What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-02-07 compared with 2024-08-06 · 397 added, 694 removed, 978 unchanged (53% of the section changed)

24 unchanged sentences

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

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

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

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

8 unchanged sentences

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

EXECUTIVE OVERVIEW

Quarter ended June 30, 2024 compared with the quarter ended June 30, 2023

For our fiscal third quarter of 2024, we generated net revenues of $3.23 billion, an increase of 11% compared with the prior-year quarter, and pre-tax income of $644 million, an increase of 33% compared with the prior-year quarter.

Summary results of operations

Three months ended December 31,

$ in millions, except per share amounts 2024 2023 % change

Net revenues $ 3,537 $ 3,013 17 %

Compensation, commissions and benefits expense

$ 2,272 $ 1,921 18 %

Non-compensation expenses

$ 516 $ 462 12 %

Pre-tax income $ 749 $ 630 19 %

Net income available to common shareholders $ 599 $ 497 21 %

Earnings per common share – basic $ 2.94 $ 2.38 24 %

Earnings per common share – diluted $ 2.86 $ 2.32 23 %

Non-GAAP measures:

Adjusted net income available to common shareholders (1)

$ 614 $ 514 19 %

Adjusted earnings per common share - diluted (1)

$ 2.93 $ 2.40 22 %

Three months ended December 31,

Other selected financial highlights 2024 2023

Return on common equity 20.4 % 19.1 %

Adjusted return on common equity (1)

20.9 % 19.7 %

Return on tangible common equity (1)

24.0 % 23.0 %

Adjusted return on tangible common equity (1)

24.6 % 23.8 %

Compensation ratio 64.2 % 63.8 %

Adjusted compensation ratio (1)

64.0 % 63.4 %

Effective income tax rate

19.9 % 21.0 %

Quarter ended December 31, 2024 compared with the quarter ended December 31, 2023

For our fiscal first quarter of 2025, we generated net revenues of $3.54 billion, an increase of 17% compared with the prior-year quarter, and pre-tax income of $749 million, an increase of 19% compared with the prior-year quarter.

Our net income available to common shareholders of $599 million also increased 21%, and our earnings per diluted share were $2.86, reflecting an increase of 23%.

Our annualized return on common equity (“ROCE”) for the quarter was 20.4%, compared with 19.1% for the prior-year quarter, and our annualized return on tangible common equity (“ROTCE”) was 24.0% (1) , compared with 23.0% (1) for the prior-year quarter.

Excluding the impact of $23 million of expenses related to acquisitions completed in prior years, such as compensation expenses related to retention awards and amortization of identifiable intangible assets, our adjusted net income available to common shareholders was $508 million (1) for the three months ended June 30, 2024, an increase of 27% compared with adjusted net income available to common shareholders for the prior-year quarter.

Excluding the impact of $20 million of expenses related to acquisitions completed in prior years, such as compensation expenses related to retention awards and amortization of identifiable intangible assets, our adjusted net income available to common shareholders was $614 million (1) for the three months ended December 31, 2024, an increase of 19% compared with adjusted net income available to common shareholders for the prior-year quarter.

Our adjusted earnings per diluted share were $2.93 (1) , an increase of 22% compared with the prior-year quarter.

Adjusted annualized ROCE for the quarter was 20.9% (1) and adjusted annualized ROTCE was 24.6% (1) compared with adjusted annualized ROCE of 19.7% (1) and adjusted annualized ROTCE of 23.8% (1) for the prior-year quarter.

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

The increase in net revenues compared with the prior-year quarter was primarily due to higher asset management and related administrative fees, largely the result of higher PCG client assets in fee-based accounts due to equity market appreciation and net new assets to the firm since the prior-year period.

Investment banking revenues also increased significantly compared with the prior-year quarter primarily due to more favorable market conditions in the current period, particularly for merger & acquisition activity.

Offsetting these increases was a decrease in combined net interest income and RJBDP fees from third‑party banks of $25 million, or 4%, due to lower interest rates compared with the prior-year quarter, which more than offset the favorable impact from growth in interest-earning assets and RJBDP balances swept to third-party banks.

(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.

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Management’s Discussion and Analysis

The increase in net revenues compared with the prior-year quarter 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 the current quarter compared with the prior-year quarter.

Brokerage revenues also increased compared with the prior-year quarter primarily due to an increase in client activity in the PCG segment.

Investment banking revenues increased compared with the prior-year quarter largely due to higher debt and equity underwriting revenues.

Combined net interest income and RJBDP fees from third-party banks declined compared with the prior-year quarter, as the benefits 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 in our Bank segment, as RJBDP balances swept to the Bank segment declined and a significant portion was replaced by higher-cost ESP balances, which was introduced to PCG clients in March 2023.

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.

Compensation, commissions and benefits expense increased 18%, primarily due to an increase in compensable revenues, as well as an increase in compensation costs to support our growth and annual cost increases, including salaries.

Our compensation ratio, or the ratio of compensation, commissions and benefits expense to net revenues, was 64.2%, compared with 63.8% for the prior-year quarter.

Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 64.0% (1) , compared with 63.4% (1) for the prior-year quarter.

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 quarter, 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 13%, largely due to a significant decrease in provisions for legal and regulatory matters, as well as a decrease in the provision for credit losses on bank loans to a benefit of $10 million in the current quarter compared with a provision of $54 million in the prior-year quarter.

Partially offsetting these decreases were higher communications and information processing expenses as we continue to invest in our technology for the benefit of our clients and advisors and to support our growth, higher investment sub-advisory fees which are highly correlated with the increase in asset management fee revenues, as well as higher occupancy and business development expenses.

Our effective income tax rate was 23.6% for our fiscal third quarter of 2024, a decrease compared with the 24.1% effective income tax rate for the prior-year quarter, primarily due to a change in the amount of nondeductible fines and penalties compared with the prior-year quarter, partially offset by the impact of a lower tax benefit recognized related to nontaxable valuation gains associated with our company-owned life insurance policies.

As of June 30, 2024, our Tier 1 leverage ratio of 12.7% and Total capital ratio of 23.6% were both significantly higher than the regulatory requirement to be considered well-capitalized.

We also continue to have substantial liquidity with $2.1 billion (2) of cash at the parent as of June 30, 2024.

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

During the three months ended June 30, 2024, we repurchased 2.0 million shares of our common stock for $243 million at an average price of $122 per share under the Board of Directors’ common stock repurchase authorization.

Non-compensation expenses increased 12%, primarily due to higher communications and information processing expenses resulting from continued investments in technology to benefit our clients and advisors and to support our growth, and higher investment sub-advisory fees resulting from growth in assets under management in sub-advised programs.

Expenses related to legal and regulatory matters also increased as the current quarter included provisions for legal and regulatory matters while the prior-year quarter reflected a net reserve release.

Partially offsetting these increases in expenses, was a decrease in the bank loan provision for credit losses.

Our effective income tax rate was 19.9% for our fiscal first quarter of 2025, a decrease compared with the 21.0% effective income tax rate for the prior-year quarter, primarily due to the impact of a larger tax benefit recognized during the current quarter related to share-based compensation that vested during the period.

As of December 31, 2024, our tier 1 leverage ratio was 13.0% and total capital ratio was 25.0% both well above regulatory capital requirements.

We also continue to have substantial liquidity with $2.3 billion (2) of cash at the parent as of December 31, 2024.

In December 2024, the Board of Directors increased the quarterly cash dividend on common shares 11% to $0.50 per share and authorized common stock repurchases of up to $1.5 billion, replacing the previous authorization.

During the three months ended December 31, 2024, we repurchased 310 thousand shares of our common stock for $50 million at an average price of $161 per share under the Board’s common stock repurchase authorization, leaving $1.45 billion available under such authorization.

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

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 accelerate our share repurchase activity;

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 to our fiscal fourth quarter of 2024, we believe we are well-positioned for long-term growth with our strong capital position, total client assets under administration of $1.48 trillion, and net bank loans of $45.1 billion.

We expect our fiscal fourth quarter of 2024 results to be favorably impacted by higher asset management and related administrative fees, which will benefit from the 3% sequential increase in PCG fee-based assets and 1% sequential increase in financial assets under management as of June 30, 2024.

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

While the timing of transaction closings remains heavily influenced by external factors, we have a healthy investment banking pipeline and we expect investment banking revenues to continue to improve over the next few quarters.

We expect our combined net interest income and RJBDP fees from third-party banks for the remainder of the fiscal year to be relatively unchanged from our current quarter aggregate level, but such revenues are largely dependent on the level of short-term interest rates, client cash balances and other factors that may impact the current cash environment.

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 result in increased bank loan provisions for credit losses in future periods.

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

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

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Nine months ended June 30, 2024 compared with the nine months ended June 30, 2023

For the nine months ended June 30, 2024, we generated net revenues of $9.36 billion, an increase of 9% compared with the prior-year period, and pre-tax income of $1.88 billion, an increase of 11%.

Our net income available to common shareholders of $1.46 billion was 12% higher than the prior-year period and our earnings per diluted share were $6.85, reflecting a 15% increase.

Our annualized ROCE was 18.2%, compared with 17.9% for the prior-year period, and our annualized ROTCE was 21.8% (1) , compared with 22.0% (1) for the prior-year period.

Excluding the impact of $72 million of expenses related to acquisitions completed in prior years, adjusted net income available to common shareholders for the nine months ended June 30, 2024 was $1.52 billion (1) , an increase of 12% compared with adjusted net income available to common shareholders for the prior-year period 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 were $7.10 (1) , an increase of 15% compared with the prior-year period.

Adjusted annualized ROCE was 18.8% (1) , compared with 18.5% (1) for the prior-year period, and adjusted annualized ROTCE was 22.5% (1) , compared with 22.7% (1) for the prior-year period.

The increase in net revenues compared with the prior-year period 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 period largely due to an increase in client activity in the PCG segment.

Investment banking revenues increased primarily due to more favorable market conditions in the current-year period.

Offsetting these increases was a decrease in combined net interest income and RJBDP fees from third-party banks, as the benefits 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 period and a significant portion was replaced with higher-cost ESP balances, as well as an increase in certificate of deposit balances.

Compensation, commissions and benefits expense increased 12%, 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 was 64.7%, compared with 63.1% for the prior-year period.

Excluding acquisition-related compensation expenses, our adjusted compensation ratio was 64.3% (1) , compared with an adjusted compensation ratio of 62.4% (1) for the prior-year period.

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 period, 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 3%, largely due to a significant decrease in expenses related to legal and regulatory matters, as the current-year period reflected net legal and regulatory matter reserve releases while the prior-year period 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, a $32 million insurance settlement received in the prior-year period related to a previously-settled litigation matter that did not recur, higher non-interest expenses related to deposits, including an FDIC special assessment of $10 million, as well as higher investment sub-advisory fees resulting from growth in assets under management in sub-advised programs.

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

Our effective income tax rate was 22.1% for the nine months ended June 30, 2024, a decrease from 23.0% for the prior-year period, primarily due to the impact of a higher tax benefit recognized in the current-year period 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 period.

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

As we look ahead to the remainder of our fiscal 2025, we believe we are well-positioned for long-term growth with our strong capital position, total client assets under administration of $1.56 trillion, and net bank loans of $47.2 billion.

Our PCG segment continues to benefit from growth in fee-based accounts and our financial advisor recruiting pipeline remains solid.

Our fiscal second quarter of 2025 results will be negatively impacted by two fewer billable days which we expect to result in an approximate 2% decline in asset management and related administrative fees, as well as impacting our combined net interest income and RJBDP fees from third-party banks.

Given our healthy pipeline and our investments in our platform and capabilities, we expect investment banking revenues to continue to benefit over the next few quarters as the market environment has become more conducive for transaction closings.

Although the market is still challenging for our fixed income brokerage revenues, we expect to benefit from increased activity from depository institution clients resulting from changes in the outlook for short-term interest rates.

With ample client cash balances and capital, 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.

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.

Our fiscal second quarter of 2025 compensation expenses will also reflect our annual salary increases and the reset of payroll taxes on January 1, 2025.

(1) These are non-GAAP financial measures.

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

RAYMOND JAMES FINANCIAL, INC.

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

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

$ in millions

2024 2023 2024 2023

Three months ended December 31,

$ in millions, except per share amounts

Net income available to common shareholders $ 599 $ 497

1 unchanged sentence

Expenses related to acquisitions:

Compensation, commissions and benefits:

Acquisition-related retention

Other acquisition-related compensation — 10 — 10

Total “Compensation, commissions and benefits” expense 11 28 33 63

Compensation, commissions and benefits — Acquisition-related retention

Communications and information processing — —

Professional fees

Amortization of identifiable intangible assets 11 11 33 33

All other acquisition-related expenses

Total “Other” expense 11 11 35 33

Total expenses related to acquisitions 23 40 72 97

Other — Insurance settlement received

Pre-tax impact of non-GAAP adjustments 23 40 72 65

Other — Amortization of identifiable intangible assets

Total pre-tax impact of non-GAAP adjustments related to acquisitions 20 23

Tax effect of non-GAAP adjustments (5) (6)

5 unchanged sentences

Compensation, commissions and benefits expense $ 2,272 $ 1,921

Total compensation-related acquisition expenses (as detailed above)

Acquisition-related retention (as detailed above)

Adjusted compensation, commissions and benefits expense

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

$ 2,264 $ 1,910

2 unchanged sentences

Acquisition-related retention 0.2 % 0.4 %

Other acquisition-related compensation — % 0.3 % — % 0.1 %

Total “Compensation, commissions and benefits” expenses related to acquisitions 0.3 % 1.0 % 0.4 % 0.7 %

Adjusted total compensation ratio 64.0 % 63.4 %

2 unchanged sentences

Expenses related to acquisitions:

Compensation, commissions and benefits:

Acquisition-related retention

0.05 0.09 0.15 0.24

Other acquisition-related compensation — 0.05 — 0.05

Total “Compensation, commissions and benefits” expense 0.05 0.14 0.15 0.29

Compensation, commissions and benefits — Acquisition-related retention

Communications and information processing — —

Professional fees — 0.01

Amortization of identifiable intangible assets 0.05 0.05 0.16 0.15

All other acquisition-related expenses — — 0.01 —

Total “Other” expense 0.05 0.05 0.17 0.15

Total expenses related to acquisitions 0.11 0.19 0.33 0.44

Other — Insurance settlement received

Other — Amortization of identifiable intangible assets

Total pre-tax impact of non-GAAP adjustments related to acquisitions

Tax effect of non-GAAP adjustments (0.02) (0.03)

4 unchanged sentences

Management’s Discussion and Analysis

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

Three months ended December 31,

$ in millions 2024 2023

2 unchanged sentences

Expenses related to acquisitions:

Compensation, commissions and benefits:

Acquisition-related retention

Other acquisition-related compensation — 4 — 2

Total “Compensation, commissions and benefits” expense 5 13 17 29

Compensation, commissions and benefits — Acquisition-related retention

Communications and information processing — —

Professional fees 1 —

Amortization of identifiable intangible assets 5 6 16 17

All other acquisition-related expenses — — 1 —

Total “Other” expense 5 6 17 17

Total expenses related to acquisitions 11 20 36 46

Other — Insurance settlement received

Other — Amortization of identifiable intangible assets

Total pre-tax impact of non-GAAP adjustments related to acquisitions

Tax effect of non-GAAP adjustments (3) (3)

7 unchanged sentences

Expenses related to acquisitions:

Compensation, commissions and benefits:

Acquisition-related retention

Other acquisition-related compensation — 4 — 2

Total “Compensation, commissions and benefits” expense 5 13 17 29

Compensation, commissions and benefits — Acquisition-related retention

Communications and information processing — —

Professional fees 1 —

Amortization of identifiable intangible assets 5 6 16 17

All other acquisition-related expenses — — 1 —

Total “Other” expense 5 6 17 17

Total expenses related to acquisitions 11 20 36 46

Other — Insurance settlement received

Other — Amortization of identifiable intangible assets

Total pre-tax impact of non-GAAP adjustments related to acquisitions

Tax effect of non-GAAP adjustments (3) (3)

5 unchanged sentences

Adjusted return on tangible common equity 24.6 % 23.8 %

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

2 unchanged sentences

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

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

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

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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 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 June 30, 2024 range of 5.25% to 5.50%.

While the Fed has left its benchmark rate unchanged in our fiscal year 2024 to-date, in its most recent meetings, it has indicated that it continues to closely monitor market conditions to determine whether it will continue to hold rates steady or initiate interest rate cuts later in our fiscal year 2024.

The Fed funds target rate began our fiscal 2024 at a range of 5.25% to 5.50% and remained throughout most of our fiscal 2024.

In late September 2024, the Fed decreased the Fed funds target rate by 50 basis points, followed by two additional 25‑basis-point reductions during our fiscal first quarter of 2025 to end the quarter at a range of 4.25% to 4.50%.

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

The following table details the Fed’s short-term interest rate activity since the beginning of our fiscal year 2024.

RJF fiscal quarter ended Effective date of interest rate action Increase in interest rates (in basis points)

RJF fiscal quarter ended Effective date of interest rate action Increase/(decrease)

in interest rates

(in basis points)

Fed funds target rate

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

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

1 unchanged sentence

December 31, 2024 December 19, 2024 (25) 4.25% - 4.50%

March 31, 2023 February 2, 2023 25 4.50% - 4.75%

March 31, 2023 March 23, 2023 25 4.75% - 5.00%

June 30, 2023 May 4, 2023 25 5.00% - 5.25%

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

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 have historically resulted in an increase in our net earnings and, notwithstanding potential offsetting favorable impacts in other areas of our business, we expect decreases in short-term interest rates to generally reduce our net earnings.

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.

1 unchanged sentence

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 impacting rates paid to clients and the demand for client cash.

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 needs for higher yields on cash balances in a relatively higher interest rate environment without sacrificing the benefits of FDIC insurance on such balances by introducing new products leveraging our bank subsidiaries or through initiatives offered within the RJBDP.

Such programs include our ESP which was introduced to our clients in fiscal year 2023 where such deposits are held by Raymond James Bank and offer enhanced rates and 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.

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, and offer 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.

Combined net interest income and RJBDP fees from third-party banks was $672 million and $2.06 billion for the three and nine months ended June 30, 2024, respectively, compared to $708 million and $2.16 billion for the three and nine months ended June 30, 2023.

The 5% decline for both periods compared with the comparable prior-year periods was driven by a decline in net interest income, as the benefits from higher short-term interest rates to-date in fiscal year 2024 over fiscal year 2023 levels, and higher average interest-earning asset balances were more than offset by a significant increase in interest expense.

The increase in interest expense primarily resulted from a shift in the mix of deposit balances in our Bank segment, as RJBDP balances swept to the Bank segment declined and a significant portion was replaced with higher-cost ESP balances, which was introduced to clients in March 2023, as well as an increase in certificate of deposit balances for the year-to-date period.

However, the growth in the ESP balances year over 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 periods.

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.

Net interest income and RJBDP fees from third-party banks

Three months ended December 31,

$ in millions 2024 2023 % change

Net interest income

$ 529 $ 546 (3) %

RJBDP fees from third-party banks

144 152 (5) %

Net interest income and RJBDP fees from third-party banks

$ 673 $ 698 (4) %

Quarter ended December 31, 2024 compared with the quarter ended December 31, 2023

Combined net interest income and RJBDP fees from third-party banks declined 4% compared with the prior-year quarter primarily due to lower interest rates, which more than offset the favorable impact from growth in interest-earning assets and RJBDP balances swept to third-party banks.

RAYMOND JAMES FINANCIAL, INC.

2 unchanged sentences

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

Quarter ended June 30, 2024 compared with the quarter ended June 30, 2023

Three months ended June 30,

Quarter ended December 31, 2024 compared with the quarter ended December 31, 2023

Three months ended December 31,

$ in millions Average

63 unchanged sentences

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

Three months ended June 30,

Three months ended December 31,

2024 compared to 2023

8 unchanged sentences

Loans held for investment:

C&I loans (20) 12 (8)

CRE loans 6 4 10

REIT loans — 3 3

Residential mortgage loans 7 9 16

Tax-exempt loans (2) 1 (1)

Loans held for sale 1 (1) —

Total loans held for sale and investment 7 31 38

All other interest-earning assets 2 — 2

Interest-earning assets — Bank segment $ — $ 41 $ 41

All other segments:

Cash and cash equivalents $ 7 $ 3 $ 10

Assets segregated for regulatory purposes and restricted cash (5) 4 (1)

Trading assets — debt securities 5 2 7

Brokerage client receivables 6 — 6

All other interest-earning assets 4 3 7

Interest-earning assets — all other segments $ 17 $ 12 $ 29

Total interest-earning assets $ 17 $ 53 $ 70

Interest-bearing liabilities:

Interest expense

Bank segment:

Bank deposits:

Money market and savings accounts $ (34) $ 73 $ 39

Interest-bearing demand deposits 91 6 97

Certificates of deposit (4) 4 —

Total bank deposits 53 83 136

FHLB advances and all other interest-bearing liabilities (3) (1) (4)

Interest-bearing liabilities — Bank segment $ 50 $ 82 $ 132

All other segments:

Trading liabilities — debt securities $ 2 $ — $ 2

Brokerage client payables (2) 7 5

Senior notes payable — — —

All other interest-bearing liabilities 8 1 9

Interest-bearing liabilities — all other segments $ 8 $ 8 $ 16

Total interest-bearing liabilities $ 58 $ 90 $ 148

Change in firmwide net interest income $ (41) $ (37) $ (78)

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Nine months ended June 30, 2024 compared with the nine months ended June 30, 2023

Nine months ended June 30,

$ in millions Average

balance Interest Annualized

Interest-earning assets:

Bank segment:

Cash and cash equivalents $ 5,699 $ 232 5.40 % $ 3,637 $ 128 4.66 %

Available-for-sale securities 10,069 167 2.22 % 10,886 163 1.99 %

Loans held for sale and investment:

Loans held for investment:

SBL 32 (28) 4

4 unchanged sentences

Tax-exempt loans (1) — (1)

1,443 29 3.28 % 1,625 31 3.13 %

Loans held for sale 2 (1) 1

11 unchanged sentences

Interest-bearing liabilities:

Bank segment:

Bank deposits:

Money market and savings accounts $ 31,459 $ 497 2.11 % $ 42,828 $ 392 1.22 %

Interest-bearing demand deposits 20,206 747 4.94 % 7,881 257 4.36 %

Certificates of deposit 2,642 92 4.64 % 1,960 54 3.66 %

Total bank deposits (4)

54,307 1,336 3.29 % 52,669 703 1.78 %

FHLB advances and all other interest-bearing liabilities 1,201 26 2.92 % 1,408 30 2.82 %

Interest-bearing liabilities — Bank segment $ 55,508 $ 1,362 3.28 % $ 54,077 $ 733 1.81 %

All other segments:

Trading liabilities — debt securities $ 806 $ 33 5.46 % $ 736 $ 26 4.80 %

Brokerage client payables 4,688 63 1.78 % 6,291 57 1.25 %

Senior notes payable 2,039 69 4.50 % 2,038 69 4.52 %

All other interest-bearing liabilities (4)

1,134 34 4.00 % 655 26 4.06 %

Interest-bearing liabilities — all other segments $ 8,667 $ 199 3.05 % $ 9,720 $ 178 2.39 %

Total interest-bearing liabilities $ 64,175 $ 1,561 3.25 % $ 63,797 $ 911 1.90 %

Firmwide net interest income $ 1,598 $ 1,818

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

Bank segment 2.68 % 3.41 %

Firmwide 2.91 % 3.37 %

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

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

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

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

(3) The average rate on tax-exempt loans in the preceding table is presented on a taxable-equivalent basis utilizing the applicable federal statutory rates for each of the years presented.

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

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

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

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

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

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

Nine months ended June 30,

2024 compared to 2023

Increase/(decrease) due to

$ in millions Volume Rate Total

Interest-earning assets:

Interest income

Bank segment:

Cash and cash equivalents $ 81 $ 23 $ 104

Available-for-sale securities (15) 19 4

Loans held for sale and investment:

Loans held for investment:

C&I loans (46) 77 31

CRE loans 22 43 65

REIT loans 2 12 14

Residential mortgage loans 25 29 54

Tax-exempt loans (4) 2 (2)

Loans held for sale — — —

Total loans held for sale and investment 6 237 243

All other interest-earning assets 4 1 5

Interest-earning assets — Bank segment $ 76 $ 280 $ 356

All other segments:

Cash and cash equivalents $ 8 $ 30 $ 38

Assets segregated for regulatory purposes and restricted cash (58) 46 (12)

Trading assets — debt securities 8 6 14

Brokerage client receivables 2 14 16

All other interest-earning assets 10 8 18

Interest-earning assets — all other segments $ (30) $ 104 $ 74

Total interest-earning assets $ 46 $ 384 $ 430

Interest-bearing liabilities:

Interest expense

21 unchanged sentences

Operating results

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

$ in millions 2024 2023 % change 2024 2023 % change

Three months ended December 31,

$ in millions 2024 2023 % change

Asset management and related administrative fees

2 unchanged sentences

Mutual and other fund products

142 135 5 % 419 398 5 %

Insurance and annuity products

1 unchanged sentence

Equities, ETFs and fixed income products

137 111 23 % 397 340 17 %

Total brokerage revenues 433 382 13 %

1 unchanged sentence

Mutual fund and annuity service fees

118 103 15 % 339 306 11 %

Bank segment 187 223 (16) %

1 unchanged sentence

Client account and other fees

66 59 12 % 195 175 11 %

Total account and service fees 527 546 (3) %

Investment banking

10 9 11 % 29 27 7 %

Interest income (1)

121 114 6 % 361 340 6 %

13 25 (48) % 23 40 (43) %

Total revenues 2,575 2,252 14 %

10 unchanged sentences

Communications and information processing

106 94 13 % 303 283 7 %

Occupancy and equipment

57 53 8 % 168 157 7 %

Business development

49 43 14 % 126 113 12 %

Professional fees

16 17 (6) % 47 47 — %

31 58 (47) % 66 117 (44) %

Total non-compensation expenses

259 265 (2) % 710 717 (1) %

Total non-interest expenses 2,086 1,787 17 %

Pre-tax income $ 462 $ 439 5 %

(1) Effective October 1, 2024, we updated our methodology for allocating interest income on certain cash balances to our segments, resulting in a reduction in interest income in the Other segment and an increase in interest income in the PCG segment.

Prior-period segment results have not been conformed to the current-period presentation.

RAYMOND JAMES FINANCIAL, INC.

3 unchanged sentences

PCG client asset balances

$ in billions June 30,

2024 March 31,

$ in billions December 31,

2024 September 30,

1 unchanged sentence

2024 March 31,

2023 September 30,

2024 December 31,

Assets under administration (“AUA”)

$ 1,491.8 $ 1,507.0 $ 1,415.7 $ 1,388.8 $ 1,310.5

Registered Investment Advisor (“RIA”) & Custody Services (“RCS”) AUA (1)

$ 167.2 $ 160.8 $ 133.3 $ 130.5 $ 123.5 $ 108.5

Assets in fee-based accounts (1)

$ 876.6 $ 875.2 $ 820.6 $ 798.8 $ 746.6

RCS assets in fee-based accounts (1)

$ 140.6 $ 134.5 $ 111.7 $ 109.9 $ 103.6 $ 89.9

Percent of AUA in fee-based accounts

58.8 % 58.1 % 58.0 % 57.5 % 57.0 %

(1) 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

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

As of December 31, 2024, September 30, 2024, and December 31, 2023 PCG AUA included assets associated with firms affiliated with us through our RCS division of $188.2 billion, $180.7 billion, and $146.9 billion, respectively, of which $160.2 billion, $153.1 billion, and $122.8 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.” The growth in RCS client assets is partially due to transfers into RCS from our other financial advisor channels.

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.

Domestic PCG net new assets

Three months ended December 31,

$ in millions 2024 2023

Domestic Private Client Group net new assets (1)

$ 16,517 $ 14,386 $ 47,740 $ 59,085

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

Domestic PCG net new assets (1)

$ 14,020 $ 21,575

(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.

This metric for the three and nine months ended June 30, 2023 includes the impact of the departure of approximately $5 billion of assets under administration, representing the portion of advisors previously associated through a single relationship in the firm’s independent contractors division whose affiliation with the firm ended in the fiscal third quarter of 2023.

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

PCG AUA and PCG assets in fee-based accounts as of June 30, 2024 increased 2% and 3%, respectively, compared with March 31, 2024, and increased 15% and 18%, respectively, compared with June 30, 2023, due to equity market appreciation and net new assets, due to the favorable impact of our advisor retention and recruiting.

Domestic PCG net new assets growth - annualized (2)

(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 asset growth - annualized percentage is based on the beginning Domestic PCG AUA balance for the indicated period.

PCG AUA as of December 31, 2024 decreased 1% compared with September 30, 2024 and were negatively impacted by changes in foreign exchange rates, as well as the departure of primarily one large branch in our independent contractor division which also negatively impacted our PCG assets in fee-based accounts and our domestic PCG net new assets growth.

PCG assets in fee-based accounts were $876.6 billion as of December 31, 2024, a slight increase compared with September 30, 2024.

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.

12 unchanged sentences

Management’s Discussion and Analysis

Financial advisors

2024 March 31,

2024 December 31,

Clients’ domestic cash sweep balances and ESP balances

$ in millions December 31,

2024 September 30,

2024 June 30,

Employees 3,812 3,747 3,718 3,693 3,654

Independent contractors

4,970 5,014 4,992 5,019 5,050

Total advisors 8,782 8,761 8,710 8,712 8,704

The number of financial advisors as of June 30, 2024 increased compared with March 31, 2024 and June 30, 2023, 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 three months ended June 30, 2024, approximately 50 financial advisors transferred to our RCS division, primarily related to one firm with financial advisors previously affiliated as independent contractors.

During the nine months ended June 30, 2024, approximately 90 financial advisors transferred to RCS.

Advisors in our RCS division are not included in our financial advisor metric although their client assets are included in PCG AUA.

We may continue to experience transfers to our RCS division;

however, consistent with our experience in fiscal 2023 and fiscal 2024 to date, we would not expect these financial advisor transfers to significantly impact our results of operations.

Clients’ domestic cash sweep balances and ESP balances

$ in millions June 30,

2024 March 31,

2024 December 31,

2023 September 30,

2023 June 30,

Bank segment $ 23,946 $ 23,978 $ 23,371 $ 23,405 $ 23,912

7 unchanged sentences

$ 59,736 $ 57,875 $ 56,448 $ 58,217 $ 57,973

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

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

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

2024 2023 2024 2023

Three months ended December 31,

Average yield on RJBDP - third-party banks

3.12 % 3.66 %

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 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.

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 Condensed Consolidated Statements of Financial Condition.

5 unchanged sentences

See “Management’s Discussion and Analysis - Net interest analysis” for further information regarding factors impacting the servicing fees we receive related to the RJBDP, as well as the interest paid to clients on their cash balances.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

The average yield on RJBDP - third-party banks for the three and nine months ended June 30, 2024 increased from the prior year largely as a result of the increases in the Fed’s short-term benchmark interest rate;

however, the average yield on RJBDP - third-party banks for the three months ended June 30, 2024 decreased 18 basis points compared with the preceding quarter as a result of an increase in certain balances in the RJBDP program which offered a higher yield.

The average yield on RJBDP - third-party banks for the three months ended December 31, 2024 decreased from the prior-year quarter largely as a result of the 50-basis-point decrease in short-term interest rates enacted by the Fed late in the preceding quarter, as well as the two 25-basis-point rate cuts enacted during the current quarter.

See “Management’s Discussion and Analysis - Net interest analysis” for further information.

Total clients’ domestic cash sweep and ESP balances decreased 3% compared with March 31, 2024, with decreases in both RJBDP balances and the ESP, which was introduced to clients in March 2023.

Total clients’ domestic cash sweep and ESP balances also decreased 3% compared with June 30, 2023, where a decline in client cash sweep balances was largely offset by growth in the ESP.

Total clients’ domestic cash sweep and ESP balances increased 3% compared with September 30, 2024, primarily due to increases in RJBDP balances.

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.

Quarter ended June 30, 2024 compared with the quarter ended June 30, 2023

Quarter ended December 31, 2024 compared with the quarter ended December 31, 2023

Net revenues of $2.55 billion increased 14% and pre-tax income of $462 million increased 5%.

Asset management and related administrative fees increased $200 million, or 17%, primarily due to higher assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter resulting from market appreciation, as well as growth primarily from advisor recruiting.

Asset management and related administrative fees increased $285 million, or 24%, primarily due to higher assets in fee-based accounts at the beginning of the current quarter compared with the prior-year quarter resulting from market appreciation and net new assets, due to the favorable impact of our advisor recruiting and retention.

Brokerage revenues increased $51 million, or 13%, primarily due to higher client activity in the current quarter.

Account and service fees decreased $15 million, or 3%, due to a decrease in RJBDP fees resulting from lower 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, while RJBDP fees from third-party banks increased largely due to higher average balances swept to third-party banks.

Partially offsetting the decline in total RJBDP fees was an increase in mutual fund service fees, primarily resulting from higher average mutual fund assets held in client accounts.

Other revenues decreased $12 million, or 48%, primarily due to a favorable arbitration award during the prior-year quarter, which did not recur in the current quarter.

Compensation-related expenses increased $210 million, or 14%, 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 decreased $6 million, or 2%, due to lower provisions for legal and regulatory matters, partially offset by higher communications and information processing expenses and occupancy expenses as a result of our growth, and higher business development expenses.

Nine months ended June 30, 2024 compared with the nine months ended June 30, 2023

Net revenues of $6.98 billion increased 9% and pre-tax income of $1.32 billion increased 3%.

Asset management and related administrative fees increased $519 million, or 16%, 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 periods resulting from market appreciation, as well as growth primarily from advisor recruiting.

Brokerage revenues increased $140 million, or 13%, primarily due to higher client activity in the current-year period, as well as higher trailing revenues, largely due to higher asset values.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Account and service fees decreased $59 million, or 4%, primarily due to a decrease in RJBDP fees resulting from lower 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 $9 million, or 3%, reflecting the increase in short-term interest rates.

Other revenues decreased by $17 million, or 43%, primarily due to the aforementioned favorable arbitration award during the prior-year period.

Compensation-related expenses increased $563 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 decreased $7 million, or 1%, compared with the prior-year period primarily due to the positive impact of a net legal and regulatory reserve release in the current-year period compared with provisions for legal and regulatory matters in the prior-year period, partially offset by higher communications and information processing, business development, and occupancy expenses largely to support our growth.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Account and service fees decreased $19 million, or 3%, primarily due to a decrease in RJBDP fees.

RJBDP fees paid to PCG from our Bank segment decreased due to the impact of lower short-term interest rates and, to a lesser extent, a decline in average balances allocated to our Bank segment, while RJBDP fees from third-party banks decreased due to lower short-term interest rates, partially offset by 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.

Net interest income increased $7 million, or 8%, largely due to an updated methodology for allocating interest income on certain cash balances to our segments, which resulted in a reduction in interest income in the Other segment and an increase in interest income in the PCG segment.

Compensation-related expenses increased $262 million, or 17%, 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 cost increases, including salaries.

Non-compensation expenses increased $37 million, or 17%, primarily due to higher communications and information processing expenses, largely to support our growth, and higher provisions for legal and regulatory matters, as the current quarter included provisions for legal and regulatory matters while the prior-year quarter reflected a net reserve release.

RESULTS OF OPERATIONS – CAPITAL MARKETS

1 unchanged sentence

Operating results

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

$ in millions 2024 2023 % change 2024 2023 % change

Three months ended December 31,

$ in millions 2024 2023 % change

Brokerage revenues:

5 unchanged sentences

Merger & acquisition and advisory

91 88 3 % 316 277 14 %

Equity underwriting

33 25 32 % 82 69 19 %

Debt underwriting

49 28 75 % 116 73 59 %

Total investment banking 317 170 86 %

Interest income

32 21 52 % 81 65 25 %

Affordable housing investments business revenues 29 23 26 %

4 4 — % 12 11 9 %

Total revenues 506 360 41 %

4 unchanged sentences

Compensation, commissions and benefits

243 220 10 % 721 664 9 %

Non-compensation expenses:

Communications and information processing

28 27 4 % 85 77 10 %

Occupancy and equipment

12 10 20 % 35 31 13 %

Business development

14 14 — % 45 46 (2) %

Professional fees

17 12 42 % 42 39 8 %

30 27 11 % 89 100 (11) %

Total non-compensation expenses

101 90 12 % 296 293 1 %

Total non-interest expenses 406 335 21 %

Pre-tax income

$ 74 $ 3 2,367 %

Quarter ended June 30, 2024 compared with the quarter ended June 30, 2023

Net revenues of $330 million increased 20% and the pre-tax loss was $14 million, compared with a pre-tax loss of $34 million for the prior-year quarter.

Investment banking revenues increased $32 million, or 23%, compared with the prior-year quarter, primarily due to improvement in debt underwriting revenues in both our public finance and fixed income businesses, as well as higher equity underwriting revenues.

Merger & acquisition and advisory revenues were slightly higher compared with the prior-year quarter.

Brokerage revenues increased $11 million, or 10%, due to higher fixed income brokerage revenues, primarily resulting from an increase in activity by depository institution clients.

Compensation-related expenses increased $23 million, or 10%, 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 increased $11 million, or 12%, primarily due to an increase in professional fees, largely resulting from higher investment banking deal expenses and external legal fees, as well as higher occupancy expenses.

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

Nine months ended June 30, 2024 compared with the nine months ended June 30, 2023

Net revenues of $989 million increased 13% and the pre-tax loss was $28 million, compared with a pre-tax loss of $84 million for the prior-year period.

Investment banking revenues increased $95 million, or 23%, primarily due to a higher volume of transactions closed as a result of more favorable investment banking market conditions in the current-year period compared to the prior-year period.

Brokerage revenues increased $9 million, or 2%, due to increases in equity brokerage revenues and, to a lesser extent, fixed income brokerage revenues.

Compensation-related expenses increased $57 million, or 9%, 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 increased $3 million, or 1%, primarily due to higher communications and information processing expenses and occupancy expenses, largely offset by lower provisions for legal and regulatory matters and external legal fee expenses.

Quarter ended December 31, 2024 compared with the quarter ended December 31, 2023

Net revenues of $480 million increased 42% and pre-tax income was $74 million, compared with $3 million for the prior-year quarter.

Investment banking revenues increased $147 million, or 86%, primarily due to more favorable market conditions in the current quarter compared with the prior-year quarter, particularly for merger & acquisition activity.

Brokerage revenues decreased $14 million, or 10%, due to a decrease in fixed income brokerage revenues primarily due to lower volatility in credit spreads in the current quarter compared with the prior-year quarter.

Compensation-related expenses increased $63 million, or 26%, primarily due to the increase in revenues.

Non-compensation expenses increased $8 million, or 8%, primarily due to higher business development expenses and communications and information processing expenses, partially offset by lower professional fees.

RESULTS OF OPERATIONS – ASSET MANAGEMENT

1 unchanged sentence

Operating results

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

$ in millions 2024 2023 % change 2024 2023 % change

Three months ended December 31,

$ in millions 2024 2023 % change

Asset management and related administrative fees:

4 unchanged sentences

Account and service fees

5 5 — % 16 16 — %

All other 6 5 20 %

2 unchanged sentences

Compensation, commissions and benefits

56 51 10 % 167 150 11 %

Non-compensation expenses:

Communications and information processing

16 15 7 % 47 43 9 %

Investment sub-advisory fees

47 39 21 % 129 107 21 %

34 32 6 % 104 98 6 %

Total non-compensation expenses 111 89 25 %

4 unchanged sentences

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

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

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

RAYMOND JAMES FINANCIAL, INC.

1 unchanged sentence

Management’s Discussion and Analysis

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

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

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

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

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

Fees for our managed programs are generally collected quarterly.

1 unchanged sentence

Financial assets under management

$ in billions June 30,

2024 March 31,

$ in billions December 31,

2024 September 30,

1 unchanged sentence

2024 March 31,

2023 September 30,

2024 December 31,

$ 181.9 $ 182.7 $ 170.5 $ 165.7 $ 154.2

Raymond James Investment Management

76.7 76.8 72.5 74.4 73.3

4 unchanged sentences

(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 RJIM and, as a result, is included in both AMS and RJIM 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.”

Activity (including activity in assets managed for affiliated entities)

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

Three months ended December 31,

$ in billions 2024 2023

Financial assets under management at beginning of period $ 259.5 $ 207.9

RJIM - net inflows/(outflows)

(1.5) (0.4) (3.7) 1.3

Raymond James Investment Management:

Transfer of Charles Stanley Asset Management (1)

Total Raymond James Investment Management

AMS - net inflows 1.1 1.7

Net market appreciation in asset values

0.2 6.2 30.4 23.7

Net market appreciation/(depreciation) in asset values

Financial assets under management at end of period $ 258.6 $ 227.5

(1) The transfer was effective as of October 1, 2024.

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.

Assets managed by RJIM include assets managed by our subsidiaries:

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

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

As of June 30, 2024

Raymond James Investment Management

The following table presents Raymond James Investment Management’s AUM by objective, excluding assets for which it does not exercise discretion, as well as the approximate average client fee rate earned on such assets.

As of December 31, 2024

$ in billions AUM Average fee rate

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

$ in billions June 30,

2024 March 31,

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

$ in billions December 31,

2024 September 30,

1 unchanged sentence

2024 March 31,

2023 September 30,

2024 December 31,

Total assets $ 509.8 $ 506.2 $ 474.7 $ 462.9 $ 431.4

The increase in these assets as of June 30, 2024 compared with March 31, 2024 and June 30, 2023 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 the quarter.

Raymond James Trust

1 unchanged sentence

(including those managed for affiliated entities).

$ in billions June 30,

2024 March 31,

$ in billions December 31,

2024 September 30,

1 unchanged sentence

2024 March 31,

2023 September 30,

2024 December 31,

Total assets $ 10.7 $ 10.6 $ 10.0 $ 9.8 $ 9.4

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

Quarter ended June 30, 2024 compared with the quarter ended June 30, 2023

Net revenues of $265 million increased 17% and pre-tax income of $112 million increased 26%.

Asset management and related administrative fees increased $37 million, or 17%, driven by higher beginning balances of 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 $5 million, or 10%, primarily due to higher revenues.

Non-compensation expenses increased $11 million, or 13%, largely due to higher investment sub-advisory fees, resulting from the increase in the beginning balance of assets under management in sub-advised programs.

Nine months ended June 30, 2024 compared with the nine months ended June 30, 2023

Quarter ended December 31, 2024 compared with the quarter ended December 31, 2023

Net revenues of $294 million increased 25% and pre-tax income of $125 million increased 34%.

Asset management and related administrative fees increased $100 million, or 16%, driven by higher beginning balances of 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.

Asset management and related administrative fees increased $58 million, or 26%, 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 $5 million, or 9%, primarily due to higher revenues, as well as an increase in compensation costs to support our growth and annual cost increases, including salaries.

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Operating results

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

$ in millions 2024 2023 % change 2024 2023 % change

Three months ended December 31,

$ in millions 2024 2023 % change

Interest income $ 847 $ 872 (3) %

5 unchanged sentences

Compensation and benefits

45 48 (6) % 136 136 — %

Non-compensation expenses:

Bank loan provision/(benefit) for credit losses

(10) 54 NM 23 96 (76) %

Bank loan provision for credit losses

RJBDP fees to PCG

187 223 (16) %

70 69 1 % 215 181 19 %

Total non-compensation expenses 261 306 (15) %

1 unchanged sentence

Pre-tax income $ 118 $ 92 28 %

Quarter ended June 30, 2024 compared with the quarter ended June 30, 2023

Quarter ended December 31, 2024 compared with the quarter ended December 31, 2023

Net revenues of $425 million decreased 4%, while pre-tax income of $118 million increased 28%.

Net interest income decreased $91 million, or 18%, as the favorable impact from higher short-term rates in the current quarter was more than offset by 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.

Net interest income decreased $12 million, or 3%, primarily due to the impact of the decrease in short-term interest rates enacted by the Fed late in the preceding quarter, as well as rate cuts enacted during the current quarter, partially offset by the impact of higher average interest-earning asset balances, particularly securities-based loans.

The Bank segment net interest margin decreased to 2.60% from 2.74% for the prior-year quarter.

The bank loan benefit for credit losses was $10 million for the current quarter, compared with a bank loan provision for credit losses of $54 million for the prior-year quarter.

The bank loan benefit for credit losses for the current quarter primarily reflected the positive impacts of net loan repayments, sales, and improved loan grades on the C&I loan portfolio, and an improvement in forecasted home prices on the residential mortgage portfolio, partially offset by the impact of loan downgrades in our CRE portfolio.

The bank loan provision for credit losses for the prior-year quarter largely reflected the impacts of a weaker economic outlook for the CRE portfolio as reflected in Moody’s CRE Price Index utilized in our CECL model and, to a lesser extent, loan downgrades.

Non-compensation expenses, excluding the bank loan provision for credit losses, decreased $78 million, or 23%, primarily due to a decrease in RJBDP fees paid to PCG resulting from the aforementioned decline in RJBDP balances swept to the Bank segment, partially offset by the impact of higher rates applicable to such balances.

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).

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Nine months ended June 30, 2024 compared with the nine months ended June 30, 2023

Net revenues of $1.28 billion decreased 18% and pre-tax income of $282 million decreased 4%.

Net interest income decreased $273 million, or 18%, 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, as well as an increase in 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 cash balances during the current-year period.

The Bank segment net interest margin decreased to 2.68% from 3.41% for the prior-year period.

The bank loan provision for credit losses was $23 million for the current-year period, compared with $96 million for the prior-year period.

The bank loan provision for credit losses for the current-year period 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.

The bank loan provision for credit losses for the prior-year period primarily reflected the impacts of a weakened macroeconomic outlook for certain loan portfolios, including the impact of a weaker economic outlook for the CRE portfolio as reflected in Moody’s CRE Price Index utilized in our CECL model, as well as loan downgrades during the prior-year period, partially offset by the impact of loan repayments and sales, which had a larger impact than provisions on new loans during the prior-year period.

The bank loan provision for credit losses decreased $12 million compared with the prior-year quarter.

The bank loan provision for credit losses for the current quarter primarily reflected the impacts of an improved macroeconomic forecast and loan repayments on criticized loans, offset by provisions on new loans, loan downgrades, primarily in the CRE and C&I loan portfolios, and charge-offs of certain loans.

The bank loan provision for credit losses for the prior-year quarter primarily reflected the impacts of specific reserves in our C&I and CRE portfolios, loan downgrades, and charge-offs, partially offset by the favorable impact of loan repayments and sales, which had a larger impact than provisions on new loans.

Compensation expenses increased $3 million, or 7%.

Non-compensation expenses, excluding the bank loan provision for credit losses, decreased $33 million, or 11%, primarily due to a decrease in RJBDP fees paid to PCG.

RJBDP fees to PCG decreased $229 million, or 27%, 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.

Non-compensation expenses also decreased as a result of a smaller provision for credit losses on unfunded lending comments in the current-year period.

These decreases were partially offset by increases in expenses related to deposits, including an incremental FDIC special assessment enacted during the current-year period and expenses related to the ESP and certificate of deposit issuances during the current-year period, as well as higher communications and information processing expenses.

The FDIC special assessment resulted in $10 million of incremental expense for the nine months ended June 30, 2024.

RJBDP fees paid to PCG decreased $36 million, or 16%, primarily due to the impact of the aforementioned decreases in short-term interest rates, as well as lower average RJBDP balances swept to the Bank segment.

Additionally, non-compensation expenses decreased as the prior-year quarter included the impact of the FDIC special assessment during that quarter which did not reoccur in the current quarter.

These decreases in expenses were partially offset by higher communications and information processing expenses.

RAYMOND JAMES FINANCIAL, INC.

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Operating results

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

$ in millions 2024 2023 % change 2024 2023 % change

Three months ended December 31,

$ in millions 2024 2023 % change

Interest income (1)

$ 34 $ 49 (31) %

All other 3 2 50 %

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Compensation and benefits 36 17 112 %

Insurance settlement received — — — % — (32) 100 %

All other 9 34 (74) % (7) 46 NM

All other 6 6 — %

Total non-interest expenses 42 23 83 %

$ (10) $ (46) 78 % $ — $ (51) 100 %

Quarter ended June 30, 2024 compared with the quarter ended June 30, 2023

Pre-tax loss was $10 million, compared with a pre-tax loss of $46 million for the prior-year quarter.

Net revenues increased $13 million primarily due to an increase in interest income earned as a result of higher average corporate cash balances, as well as higher short-term interest rates applicable to such balances.

Non-interest expenses decreased $23 million, primarily due to a provision for legal and regulatory matters in the prior-year quarter which did not recur in the current quarter.

Nine months ended June 30, 2024 compared with the nine months ended June 30, 2023

Pre-tax earnings were breakeven compared with a pre-tax loss of $51 million for the prior-year period.

Net revenues increased $37 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 $14 million, or 16%, primarily due to the positive impact of a net legal and regulatory reserve release in the current-year period compared with a provision in the prior-year period, partially offset by the impacts of a $32 million insurance settlement received during the prior-year period related to a previously-settled legal matter that did not recur in the current-year period and, to a lesser extent, higher compensation expenses in the current-year period.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Pre-tax income/(loss)

$ (30) $ 3 NM

Prior-period segment results have not been conformed to the current-period presentation.

Quarter ended December 31, 2024 compared with the quarter ended December 31, 2023

Pre-tax loss was $30 million, compared with a pre-tax income of $3 million for the prior-year quarter.

Net revenues decreased $14 million primarily due to a decrease in interest income due to an updated methodology for allocating interest income on certain cash balances to our segments, resulting in a reduction in interest income in the Other segment and an increase in interest income in the PCG segment, as well as a decrease in short-term interest rates.

Non-interest expenses increased $19 million, primarily due to higher compensation expenses in the current quarter.

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 $80.63 billion as of June 30, 2024 were $2.27 billion, or 3%, greater than our total assets as of September 30, 2023.

Bank loans, net increased $1.37 billion primarily driven by increases in SBL, residential mortgage loans, and CRE loans, partially offset by a decrease in C&I loans, largely resulting from net loan repayments and sales.

Other assets increased $429 million, primarily due to valuation increases on our company-owned life insurance policies.

Assets segregated for regulatory purposes and restricted cash increased $406 million, primarily due to an increase in client cash balances in our broker-dealer subsidiaries.

Other receivables, net, trading assets, and brokerage client receivables, net also increased $325 million, $285 million, and $273 million, respectively.

These increases were partially offset by a $651 million decrease in available-for-sale securities primarily driven by net maturities.

As of June 30, 2024, our total liabilities of $69.44 billion were $1.27 billion, or 2%, greater than our total liabilities as of September 30, 2023.

Collateralized financings increased $817 million due to an increase in securities lending activity.

Bank deposits increased $202 million, primarily driven by growth in ESP balances and other interest-bearing demand deposits, partially offset by a decrease in RJBDP client cash sweep balances swept to our Bank segment.

Trading liabilities and other payables also increased $175 million and $153 million, respectively.

Total assets of $82.28 billion as of December 31, 2024 were $710 million, or 1%, less than our total assets as of September 30, 2024.

Cash and cash equivalents decreased $950 million predominantly driven by a decrease in cash held in our Bank segment, largely resulting from investments in bank loans.

Available-for-sale securities decreased $533 million primarily driven by net maturities and, to a lesser extent, sales.

Other receivables, net and collateralized agreements also decreased $317 million and $219 million, respectively.

These decreases were partially offset by a $1.2 billion increase in bank loans, net including continued growth in securities-based loans.

As of December 31, 2024, our total liabilities of $70.35 billion were $972 million, or 1%, less than our total liabilities as of September 30, 2024.

Accrued compensation, commissions, and benefits decreased $538 million, primarily due to the payment of prior-year bonuses during the quarter.

Collateralized financings, bank deposits, and trading liabilities also decreased $170 million, $160 million, and $141 million, respectively.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

LIQUIDITY AND CAPITAL RESOURCES

6 unchanged sentences

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 Condensed 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 borrowing from the Federal Reserve’s discount window.

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.

These actions include reallocating client cash balances in the RJBDP from third-party banks to our bank subsidiaries thereby bringing those deposits onto our Condensed 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 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, 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 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.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Liquidity and capital management

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We manage the maturities and diversity of our funding across products and seek to maintain a diversified funding profile with an appropriate tenor, taking into consideration the characteristics and liquidity profile of our assets (e.g., the maturities of our available-for-sale securities portfolio).

The liquidity management framework includes senior management’s review of short- and long-term cash flow forecasts, review of necessary expenditures, monitoring of the availability of alternative sources of financing, and daily monitoring of liquidity in our significant subsidiaries.

The liquidity management framework includes senior management’s review of short- and long-term cash flow forecasts, monitoring of the availability of alternative sources of financing, and daily monitoring of liquidity in our significant subsidiaries.

Our decisions on the allocation of resources to our business units consider, among other factors, projected profitability, cash flow, risk, future liquidity needs, and required capital levels.

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Capital structure

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

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

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 Condensed Consolidated Statements of Financial Condition, the Condensed Consolidated Statements of Changes in Shareholders’ Equity, and Note 16 of this Form 10-Q.

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

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, 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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We have elected the AOCI opt-out for regulatory capital purposes and therefore exclude certain elements of AOCI, including gains/losses on our available-for-sale portfolio, from our capital calculations.

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 continuing to evaluate 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 current businesses and strategies.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

$ in millions

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

Common equity tier 1 capital/Tier 1 capital

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Total capital $ 11,372 $ 11,001

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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

$ in millions

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

On-balance sheet assets:

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government and its agencies.

Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) of $9.10 billion at June 30, 2024 decreased $218 million compared with September 30, 2023.

The decrease in cash and cash equivalents primarily resulted from investments in bank loans, property and equipment, and loans to financial advisors, as well as common stock repurchases and dividends paid on our common and preferred stock.

Cash and cash equivalents (excluding amounts segregated for regulatory purposes and restricted cash) of $10.05 billion at December 31, 2024 decreased $950 million compared with September 30, 2024.

The decrease in cash and cash equivalents primarily resulted from net investments in bank loans, payments of prior-year bonuses, a decrease in bank deposits, and common stock repurchases and dividends paid on our common stock.

These decreases were partially offset by net income and net maturities of available-for-sale securities during the period.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Sources of liquidity

Approximately $2.11 billion of our total June 30, 2024 cash and cash equivalents was RJF corporate cash, which included the cash held at the parent company, as well as cash it loaned to RJ&A.

As of June 30, 2024, RJF had loaned $1.39 billion to RJ&A (such amount is included in the RJ&A cash balance in the following table), which RJ&A has invested on behalf of RJF in cash and cash equivalents or otherwise deployed in its normal business activities.

Approximately $2.34 billion of our total December 31, 2024 cash and cash equivalents was RJF corporate cash, which included the cash held at the parent company, as well as cash it loaned to RJ&A.

As of December 31, 2024, RJF had loaned $1.60 billion to RJ&A (such amount is included in the RJ&A cash balance in the following table), which RJ&A has invested on behalf of RJF in cash and cash equivalents or otherwise deployed in its normal business activities.

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

$ in millions June 30, 2024

$ in millions December 31, 2024

TriState Capital Bank 3,343

Raymond James Bank 2,078

Raymond James Ltd.

(“RJ Ltd.”) 610

Raymond James Capital Services, LLC 181

Raymond James Financial Services, Inc.

Charles Stanley 145

Raymond James Trust Company of New Hampshire 129

Charles Stanley Group Limited (“Charles Stanley”) 119

Raymond James Financial Services, Inc.

Raymond James Investment Management 109

Other subsidiaries 341

Total cash and cash equivalents $ 10,048

RJF maintained depository accounts at Raymond James Bank and TriState Capital Bank totaling $294 million as of June 30, 2024.

The portion of this total that was available on demand without restrictions, which amounted to $250 million as of June 30, 2024, is reflected in the RJF cash balance and excluded from Raymond James Bank’s cash balance in the preceding table.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

RJF maintained depository accounts at Raymond James Bank and TriState Capital Bank totaling $301 million as of December 31, 2024.

The portion of this total that was available on demand without restrictions, which amounted to $256 million as of December 31, 2024, is reflected in the RJF cash balance and excluded from Raymond James Bank’s cash balance in the preceding table.

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

subsidiaries, including RJ Ltd.

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

and Charles Stanley, was held to meet regulatory requirements and was not available for use by the parent as of December 31, 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 June 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.

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 December 31, 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.

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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.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

Borrowings and financing arrangements

3 unchanged sentences

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

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

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

As of December 31, 2024, RJF and RJ&A had the ability to borrow under our $750 million Credit Facility, a committed unsecured line of credit.

We had no such borrowings outstanding under this facility as of December 31, 2024.

See Note 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding our Credit Facility.

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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 June 30, 2024, we had outstanding borrowings of $374 million under four uncommitted secured borrowing arrangements out of a total of 12 uncommitted financing arrangements (eight uncommitted secured and four uncommitted unsecured).

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

As of December 31, 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 generally under no contractual obligation to lend

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

to us under uncommitted credit facilities.

See Notes 6 and 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding these borrowings.

12 unchanged sentences

during the quarter End of period

June 30, 2024 $ 407 $ 374 $ 374 $ 349 $ 311 $ 311

March 31, 2024 $ 256 $ 371 $ 371 $ 244 $ 449 $ 449

December 31, 2024 $ 344 $ 345 $ 307 $ 318 $ 330 $ 267

1 unchanged sentence

June 30, 2024 $ 407 $ 374 $ 110 $ 349 $ 311 $ 181

March 31, 2024 $ 256 $ 371 $ 371 $ 244 $ 449 $ 449

December 31, 2023 $ 171 $ 193 $ 169 $ 225 $ 252 $ 194

Other borrowings and collateralized financings

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

We had $950 million in FHLB borrowings outstanding at December 31, 2024, comprised of floating-rate and fixed-rate advances.

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

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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 June 30, 2024, we had $9.57 billion in immediate credit available from the FHLB based on the collateral pledged.

As of December 31, 2024, we had $9.52 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 4, 6, 7, and 14 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding bank loans and available-for-sale securities pledged with the FHLB and for further information on our FHLB borrowings, including the related maturities and interest rates.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

See Notes 6 and 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q 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.

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.

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

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

As of December 31, 2024, our bank subsidiaries had pledged certain bank loans with the Federal Reserve and had $2.1 billion in immediate credit available from the FRB based on collateral pledged.

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

See Note 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding our assets 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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Amounts outstanding under this financing arrangement are collateralized by a portion of our trading inventory and accrue interest based on market rates.

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

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

While we had borrowings outstanding as of December 31, 2024, the clearing organization is under no contractual obligation to lend to us under this arrangement.

At December 31, 2024, we had subordinated notes due May 2030 outstanding, with an aggregate principal amount of $98 million.

See Note 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 16 of our 2024 Form 10-K for additional information regarding these borrowings.

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

We account for each of these types of transactions as collateralized agreements and financings, with the outstanding balance of $780 million as of June 30, 2024 related to the securities loaned included in “Collateralized financings” on our Condensed Consolidated Statements of Financial Condition of this Form 10-Q.

We account for each of these types of transactions as collateralized agreements and financings, with the outstanding balance of $461 million as of December 31, 2024 related to the securities loaned included in “Collateralized financings” on our Condensed Consolidated Statements of Financial Condition of this Form 10-Q.

See Note 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and Note 2 of our 2024 Form 10-K for more information on our collateralized agreements and financings.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Senior notes payable

At June 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 2030, $800 million par 4.95% senior notes due 2046, and $750 million par 3.75% senior notes due 2051.

See Note 17 of the Notes to the Consolidated Financial Statements of our 2023 Form 10-K for additional information on our senior notes payable.

At December 31, 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 our 2024 Form 10-K for additional information on our senior notes payable.

Credit ratings

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

RAYMOND JAMES FINANCIAL, INC.

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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.

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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 $1.11 billion as of June 30, 2024, comprised of $746 million related to employee-directed plans and $363 million related to company-directed plans, and we were able to borrow up to 90%, or $998 million, of the June 30, 2024 total without restriction.

Those policies against which we could readily borrow had a cash surrender value of $1.20 billion as of December 31, 2024, comprised of $822 million related to employee-directed plans and $382 million related to company-directed plans, and we were able to borrow up to 90%, or $1.08 billion, of the December 31, 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.

There were no borrowings outstanding against any of these policies as of June 30, 2024.

There were no borrowings outstanding against any of these policies as of December 31, 2024.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

On May 8, 2024, we filed a “universal” shelf registration statement with the SEC pursuant to which we can issue debt, equity and other capital instruments if and when necessary or perceived by us to be opportune.

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

In May 2024, Raymond James Bank entered into a joint venture with a third party to offer private credit solutions in order to finance merger and acquisitions 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 as of June 30, 2024 or results of operations for the three months ended June 30, 2024.

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 licenses and various services.

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

As of June 30, 2024, all of our active regulated domestic and international subsidiaries had net capital in excess of minimum requirements.

In addition, RJF, Raymond James Bank, and TriState Capital Bank were categorized as “well-capitalized” as of June 30, 2024.

As of December 31, 2024, all of our active regulated domestic and international subsidiaries had net capital in excess of minimum requirements.

In addition, RJF, Raymond James Bank, and TriState Capital Bank were categorized as “well-capitalized” as of December 31, 2024.

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

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 21 of the Notes to Condensed Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and capital resources - Capital structure” of this Form 10-Q for further information on regulatory capital requirements.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

In March 2024, the SEC adopted a final rule that requires registrants to provide significantly enhanced and standardized climate-related disclosures in their annual reports.

The rule requires, among other things, disclosures about the financial statement impacts of severe weather events and other natural conditions, as well as our climate-related oversight and risk management activities and material Scope 1 and 2 greenhouse gas emissions.

Under the final rule, the aforementioned disclosures are effective for annual periods beginning with our fiscal 2026, except for disclosures of Scope 1 and 2 greenhouse gas emissions and certain other disclosures which are effective for annual periods beginning with our fiscal 2027.

However, several legal challenges were filed following issuance of the final rule, and the consolidated petitions are currently being reviewed by the Eighth Circuit Court of Appeals.

The SEC has stayed the final rule pending completion of judicial review and has indicated that a new implementation period will be provided upon lifting of the stay.

We are monitoring the legal activity while continuing to evaluate the impact that this new rule will have on our disclosures.

Compliance with these additional disclosures could result in additional costs.

On April 23, 2024, the Department of Labor (“DOL”) issued a final rule significantly expanding the definition of “investment advice fiduciary” under the Employee Retirement Income Security Act of 1974.

In related rulemakings, the DOL also finalized amendments to several class prohibited transaction exemptions (“PTEs”), which exempt certain compensation arrangements that would otherwise be prohibited.

In July 2024, two federal district courts separately issued nationwide stays of the effective date of the final rule and PTE amendments pending consideration of the merits.

We are monitoring the legal activity while continuing to evaluate the impact these new rules could have on our business.

If the rules become effective as promulgated, we expect compliance will require us to alter certain of our business practices and impose additional costs.

On April 23, 2024, the Federal Trade Commission (“FTC”) issued a final rule which will prohibit companies from entering into any new post-employment non-competition agreements with employees and independent contractors and make existing non-competition clauses for the vast majority of U.S.

workers unenforceable.

The rule will permit companies to enforce existing non-competition clauses only with a narrowly defined group of “senior executives,” but provides an exception for non-competition agreements entered into as part of the sale of a business.

The rule will become effective on September 4, 2024, unless it is enjoined or stayed as a result of legal challenges.

Compliance with the rule could require us to alter our business practices where such non-competition agreements are present and would result in the accelerated recognition of compensation expense related to certain of our deferred compensation plans.

See Note 20 of the Notes to Condensed Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and capital resources - Capital structure” of this Form 10-Q 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 sweep programs for investment advisory clients and is reportedly conducting similar reviews at other financial institutions.

The firm has been cooperating with this inquiry.

In addition, in August and December 2024, a total of three 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.

All three cases have been consolidated, and we intend to vigorously defend against these lawsuits.

The SEC adopted final rules mandating central clearing of cash, repurchase transactions and reverse repurchase transactions in U.S.

The rules require initial compliance for cash transaction reporting by December 2025, and reporting of repurchase and reverse repurchase transactions by June 2026.

Industry groups have requested extensions to those compliance dates, and we are monitoring the status of this rule.

We are continuing to evaluate the impact that this rule will have on our business practices, financial position, and results of operations.

In December 2024, the SEC adopted a final rule amending SEC Rules 15c3-3, the Customer Protection rule, and 15c3-1, the Net Capital rule.

These amendments will require large clearing/carrying broker-dealers, including RJ&A, to compute customer and Proprietary Account of Broker-dealer reserve requirements and make any required reserve account deposits daily rather than the current weekly requirement.

The effective date for the regulation is December 31, 2025.

We are currently evaluating the impact that this rule will have on our business practices, financial position, and results of operations.

CRITICAL ACCOUNTING ESTIMATES

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For a description of our significant accounting policies, see Note 2 of the Notes to Consolidated Financial Statements of our 2024 Form 10-K.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Due to their nature, estimates involve judgment based upon available information.

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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 our 2023 Form 10-K.

In addition, refer to Note 16 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding legal and regulatory matters contingencies as of June 30, 2024.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Allowance for credit losses

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

As of June 30, 2024, use of the downside case scenario would have resulted in an increase of approximately $180 million in the quantitative portion of our allowance for credit losses on bank loans, while the use of the upside case would have resulted in a reduction of approximately $30 million in the quantitative portion of our allowance for credit losses on bank loans at June 30, 2024.

To demonstrate the sensitivity of credit loss estimates on our bank loan portfolio to macroeconomic forecasts, we compared our modeled estimates under the base case economic scenario used to estimate the allowance for credit losses as of December 31, 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 December 31, 2024.

As of December 31, 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 $35 million in the quantitative portion of our allowance for credit losses on bank loans at December 31, 2024.

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

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See Note 2 of the Notes to Consolidated Financial Statements of our 2024 Form 10-K for information regarding our methodologies and assumptions used in estimating the allowance for credit losses.

See Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding our allowance for credit losses related to bank loans as of June 30, 2024.

See Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding our allowance for credit losses related to bank loans as of December 31, 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 15 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for information regarding legal and regulatory matters contingencies as of December 31, 2024.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

ACCOUNTING STANDARDS UPDATE

In November 2023, the FASB issued amended guidance related to disclosures for segment reporting (ASU 2023-07).

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.

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This guidance will be applied on a retrospective basis.

We are evaluating the impact that this new guidance will have on our disclosures.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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).

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

We are evaluating the impact that this new guidance will have on our disclosures.

See Note 2 of the Notes to the Condensed Consolidated Financial Statements of this Form 10-Q for information regarding new accounting guidance we adopted during the three and nine months ended June 30, 2024.

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.

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.

RISK MANAGEMENT

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

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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

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

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 SBA 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 SBA 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.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

Interest rate risk

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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As a result, management complements VaR with sensitivity analysis and stress testing and employs additional controls such as a daily review of trading results, review of aged inventory, independent review of pricing, monitoring of concentrations, and review of issuer ratings.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

To calculate VaR, we use models that incorporate historical simulation.

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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.

For regulatory capital calculation purposes, we also report VaR and Stressed VaR numbers for a ten-day time horizon.

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

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As a result, VaR results are more reliable when used as indicators of risk levels and trends within a firm than as a basis for inferring differences in risk-taking across firms.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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

Nine months ended June 30, 2024 Period-end VaR Three months ended June 30, Nine months ended June 30,

$ in millions High Low June 30,

Three months ended December 31, 2024 Period-end VaR Three months ended December 31,

$ in millions High Low December 31,

2024 September 30,

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Daily VaR $ 4 $ 1 $ 3 $ 2 Average daily VaR $ 2 $ 2

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.

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, 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 three and nine months ended June 30, 2024, our regulatory-defined daily losses in our trading portfolios exceeded our predicted VaR on one occasion and two occasions, respectively.

During the three months ended December 31, 2024, our regulatory-defined daily losses in our trading portfolios exceeded our predicted VaR on one occasion.

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

Banking operations

Our Bank segment maintains an interest-earning asset portfolio that is comprised of cash, 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 our 2023 Form 10-K and Notes 13 and 14 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q.

See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and capital resources” of our 2023 Form 10-K for further information.

For additional information regarding this hedging strategy, see Note 2 of the Notes to Consolidated Financial Statements of our 2024 Form 10-K and Notes 5, 12 and 13 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q.

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

See “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and capital resources” of this Form 10-Q for additional information.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

The following table is an analysis of our banking operations’ estimated net interest income over a 12-month period based on instantaneous shifts in interest rates (expressed in basis points) using our previously described asset/liability model, which assumes a dynamic balance sheet, a weighted-average deposit beta on our interest-bearing deposit accounts without stated maturities of approximately 65% as interest rates rise and approximately 55% as interest rates fall, and that interest rates do not decline below zero.

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-200 $1,622 (8)%

(1) Our 0-basis point scenario was based on interest rates as of June 30, 2024.

(1) Our 0-basis point scenario was based on interest rates as of December 31, 2024.

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 Condensed 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-Q for additional information on our net interest income.

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.

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.

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

At June 30, 2024, our available-for-sale securities portfolio had a fair value of $8.53 billion with a weighted-average yield of 2.25% and a weighted-average life, after factoring in estimated prepayments, of 4.0 years.

At December 31, 2024, our available-for-sale securities portfolio had a fair value of $7.73 billion with a weighted-average yield of 2.23% and a weighted-average life, after factoring in estimated prepayments, of 4.0 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 June 30, 2024, the effective duration of our available-for-sale securities portfolio was approximately 3.29, which means that we would expect the market value of our available-for-sale securities portfolio to decline approximately 3.29% for every 100-basis point increase in interest rates and increase approximately 3.29% for every 100-basis point decline in interest rates.

As of December 31, 2024, the effective duration of our available-for-sale securities portfolio was approximately 3.49, which means that we would expect the market value of our available-for-sale securities portfolio to increase approximately 3.49% for every 100-basis point decline in interest rates and decline approximately 3.49% for every 100-basis point increase in interest rates.

See Note 2 of the Notes to Consolidated Financial Statements of our 2024 Form 10-K and Note 4 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information on our available-for-sale securities portfolio.

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These limits set a risk tolerance to changing interest rates and assist in determining strategies for mitigating this risk as EVE approaches these limits.

As of June 30, 2024, our EVE analyses were within approved limits.

As of December 31, 2024, our EVE analyses were within approved limits.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

The following table shows the maturities of our bank loan portfolio at June 30, 2024, including contractual principal repayments.

The following table shows the maturities of our bank loan portfolio at December 31, 2024, including contractual principal repayments.

Maturities are generally determined based upon contractual terms;

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Total loans held for sale and investment $ 19,504 $ 12,385 $ 6,120 $ 9,607 $ 47,616

The following table shows the distribution of the recorded investment of those bank loans that mature in more than one year between fixed and adjustable interest rate loans at June 30, 2024.

The following table shows the distribution of the recorded investment of those bank loans that mature in more than one year between fixed and adjustable interest rate loans at December 31, 2024.

Interest rate type

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

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 Condensed Consolidated Statements of Financial Condition, which is primarily comprised of investments in third-party funds.

See Note 3 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q 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 U.S.

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 U.S.

dollar (“USD”).

For example, our bank loan portfolio includes loans which are denominated in Canadian dollars (“CAD”), totaling $1.28 billion and $1.40 billion at June 30, 2024 and September 30, 2023, respectively, when converted to the USD.

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

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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.

For example, our bank loan portfolio includes loans which are denominated in Canadian dollars (“CAD”), totaling $1.09 billion and $1.23 billion at December 31, 2024 and September 30, 2024, respectively, when converted to the USD using the spot rate at that time.

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 the Canadian subsidiary.

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

See Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K and Note 5 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding these derivatives.

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

See Note 2 of the Notes to Consolidated Financial Statements of our 2024 Form 10-K and Note 5 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information regarding these derivatives.

Other sources of foreign exchange risk

Investments in non-bank foreign subsidiaries

At December 31, 2024, we had foreign exchange risk in our investment in RJ Ltd.

of CAD 461 million and in our investment in Charles Stanley of £289 million, 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 June 30, 2024.

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

however, we do not believe we had material foreign exchange risk either individually, or in the aggregate, pertaining to these subsidiaries as of December 31, 2024.

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

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

and Comprehensive Income.

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

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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 Condensed 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 Condensed 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 Condensed 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 Condensed Consolidated Statements of Income and Comprehensive Income.

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

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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.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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 Note 2 of the Notes to Consolidated Financial Statements of our 2023 Form 10-K and Notes 5 and 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information about our credit risk mitigation related to derivatives and collateralized agreements.

See Note 2 of the Notes to Consolidated Financial Statements of our 2024 Form 10-K and Notes 5 and 6 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q 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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See Note 2 of the Notes to Consolidated Financial Statements of our 2024 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 retention and recruiting purposes.

RAYMOND JAMES FINANCIAL, INC.

AND SUBSIDIARIES

Management’s Discussion and Analysis

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 Note 2 of the Notes to Consolidated Financial Statements of our 2024 Form 10-K and Note 8 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for further information about our loans to financial advisors.

Banking activities

Banking operations

Our Bank segment has a substantial loan portfolio.

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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.

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.

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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 our 2024 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 bank loan portfolio into six loan portfolio segments, which also serve as classes of financing receivables for purposes of credit analysis.

See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk” of our 2024 Form 10-K for further information about the risk characteristics relevant to each portfolio segment.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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

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

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

2024 2023 2024 2023

Three months ended December 31,

$ in millions Net loan

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amount Annualized

loans Net loan

(charge-off)/recovery

amount Annualized

loans Net loan

(charge-off)/recovery

amount Annualized

C&I loans $ (4) 0.16 % $ (6) 0.23 %

CRE loans — — % (2) 0.11 %

Residential mortgage loans 1 0.04 % — — % 1 0.09 % — — %

Total loans held for sale and investment $ (4) 0.03 % $ (8) 0.07 %

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

$ in millions June 30, 2024 September 30, 2023

$ in millions December 31, 2024 September 30, 2024

Nonperforming loans (1)

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Nonperforming assets as a % of Bank segment total assets 0.26 % 0.28 %

(1) Nonperforming loans at June 30, 2024 and September 30, 2023 included $56 million and $96 million, respectively, of loans, which were current pursuant to their contractual terms.

The increase in nonperforming loans and assets as of June 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 nine months ended June 30, 2024.

See the table summarizing nonaccrual loans by category in Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q.

Although our nonperforming assets as a percentage of our Bank segment’s assets remained low as of June 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.

(1) Nonperforming loans at December 31, 2024 and September 30, 2024 included $72 million and $89 million, respectively, of loans, which were current pursuant to their contractual terms.

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Management’s Discussion and Analysis

See the table summarizing nonaccrual loans by portfolio segment in Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information.

Although our nonperforming assets as a percentage of our Bank segment’s assets remained low as of December 31, 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.

See further explanation of our bank loan portfolio segments, allowance for credit losses, and the credit loss provision in Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q and “Management’s Discussion and Analysis - Results of Operations - Bank” of this Form 10-Q and Note 2 of the Notes to Consolidated Financial Statements of our 2024 Form 10-K.

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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.

There were no significant changes to those processes during the three months ended June 30, 2024.

There were no significant changes to those processes during the three months ended December 31, 2024.

See further discussion of our risk monitoring process in “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk - Banking activities” of our 2024 Form 10-K.

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Management’s Discussion and Analysis

SBL and residential mortgage loan portfolios

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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 no losses incurred during the three and nine months ended June 30, 2024.

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.

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

See Note 7 of the Notes to the Condensed Consolidated Financial Statements of this Form 10-Q for additional information about our residential mortgage loan portfolio.

See Note 7 of the Notes to the Condensed Consolidated Financial Statements of this Form 10-Q 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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$ in millions 30-89 days 90 days or more Total 30-89 days 90 days or more Total

June 30, 2024 $ 7 $ 3 $ 10 0.08 % 0.03 % 0.11 %

December 31, 2024 $ 5 $ 9 $ 14 0.05 % 0.10 % 0.15 %

September 30, 2024 $ 6 $ 8 $ 14 0.07 % 0.08 % 0.15 %

Our June 30, 2024 percentage compares favorably to the national average for over 30 day delinquencies of 1.88%, as most recently reported by the Fed.

Our December 31, 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.

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Management’s Discussion and Analysis

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

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

June 30, 2024

December 31, 2024

Loans outstanding as a % of

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Payments may increase significantly when the interest-only period ends and the loan principal begins to amortize.

At June 30, 2024 and September 30, 2023, these loans totaled $2.94 billion and $2.85 billion, respectively, or approximately 32% 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 June 30, 2024, begins amortizing is five years.

At December 31, 2024 and September 30, 2024, these loans totaled $2.94 billion and $2.96 billion, respectively, or approximately 31% of the residential mortgage portfolio at each respective period end.

The weighted-average number of years before the remainder of the loans, which were still in their interest-only period at December 31, 2024, begins amortizing is five years.

Corporate and tax-exempt loans

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

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.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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.

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, geographic concentrations, and total relationship exposure.

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

Corporate and tax-exempt loans are also subject to regulatory review.

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

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

June 30, 2024

December 31, 2024

Loans outstanding as a % of

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Industrial warehouse 10% 4%

Office real estate 8% 3%

Loan fund 7% 3%

Office real estate 7% 3%

Subscription lines 6% 2%

The Fed’s measures to control inflation, including through increases in short-term interest rates in prior fiscal years, have had a dampening effect on certain sectors of the economy.

We expect that the continued elevated interest rates coupled with the uncertainty regarding the timing of future Fed interest rate cuts will negatively impact borrowers through the remainder of our fiscal 2024.

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

Additionally, in our fiscal 2023 and year-to-date fiscal 2024 we have sold, and may continue to sell, corporate loans as part of our credit risk mitigation strategies.

The aforementioned dampening effect on the economy and changes in business and consumer behavior have most notably impacted the commercial real estate sector, specifically office real estate loans.

Risks related to such loans have increased due to 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 40% 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.

As of June 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 June 30, 2024, 11% of such loans were considered criticized loans and only 5% were nonperforming.

As of June 30, 2024, our allowance for credit losses related to office real estate CRE loans represented 6% of the amortized cost of such loans.

The Fed enacted a 50-basis-point decrease in short-term interest rates late in the preceding quarter and two 25-basis-point rate cuts during the current quarter.

Despite lower short-term interest rates, market-wide corporate loan growth has remained muted in our fiscal first quarter of 2025, 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 and other factors that may impact our borrowers and corporate loan portfolio, including the regulatory environment following the recent change in the U.S.

presidential administration, inflation, and interest rates.

RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

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

Construction CRE loans involve risks such as project budget overruns, performance variables related to the contractor and subcontractors, or the inability to sell the project or secure permanent financing once the project is completed.

With respect to commercial construction of residential developments, there is also the risk that the builder has a geographic concentration of developments.

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.

In addition to the aforementioned CRE loans, we also have certain owner-occupied commercial real estate loans of approximately $200 million as of June 30, 2024 that were appropriately 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.

Risks related to our CRE loans, specifically, office real estate loans, continue to be impacted by remote work, pressure from the relatively high interest rate environment that persisted throughout most of our fiscal 2024, uncertainty related to tenant lease renewals, and elevated refinancing risk for loans with near-term maturities, among other issues.

As of December 31, 2024, our highest industry concentrations within our CRE portfolio were multi-family, industrial warehouse, and office real estate, and the concentrations of such loans were generally consistent with those for our corporate loan portfolio detailed in the preceding table.

Refer to “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Credit risk - Banking activities” of our 2024 Form 10-K for further information on our CRE loans and a discussion of our risk monitoring process for these loans.

There were no significant changes to those processes during the three months ended December 31, 2024.

Refer to Note 7 of the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for additional information on our credit metrics related to our CRE loan portfolio.

Liquidity risk

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See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Risk management - Operational risk” of our 2024 Form 10-K for a discussion of our operational risk and certain of our risk mitigation processes.

Effective the last week of May 2024, certain of our broker-dealer securities transactions, including those in the United States and Canada, transitioned from a trade date plus two business days settlement timeframe to a trade date plus one business day (“T+1”) settlement timeframe.

The transition to a T+1 settlement timeframe subjects us to increased operational risk with respect to reporting and timely settlement of transactions and heightens the need for careful coordination with and dependencies on other industry participants.

The transition to T+1 did not have a material impact on our results of operations or financial condition.

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 nine months ended June 30, 2024.

As more fully described in the discussion of our business technology risks included in various risk factors presented in “Item 1A - Risk Factors” of our 2023 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.

We did not incur any significant losses related to such operational challenges during the three months ended December 31, 2024 or 2023.

As more fully described in the discussion of our business technology risks included in various risk factors presented in “Item 1A - Risk Factors” and “Item 1C - Cybersecurity” of our 2024 Form 10-K, despite our implementation of protective measures and endeavoring to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable to human error, natural disasters, power loss, cyber-attacks and other information security breaches, and other events that could have an impact on the security and stability of our operations.

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

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RAYMOND JAMES FINANCIAL, INC.

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Management’s Discussion and Analysis

AND SUBSIDIARIES Index

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis