Raymond James Financial : Q3 2021 Earnings Supplement

EARNINGS RELEASE FINANCIAL SUPPLEMENT

THIRD QUARTER

OF FISCAL 2021 RESULTS

RAYMOND JAMES FINANCIAL, INC.

Consolidated Statements of Income (Unaudited)

						Three months ended						% change from			Nine months ended
in millions, except per share amounts			June 30,		September 30,		December 31,			March 31,			June 30,		June 30,		March 31,			June 30,			June 30,	%
	2020			2020			2020			2021			2021		2020		2021			2020			2021			change
Revenues:
Asset management and related administrative fees	$	867	$	1,006	$	1,067	$	1,173	$	1,262	46 %	8 %	$	2,828	$	3,502			24 %
Brokerage revenues:
Securities commissions		343			352			381			443			415	21 %	(6)%			1,116			1,239			11 %
Principal transactions		143			143			147			148			137	(4)%	(7)%			345			432			25 %
Total brokerage revenues		486			495			528			591			552	14 %	(7)%			1,461			1,671			14 %
Account and service fees		134			140			145			159			161	20 %	1 %			484			465			(4)%
Investment banking		139			222			261			242			276	99 %	14 %			428			779			82 %
Interest income		217			201			203			200			205	(6)%	3 %			799			608			(24)%
Other (1)		33			57			56			44			55	67 %	25 %			47			155			230 %
Total revenues		1,876			2,121			2,260			2,409			2,511	34 %	4 %			6,047			7,180			19 %
Interest expense		(42)			(42)			(38)			(37)			(40)	(5)%	8 %			(136)			(115)			(15)%
Net revenues		1,834			2,079			2,222			2,372			2,471	35 %	4 %			5,911			7,065			20 %
Non-interest expenses:
Compensation, commissions and benefits		1,277			1,415			1,500			1,648			1,661	30 %	1 %			4,050			4,809			19 %
Non-compensation expenses:
Communications and information processing		100			100			99			107			109	9 %	2 %			293			315			8 %
Occupancy and equipment		55			57			57			57			58	5 %	2 %			168			172			2 %
Business development		21			28			23			21			31	48 %	48 %			106			75			(29)%
Investment sub-advisory fees		23			26			28			31			34	48 %	10 %			75			93			24 %
Professional fees		24			23			30			24			26	8 %	8 %			68			80			18 %
Bank loan provision/(benefit) for credit losses (2)		81			45			14			(32)			(19)		NM		NM			188			(37)			NM
Losses on extinguishment of debt (3)		-			-			-			-			98		NM		NM			-			98			NM
Acquisition and disposition-related expenses (4)		-			7			2			-			7		NM		NM			-			9			NM
Reduction in workforce expenses (5)		-			46			-			-			-		-		-			-			-	-
Other (1)		55			76			70			69			81	47 %	17 %			167			220			32 %
Total non-compensation expenses		359			408			323			277			425	18 %	53 %			1,065			1,025			(4)%
Total non-interest expenses		1,636			1,823			1,823			1,925			2,086	28 %	8 %			5,115			5,834			14 %
Pre-tax income		198			256			399			447			385	94 %	(14)%			796			1,231			55 %
Provision for income taxes		26			47			87			92			78	200 %	(15)%			187			257			37 %
Net income	$	172		$	209		$	312		$	355		$	307	78 %	(14)%		$	609		$	974			60 %
Earnings per common share - basic (6)
$	1.25		$	1.53		$	2.27		$	2.58		$	2.24	79 %	(13)%		$	4.41		$	7.09			61 %
Earnings per common share - diluted (6)	$	1.23	$	1.50	$	2.23	$	2.51	$	2.18	77 %	(13)%	$	4.33	$	6.92			60 %
Weighted-average common shares outstanding -		137.1			136.9			136.8			137.8			137.2		-		-			137.9			137.2			(1)%
basic
Weighted-average common and common
	139.4			139.6			139.7			141.2			141.1	1 %		-			140.5			140.6			-
equivalent shares outstanding - diluted

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

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RAYMOND JAMES FINANCIAL, INC. Consolidated Selected Key Metrics (Unaudited)

									As of
$ in millions, except per share amounts			June 30,		September 30,			December 31,			March 31,			June 30,
	2020			2020			2020			2021			2021
Total assets	$	44,682	$	47,482	$	53,657	$	56,066	$	57,161
Total equity attributable to Raymond James Financial, Inc.	$	6,965	$	7,114	$	7,363	$	7,592	$	7,863
Book value per share (7)	$	50.84	$	52.08	$	53.59	$	55.34	$	57.44
Tangible book value per share (7) (8)	$	46.69	$	47.94	$	47.93	$	49.42	$	51.55

Capital ratios:
Tier 1 capital	24.8 %	24.2 %	23.4 %	23.6 %	24.3 %
Total capital	26.0 %	25.4 %	24.6 %	24.7 %	25.5 %
Tier 1 leverage	14.5 %	14.2 %	12.9 %	12.2 %	12.6 %

% change from

June 30,		March 31,
2020		2021
28 %	2 %
13 %	4 %
13 %	4 %
10 %	4 %

(9)

(9)

(9)

					Three months ended						% change from		Nine months ended
$ in millions		June 30,		September 30,		December 31,	March 31,			June 30,		June 30,		March 31,		June 30,			June 30,		% change
2020			2020			2020			2021			2021		2020		2021		2020			2021
Adjusted pre-tax income (8)	NA	$	309	$	401			NA	$	490	147 %	10 %		NA	$	1,338	68 %
Adjusted net income (8)	NA	$	249	$	314			NA	$	386	124 %	9 %		NA	$	1,055	73 %
Adjusted earnings per common share - basic (6) (8)	NA	$	1.82	$	2.29			NA	$	2.81	125 %	9 %		NA	$	7.68	74 %
Adjusted earnings per common share - diluted (6) (8)	NA	$	1.78	$	2.24			NA	$	2.74	123 %	9 %		NA	$	7.50	73 %
Return on equity (10)	10.0 %			11.9 %			17.2 %			19.0 %			15.9 %					11.9 %			17.4 %
Adjusted return on equity (8) (10)	NA			14.1 %			17.3 %			NA			19.9 %						NA			18.7 %
Return on tangible common equity (8) (10)	10.9 %			12.9 %			19.0 %			21.2 %			17.7 %					13.1 %			19.3 %
Adjusted return on tangible common equity (8) (10)	NA			15.3 %			19.1 %			NA			22.2 %						NA			20.8 %
Pre-tax margin (11)	10.8 %			12.3 %			18.0 %			18.8 %			15.6 %					13.5 %			17.4 %
Adjusted pre-tax margin (8) (11)	NA			14.9 %			18.0 %			NA			19.8 %						NA			18.9 %
Total compensation ratio (12)	69.6 %			68.1 %			67.5 %			69.5 %			67.2 %					68.5 %			68.1 %
Effective tax rate	13.1 %			18.4 %			21.8 %			20.6 %			20.3 %					23.5 %			20.9 %

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

3

RAYMOND JAMES FINANCIAL, INC.

Consolidated Selected Key Metrics (Unaudited)

									As of									% change from
			June 30,		September 30,			December 31,			March 31,			June 30,			June 30,		March 31,
			2020			2020			2020			2021			2021		2020		2021
Client asset metrics ($ in billions):
Client assets under administration	$	876.9	$	930.1	$	1,024.8	$	1,085.4	$	1,165.0	33 %	7 %
Private Client Group assets under administration	$	833.1	$	883.3	$	974.2	$	1,028.1	$	1,102.9	32 %	7 %
Private Client Group assets in fee-based accounts	$	443.0	$	475.3	$	532.7	$	567.6	$	616.7	39 %	9 %
Financial assets under management	$	145.4	$	153.1	$	169.6	$	178.2	$	191.0	31 %	7 %
Clients' domestic cash sweep balances ($ in millions):
Raymond James Bank Deposit Program ("RJBDP"): (13)
Raymond James Bank	$	24,101	$	25,599	$	26,697	$	28,174	$	29,253	21 %	4 %
Third-party banks		24,661			25,998			26,142			25,110			25,080	2 %		-
Subtotal RJBDP		48,762			51,597			52,839			53,284			54,333	11 %	2 %
Client Interest Program		3,157			3,999			8,769			9,517			8,610	173 %	(10)%
Total clients' domestic cash sweep balances	$	51,919		$	55,596		$	61,608		$	62,801		$	62,943	21 %		-
						Three months ended							Nine months ended
			June 30,		September 30,			December 31,			March 31,			June 30,			June 30,		June 30,
			2020			2020			2020			2021			2021			2020		2021
Average yield on RJBDP - third-party banks (14)		0.33 %			0.33 %			0.31 %			0.30 %			0.29 %		0.97 %	0.30 %
									As of									% change from
			June 30,		September 30,			December 31,			March 31,			June 30,			June 30,		March 31,
			2020			2020			2020			2021			2021	2020	2021
Private Client Group financial advisors:
Employees		3,379			3,404			3,387			3,375			3,423	1 %	1 %
Independent contractors		4,776			4,835			4,846			4,952			4,990	4 %	1 %
Total advisors		8,155			8,239			8,233			8,327			8,413	3 %	1 %

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

4

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Private Client Group (Unaudited)

						Three months ended						% change from			Nine months ended
$ in millions			June 30,		September 30,		December 31,			March 31,			June 30,		June 30,		March 31,			June 30,			June 30,		% change
	2020			2020			2020			2021			2021		2020		2021			2020			2021
Revenues:
Asset management and related	$	715	$	832	$	885	$	979	$	1,050	47 %	7 %	$	2,330	$	2,914	25 %
administrative fees
Brokerage revenues:
Mutual and other fund products		131			129			148			183			167	27 %	(9)%			438			498	14 %
Insurance and annuity products		88			109			98			109			113	28 %	4 %			288			320	11 %
Equities, ETFs, and fixed income		100			95			107			121			110	10 %	(9)%			324			338	4 %
products
Total brokerage revenues		319			333			353			413			390	22 %	(6)%			1,050			1,156	10 %
Account and service fees:
Mutual fund and annuity service		82			88			94			99			105	28 %	6 %			260			298	15 %
fees
RJBDP fees: (13)
Third-party banks		20			21			21			19			18	(10)%	(5)%			129			58	(55)%
Raymond James Bank		43			42			43			44			47	9 %	7 %			138			134	(3)%
Client account and other fees		32			33			32			42			39	22 %	(7)%			96			113	18 %
Total account and service fees		177			184			190			204			209	18 %	2 %			623			603	(3)%
Investment banking		7			12			6			16			11	57 %	(31)%			29			33	14 %
Interest income		31			30			30			30			31		-	3 %			125			91	(27)%
All other		4			7			5			8			7	75 %	(13)%			20			20		-
Total revenues		1,253			1,398			1,469			1,650			1,698	36 %	3 %			4,177			4,817	15 %
Interest expense		(4)			(4)			(2)			(3)			(2)	(50)%	(33)%			(19)			(7)	(63)%
Net revenues		1,249			1,394			1,467			1,647			1,696	36 %	3 %			4,158			4,810	16 %
Non-interest expenses:
Financial advisor compensation and		783			873			931			1,040			1,082	38 %	4 %			2,555			3,053	19 %
benefits
Administrative compensation and		235			244			249			260			251	7 %	(3)%			727			760	5 %
benefits
Total compensation, commissions		1,018			1,117			1,180			1,300			1,333	31 %	3 %			3,282			3,813	16 %
and benefits
Non-compensation expenses		140			152			147			155			168	20 %	8 %			462			470	2 %
Total non-interest expenses		1,158			1,269			1,327			1,455			1,501	30 %	3 %			3,744			4,283	14 %
Pre-tax income	$	91	$	125	$	140	$	192	$	195	114 %	2 %	$	414	$	527	27 %

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

5