had no such borrowings outstanding under this facility as of September 30, 2024.

See our discussion of the Credit Facility in Note 16 of the Notes to Consolidated Financial Statements of this Form 10-K.

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

As of September 30, 2023, we had outstanding borrowings under two uncommitted secured borrowing arrangements out of a total of 13 uncommitted financing arrangements (nine uncommitted secured and four uncommitted unsecured).

As of September 30, 2024, we had outstanding borrowings under three uncommitted secured borrowing arrangements 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.

Our borrowings on uncommitted financing arrangements, which were in the form of repurchase agreements in RJ&A, were included in “Collateralized financings” on our Consolidated Statements of Financial Condition.

See Notes 7 and 16 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information regarding these borrowings.

Our borrowings on uncommitted secured financing arrangements, which were in the form of repurchase agreements in RJ&A, were included in “Collateralized financings” on our Consolidated Statements of Financial Condition.

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

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Other borrowings and collateralized financings

We had $1.00 billion in FHLB borrowings outstanding at September 30, 2023, comprised of floating-rate and fixed-rate advances.

We had $950 million in FHLB borrowings outstanding at September 30, 2024, comprised of floating-rate and fixed-rate advances.

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

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

We pledge certain of our bank loans and available-for-sale securities with the FHLB as security for both the repayment of certain borrowings and to secure capacity for additional borrowings as needed.

As of September 30, 2024, we had an additional $9.61 billion in immediate credit available from the FHLB based on the collateral pledged.

With the pledge of incremental collateral, we could further increase credit available to us from the FHLB.

See Notes 7 and 16 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information regarding bank loans and available-for-sale securities pledged with the FHLB and for additional information on our FHLB borrowings, including the related maturities and interest rates.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

During the year ended September 30, 2023, we increased our borrowing capacity with the FHLB through the pledge of additional available-for-sale securities.

At September 30, 2023, we had pledged with the FHLB bank loans and available-for-sale securities of $9.40 billion and $3.66 billion, respectively.

As of September 30, 2023, we had an additional $9.25 billion in immediate credit available from the FHLB based on the collateral pledged.

Further, with the pledge of incremental collateral, we could further increase credit available to us from the FHLB.

See Notes 7 and 16 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information regarding bank loans, net and available-for-sale securities pledged with the FHLB and for further information on our FHLB borrowings, including the related maturities and interest rates.

As member banks, our bank subsidiaries have access to the Federal Reserve’s discount window and may have access to other lending programs that may be established by the Federal Reserve in unusual and exigent circumstances.

As of September 30, 2024, our bank subsidiaries had pledged certain bank loans and available-for-sale securities with the Federal Reserve and subsequent to that date have continued to pledge additional assets to further increase our borrowing capacity and support our operational readiness to borrow from the discount window.

See Note 7 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information regarding bank loans pledged with the FRB.

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

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While we had borrowings outstanding as of September 30, 2024, the clearing organization is under no contractual obligation to lend to us under this arrangement.

As member banks, Raymond James Bank and TriState Capital Bank have access to the Federal Reserve’s discount window and may have access to other lending programs that may be established by the Federal Reserve in unusual and exigent circumstances, including the Bank Term Funding Program that was created by the Federal Reserve on March 12, 2023;

however, we do not view borrowings from the Federal Reserve as one of our primary sources of funding.

See Note 7 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information regarding bank loans, net pledged with the FRB.

At September 30, 2023, we had subordinated notes due 2030 outstanding, with an aggregate principal amount of $98 million.

At September 30, 2024, we had subordinated notes due May 2030 outstanding, with an aggregate principal amount of $98 million.

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

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We account for each of these types of transactions as collateralized agreements and financings, with the outstanding balance of $536 million as of September 30, 2024 related to the securities loaned included in “Collateralized financings” on our Consolidated Statements of Financial Condition of this Form 10-K.

See Notes 2 and 7 of the Notes to Consolidated Financial Statements of this Form 10-K for more information on our collateralized agreements and financings.

See Notes 2 and 7 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information on our collateralized agreements and financings.

Senior notes payable

At September 30, 2023, 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.

At September 30, 2024, 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 April 2030, $800 million par 4.95% senior notes due July 2046, and $750 million par 3.75% senior notes due April 2051.

See Note 17 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information on senior notes payable.

At September 30, 2023, estimated future contractual interest payments on our senior notes were approximately $1.9 billion, of which $91 million is payable in fiscal 2024, with the remainder extending through 2051.

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Management’s Discussion and Analysis

At September 30, 2024, estimated future contractual interest payments on our senior notes were approximately $1.8 billion, of which $91 million is payable in fiscal 2025, with the remainder extending through fiscal 2051.

Credit ratings

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February 2024

February 2023

Preferred stock:

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Any rating downgrades could increase our costs in the event we were to obtain additional financing.

Should our credit rating be downgraded prior to a public debt offering, it is probable that we would have to offer a higher rate of interest to bond holders.

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Management’s Discussion and Analysis

Should our credit rating be downgraded prior to a public debt offering, it is probable that we would have to offer a higher rate of interest to bond investors.

A downgrade to below investment grade may make a public debt offering difficult to execute on terms we would consider to be favorable.

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

Those policies against which we could readily borrow had a cash surrender value of $895 million as of September 30, 2023, comprised of $589 million related to employee-directed plans and $306 million related to company-directed plans, and we were able to borrow up to 90%, or $806 million, of the September 30, 2023 total without restriction.

Those policies against which we could readily borrow had a cash surrender value of $1.18 billion as of September 30, 2024, comprised of $797 million related to employee-directed plans and $379 million related to company-directed plans, and we were able to borrow up to 90%, or $1.06 billion, of the September 30, 2024 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.

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Subject to certain conditions, this registration statement will be effective through May 8, 2027.

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Management’s Discussion and Analysis

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.

In May 2024, Raymond James Bank entered into a joint venture with a third party to offer private credit solutions in order to finance clients’ merger and acquisition transactions.

All loans made by the joint venture to borrower companies are subject to unanimous approval by both Raymond James Bank and the joint venture member.

Raymond James Bank may make advances through a loan to the joint venture.

The activity of this joint venture did not have a significant impact on our financial position or results of operations for the year ended September 30, 2024.

See Notes 14 and 15 of the Notes to Consolidated Financial Statements of this Form 10-K for information regarding our lease obligations and certificates of deposit, respectively.

We have entered into investment commitments, lending commitments, and other commitments to extend credit for which we are unable to reasonably predict the timing of future payments.

See Note 19 of the Notes to Consolidated Financial Statements of this Form 10-K for further information.

See Note 19 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information.

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 this Form 10-K.

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However, due to the current capital position of RJF and its regulated subsidiaries, we do not anticipate these capital requirements will have a negative impact on our future business activities.

See Note 24 of the Notes to Consolidated Financial Statements of this Form 10-K for further information on regulatory capital requirements.

See Note 24 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information on regulatory capital requirements.

RJF and certain of its subsidiaries are subject to regular reviews and inspections by regulatory authorities and SROs.

In addition, regulatory agencies and SROs institute investigations from time to time into industry practices, among other things.

For example, in August 2024, the SEC’s Division of Enforcement requested information regarding our practices related to cash

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Management’s Discussion and Analysis

sweep programs for investment advisory clients and is reportedly conducting similar reviews at other financial institutions.

The firm has been cooperating with this request.

In addition, in August 2024, two putative class action lawsuits were filed in federal district court alleging, among other things, that the firm breached its fiduciary duties or agreements with regard to rates paid to clients in our cash sweep programs.

We intend to vigorously defend against these lawsuits.

In August 2024, the firm entered into a settlement (the “Settlement”) with the SEC’s Division of Enforcement to resolve an investigation of the firm’s compliance with records preservation requirements relating to business communications sent over electronic messaging channels that have not been approved by the firm.

In the Settlement, the firm agreed to cease and desist from further violations of certain records preservation requirements, admitted the SEC’s factual findings, agreed to pay a civil monetary penalty of $50 million, agreed to engage an independent compliance consultant, and agreed to implement improvements to our related compliance policies and procedures.

In August 2023, Raymond James Investment Services Limited, one of our U.K.

subsidiaries, agreed to a Voluntary Application for Imposition of Requirements (“VREQ”) with the FCA that prohibits the onboarding of new branches or financial advisors without the prior consent of the FCA.

We do not expect this VREQ to have a material impact on our consolidated results of operations.

This VREQ has not had a material impact on our consolidated results of operations, and we do not expect it to have a material impact in the future.

The Organization for Economic Co-operation and Development (“OECD”) has issued the Global Anti-Base Erosion Model Rules (“Pillar II”) which generally provides for multinational organizations to have a minimum effective corporate tax rate of 15% in each jurisdiction in which they operate.

We have foreign operations in the U.K, Canada, and Germany, and will be subject to certain portions of Pillar II beginning in fiscal 2025.

We do not anticipate that Pillar II will have a material impact on our consolidated results of operations or effective income tax rate.

CRITICAL ACCOUNTING ESTIMATES

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Loss provisions

Loss provisions for legal and regulatory matters

The recorded amount of liabilities related to legal and regulatory matters is subject to significant management judgment.

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 this Form 10-K.

In addition, refer to Note 19 of the Notes to Consolidated Financial Statements of this Form 10-K for information regarding legal and regulatory matters contingencies as of September 30, 2023.

Allowance for credit losses

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This uncertainty can produce volatility in our allowance for credit losses.

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Management’s Discussion and Analysis

addition, the allowance for credit losses could be insufficient to cover actual losses.

In addition, the allowance for credit losses could be insufficient to cover actual losses.

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.

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.

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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 September 30, 2023 to what our estimate would have been under a downside case scenario and an upside case scenario, without considering any offsetting effects in the qualitative component of our allowance for credit losses as of September 30, 2023.

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Management’s Discussion and Analysis

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 September 30, 2024 to what our estimate would have been under a downside case scenario and an upside case scenario, without considering any offsetting effects in the qualitative component of our allowance for credit losses.

As of September 30, 2024, use of the downside case scenario would have resulted in an increase of approximately $175 million in the quantitative portion of our allowance for credit losses on bank loans, while the use of the upside case scenario would have resulted in a reduction of approximately $30 million in the quantitative portion of our allowance for credit losses on bank loans.

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See Note 2 of the Notes to Consolidated Financial Statements of this Form 10-K for information regarding our allowance for credit losses related to bank loans as of September 30, 2024.

Loss provisions for legal and regulatory matters

The recorded amount of liabilities related to legal and regulatory matters is subject to significant management judgment.

In addition, refer to Note 19 of the Notes to Consolidated Financial Statements of this Form 10-K for information regarding legal and regulatory matters contingencies as of September 30, 2024.

ACCOUNTING STANDARDS UPDATE

In March 2022, the Financial Accounting Standards Board issued new guidance related to troubled debt restructurings and disclosures regarding write-offs of financing receivables (ASU 2022-02), amending guidance related to the measurement of credit losses on financial instruments (ASU 2016-13).

The amendment eliminates the accounting guidance for troubled debt restructurings for creditors, but requires enhanced disclosures for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty, and requires disclosure of current-period gross write-offs by year of origination for financing receivables.

This guidance was adopted on a prospective basis on October 1, 2023 and did not have a material impact on our financial position and results of operations.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued amended guidance related to disclosures for segment reporting (ASU 2023-07).

The amendment requires a public entity to disclose on an annual and interim basis, for each reportable segment, the significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

The guidance also requires a public entity to disclose, for each reportable segment, an amount for other segment items (those not captured as a significant expense) and the reported measure of a segment’s profit or loss.

This new guidance is effective for annual periods beginning in our fiscal 2025 and interim periods beginning in our fiscal first quarter of 2026 with early adoption permitted.

This guidance will be applied on a retrospective basis.

Since this amendment only requires additional disclosures, adoption of this ASU will not have an impact on our financial condition, results of operations, or cash flows.

In December 2023, the FASB issued amended guidance related to disclosures for income taxes (ASU 2023-09).

The amendment requires a public entity to enhance its existing annual tabular reconciliation of its statutory income tax rate to its effective tax rate, with certain reconciling items at or above 5% of the applicable statutory income tax rate broken out by nature and/or jurisdiction.

The guidance also requires an entity to disclose income taxes paid (net of refunds received), disaggregated by federal, state, and foreign taxes, and net amounts paid to an individual jurisdiction when they represent 5% or more of the total income taxes paid.

This new guidance is effective for annual periods beginning in our fiscal 2026 with early adoption permitted.

This guidance will be applied on a prospective basis with retrospective application permitted.

Since this amendment only requires additional disclosures, adoption of this ASU will not have an impact on our financial condition, results of operations, or cash flows.

In November 2024, the FASB issued amended guidance related to disclosure of disaggregated expenses (ASU 2024-03).

This amendment requires public business entities to provide detailed disclosures in the notes to financial statements disaggregating specific expense categories, including employee compensation, depreciation, and intangible asset amortization, as well as certain other disclosures to provide enhanced transparency into the nature and function of expenses.

This new guidance is effective for annual periods beginning in our fiscal 2028 and interim periods beginning in our fiscal first quarter of 2029 with early adoption permitted.

This guidance will be applied on a prospective basis with retrospective application permitted.

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Management’s Discussion and Analysis

this amendment only requires additional disclosures, adoption of this ASU will not have an impact on our financial condition, results of operations, or cash flows.

See Note 2 of the Notes to Consolidated Financial Statements of this Form 10-K for information regarding accounting guidance adopted during the year ended September 30, 2024.

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Our risk management processes are multi-faceted and require communication, judgment and knowledge of financial products and markets.

We have a formal Enterprise Risk Management (“ERM”) program to assess and review aggregate risks across the firm.

We have a formal ERM program to assess and review aggregate risks across the firm.

Our management takes an active role in the ERM process, which requires specific administrative and business functions to participate in the identification, assessment, monitoring and control of various risks.

The principal risks related to our business activities are market, credit, liquidity, operational, model, and compliance.

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Management’s Discussion and Analysis

Our Board of Directors, including its Risk Committee and Audit Committee, oversees the firm’s management and mitigation of risk, reinforcing a culture that encourages ethical conduct and risk management throughout the firm.

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

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.

Through our broker-dealer subsidiaries, we trade debt obligations and, to a lesser extent, 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.

We also hold investments within our available-for-sale securities portfolio, and from time to time may hold Small Business Administration loan securitizations not yet sold.

Within our banking operations, we hold investments in an available-for-sale securities portfolio, and from time to time may hold Small Business Administration loan securitizations not yet sold.

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

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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.

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

While Market Risk Management maintains ongoing communication with the revenue-generating business units, it is independent of such units.

Interest rate risk

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Management’s Discussion and Analysis

Trading activities

We are exposed to interest rate risk as a result of our trading inventory (primarily comprised of fixed income instruments) in our Capital Markets segment.

We are exposed to market risk, primarily related to interest rate risk, as a result of our trading inventory (primarily comprised of fixed income financial instruments) in our Capital Markets segment.

Changes in the value of our trading inventory may result from fluctuations in interest rates, credit spreads, equity prices, macroeconomic factors, investor expectations or risk appetites, liquidity, as well as dynamic relationships between these factors.

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Treasuries, exchange traded funds, futures contracts, liquid spread products, and derivatives.

We are also exposed to equity price risk as a result of our capital markets activities.

Our broker-dealer activities are generally client-driven, and we hold equity securities as part of our trading inventory to facilitate such activities, although the amounts are not as significant as our fixed income trading inventory.

Our primary method for controlling risks within trading inventories is through the use of dollar-based and exposure-based limits.

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During volatile markets, we may temporarily reduce limits and/or choose to pare our trading inventories to reduce risk.

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Management’s Discussion and Analysis

We monitor Value-at-Risk (“VaR”) for all of our trading portfolios on a daily basis for risk management purposes and as a result of applying the Fed’s Market Risk Rule (“MRR”) for the purpose of calculating our capital ratios.

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VaR is reported at a 99% confidence level for a one-day time horizon.

Assuming that future market conditions change as they have in the past twelve months, we would expect to incur losses greater than those predicted by our one-day VaR estimates about once every 100 trading days, or about three times per year on average.

The VaR model is independently reviewed by our Model Risk Management function.

See the “Model risk” section that follows for further information.

See the “Model risk” section that follows for additional information.

The modeling of the risk characteristics of trading positions involves a number of assumptions and approximations that management believes to be reasonable.

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

Average daily VaR was higher during the year ended September 30, 2023 compared with the year ended September 30, 2022 due to the impact of increased market volatility during the year, as well as the addition of the SumRidge Partners trading inventory beginning in July 2022.

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.

Regulatory-defined daily trading losses are used to evaluate the performance of our VaR model and are not comparable to our actual daily net revenues.

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 year ended September 30, 2023, our regulatory-defined daily losses in our trading portfolios exceeded our predicted VaR on three occasions in line with our previously described expectations.

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.”

We perform daily back-testing procedures for our VaR model, as defined by the Fed’s MRR, whereby we compare each day’s projected VaR to its regulatory-defined daily trading losses, which exclude fees, commissions, reserves, net interest income,

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Management’s Discussion and Analysis

and intraday trading.

Regulatory-defined daily trading losses are used to evaluate the performance of our VaR model and are not comparable to our actual daily net revenues.

During the year ended September 30, 2024, our regulatory-defined daily losses in our trading portfolios exceeded our predicted VaR on two occasions.

Banking operations

Our Bank segment maintains an interest-earning asset portfolio that is comprised of cash, SBL, C&I loans, CRE loans, REIT loans, residential mortgage 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.

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We utilize hedging strategies using interest rate swaps in our banking operations as a component 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 this Form 10-K.

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

We also manage interest rate risk as part of our liquidity management framework.

See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and capital resources” of this Form 10-K for further information.

See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and capital resources” of this Form 10-K for additional information.

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.

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-200 $1,578 (8)%

(1) Our 0-basis point scenario was based on interest rates as of September 30, 2023.

The preceding table does not include the impacts of an instantaneous change in interest rates on net interest income on assets and liabilities outside of our banking operations or on our RJBDP fees from third-party banks, which are also sensitive to changes in interest rates and are included in “Account and service fees” on our Consolidated Statements of Income and Comprehensive Income.

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

We have classified all of our investments in debt securities as available-for-sale and have not classified any of our investments in debt securities as held-to-maturity.

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 Consolidated Statements of Financial Condition, with changes in the fair value of the portfolio recorded through other comprehensive income (“OCI”) on our Consolidated Statements of Income and Comprehensive Income.

As the majority of our available-for-sale securities portfolio is comprised of U.S.

government and government agency-backed securities, changes in fair value are primarily driven by changes

(1) Our 0-basis point scenario was based on interest rates as of September 30, 2024 and did not include the impact of the Fed’s November 2024 decrease in short-term interest rates.

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Management’s Discussion and Analysis

in interest rates.

Comprehensive Income.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net interest analysis” of this Form 10-K for additional information on our net interest income.

We have classified all of our investments in debt securities in our banking operations as available-for-sale and have not classified any of our investments in debt securities as held-to-maturity.

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

As the majority of our available-for-sale securities portfolio is comprised of U.S.

government and government agency-backed securities, changes in fair value are primarily driven by changes in interest rates.

At September 30, 2024, our available-for-sale securities portfolio had a fair value of $8.26 billion with a weighted-average yield of 2.21% and a weighted-average life, after factoring in estimated prepayments, of 3.8 years.

To evaluate the interest rate sensitivity of our available-for-sale securities portfolio we also monitor, among other things, effective duration, defined as the approximate percentage change in price for a 100-basis point change in rates.

As of September 30, 2023, the effective duration of our available-for-sale securities portfolio was approximately 3.56, which means that we would expect the market value of our available-for-sale securities portfolio to decline approximately 3.56% for every 100-basis point increase in interest rates and increase approximately 3.56% for every 100-basis point decline in interest rates.

As of September 30, 2024, the effective duration of our available-for-sale securities portfolio was approximately 3.28, which means that we would expect the market value of our available-for-sale securities portfolio to increase approximately 3.28% for every 100-basis point decline in interest rates and decline approximately 3.28% for every 100-basis point increase in interest rates.

See Notes 2 and 5 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information on our available-for-sale securities portfolio.

The Asset and Liability Committee also reviews EVE, which is a point-in-time analysis of current interest-earning assets and interest-bearing liabilities that incorporates all cash flows over their estimated remaining lives, discounted at current rates.

The Asset and Liability Committee also reviews EVE, which is a point in time analysis of current interest-earning assets and interest-bearing liabilities that incorporates cash flows over their estimated remaining lives, discounted at current rates.

The EVE approach is based on a static balance sheet and provides an indicator of future earnings and capital levels as the changes in EVE indicate the anticipated change in the value of future cash flows.

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Total loans held for sale and investment $ 18,683 $ 12,225 $ 6,184 $ 9,359 $ 46,451

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Management’s Discussion and Analysis

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 September 30, 2024.

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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-K for additional information regarding our interest-only residential mortgage loan portfolio.

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Management’s Discussion and Analysis

Equity price risk

We are exposed to equity price risk as a result of our capital markets activities.

Our broker-dealer activities are generally client-driven, and we carry equity securities as part of our trading inventory to facilitate such activities, although the amounts are not as significant as our fixed income trading inventory.

We attempt to reduce the risk of loss inherent in our inventory of equity securities by monitoring those security positions each day and establishing position limits.

Equity securities held in our trading inventory are generally included in VaR.

In addition, we have a private equity portfolio, included in “Other investments” on our Consolidated Statements of Financial Condition, which is primarily comprised of investments in third-party funds.

See Note 4 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information on this portfolio.

Foreign exchange risk

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 USD.

Our banking operations are also 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 USD.

For example, our bank loan portfolio includes loans which are denominated in Canadian dollars, totaling $1.23 billion and $1.40 billion at September 30, 2024 and 2023, respectively, when converted to USD.

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

Investments in foreign subsidiaries

Raymond James Bank has an investment in a Canadian subsidiary, resulting in foreign exchange risk.

To mitigate its foreign exchange risk, Raymond James Bank utilizes short-term, forward foreign exchange contracts.

A majority of such loans are held in a Canadian subsidiary of Raymond James Bank.

Raymond James Bank utilizes short-term, forward foreign exchange contracts to mitigate its foreign exchange risk related to such investment in this Canadian subsidiary.

These derivatives are primarily accounted for as net investment hedges in the consolidated financial statements.

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

See Notes 2 and 6 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information regarding these derivatives.

Other sources of foreign exchange risk

Investments in non-bank foreign subsidiaries

At September 30, 2024, we had foreign exchange risk in our investment in RJ Ltd.

of CAD 441 million and in our investment in Charles Stanley of £277 million, which were not hedged.

At September 30, 2023, we had other, less significant investments in foreign domiciled subsidiaries, primarily in Europe, which were not hedged;

We had other, less significant investments in foreign domiciled subsidiaries, primarily in Europe, which were not hedged;

however, we do not believe we had material foreign exchange risk either individually, or in the aggregate, pertaining to these subsidiaries as of September 30, 2024.

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

See Note 20 of the Notes to Consolidated Financial Statements of this Form 10-K for further information regarding our components of OCI.

See Note 20 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information regarding our components of OCI.

Transactions and resulting balances denominated in a currency other than the USD

We are subject to foreign exchange risk due to our holdings of cash and certain other assets and liabilities resulting from transactions denominated in a currency other than the USD.

Any currency-related gains/losses arising from these foreign currency denominated balances are reflected in “Other” revenues in our Consolidated Statements of Income and Comprehensive Income.

Any currency-related gains/losses arising from these foreign currency denominated balances are reflected in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

The foreign exchange risk associated with a portion of such transactions and balances denominated in foreign currency are mitigated utilizing short-term, forward foreign exchange contracts.

Such derivatives are not designated hedges and therefore, the related gains/losses are included in “Other” revenues in our Consolidated Statements of Income and Comprehensive Income.

Such derivatives are not designated hedges and therefore, the related gains/losses are included in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

See Note 6 of the Notes to Consolidated Financial Statements of this Form 10-K for information regarding our derivatives.

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Management’s Discussion and Analysis

Credit risk is the risk of loss due to adverse changes in a borrower’s, issuer’s, or counterparty’s ability to meet its financial obligations under contractual or agreed-upon terms.

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As a result, we may be exposed to the risk that these financial institutions may not return our cash to us in the event that the institution experiences financial distress or ceases its operations.

In order to mitigate our credit risk to such financial

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Management’s Discussion and Analysis

institutions, we monitor our exposure with each institution on a daily basis and subject each institution to limits based on various factors including but not limited to financial strength, capitalization levels, liquidity, credit ratings, and market factors to the extent applicable.

In order to mitigate our credit risk to such financial institutions, we monitor our exposure with each institution on a daily basis and subject each institution to limits based on various factors including but not limited to financial strength, capitalization levels, liquidity, credit ratings, and market factors to the extent applicable.

Brokerage activities

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We seek to mitigate these risks by imposing and monitoring individual and aggregate position limits within each business segment for each counterparty, conducting regular credit reviews of financial counterparties, reviewing security, derivative, and loan concentrations, holding collateral as security for certain transactions and conducting business through clearing organizations, which may guarantee performance.

See Notes 2, 6, and 7 of the Notes to Consolidated Financial Statements of this Form 10-K for further information about our credit risk mitigation related to derivatives and collateralized agreements.

See Notes 2, 6, and 7 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information about our credit risk mitigation related to derivatives and collateralized agreements.

Our client activities involve the execution, settlement, and financing of various transactions on behalf of our clients.

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

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

See Note 2 of the Notes to Consolidated Financial Statements of this Form 10‑K for additional 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.

We have credit risk and may incur a loss primarily in the event that such borrower is no longer affiliated with us.

See Notes 2 and 9 of the Notes to Consolidated Financial Statements of this Form 10-K for further information about our loans to financial advisors.

See Notes 2 and 9 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information about our loans to financial advisors.

Banking activities

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The strategy also includes diversification across loan types, geographic locations, industries and clients, 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 independent reviews at least annually of the credit risk monitoring process that performs assessments of compliance with credit policies, risk ratings, and other critical credit information.

The credit risk management process also includes periodic 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 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.

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

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, historical experience through various economic cycles, industry or client

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Management’s Discussion and Analysis

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 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.

On an ongoing basis, we evaluate our methods for determining the allowance for each loan portfolio segment and make enhancements we consider appropriate.

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

We segregate our loan portfolio into six loan portfolio segments, which also serve as classes of financing receivables for purposes of credit analysis.

The risk characteristics relevant to each portfolio segment are as follows.

Loans in this segment are primarily collateralized by the borrower’s marketable securities at advance rates consistent with industry standards and, to a lesser extent, the cash surrender value of life insurance policies issued by an investment-grade insurance company.

An insignificant portion of our SBL portfolio is collateralized by private securities or other financial instruments with a limited trading market.

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SBL also generally qualify for lower capital requirements under regulatory capital rules.

Loans in this segment are made to businesses and are generally secured by all assets of the business.

Repayment, including for owner-occupied properties, is expected from the cash flows of the respective business.

Loans in this segment are made to businesses and are generally secured by assets of the business and repayment is expected from the cash flows of the respective business.

In addition, we also have certain owner-occupied commercial real estate loans of approximately $200 million as of September 30, 2024 that were classified as C&I loans as the primary source of repayment for these loans is based on the financial strength of the owner and the cash flows of the respective business rather than the ability of the collateral to generate cash flows.

Unfavorable economic and political conditions, including the resultant decrease in consumer or business spending, may have an adverse effect on the credit quality of loans in this segment.

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Residential mortgage (includes home equity loans/lines):

All of our residential mortgage loans adhere to stringent underwriting parameters pertaining to credit score and credit history, debt-to-income ratio of the borrower, LTV, and combined LTV (including second mortgage/home equity loans).

All loans in this segment are collateralized by residential real estate and repayment is primarily dependent on the credit quality of the individual borrower.

We do not originate or purchase adjustable rate mortgage (“ARM”) loans with negative amortization, reverse mortgages, or loans to subprime borrowers.

Loans with deeply discounted teaser rates are also not originated or purchased.

All loans in this segment are collateralized by residential real estate and repayment is primarily dependent on the credit quality of the individual borrower.

A decline in the strength of the economy, particularly unemployment rates and housing prices, among other factors, could have a significant effect on the credit quality of loans in this segment.

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For non-profit entities, repayment is expected from revenues which may include fundraising proceeds.

These loans are subject to demographic risk, therefore much of the credit assessment of tax-exempt loans is driven by the entity’s revenue base and the general economic environment.

Adverse developments in either of these areas may have a negative effect on the credit quality of loans in this segment.

These loans are subject to demographic risk, therefore much of the credit assessment of tax-exempt loans is driven by the entity’s revenue base and the general economic

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Adverse developments in either of these areas may have a negative effect on the credit quality of loans in this segment.

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

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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.

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

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

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Nonperforming assets as a % of Bank segment total assets 0.28 % 0.21 %

(1) Nonperforming loans at September 30, 2023 and September 30, 2022 included $96 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 September 30, 2023 and 2022 of residential troubled debt restructurings which were returned to accrual status in accordance with our policy.

(1) Nonperforming loans at September 30, 2024 and 2023 included $89 million and $96 million, respectively, which were current pursuant to their contractual terms.

The increase in nonperforming loans and assets as of September 30, 2024 as compared with September 30, 2023 was primarily due to certain loans that were placed on nonaccrual status with an associated allowance during the year ended September 30, 2024.

See table summarizing nonaccrual loans by portfolio segment in Note 8 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information.

Although our nonperforming assets as a percentage of our Bank segment’s assets remained low as of September 30, 2024, 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.

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A component of our Bank segment’s credit risk management strategy is conservative, well-defined policies and procedures.

Our Bank segment’s underwriting policies for the major types of loans are described in the following sections.

Our underwriting policies for the major types of bank loans are described in the following sections.

SBL portfolio

Our SBL portfolio represented 35% of our total loans held for sale and investment as of September 30, 2024.

This portfolio is primarily comprised of loans fully collateralized by a borrower’s marketable securities and, to a lesser extent, the cash surrender value of life insurance policies issued by an investment-grade insurance company.

An insignificant portion of our SBL portfolio is collateralized by private securities or other financial instruments with a limited trading market.

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Corporate and tax-exempt loan portfolios

Our corporate and tax-exempt loan portfolios were comprised of approximately 1,600 borrowers as of September 30, 2023.

Of these loan portfolios, approximately 80% was comprised of loans to larger companies with earnings before interest, taxes, depreciation, and amortization greater than $100 million, of which approximately 40% were loans to public companies.

The remaining 20% was primarily focused on middle-market businesses located within the primary markets of Pennsylvania, Ohio, New Jersey, and New York.

We have offices in each of these states led by experienced regional presidents to understand the unique borrowing needs and credit risk of the middle-market businesses in the area.

They are supported by highly experienced relationship managers who target middle-market business customers with annual revenues of $10 million to $300 million.

As of September 30, 2024, our corporate and tax-exempt loans held for investment represented approximately 33% of the Bank segment’s total assets and were comprised of approximately 1,500 borrowers.

A large portion of these loan portfolios was comprised of loans to larger companies, including public companies, with earnings before interest, taxes, depreciation, and amortization greater than $100 million.

We also had issued corporate and tax-exempt loans to middle-market businesses.

Our corporate loan portfolio is diversified by geography, by loan type, and among a number of industries in the U.S and Canada, and a large portion of these loans are to borrowers in industries in which we have expertise through coverage provided by our Capital Markets research analysts.

Our corporate loans include project finance real estate loans, commercial lines of credit, and term loans, the majority of which are participations in Shared National Credit (“SNC”) or other large, syndicated loans.

Our corporate loans included project finance real estate loans, commercial lines of credit, and term loans.

As of September 30, 2024, approximately 67% of our corporate loans were participations in Shared National Credit (“SNC”) or other large, syndicated loans.

We are typically either involved in the syndication of the loans at inception or purchase loans in secondary trading markets.

The remainder of the corporate loan portfolio is comprised of smaller participations and direct loans.

The remainder of our corporate loan portfolio is comprised of smaller participations and direct loans.

There are no subordinated loans or mezzanine financings in the corporate loan portfolio.

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These loans generally have lower overall credit risk but are subject to other risks that are not usually present with corporate clients, including the risk associated with the constituency served by a local government and the risk in ensuring an obligation has appropriate tax treatment.

The majority of our corporate and tax-exempt loan portfolios are underwritten, managed, and reviewed at one of our corporate locations while the remainder are approved by a committee of senior executives, both of which facilitates close monitoring of the portfolio by credit risk personnel, relationship officers, and senior bank executives.

All corporate and tax-exempt loans are independently underwritten to our credit policies, are subject to approval by a loan committee, and credit quality is monitored on an ongoing basis by our lending staff.

All corporate and tax-exempt loans are independently underwritten in accordance with our credit policies, are subject to approval by a loan committee, and credit quality is monitored on an ongoing basis by our lending staff.

Our credit policies include criteria related to LTV limits based upon property type, single borrower loan limits, loan term and structure parameters (including guidance on leverage, debt service coverage ratios, and debt repayment ability), industry concentration limits, secondary sources of repayment, municipality demographics, and other criteria.

Our corporate loans are generally secured by all assets of the borrower and in some instances are secured by mortgages on specific real estate.

Tax-exempt loans are generally secured by a pledge of revenue.

The majority of our tax-exempt loan portfolio is comprised of loans to investment-grade borrowers, and such loans are generally secured by a pledge of revenue.

In a limited number of transactions, loans in the portfolio are extended on an unsecured basis.

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Risk monitoring process

Another component of credit risk strategy for our bank loan portfolio is the ongoing risk monitoring and review processes, including our internal loan review process, as well as our rigorous processes to manage and limit credit losses arising from loan delinquencies.

Another component of credit risk strategy for our bank loan portfolio is the ongoing risk monitoring and review processes, including our independent loan review process, as well as our processes to manage and limit credit losses arising from loan delinquencies.

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

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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 portfolio with insignificant losses incurred during the year ended September 30, 2023.

Collateral calls have been minimal relative to our SBL portfolio.

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

The factors include, but are not limited to:

loan performance trends, loan product parameters and qualification requirements, borrower credit scores, level of

loan performance trends, loan product parameters and qualification requirements, borrower credit scores, level of documentation, loan purpose, geographic concentrations, average loan size, risk rating, and LTV ratios.

See Note 8 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

documentation, loan purpose, geographic concentrations, average loan size, risk rating, and LTV ratios.

See Note 8 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information.

The following table presents a summary of delinquent residential mortgage loans, the vast majority of which are first mortgage loans, which are comprised of loans which are two or more payments past due as well as loans in the process of foreclosure.

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September 30, 2023 $ 3 $ 4 $ 7 0.03 % 0.05 % 0.08 %

Our September 30, 2023 percentage compares favorably to the national average for over 30 day delinquencies of 1.85%, as most recently reported by the Fed.

To manage and limit credit losses, we maintain a rigorous process to manage our loan delinquencies.

Our September 30, 2024 percentage of over 30 day delinquent residential mortgage loans compares favorably to the national average of 1.84%, as most recently reported by the Fed.

To manage and limit credit losses, we maintain processes to manage our loan delinquencies.

Substantially all of our residential first mortgages are serviced by a third party whereby the primary collection effort resides with the servicer.

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Colorado 4% 1%

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.

The occurrence of a natural disaster or severe weather event in any of these states, for example wildfires in California and hurricanes impacting the southeastern U.S., such as hurricanes Helene and Milton which made landfall in September 2024 and October 2024, respectively, 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.

Loans where borrowers may be subject to payment increases include ARM loans with terms that initially require payment of interest only.

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At September 30, 2024 and 2023, these loans totaled $2.96 billion and $2.85 billion, respectively, or approximately 31% and 33% 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 September 30, 2023, begins amortizing is six years.

The weighted-average number of years before the remainder of the loans, which were still in their interest-only period at September 30, 2024, begins amortizing is five years.

Corporate and tax-exempt loans

Credit risk in our corporate and tax-exempt loan portfolios is monitored on an individual loan basis for trends in borrower operating performance, payment history, credit ratings, collateral performance, loan covenant compliance, municipality demographics and other factors including industry performance and concentrations.

As part of the credit review process, the loan rating is reviewed on an ongoing basis to confirm the appropriate risk rating for each credit.

The individual loan ratings resulting from semi-annual SNC exams are incorporated in our internal loan ratings when the ratings are received.

If the SNC rating is lower on an individual loan than our internal rating, the loan is downgraded.

While we consider historical SNC exam results in our loan ratings methodology, differences between the SNC exam and internal ratings on individual loans typically arise due to subjectivity of the loan classification process.

Downgrades resulting from these differences may result in additional

One way in which we manage credit risk is through diversification of the corporate bank loan portfolio.

We monitor industry concentrations and have established limits relative to capital as part of our overall liquidity and capital planning.

Further, key credit policies are reviewed at least annually by senior bank executives to ensure policies align with our banks’ risk appetites.

Credit policies for our corporate loans include criteria related to single borrower loan limits, loan term and structure parameters (including guidance on leverage, debt service coverage ratios, and debt repayment ability), industry concentration limits, secondary sources of repayment, municipality demographics, and other criteria.

Credit policies for our CRE loans also include LTV limits based upon property type.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

provisions for credit losses in periods when SNC exam results are received.

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

In addition, credit quality trends are monitored by industry to determine if a change in the risk exposure to a certain industry may warrant incremental monitoring or tightening of our underwriting standards during times of market uncertainty.

We also utilize loan sales and other risk mitigation techniques to manage the size and risk profile of our corporate bank loans.

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

The majority of loans in our corporate loan portfolio are assigned risk ratings based on an assessment of conditions that affect the borrower’s ability to meet contractual obligations under the loan agreement.

This process includes reviewing borrowers’ financial information and other credit-related documentation, public information, and other information specific to each borrower and loan.

As part of the credit review process, the loan rating is reviewed at least annually, or more frequently based on policy requirements regarding various risk characteristics, to confirm the appropriate risk rating for each credit.

The individual loan ratings resulting from semi-annual SNC exams are incorporated in our internal loan ratings when the ratings are received.

If the SNC rating is lower on an individual loan than our internal rating, the loan is downgraded.

Downgrades resulting from these differences may result in additional provisions for credit losses in periods when SNC exam results are received.

See Note 2 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information on our allowance for credit losses policies.

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

Our corporate bank loan portfolio does not contain a significant concentration in any single industry.

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Loan fund 7% 3%

Consumer products and services 5% 2%

The Fed’s measures to control inflation, including through increases in short-term interest rates, have had a dampening effect on the economy and are likely to continue to do so in the near-term.

These and related factors could negatively impact our borrowers, particularly those with heightened exposure to rising interest rates.

In response to changing trends and industry-wide challenges, we continue to closely monitor each loan in our commercial real estate portfolio, particularly office real estate, utilizing LTV ratios and other metrics.

We are also monitoring any impacts of inflation, higher interest rates, and a potential recession on our corporate loan portfolio.

During the year ended September 30, 2023, we reduced our corporate loan exposure in certain sectors with increasing credit concerns and sold approximately $670 million of par value of corporate loans.

We may sell additional corporate loans in fiscal 2024 as part of our credit risk mitigation strategies.

In addition, while we are well-positioned to lend once activity increases, we expect to be prudent when growing our corporate loan portfolio.

Subscription lines 5% 2%

The Fed’s measures to control inflation, including through increases in short-term interest rates in prior fiscal years resulted in relatively high interest rates throughout most of our fiscal 2024, which coupled with the uncertainty regarding the timing and magnitude of Fed interest rate cuts during fiscal 2024 had a negative impact on borrowers.

Market-wide corporate loan growth has remained low in fiscal 2024, but we believe we are well-positioned to increase lending as new origination activity increases, which may increase provisions for credit losses in future periods.

We continue to closely monitor economic factors, including inflation and interest rates, that may impact our corporate loan portfolio.

Additionally, in our fiscal 2024 we have sold, and may continue to sell in our fiscal 2025, corporate loans as part of our credit risk mitigation strategies.

The effects of recent macroeconomic factors, including changes in business and consumer behavior, have most notably impacted the commercial real estate sector.

Specifically, risk related to office real estate loans has increased due to the increase in remote work, pressure from higher interest rates, uncertainty related to tenant lease renewals, and elevated refinancing risks for loans with near-term maturities, among other issues.

To mitigate risks related to our CRE portfolio, the expected cash flows from all significant new or renewed income-producing property commitments are stress tested to reflect risks related to varying interest rates, vacancy rates, and rental rates.

Additionally, we continue to maintain conservative underwriting standards, including LTV limits that generally range between 65% to 80% at origination, depending upon property type and, in times of uncertainty, we may originate loans at even tighter thresholds.

Currently, LTV at origination is generally at or below 70% for newly-originated CRE loans.

These LTV ratios are subject to change over the life of the loan as property values change.

We seek to mitigate our refinancing risks in our CRE portfolio by subjecting loans with stated maturities in the near term to enhanced monitoring procedures.

For example, approximately 50% of our office real estate loans are scheduled to mature in calendar years 2024 and 2025.

Such office real estate loans with near-term maturities are subject to monthly reporting if a loan reaches our lowest pass rating.

We also remain in frequent contact with the related borrowers well in advance of a loan’s stated maturity to take action on the loan ahead of any credit concerns, including working with the borrower to restructure the loan as necessary and ensuring that our allowances for credit losses are adequate to cover potential losses on the loans.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

The collateral securing our CRE loan portfolio is geographically diverse and primarily located throughout the United States.

As of September 30, 2024, the CRE loans with collateral in Pennsylvania, New York, New Jersey, and California represented approximately 8% of total loans held for sale and investment.

No single state individually accounted for more than 3% of the total loans held for sale and investment, while our CRE loans with collateral located in Canada represented less than 2%.

As of September 30, 2024, our highest industry concentrations within our CRE portfolio were multi-family, industrial warehouse, and office real estate which were 5%, 4%, and 3%, respectively, of total loans held for sale and investment.

As a result of the aforementioned pressures on office real estate loans within our CRE portfolio, we are actively monitoring credit metrics across these loans.

As of September 30, 2024, 9% of such loans were considered criticized loans and 5% were nonperforming.

As of September 30, 2024, our allowance for credit losses related to office real estate CRE loans represented 4% of the amortized cost of such loans.

As of September 30, 2024, our CRE portfolio included CRE construction loans of less than 2% of total loans held for sale and investment.

Construction CRE loans are monitored on an ongoing basis to ensure projects are on time and within budget to evaluate credit risk.

Consistent with all CRE loans, construction CRE loans are also monitored for geographic concentration, as well as the total relationship exposure.

Furthermore, CRE construction loans designated as higher risk are reviewed at least quarterly by senior bank executives.

Liquidity risk

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Operational risk

Operational risk generally refers to the risk of loss resulting from our operations, including, but not limited to, business disruptions, improper or unauthorized execution and processing of transactions, deficiencies in our technology or financial operating systems and inadequacies or breaches in our control processes, including cybersecurity incidents (see “Item 1A - Risk Factors” of this Form 10-K for a discussion of certain cybersecurity risks).

Operational risk generally refers to the risk of loss resulting from our operations, including, but not limited to, business disruptions, improper or unauthorized execution and processing of transactions, deficiencies in our technology or financial operating systems and inadequacies or breaches in our control processes, including cybersecurity incidents (see “Item 1A - Risk Factors” and “Item 1C - Cybersecurity” of this Form 10-K for a discussion of certain cybersecurity risks).

These risks are less direct than credit and market risk, but managing them is critical, particularly in a rapidly changing environment with increasing transaction volumes and complexity.

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The committee establishes risk appetite levels for major operational risks, monitors operating unit performance for adherence to defined risk tolerances, and establishes policies for risk management at the enterprise level.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Periods of severe market volatility can result in a significantly higher level of transactions on specific days, which may present operational challenges from time to time that may result in losses.

These losses can result from, but are not limited to, trade errors, failed transaction settlements, late collateral calls to borrowers and counterparties, or interruptions to our system processing.

We did not incur any significant losses related to such operational challenges during the year ended September 30, 2023.

We did not incur any significant losses related to such operational challenges during the years ended September 30, 2024, 2023, or 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 this 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.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Model risk refers to the possibility of unintended business outcomes arising from the design, implementation or use of models.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis