Raymond James Financial (RJF) 8-K Raymond James Financial Reports Fiscal 3RD Quarter 2015 Results

July 22, 2015FOR IMMEDIATE RELEASE

Media Contact: Steve Hollister, 727.567.2824

Investor Contact: Paul Shoukry, 727.567.5133

raymondjames.com/media

RAYMOND JAMES FINANCIAL REPORTS FISCAL 3RD QUARTER 2015 RESULTS

• Record quarterly net revenues of $1.32 billion, up 9 percent over last year’s June quarter and 3 percent over the preceding quarter

• Second highest quarterly net income of $133.2 million, or $0.91 per diluted share

• Quarter-end records for client assets under administration of $499.8 billion and financial assets under management of $70.2 billion

• The number of Private Client Group financial advisors increased 256 over last year’s June and 123 over the preceding quarter reaching a record 6,507

ST. PETERSBURG, Fla - Raymond James Financial, Inc. (NYSE: RJF) today reported net revenues of $1.32 billion and net income of $133.2 million, or $0.91 per diluted share, for the fiscal third quarter ended June 30, 2015. Both revenues and net income improved 9 percent over last year’s June quarter. Compared to the preceding March quarter, revenues increased 3 percent and net income increased 17 percent. The annualized return on equity in the quarter was 12.0 percent.   

“We continue to benefit from very robust financial advisor retention and recruiting results, which has helped us achieve quarter-end records for both client assets under administration and financial assets under management,” explained CEO Paul Reilly. “All of our businesses are well-positioned for sustainable, long-term growth, as we maintain an unwavering commitment to serving our clients.”

Segment Results

Private Client Group

• Record quarterly net revenues of $892.2 million, up 9 percent compared to the prior year’s fiscal third quarter and 2 percent compared to the preceding quarter

• Quarterly pre-tax income of $86.4 million, up 6 percent compared to the prior year’s fiscal third quarter and 15 percent compared to the preceding quarter

• Record quarter-end Private Client Group assets under administration of $475.4 billion, up 5 percent over last year’s June and 1 percent over the preceding quarter

The Private Client Group segment maintained excellent financial advisor retention and recruiting results, which resulted in the number of advisors increasing to a record 6,507. Revenue growth in the segment was largely driven by assets in fee-based accounts, which increased 11 percent over last year’s June to $186.2 billion, representing 39 percent of the segment’s total client assets.      

“Our success in retaining and recruiting financial advisors in an intensely competitive environment validates the attractiveness of our platform, which provides a unique combination of a client-focused culture enabled by a full-service product and technology offering,” said Reilly.  

1

Capital Markets

• Quarterly net revenues of $233.1 million, essentially flat compared to the prior year’s fiscal third quarter and down 1 percent compared to the preceding quarter

• Quarterly pre-tax income of $18.3 million, down 35 percent and 12 percent, respectively, compared to the prior year’s fiscal third quarter and the preceding quarter

• Institutional fixed income commissions of $75.6 million, a substantial 23 percent increase compared to the prior year’s fiscal third quarter

Despite reasonable equity investment banking results, depressed institutional equity commissions, which were down 16 percent compared to last year’s June quarter, provided headwinds for the Equity Capital Markets division in the quarter. Furthermore, profitability in the Equity Capital Markets division was negatively impacted by numerous new hires during the quarter.   

Meanwhile, the Fixed Income division generated strong results in the quarter, driven by resilient institutional fixed income commissions and trading profits, as well as a robust quarter for public finance.    

“The solid performance in our Fixed Income division is a testament to our client-focused business model and our disciplined approach to risk management,” explained Reilly. “We are also excited by the significant additions to strengthen our Life Sciences, Financial Services, Energy and Government Services verticals within Equity Capital Markets during the quarter.” 

Asset Management

• Quarterly net revenues of $98.8 million, up 8 percent compared to the prior year’s fiscal third quarter and 5 percent compared to the preceding quarter

• Quarterly pre-tax income of $31.6 million, up 1 percent compared to both the prior year’s fiscal third quarter and preceding quarter

• Record quarter-end financial assets under management of $70.2 billion, up 8 percent over last year’s June and 1 percent over the preceding quarter

Financial assets under management continue to benefit from synergies with the Private Client Group segment and market appreciation, as the S&P 500 improved 5 percent compared to last year’s June. While the acquisition of Cougar Global Investments Ltd. closed during the quarter, the impact to financial assets under management was relatively modest, as the vast majority of Cougar’s assets are in model delivery programs and therefore not included in financial assets under management.

Raymond James Bank

• Record quarterly net revenues of $103.9 million, an increase of 13 percent compared to the prior year’s fiscal third quarter and a 1 percent increase compared to the preceding quarter

• Record quarterly pre-tax income of $78.0 million, substantial increases of 20 percent compared to the prior year’s fiscal third quarter and 9 percent compared to the preceding quarter

• Net loans of $12.1 billion, up 16 percent compared to the last year’s June and essentially flat compared to the preceding March

The Bank generated record net revenues of $103.9 million and record pre-tax income of $78.0 million in the quarter. Total net loans were essentially flat compared to the preceding March, as a decline in commercial and industrial loans was offset by increases in securities based loans to clients in the Private Client Group and commercial real estate loans. The Bank’s net interest margin in the quarter was 3.09 percent, which improved 21 basis points compared to last year’s June quarter and was flat compared to the preceding March quarter. Notably, the Bank recorded a $3 million loan loss provision benefit in the quarter, driven by net recoveries and a substantial decrease in nonperforming assets, which now represent 46 basis points of total assets, down from 78 basis points in the year-ago June.  

2

Other

Total revenues in the Other segment increased substantially to $28.9 million, which were lifted by an $11 million realized gain on the sale of auction rate securities and $13.1 million of unrealized gains related to indirect private equity investments, of which $2.7 million were attributable to noncontrolling interests.

“We are very pleased with the results we generated this quarter, as we were able to generate attractive returns for our shareholders while also investing significantly in future growth for all of our businesses,” explained Reilly.   

A conference call to discuss the results will take place tomorrow morning, Thursday, July 23, at 8:15 a.m. ET. For a listen only connection, please call: 877-666-1952 (conference code: 83640023), or visit raymondjames.com/analystcall for a live audio webcast. An audio replay of the call will be available until 5:00 p.m. ET on January 15, 2016, under the Investor Relations page of our website at www.raymondjames.com.

About Raymond James Financial, Inc.

Raymond James Financial, Inc. (NYSE: RJF) is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. The company has more than 6,500 financial advisors serving nearly 2.7 million client accounts in more than 2,600 locations throughout the United States, Canada and overseas. Total client assets are approximately $500 billion. Public since 1983, the firm has been listed on the New York Stock Exchange since 1986 under the symbol RJF. Additional information is available atwww.raymondjames.com.

Forward Looking Statements

Certain statements made in this press release and the associated conference call may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions, demand for and pricing of our products, acquisitions and divestitures, anticipated results of litigation and regulatory developments or general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. 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 Forms 10-Q, which are available on 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.

3

Raymond James Financial, Inc. Selected financial highlights (Unaudited)
Summary results of operations
	Three months ended
	June 30, 2015		June 30, 2014		% Change		March 31, 2015		% Change
	($ in thousands, except per share amounts)
Total revenues	$	1,348,713	$	1,241,283	9	%	$	1,312,624	3	%
Net revenues	$	1,320,989	$	1,214,231	9	%	$	1,285,778	3	%
Pre-tax income	$	208,130	$	191,243	9	%	$	180,320	15	%
Net income	$	133,195	$	122,689	9	%	$	113,463	17	%
Earnings per common share:
Basic	$	0.93	$	0.87	7	%	$	0.79	18	%
Diluted	$	0.91	$	0.85	7	%	$	0.77	18	%

	Nine months ended
	June 30, 2015		June 30, 2014		% Change
	($ in thousands, except per share amounts)
Total revenues	$	3,941,181	$	3,654,682	8	%
Net revenues	$	3,859,227	$	3,576,278	8	%
Pre-tax income	$	591,358	$	535,631	10	%
Net income	$	372,954	$	343,882	8	%
Earnings per common share:
Basic	$	2.61	$	2.44	7	%
Diluted	$	2.55	$	2.38	7	%

4

Raymond James Financial, Inc. Consolidated Statements of Income (Unaudited)
	Three months ended
	June 30, 2015			June 30, 2014			% Change		March 31, 2015			% Change
	($ in thousands, except per share amounts)
Revenues:
Securities commissions and fees	$	874,606		$	813,461		8	%	$	860,214		2	%
Investment banking	76,988			78,694			(2	)%	74,240			4	%
Investment advisory fees	96,235			89,080			8	%	91,016			6	%
Interest	137,147			119,391			15	%	134,413			2	%
Account and service fees	113,866			101,585			12	%	111,966			2	%
Net trading profit	16,216			17,276			(6	)%	17,060			(5	)%
Other	33,655			21,796			54	%	23,715			42	%
Total revenues	1,348,713			1,241,283			9	%	1,312,624			3	%
Interest expense	(27,724		)	(27,052		)	2	%	(26,846		)	3	%
Net revenues	1,320,989			1,214,231			9	%	1,285,778			3	%
Non-interest expenses:
Compensation, commissions and benefits	901,342			825,506			9	%	882,234			2	%
Communications and information processing	69,267			63,341			9	%	67,635			2	%
Occupancy and equipment costs	40,269			40,757			(1	)%	41,604			(3	)%
Clearance and floor brokerage	9,648			9,335			3	%	13,588			(29	)%
Business development	40,127			35,079			14	%	42,490			(6	)%
Investment sub-advisory fees	15,293			12,887			19	%	14,987			2	%
Bank loan loss (benefit) provision	(3,009		)	4,467			NM		3,937			NM
Other	46,757			43,926			6	%	43,670			7	%
Total non-interest expenses	1,119,694			1,035,298			8	%	1,110,145			1	%
Income including noncontrolling interests and before provision for income taxes	201,295			178,933			12	%	175,633			15	%
Provision for income taxes	74,935			68,554			9	%	66,857			12	%
Net income including noncontrolling interests	126,360			110,379			14	%	108,776			16	%
Net loss attributable to noncontrolling interests	(6,835		)	(12,310		)	44	%	(4,687		)	(46	)%
Net income attributable to Raymond James Financial, Inc.	$	133,195		$	122,689		9	%	$	113,463		17	%
Net income per common share – basic	$	0.93		$	0.87		7	%	$	0.79		18	%
Net income per common share – diluted	$	0.91		$	0.85		7	%	$	0.77		18	%
Weighted-average common shares outstanding – basic	143,252			140,270					142,320
Weighted-average common and common equivalent shares outstanding – diluted	146,493			143,985					146,050

5

Raymond James Financial, Inc. Consolidated Statements of Income (Unaudited)
	Nine months ended
	June 30, 2015			June 30, 2014			% Change
	($ in thousands, except per share amounts)
Revenues:
Securities commissions and fees	$	2,568,829		$	2,401,360		7	%
Investment banking	228,766			225,802			1	%
Investment advisory fees	286,012			270,590			6	%
Interest	403,669			354,877			14	%
Account and service fees	336,990			296,183			14	%
Net trading profit	42,157			50,269			(16	)%
Other	74,758			55,601			34	%
Total revenues	3,941,181			3,654,682			8	%
Interest expense	(81,954		)	(78,404		)	5	%
Net revenues	3,859,227			3,576,278			8	%
Non-interest expenses:
Compensation, commissions and benefits	2,621,830			2,442,742			7	%
Communications and information processing	196,014			194,698			1	%
Occupancy and equipment costs	121,100			120,339			1	%
Clearance and floor brokerage	32,734			29,165			12	%
Business development	119,607			103,990			15	%
Investment sub-advisory fees	44,535			38,484			16	%
Bank loan loss provision	10,293			8,082			27	%
Other	137,537			128,034			7	%
Total non-interest expenses	3,283,650			3,065,534			7	%
Income including noncontrolling interests and before provision for income taxes	575,577			510,744			13	%
Provision for income taxes	218,404			191,749			14	%
Net income including noncontrolling interests	357,173			318,995			12	%
Net loss attributable to noncontrolling interests	(15,781		)	(24,887		)	37	%
Net income attributable to Raymond James Financial, Inc.	$	372,954		$	343,882		8	%
Net income per common share – basic	$	2.61		$	2.44		7	%
Net income per common share – diluted	$	2.55		$	2.38		7	%
Weighted-average common shares outstanding – basic	142,303			139,747
Weighted-average common and common equivalent shares outstanding – diluted	145,870			143,312

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Raymond James Financial, Inc. Segment Results (Unaudited)
	Three months ended
	June 30, 2015			June 30, 2014				% Change		March 31, 2015			% Change
	($ in thousands)
Total revenues:
Private Client Group	$	894,727		$	822,741		(1)	9	%	$	873,634		2	%
Capital Markets	237,680			237,708			(1)	—		238,921			(1	)%
Asset Management	98,899			91,222				8	%	94,022			5	%
RJ Bank	107,244			93,740				14	%	105,390			2	%
Other (2)	28,890			12,984				123	%	17,806			62	%
Intersegment eliminations	(18,727		)	(17,112		)				(17,149		)
Total revenues	$	1,348,713		$	1,241,283			9	%	$	1,312,624		3	%
Net revenues:
Private Client Group	$	892,162		$	820,223		(1)	9	%	$	870,552		2	%
Capital Markets	233,133			233,204			(1)	—		235,245			(1	)%
Asset Management	98,848			91,216				8	%	94,016			5	%
RJ Bank	103,873			91,556				13	%	102,910			1	%
Other (2)	9,657			(6,541		)		NM		(1,698		)	NM
Intersegment eliminations	(16,684		)	(15,427		)				(15,247		)
Total net revenues	$	1,320,989		$	1,214,231			9	%	$	1,285,778		3	%
Pre-tax income (loss) (excluding noncontrolling interests):
Private Client Group	$	86,363		$	81,473			6	%	$	75,420		15	%
Capital Markets	18,287			28,009				(35	)%	20,848			(12	)%
Asset Management	31,554			31,306				1	%	31,095			1	%
RJ Bank	78,008			64,921				20	%	71,264			9	%
Other (2)	(6,082		)	(14,466		)		58	%	(18,307		)	67	%
Pre-tax income (excluding noncontrolling interests)	$	208,130		$	191,243			9	%	$	180,320		15	%

Continued on next page

(the text of the footnotes in the above table are on the following page)

7

Raymond James Financial, Inc. Segment Results (Unaudited) (continued from previous page)
	Nine months ended
	June 30, 2015			June 30, 2014				% Change
	($ in thousands)
Total revenues:
Private Client Group	$	2,617,604		$	2,423,071		(1)	8	%
Capital Markets	711,775			704,374			(1)	1	%
Asset Management	292,551			274,772				6	%
RJ Bank	315,590			264,770				19	%
Other (2)	56,462			37,055				52	%
Intersegment eliminations	(52,801		)	(49,360		)
Total revenues	$	3,941,181		$	3,654,682			8	%
Net revenues:
Private Client Group	$	2,607,929		$	2,415,597		(1)	8	%
Capital Markets	700,180			692,823			(1)	1	%
Asset Management	292,488			274,753				6	%
RJ Bank	307,301			258,702				19	%
Other (2)	(1,653		)	(21,347		)		92	%
Intersegment eliminations	(47,018		)	(44,250		)
Total net revenues	$	3,859,227		$	3,576,278			8	%
Pre-tax income (loss) (excluding noncontrolling interests):
Private Client Group	$	254,527		$	230,098			11	%
Capital Markets	66,788			91,025				(27	)%
Asset Management	102,445			93,006				10	%
RJ Bank	213,628			178,777				19	%
Other (2)	(46,030		)	(57,275		)		20	%
Pre-tax income (excluding noncontrolling interests)	$	591,358		$	535,631			10	%

The text of the footnotes to the above table and to the table on the previous page are as follows:

(1) Certain prior period amounts have been reclassified to conform to the current period’s presentation.

(2) The Other segment includes the results of our principal capital and private equity activities as well as various corporate overhead costs of RJF.

8

Raymond James Financial, Inc. Selected key metrics (Unaudited)
Details of certain key revenue and expense components:
	Three months ended
	June 30, 2015				June 30, 2014				% Change		March 31, 2015			% Change
	($ in thousands)
Securities commissions and fees:
PCG segment securities commissions and fees	$	750,430			$	691,600			9	%	$	730,936		3	%
Capital Markets segment institutional sales commissions:
Equity commissions	54,575				65,089				(16	)%	59,913			(9	)%
Fixed Income commissions	75,557				61,652				23	%	75,066			1	%
All other segments	75				70				7	%	70			7	%
Intersegment eliminations	(6,031		)		(4,950		)				(5,771		)
Total securities commissions and fees	$	874,606			$	813,461			8	%	$	860,214		2	%
Investment banking revenues:
Equity:
Underwritings	$	22,466			$	26,171			(14	)%	$	15,651		44	%
Mergers & acquisitions and advisory fees	31,136				24,894				25	%	41,086			(24	)%
Fixed Income investment banking revenues	10,897				13,795				(21	)%	9,135			19	%
Tax credit funds syndication fees	12,345				13,460				(8	)%	8,260			49	%
Other	144				374				(61	)%	108			33	%
Total investment banking revenues	$	76,988			$	78,694			(2	)%	$	74,240		4	%
Other revenues:
Realized/unrealized gain attributable to private equity investments	$	13,126			$	8,047			63	%	$	17,320		(24	)%
Realized gain on sale or redemptions of auction rate securities	11,040			(1)	542				NM		27			NM
All other revenues	9,489				13,207				(28	)%	6,368			49	%
Total other revenues	$	33,655			$	21,796			54	%	$	23,715		42	%
Other expenses:
Losses of real estate partnerships held by consolidated variable interest entities (2)	$	10,600			$	12,126		(3)	(13	)%	$	11,110		(5	)%
All other expenses	36,157				31,800			(3)	14	%	32,560			11	%
Total other expenses	$	46,757			$	43,926			6	%	$	43,670		7	%
Net (loss) income attributable to noncontrolling interests:
Private equity investments	$	2,659			$	(965	)		NM		$	5,731		(54	)%
Consolidation of low-income housing tax credit funds	(10,898		)		(12,408		)		12	%	(11,922		)	9	%
Other	1,404				1,063				32	%	1,504			(7	)%
Total net loss attributable to noncontrolling interests	$	(6,835	)		$	(12,310	)		44	%	$	(4,687	)	(46	)%

Continued on next page

(the text of the footnotes in the above table are on the following page)

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Raymond James Financial, Inc. Selected key metrics (Unaudited) (continued from previous page)
Details of certain key revenue and expense components:
	Nine months ended
	June 30, 2015				June 30, 2014				% Change
	($ in thousands)
Securities commissions and fees:
PCG segment securities commissions and fees	$	2,188,050			$	2,032,640			8	%
Capital Markets segment institutional sales commissions:
Equity commissions	184,702				197,128				(6	)%
Fixed Income commissions	214,567				188,885				14	%
All other segments	220				248				(11	)%
Intersegment eliminations	(18,710		)		(17,541		)
Total securities commissions and fees	$	2,568,829			$	2,401,360			7	%
Investment banking revenues:
Equity:
Underwritings	$	56,282			$	68,072		(3)	(17	)%
Mergers & acquisitions and advisory fees	119,633				93,647				28	%
Fixed Income investment banking revenues	28,407				38,868				(27	)%
Tax credit funds syndication fees	24,195				25,229			(3)	(4	)%
Other	249				(14		)		NM
Total investment banking revenues	$	228,766			$	225,802			1	%
Other revenues:
Realized/unrealized gain attributable to private equity investments	$	35,646			$	17,208			107	%
Realized gain on sale or redemptions of auction rate securities	11,067			(1)	6,170			(4)	79	%
All other revenues	28,045				32,223				(13	)%
Total other revenues	$	74,758			$	55,601			34	%
Other expenses:
Losses of real estate partnerships held by consolidated variable interest entities (2)	$	29,683			$	33,338			(11	)%
All other expenses	107,854				94,696				14	%
Total other expenses	$	137,537			$	128,034			7	%
Net (loss) income attributable to noncontrolling interests:
Private equity investments	$	11,079			$	5,737			93	%
Consolidation of low-income housing tax credit funds	(31,508		)		(38,090		)		17	%
Other	4,648				7,466				(38	)%
Total net loss attributable to noncontrolling interests	$	(15,781	)		$	(24,887	)		37	%

The text of the footnotes to the above table and to the table on the previous page are as follows:

(1) Total for the three and nine months ended June 30, 2015 includes an $11 million realized gain on the sale of Jefferson County, Alabama Limited Obligation School Warrants auction rate securities.

(2) Nearly all of these losses are attributable to noncontrolling interests. After adjusting for the portion attributable to noncontrolling interests, RJF’s share of these losses is insignificant in all periods presented.

(3) Certain prior period amounts have been reclassified to conform to the current period’s presentation.

(4) Total for the nine months ended June 30, 2014 includes a $5.5 million realized gain on the December 2013 redemption by the issuer of Jefferson County, Alabama Sewer Revenue Refunding Warrants auction rate securities that resulted from the resolution of the Jefferson County, Alabama bankruptcy proceedings.

10

Raymond James Financial, Inc.

Selected key metrics

(Unaudited)

Selected key financial metrics:
	As of
	June 30, 2015				June 30, 2014			March 31, 2015
Total assets	$	24.8	bil.		$	23.1	bil.	$	25.0	bil.
Shareholders’ equity (attributable to RJF)	$	4,473	mil.		$	4,015	mil.	$	4,375	mil.
Book value per share	$	31.16			$	28.59		$	30.69
Tangible book value per share (a non-GAAP measure) (1)	$	28.81			$	26.15		$	28.34
Return on equity - quarter (annualized)	12.0		%		12.4		%	10.5		%
Return on equity - year to date (annualized)	11.5		%		11.9		%	11.3		%
Common equity tier 1 capital ratio	21.1		%	(2)	n/a			19.2		%
Tier 1 capital ratio	21.1		%	(2)	19.6		%	19.2		%
Total capital ratio	22.0		%	(2)	20.5		%	20.1		%
Tier 1 leverage ratio	16.7		%	(2)	15.8		%	16.2		%
Pre-tax margin on net revenues - quarter	15.8		%		15.8		%	14.0		%
Pre-tax margin on net revenues - year to date	15.3		%		15.0		%	15.1		%
Effective tax rate - quarter	36.0		%		35.8		%	37.1		%
Effective tax rate - year to date	36.9		%		35.8		%	37.4		%

Private Client Group financial advisors:
	As of
	June 30, 2015	June 30, 2014	March 31, 2015
Raymond James & Associates	2,541	2,455	2,496
Raymond James Financial Services	3,487	3,320	3,422
Raymond James Limited	385	397	380
Raymond James Investment Services	94	79	86
Total advisors	6,507	6,251	6,384

Selected client asset metrics:
	As of
	June 30, 2015		June 30, 2014		% Change		March 31, 2015		% Change
	($ in billions)
Client assets under administration	$	499.8	$	479.0	4	%	$	495.8	1	%
Private Client Group assets under administration	$	475.4	$	454.1	5	%	$	471.1	1	%
Private Client Group assets in fee-based accounts	$	186.2	$	168.0	11	%	$	182.1	2	%
Financial assets under management	$	70.2	$	65.3	8	%	$	69.4	1	%
Secured client lending (3)	$	3.2	$	2.7	19	%	$	3.0	7	%

(1) Tangible book value per share (a non-GAAP measure) is computed by dividing shareholders’ equity, less goodwill and other intangible assets in the amount of $355 million, $351 million, and $356 million as of June 30, 2015, March 31, 2015, and June 30, 2014, respectively, which are net of their related deferred tax balance in the amounts of $17.4 million, $16.0 million, and $12.8 million as of June 30, 2015, March 31, 2015, and June 30, 2014, respectively, by the number of common shares outstanding. Management believes tangible book value per share is a measure that is useful to investors because it allows them to better assess the capital strength of the company.

(2) Estimated. Basel III rules became effective for RJF on January 1, 2015. The ratios for all periods prior to that date are computed based on Basel 2.5 rules in effect during such periods.

(3) Includes client margin balances held by our broker-dealer subsidiaries and securities based loans available through RJ Bank.

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Raymond James Bank

Selected financial highlights

(Unaudited)

Selected operating data:
	Three months ended
	June 30, 2015			June 30, 2014			% Change	March 31, 2015			% Change
	($ in thousands)
Net interest income	$	102,054		$	87,089		17%	$	99,857		2%
Net revenues	$	103,873		$	91,556		13%	$	102,910		1%
Bank loan loss (benefit) provision	$	(3,009	)	$	4,467		NM	$	3,937		NM
Pre-tax income	$	78,008		$	64,921		20%	$	71,264		9%
Net (recoveries) charge-offs	$	(3,501	)	$	395		NM	$	(131	)	NM
Net interest margin (% earning assets)	3.09		%	2.88		%	7%	3.09		%	—

	Nine months ended
	June 30, 2015			June 30, 2014			% Change
	($ in thousands)
Net interest income	$	298,633		$	253,730		18%
Net revenues	$	307,301		$	258,702		19%
Bank loan loss provision	$	10,293		$	8,082		27%
Pre-tax income	$	213,628		$	178,777		19%
Net (recoveries) charge-offs	$	(3,752	)	$	1,936		NM
Net interest margin (% earning assets)	3.08		%	2.96		%	4%

RJ Bank Balance Sheet data:
	As of
	June 30, 2015				June 30, 2014			March 31, 2015
	($ in thousands)
Total assets (1)	$	13,811,404			$	12,123,100		$	13,761,822
Total equity	$	1,487,147			$	1,254,560		$	1,432,334
Total loans, net	$	12,053,678			$	10,374,274		$	12,060,663
Total deposits (1)	$	11,518,724			$	10,276,206		$	11,692,531
Available for Sale (AFS) securities, at fair value	$	303,824			$	379,529		$	329,878
Net unrealized loss on AFS securities, before tax	$	(4,117	)		$	(7,387	)	$	(4,745	)
Common equity tier 1 capital ratio	13.5		%	(2)	n/a			11.5		%
Tier 1 capital ratio	13.5		%	(2)	11.4		%	11.5		%
Total capital ratio	14.8		%	(2)	12.6		%	12.8		%
Tier 1 leverage ratio	11.1		%	(2)	10.4		%	10.8		%
Commercial and industrial loans (3)	$	6,539,642			$	6,049,340		$	6,813,200
Commercial Real Estate (CRE) and CRE construction loans (3)	$	1,889,047			$	1,683,831		$	1,773,859
Residential mortgage loans (3)	$	1,950,603			$	1,751,310		$	1,966,247
Securities based loans (3)	$	1,391,086			$	907,912		$	1,251,838
Tax-exempt loans (3)	$	385,234			$	94,855		$	361,644
Loans held for sale (3) (4)	$	83,583			$	61,746		$	82,091

Continued on next page

(the text of the footnotes in the above tables are on the following page)

12

Raymond James Bank

Selected financial highlights

(Unaudited)

(continued from previous page)

Credit metrics:
	As of
	June 30, 2015			June 30, 2014			March 31, 2015
	($ in thousands)
Allowance for loan losses	$	160,631		$	142,309		$	160,008
Allowance for loan losses (as % of loans)	1.33		%	1.36		%	1.32		%
Nonperforming loans (5)	$	59,218		$	90,485		$	69,638
Other real estate owned	$	4,892		$	3,740		$	6,451
Total nonperforming assets	$	64,110		$	94,225		$	76,089
Nonperforming assets (as % of total assets)	0.46		%	0.78		%	0.55		%
Total criticized loans (6)	$	263,499		$	247,296		$	210,698
1-4 family residential mortgage loans over 30 days past due (as a % 1-4 family residential loans)	1.85		%	2.49		%	1.81		%

The text of the footnotes to the above table and the tables on the previous page are as follows:

(1) Includes affiliate deposits.

(2) Estimated. Basel III rules became effective for RJ Bank on January 1, 2015. The ratios for all periods prior to that date are computed based on Basel I rules in effect during such periods.

(3) Outstanding loan balances are shown gross of unearned income and deferred expenses.

(4) Primarily comprised of the guaranteed portions of Small Business Administration section 7(a) loans purchased from other financial institutions.

(5) Nonperforming loans includes 90+ days past due plus nonaccrual loans.

(6) Represents the loan balance for all loans in the Special Mention, Substandard, Doubtful and Loss classifications as utilized by the banking regulators. In accordance with its accounting policy, RJ Bank does not have any loan balances within the Loss classification as loans or a portion thereof, which are considered to be uncollectible, are charged-off prior to assignment to this classification.

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