Raymond James Financial : Q1 2021 Earnings Supplement

EARNINGS RELEASE FINANCIAL SUPPLEMENT

FIRST QUARTER

OF FISCAL 2021 RESULTS

RAYMOND JAMES FINANCIAL, INC.

Consolidated Statements of Income (Unaudited)

						Three months ended						% change from
in millions, except per share amounts			December 31,			March 31,			June 30,		September 30,		December 31,		December 31,		September 30,
	2019			2020			2020			2020			2020		2019		2020
Revenues:
Asset management and related administrative fees	$	955	$	1,006	$	867	$	1,006	$	1,067	12 %	6 %
Brokerage revenues:
Securities commissions		363			410			343			352			381	5 %	8 %
Principal transactions		97			105			143			143			147	52 %	3 %
Total brokerage revenues		460			515			486			495			528	15 %	7 %
Account and service fees		178			172			134			140			145	(19)%	4 %
Investment banking		141			148			139			222			261	85 %	18 %
Interest income		297			285			217			201			203	(32)%	1 %
Other (1)		29			(15)			33			57			56	93 %	(2)%
Total revenues		2,060			2,111			1,876			2,121			2,260	10 %	7 %
Interest expense		(51)			(43)			(42)			(42)			(38)	(25)%	(10)%
Net revenues		2,009			2,068			1,834			2,079			2,222	11 %	7 %
Non-interest expenses:
Compensation, commissions and benefits		1,351			1,422			1,277			1,415			1,500	11 %	6 %
Non-compensation expenses:
Communications and information processing		94			99			100			100			99	5 %	(1)%
Occupancy and equipment		57			56			55			57			57		-		-
Business development		44			41			21			28			23	(48)%	(18)%
Investment sub-advisory fees		26			26			23			26			28	8 %	8 %
Professional fees		21			23			24			23			30	43 %	30 %
Bank loan provision/(benefit) for credit losses (2)		(2)			109			81			45			14		NM	(69)%
Acquisition and disposition-related expenses (3)		-			-			-			7			2		NM	(71)%
Reduction in workforce expenses (4)		-			-			-			46			-		-	(100)%
Other (1)		59			53			55			76			70	19 %	(8)%
Total non-compensation expenses		299			407			359			408			323	8 %	(21)%
Total non-interest expenses		1,650			1,829			1,636			1,823			1,823	10 %		-
Pre-tax income		359			239			198			256			399	11 %	56 %
Provision for income taxes		91			70			26			47			87	(4)%	85 %
Net income	$	268		$	169		$	172		$	209		$	312	16 %	49 %
Earnings per common share - basic (5)
$	1.93		$	1.22		$	1.25		$	1.53		$	2.27	18 %	48 %
Earnings per common share - diluted (5)	$	1.89	$	1.20	$	1.23	$	1.50	$	2.23	18 %	49 %
Weighted-average common shares outstanding - basic		138.3			138.4			137.1			136.9			136.8	(1)%		-
Weighted-average common and common equivalent shares
	141.5			141.1			139.4			139.6			139.7	(1)%		-
outstanding - diluted

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

2

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

									As of
$ in millions, except per share amounts			December 31,			March 31,			June 30,		September 30,		December 31,
	2019			2020			2020			2020			2020
Total assets	$	40,154	$	49,809	$	44,682	$	47,482	$	53,657
Total equity attributable to Raymond James Financial, Inc.	$	6,842	$	6,798	$	6,965	$	7,114	$	7,363
Book value per share (6)	$	49.26	$	49.69	$	50.84	$	52.08	$	53.59
Tangible book value per share (6) (7)	$	45.10	$	45.50	$	46.69	$	47.94	$	47.93

Capital ratios:
Tier 1 capital	24.8 %	24.1 %	24.8 %	24.2 %	23.4 %
Total capital	25.7 %	25.3 %	26.0 %	25.4 %	24.6 %
Tier 1 leverage	15.8 %	14.2 %	14.5 %	14.2 %	12.9 %

% change from

December 31,		September 30,
2019		2020
34 %	13 %
8 %	4 %
9 %	3 %
6 %		-

(8)

(8)

(8)

				Three months ended						% change from
$ in millions		December 31,		March 31,		June 30,		September 30,		December 31,		December 31,		September 30,
2019		2020		2020			2020			2020		2019		2020
Adjusted pre-tax income (7)	NA		NA		NA	$	309	$	401	12 %	30 %
Adjusted net income (7)	NA		NA		NA	$	249	$	314	17 %	26 %
Adjusted earnings per common share - basic (5) (7)	NA		NA		NA	$	1.82	$	2.29	19 %	26 %
Adjusted earnings per common share - diluted (5) (7)	NA		NA		NA	$	1.78	$	2.24	19 %	26 %
Return on equity (9)	16.0 %	9.9 %	10.0 %			11.9 %			17.2 %
Adjusted return on equity (7) (9)	NA		NA		NA			14.1 %			17.3 %
Return on tangible common equity (7) (9)	17.5 %	10.8 %	10.9 %			12.9 %			19.0 %
Adjusted return on tangible common equity (7) (9)	NA		NA		NA			15.3 %			19.1 %
Pre-tax margin (10)	17.9 %	11.6 %	10.8 %			12.3 %			18.0 %
Adjusted pre-tax margin (7) (10)	NA		NA		NA			14.9 %			18.0 %
Total compensation ratio (11)	67.2 %	68.8 %	69.6 %			68.1 %			67.5 %
Effective tax rate	25.3 %	29.3 %	13.1 %			18.4 %			21.8 %

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
			December 31,			March 31,			June 30,		September 30,		December 31,		December 31,		September 30,
			2019			2020			2020			2020			2020		2019		2020
Client asset metrics ($ in billions):
Client assets under administration	$	896.0	$	773.9	$	876.9	$	930.1	$	1,024.8	14 %	10 %
Private Client Group assets under administration	$	855.2	$	734.0	$	833.1	$	883.3	$	974.2	14 %	10 %
Private Client Group assets in fee-based accounts	$	444.2	$	383.5	$	443.0	$	475.3	$	532.7	20 %	12 %
Financial assets under management	$	151.7	$	128.2	$	145.4	$	153.1	$	169.6	12 %	11 %
Clients' domestic cash sweep balances ($ in millions):
Raymond James Bank Deposit Program ("RJBDP"): (12)
Raymond James Bank	$	21,891	$	28,711	$	24,101	$	25,599	$	26,697	22 %	4 %
Third-party banks		15,061			20,379			24,661			25,998			26,142	74 %	1 %
Subtotal RJBDP		36,952			49,090			48,762			51,597			52,839	43 %	2 %
Client Interest Program		2,528			3,782			3,157			3,999			8,769	247 %	119 %
Total clients' domestic cash sweep balances	$	39,480		$	52,872		$	51,919		$	55,596		$	61,608	56 %	11 %
						Three months ended
			December 31,			March 31,			June 30,		September 30,		December 31,
			2019			2020			2020			2020			2020
Average yield on RJBDP - third-party banks (13)		1.64 %			1.33 %			0.33 %			0.33 %			0.31 %
									As of								% change from
			December 31,			March 31,			June 30,		September 30,		December 31,		December 31,		September 30,
			2019			2020			2020			2020			2020	2019	2020
Private Client Group financial advisors:
Employees		3,331			3,376			3,379			3,404			3,387	2 %		-
Independent contractors		4,729			4,772			4,776			4,835			4,846	2 %		-
Total advisors		8,060			8,148			8,155			8,239			8,233	2 %		-

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
$ in millions			December 31,			March 31,			June 30,		September 30,		December 31,		December 31,		September 30,
	2019			2020			2020			2020			2020		2019		2020
Revenues:
Asset management and related administrative fees	$	782	$	833	$	715	$	832	$	885	13 %	6 %
Brokerage revenues:
Mutual and other fund products		144			163			131			129			148	3 %	15 %
Insurance and annuity products		101			99			88			109			98	(3)%	(10)%
Equities, ETFs, and fixed income products		102			122			100			95			107	5 %	13 %
Total brokerage revenues		347			384			319			333			353	2 %	6 %
Account and service fees:
Mutual fund and annuity service fees		90			88			82			88			94	4 %	7 %
RJBDP fees: (12)
Third-party banks		58			51			20			21			21	(64)%		-
Raymond James Bank		47			48			43			42			43	(9)%	2 %
Client account and other fees		29			35			32			33			32	10 %	(3)%
Total account and service fees		224			222			177			184			190	(15)%	3 %
Investment banking		11			11			7			12			6	(45)%	(50)%
Interest income		49			45			31			30			30	(39)%		-
All other		9			7			4			7			5	(44)%	(29)%
Total revenues		1,422			1,502			1,253			1,398			1,469	3 %	5 %
Interest expense		(8)			(7)			(4)			(4)			(2)	(75)%	(50)%
Net revenues		1,414			1,495			1,249			1,394			1,467	4 %	5 %
Non-interest expenses:
Financial advisor compensation and benefits		857			915			783			873			931	9 %	7 %
Administrative compensation and benefits		247			245			235			244			249	1 %	2 %
Total compensation, commissions and benefits		1,104			1,160			1,018			1,117			1,180	7 %	6 %
Non-compensation expenses		157			165			140			152			147	(6)%	(3)%
Total non-interest expenses		1,261			1,325			1,158			1,269			1,327	5 %	5 %
Pre-tax income	$	153	$	170	$	91	$	125	$	140	(8)%	12 %

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

5

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Capital Markets (Unaudited)

						Three months ended						% change from
$ in millions			December 31,			March 31,			June 30,		September 30,		December 31,		December 31,		September 30,
	2019			2020			2020			2020			2020		2019		2020
Revenues:
Brokerage revenues:
Fixed income	$	81	$	90	$	125	$	125	$	131	62 %	5 %
Equity		34			40			41			35			42	24 %	20 %
Total brokerage revenues		115			130			166			160			173	50 %	8 %
Investment banking:
Merger & acquisition and advisory		60			72			60			98			149	148 %	52 %
Equity underwriting		39			43			35			68			60	54 %	(12)%
Debt underwriting		31			22			37			43			46	48 %	7 %
Total investment banking		130			137			132			209			255	96 %	22 %
Interest income		8			10			4			3			3	(63)%		-
Tax credit fund revenues		18			12			20			33			16	(11)%	(52)%
All other		3			7			3			7			7	133 %		-
Total revenues		274			296			325			412			454	66 %	10 %
Interest expense		(6)			(6)			(2)			(2)			(2)	(67)%		-
Net revenues		268			290			323			410			452	69 %	10 %
Non-interest expenses:
Compensation, commissions and benefits		166			184			195			229			252	52 %	10 %
Non-compensation expenses (3)		73			78			66			75			71	(3)%	(5)%
Total non-interest expenses		239			262			261			304			323	35 %	6 %
Pre-tax income	$	29	$	28	$	62	$	106	$	129	345 %	22 %

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

6

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Asset Management (Unaudited)

						Three months ended						% change from
$ in millions			December 31,			March 31,			June 30,		September 30,		December 31,		December 31,		September 30,
	2019			2020			2020			2020			2020		2019		2020
Revenues:
Asset management and related administrative fees:
Managed programs	$	125	$	124	$	109	$	123	$	129	3 %	5 %
Administration and other		51			53			48			55			59	16 %	7 %
Total asset management and related administrative fees		176			177			157			178			188	7 %	6 %
Account and service fees		5			4			3			4			4	(20)%		-
All other		3			3			3			2			3		-	50 %
Net revenues		184			184			163			184			195	6 %	6 %
Non-interest expenses:
Compensation, commissions and benefits		45			45			44			43			45		-	5 %
Non-compensation expenses		66			66			59			63			67	2 %	6 %
Total non-interest expenses		111			111			103			106			112	1 %	6 %
Pre-tax income	$	73	$	73	$	60	$	78	$	83	14 %	6 %

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

7