Raymond James Financial 8K Reports Fourth Quarter | RJF 27 Oct 21

EARNINGS RELEASE FINANCIAL SUPPLEMENT

FOURTH QUARTER

AND FISCAL 2021 RESULTS

RAYMOND JAMES FINANCIAL, INC.

Consolidated Statements of Income (Unaudited)


	Three months ended										% change from				Twelve months ended
in millions, except per share amounts	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		September 30, 2020		June 30, 2021		September 30, 2020		September 30, 2021		% change
Revenues:
Asset management and related administrative fees	$	1,006	$	1,067	$	1,173	$	1,262	$	1,366	36	%	8	%	$	3,834	$	4,868	27	%
Brokerage revenues:
Securities commissions	352		381		443		415		412		17	%	(1)	%	1,468		1,651		12	%
Principal transactions	143		147		148		137		129		(10)	%	(6)	%	488		561		15	%
Total brokerage revenues	495		528		591		552		541		9	%	(2)	%	1,956		2,212		13	%
Account and service fees	140		145		159		161		170		21	%	6	%	624		635		2	%
Investment banking	222		261		242		276		364		64	%	32	%	650		1,143		76	%
Interest income	201		203		200		205		215		7	%	5	%	1,000		823		(18)	%
Other (1)	57		56		44		55		74		30	%	35	%	104		229		120	%
Total revenues	2,121		2,260		2,409		2,511		2,730		29	%	9	%	8,168		9,910		21	%
Interest expense	(42)		(38)		(37)		(40)		(35)		(17)	%	(13)	%	(178)		(150)		(16)	%
Net revenues	2,079		2,222		2,372		2,471		2,695		30	%	9	%	7,990		9,760		22	%
Non-interest expenses:
Compensation, commissions and benefits	1,415		1,500		1,648		1,661		1,774		25	%	7	%	5,465		6,583		20	%
Non-compensation expenses:
Communications and information processing	100		99		107		109		114		14	%	5	%	393		429		9	%
Occupancy and equipment	57		57		57		58		60		5	%	3	%	225		232		3	%
Business development	28		23		21		31		36		29	%	16	%	134		111		(17)	%
Investment sub-advisory fees	26		28		31		34		37		42	%	9	%	101		130		29	%
Professional fees	23		30		24		26		32		39	%	23	%	91		112		23	%
Bank loan provision/(benefit) for credit losses (2)	45		14		(32)		(19)		5		(89)	%	NM		233		(32)		NM
Losses on extinguishment of debt (3)	—		—		—		98		—		—	%	(100)	%	—		98		NM
Acquisition and disposition-related expenses (4)	7		2		—		7		10		43	%	43	%	7		19		171	%
Reduction in workforce expenses (5)	46		—		—		—		—		(100)	%	—	%	46		—		(100)	%
Other (1)	76		70		69		81		67		(12)	%	(17)	%	243		287		18	%
Total non-compensation expenses	408		323		277		425		361		(12)	%	(15)	%	1,473		1,386		(6)	%
Total non-interest expenses	1,823		1,823		1,925		2,086		2,135		17	%	2	%	6,938		7,969		15	%
Pre-tax income	256		399		447		385		560		119	%	45	%	1,052		1,791		70	%
Provision for income taxes	47		87		92		78		131		179	%	68	%	234		388		66	%
Net income	$	209	$	312	$	355	$	307	$	429	105	%	40	%	$	818	$	1,403	72	%

Earnings per common share – basic (6) (7)	$	1.02	$	1.52	$	1.72	$	1.49	$	2.08	104	%	40	%	$	3.96	$	6.81	72	%
Earnings per common share – diluted (6) (7)	$	1.00	$	1.48	$	1.68	$	1.45	$	2.02	102	%	39	%	$	3.88	$	6.63	71	%
Weighted-average common shares outstanding – basic (7)	205.4		205.2		206.7		205.8		205.5		—	%	—	%	206.4		205.7		—	%
Weighted-average common and common equivalent shares outstanding – diluted (7)	209.4		209.6		211.8		211.7		211.7		1	%	—	%	210.3		211.2		—	%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Consolidated Selected Key Metrics (Unaudited)


	As of																% change from
$ in millions, except per share amounts	September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021				September 30, 2020		June 30, 2021
Total assets	$	47,482		$	53,657		$	56,066		$	57,161		$	61,891			30	%	8	%
Total equity attributable to Raymond James Financial, Inc.	$	7,114		$	7,363		$	7,592		$	7,863		$	8,245			16	%	5	%
Book value per share (7) (8)	$	34.72		$	35.73		$	36.89		$	38.28		$	40.08			15	%	5	%
Tangible book value per share (7) (8) (9)	$	31.96		$	31.95		$	32.94		$	34.36		$	36.11			13	%	5	%

Capital ratios:
Tier 1 capital	24.2		%	23.4		%	23.6		%	24.4		%	25.0		%	(10)
Total capital	25.4		%	24.6		%	24.7		%	25.6		%	26.2		%	(10)
Tier 1 leverage	14.2		%	12.9		%	12.2		%	12.6		%	12.6		%	(10)


	Three months ended														% change from				Twelve months ended
$ in millions	September 30, 2020			December 31, 2020			March 31, 2021		June 30, 2021			September 30, 2021			September 30, 2020		June 30, 2021		September 30, 2020			September 30, 2021			% change
Adjusted pre-tax income (9)	$	309		$	401		NA		$	490		$	570		84	%	16	%	$	1,105		$	1,908		73	%
Adjusted net income (9)	$	249		$	314		NA		$	386		$	437		76	%	13	%	$	858		$	1,492		74	%
Adjusted earnings per common share - basic (6) (7) (9)	$	1.21		$	1.53		NA		$	1.88		$	2.12		75	%	13	%	$	4.15		$	7.24		74	%
Adjusted earnings per common share - diluted (6) (7) (9)	$	1.19		$	1.49		NA		$	1.82		$	2.06		73	%	13	%	$	4.08		$	7.05		73	%
Return on equity (11)	11.9		%	17.2		%	19.0	%	15.9		%	21.3		%					11.9		%	18.4		%
Adjusted return on equity (9) (11)	14.1		%	17.3		%	NA		19.9		%	21.7		%					12.5		%	19.5		%
Return on tangible common equity (9) (11)	12.9		%	19.0		%	21.2	%	17.7		%	23.7		%					13.0		%	20.4		%
Adjusted return on tangible common equity (9) (11)	15.3		%	19.1		%	NA		22.2		%	24.1		%					13.6		%	21.6		%
Pre-tax margin (12)	12.3		%	18.0		%	18.8	%	15.6		%	20.8		%					13.2		%	18.4		%
Adjusted pre-tax margin (9) (12)	14.9		%	18.0		%	NA		19.8		%	21.2		%					13.8		%	19.5		%
Total compensation ratio (13)	68.1		%	67.5		%	69.5	%	67.2		%	65.8		%					68.4		%	67.4		%
Effective tax rate	18.4		%	21.8		%	20.6	%	20.3		%	23.4		%					22.2		%	21.7		%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Consolidated Selected Key Metrics (Unaudited)


	As of										% change from
	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		September 30, 2020		June 30, 2021
Client asset metrics ($ in billions):
Client assets under administration	$	930.1	$	1,024.8	$	1,085.4	$	1,165.0	$	1,178.7	27	%	1	%
Private Client Group assets under administration	$	883.3	$	974.2	$	1,028.1	$	1,102.9	$	1,115.4	26	%	1	%
Private Client Group assets in fee-based accounts	$	475.3	$	532.7	$	567.6	$	616.7	$	627.1	32	%	2	%
Financial assets under management	$	153.1	$	169.6	$	178.2	$	191.0	$	191.9	25	%	—	%

Clients' domestic cash sweep balances ($ in millions):
Raymond James Bank Deposit Program (“RJBDP”): (14)
Raymond James Bank	$	25,599	$	26,697	$	28,174	$	29,253	$	31,410	23	%	7	%
Third-party banks	25,998		26,142		25,110		25,080		24,496		(6)	%	(2)	%
Subtotal RJBDP	51,597		52,839		53,284		54,333		55,906		8	%	3	%

Client Interest Program	3,999		8,769		9,517		8,610		10,762		169	%	25	%
Total clients’ domestic cash sweep balances	$	55,596	$	61,608	$	62,801	$	62,943	$	66,668	20	%	6	%


	Three months ended										Twelve months ended
	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		September 30, 2020		September 30, 2021
Average yield on RJBDP - third-party banks (15)	0.33	%	0.31	%	0.30	%	0.29	%	0.29	%	0.77	%	0.30	%


	As of					% change from
	September 30, 2020	December 31, 2020	March 31, 2021	June 30, 2021	September 30, 2021	September 30, 2020		June 30, 2021
Private Client Group financial advisors:
Employees	3,404	3,387	3,375	3,423	3,461	2	%	1	%
Independent contractors	4,835	4,846	4,952	4,990	5,021	4	%	1	%
Total advisors	8,239	8,233	8,327	8,413	8,482	3	%	1	%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Private Client Group (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		September 30, 2020		June 30, 2021		September 30, 2020		September 30, 2021		% change
Revenues:
Asset management and related administrative fees	$	832	$	885	$	979	$	1,050	$	1,142	37	%	9	%	$	3,162	$	4,056	28	%
Brokerage revenues:
Mutual and other fund products	129		148		183		167		172		33	%	3	%	567		670		18	%
Insurance and annuity products	109		98		109		113		118		8	%	4	%	397		438		10	%
Equities, ETFs, and fixed income products	95		107		121		110		100		5	%	(9)	%	419		438		5	%
Total brokerage revenues	333		353		413		390		390		17	%	—	%	1,383		1,546		12	%
Account and service fees:
Mutual fund and annuity service fees	88		94		99		105		110		25	%	5	%	348		408		17	%
RJBDP fees: (14)
Third-party banks	21		21		19		18		18		(14)	%	—	%	150		76		(49)	%
Raymond James Bank	42		43		44		47		49		17	%	4	%	180		183		2	%
Client account and other fees	33		32		42		39		44		33	%	13	%	129		157		22	%
Total account and service fees	184		190		204		209		221		20	%	6	%	807		824		2	%
Investment banking	12		6		16		11		14		17	%	27	%	41		47		15	%
Interest income	30		30		30		31		32		7	%	3	%	155		123		(21)	%
All other	7		5		8		7		5		(29)	%	(29)	%	27		25		(7)	%
Total revenues	1,398		1,469		1,650		1,698		1,804		29	%	6	%	5,575		6,621		19	%
Interest expense	(4)		(2)		(3)		(2)		(3)		(25)	%	50	%	(23)		(10)		(57)	%
Net revenues	1,394		1,467		1,647		1,696		1,801		29	%	6	%	5,552		6,611		19	%
Non-interest expenses:
Financial advisor compensation and benefits	873		931		1,040		1,082		1,151		32	%	6	%	3,428		4,204		23	%
Administrative compensation and benefits	244		249		260		251		255		5	%	2	%	971		1,015		5	%
Total compensation, commissions and benefits	1,117		1,180		1,300		1,333		1,406		26	%	5	%	4,399		5,219		19	%
Non-compensation expenses	152		147		155		168		173		14	%	3	%	614		643		5	%
Total non-interest expenses	1,269		1,327		1,455		1,501		1,579		24	%	5	%	5,013		5,862		17	%
Pre-tax income	$	125	$	140	$	192	$	195	$	222	78	%	14	%	$	539	$	749	39	%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Capital Markets (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		September 30, 2020		June 30, 2021		September 30, 2020		September 30, 2021		% change
Revenues:
Brokerage revenues:
Fixed income	$	125	$	131	$	142	$	124	$	118	(6)	%	(5)	%	$	421	$	515	22	%
Equity	35		42		34		36		33		(6)	%	(8)	%	150		145		(3)	%
Total brokerage revenues	160		173		176		160		151		(6)	%	(6)	%	571		660		16	%
Investment banking:
Merger & acquisition and advisory	98		149		122		153		215		119	%	41	%	290		639		120	%
Equity underwriting	68		60		67		69		89		31	%	29	%	185		285		54	%
Debt underwriting	43		46		37		43		46		7	%	7	%	133		172		29	%
Total investment banking	209		255		226		265		350		67	%	32	%	608		1,096		80	%
Interest income	3		3		5		4		4		33	%	—	%	25		16		(36)	%
Tax credit fund revenues	33		16		24		17		48		45	%	182	%	83		105		27	%
All other	7		7		4		3		4		(43)	%	33	%	20		18		(10)	%
Total revenues	412		454		435		449		557		35	%	24	%	1,307		1,895		45	%
Interest expense	(2)		(2)		(2)		(3)		(3)		50	%	—	%	(16)		(10)		(38)	%
Net revenues	410		452		433		446		554		35	%	24	%	1,291		1,885		46	%
Non-interest expenses:
Compensation, commissions and benefits	229		252		259		256		288		26	%	13	%	774		1,055		36	%
Acquisition and disposition-related expenses (4)	7		—		—		3		3		(57)	%	—	%	7		6		(14)	%
Other non-compensation expenses	68		71		69		72		80		18	%	11	%	285		292		2	%
Total non-interest expenses	304		323		328		331		371		22	%	12	%	1,066		1,353		27	%
Pre-tax income	$	106	$	129	$	105	$	115	$	183	73	%	59	%	$	225	$	532	136	%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Asset Management (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		September 30, 2020		June 30, 2021		September 30, 2020		September 30, 2021		% change
Revenues:
Asset management and related administrative fees:
Managed programs	$	123	$	129	$	137	$	148	$	156	27	%	5	%	$	481	$	570	19	%
Administration and other	55		59		64		70		74		35	%	6	%	207		267		29	%
Total asset management and related administrative fees	178		188		201		218		230		29	%	6	%	688		837		22	%
Account and service fees	4		4		5		4		5		25	%	25	%	16		18		13	%
All other	2		3		3		3		3		50	%	—	%	11		12		9	%
Net revenues	184		195		209		225		238		29	%	6	%	715		867		21	%
Non-interest expenses:
Compensation, commissions and benefits	43		45		50		43		44		2	%	2	%	177		182		3	%
Non-compensation expenses	63		67		72		77		80		27	%	4	%	254		296		17	%
Total non-interest expenses	106		112		122		120		124		17	%	3	%	431		478		11	%
Pre-tax income	$	78	$	83	$	87	$	105	$	114	46	%	9	%	$	284	$	389	37	%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Raymond James Bank (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		September 30, 2020		June 30, 2021		September 30, 2020		September 30, 2021		% change
Revenues:
Interest income	$	165	$	168	$	165	$	172	$	179	8	%	4	%	$	800	$	684	(15)	%
Interest expense	(11)		(11)		(10)		(11)		(10)		(9)	%	(9)	%	(62)		(42)		(32)	%
Net interest income	154		157		155		161		169		10	%	5	%	738		642		(13)	%
All other	7		10		5		8		7		—	%	(13)	%	27		30		11	%
Net revenues	161		167		160		169		176		9	%	4	%	765		672		(12)	%
Non-interest expenses:
Compensation and benefits	13		12		13		13		13		—	%	—	%	51		51		—	%
Non-compensation expenses:
Bank loan provision/(benefit) for credit losses (2)	45		14		(32)		(19)		5		(89)	%	NM		233		(32)		NM
RJBDP fees to Private Client Group (14)	42		43		44		47		49		17	%	4	%	180		183		2	%
All other	28		27		24		24		28		—	%	17	%	105		103		(2)	%
Total non-compensation expenses	115		84		36		52		82		(29)	%	58	%	518		254		(51)	%
Total non-interest expenses	128		96		49		65		95		(26)	%	46	%	569		305		(46)	%
Pre-tax income	$	33	$	71	$	111	$	104	$	81	145	%	(22)	%	$	196	$	367	87	%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Other (16) (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021		September 30, 2020		June 30, 2021		September 30, 2020		September 30, 2021		% change
Revenues:
Interest income	$	3	$	3	$	3	$	—	$	2	(33)	%	NM		$	30	$	8	(73)	%
Gains/(losses) on private equity investments (1)	12		24		8		24		18		50	%	(25)	%	(28)		74		NM
All other	—		1		2		4		(1)		NM		NM		4		6		50	%
Total revenues	15		28		13		28		19		27	%	(32)	%	6		88		1,367	%
Interest expense	(25)		(24)		(25)		(26)		(21)		(16)	%	(19)	%	(88)		(96)		9	%
Net revenues	(10)		4		(12)		2		(2)		80	%	NM		(82)		(8)		90	%
Non-interest expenses:
Compensation and all other (1)	30		26		36		34		31		3	%	(9)	%	64		127		98	%
Losses on extinguishment of debt (3)	—		—		—		98		—		—	%	(100)	%	—		98		NM
Acquisition and disposition-related expenses (4)	—		2		—		4		7		NM		75	%	—		13		NM
Reduction in workforce expenses (5)	46		—		—		—		—		(100)	%	—	%	46		—		(100)	%
Total non-interest expenses	76		28		36		136		38		(50)	%	(72)	%	110		238		116	%
Pre-tax loss	$	(86)	$	(24)	$	(48)	$	(134)	$	(40)	53	%	70	%	$	(192)	$	(246)	(28)	%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Raymond James Bank Selected Key Metrics (Unaudited)

The following metrics are attributable to our Raymond James Bank banking subsidiary, which is a component of our Raymond James Bank segment.


	As of																% change from
$ in millions	September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021				September 30, 2020		June 30, 2021
Total assets	$	30,610		$	31,580		$	33,221		$	34,576		$	36,481			19	%	6	%
Total equity	$	2,315		$	2,364		$	2,409		$	2,532		$	2,594			12	%	2	%
Bank loans, net	$	21,195		$	21,957		$	22,879		$	23,896		$	24,994			18	%	5	%
Bank loan allowance for credit losses (2)	$	354		$	378		$	345		$	322		$	320			(10)	%	(1)	%
Bank loan allowance for credit losses as a % of loans held for investment (2)	1.65		%	1.71		%	1.50		%	1.34		%	1.27		%
Total nonperforming assets	$	32		$	28		$	31		$	43		$	74			131	%	72	%
Nonperforming assets as a % of total assets	0.10		%	0.09		%	0.09		%	0.12		%	0.20		%
Total criticized loans	$	933		$	899		$	1,001		$	980		$	824			(12)	%	(16)	%
Criticized loans as a % of loans held for investment	4.35		%	4.06		%	4.35		%	4.07		%	3.27		%

Capital ratios:
Tier 1 capital	13.0		%	13.1		%	13.1		%	13.5		%	13.4		%	(10)
Total capital	14.3		%	14.4		%	14.4		%	14.7		%	14.6		%	(10)
Tier 1 leverage	7.7		%	7.5		%	7.5		%	7.5		%	7.5		%	(10)


	Three months ended															% change from				Twelve months ended
$ in millions	September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021			September 30, 2020		June 30, 2021		September 30, 2020			September 30, 2021			% change
Bank loan provision/(benefit) for credit losses (2)	$	45		$	14		$	(32)		$	(19)		$	5		(89)	%	NM		$	233		$	(32)		NM
Net charge-offs	$	26		$	—		$	2		$	4		$	7		(73)	%	75	%	$	98		$	13		(87)	%
Net interest margin (net yield on interest-earning assets)	2.09		%	2.02		%	1.94		%	1.92		%	1.92		%					2.63		%	1.95		%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited)

We utilize certain non-GAAP financial measures as additional measures to aid in, and enhance, the understanding of our financial results and related measures. These non-GAAP financial measures have been separately identified in this document. We believe certain of these non-GAAP financial measures provides useful information to management and investors by excluding certain material items that may not be indicative of our core operating results. We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a comparison of current- and prior-period results. We believe that return on tangible common equity and tangible book value per share are meaningful to investors as they facilitate comparisons of our results to the results of other companies. In the following tables, the tax effect of non-GAAP adjustments reflects the statutory rate associated with each non-GAAP item. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other companies. The following tables provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures for those periods which include non-GAAP adjustments.


	Three months ended												Twelve months ended
$ in millions	September 30, 2020			December 31, 2020			June 30, 2021			September 30, 2021				September 30, 2020			September 30, 2021
Net income	$	209		$	312		$	307		$	429			$	818		$	1,403
Non-GAAP adjustments:
Losses on extinguishment of debt (3)	—			—			98			—				—			98
Acquisition and disposition-related expenses (4)	7			2			7			10				7			19
Reduction in workforce expenses (5)	46			—			—			—				46			—

Pre-tax impact of non-GAAP adjustments	53			2			105			10				53			117
Tax effect of non-GAAP adjustments	(13)			—			(26)			(2)				(13)			(28)
Total non-GAAP adjustments, net of tax	40			2			79			8				40			89
Adjusted net income	$	249		$	314		$	386		$	437			$	858		$	1,492

Pre-tax income	$	256		$	399		$	385		$	560			$	1,052		$	1,791
Pre-tax impact of non-GAAP adjustments (as detailed above)	53			2			105			10				53			117
Adjusted pre-tax income	$	309		$	401		$	490		$	570			$	1,105		$	1,908

Pre-tax margin (12)	12.3		%	18.0		%	15.6		%	20.8		%		13.2		%	18.4		%
Non-GAAP adjustments:
Losses on extinguishment of debt (3)	—		%	—		%	3.9		%	—		%		—		%	1.0		%
Acquisition and disposition-related expenses (4)	0.4		%	—		%	0.3		%	0.4		%		0.1		%	0.1		%
Reduction in workforce expenses (5)	2.2		%	—		%	—		%	—		%		0.5		%	—		%

Total non-GAAP adjustments, net of tax	2.6		%	—		%	4.2		%	0.4		%		0.6		%	1.1		%
Adjusted pre-tax margin (12)	14.9		%	18.0		%	19.8		%	21.2		%		13.8		%	19.5		%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited)

(Continued from previous page)


	Three months ended						Twelve months ended
Earnings per common share (6) (7)	September 30, 2020		December 31, 2020		June 30, 2021		September 30, 2021		September 30, 2020		September 30, 2021





















Basic	$	1.02	$	1.52	$	1.49	$	2.08	$	3.96	$	6.81
Non-GAAP adjustments:
Losses on extinguishment of debt (3)	—		—		0.48		—		—		0.48
Acquisition and disposition-related expenses (4)	0.03		0.01		0.03		0.05		0.03		0.09
Reduction in workforce expenses (5)	0.22		—		—		—		0.22		—

Tax effect of non-GAAP adjustments	(0.06)		—		(0.12)		(0.01)		(0.06)		(0.14)
Total non-GAAP adjustments, net of tax	0.19		0.01		0.39		0.04		0.19		0.43
Adjusted basic	$	1.21	$	1.53	$	1.88	$	2.12	$	4.15	$	7.24

Diluted	$	1.00	$	1.48	$	1.45	$	2.02	$	3.88	$	6.63
Non-GAAP adjustments:
Losses on extinguishment of debt (3)	—		—		0.46		—		—		0.46
Acquisition and disposition-related expenses (4)	0.03		0.01		0.03		0.05		0.03		0.09
Reduction in workforce expenses (5)	0.22		—		—		—		0.22		—

Tax effect of non-GAAP adjustments	(0.06)		—		(0.12)		(0.01)		(0.05)		(0.13)
Total non-GAAP adjustments, net of tax	0.19		0.01		0.37		0.04		0.20		0.42
Adjusted diluted	$	1.19	$	1.49	$	1.82	$	2.06	$	4.08	$	7.05


Book value per share	As of
$ in millions, except per share amounts	September 30, 2020		December 31, 2020		March 31, 2021		June 30, 2021		September 30, 2021
Total equity attributable to Raymond James Financial, Inc.	$	7,114	$	7,363	$	7,592	$	7,863	$	8,245
Less non-GAAP adjustments:
Goodwill and identifiable intangible assets, net	600		834		868		862		882
Deferred tax liabilities, net	(34)		(56)		(56)		(56)		(64)
Tangible common equity attributable to Raymond James Financial, Inc.	$	6,548	$	6,585	$	6,780	$	7,057	$	7,427
Common shares outstanding	204.9		206.1		205.8		205.4		205.7
Book value per share (7) (8)	$	34.72	$	35.73	$	36.89	$	38.28	$	40.08
Tangible book value per share (7) (8) (9)	$	31.96	$	31.95	$	32.94	$	34.36	$	36.11

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Reconciliation of non-GAAP financial measures to GAAP financial measures (Unaudited)

(Continued from previous page)


Return on equity	Three months ended															Twelve months ended
$ in millions	September 30, 2020			December 31, 2020			March 31, 2021			June 30, 2021			September 30, 2021			September 30, 2020			September 30, 2021

Average equity (17)	$	7,040		$	7,239		$	7,478		$	7,728		$	8,054		$	6,860		$	7,635
Impact on average equity of non-GAAP adjustments:
Losses on extinguishment of debt (3)	—			—			NA			49			—			—			39
Acquisition and disposition-related expenses (4)	4			1			NA			4			5			1			6
Reduction in workforce expenses (5)	23			—			NA			—			—			9			—

Tax effect of non-GAAP adjustments	(7)			—			NA			(13)			(1)			(2)			(11)
Adjusted average equity (17)	$	7,060		$	7,240		NA			$	7,768		$	8,058		$	6,868		$	7,669

Average equity (17)	$	7,040		$	7,239		$	7,478		$	7,728		$	8,054		$	6,860		$	7,635
Less:
Average goodwill and identifiable intangible assets, net	601			717			851			865			872			605			809
Average deferred tax liabilities, net	(33)			(45)			(56)			(56)			(60)			(31)			(53)

Average tangible common equity (17)	$	6,472		$	6,567		$	6,683		$	6,919		$	7,242		$	6,286		$	6,879
Impact on average equity of non-GAAP adjustments:
Losses on extinguishment of debt (3)	—			—			NA			49			—			—			39
Acquisition and disposition-related expenses (4)	4			1			NA			4			5			1			6
Reduction in workforce expenses (5)	23			—			NA			—			—			9			—

Tax effect of non-GAAP adjustments	(7)			—			NA			(13)			(1)			(2)			(11)
Adjusted average tangible common equity (17)	$	6,492		$	6,568		NA			$	6,959		$	7,246		$	6,294		$	6,913

Return on equity (11)	11.9		%	17.2		%	19.0		%	15.9		%	21.3		%	11.9		%	18.4		%
Adjusted return on equity (11)	14.1		%	17.3		%	NA			19.9		%	21.7		%	12.5		%	19.5		%
Return on tangible common equity (11)	12.9		%	19.0		%	21.2		%	17.7		%	23.7		%	13.0		%	20.4		%
Adjusted return on tangible common equity (11)	15.3		%	19.1		%	NA			22.2		%	24.1		%	13.6		%	21.6		%

Please refer to the footnotes at the end of this supplement for additional information.

RAYMOND JAMES FINANCIAL, INC.

Footnotes


(1)						Other revenues included $12 million, $24 million, $8 million, $24 million, and $18 million of private equity gains for the three months ended September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, and September 30, 2021, respectively, which were included in our Other segment. Of these amounts, $3 million, $10 million, an insignificant amount, $10 million, and $5 million for three months ended September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, and September 30, 2021, respectively, were attributable to noncontrolling interests and were offset in Other expenses. Other revenues included $28 million of private equity losses and $74 million of private equity gains for the twelve months ended September 30, 2020 and 2021, respectively. Of these amounts, approximately $20 million of the losses and $25 million of the gains for the twelve months ended September 30, 2020 and 2021, respectively, were attributable to noncontrolling interests and were offset in Other expenses.

(2)						The allowances for credit losses as of December 31, 2020, March 31, 2021, June 30, 2021, and September 30, 2021 were determined under the current expected credit loss (“CECL”) model as a result of our October 1, 2020 adoption of new accounting guidance related to the measurement of credit losses on financial instruments. The impact of adoption on October 1, 2020 resulted in an increase in our allowance for credit losses of $42 million (including $25 million related to loans to financial advisors in the Private Client Group, $9 million related to funded bank loans and $8 million related to unfunded lending commitments) and a corresponding reduction in the beginning balance of retained earnings of $35 million, net of tax. The Bank loan provision/(benefit) for credit losses of $14 million, $(32) million, $(19) million, and $5 million for the three months ended December 31, 2020, March 31, 2021, June 30, 2021, and September 30, 2021 respectively, and $(32) million for the twelve months ended September 30, 2021 were determined under the CECL model and represented the provision/(benefit) for credit losses post the CECL adoption date.

(3)						Losses on extinguishment of debt include make-whole premiums, the accelerated amortization of debt issuance costs, and certain legal and other professional fees associated with the redemptions of our $250 million of 5.625% senior notes due 2024 and our $500 million of 3.625% senior notes due 2026 which occurred during our fiscal third quarter of 2021.

(4)						The three and twelve months ended September 30, 2020 included a $7 million loss in our Capital Markets segment related to the sale of our interests in certain entities that operated predominantly in France, which closed during our fiscal first quarter of 2021. Acquisition and disposition-related expenses in our Other segment for our fiscal 2021 periods primarily included professional and integration expenses associated with our acquisitions of NWPS Holdings, Inc., Financo, LLC, and Cebile Capital which were completed in fiscal 2021, and Charles Stanley Group PLC and TriState Capital Holdings, Inc., announced in July 2021 and October 2021, respectively. Acquisition and disposition-related expenses in our Capital Markets segment for our fiscal 2021 periods included amortization expense related to intangible assets with short useful lives primarily associated with our Financo, LLC and Cebile Capital acquisitions.

(5)						Reduction in workforce expenses for the three and twelve months ended September 30, 2020 are associated with position eliminations that occurred in our fiscal fourth quarter of 2020 in response to the economic environment. These expenses were included in our Other segment and primarily consisted of severance and related payroll expenses, as well as expenses related to company-paid benefits.

(6)						Earnings per common share is computed by dividing net income (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period or, in the case of adjusted earnings per common share, computed by dividing adjusted net income (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period.

(7)						During our fiscal fourth quarter of 2021 the Board of Directors approved a 3-for-2 stock split, effected in the form of a 50% stock dividend, payable September 21, 2021. All share and per share information has been retroactively adjusted to reflect this stock split.

(8)						Book value per share is computed by dividing total equity attributable to Raymond James Financial, Inc. by the number of common shares outstanding at the end of each respective period or, in the case of tangible book value per share, computed by dividing tangible common equity by the number of common shares outstanding at the end of each respective period. Tangible common equity is defined as total equity attributable to Raymond James Financial, Inc. less goodwill and intangible assets, net of related deferred taxes.

(9)						These are non-GAAP financial measures. See the schedules on the previous pages for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. There were no non-GAAP adjustments to earnings for the three months ended March 31, 2021.

(10)						Estimated.

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

(12)						Pre-tax margin is computed by dividing pre-tax income by net revenues for each respective period or, in the case of adjusted pre-tax margin, computed by dividing adjusted pre-tax income by net revenues for each respective period.

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

(14)						We earn fees from RJBDP, a multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into interest-bearing deposit accounts at Raymond James Bank and various third-party banks. Fees earned by the Private Client Group on Raymond James Bank deposits are eliminated in consolidation.

(15)						Average yield on RJBDP - third-party banks is computed by dividing annualized RJBDP fees - 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.

(16)						The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, acquisition-related expenses, and certain corporate overhead costs of RJF, including the interest costs on our public debt and any losses on extinguishment of such debt. The Other segment also includes reduction in workforce expenses associated with position eliminations that occurred in our fiscal fourth quarter of 2020 in response to the economic environment.

RAYMOND JAMES FINANCIAL, INC.



(17)						Average equity is computed by adding the total equity attributable to Raymond James Financial, Inc. 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. For the annual period, average equity is computed by adding the total equity attributable to Raymond James Financial, Inc. as of each quarter-end date during the indicated period to the beginning of year total, and dividing by five, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated period to the beginning of year total, and dividing by five. Adjusted average equity is computed by adjusting for the impact on average equity of the non-GAAP adjustments, as applicable for each respective period. Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period.

Raymond James Financial (RJF) 8-KRaymond James Financial Reports Fourth Quarter