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RAYMOND JAMES FINANCIAL, INC.

(RJF)
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RAYMOND JAMES FINANCIAL : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/09/2021 | 12:12pm EST

INDEX

PAGE

Factors affecting "forward-looking statements"                                52
Introduction                                                                  52
Executive overview                                                            52

Reconciliation of non-GAAP financial measures to GAAP financial measures

  56
Segments                                                                      58
Net interest analysis                                                         58
Results of Operations
Private Client Group                                                          63
Capital Markets                                                               67
Asset Management                                                              69
Raymond James Bank                                                            71
Other                                                                         72
Certain statistical disclosures by bank holding companies                   

73

Liquidity and capital resources                                             

74

Statement of financial condition analysis                                   

78

Regulatory                                                                  

78

Critical accounting estimates                                               

79

Recent accounting developments                                                80
Risk management                                                               81


                                       51
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

FACTORS AFFECTING "FORWARD-LOOKING STATEMENTS"


Certain statements made in this Quarterly Report on Form 10-Q may constitute
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include information concerning future
strategic objectives, business prospects, anticipated savings, financial results
(including expenses, earnings, liquidity, cash flow and capital expenditures),
anticipated timing and benefits of our acquisitions and our level of success in
integrating acquired businesses, industry or market conditions, demand for and
pricing of our products, anticipated results of litigation, regulatory
developments, impacts of the COVID-19 pandemic, effects of accounting
pronouncements, and general economic conditions.  In addition, words such as
"believes," "expects," "anticipates," "intends," "estimates," "projects," 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 SEC from
time to time, including our most recent Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q, 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.

INTRODUCTION


The following Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") is intended to help the reader understand the
results of our operations and financial condition. This MD&A is provided as a
supplement to, and should be read in conjunction with, our condensed
consolidated financial statements and accompanying notes to condensed
consolidated financial statements. Where "NM" is used in various percentage
change computations, the computed percentage change has been determined to be
not meaningful.

We operate as a financial holding company and bank holding company. Results in
the businesses in which we operate are highly correlated to general economic
conditions and, more specifically, to the direction of the U.S. equity and fixed
income markets, changes in interest rates, market volatility, corporate and
mortgage lending markets and commercial and residential credit trends. Overall
market conditions, economic, political and regulatory trends, and industry
competition are among the factors which could affect us and which are
unpredictable and beyond our control. These factors affect the financial
decisions made by market participants, including investors, borrowers, and
competitors, impacting their level of participation in the financial markets.
These factors also impact the level of investment banking activity and asset
valuations, which ultimately affect our business results.

EXECUTIVE OVERVIEW

Quarter ended June 30, 2021 compared with the quarter ended June 30, 2020


Net revenues of $2.47 billion increased $637 million, or 35%, and pre-tax income
of $385 million increased $187 million, or 94%, compared with the prior-year
quarter, which was negatively impacted by uncertainty resulting from the onset
of the COVID-19 pandemic. Net income of $307 million increased $135 million, or
78%, and our earnings per diluted share were $2.18, reflecting a 77% increase.
Our annualized return on equity ("ROE") for the quarter was 15.9%, compared with
10.0% in the prior-year quarter, and annualized return on tangible common equity
("ROTCE") was 17.7% (1), compared with 10.9% (1) for the prior-year quarter.

During the quarter, we completed a $750 million, 30-year senior notes offering
at 3.75%, utilizing the proceeds from the offering and cash on hand to
early-redeem our $250 million of 5.625% senior notes due 2024 and our $500
million of 3.625% senior notes due 2026. We recognized losses on the
extinguishment of such notes of $98 million. Excluding these losses and
acquisition-related expenses of $7 million, our adjusted net income was $386
million (1) and our adjusted earnings per diluted share were $2.74 (1). Adjusted
annualized ROE for the quarter was 19.9% (1) and adjusted annualized ROTCE was
22.2% (1). Client assets under administration increased to $1.17 trillion as of
June 30, 2021, a 33% increase over June 30, 2020.



(1)  ROTCE, adjusted net income, adjusted earnings per diluted share, adjusted
annualized ROE and adjusted annualized ROTCE are non-GAAP financial measures.
Please see the "Reconciliation of non-GAAP financial measures to GAAP financial
measures" in this MD&A for a reconciliation of these non-GAAP financial measures
to the most directly comparable GAAP measure, and for other important
disclosures.
                                       52
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

The $637 million, or 35%, increase in net revenues compared with the prior-year
quarter was primarily driven by significantly higher asset management and
related administrative fees, largely attributable to higher PCG assets in
fee-based accounts, and strong investment banking revenues, also significantly
higher than the prior-year quarter. Brokerage revenues were also strong and
increased compared with the prior-year quarter. Revenues in the current-year
quarter included $24 million of private equity valuation gains, of which $10
million were attributable to noncontrolling interests and were offset in other
expenses, compared with insignificant gains in the prior-year quarter.

Compensation, commissions and benefits expense increased $384 million, or 30%,
primarily resulting from the growth in revenues and pre-tax income compared with
the prior-year quarter. Our compensation ratio, or the ratio of compensation,
commissions and benefits expense to net revenues, decreased to 67.2%, compared
with 69.6% for the prior-year quarter, primarily due to a change in the
composition of net revenues compared with the prior-year quarter. Our current
quarter compensation ratio reflected the impact of strong net revenues in the
Capital Markets segment, which had a 57% compensation ratio for the quarter, and
from the private equity valuation gains, which do not have direct compensation
associated with them.

Non-compensation expenses increased $66 million, or 18%, primarily due to the
losses on extinguishment of debt of $98 million described above, the
aforementioned private equity valuation gains attributable to noncontrolling
interests in the current quarter that were offset within other expenses,
acquisition-related expenses, and increased investment sub-advisory fees.
Business development expenses also increased from the very low prior-year
quarter level, primarily due to higher recruiting-related expenses and an
increase in travel, meal and event-related expenses. These increases were offset
by a $100 million decrease in the bank loan provision for credit losses, which
was a benefit of $19 million in the current-year quarter computed under the CECL
methodology compared with a provision of $81 million in the prior-year quarter
computed under the incurred loss methodology.

Our effective income tax rate was 20.3% for our fiscal third quarter of 2021, an
increase compared with a 13.1% effective income tax rate for the prior-year
quarter. Our tax rate in the prior-year quarter was unusually low due to a
significant change in the projected impact of our corporate-owned life insurance
portfolio on our effective tax rate during that quarter, from a large
non-deductible loss projected at March 31, 2020, to a relatively small
non-taxable gain projected as of June 30, 2020 resulting from a significant
rebound in equity markets during our fiscal third quarter of 2020. We expect our
effective tax rate to be approximately 21% in the fiscal fourth quarter of 2021.

The firm ended our fiscal third quarter of 2021 with capital ratios well in
excess of regulatory requirements and substantial liquidity, with approximately
$1.6 billion (1) of cash at the parent company. Pursuant to our Board of
Directors' share repurchase authorization, we repurchased 375,000 shares of
common stock during our fiscal third quarter for $48 million at an average price
of $128.55 per share, leaving $632 million of availability remaining under the
authorization as of June 30, 2021. We expect to continue to be opportunistic in
deploying our capital in future quarters, through a combination of organic
growth, additional share repurchases and acquisitions, as evidenced by the NWPS
and Financo acquisitions, which were announced and completed during fiscal 2021,
and the announced acquisitions of Charles Stanley and Cebile.

Our results for our fiscal third quarter of 2021 were strong and we remain
well-positioned entering our fiscal fourth quarter, with strong capital ratios,
over $1 trillion of client assets under administration, a 9% increase in PCG
fee-based assets from March 31, 2021 to June 30, 2021, and a strong investment
banking backlog. However, we expect to continue to face headwinds from near-zero
short-term interest rates and continued economic uncertainty resulting from the
ongoing COVID-19 pandemic, which continues to evolve as recently experienced
with the rapid spread of the Delta variant. As a result, we may experience
volatility of brokerage revenues and investment banking revenues, which may
negatively impact our ability to sustain the level of revenues in future periods
which were achieved in the current quarter. Although our results during the
quarter were positively impacted by a benefit for credit losses related to our
bank loan portfolio, net loan growth and/or future market deterioration could
result in increased provisions in future quarters. In addition, we expect that
expenses may continue to increase over the next several quarters as business and
event-related travel increase and as we continue to make investments in our
technology and growth.

A summary of our financial results by segment as compared to the prior-year quarter is as follows:


•PCG segment net revenues of $1.70 billion increased 36% and pre-tax income of
$195 million increased 114%. The $447 million increase in net revenues was
primarily attributable to a significant increase in asset management fees due to
higher assets in fee-based accounts at the beginning of the current-year
quarter, and higher brokerage and account and service fee revenues. Non-interest
expenses increased $343 million, or 30%, primarily resulting from an increase in
compensation expenses largely due to the growth in net revenues.

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

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

•Capital Markets net revenues of $446 million increased 38% and pre-tax income
of $115 million increased 85%. The $123 million increase in net revenues was due
to a significant increase in investment banking revenues from both mergers &
acquisition activity and equity underwriting activity compared with the
prior-year quarter, which was negatively impacted by the COVID-19 pandemic.
Non-interest expenses increased $70 million, or 27%, primarily due to higher
compensation expenses resulting from the increase in revenues.

•Asset Management segment net revenues of $225 million increased 38% and pre-tax
income of $105 million increased 75%. The $62 million increase in net revenues
was primarily driven by higher financial assets under management. Non-interest
expenses increased $17 million, or 17%, primarily due to higher investment
sub-advisory fees.

•Raymond James Bank net revenues of $169 million decreased 5%, while pre-tax
income of $104 million increased 643%. The $9 million decrease in net revenues
primarily reflected the negative impact of lower short-term interest rates and a
shift in the composition of interest-earning assets, which more than offset the
growth in interest-earning assets. Non-interest expenses decreased $99 million,
or 60%, primarily due to the $100 million decrease in the bank loan provision
for credit losses.

•The Other segment reflected a pre-tax loss that was $105 million larger than
the loss in the prior-year quarter, due to the aforementioned losses on
extinguishment of debt of $98 million and acquisition-related expenses of $4
million, partially offset by the impact of the private equity gains in the
current-year quarter.

Nine months ended June 30, 2021 compared with the nine months ended June 30, 2020


Net revenues of $7.07 billion increased $1.15 billion, or 20%, and pre-tax
income of $1.23 billion increased $435 million, or 55%. Net income of $974
million increased $365 million, or 60% and our earnings per diluted share were
$6.92, also reflecting a 60% increase. Our annualized ROE for the nine months
ended June 30, 2021 was 17.4%, compared with 11.9% for the prior-year period,
and annualized ROTCE was 19.3% (1), compared with 13.1% (1) for the prior-year
period. Excluding the impact of losses on extinguishment of debt and
acquisition-related expenses, adjusted net income was $1.06 billion and adjusted
earnings per diluted share were $7.50 (1). Adjusted annualized ROE was 18.7% (1)
and adjusted annualized ROTCE was 20.8% (1).

The $1.15 billion increase in net revenues compared with the prior-year period
was primarily driven by higher asset management and related administrative fees,
largely attributable to higher PCG assets in fee-based accounts, as well as
strong investment banking and brokerage revenues, which also increased compared
with the prior-year period. Revenues in the current year also included private
equity gains of $56 million ($20 million attributable to noncontrolling
interests), compared with $40 million of losses in the prior-year period ($23
million attributable to noncontrolling interests). Offsetting these increases
was the negative impact of lower short-term interest rates on our net interest
income and RJBDP fees from third-party banks.

Compensation, commissions and benefits expense increased $759 million, or 19%,
primarily resulting from the growth in revenues and pre-tax income compared with
the prior-year period. Our compensation ratio was 68.1%, compared with 68.5% for
the prior-year period.

Non-compensation expenses decreased $40 million, or 4%, primarily due to a $225
million decrease in the bank loan provision for credit losses, which was a
benefit of $37 million in the current year computed under the CECL methodology
compared with a provision of $188 million in the prior-year period computed
under the incurred loss methodology. Business development expenses also
declined, due to lower travel and event-related expenses as a result of the
COVID-19 pandemic, partially offset by an increase in recruiting-related
expenses. Offsetting these decreases was the aforementioned losses on
extinguishment of debt of $98 million in the current-year period and an increase
in other expenses, primarily due to the change in private equity valuations
attributable to noncontrolling interests compared with the prior-year period.

Our effective income tax rate was 20.9% for the nine months ended June 30, 2021,
a decrease from 23.5% for the prior-year period, primarily due to the impact of
larger non-taxable gains on our corporate-owned life insurance portfolio in the
current-year period.

Pursuant to the Board of Directors' repurchase authorization, we repurchased
982,750 shares of common stock during the nine months ended June 30, 2021 for
approximately $118 million at an average price of approximately $120 per share.


(1)  ROTCE, adjusted net income, adjusted earnings per diluted share, adjusted
annualized ROE and adjusted annualized ROTCE are non-GAAP financial measures.
Please see the "Reconciliation of non-GAAP financial measures to GAAP financial
measures" in this MD&A for a reconciliation of these non-GAAP financial measures
to the most directly comparable GAAP measure, and for other important
disclosures.
                                       54
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

A summary of our financial results by segment as compared to the prior-year period is as follows:


•PCG segment net revenues of $4.81 billion increased 16% and pre-tax income of
$527 million increased 27%. The $652 million increase in net revenues was
primarily attributable to an increase in asset management fees largely due to
higher assets in fee-based accounts at the beginning of each quarterly billing
period within the current-year period, and higher brokerage revenues, partially
offset by decreases in RJBDP fees from third-party banks and net interest income
due to lower short-term interest rates. Non-interest expenses increased $539
million, or 14%, primarily resulting from an increase in compensation expenses
largely due to the growth in revenues.

•Capital Markets net revenues of $1.33 billion increased 51% and pre-tax income
of $349 million increased 193%. The $450 million increase in net revenues was
primarily due to a significant increase in investment banking revenues from both
mergers & acquisition activity and underwriting activity, as well as growth in
fixed income brokerage revenues. Non-interest expenses increased $220 million,
or 29%, due to higher compensation expenses primarily attributable to the
increase in revenues, partially offset by a decrease in business development
expenses.

•Asset Management segment net revenues of $629 million increased 18% and pre-tax
income of $275 million increased 33%. The $98 million increase in net revenues
was primarily driven by higher financial assets under management. Non-interest
expenses increased $29 million, or 9%, primarily due to higher investment
sub-advisory fees.

•Raymond James Bank segment net revenues of $496 million decreased 18%, while
pre-tax income of $286 million increased 75%. The $108 million decrease in net
revenues reflected the negative impact of lower short-term interest rates, which
more than offset the growth in interest-earning assets. Non-interest expenses
decreased $231 million, or 52%, primarily due to a $225 million decrease in the
bank loan provision for credit losses.

•The Other segment reflected a pre-tax loss that was $100 million greater than
the loss in the prior-year period, primarily due to the losses on extinguishment
of debt of $98 million and acquisition-related expenses of $6 million in the
current-year period. These negative impacts were partially offset by the
aforementioned private equity gains compared with losses in the prior-year
period.



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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES


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 include adjusted net income, adjusted earnings
per diluted share, adjusted ROE, ROTCE, and adjusted ROTCE. 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
meaningful comparison of current- and prior-period results. We believe that
ROTCE is meaningful to investors as this measure facilitates comparison 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 financial measures for the periods
indicated.

                                                                      Three months ended       Nine months ended
$ in millions                                                         June 30, 2021                                  June 30, 2021
Net income                                                           $        307                                  $          974
Non-GAAP adjustments:
Losses on extinguishment of debt                                               98                                              98
Acquisition-related expenses                                                    7                                               9
Pre-tax impact of non-GAAP adjustments                                        105                                             107
Tax effect of non-GAAP adjustments                                            (26)                                            (26)
Total non-GAAP adjustments, net of tax                                         79                                              81
Adjusted net income                                                  $        386                                  $        1,055

Earnings per common share - diluted                                  $       2.18                                  $         6.92
Non-GAAP adjustments:
Losses on extinguishment of debt                                             0.69                                            0.70
Acquisition-related expenses                                                 0.05                                            0.06
Tax effect of non-GAAP adjustments                                          (0.18)                                          (0.18)
Total non-GAAP adjustments, net of tax                                       0.56                                            0.58
Adjusted earnings per common share - diluted                         $       2.74                                  $         7.50


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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

                                                        Three months ended June 30,                Nine months ended June 30,
$ in millions                                             2021                  2020                 2021                 2020
Annualized return on equity
Average equity                                      $       7,728           $   6,882          $      7,483           $   6,797
Impact on average equity of non-GAAP
adjustments:
Losses on extinguishment of debt                               49                     NA                 25                     NA
Acquisition-related expenses                                    4                     NA                  2                     NA
Tax effect of non-GAAP adjustments                            (13)                    NA                 (7)                    NA
Adjusted average equity                             $       7,768                     NA       $      7,503                     NA

Average equity                                      $       7,728           $   6,882          $      7,483           $   6,797
Less:
Average goodwill and identifiable intangible
assets, net                                                   865                 603                   791                 606
Average deferred tax liabilities, net                         (56)                (32)                  (51)                (30)
Average tangible common equity                      $       6,919           $   6,311          $      6,743           $   6,221
Impact on average equity of non-GAAP
adjustments:
Losses on extinguishment of debt                               49                     NA                 25                     NA
Acquisition-related expenses                                    4                     NA                  2                     NA
Tax effect of non-GAAP adjustments                            (13)                    NA                 (7)                    NA
Adjusted average tangible common equity             $       6,959                     NA       $      6,763                     NA

Return on equity                                             15.9   %            10.0  %               17.4   %            11.9  %
Adjusted annualized return on equity                         19.9   %                 NA               18.7   %                 NA
Return on tangible common equity                             17.7   %            10.9  %               19.3   %            13.1  %
Adjusted annualized return on tangible common
equity                                                       22.2   %                 NA               20.8   %                 NA



Average equity for the quarterly periods is computed by adding the total 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. Tangible common equity is computed by subtracting
goodwill and identifiable intangible assets, net, along with the associated
deferred tax liabilities, from total equity attributable to RJF. Average equity
for the year-to-date periods is computed by adding the total equity attributable
to RJF as of each quarter-end date during the indicated year-to-date period to
the beginning of the year total, and dividing by four, or in the case of average
tangible common equity, computed by adding tangible common equity as of each
quarter-end date during the indicated year-to-date period to the beginning of
the year total, and dividing by four. 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.

ROE is computed by dividing annualized net income for the period indicated by
average equity for each respective period or, in the case of ROTCE, computed by
dividing annualized net income by average tangible common equity for each
respective period. Adjusted ROE is computed by dividing annualized adjusted net
income by adjusted average equity for each respective period, or in the case of
adjusted ROTCE, computed by dividing annualized adjusted net income by adjusted
average tangible common equity for each respective period.

                                       57
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis


SEGMENTS


We currently operate through five segments. Our business segments are PCG,
Capital Markets, Asset Management and Raymond James Bank. Our Other segment
includes our private equity investments, interest income on certain corporate
cash balances, certain 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 following table presents our consolidated and segment net revenues and pre-tax income/(loss) for the periods indicated.

                                                        Three months ended June 30,                                     Nine months ended June 30,
$ in millions                                   2021                2020              % change                 2021                2020              % change
Total company
Net revenues                              $       2,471          $ 1,834                     35  %       $       7,065          $ 5,911                     20  %
Pre-tax income                            $         385          $   198                     94  %       $       1,231          $   796                     55  %

Private Client Group
Net revenues                              $       1,696          $ 1,249                     36  %       $       4,810          $ 4,158                     16  %
Pre-tax income                            $         195          $    91                    114  %       $         527          $   414                     27  %

Capital Markets
Net revenues                              $         446          $   323                     38  %       $       1,331          $   881                     51  %
Pre-tax income                            $         115          $    62                     85  %       $         349          $   119                    193  %

Asset Management
Net revenues                              $         225          $   163                     38  %       $         629          $   531                     18  %
Pre-tax income                            $         105          $    60                     75  %       $         275          $   206                     33  %

Raymond James Bank
Net revenues                              $         169          $   178                     (5) %       $         496          $   604                    (18) %
Pre-tax income                            $         104          $    14                    643  %       $         286          $   163                     75  %

Other
Net revenues                              $           2          $   (20)                       NM       $          (6)         $   (72)                    92  %
Pre-tax loss                              $        (134)         $   (29)                  (362) %       $        (206)         $  (106)                   (94) %

Intersegment eliminations
Net revenues                              $         (67)         $   (59)                   (14) %       $        (195)         $  (191)                    (2) %



NET INTEREST ANALYSIS

The following table presents the high, low and end of period target federal funds rates for the periods presented.

                                     Target federal funds rate
                          Low               High             End of period
Three months ended
June 30, 2021            0.00%             0.25%              0% - 0.25%
June 30, 2020            0.00%             0.25%              0% - 0.25%
Nine months ended
June 30, 2021            0.00%             0.25%              0% - 0.25%
June 30, 2020            0.00%             2.00%              0% - 0.25%



In response to macroeconomic concerns resulting from the COVID-19 pandemic, the
Federal Reserve decreased its benchmark short-term interest rate in March 2020
to a range of 0-0.25%, a reduction of 150 basis points. These decreases, in
addition to other interest rate cuts implemented during calendar 2019 (225 basis
points in total), have negatively impacted our net interest income, as well as
the fees we earn from third-party banks on client cash balances swept to such
banks as part of the RJBDP which are also sensitive to changes in interest
rates. The negative impact of the decline in short-term interest rates has
outweighed the growth in interest-earning assets and RJBDP balances swept to
third-party banks compared with the prior-year periods. We expect the current
near-zero interest rate environment to continue for the remainder of fiscal 2021
and into fiscal 2022.
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis


Given the relationship between our interest-sensitive assets and liabilities
(primarily held in our PCG, Raymond James Bank and Other segments) and the
nature of fees we earn from third-party banks on the RJBDP, decreases in
short-term interest rates generally result in an overall decrease in our net
earnings, although the magnitude of the impact to the net interest margin
depends on the yields on interest-earning assets relative to the cost of
interest-bearing liabilities, including deposit rates paid to clients on their
cash balances. Conversely, any increases in short-term interest rates and/or
decreases in the deposit rates paid to clients generally have a positive impact
on our earnings.

Refer to the discussion of the specific components of our net interest income
within "Management's Discussion and Analysis - Results of Operations" for our
PCG, Raymond James Bank, and Other segments. 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.

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

Quarter ended June 30, 2021 compared with the quarter ended June 30, 2020

                                                                                                  Three months ended June 30,
                                                                               2021                                                         2020
                                                        Average                               Annualized             Average                               Annualized
                                                         daily                                  average               daily                                  average
$ in millions                                           balance           Interest               rate                balance           Interest               rate
Interest-earning assets:
Cash and cash equivalents                             $     5,644       $       3                    0.20  %       $  6,605          $       4                    0.26  %
Assets segregated pursuant to regulations                   9,016               3                    0.16  %          3,408                  3                    0.36  %
Available-for-sale securities                               8,041              20                    0.96  %          4,437                 23                    2.01  %
Brokerage client receivables                                2,363              19                    3.33  %          2,065                 18                    3.47  %
Bank loans, net of unearned income and deferred
expenses:
Loans held for investment:
C&I loans                                                7,936                 50                    2.51  %          7,957                 58                    2.93  %
CRE loans                                                2,748                 18                    2.59  %          2,610                 19                    2.85  %
REIT loans                                               1,327                  9                    2.53  %          1,412                  9                    2.45  %
Tax-exempt loans                                         1,294                  9                    3.33  %          1,272                  9                    3.34  %
Residential mortgage loans                               5,126                 34                    2.70  %          4,983                 37                    2.97  %
SBL and other                                            5,208                 29                    2.22  %          3,576                 24                    2.59  %
Loans held for sale                                        142                  1                    2.92  %            111                  1                    3.22  %
Total bank loans, net                                   23,781                150                    2.54  %         21,921                157                    2.87  %
All other interest-earning assets                        2,288                 10                    1.51  %          1,964                 12                    2.66  %
Total interest-earning assets                         $ 51,133          $     205                    1.60  %       $ 40,400          $     217                    2.16  %
Interest-bearing liabilities:
Bank deposits:
Savings, money market and NOW accounts                $ 28,908          $       1                    0.02  %       $ 25,060          $       2                    0.02  %
Certificates of deposit                                    883                  4                    1.91  %          1,104                  5                    2.00  %
Total bank deposits                                     29,791                  5                    0.08  %         26,164                  7                    0.10  %
Brokerage client payables                               10,486                  1                    0.03  %          4,751                  3                    0.18  %
Other borrowings                                           860                  4                    2.19  %            891                  5                    2.23  %
Senior notes payable                                     2,211                 25                    4.49  %          2,067                 24                    4.69  %
All other interest-bearing liabilities                     602                  5                    1.12  %            586                  3                    1.10  %
Total interest-bearing liabilities                    $ 43,950          $      40                    0.34  %       $ 34,459          $      42                    0.48  %
Net interest income                                                     $     165                                                    $     175
Firmwide net interest margin (net yield on
interest-earning assets)                                                                             1.31  %                                                      1.75  %
Raymond James Bank net interest margin                                                               1.92  %                                                      2.29  %


Nonaccrual loans are included in the average loan balances in the preceding table. Any payments received for corporate nonaccrual loans are applied entirely to principal. Interest income on residential mortgage nonaccrual loans is recognized on a cash basis.

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

The yield on tax-exempt loans in the preceding table is presented on a taxable-equivalent basis utilizing the applicable federal statutory rates for each of the three months ended June 30, 2021 and 2020.


Increases and decreases in interest income and interest expense result from
changes in average balances (volume) of interest-earning assets and
interest-bearing liabilities, as well as changes in average interest rates. The
following table shows the effect that these factors had on the interest earned
on our interest-earning assets and the interest incurred on our interest-bearing
liabilities. The effect of changes in volume is determined by multiplying the
change in volume by the previous period's average yield/cost. Similarly, the
effect of rate changes is calculated by multiplying the change in average
yield/cost by the previous period's volume. Changes attributable to both volume
and rate have been allocated proportionately.
                                                                                    Three months ended June 30,
                                                                                       2021 compared to 2020
                                                                                     Increase/(decrease) due to
$ in millions                                                                Volume               Rate              Total
Interest income:
Interest-earning assets:
Cash and cash equivalents                                               $       -              $     (1)         $     (1)
Assets segregated pursuant to regulations                                       5                    (5)                -
Available-for-sale securities                                                  18                   (21)               (3)
Brokerage client receivables                                                    2                    (1)                1
Bank loans, net of unearned income and deferred expenses:
Loans held for investment:
C&I loans                                                                       -                    (8)               (8)
CRE loans                                                                       1                    (2)               (1)
REIT loans                                                                      1                    (1)                -
Tax-exempt loans                                                                -                     -                 -
Residential mortgage loans                                                      1                    (4)               (3)
SBL and other                                                                   9                    (4)                5
Loans held for sale                                                             -                     -                 -
Total bank loans, net                                                          12                   (19)               (7)
All other interest-earning assets                                               2                    (4)               (2)
Total interest-earning assets                                           $      39              $    (51)         $    (12)
Interest expense:
Interest-bearing liabilities:
Bank deposits:
Savings, money market and NOW accounts                                  $       -              $     (1)         $     (1)
Certificates of deposit                                                        (1)                    -                (1)
Total bank deposits                                                            (1)                   (1)               (2)
Brokerage client payables                                                       2                    (4)               (2)
Other borrowings                                                                -                    (1)               (1)
Senior notes payable                                                            2                    (1)                1
All other interest-bearing liabilities                                          -                     2                 2
Total interest-bearing liabilities                                      $       3              $     (5)         $     (2)
Change in net interest income                                           $      36              $    (46)         $    (10)


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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

Nine months ended June 30, 2021 compared with the nine months ended June 30,
2020
                                                                                                  Nine months ended June 30,
                                                                               2021                                                         2020
                                                        Average                               Annualized             Average                               Annualized
                                                         daily                                  average               daily                                  average
$ in millions                                           balance           Interest               rate                balance           Interest               rate
Interest-earning assets:
Cash and cash equivalents                             $  5,548          $       9                    0.22  %       $  5,013          $      37                    0.99  %
Assets segregated pursuant to regulations                8,307                 11                    0.18  %          2,853                 25                    1.20  %
Available-for-sale securities                            7,837                 64                    1.08  %          3,654                 60                    2.18  %
Brokerage client receivables                             2,222                 56                    3.38  %          2,290                 66                    3.87  %
Bank loans, net of unearned income and deferred
expenses:
Loans held for investment:
C&I loans                                                7,670                149                    2.57  %          8,012                225                    3.70  %
CRE loans                                                2,665                 52                    2.57  %          2,593                 72                    3.63  %
REIT loans                                               1,290                 25                    2.49  %          1,349                 34                    3.33  %
Tax-exempt loans                                         1,253                 25                    3.34  %          1,236                 25                    3.35  %
Residential mortgage loans                               5,044                103                    2.73  %          4,823                112                    3.09  %
SBL and other                                            4,709                 80                    2.24  %          3,460                 89                    3.37  %
Loans held for sale                                        153                  3                    2.54  %            138                  4                    3.77  %
Total bank loans, net                                   22,784                437                    2.57  %         21,611                561                    3.46  %
All other interest-earning assets                        2,264                 31                    1.79  %          2,329                 50                    2.82  %
Total interest-earning assets                         $ 48,962          $     608                    1.66  %       $ 37,750          $     799                    2.83  %
Interest-bearing liabilities:
Bank deposits:
Savings, money market and NOW accounts                $ 27,732          $       4                    0.02  %       $ 23,190          $      20                    0.11  %
Certificates of deposit                                    911                 13                    1.90  %            993                 15                    2.06  %
Total bank deposits                                     28,643                 17                    0.08  %         24,183                 35                    0.19  %
Brokerage client payables                                9,765                  3                    0.03  %          3,929                  9                    0.31  %
Other borrowings                                           863                 14                    2.20  %            893                 15                    2.23  %
Senior notes payable                                     2,115                 73                    4.62  %          1,742                 61                    4.66  %
All other interest-bearing liabilities                     591                  8                    1.05  %            878                 16                    1.81  %
Total interest-bearing liabilities                    $ 41,977          $     115                    0.36  %       $ 31,625          $     136                    0.56  %
Net interest income                                                     $     493                                                    $     663
Firmwide net interest margin (net yield on
interest-earning assets)                                                                             1.35  %                                                      2.36  %
Raymond James Bank net interest margin                                                               1.96  %                                                      2.82  %


Nonaccrual loans are included in the average loan balances in the preceding table. Any payments received for corporate nonaccrual loans are applied entirely to principal. Interest income on residential mortgage nonaccrual loans is recognized on a cash basis.

The yield on tax-exempt loans in the preceding table is presented on a taxable-equivalent basis utilizing the applicable federal statutory rates for each of the nine months ended June 30, 2021 and 2020.

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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,
                                                                                     2021 compared to 2020
                                                                                   Increase/(decrease) due to
$ in millions                                                              Volume             Rate              Total
Interest income:
Interest-earning assets:
Cash and cash equivalents                                               $      10          $    (38)         $    (28)
Assets segregated pursuant to regulations                                      52               (66)              (14)
Available-for-sale securities                                                  69               (65)                4
Brokerage client receivables                                                   (3)               (7)              (10)
Bank loans, net of unearned income and deferred expenses:
Loans held for investment:
C&I loans                                                                     (11)              (65)              (76)
CRE loans                                                                       1               (21)              (20)
REIT loans                                                                      -                (9)               (9)
Tax-exempt loans                                                                2                (2)                -
Residential mortgage loans                                                      5               (14)               (9)
SBL and other                                                                  27               (36)               (9)
Loans held for sale                                                             1                (2)               (1)
Total bank loans, net                                                          25              (149)             (124)
All other interest-earning assets                                              (4)              (15)              (19)
Total interest-earning assets                                           $     149          $   (340)         $   (191)
Interest expense:
Interest-bearing liabilities:
Bank deposits:
Savings, money market and NOW accounts                                  $       4          $    (20)         $    (16)
Certificates of deposit                                                        (1)               (1)               (2)
Total bank deposits                                                             3               (21)              (18)
Brokerage client payables                                                      15               (21)               (6)
Other borrowings                                                                -                (1)               (1)
Senior notes payable                                                           13                (1)               12
All other interest-bearing liabilities                                         (7)               (1)               (8)
Total interest-bearing liabilities                                      $      24          $    (45)         $    (21)
Change in net interest income                                           $     125          $   (295)         $   (170)




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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis


RESULTS OF OPERATIONS - PRIVATE CLIENT GROUP


For an overview of our PCG segment operations, as well as a description of the
key factors impacting our PCG results of operations, refer to the information
presented in "Item 1 - Business" and "Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations" of our 2020 Form
10-K.

Operating results
                                                              Three months ended June 30,                                 Nine months ended June 30,
$ in millions                                         2021              2020             % change                 2021                2020             % change
Revenues:
Asset management and related administrative
fees                                              $   1,050          $   715                    47  %       $       2,914          $ 2,330                    25  %
Brokerage revenues:
Mutual and other fund products                          167              131                    27  %                 498              438                    14  %
Insurance and annuity products                          113               88                    28  %                 320              288                    11  %
Equities, ETFs and fixed income products                110              100                    10  %                 338              324                     4  %
Total brokerage revenues                                390              319                    22  %               1,156            1,050                    10  %
Account and service fees:
Mutual fund and annuity service fees                    105               82                    28  %                 298              260                    15  %
RJBDP fees:
Third-party banks                                        18               20                   (10) %                  58              129                   (55) %
Raymond James Bank                                       47               43                     9  %                 134              138                    (3) %
Client account and other fees                            39               32                    22  %                 113               96                    18  %
Total account and service fees                          209              177                    18  %                 603              623                    (3) %
Investment banking                                       11                7                    57  %                  33               29                    14  %
Interest income                                          31               31                     -                     91              125                   (27) %
All other                                                 7                4                    75  %                  20               20                     -
Total revenues                                        1,698            1,253                    36  %               4,817            4,177                    15  %
Interest expense                                         (2)              (4)                  (50) %                  (7)             (19)                  (63) %
Net revenues                                          1,696            1,249                    36  %               4,810            4,158                    16  %
Non-interest expenses:
Financial advisor compensation and benefits           1,082              783                    38  %               3,053            2,555                    19  %
Administrative compensation and benefits                251              235                     7  %                 760              727                     5  %
Total compensation, commissions and
benefits                                              1,333            1,018                    31  %               3,813            3,282                    16  %
Non-compensation expenses:
Communications and information processing                70               66                     6  %                 201              187                     7  %
Occupancy and equipment                                  45               42                     7  %                 133              130                     2  %
Business development                                     19               12                    58  %                  50               63                   (21) %
Professional fees                                        10                8                    25  %                  33               25                    32  %
All other                                                24               12                   100  %                  53               57                    (7) %
Total non-compensation expenses                         168              140                    20  %                 470              462                     2  %
Total non-interest expenses                           1,501            1,158                    30  %               4,283            3,744                    14  %
Pre-tax income                                    $     195          $    91                   114  %       $         527          $   414                    27  %




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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

Selected key metrics

PCG client asset balances
                                                                                   As of
                                         June 30,          March 31,          September 30,               June 30,         March 31,         September 30,
$ in billions                              2021               2021                2020                      2020             2020                2019
Assets under administration
("AUA")                                $ 1,102.9          $ 1,028.1          $      883.3                $ 833.1          $  734.0          $      

798.4

Assets in fee-based accounts (1) $ 616.7 $ 567.6

  $      475.3                $ 443.0          $  383.5          $      

409.1

Percent of AUA in fee-based
accounts                                    55.9  %            55.2  %               53.8  %                53.2  %           52.2  %               51.2  %


(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."

Fee-based accounts within our PCG segment are comprised of a wide array of
products and programs that we offer our clients. The majority of assets in
fee-based accounts within our PCG segment are invested in programs for which our
financial advisors provide investment advisory services, either on a
discretionary or non-discretionary basis. Administrative services for such
accounts (e.g., record-keeping) are generally performed by our Asset Management
segment and, as a result, a portion of the related revenues is shared with the
Asset Management segment.

We also offer our clients fee-based accounts that are invested in "managed
programs" overseen by AMS, which is part of our Asset Management segment.
Fee-billable assets invested in managed programs are included in both "Assets in
fee-based accounts" in the preceding table and "Financial assets under
management" in the Asset Management segment. Revenues related to managed
programs are shared by our PCG and Asset Management segments. The Asset
Management segment receives a higher portion of the revenues related to accounts
invested in managed programs, as compared to the portion received for
non-managed programs, as it is performing portfolio management services in
addition to administrative services.

The vast majority of the revenues we earn from fee-based accounts are recorded
in "Asset management and related administrative fees" on our Condensed
Consolidated Statements of Income and Comprehensive Income. Fees received from
such accounts are based on the value of client assets in fee-based accounts and
vary based on the specific account types in which the client invests and the
level of assets in the client relationship. As fees for substantially all of
such accounts are billed based on balances as of the beginning of the quarter,
revenues from fee-based accounts may not be immediately affected by changes in
asset values, but rather the impacts are seen in the following quarter.

PCG assets under administration increased during the three months ended June 30,
2021, primarily due to equity market appreciation, as well as net inflows of
client assets. In addition, PCG assets in fee-based accounts continued to
increase as a percentage of overall PCG assets under administration due to
clients' increased preference for fee-based alternatives versus
transaction-based accounts. As a result of the shift to fee-based accounts over
the past several years, a larger portion of our PCG revenues are more directly
impacted by market movements.

Financial advisors
                               June 30,       March 31,       September 30,             June 30,
                                 2021           2021              2020                    2020
Employees                      3,423          3,375              3,404                  3,379
Independent contractors        4,990          4,952              4,835                  4,776
Total advisors                 8,413          8,327              8,239                  8,155



The number of financial advisors increased compared with the prior quarter and
September 30, 2020 due to strong recruiting of financial advisors and new
trainees that were moved into production roles, partially offset by the impact
of advisors who left the firm, including planned retirements, where assets are
generally retained at the firm. The growth in the number of financial advisors
has been impacted by the transfer of advisors who were previously affiliated
with the firm as independent contractors or employees to our RIA & Custody
Services ("RCS") division. Advisors in RCS are not included in the financial
advisor count, although their assets are still included in client assets under
administration. The recruiting pipeline remains strong across our affiliation
options despite an increasingly competitive recruiting environment.


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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

Clients' domestic cash sweep balances

                                                                                     As of
                                         June 30,          March 31,           December 31,           September 30,          June 30,
$ in millions                              2021               2021                 2020                   2020                 2020
RJBDP
Raymond James Bank                      $ 29,253          $  28,174          $      26,697          $       25,599          $ 24,101
Third-party banks                         25,080             25,110                 26,142                  25,998            24,661
Subtotal RJBDP                            54,333             53,284                 52,839                  51,597            48,762
CIP                                        8,610              9,517                  8,769                   3,999             3,157
Total clients' domestic cash
sweep balances                          $ 62,943          $  62,801          $      61,608          $       55,596          $ 51,919


                                                        Three months ended June 30,                    Nine months ended June 30,
                                                        2021                   2020                   2021                   2020
Average yield on RJBDP - third-party banks                 0.29  %                0.33  %                0.30  %                 0.97  %



A significant portion of our clients' cash is included in the RJBDP, a
multi-bank sweep program in which clients' cash deposits in their accounts are
swept into interest-bearing deposit accounts at Raymond James Bank and various
third-party banks. We earn servicing fees for the administrative services we
provide related to our clients' deposits that are swept to such banks as part of
the RJBDP. The amounts from third-party banks are variable in nature and
fluctuate based on client cash balances in the program, as well as the level of
short-term interest rates and the interest paid to clients by the third-party
banks on balances in the RJBDP. The "Average yield on RJBDP - third party banks"
in the preceding table is computed by dividing annualized RJBDP fees from
third-party banks, which are net of the interest expense paid to clients by the
third-party banks, by the average daily RJBDP balance at third-party banks. The
PCG segment also earns RJBDP servicing fees from the Raymond James Bank segment,
which are based on the number of accounts that are swept to Raymond James Bank.
The fees from the Raymond James Bank segment are eliminated in consolidation.
PCG segment results are impacted by changes in the allocation of client cash
balances in RJBDP between Raymond James Bank and third-party banks. PCG segment
results are also impacted by changes in the allocation of cash balances between
RJBDP and CIP, as the net yield to the firm on cash balances in CIP (i.e., the
spread between amounts earned on assets segregated for regulatory purposes and
the interest paid to clients on CIP balances) is lower than the yield to the
firm on RJBDP balances, on average.

Client cash balances remained elevated as of June 30, 2021 compared to prior
year balances as a result of a number of factors, including the continuing
economic uncertainty caused by the COVID-19 pandemic, as well as uncertainty
related to the nature and timing of policy changes that may be put forth by the
new federal government administration. The average yield on RJBDP - third-party
banks decreased compared with the prior-year periods due to a decline in
short-term interest rates. We expect the average yield on RJBDP balances at
third-party banks to remain approximately 0.29% for the remainder of our 2021
fiscal year; however, this projected yield could decline in fiscal 2022 if
demand for deposits from third-party banks does not improve from current levels.

Quarter ended June 30, 2021 compared with the quarter ended June 30, 2020

Net revenues of $1.70 billion increased $447 million, or 36%, and pre-tax income of $195 million increased $104 million, or 114%.


Asset management and related administrative fees increased $335 million, or 47%,
primarily due to higher assets in fee-based accounts at the beginning of the
current quarter. As assets in these accounts are billed primarily on balances as
of the beginning of the quarter, the 9% increase in fee-based assets as of
June 30, 2021 compared to March 31, 2021, should positively impact asset
management fees in our fiscal fourth quarter of 2021.

Brokerage revenues increased $71 million, or 22%, due to higher trailing
revenues from mutual and other fund products and annuity products, resulting
from higher asset values in the current quarter, as well as higher transactional
revenues.

Account and service fees increased $32 million, or 18%, primarily due to an
increase in mutual fund service fees, primarily resulting from higher average
mutual fund assets, as well as incremental client account and other fees
resulting from our acquisition of NWPS at the end of our fiscal first quarter of
2021.

Compensation-related expenses increased $315 million, or 31%, primarily due to higher compensable net revenues.

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

Non-compensation expenses increased $28 million, or 20%, in part due to increased recruiting costs and other business development expenses, including travel-related expenses.

Nine months ended June 30, 2021 compared with the nine months ended June 30, 2020

Net revenues of $4.81 billion increased $652 million, or 16%, and pre-tax income of $527 million increased $113 million, or 27%.


Asset management and related administrative fees increased $584 million, or 25%,
primarily due to higher assets in fee-based accounts at the beginning of each of
the current-year quarterly billing periods compared with the prior-year
quarterly billing periods.

Brokerage revenues increased $106 million, or 10%, primarily due to higher trailing revenues from mutual and other fund products and annuity products, resulting from higher average asset values, as well as higher transactional revenues due to increased client activity.


Account and service fees decreased $20 million, or 3%, primarily due to a
decline in RJBDP fees from third-party banks as a result of lower short-term
interest rates. Partially offsetting this decrease was an increase in mutual
fund service fees, resulting from higher average mutual fund assets, as well as
incremental client account and other fees resulting from our acquisition of NWPS
at the end of our fiscal first quarter of 2021.

Net interest income decreased $22 million, or 21%, driven by a decline in
interest income due to lower short-term interest rates applicable to both cash
and segregated asset balances, which more than offset the impact of higher
segregated asset balances. Our CIP balances increased significantly compared
with the prior-year period resulting in the increase in segregated assets, and a
majority of the increase was held in segregated short-term U.S. Treasury
securities at very low interest rates. Partially offsetting the impact of a
decrease in interest income, interest expense also decreased, despite the
significant increase in client cash balances in our CIP, due to the impact of
lower deposit rates paid on these balances.

Compensation-related expenses increased $531 million, or 16%, primarily due to higher compensable net revenues.


Non-compensation expenses increased $8 million, or 2%, largely due to higher
communications and information processing expenses, partially offset by lower
business development expenses due to limited travel and event-related expenses
during the COVID-19 pandemic.

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis


RESULTS OF OPERATIONS - CAPITAL MARKETS


For an overview of our Capital Markets segment operations, as well as a
description of the key factors impacting our Capital Markets results of
operations, refer to the information presented in "Item 1 - Business" and "Item
7 - Management's Discussion and Analysis of Financial Condition and Results of
Operations" of our 2020 Form 10-K.

Operating results
                                                                  Three months ended June 30,                                   Nine months ended June 30,
$ in millions                                              2021               2020             % change                 2021               2020             % change
Revenues:
Brokerage revenues:
Fixed income                                         $         124          $  125                    (1) %       $         397          $  296                    34  %
Equity                                                          36              41                   (12) %                 112             115                    (3) %
Total brokerage revenues                                       160             166                    (4) %                 509             411                    24  %
Investment banking:
Merger & acquisition and advisory                              153              60                   155  %                 424             192                   121  %
Equity underwriting                                             69              35                    97  %                 196             117                    68  %
Debt underwriting                                               43              37                    16  %                 126              90                    40  %
Total investment banking                                       265             132                   101  %                 746             399                    87  %
Interest income                                                  4               4                     -                     12              22                   (45) %
Tax credit fund revenues                                        17         
    20                   (15) %                  57              50                    14  %
All other                                                        3               3                     -                     14              13                     8  %
Total revenues                                                 449             325                    38  %               1,338             895                    49  %
Interest expense                                                (3)             (2)                   50  %                  (7)            (14)                  (50) %
Net revenues                                                   446             323                    38  %               1,331             881                    51  %
Non-interest expenses:
Compensation, commissions and benefits                         256             195                    31  %                 767             545                    41  %
Non-compensation expenses:
Communications and information processing                       22              19                    16  %                  61              58                     5  %
Occupancy and equipment                                          9               9                     -                     27              27                     -
Business development                                             8               7                    14  %                  23              38                   (39) %
Professional fees                                               12              12                     -                     38              35                     9  %
Acquisition-related expenses                                     3               -                       NM                   3               -                       NM
All other                                                       21              19                    11  %                  63              59                     7  %
Total non-compensation expenses                                 75              66                    14  %                 215             217                    (1) %
Total non-interest expenses                                    331             261                    27  %                 982             762                    29  %
Pre-tax income                                       $         115          $   62                    85  %       $         349          $  119                   193  %


Quarter ended June 30, 2021 compared with the quarter ended June 30, 2020

Net revenues of $446 million increased $123 million, or 38%, and pre-tax income of $115 million increased $53 million, or 85%.


Brokerage revenues decreased $6 million, or 4%, primarily due to a decrease in
equity brokerage revenues, as uncertainty related to the onset of the COVID-19
pandemic drove high levels of client activity in the prior-year quarter.
Similarly, fixed income brokerage revenues continued to be strong but were
slightly lower than the prior-year quarter.

Investment banking revenues increased $133 million, or 101%, compared with the
prior-year quarter, due to a combination of strong results in the current
quarter, and a prior-year quarter which had been negatively impacted by a
slowdown in activity during the onset of the COVID-19 pandemic. Merger &
acquisition and advisory revenues increased significantly compared with the
prior-year quarter, due to an increase in both the number and size of
transactions, and reflected strong activity in both the U.S. and U.K. Equity
underwriting revenues increased significantly, primarily due to higher levels of
client activity and larger transactions in the current quarter. Debt
underwriting revenues also increased, due to higher revenues from corporate
underwritings, partially offset by lower revenues from public finance and
asset-backed transactions. In addition to the strong results during the quarter,
our investment banking pipelines remain strong and, in part, reflect the
investments we have made
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

over the past several years, which has positioned us to enhance our services to
our clients. The most recent example of such investments is our acquisition of
Financo which closed at the end of our fiscal second quarter of 2021.

Compensation-related expenses increased $61 million, or 31%, primarily due to the increase in revenues.


Non-compensation expenses increased $9 million, or 14%, and included $3 million
of acquisition-related expenses, comprised of the amortization expense related
to intangible assets with short useful lives which arose in our acquisition of
Financo.

Nine months ended June 30, 2021 compared with the nine months ended June 30, 2020

Net revenues of $1.33 billion increased $450 million, or 51%, and pre-tax income of $349 million increased $230 million, or 193%.


Brokerage revenues increased $98 million, or 24%, due to a significant increase
in fixed income brokerage revenues as a result of an increase in client activity
levels throughout the current-year period. The significant increase in client
activity levels, particularly with depository clients, began toward the end of
our fiscal second quarter of fiscal 2020.

Investment banking revenues increased $347 million, or 87%, due to a significant
increase in merger & acquisition and advisory revenues and underwriting
revenues. The significant increase in merger & acquisition and advisory revenues
reflected larger individual transactions and an increase in the number of
transactions, as the current-year period reflected high levels of client
activity, while the prior-year period was impacted by low levels of client
activity during the onset of the pandemic. Equity underwriting revenues also
increased significantly, primarily due to an increase in market activity in both
the U.S. and Canada. An increase in debt underwriting primarily reflected higher
revenues from corporate and asset-backed underwritings, partially offset by
lower revenues from public finance transactions.

Compensation-related expenses increased $222 million, or 41%, primarily due to the increase in net revenues.


Non-compensation expenses decreased $2 million, or 1%, primarily due to lower
travel and event-related expenses as a result of the COVID-19 pandemic,
partially offset by smaller increases across various expense categories,
including the aforementioned acquisition-related expenses associated with the
Financo acquisition.

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis


RESULTS OF OPERATIONS - ASSET MANAGEMENT


For an overview of our Asset Management segment operations as well as a
description of the key factors impacting our Asset Management results of
operations, refer to the information presented in "Item 1 - Business" and "Item
7 - Management's Discussion and Analysis of Financial Condition and Results of
Operations" of our 2020 Form 10-K.

Operating results
                                                               Three months ended June 30,                                   Nine months ended June 30,
$ in millions                                           2021               2020             % change                 2021               2020             % change
Revenues:
Asset management and related administrative
fees:
Managed programs                                  $         148          $  109                    36  %       $         414          $  358                    16  %
Administration and other                                     70              48                    46  %                 193             152                    27  %
Total asset management and related
administrative fees                                         218             157                    39  %                 607             510                    19  %
Account and service fees                                      4               3                    33  %                  13              12                     8  %
All other                                                     3               3                     -                      9               9                     -
Net revenues                                                225             163                    38  %                 629             531                    18  %
Non-interest expenses:
Compensation, commissions and benefits                       43              44                    (2) %                 138             134                     3  %
Non-compensation expenses:
Communications and information processing                    12              10                    20  %                  35              33                     6  %
Investment sub-advisory fees                                 33              23                    43  %                  91              74                    23  %
All other                                                    32              26                    23  %                  90              84                     7  %
Total non-compensation expenses                              77              59                    31  %                 216             191                    13  %
Total non-interest expenses                                 120             103                    17  %                 354             325                     9  %
Pre-tax income                                    $         105          $   60                    75  %       $         275          $  206                    33  %



Selected key metrics

Managed programs

Management fees recorded in our Asset Management segment are generally
calculated as a percentage of the value of our fee-billable financial assets
under management ("AUM"). These AUM include the portion of fee-based AUA in our
PCG segment that is invested in programs overseen by our Asset Management
segment (included in the "AMS" line of the following table), as well as retail
accounts managed on behalf of third-party institutions, institutional accounts
and proprietary mutual funds that we manage (collectively included in the
"Carillon Tower Advisers" line of the following table).

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 clients are
invested in assets that are in managed programs overseen by our Asset Management
segment and the administrative services provided (see our "Management's
Discussion and Analysis - Results of Operations - Private Client Group" for more
information). Our AUM in AMS are impacted by market fluctuations and net inflows
or outflows of assets, as well as transfers between fee-based accounts and
transaction-based accounts within our PCG segment.

Revenues earned by Carillon Tower Advisers for retail accounts managed on behalf
of third-party institutions, institutional accounts and our proprietary mutual
funds are recorded entirely in the Asset Management segment. Our AUM in Carillon
Tower Advisers are impacted by market and investment performance and net inflows
or outflows of assets.

Fees for our managed programs are generally collected quarterly. Approximately 65% of these fees are based on balances as of the beginning of the quarter, approximately 10% are based on balances as of the end of the quarter, and approximately 25% are based on average daily balances throughout the quarter.

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

Financial assets under management

                                     June 30,           March 31,           September 30,          June 30,           March 31,           September 30,
$ in billions                          2021               2021                  2020                 2020               2020                  2019
AMS (1)                             $  131.8          $    121.2          $        102.2          $   96.0          $     84.0          $         91.8
Carillon Tower Advisers                 69.2                66.6                    59.5              57.5                51.7                    58.5
Subtotal financial assets
under management                       201.0               187.8                   161.7             153.5               135.7                   150.3
Less: Assets managed for
affiliated entities                    (10.0)               (9.6)                   (8.6)             (8.1)               (7.5)                   (7.2)
Total financial assets under
management                          $  191.0          $    178.2          $        153.1          $  145.4          $    128.2          $        143.1



(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. 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.

Activity (including activity in assets managed for affiliated entities)

                                                         Three months ended June 30,                 Nine months ended June 30,
$ in billions                                              2021                  2020                 2021                  2020
Financial assets under management at beginning
of period                                            $        187.8          $   135.7          $        161.7          $   150.3
Carillon Tower Advisers - net
inflows/(outflows)                                             (0.3)              (2.0)                    0.8               (4.4)
AMS - net inflows                                               4.5                1.5                     9.8                4.8
Net market appreciation in asset values                         9.0               18.3                    28.7                2.8
Financial assets under management at end of
period                                               $        201.0          $   153.5          $        201.0          $   153.5



Carillon Tower Advisers

Assets managed by Carillon Tower Advisers include assets managed by its
subsidiaries and affiliates: Eagle Asset Management, Scout Investments, Reams
Asset Management (a division of Scout Investments), ClariVest Asset Management
and Cougar Global Investments. The following table presents Carillon Tower
Advisers' AUM by objective, excluding assets for which it does not exercise
discretion, as well as the approximate average client fee rate earned on such
assets for the period presented.
                                                                            

Average fee rate for the

                                                                                three months ended June 30,
$ in billions                                            June 30, 2021                     2021
Equity                                                $           31.6                              0.52  %
Fixed income                                                      31.6                              0.18  %
Balanced                                                           6.0                              0.35  %
Total financial assets under management               $           69.2                              0.35  %



Non-discretionary asset-based programs


The following table includes assets held in certain non-discretionary
asset-based programs for which the Asset Management segment does not exercise
discretion but provides administrative support (including for affiliated
entities). The 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").
Administrative fees associated with these programs are predominantly based on
balances at the beginning of the quarter.
                      June 30,      March 31,       September 30,             June 30,      March 31,       September 30,
$ in billions           2021           2021              2020                   2020           2020              2019
Total assets         $  361.5      $    334.2      $        280.6            $  253.7      $    217.3      $        229.7



RJ Trust

The following table includes assets held in asset-based programs in RJ Trust (including those managed for affiliated entities).

                                         June 30,           March 31,           September 30,                 June 30,           March 31,           September 30,
$ in billions                              2021               2021                  2020                        2020               2020                  2019
Total assets                           $     8.1          $      7.8          $          7.1                $     7.1          $      6.4          $          6.6



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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

Quarter ended June 30, 2021 compared with the quarter ended June 30, 2020

Net revenues of $225 million increased $62 million, or 38%, and pre-tax income of $105 million increased $45 million, or 75%.

Asset management and related administrative fees increased $61 million, or 39%, driven by higher AUM and higher assets in non-discretionary asset-based programs.


Compensation expenses decreased $1 million, or 2%, and non-compensation expenses
increased $18 million, or 31%. The increase in non-compensation expenses was
primarily due to investment sub-advisory fees, which resulted from the increase
in AUM in sub-advised programs.

Nine months ended June 30, 2021 compared with the nine months ended June 30, 2020

Net revenues of $629 million increased $98 million, or 18%, and pre-tax income of $275 million increased $69 million, or 33%.


Asset management and related administrative fees increased $97 million, or 19%,
driven by higher AUM and higher assets in non-discretionary asset-based
programs, resulting from both equity market appreciation and net inflows.
Carillon Tower Advisers generated net inflows during the current-year period,
despite the structural headwinds for active asset managers resulting from the
industry shift from actively managed investment strategies to passive investment
strategies.

Compensation expenses increased $4 million, or 3%, and included the impact of
higher net revenues. Non-compensation expenses increased $25 million, or 13%,
largely due to investment sub-advisory fees which resulted from the increase in
AUM in sub-advised programs.

RESULTS OF OPERATIONS - RAYMOND JAMES BANK


For an overview of our Raymond James Bank segment operations, as well as a
description of the key factors impacting our Raymond James Bank segment results
of operations, refer to the information presented in "Item 1 - Business" and
"Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations" of our 2020 Form 10-K.

Operating results
                                                          Three months ended June 30,                                   Nine months ended June 30,
$ in millions                                      2021               2020             % change                 2021               2020             % change
Revenues:
Interest income                              $         172          $  181                    (5) %       $         505          $  635                   (20) %
Interest expense                                       (11)            (12)                   (8) %                 (32)            (51)                  (37) %
Net interest income                                    161             169                    (5) %                 473             584                   (19) %
All other                                                8               9                   (11) %                  23              20                    15  %
Net revenues                                           169             178                    (5) %                 496             604                   (18) %
Non-interest expenses:
Compensation and benefits                               13              13                     -                     38              38                     -
Non-compensation expenses:
Bank loan provision/(benefit) for
credit losses                                          (19)             81                       NM                 (37)            188                       NM
RJBDP fees to PCG                                       47              43                     9  %                 134             138                    (3) %
All other                                               24              27                   (11) %                  75              77                    (3) %
Total non-compensation expenses                         52             151                   (66) %                 172             403                   (57) %
Total non-interest expenses                             65             164                   (60) %                 210             441                   (52) %
Pre-tax income                               $         104          $   14                   643  %       $         286          $  163                    75  %


Quarter ended June 30, 2021 compared with the quarter ended June 30, 2020

Net revenues of $169 million decreased $9 million, or 5%, and pre-tax income of $104 million increased $90 million, or 643%.


Net interest income decreased $8 million, or 5%, as the negative impacts from
lower average LIBOR and a shift in the composition of interest-earning assets
compared with the prior-year quarter more than offset the impact of higher
average interest-earning assets. The net interest margin decreased to 1.92% from
2.29% for the prior-year quarter, primarily due to the decline in average LIBOR,
as well as a higher concentration of agency-backed available-for-sale
securities, which have a lower
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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

yield on average than loans. Based on current rates, as well as the elevated
prepayment of higher-yielding securities and mortgages, we project our net
interest margin to decline to approximately 1.90% for our fiscal fourth quarter
of 2021.

The bank loan benefit for credit losses was $19 million in the current quarter,
which was calculated under the CECL model, compared with an $81 million
provision in the prior-year quarter, which was calculated under the incurred
loss model. The current quarter benefit reflected an improved economic forecast,
as well as improved credit ratings within our corporate loan portfolio. The
provision for credit losses in the prior-year quarter reflected the rapid and
widespread economic deterioration and uncertainty at the onset of the COVID-19
pandemic.

Nine months ended June 30, 2021 compared with the nine months ended June 30, 2020

Net revenues of $496 million decreased $108 million, or 18%, and pre-tax income of $286 million increased $123 million, or 75%.


Net interest income decreased $111 million, or 19%, as the negative impact from
lower short-term interest rates more than offset the impact of higher average
interest-earning assets. The increase in average interest-earning assets was
primarily driven by significant growth in the available-for-sale securities
portfolio and securities-based loans to PCG clients. The net interest margin
decreased to 1.96% from 2.82% for the prior-year period, primarily due to the
significant decline in short-term interest rates, as well as a higher
concentration of agency-backed available-for-sale securities, which on average
have a lower yield than loans.

We had a bank loan benefit for credit losses of $37 million, which was
calculated under the CECL model, compared with a $188 million provision in the
prior-year period, which was calculated under the incurred loss model. The
current period benefit was largely attributable to improved economic forecasts
utilized in our CECL model since our October 1, 2020 adoption date, including
improved outlooks on unemployment and gross domestic product, which favorably
impact most of our loan portfolios, as well as improved credit ratings within
our corporate loan portfolio. The provision for credit losses in the prior-year
period reflected the rapid and widespread economic deterioration and uncertainty
caused by the onset of the COVID-19 pandemic.

RESULTS OF OPERATIONS - OTHER


This segment includes our private equity investments, interest income on certain
corporate cash balances, certain acquisition-related expenses, and certain
corporate overhead costs of RJF that are not allocated to other segments,
including the interest costs on our public debt and any losses on extinguishment
of such debt. For an overview of our Other segment operations, refer to the
information presented in "Item 1 - Business" of our 2020 Form 10-K.

Operating results
                                                        Three months ended June 30,                               Nine months ended June 30,
$ in millions                                   2021             2020             % change                2021               2020             % change
Revenues:
Interest income                              $      -          $    3                  (100) %       $          6          $   27                   (78) %
Gains/(losses) on private equity
investments                                        24               1                 2,300  %                 56             (40)                      NM
All other                                           4               2                   100  %                  7               4                    75  %
Total revenues                                     28               6                   367  %                 69              (9)                      NM
Interest expense                                  (26)            (26)                    -                   (75)            (63)                   19  %
Net revenues                                        2             (20)                      NM                 (6)            (72)                   92  %
Non-interest expenses:
Compensation and all other                         34               9                   278  %                 96              34                   182  %
Losses on extinguishment of debt                   98               -                       NM                 98               -                       NM
Acquisition-related expenses                        4               -                       NM                  6               -                       NM
Total non-interest expenses                       136               9                 1,411  %                200              34                   488  %
Pre-tax loss                                 $   (134)         $  (29)                 (362) %       $       (206)         $ (106)                  (94) %


Quarter ended June 30, 2021 compared with the quarter ended June 30, 2020

The pre-tax loss of $134 million was $105 million larger than the loss in the prior-year quarter.

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

Net revenues increased $22 million, as the current quarter included $24 million
of private equity valuation gains, of which $10 million were attributable to
noncontrolling interests and were offset within other expenses, compared with $1
million of gains in the prior-year quarter. The current quarter valuation gains
primarily reflected the impact of continued improvement in market conditions and
an improved outlook for certain of our investments.

Non-interest expenses increased $127 million, primarily due to losses on the
extinguishment of debt of $98 million (see Note 14 for further information), as
well as the aforementioned $10 million offset of private equity valuation losses
attributable to noncontrolling interests in the current quarter. The $4 million
of acquisition-related expenses in the current quarter primarily included
professional expenses associated with our acquisitions of Cebile Capital, which
was announced in our fiscal third quarter of 2021, and Charles Stanley, which
was announced in July 2021.

Nine months ended June 30, 2021 compared with the nine months ended June 30, 2020

The pre-tax loss of $206 million was $100 million larger than the loss in the prior-year period.


Net revenues increased $66 million, primarily due to private equity valuation
gains in the current period, compared with losses in the prior-year period,
which reflected the impact of challenging market conditions at the onset of the
COVID-19 pandemic. The current period included $56 million of private equity
valuation gains, of which $20 million were attributable to noncontrolling
interests and were offset within other expenses. These valuation gains were
primarily the result of continued improvement in market conditions and an
improved outlook for certain of our investments. The prior-year period included
$40 million of private equity valuation losses, of which $23 million were
attributable to noncontrolling interests and were offset within other expenses.
Interest income earned on corporate cash balances decreased compared with the
prior-year period due to lower short-term interest rates, partially offset by
the impact of higher average balances, and interest expense increased primarily
as a result of the issuance of $500 million of senior notes in March 2020.

Non-interest expenses increased $166 million, or 488%, primarily due to the
aforementioned losses on extinguishment of debt of $98 million, as well as the
aforementioned $20 million in gains attributable to noncontrolling interests,
compared with $23 million in losses in the prior-year period. The $6 million of
acquisition-related expenses in the current year primarily included professional
and integration expenses associated with our acquisitions of NWPS and Financo
during fiscal 2021, as well as our announced acquisitions of Cebile Capital and
Charles Stanley.

CERTAIN STATISTICAL DISCLOSURES BY BANK HOLDING COMPANIES


We are required to provide certain statistical disclosures as a bank holding
company under the SEC's Industry Guide 3. The following table provides certain
of those disclosures.
                                                 Three months ended June 30,                              Nine months ended June 30,
                                            2021                            2020                      2021                           2020
Return on assets                            2.2%                            1.5%                      2.4%                           1.9%
Return on equity                            15.9%                           10.0%                    17.4%                          11.9%
Average equity to average
assets                                      13.6%                           14.6%                    14.0%                          15.7%
Dividend payout ratio                       17.9%                           30.1%                    16.9%                          25.6%



Return on assets is computed by dividing annualized net income for the period
indicated by average assets for each respective period. Average assets for the
quarter is computed by adding total assets as of the date indicated to the prior
quarter-end total and dividing by two. Average assets for the year-to-date
period is computed by adding total assets as of each quarter-end date during the
year-to-date period to the beginning of the year total and dividing by four.

Return on equity is computed by dividing annualized net income for the period
indicated by average equity for each respective period. Average equity for the
quarter is computed by adding total equity attributable to RJF as of the date
indicated to the prior quarter-end total and dividing by two. Average equity for
the year-to-date period is computed by adding total equity attributable to RJF
as of each quarter-end date during the year-to-date period to the beginning of
the year total and dividing by four.

Average equity to average assets is computed by dividing average equity by average assets, as calculated in accordance with the previous explanations.

Dividend payout ratio is computed by dividing dividends declared per common share during the period by earnings per diluted common share for the period.

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis


Refer to the "Net interest analysis" and "Risk management - Credit risk" sections of this MD&A and to the Notes to Condensed Consolidated Financial Statements of this Form 10-Q for the other required disclosures.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is essential to our business. The primary goal of our liquidity management activities is to ensure adequate funding to conduct our business over a range of economic and market environments.


Senior management establishes our liquidity and capital management framework.
This framework includes senior management's review of short- and long-term cash
flow forecasts, review of monthly capital expenditures, monitoring of the
availability of alternative sources of financing, and daily monitoring of
liquidity in our significant subsidiaries. Our decisions on the allocation of
capital to our business units consider, among other factors, projected
profitability, cash flow, risk, and future liquidity needs. Our treasury
department assists in evaluating, monitoring and controlling the impact that our
business activities have on our financial condition, liquidity and capital
structure, and maintains our relationships with various lenders. The objective
of this framework is to support the successful execution of our business
strategies while ensuring ongoing and sufficient liquidity.

Liquidity is provided primarily through our business operations and financing
activities. Financing activities could include bank borrowings, collateralized
financing arrangements or additional capital raising activities under our
"universal" shelf registration statement.

Cash and cash equivalents increased $592 million during the nine months ended
June 30, 2021 to $5.98 billion. During the nine months ended June 30, 2021, cash
provided by our operations (including significant net income) and proceeds from
our $750 million of 3.75% senior notes offering (net of debt issuance costs),
were offset by cash used for the early-redemption of $750 million of our
pre-existing senior notes and the related make-whole premiums, dividend
payments, share repurchases, and investments in future growth with our
acquisitions of NWPS and Financo. We also had significant increases in client
cash balances, which increased both our brokerage client payables and our bank
deposits. However, this cash was largely used to increase our assets segregated
pursuant to regulations, primarily through the purchase of U.S. Treasuries, as
part of our brokerage activities, and to increase our bank loan portfolio and
available-for-sale securities as part of our banking activities.

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.

Sources of liquidity


Approximately $1.6 billion of our total June 30, 2021 cash and cash equivalents
included cash held directly at the parent, or parent cash loaned to RJ&A. As of
June 30, 2021, RJF had loaned $1.09 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, 2021
RJF                                    $          480
RJ&A                                            2,262
Raymond James Bank                              1,847
RJ Ltd.                                           869
RJFS                                              123
Carillon Tower Advisers                            82
Other subsidiaries                                319

Total cash and cash equivalents $ 5,982




RJF maintained depository accounts at Raymond James Bank with a balance of $185
million as of June 30, 2021. The portion of this total that was available on
demand without restrictions, which amounted to $108 million as of June 30, 2021,
is reflected in the RJF total (and is excluded from the Raymond James Bank cash
balance in the preceding table).

A large portion of the RJ Ltd. cash and cash equivalents balance as of June 30,
2021 was held to meet regulatory requirements and was not available for use by
the parent.

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RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis

In addition to the cash balances described, we have various other potential sources of cash available to the parent from subsidiaries, as described in the following section.

Liquidity available from subsidiaries

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


Certain of our broker-dealer subsidiaries are subject to the requirements of the
Uniform Net Capital Rule (Rule 15c3-1) under the Securities and Exchange Act of
1934. As a member firm of the Financial Industry Regulatory Authority ("FINRA"),
RJ&A is subject to FINRA's capital requirements, which are substantially the
same as Rule 15c3-1. Rule 15c3-1 provides for an "alternative net capital
requirement," which RJ&A has elected. 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 transactions. 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, 2021, RJ&A 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.

RJ&A, as a nonbank custodian of Individual Retirement Accounts ("IRAs"), must
also satisfy certain Internal Revenue Service regulations in order to accept new
IRAs and qualified plans and retain the accounts for which it serves as nonbank
custodian. With growth in the value of client assets in such accounts, the
capital of RJ&A may need to grow to continue to satisfy this requirement. As a
result, RJ&A may limit dividends it would otherwise remit to RJF. We evaluate
regulatory requirements, loan covenants and certain internal tolerances when
determining the amount of liquidity available to RJF from RJ&A.

Raymond James Bank may pay dividends to RJF without prior approval of its
regulator as long as the dividends do not exceed the sum of Raymond James Bank's
current calendar year and the previous two calendar years' retained net income,
and Raymond James Bank maintains its targeted regulatory capital ratios.
Dividends from Raymond James Bank may be limited to the extent that capital is
needed to support its balance sheet growth.

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

Borrowings and financing arrangements

Committed financing arrangements


Our ability to borrow is dependent upon compliance with the conditions in our
various loan agreements and, in the case of secured borrowings, collateral
eligibility requirements. Our committed financing arrangements consist of a
tri-party repurchase agreement (i.e., securities sold under agreements to
repurchase) and, in the case of the $500 million revolving credit facility
agreement (the "Credit Facility"), an unsecured line of credit. The required
market value of the collateral associated with the tri-party repurchase
agreement ranges from 105% to 125% of the amount financed.

The following table presents our committed financing arrangements with
third-party lenders, which we generally utilize to finance a portion of our
fixed income trading instruments, and the outstanding balances related thereto.

                                                                      June 30, 2021
                                                                                                                Total number of
$ in millions                                        RJ&A                     RJF              Total              arrangements
Financing arrangement:
Committed secured                                 $    100                $      -          $    100                       1
Committed unsecured                                    200                     300               500                       1
Total committed financing arrangements            $    300                $    300          $    600                       2

Outstanding borrowing amount:
Committed secured                                 $      -                $      -          $      -
Committed unsecured                                      -                       -                 -
Total outstanding borrowing amount                $      -                $ 

- $ -

                                       75
--------------------------------------------------------------------------------
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Management's Discussion and Analysis


Our committed unsecured financing arrangement in the preceding table represents
our Credit Facility, which provides for maximum borrowings of up to $500
million, with a sublimit of $300 million for RJF. RJ&A may borrow up to $500
million under the Credit Facility, depending on the amount of outstanding
borrowings by RJF. For additional details on our committed unsecured financing
arrangement, see our discussion of the Credit Facility in Note 14 of the Notes
to Consolidated Financial Statements of our 2020 Form 10-K. In April 2021, we
amended our Credit Facility, maintaining the $500 million maximum borrowing
amount, but extending the term through April 2026 and incorporating a lower cost
of borrowing under the facility and certain favorable covenant modifications.

Uncommitted financing arrangements


Our uncommitted financing arrangements are in the form of secured lines of
credit, secured bilateral or tri-party repurchase agreements, or unsecured lines
of credit. Our arrangements with third-party lenders are generally utilized to
finance a portion of our fixed income securities or for cash management
purposes. Our 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. As of June 30, 2021, we had
outstanding borrowings under three uncommitted secured borrowing arrangements
out of a total of 11 uncommitted financing arrangements (seven uncommitted
secured and four uncommitted unsecured). However, lenders are under no
contractual obligation to lend to us under uncommitted credit facilities.

The following table presents our borrowings on uncommitted financing arrangements, all of which were in the form of repurchase agreements in RJ&A and were included in "Collateralized financings" on our Condensed Consolidated Statements of Financial Condition.

© Edgar Online, source Glimpses

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