Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Table of Contents


			PAGE
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 185)			80
Consolidated Statements of Financial Condition			83
Consolidated Statements of Income and Comprehensive Income			84
Consolidated Statements of Changes in Shareholders’ Equity			85
Consolidated Statements of Cash Flows			86

Notes to Consolidated Financial Statements
Note 1 - Organization and basis of presentation			88
Note 2 - Summary of significant accounting policies			88
Note 3 - Acquisitions			107
Note 4 - Fair value			113
Note 5 - Available-for-sale securities			118
Note 6 - Derivative assets and derivative liabilities			121
Note 7 - Collateralized agreements and financings			123
Note 8 - Bank loans, net			125
Note 9 - Loans to financial advisors, net			132
Note 10 - Variable interest entities			132
Note 11 - Goodwill and identifiable intangible assets, net			134
Note 12 - Other assets			136
Note 13 - Property and equipment, net			136
Note 14 - Leases			137
Note 15 - Bank deposits			138
Note 16 - Other borrowings			139
Note 17 - Senior notes payable			140
Note 18 - Income taxes			141
Note 19 - Commitments, contingencies and guarantees			143
Note 20 - Shareholders’ equity			146
Note 21 - Revenues			149
Note 22 - Interest income and interest expense			152
Note 23 - Share-based and other compensation			152
Note 24 - Regulatory capital requirements			155
Note 25 - Earnings per share			157
Note 26 - Segment information			158
Note 27 - Condensed financial information (parent company only)			161

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Raymond James Financial, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial condition of Raymond James Financial, Inc. and subsidiaries (the Company) as of September 30, 2022 and 2021, the related consolidated statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three‑year period ended September 30, 2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three‑year period ended September 30, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated November 22, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the allowance for credit losses related to the commercial and industrial (C&I), real estate investment trust (REIT) and the commercial real estate (CRE) portfolio segments that are collectively evaluated for impairment

As discussed in Note 2 and Note 8 to the consolidated financial statements, the Company’s allowance for credit losses on loans was $396 million as of September 30, 2022, a portion of which related to the Raymond James Bank allowance for credit losses (ACL) on C&I, REIT and CRE portfolio segments evaluated on a collective basis (the collective ACL). The Company estimates the collective ACL using a current expected credit losses methodology which is based on relevant information about historical losses, current conditions, and reasonable and supportable forecasts of economic conditions that affect the collectability of loan balances. The collective ACL is a product of multiplying the Company’s estimates of probability of default (PD), loss given default (LGD) and exposure at default. The Company uses third-party historical information combined with macroeconomic variables over the reasonable and supportable forecast periods based on a single economic forecast scenario to estimate the PDs and LGDs. After the reasonable and supportable forecast periods, for C&I and REIT portfolio segments, the Company reverts to historical loss information over a one-year period using a

straight-line reversion approach. For the CRE portfolio segment, the Company incorporates a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the assets. The estimated PDs and LGDs are applied to estimated exposure at default considering the contractual loan term adjusted for expected prepayments to estimate expected losses. Adjustments are made to the collective ACL to reflect certain qualitative factors that are not incorporated into the quantitative models and related estimate.

We identified the assessment of the September 30, 2022 collective ACL on Raymond James Bank loans related to the C&I, REIT and CRE portfolio segments as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the September 30, 2022 collective ACL methodology, including the methods and models used to estimate the PDs and LGDs and their significant assumptions. Such significant assumptions included portfolio segmentation, risk ratings, the selection of the single economic forecast scenario and macroeconomic variables, the reasonable and supportable forecast periods and the reversion periods, and third-party historical information. The assessment also included the evaluation of the qualitative factors by portfolio segment. The assessment also included an evaluation of the conceptual soundness and performance of the PD and LGD models. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the September 30, 2022 collective ACL estimate on Raymond James Bank loans related to the C&I, REIT and CRE portfolio segments, including controls over the:

development of the collective ACL methodology on Bank loans related to the C&I, REIT and CRE portfolio segments
development of the PD and LGD models
identification and determination of the significant assumptions used in the PD and LGD models
development of the qualitative methodology and factors
performance monitoring of the PD and LGD models
analysis of the collective ACL on Bank loans related to the C&I, REIT and CRE portfolio segments results, trends, and ratios.

We evaluated the Company’s process to develop the September 30, 2022 collective ACL estimate on Bank loans related to the C&I, REIT and CRE portfolio segments by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:

evaluating the Company’s collective ACL methodology for compliance with U.S. generally accepted accounting principles
evaluating judgments made by the company relative to the development and performance testing of the PD and LGD models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices
assessing the conceptual soundness and performance of the PD and LGD models by inspecting the model documentation to determine whether the models are suitable for the intended use
evaluating the selection of the economic forecast scenario and underlying macroeconomic variables by comparing it to the Company’s business environment and relevant industry practices
evaluating the length of the reasonable and supportable forecast periods and the reversion periods by comparing them to specific portfolio segment risk characteristics and trends
determining whether the loan portfolio is segmented by similar risk characteristics by comparing to the Company’s business environment and relevant industry practices
evaluating the relevance of third-party historical information by comparing to specific portfolio segment risk characteristics
performing credit file reviews on a selection of loans to assess loan characteristics or risk ratings by evaluating the financial performance of the borrower, sources of repayment, and any relevant guarantees or underlying collateral and
evaluating the methodology used to develop the qualitative factors and the effect of those factors on the allowance for credit losses on Bank loans compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying quantitative models.

We also assessed the sufficiency of the audit evidence obtained related to the September 30, 2022 collective ACL estimate on Bank loans related to the C&I, REIT and CRE portfolio segments by evaluating the:

cumulative results of the audit procedures
qualitative aspects of the Company’s accounting practices and
potential bias in the accounting estimate.

The fair value measurement of a customer relationship intangible asset, bank loans, and core deposit intangible asset acquired in business combinations

As discussed in Note 3 to the consolidated financial statements, on January 21, 2022, the Company completed the acquisition of Charles Stanley Group, PLC (Charles Stanley), and on June 1, 2022, the Company completed the acquisition of TriState Capital Holdings, Inc. (TriState Capital) and its wholly owned subsidiaries. The Company accounted for these transactions as business combinations. Accordingly, the purchase price attributable to these respective acquisitions was allocated to the assets acquired and liabilities assumed based on their estimated fair values. In the Charles Stanley acquisition, the Company acquired a customer relationship intangible asset at a fair value of $65 million. The fair value of the customer relationship intangible asset was based on a multi-period excess earnings approach that considered future period post-tax earnings and a discount rate. In the TriState Capital acquisition, the Company acquired bank loans at a fair value of $11.5 billion, and a core deposit intangible asset at a fair value of $89 million. The fair value of the bank loans was based on a discounted cash flow methodology that considered loan type and related collateral, credit loss expectations, classification status, market interest rates and other market factors from the perspective of a market participant using key assumptions of credit loss expectations and discount rate. The fair value of the core deposit intangible asset was based on the discounted cash flow approach, specifically the favorable source of funds method, that considered the servicing and interest costs of the acquired deposit base, an estimate of the cost associated with alternative funding sources, expected client attrition rates, deposit growth rates, and discount rate.

We identified the evaluation of the fair value measurements of the customer relationship intangible asset, bank loans, and core deposit intangible asset as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the fair value measurements due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the (1) fair value measurement methodologies, and (2) customer relationship intangible asset fair value measurement key assumptions, including future period post-tax earnings and a discount rate; bank loans fair value measurement key assumptions, including the credit loss expectations and discount rate; and core deposit intangible asset fair value measurement key assumptions, including servicing and interest cost of the acquired deposit base, cost associated with alternative funding sources, expected client attrition rates, deposit growth rates, and discount rate.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s fair value measurements of the customer relationship intangible asset, bank loans, and core deposit intangible asset including controls over the (1) development of the overall fair value measurement methodologies, and (2) determination of the key assumptions used in the fair value estimates.

We evaluated the Company’s process to develop the fair value measurements of the customer relationship intangible asset, bank loans and core deposit intangible asset by testing certain sources of data, inputs, and assumptions that the Company used, and considered the relevance and reliability of such data, inputs, and assumptions. We involved valuation professionals with specialized skills and knowledge, who assisted in:

evaluating the fair value measurement methodology for compliance with U.S. generally accepted accounting principles
reviewing the underlying methodologies for the development of the key assumptions as compared to commonly applied industry valuation techniques as well as internal and external data
evaluating the historical data for the future period post-tax earnings by comparing to internal data, and the discount rate by comparing to internal and publicly available data for the customer relationship intangible asset
evaluating the credit loss expectations and discount rate by comparing to internal and publicly available data for the bank loans and
evaluating the servicing cost, interest cost, and discount rate, by comparing to internal and publicly available data; the costs of alternative funding and client attrition rates by comparing to internal data, and the deposit growth rates by comparing to publicly available data for the core deposit intangible asset.

/s/ KPMG LLP

We have served as the Company’s auditor since 2001.

Tampa, Florida

November 22, 2022


RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	September 30,
$ in millions, except per share amounts	2022		2021
Assets:
Cash and cash equivalents	$	6,178	$	7,201
Assets segregated for regulatory purposes and restricted cash	8,481		11,348
Collateralized agreements	704		480
Financial instruments, at fair value:
Trading assets ($1,188 and $326 pledged as collateral)	1,270		610
Available-for-sale securities ($74 and $20 pledged as collateral)	9,885		8,315
Derivative assets	188		255
Other investments ($14 and $22 pledged as collateral)	292		357
Brokerage client receivables, net	2,934		2,831
Other receivables, net	1,615		999
Bank loans, net	43,239		24,994
Loans to financial advisors, net	1,152		1,057
Deferred income taxes, net	630		305
Goodwill and identifiable intangible assets, net	1,931		882
Other assets	2,452		2,257
Total assets	$	80,951	$	61,891

Liabilities and shareholders’ equity:
Bank deposits	$	51,357	$	32,495
Collateralized financings	466		277
Financial instrument liabilities, at fair value:
Trading liabilities	836		176
Derivative liabilities	530		228
Brokerage client payables	11,446		13,991
Accrued compensation, commissions and benefits	1,787		1,825
Other payables	1,768		1,701
Other borrowings	1,291		858
Senior notes payable	2,038		2,037
Total liabilities	71,519		53,588
Commitments and contingencies (see Note 19)
Shareholders’ equity
Preferred stock	120		—
Common stock; $.01 par value; 650,000,000 shares authorized, 248,018,564 shares issued, and 215,122,523 shares outstanding as of September 30, 2022; 350,000,000 shares authorized, 239,062,254 shares issued, and 205,738,821 shares outstanding as of September 30, 2021	2		2
Additional paid-in capital	2,987		2,088
Retained earnings	8,843		7,633
Treasury stock, at cost; 32,896,041 and 33,323,433 common shares as of September 30, 2022 and 2021, respectively	(1,512)		(1,437)
Accumulated other comprehensive loss	(982)		(41)
Total equity attributable to Raymond James Financial, Inc.	9,458		8,245
Noncontrolling interests	(26)		58
Total shareholders’ equity	9,432		8,303
Total liabilities and shareholders’ equity	$	80,951	$	61,891

See accompanying Notes to Consolidated Financial Statements.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


	Year ended September 30,
$ in millions, except per share amounts	2022		2021		2020
Revenues:
Asset management and related administrative fees	$	5,563	$	4,868	$	3,834
Brokerage revenues:
Securities commissions	1,589		1,651		1,468
Principal transactions	527		561		488
Total brokerage revenues	2,116		2,212		1,956
Account and service fees	833		635		624
Investment banking	1,100		1,143		650
Interest income	1,508		823		1,000
Other	188		229		104
Total revenues	11,308		9,910		8,168
Interest expense	(305)		(150)		(178)
Net revenues	11,003		9,760		7,990
Non-interest expenses:
Compensation, commissions and benefits	7,329		6,584		5,465
Non-compensation expenses:
Communications and information processing	506		429		393
Occupancy and equipment	252		232		225
Business development	186		111		134
Investment sub-advisory fees	152		130		101
Professional fees	131		122		91
Bank loan provision/(benefit) for credit losses	100		(32)		233
Losses on extinguishment of debt	—		98		—
Reduction in workforce expenses	—		—		46
Other	325		295		250
Total non-compensation expenses	1,652		1,385		1,473
Total non-interest expenses	8,981		7,969		6,938
Pre-tax income	2,022		1,791		1,052
Provision for income taxes	513		388		234
Net income	1,509		1,403		818
Preferred stock dividends	4		—		—
Net income available to common shareholders	$	1,505	$	1,403	$	818

Earnings per common share – basic	$	7.16	$	6.81	$	3.96
Earnings per common share – diluted	$	6.98	$	6.63	$	3.88
Weighted-average common shares outstanding – basic	209.9		205.7		206.4
Weighted-average common and common equivalent shares outstanding – diluted	215.3		211.2		210.3

Net income	$	1,509	$	1,403	$	818
Other comprehensive income/(loss), net of tax:
Available-for-sale securities	(897)		(94)		68
Currency translations, net of the impact of net investment hedges	(114)		16		—
Cash flow hedges	70		26		(34)
Total other comprehensive income/(loss), net of tax	(941)		(52)		34
Total comprehensive income	$	568	$	1,351	$	852

See accompanying Notes to Consolidated Financial Statements.


RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	Year ended September 30,
$ in millions, except per share amounts	2022		2021		2020
Preferred stock:
Balance beginning of year	$	—	$	—	$	—
Preferred stock issued for TriState Capital Holdings, Inc. (“TriState Capital”) acquisition	120		—		—
Balance end of year	120		—		—

Common stock, par value $.01 per share:
Balance beginning of year	2		2		2

Issuance of shares for stock split	—		1		—
Other	—		(1)		—
Balance end of year	2		2		2

Additional paid-in capital:
Balance beginning of year	2,088		2,007		1,938
Common stock issued for TriState Capital acquisition	778		—		—
Restricted stock awards issued for TriState Capital acquisition	28		—		—
Employee stock purchases	42		32		36
Distributions due to vesting of restricted stock units and exercise of stock options, net of forfeitures	(135)		(77)		(80)
Share-based compensation amortization	186		126		113
Issuance of shares for stock split	—		(1)		—
Other	—		1		—
Balance end of year	2,987		2,088		2,007

Retained earnings:
Balance beginning of year	7,633		6,484		5,874
Net income attributable to Raymond James Financial, Inc.	1,509		1,403		818
Common and preferred stock cash dividends declared (see Note 20)	(299)		(219)		(208)
Cumulative adjustments for changes in accounting principles	—		(35)		—
Balance end of year	8,843		7,633		6,484

Treasury stock:
Balance beginning of year	(1,437)		(1,390)		(1,210)
Purchases/surrenders	(173)		(128)		(273)
Reissuances due to vesting of restricted stock units and exercise of stock options	98		81		93
Balance end of year	(1,512)		(1,437)		(1,390)

Accumulated other comprehensive income/(loss):
Balance beginning of year	(41)		11		(23)
Other comprehensive income/(loss), net of tax	(941)		(52)		34

Balance end of year	(982)		(41)		11
Total equity attributable to Raymond James Financial, Inc.	$	9,458	$	8,245	$	7,114

Noncontrolling interests:
Balance beginning of year	$	58	$	62	$	62
Net income/(loss) attributable to noncontrolling interests	(1)		23		(26)

Deconsolidations and sales	(83)		(27)		26


Balance end of year	(26)		58		62
Total shareholders’ equity	$	9,432	$	8,303	$	7,176

See accompanying Notes to Consolidated Financial Statements.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year ended September 30,
$ in millions	2022		2021		2020
Cash flows from operating activities:
Net income	$	1,509	$	1,403	$	818
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	145		134		119
Deferred income taxes, net	(16)		(37)		(39)
Premium and discount amortization on available-for-sale securities and bank loans and net unrealized gain/loss on other investments	23		15		57
Provisions/(benefits) for credit losses and legal and regulatory proceedings	111		(20)		257
Share-based compensation expense	192		132		120
Unrealized (gain)/loss on company-owned life insurance policies, net of expenses	174		(150)		(46)
Losses on extinguishment of debt	—		98		—

Other	49		66		92
Net change in:
Assets segregated for regulatory purposes excluding cash and cash equivalents	2,100		(2,100)		—
Collateralized agreements, net of collateralized financings	(37)		(29)		(55)
Loans provided to financial advisors, net of repayments	(120)		(90)		(49)
Brokerage client receivables and other receivables, net	(203)		(420)		127
Trading instruments, net	48		(141)		150
Derivative instruments, net	479		53		(51)
Other assets	(126)		16		(13)
Brokerage client payables and other payables	(4,213)		7,306		2,505
Accrued compensation, commissions and benefits	(76)		416		70
Purchases and originations of loans held for sale, net of proceeds from sales of securitizations and loans held for sale	33		(5)		11
Net cash provided by operating activities	72		6,647		4,073

Cash flows from investing activities:
Increase in bank loans, net	(7,235)		(4,027)		(1,136)
Proceeds from sales of loans held for investment	213		287		634
Purchases of available-for-sale securities	(3,069)		(4,218)		(5,710)
Available-for-sale securities maturations, repayments and redemptions	1,712		2,181		1,188
Proceeds from sales of available-for-sale securities	52		969		222
Cash and cash equivalents acquired in business acquisitions, including those segregated for regulatory purposes, net of cash paid for acquisitions	1,461		(266)		(5)
Additions to property and equipment	(91)		(74)		(124)
Investment in note receivable	(125)		—		—
(Purchases)/sales of other investments, net	24		27		5
Other investing activities, net	(93)		(19)		(59)
Net cash used in investing activities	(7,151)		(5,140)		(4,985)

See accompanying Notes to Consolidated Financial Statements.


RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
	Year ended September 30,
$ in millions	2022		2021		2020
Cash flows from financing activities:
Proceeds from senior notes issuances, net of debt issuance costs paid	—		737		494
Extinguishment of senior notes payable	—		(844)		—
Increase in bank deposits	6,269		5,694		4,520
Repurchases of common stock and share-based awards withheld for payment of withholding tax requirements	(216)		(150)		(291)
Dividends on preferred and common stock	(277)		(218)		(205)
Exercise of stock options and employee stock purchases	52		53		62
Proceeds from Federal Home Loan Bank advances	1,025		—		850
Repayments of Federal Home Loan Bank advances and other borrowed funds	(967)		(31)		(855)





Other financing, net	(7)		(9)		(1)
Net cash provided by financing activities	5,879		5,232		4,574

Currency adjustment:
Effect of exchange rate changes on cash and cash equivalents, including those segregated for regulatory purposes	(590)		76		1
Net increase/(decrease) in cash and cash equivalents, including those segregated for regulatory purposes and restricted cash	(1,790)		6,815		3,663
Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at beginning of year	16,449		9,634		5,971
Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of year	$	14,659	$	16,449	$	9,634

Cash and cash equivalents	$	6,178	$	7,201	$	5,390
Cash and cash equivalents segregated for regulatory purposes and restricted cash	8,481		9,248		4,244
Total cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of year	$	14,659	$	16,449	$	9,634

Supplemental disclosures of cash flow information:
Cash paid for interest	$	323	$	145	$	164
Cash paid for income taxes, net	$	524	$	437	$	246
Cash outflows for lease liabilities	$	111	$	110	$	101
Non-cash right-of-use assets recorded for new and modified leases	$	68	$	168	$	74
Common stock issued as consideration for TriState Capital acquisition	$	778	$	—	$	—
Restricted stock awards issued as consideration for TriState Capital acquisition	$	28	$	—	$	—
Preferred stock issued as consideration for TriState Capital acquisition	$	120	$	—	$	—
Effective settlement of note receivable for TriState Capital acquisition	$	123	$	—	$	—

See accompanying Notes to Consolidated Financial Statements.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Organization

Raymond James Financial, Inc. (“RJF” or the “firm”) is a financial holding company which, together with its subsidiaries, is engaged in various financial services activities, including providing investment management services to retail and institutional clients, merger & acquisition and advisory services, the underwriting, distribution, trading and brokerage of equity and debt securities, and the sale of mutual funds and other investment products. The firm also provides corporate and consumer banking services, and trust services. For further information about our business segments, see Note 26 of this Form 10-K. As used herein, the terms “our,” “we,” or “us” refer to RJF and/or one or more of its subsidiaries.

Basis of presentation

The accompanying consolidated financial statements include the accounts of RJF and its consolidated subsidiaries that are generally controlled through a majority voting interest. We consolidate all of our 100%-owned subsidiaries. In addition, we consolidate any variable interest entity (“VIE”) in which we are the primary beneficiary. Additional information on these VIEs is provided in Note 2 and in Note 10 of this Form 10-K. When we do not have a controlling interest in an entity, but we exert significant influence over the entity, we apply the equity method of accounting. All material intercompany balances and transactions have been eliminated in consolidation.

Accounting estimates and assumptions

The preparation of consolidated financial statements in conformity with United States (“U.S.”) generally accepted accounting principles (“GAAP”) requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates and could have a material impact on the consolidated financial statements.

Reclassifications

We reclassified acquisition and disposition-related expenses which in prior years were reported separately as “Acquisition and disposition-related expenses” on our Consolidated Statements of Income and Comprehensive Income to the respective income statement line items that align with the nature of the expenses, including reclassifications to “Compensation, commissions, and benefits,” “Professional fees,” or “Other” expenses, as appropriate. Prior years have been conformed to the current presentation.

In addition to the reclassifications discussed above, certain other prior period amounts have been reclassified to conform to the current period’s presentation.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recognition of non-interest revenues

Revenue from contracts with customers is recognized when promised services are delivered to our customers in an amount we expect to receive in exchange for those services (i.e., the transaction price). Contracts with customers can include multiple services, which are accounted for as separate “performance obligations” if they are determined to be distinct. Our performance obligations to our customers are generally satisfied when we transfer the promised service to our customer, either at a point in time or over time. Revenue from a performance obligation transferred at a point in time is recognized at the time that the customer obtains control over the promised service. Revenue from our performance obligations satisfied over time is recognized in a manner that depicts our performance in transferring control of the service, which is generally measured based on time elapsed, as our customers receive the benefit of our services as they are provided.

Payment for the majority of our services is considered to be variable consideration, as the amount of revenue we expect to receive is subject to factors outside of our control, including market conditions. Variable consideration is only included in

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

revenue when amounts are not subject to significant reversal, which is generally when uncertainty around the amount of revenue to be received is resolved. We record deferred revenue from contracts with customers when payment is received prior to the performance of our obligation to the customer.

We involve third parties in providing services to the customer for certain of our contracts with customers. We are generally deemed to control the promised services before they are transferred to the customer. Accordingly, we present the related revenues gross of the related costs.

We have elected the practical expedient allowed by the accounting guidance to not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. See Note 21 for additional information on our revenues.

Asset management and related administrative fees

We earn asset management and related administrative fees for performing asset management, portfolio management and related administrative services to retail and institutional clients. Such fees are generally calculated as a percentage of the value of client assets in fee-based accounts in our Private Client Group (“PCG”) segment or on the net asset value of assets managed by our Raymond James Investment Management division (“Raymond James Investment Management,” formerly Carillon Tower Advisers) in our Asset Management segment. The value of these assets is impacted by market fluctuations and net inflows or outflows of assets. Fees are generally collected quarterly and are based on balances either at the beginning of the quarter or the end of the quarter, or average balances throughout the quarter. Asset management and related administrative fees are recognized on a monthly basis (i.e., over time) as the services are performed.

Revenues related to fee-based accounts under administration in PCG are shared by the PCG and Asset Management segments, the amount of which depends on whether clients are invested in “managed programs” that are overseen by our Asset Management segment (i.e., included in financial assets under management (“AUM”) in the Asset Management segment) and the administrative services provided. Asset management revenues earned by Raymond James Investment Management for retail accounts managed on behalf of third-party institutions, institutional accounts and proprietary mutual funds that we manage are recorded entirely in the Asset Management segment.

Brokerage revenues

Securities commissions

Mutual and other fund products and insurance and annuity products

We earn revenues for distribution and related support services performed related to mutual and other funds, fixed and variable annuities and insurance products. Depending on the product sold, we may receive an upfront fee for our services, a trailing commission, or some combination thereof. Upfront commissions received are generally based on a fixed rate applied, as a percentage, to amounts invested or the value of the contract at the time of sale and are generally recognized at the time of sale. Trailing commissions are generally based on a fixed rate applied, as a percentage, to the net asset value of the fund, or the value of the insurance policy or annuity contract. Trailing commissions on eligible products are generally received monthly or quarterly in periods while our client holds the investment or holds the contract. As these trailing commissions are based on factors outside of our control, including market movements and client behavior (i.e., how long clients hold their investment, insurance policy or annuity contract), such revenue is recognized when it is probable that a significant reversal will not occur.

Equities, ETFs and fixed income products

We earn commissions for executing and clearing transactions for customers, primarily in listed and over-the-counter equity securities, including exchange-traded funds (“ETFs”), and options. Such revenues primarily arise from transactions for retail clients in our PCG segment, as well as services related to sales and trading activities transacted on an agency basis in our Capital Markets segment. Commissions are recognized on trade date, generally received from the customer on settlement date, and we record a receivable between the trade date and the date collected from the customer.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Principal transactions

Principal transactions include revenues from clients’ purchases and sales of financial instruments, including fixed income and equity securities and derivatives, in which we transact on a principal basis. We make markets in certain fixed income securities and we carry inventories of financial instruments to facilitate such transactions. The gains and losses on such inventories, both realized and unrealized, are reported as principal transactions revenues.

Account and service fees

Mutual fund and annuity service fees

We earn servicing fees for providing sales and marketing support to third-party financial entities and for supporting the availability and distribution of their products on our platforms. We also earn servicing fees for accounting and administrative services provided to such parties. These fees, which are received monthly or quarterly, are generally based on the market value of the related assets, a fixed annual fee or, in certain cases, the number of positions in such programs, and are recognized over time as the services are performed.

Raymond James Bank Deposit Program fees

We earn servicing fees from various banks for administrative services we provide related to our clients’ deposits that are swept to such banks as part of the Raymond James Bank Deposit Program (“RJBDP”), our multi-bank sweep program. The amounts received 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 fees are earned over time as the related administrative services are performed and are received monthly. Our PCG segment also earns servicing fees from our Bank segment, which is calculated as the greater of a base servicing fee or a net yield equivalent to the average yield that the firm would otherwise receive from third-party banks in the RJBDP. These intercompany fees, and the offsetting intercompany expense in the Bank segment, are eliminated in consolidation.

Investment banking

We earn revenue from investment banking transactions, including public and private equity and debt financing, merger & acquisition advisory services, and other advisory services. Underwriting revenues, which are typically deducted from the proceeds remitted to the issuer, are recognized on trade date if there is no uncertainty or contingency related to the amount to be received. Fees from merger & acquisition and advisory assignments are generally recognized at the time the services related to the transaction are completed under the terms of the engagement. Fees for merger & acquisition and advisory services are typically received upfront, as non-refundable retainer fees, and/or upon completion of a transaction as a success fee. Expenses related to investment banking transactions are generally deferred until the related revenue is recognized or the assignment is otherwise concluded. Such expenses are included in “Professional fees” on our Consolidated Statements of Income and Comprehensive Income.

Cash and cash equivalents

Our cash equivalents include money market funds or highly liquid investments with maturities of 3 months or less as of our date of purchase, other than those held for trading purposes.

Assets segregated for regulatory purposes and restricted cash

Our broker-dealers carrying client accounts are generally subject to requirements to maintain cash or qualified securities on deposit in a segregated reserve account for the exclusive benefit of their clients. Such amounts are included in “Assets segregated for regulatory purposes and restricted cash” on our Consolidated Statements of Financial Condition as of each respective period end. These amounts include cash and cash equivalents, which represent highly liquid investments with maturities of 3 months or less as of our date of purchase, and highly liquid securities, such as U.S. Treasury securities (“U.S” Treasuries”), which have maturities of greater than 3 months as of our date of purchase and are carried at fair value on our Consolidated Statements of Financial Condition.

We may also from time-to-time be required to restrict cash for other corporate purposes. In addition, Raymond James Ltd. (“RJ Ltd.”) holds client Registered Retirement Savings Plan funds in trust in accordance with Canadian retirement plan regulations.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Collateralized agreements and financings

Securities purchased under agreements to resell and securities sold under agreements to repurchase

We purchase securities under short-term agreements to resell (“reverse repurchase agreements”). Additionally, we sell securities under agreements to repurchase (“repurchase agreements”). Reverse repurchase agreements and repurchase agreements are accounted for as collateralized agreements and collateralized financings, respectively, and are carried at contractual amounts plus accrued interest. We receive collateral with a fair value that is typically equal to or in excess of the principal amount loaned under reverse repurchase agreements to mitigate credit exposure. To ensure that the market value of the underlying collateral remains sufficient, collateral values are evaluated on a daily basis, and collateral is obtained from or returned to the counterparty when contractually required. Under repurchase agreements, we are required to post collateral in an amount that typically exceeds the carrying value of these agreements. In the event that the market value of the securities we pledge as collateral declines, we may have to post additional collateral or reduce borrowing amounts. Reverse repurchase agreements and repurchase agreements are included in “Collateralized agreements” and “Collateralized financings,” respectively, on our Consolidated Statements of Financial Condition. See Note 7 for additional information regarding collateralized agreements and financings.

Securities borrowed and securities loaned

We may act as an intermediary between broker-dealers and other financial institutions whereby we borrow securities from one broker-dealer and then either lend them to another broker-dealer or use them in our broker-dealer operations to cover short positions. Where permitted, we have also loaned, to broker-dealers and other financial institutions, securities owned by the firm or our clients or others we have received as collateral. Securities borrowed and securities loaned transactions are accounted for as collateralized agreements and collateralized financings, respectively, and are recorded at the amount of cash advanced or received. In securities borrowed transactions, we are required to deposit cash with the lender in an amount which is generally in excess of the market value of securities borrowed. With respect to securities loaned, we generally receive cash in an amount in excess of the market value of securities loaned. We evaluate the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as necessary. Securities borrowed and securities loaned are included in “Collateralized agreements” and “Collateralized financings,” respectively, on our Consolidated Statements of Financial Condition. See Note 7 for additional information regarding collateralized agreements and financings.

Financial instruments, financial instrument liabilities, at fair value

“Financial instruments” and “Financial instrument liabilities” are recorded at fair value. Fair value is defined by GAAP as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for the asset or liability.

In determining the fair value of our financial instruments in accordance with GAAP, we use various valuation approaches, including market and/or income approaches. Fair value is a market-based measurement considered from the perspective of a market participant. As such, our fair value measurements reflect assumptions that we believe market participants would use in pricing the asset or liability at the measurement date. GAAP provides for the following three levels to be used to classify our fair value measurements.

Level 1 - Financial instruments included in Level 1 are highly liquid instruments valued using unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 - Financial instruments reported in Level 2 include those that have pricing inputs that are other than unadjusted quoted prices in active markets, but which are either directly or indirectly observable as of the reporting date (i.e., prices for similar instruments).

Level 3 - Financial instruments reported in Level 3 have little, if any, market activity and are measured using one or more inputs that are significant to the fair value measurement and unobservable. These valuations require judgment or estimation. These instruments are generally valued using discounted cash flow techniques or market multiples.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

GAAP requires that we maximize the use of observable inputs and minimize the use of unobservable inputs when performing our fair value measurements. The availability of observable inputs can vary from instrument to instrument and, in certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement of an instrument requires judgment and consideration of factors specific to the instrument.

Valuation techniques and inputs

The fair values for certain of our financial instruments are derived using pricing models and other valuation techniques that involve management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of our financial instruments. Financial instruments which are actively traded will generally have a higher degree of price transparency than financial instruments that are less frequently traded. In accordance with GAAP, the criteria used to determine whether the market for a financial instrument is active or inactive is based on the particular asset or liability. For equity securities, our definition of actively traded is based on average daily trading volume. We have determined the market for certain other types of financial instruments to be uncertain or inactive as of both September 30, 2022 and 2021. As a result, the valuation of these financial instruments included management judgment in determining the relevance and reliability of market information available.

The level within the fair value hierarchy, specific valuation techniques, and other significant accounting policies pertaining to financial instruments at fair value on our Consolidated Statements of Financial Condition are described as follows.

Trading assets and trading liabilities

Trading assets and trading liabilities are comprised primarily of the financial instruments held by our broker-dealer subsidiaries and include debt securities, equity securities, brokered certificates of deposit, and other financial instruments. Trading assets and trading liabilities are recorded at fair value with realized and unrealized gains and losses reflected in “Principal transactions” in current period net income.

When available, we use quoted prices in active markets to determine the fair value of our trading assets and trading liabilities. Such instruments are classified within Level 1 of the fair value hierarchy.

When trading instruments are traded in secondary markets and quoted market prices for identical instruments do not exist, we utilize valuation techniques, including matrix pricing, to estimate fair value. Matrix pricing generally utilizes spread-based models periodically re-calibrated to observable inputs such as market trades or to dealer price bids in similar securities in order to derive the fair value of the instruments. Valuation techniques may also rely on other observable inputs such as yield curves, interest rates and expected principal prepayments and default probabilities. We utilize prices from third-party pricing services to corroborate our estimates of fair value. Depending upon the type of security, the pricing service may provide a listed price, a matrix price or use other methods. Securities valued using these techniques are classified within Level 2 of the fair value hierarchy.

Within each broker-dealer subsidiary, we offset our long and short positions for identical securities recorded at fair value as part of our trading assets (long positions) and trading liabilities (short positions).

Available-for-sale securities

Available-for-sale securities are classified at the date of purchase. They are comprised primarily of agency mortgage-backed securities (“MBS”), agency collateralized mortgage obligations (“CMOs”), and other securities which are guaranteed by the U.S. government or its agencies. Available-for-sale securities are used as part of our interest rate risk and liquidity management strategies and may be sold in response to changes in interest rates, changes in prepayment risks, or other factors.

The fair values of our available-for-sale securities are determined by obtaining prices from third-party pricing services, which are primarily based on valuation models. The third-party pricing services provide comparable price evaluations utilizing observable market data for similar securities. Such observable market data is comprised of benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data (including market research publications), and loan performance experience. We utilize other third-party pricing services to corroborate the pricing information obtained from the primary pricing service. Available-for-sale securities are valued using valuation techniques that rely on observable market data. Substantially all available-for-sale securities are classified within Level 2 of the fair value hierarchy; however, certain available-sale-securities are classified within Level 1 of the fair value hierarchy.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Interest on available-for-sale securities is recognized in interest income on an accrual basis, with the related accrued interest not yet received reflected in “Other receivables” on our Consolidated Statements of Financial Condition. Discounts are accreted and premiums are amortized as an adjustment to yield over the estimated average life of the security. Realized gains and losses on sales of available-for-sale securities are recognized using the specific identification method and are reflected in “Other” revenue in the period sold. Unrealized gains or losses due to market factors on available-for-sale securities are recorded through other comprehensive income/(loss) (“OCI”), net of applicable taxes, and are thereafter presented in equity as a component of accumulated other comprehensive income (“AOCI”) on our Consolidated Statements of Financial Condition.

Derivative assets and derivative liabilities

Our derivative assets and derivative liabilities are recorded at fair value and are included in “Derivative assets” and “Derivative liabilities” on our Consolidated Statements of Financial Condition. To reduce credit exposure on certain of our derivative transactions, we may enter into a master netting arrangement that allows for net settlement of all derivative transactions with each counterparty within the same subsidiary. In addition, the credit support annex allows parties to the master netting agreement to mitigate their credit risk by requiring the party which is out of the money to post collateral. Generally the collateral we accept is in the form of either cash or other marketable securities. Where permitted, we elect to net-by-counterparty certain derivatives entered into under a legally enforceable master netting agreement and, therefore, the fair value of those derivatives are netted by counterparty and subsidiary on our Consolidated Statements of Financial Condition. As we elect to net-by-counterparty the fair value of such derivatives, we also net-by-counterparty and subsidiary cash collateral exchanged as part of those derivative agreements. We may also require certain counterparties to make a cash deposit at the inception of a derivative agreement, referred to as “initial margin.” This initial margin is included in “Cash and cash equivalents” and “Other payables” on our Consolidated Statements of Financial Condition.

We are also required to maintain deposits with the clearing organizations we utilize to clear certain of our interest rate derivatives, for which we have posted securities as collateral. This initial margin is included as a component of “Other investments” and “Available-for-sale securities” on our Consolidated Statements of Financial Condition. On a daily basis, we also pay cash to, or receive cash from, these clearing organizations due to changes in the fair value of the derivatives which they clear. Such payments are referred to as “variation margin” and are considered to be settlement of the related derivatives.

Interest rate derivatives

We enter into interest rate derivatives as part of our trading activities in our fixed income business to facilitate client transactions or to actively manage risk exposures that arise from our client activity, including a portion of our trading inventory. In addition, we enter into interest rate derivatives with clients of our Bank segment, including clients with whom we have entered into loans or other lending arrangements, to facilitate their respective interest rate risk management strategies. The majority of these derivatives are traded in the over-the-counter market and are executed directly with another counterparty or are cleared and settled through a clearing organization. Realized and unrealized gains or losses on such derivatives are recorded in “Principal transactions” on our Consolidated Statements of Income and Comprehensive Income. The fair values of these interest rate derivatives are obtained from internal or third-party pricing models that consider current market trading levels and the contractual prices for the underlying financial instruments, as well as time value, yield curve and other volatility factors underlying the positions. Since these model inputs can be observed in liquid markets and the models do not require significant judgment, such derivatives are classified within Level 2 of the fair value hierarchy. We corroborate the output of our internal pricing models by preparing an independent calculation using a third-party model. Our fixed income business also holds to-be-announced security contracts (“TBAs”) that are accounted for as derivatives, which are classified within Level 1 of the fair value hierarchy.

We also facilitate matched book derivative transactions in which we enter into interest rate derivatives with clients. For every matched book derivative we enter into with a client, we also enter into an offsetting derivative on terms that mirror the client transaction with a credit support provider, which is a third-party financial institution. Any collateral required to be exchanged under these matched book derivatives is administered directly between the client and the third-party financial institution. Due to this pass-through transaction structure, we have completely mitigated the market and credit risk on these matched book derivatives. As a result, matched book derivatives for which the fair value is in an asset position have an equal and offsetting derivative liability. Fair value is determined using an internal pricing model which includes inputs from independent pricing sources to project future cash flows under each underlying derivative. Since any changes in fair value are completely offset by a change in fair value of the offsetting derivative, there is no net impact on our Consolidated Statements of Income and Comprehensive Income from changes in the fair value of these derivatives. We recognize revenue on these matched book derivatives on the transaction date, computed as the present value of the expected cash flows we expect to receive from the third-party financial institution over the life of the derivative. The difference between the present value of these cash flows at

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

the date of inception and the gross amount potentially received is accreted to revenue over the term of the contract. The revenue from these transactions is included within “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

We enter into primarily floating-rate advances from the Federal Home Loan Bank (“FHLB”) to, in part, fund lending and investing activities in our Bank segment and then enter into interest rate contracts which swap variable interest payments on such borrowings for fixed interest payments. These interest rate swaps are designated as cash flow hedges and effectively fix a portion of our Bank segment’s cost of funds and mitigate a portion of the market risk associated with its lending and investing activities. The gain or loss on our Bank segment’s cash flow hedges is recorded, net of tax, in shareholders’ equity as part of the cash flow hedge component of AOCI and subsequently reclassified to earnings when the hedged transaction affects earnings, specifically upon the incurrence of interest expense on the hedged borrowings. Hedge effectiveness is assessed at inception and at each reporting period utilizing regression analysis. As the key terms of the hedging instrument and hedged transaction match at inception, management expects the hedges to be effective while they are outstanding. The fair value of these interest rate swaps is determined by obtaining valuations from a third-party pricing service. These third-party valuations are based on observable inputs such as time value and yield curves. We validate these observable inputs by preparing an independent calculation using a secondary model. Cash flows from hedging activities are included in the same category as the items being hedged. Cash flows from derivative instruments used to manage interest rates are classified as operating activities. We classify these derivatives within Level 2 of the fair value hierarchy.

Foreign-exchange derivatives

We enter into three-month forward foreign exchange contracts primarily to hedge the risks related to Raymond James Bank’s investment in its Canadian subsidiary, as well as its risk resulting from transactions denominated in currencies other than the U.S. dollar. The majority of these derivatives are designated as net investment hedges. The gain or loss related to these designated net investment hedges is recorded, net of tax, in shareholders’ equity as part of the cumulative translation adjustment component of AOCI with such balance impacting “Other” revenues in the event the net investment is sold or substantially liquidated. Gains and losses on undesignated derivative instruments are recorded in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income. Hedge effectiveness is assessed at each reporting period using a method that is based on changes in forward rates and measured using the hypothetical derivatives method. As the terms of the hedging instrument and hypothetical derivative generally match at inception, the hedge is expected to be highly effective.

The fair values of our forward foreign exchange contracts are determined by obtaining valuations from a third-party pricing service or model. These valuations are based on observable inputs such as spot rates, forward foreign exchange rates and both U.S. and foreign interest rate curves. We validate the observable inputs utilized in the third-party valuation model by preparing an independent calculation using a secondary valuation model. These forward foreign exchange contracts are classified within Level 2 of the fair value hierarchy.

Other investments

Other investments consist primarily of private equity investments, securities pledged as collateral with clearing organizations, and term deposits with Canadian financial institutions. Our securities pledged as collateral with clearing organizations, which primarily include U.S. Treasuries, and term deposits are categorized within Level 1 of the fair value hierarchy.

Private equity investments consist primarily of investments in third-party private equity funds. The private equity funds in which we invest are primarily closed-end funds in which our investments are generally not eligible for redemption. We receive distributions from these funds as the underlying assets are liquidated or distributed. These investments are measured at fair value with any gains or losses recognized in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income. The fair value of substantially all of our private equity investments are determined utilizing the net asset value (“NAV”) of the fund as a practical expedient with the remainder utilizing Level 3 valuation techniques.

Fractional shares

Within our broker-dealer subsidiaries, when dividend reinvestment programs or other corporate action events result in clients receiving a share quantity that is not a whole number, we transact in the fractional shares on a principal basis. We include these fractional shares in “Other assets” in our Consolidated Statements of Financial Condition and record an associated liability to the client in “Other payables” as we must fulfill our clients’ future fractional share redemptions. We account for the fractional share assets and the liability to the client at fair value. The fair values of the fractional share assets and liabilities are determined based on quoted prices in active markets and are classified within Level 1 of the fair value hierarchy.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Brokerage client receivables, net

Brokerage client receivables include receivables from the clients of our broker-dealer subsidiaries and are principally for amounts due on cash and margin transactions. Such receivables are generally collateralized by securities owned by the clients. Brokerage client receivables are reported at their outstanding principal balance, net of any allowance for credit losses. See the “Allowance for credit losses” section below for a discussion of our application of the practical expedient under the current expected credit losses (“CECL”) guidance for financial assets secured by collateral.

Securities beneficially owned by clients, including those that collateralize margin or other similar transactions, are not reflected on our Consolidated Statements of Financial Condition (see Note 7 for additional information regarding this collateral).

Other receivables, net

Other receivables primarily include receivables from brokers, dealers and clearing organizations, accrued fees from product sponsors, and accrued interest receivables. Receivables from brokers, dealers and clearing organizations primarily consist of cash deposits placed with clearing organizations, which includes cash deposited as initial margin, as well as receivables related to sales of securities which have traded but not yet settled including amounts receivable for securities failed to deliver.

We present “Other receivables, net” on our Consolidated Statements of Financial Condition, net of any allowance for credit losses. However, these receivables generally have minimal credit risk due to the low probability of clearing organization default and the short-term nature of receivables related to securities settlements and therefore, the allowance for credit losses on such receivables is not significant. Any allowance for credit losses for other receivables is estimated using assumptions based on historical experience, current facts and other factors. We update these estimates through periodic evaluations against actual trends experienced.

We include accrued interest receivables related to our financial assets in “Other receivables, net” on the Consolidated Statements of Financial Condition. We reverse any uncollectible accrued interest against interest income when the related financial asset is moved to nonaccrual status. Given that we write off uncollectible amounts in a timely manner, we do not recognize an allowance for credit losses against accrued interest receivable.

Bank loans, net

Loans held for investment

Bank loans are comprised of loans originated or purchased by our Bank segment and include securities-based loans (“SBL”), commercial and industrial (“C&I”) loans, real estate investment trust (“REIT”) loans, tax-exempt loans, and commercial and residential real estate loans. Other than the loans acquired in the TriState Capital acquisition which were recorded at acquisition-date fair value (see Note 3 for additional information), the loans which we have the intent and the ability to hold until maturity or payoff are recorded at their unpaid principal balance plus any premium paid in connection with the purchase of the loan or less any discounts received in connection with the purchase of the loan, less the allowance for credit losses and net of deferred fees and costs on originated loans. Loan origination fees and direct costs, as well as premiums and discounts on loans that are not revolving, are capitalized and recognized in interest income using the effective interest method, taking into consideration scheduled payments and prepayments. Loan discounts include fair value adjustments associated with our acquisition of TriState Capital Bank totaled $145 million as of June 1, 2022 and will be accreted into interest income over the weighted-average life of the underlying loans, estimated to approximate 4 years as of the acquisition date, which may vary based on prepayments. For revolving loans, the straight-line method is used based on the contractual term. Syndicated loans purchased in the secondary market are recorded on the trade date. Interest income is recorded on an accrual basis.

We segregate our loan portfolio into six loan portfolio segments: SBL, C&I, commercial real estate (“CRE”) (primarily loans that are secured by income-producing properties and CRE construction loans), REIT (loans made to businesses that own or finance income-producing real estate), residential mortgage, and tax-exempt. Loans in our SBL portfolio segment are primarily collateralized by the borrower’s marketable securities at advance rates consistent with industry standards and, to a lesser extent, the cash surrender value of any applicable life insurance policies. These portfolio segments also serve as the portfolio loan classes for purposes of credit analysis. See the “Allowance for credit losses” section below for information on our allowance policies.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Loans held for sale

Certain residential mortgage loans originated and intended for sale in the secondary market due to their fixed interest rate terms, as well as Small Business Administration (“SBA”) loans which we may purchase with intent to sell in the secondary market, as part of a securitization as discussed below, but have not yet been aggregated for securitization into pools, are each carried at the lower of cost or estimated fair value. The fair values of the residential mortgage loans held for sale are estimated using observable prices obtained from counterparties for similar loans. These nonrecurring fair value measurements are classified within Level 2 of the fair value hierarchy.

We purchase the guaranteed portions of SBA loans and account for these loans in accordance with the policy for loans held for sale. We then aggregate SBA loans with similar characteristics into pools for securitization and sell these pools in the secondary market. Individual SBA loans may be sold prior to securitization. The fair values of the SBA loans are determined based upon their committed sales price, third-party price quotes, or are determined using a third-party pricing service.

Once the SBA loans are securitized into a pool, the respective securities are classified as trading instruments based on our intention to sell the securitizations and are carried at fair value. Sales of the securitizations are accounted for as of settlement date, which is the date we have surrendered control over the transferred assets. We do not retain any interest in the securitizations once they are sold.

Corporate loans, which include C&I, CRE and REIT loans, as well as tax-exempt loans are designated as held for investment upon inception and recorded in loans receivable. If we subsequently designate a corporate or tax-exempt loan as held for sale, which generally occurs as part of our credit management activities, we then write down the carrying value of the loan with a partial charge-off, if necessary, to carry it at the lower of cost or estimated fair value.

Gains and losses on sales of residential mortgage loans held for sale, SBA loans that are not part of a securitized pool, and corporate loans transferred from the held for investment portfolio, are included as a component of “Other” revenues on our Consolidated Statements of Income and Comprehensive Income, while interest collected on these assets is included in “Interest income.” Net unrealized losses are a component of “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.

Unfunded lending commitments

We have outstanding at any time a significant number of commitments to extend credit and other credit-related off-balance-sheet financial instruments such as revolving lines of credit, standby letters of credit and loan purchases. Our policy is generally to require customers to provide collateral at the time of closing. The amount of collateral obtained, if it is deemed necessary upon extension of credit, is based on our credit evaluation of the borrower. Collateral held varies but may include assets such as marketable securities, accounts receivable, inventory, real estate, and income-producing commercial properties.

In the normal course of business, we issue or participate in the issuance of standby letters of credit whereby we provide an irrevocable guarantee of payment in the event the letter of credit is drawn down by the beneficiary. These standby letters of credit generally expire in one year or less. In the event that a letter of credit is drawn down, we would pursue repayment from the party under the existing borrowing relationship or would liquidate collateral, or both. The proceeds from repayment or liquidation of collateral are expected to satisfy the amounts drawn down under the existing letters of credit.

The allowance for potential credit losses associated with these unfunded lending commitments is included in “Other payables” on our Consolidated Statements of Financial Condition. Refer to the “Allowance for credit losses” section that follows for a discussion of the reserve calculation methodology and Note 19 for further information about these commitments.

We recognize the revenue associated with corporate syndicated standby letters of credit, which is generally received quarterly, on a cash basis, the effect of which does not differ significantly from recognizing the revenue in the period the fee is earned. Unused corporate line of credit fees are accounted for on an accrual basis.

Nonperforming assets

Nonperforming assets are comprised of both nonperforming loans and other real estate owned. Nonperforming loans include those loans which have been placed on nonaccrual status and certain accruing loans which are 90 days or more past due and in the process of collection. Loans which have been restructured in a manner that grants a concession that would not normally be granted to a borrower experiencing financial difficulties are deemed to be troubled debt restructurings (“TDRs”). Loans structured as TDRs which are placed on nonaccrual status are considered nonperforming loans.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Loans of all classes are generally placed on nonaccrual status when we determine that full payment of all contractual principal and interest is in doubt or the loan is past due 90 days or more as to contractual interest or principal unless the loan, in our opinion, is well-secured and in the process of collection. When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is written-off against interest income and accretion of the net deferred loan origination fees ceases. Interest is recognized using the cash method for SBL and substantially all residential mortgage loans, and the cost recovery method for corporate and tax-exempt loans thereafter until the loan qualifies for return to accrual status. Most loans (including residential mortgage TDRs) are returned to an accrual status when the loans have been brought contractually current with the original or amended terms and have been maintained on a current basis for a reasonable period, generally six months. However, corporate loan TDRs have generally been partially charged off and therefore remain on nonaccrual status until the loan is fully repaid or sold.

Other real estate acquired in the settlement of loans, including through, or in lieu of, loan foreclosure, is initially recorded at the lower of cost or fair value less estimated selling costs through a charge to the allowance for credit losses, thus establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed and the assets are carried at the lower of the carrying amount or fair value, as determined by a current appraisal or discounted cash flow valuation less estimated costs to sell, and are included in “Other assets” on our Consolidated Statements of Financial Condition. These nonrecurring fair value measurements are classified within Level 2 of the fair value hierarchy.

Bank loan charge-off policies

Corporate and tax-exempt loans are monitored on an individual basis, and loan grades are reviewed at least quarterly to ensure they reflect the loan’s current credit risk. When we determine that it is likely that a corporate or tax-exempt loan will not be collected in full, the loan is evaluated for a potential write down of the carrying value. After consideration of a number of factors, including the borrower’s ability to restructure the loan, alternative sources of repayment, and other factors affecting the borrower’s ability to repay the debt, the portion of the loan deemed to be a confirmed loss, if any, is charged-off. For collateral-dependent loans secured by real estate, the amount of the loan considered a confirmed loss and charged-off is generally equal to the difference between the recorded investment in the loan and the collateral’s appraised value less estimated costs to sell. For C&I and tax-exempt loans, we evaluate all sources of repayment to arrive at the amount considered to be a loss and charged-off. Corporate banking and credit risk managers also meet regularly to review criticized loans (i.e., loans that are rated special mention or worse as defined by bank regulators). Additional charge-offs are taken when the value of the collateral changes or there is an adverse change in the expected cash flows.

A portion of our corporate loan portfolio is comprised of participations in either Shared National Credits (“SNCs”) or other large syndicated loans in the U.S. and Canada. The SNCs are U.S. loan syndications totaling over $100 million that are shared between three or more regulated institutions. The agent bank’s regulator reviews a portion of SNC loans on a semi-annual basis and provides a synopsis of each loan’s regulatory classification, including loans that are designated for nonaccrual status and directed charge-offs. We are at least as critical with our nonaccrual designations, directed charge-offs, and classifications, potentially impacting our allowance for credit losses and charge-offs. Corporate loans are subject to our internal review procedures and regulatory review by either the Florida Office of Financial Regulation (“OFR”) and the Board of Governors of the Federal Reserve System (“the Fed”) or the Federal Deposit Insurance Corporation (“FDIC”) and the Pennsylvania Department of Banking and Securities (“PDBS”) as part of our respective banks’ regulatory examinations.

Substantially all residential mortgage loans over 60 days past due are reviewed to determine loan status, collection strategy and charge-off recommendations. Charge-offs are typically considered on residential mortgage loans once the loans are delinquent 90 days or more and then generally taken before the loan is 120 days past due. A charge-off is taken against the allowance for credit losses for the difference between the loan amount and the amount that we estimate will ultimately be collected, based on the value of the underlying collateral less estimated costs to sell. We predominantly use broker price opinions for these valuations. If a loan remains in pre-foreclosure status for more than nine months, an updated valuation is obtained to determine if further charge-offs are necessary.

Loans to financial advisors, net

We offer loans to financial advisors for recruiting and retention purposes. The decision to extend credit to a financial advisor is generally based on their ability to generate future revenues. Loans offered are generally repaid over a five to ten year period, with interest recognized as earned, and are contingent upon continued affiliation with us. These loans are not assignable by the financial advisor and may only be assigned by us to a successor in interest. There is no fee income associated with these loans. In the event that the financial advisor is no longer affiliated with us, any unpaid balance of such loan becomes immediately due and payable to us and generally does not continue to accrue interest. Based upon the nature of these financing receivables,

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Notes to Consolidated Financial Statements

affiliation status (i.e., whether the advisor is actively affiliated with us or has terminated affiliation with us) is the primary credit risk factor within this portfolio. We present the outstanding balance of loans to financial advisors on our Consolidated Statements of Financial Condition, net of the allowance for credit losses. Refer to the allowance for credit losses section that follows for further information related to our allowance for credit losses on our loans to financial advisors. See Note 9 for additional information on our loans to financial advisors.

Loans to financial advisors who are actively affiliated with us are considered past due once they are 30 days or more delinquent as to the payment of contractual interest or principal. Such loans are placed on nonaccrual status when we determine that full payment of contractual principal and interest is in doubt, or the loan is past due 180 days or more as to contractual interest or principal. When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is written-off against interest income. Interest is recognized using the cash method for these loans thereafter until the loan qualifies for return to accrual status. Loans are returned to an accrual status when the loans have been brought contractually current with the original terms and have been maintained on a current basis for a reasonable period, generally six months.

When we determine that it is likely a loan will not be collected in full, the loan is evaluated for a potential write down of the carrying value. After consideration of the borrower’s ability to restructure the loan, sources of repayment, and other factors affecting the borrower’s ability to repay the debt, the portion of the loan deemed a confirmed loss, if any, is charged-off. A charge-off is taken against the allowance for credit losses for the difference between the amortized cost and the amount we estimate will ultimately be collected. Additional charge-offs are taken if there is an adverse change in the expected cash flows.

Allowance for credit losses

We evaluate our held for investment bank loans, unfunded lending commitments, loans to financial advisors and certain other financial assets to estimate an allowance for credit losses (“ACL”) over the remaining life of the financial instrument. The remaining life of our financial assets is determined by considering contractual terms and expected prepayments, among other factors.

We use multiple methodologies in estimating an allowance for credit losses and our approaches may differ by the subsidiary which holds the asset, the type of financial asset and the risk characteristics within each financial asset type. Our estimates are based on ongoing evaluations of the portfolio, the related credit risk characteristics, and the overall economic and environmental conditions affecting the financial assets. For certain of our financial assets with collateral maintenance provisions (e.g., SBL, collateralized agreements, and margin loans), we apply the practical expedient allowed under the CECL guidance in estimating an allowance for credit losses. We reasonably expect that borrowers (or counterparties, as applicable) will replenish the collateral as required. As a result, we estimate zero credit losses to the extent that the fair value equals or exceeds the related carrying value of the financial asset. When the fair value of the collateral securing the financial asset is less than the carrying value, qualitative factors such as historical experience (adjusted for current risk characteristics and economic conditions) as well as reasonable and supportable forecasts are considered in estimating the allowance for credit losses on the unsecured portion of the financial asset.

Credit losses are charged-off against the allowance when we believe the uncollectibility of the financial asset is confirmed. Subsequent recoveries, if any, are credited to the allowance once received. A credit loss expense, or benefit, is recorded in earnings in an amount necessary to adjust the allowance for credit losses to our estimate as of the end of each reporting period. Our provision or benefit for credit losses for outstanding bank loans is included in “Bank loan provision/(benefit) for credit losses” on our Consolidated Statements of Income and Comprehensive Income and our provision or benefit for credit losses for all other financing receivables, including loans to financial advisors, and unfunded lending commitments, is included in “Other” expense.

Loans

We generally estimate the allowance for credit losses on our loan portfolios using credit risk models which incorporate relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable economic forecasts. After testing the reasonableness of a variety of economic forecast scenarios, each model is run using a single forecast scenario selected for such model. Our forecasts incorporate assumptions related to macroeconomic indicators including, but not limited to, U.S. gross domestic product (“GDP”), equity market indices, unemployment rates, and commercial real estate and residential home price indices. At the conclusion of our reasonable and supportable forecast period, which currently ranges from two to four years depending on the model and macroeconomic variables, we generally use a straight-line reversion approach over a one-year period, where applicable, to revert to historical loss information for C&I, REIT and tax-exempt loans. For CRE and residential mortgage loans, we incorporate a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the assets. The development of the forecast used for CRE and

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Notes to Consolidated Financial Statements

residential mortgage loans incorporates an assumption that each macroeconomic variable will revert to a long-term expectation starting in years two to four of the forecast and largely completing within the first five years of the forecast. We assess the length of the reasonable and supportable forecast period and the reversion period, our reversion approach, our economic forecasts and our methodology for estimating the historical loss information on a quarterly basis.

The allowance for credit losses on loans is generally evaluated and measured on a collective basis, based on the subsidiary which holds the asset, and then typically by loan portfolio segment, due to similar risk characteristics. When a loan does not share similar risk characteristics with other loans, the loan is evaluated for credit losses on an individual basis. Various risk characteristics are considered when determining whether the loan should be collectively evaluated including, but not limited to, financial asset type, internal risk ratings, collateral type, industry of the borrower, and historical or expected credit loss patterns.

The allowance for credit losses on collectively evaluated loans for each respective bank is comprised of two components: (a) a quantitative allowance; and (b) a qualitative allowance, which is based on an analysis of model limitations and other factors not considered by the quantitative models. There are several factors considered in estimating the quantitative allowance for credit losses on collectively evaluated loans which generally include, but are not limited to, the internal risk rating, historical loss experience (including adjustments due to current risk characteristics and economic conditions), prepayments, borrower-controlled extensions, and expected recoveries. We use third-party data for historical information on collectively evaluated corporate loans (C&I, CRE and REIT loans) and residential mortgage loans.

The qualitative portion of our allowance for credit losses includes certain factors that are not incorporated into the quantitative estimate and would generally require adjustments to the allowance for credit losses. These qualitative factors are intended to address developing trends related to each portfolio segment and would generally include, but are not limited to: changes in lending policies and procedures, including changes in underwriting standards and collection; our loan review process; volume and severity of delinquent loans; changes in the seasoning of the loan portfolio and the nature, volume and terms of loans; loan diversification and credit concentrations; changes in the value of underlying collateral; changes in legal and regulatory environments; local, regional, national and international economic conditions, or recent catastrophic events not already reflected in the quantitative estimate; and the routine time delay between when economic data is gathered, analyzed and distributed by our service providers and current macroeconomic developments.

Held for investment bank loans

Raymond James Bank: The allowance for credit losses for the C&I, CRE, REIT, residential mortgage, and tax-exempt portfolio segments is estimated using credit risk models that project a probability of default (“PD”), which is then multiplied by the loss given default (“LGD”) and the estimated exposure at default (“EAD”) at the loan-level for every period remaining in the loan’s expected life, including the maturity period. Historical information, combined with macroeconomic variables, are used in estimating the PD, LGD and EAD. Our credit risk models consider several factors when estimating the expected credit losses which may include, but are not limited to, financial performance and position, estimated prepayments, geographic location, industry or sector type, debt type, loan size, capital structure, initial risk levels and the economic outlook. Additional factors considered by the residential mortgage model include Fair Isaac Corporation (“FICO”) scores and loan-to-value (“LTV”) ratios.

TriState Capital Bank: The allowance for credit losses utilizes a lifetime or cumulative loss rate methodology, which identifies macroeconomic factors and asset-specific characteristics correlated with credit loss experience including loan age, loan type, and leverage. The lifetime loss rate is applied to the amortized cost of the loan and builds on default and recovery probabilities by utilizing pool-specific historical loss rates. These pool-specific historical loss rates may be adjusted for forecasted macroeconomic variables and other factors such as differences in underwriting standards, portfolio mix, or when historical asset terms do not reflect the contractual terms of the financial assets. Each quarter, the relevancy of historical loss information is assessed and management considers any necessary adjustments. Loss rates are based on historical averages for each loan pool, adjusted to reflect the impact of a single, forward-looking forecast of certain macroeconomic variables such as GDP, unemployment rates, corporate bond credit spreads and commercial property values, which management considers to be both reasonable and supportable.

See Note 8 for further information about our bank loans, including credit quality indicators considered in developing the allowance for credit losses.

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Notes to Consolidated Financial Statements

Unfunded lending commitments

We estimate credit losses on unfunded lending commitments using a methodology consistent with that used in the corresponding bank loan portfolio segment and also based on the expected funding probabilities for fully binding commitments. As a result, the allowance for credit losses for unfunded lending commitments will vary depending upon the mix of lending commitments and future funding expectations. All classes of individually evaluated unfunded lending commitments are analyzed in conjunction with the specific allowance process previously described.

Loans to financial advisors

The allowance for credit losses on loans to financial advisors is estimated using credit risk models that incorporate average annual loan-level loss rates and estimated prepayments based on historical data. The qualitative component of our estimate considers internal and external factors that are not incorporated into the quantitative estimate such as the reasonable and supportable forecast period. In estimating an allowance for credit losses on our individually-evaluated loans to financial advisors, we generally take into account the affiliation status of the financial advisor (i.e., whether the advisor is actively affiliated with us or has terminated affiliation with us), the borrower’s ability to restructure the loan, sources of repayment, and other factors affecting the borrower’s ability to repay the debt.

Available-for-sale securities

Credit losses on available-for-sale securities are limited to the difference between the security’s amortized cost basis, or for the securities acquired in the TriState Capital acquisition, the fair value of such securities on the acquisition date, and its fair value on the reporting date. Credit losses, if any, are recognized through an allowance for credit losses rather than as a direct reduction in amortized cost basis or the acquisition date fair value, as applicable. We expect zero credit losses on the portion of our available-for-sale securities portfolio that is comprised of U.S. government and government agency-backed securities and the related accrued interest receivable for which payments of both principal and interest are guaranteed, and for which we have not historically experienced any credit losses. In addition, we have the ability and intent to hold these securities and unrealized losses related to these available-for-sale securities are generally due to changes in market interest rates. On a quarterly basis, we reassess our expectation of zero credit losses on such securities, giving consideration to any relevant changes in the securities or the issuer.

On a quarterly basis, we also evaluate non-agency-backed available-for-sale securities in an unrealized loss position for expected credit losses. We first determine whether it is more likely than not that we will sell the impaired securities, giving consideration to current and forecasted liquidity requirements, regulatory and capital requirements, and our securities portfolio management. If it is more likely than not that we will sell an available-for-sale security with a fair value below amortized cost before recovery, the security’s book basis is written down to fair value through earnings. For available-for-sale debt securities that it is more likely than not that we will not sell before recovery, a provision for credit losses is recorded through earnings for the amount of the valuation decline below book basis that is attributable to credit losses. We consider the extent to which fair value is less than amortized cost, credit ratings and other factors related to the security in assessing whether a credit loss exists, and we measure the credit loss by comparing the present value of cash flows expected to be collected to the book basis of the security limited by the amount that the fair value is less than the book basis. The remaining difference between the security’s fair value and its book basis (that is, the decline in fair value not attributable to credit losses) is recognized in other comprehensive income on an after-tax basis. Changes in the allowance for credit losses are recorded as provisions for credit losses. Losses are charged against the allowance when we believe the security is uncollectible or we intend to sell the security. At September 30, 2022, based on our assessment of those securities not guaranteed by the U.S government or its agencies, we recognized an insignificant allowance for credit losses.

Identifiable intangible assets, net

Certain identifiable intangible assets we acquire such as those related to customer relationships, core deposits, developed technology, trade names and non-compete agreements, are amortized over their estimated useful lives on a straight-line basis and are evaluated for potential impairment whenever events or changes in circumstances suggest that the carrying value of an asset or asset group may not be fully recoverable. Amortization expense related to our identifiable intangible assets is included in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income. See Note 3 for further information on our intangible assets resulting from recent acquisitions.

We also hold indefinite-lived identifiable intangible assets, which are not amortized. Rather, these assets are subject to an evaluation of potential impairment on an annual basis to determine whether the estimated fair value is in excess of its carrying value, or between annual impairment evaluation dates, if events or circumstances indicate there may be impairment. In the

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

course of our evaluation of the potential impairment of such indefinite-lived assets, we may elect either a qualitative or a quantitative assessment. If after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value is greater than its carrying amount, we are not required to perform a quantitative impairment analysis. However, if we conclude otherwise, we then perform a quantitative impairment analysis. We have elected January 1 as our annual impairment evaluation date, evaluating balances as of December 31. See Note 11 for additional information regarding the outcome of our impairment assessment.

Goodwill

Goodwill represents the cost of acquired businesses in excess of the fair value of the related net assets acquired. Indefinite-lived intangible assets such as goodwill are not amortized, but rather evaluated for impairment at least annually, or between annual impairment evaluation dates whenever events or circumstances indicate potential impairment exists. Impairment exists when the carrying value of a reporting unit, which is generally at the level of or one level below our business segments, exceeds its respective fair value.

In the course of our evaluation of a potential impairment to goodwill, we may elect either a qualitative or a quantitative assessment. Our qualitative assessments consider macroeconomic indicators, such as trends in equity and fixed income markets, GDP, labor markets, interest rates, and housing markets. We also consider regulatory changes, reporting unit specific results, and changes in key personnel and strategy. Changes in these indicators, and our ability to respond to such changes, may trigger the need for impairment testing at a point other than our annual assessment date. We assess these, and other, qualitative factors to determine whether the existence of events or circumstances indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then performing a quantitative impairment analysis is not required. However, if we conclude otherwise, we then perform a quantitative impairment analysis. Alternatively, if we elect not to perform a qualitative assessment, we perform a quantitative evaluation.

In the event of a quantitative assessment, we estimate the fair value of the reporting unit with which the goodwill is associated and compare it to the carrying value. We estimate the fair value of our reporting units using an income approach based on a discounted cash flow model that includes significant assumptions about future operating results and cash flows and, if appropriate, a market approach. If the carrying value of a reporting unit is greater than the estimated fair value, an impairment charge is recognized for the excess.

We have elected January 1 as our annual goodwill impairment evaluation date, evaluating balances as of December 31. See Note 11 for additional information regarding the outcome of our goodwill impairment assessments.

Other assets

Other assets is primarily comprised of investments in company-owned life insurance, property and equipment, net, right-of-use assets (“ROU assets”) associated with leases, prepaid expenses, FHLB stock, Federal Reserve Bank (“FRB”) stock, investments in real estate partnerships held by consolidated VIEs, and certain investments held in our Bank segment. See Note 12 for further information. Other assets also includes client fractional shares for which we act in a principal capacity. See our fractional shares policy above for further information.

We maintain investments in company-owned life insurance policies utilized to indirectly fund certain non-qualified deferred compensation plans and other employee benefit plans (see Note 23 for information on the non-qualified deferred compensation plans). These life insurance policies are recorded at cash surrender value as determined by the insurer.

Ownership of FHLB and FRB stock is a requirement for all banks seeking membership into and access to the services provided by these banking systems. These investments are carried at cost.

Raymond James Affordable Housing Investments, Inc. (“RJAHI”) (formerly Raymond James Tax Credit Funds, Inc.) a wholly-owned subsidiary of RJF, or one of its affiliates, acts as the managing member or general partner in Low-Income Housing Tax Credit (“LIHTC”) funds and other funds of a similar nature, some of which require consolidation. These funds invest in housing project limited partnerships or limited liability companies (“LLCs”) which purchase and develop affordable housing properties generally qualifying for federal and state low-income housing tax credits and/or provide a mechanism for banks and other institutions to meet certain regulatory obligations. The investments in project partnerships of all of the LIHTC fund VIEs which require consolidation are included in “Other assets” on our Consolidated Statements of Financial Condition.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Our Bank segment holds investments which deliver tax benefits, including in LIHTC funds, some of which are managed by RJAHI. We have determined that LIHTC funds managed by RJAHI are VIEs. See additional discussion in this Note 2 regarding our evaluation and conclusions around consolidation of such VIEs. These investments are included in “Other assets” on our Consolidated Statements of Financial Condition. See the “Income taxes” section of this Note 2 for a discussion of our accounting for investments which qualify for tax credits.

Property and equipment, net

Property and equipment are stated at cost less accumulated depreciation and software amortization. Property and equipment primarily consists of software, buildings, certain leasehold improvements, and furniture. Software includes both purchased software and internally developed software that has been placed in service, including certain software projects where development is in progress. Buildings primarily consists of owned facilities. Leasehold improvements are generally costs associated with lessee-owned interior office space improvements. Equipment primarily consists of communications and technology hardware. Depreciation of assets (other than land) is primarily calculated using the straight-line method over the estimated useful lives of the assets, within ranges outlined in the following table.


Asset type						Estimated useful life
Buildings, building components and land improvements						15 to 40 years
Furniture, fixtures and equipment						3 to 5 years
Software						2 to 10 years
Leasehold improvements (lessee-owned)						Lesser of useful life or lease term

Costs for significant internally developed software projects are capitalized when the costs relate to development of new applications or modification of existing internal-use software that results in additional functionality. Internally developed software project costs related to preliminary-project and post-project activities are expensed as incurred.

Additions, improvements and expenditures that extend the useful life of an asset are capitalized. Expenditures for repairs and maintenance, as well as all maintenance costs associated with software applications, are expensed in the period incurred. Depreciation expense associated with property and equipment is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income. Amortization expense associated with computer software is included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income. Gains and losses on disposals of property and equipment are included in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income in the period of disposal. See Note 13 for additional information regarding our property and equipment.

Leases

We have operating leases for the premises we occupy in many of our U.S. and foreign locations, including our employee-based branch office operations. At inception, we determine if an arrangement to utilize a building or piece of equipment is a lease and, if so, the appropriate lease classification. Substantially all of our leases are operating leases. If the arrangement is determined to be a lease, we recognize a ROU asset in “Other assets” and a corresponding lease liability in “Other payables” on our Consolidated Statements of Financial Condition. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. We elected the practical expedient, where leases with an initial or acquired term of 12 months or less are not recorded as an ROU asset or lease liability. Our lease terms include any noncancelable periods and may reflect periods covered by options to extend or terminate when it is reasonably certain that we will exercise those options.

We record our lease ROU assets at the amount of the lease liability plus any prepaid rent, amounts paid for lessor-owned leasehold improvements, and initial direct costs, less any lease incentives and accrued rent. We record lease liabilities at commencement date (or acquisition date, for leases assumed through acquisitions) based on the present value of lease payments over the lease term, which is discounted using our commencement date or acquisition date incremental borrowing rate, or at the imputed rate within the lease, as appropriate. Our incremental borrowing rate considers the weighted-average yields on our senior notes payable, adjusted for collateralization and tenor. Payments that vary because of changes in facts or circumstances occurring after the commencement date, such as operating expense payments under a real estate lease, are considered variable and are expensed in the period incurred. For our real estate leases, we elected the practical expedient to account for the lease and non-lease components as a single lease. Lease expense for our lease payments is recognized on a straight-line basis over the lease term if the ROU asset has not been impaired or abandoned. See Note 14 for additional information on our leases.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Bank deposits

Bank deposits include money market accounts, savings accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposit held at Raymond James Bank and TriState Capital Bank. Raymond James Bank deposits are substantially comprised of deposits that are swept from the investment accounts of PCG clients through the RJBDP. TriState Capital Bank’s deposits are generally comprised of money market and savings accounts and interest-bearing checking accounts. Deposits are stated at the principal amount outstanding. Interest on deposits is accrued and charged to interest expense daily and is paid or credited in accordance with the terms of the respective accounts. The interest rates on the vast majority of our deposits are determined based on market rates and, in certain cases, may be linked to an index, such as the effective federal funds rate. For additional detail regarding deposits, see Note 15.

Contingent liabilities

We recognize liabilities for contingencies when there is an exposure that, when fully analyzed, indicates it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Whether a loss is probable, and if so, the estimated range of possible loss, is based upon currently available information and is subject to significant judgment, a variety of assumptions, and uncertainties. When a loss is probable and a range of possible loss can be estimated, we accrue the most likely amount within that range; if the most likely amount of possible loss within that range is not determinable, the minimum amount in the range of loss is accrued. No liability is recognized for those matters which, in management’s judgment, the determination of a reasonable estimate of loss is not possible, or for which a loss is not determined to be probable.

We record liabilities related to legal and regulatory proceedings in “Other payables” on our Consolidated Statements of Financial Condition. The determination of these liability amounts requires significant judgment on the part of management. Management considers many factors including, but not limited to: the amount of the claim; the amount of the loss in the client’s account; the basis and validity of the claim; the possibility of wrongdoing on the part of one of our employees or financial advisors; previous results in similar cases; and legal precedents and case law. Each legal proceeding or significant regulatory matter is reviewed in each accounting period and the liability balance is adjusted as deemed appropriate by management. Any change in the liability amount is recorded through “Other” expense on our Consolidated Statements of Income and Comprehensive Income in that period. The actual costs of resolving legal matters or regulatory proceedings may be substantially higher or lower than the recorded liability amounts for such matters. Our costs of defense related to such matters are expensed in the period they are incurred. Such defense costs are primarily related to external legal fees which are included within “Professional fees” on our Consolidated Statements of Income and Comprehensive Income. See Note 19 for additional information.

Share-based compensation

We account for the compensation cost related to share-based payment awards made to employees, directors, and independent contractors based on the estimated fair values of the awards on the date of grant. The compensation cost of our share-based awards, net of estimated forfeitures, is amortized over the requisite service period of the awards. Share-based compensation amortization is included in “Compensation, commissions and benefits” expense on our Consolidated Statements of Income and Comprehensive Income. See Note 23 for additional information on our share-based compensation plan.

Deferred compensation plans

We maintain various deferred compensation plans for the benefit of certain employees and independent contractors that provide a return to the participant based upon the performance of various referenced investments. For the Voluntary Deferred Compensation Plan (“VDCP”), Long-Term Incentive Plan (“LTIP”), and certain other plans, we purchase and hold company-owned life insurance policies on the lives of certain current and former participants to earn a competitive rate of return for participants and to provide a source of funds available to satisfy our obligations under the plan. See Note 12 for information regarding the carrying value of such policies. Compensation expense is recognized for all awards made under such plans with future service requirements over the requisite service period using the straight-line method. Changes in the value of the company-owned life insurance policies, as well as the expenses associated with the related deferred compensation plans, are recorded in “Compensation, commissions and benefits” expense on our Consolidated Statements of Income and Comprehensive Income. See Note 23 for additional information.

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Notes to Consolidated Financial Statements

Foreign currency translation

The statements of financial condition of the foreign subsidiaries we consolidate are translated at exchange rates as of the period-end. The statements of income are translated either at an average exchange rate for the period or, in certain cases, at the exchange rate in effect on the date which transactions occur. The gains or losses resulting from translating foreign currency financial statements into U.S. dollars are included in OCI and are thereafter presented in equity as a component of AOCI. Gains and losses relating to transactions in currencies other than the respective subsidiaries’ functional currency are reported in “Other” revenues in our Consolidated Statements of Income and Comprehensive Income.

Income taxes

The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year. We utilize the asset and liability method to provide for income taxes on all transactions recorded in our consolidated financial statements. This method requires that income taxes reflect the expected future tax consequences of temporary differences between the carrying amounts of assets or liabilities for book and tax purposes. Accordingly, a deferred tax asset or liability for each temporary difference is determined based on the tax rates that we expect to be in effect when the underlying items of income and expense are realized. Our net deferred tax assets and net deferred tax liabilities presented on the financial statements are based upon the jurisdictional footprint of the firm. We consider our major jurisdictions for disclosure purposes to be federal, state, Canada, and the United Kingdom (“U.K.”). Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns, including the repatriation of undistributed earnings of foreign subsidiaries. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations, or liquidity. See Note 18 for further information on our income taxes.

We hold investments in certain LIHTC and other funds which deliver tax benefits. For those investments in LIHTC funds that qualify for application of the proportional amortization method, we apply such method. Under the proportional amortization method, the LIHTC investment is amortized in proportion to the allocation of tax credits received in each period, and the investment amortization and the tax credits are presented on a net basis within “Provision for income taxes” in our Consolidated Statements of Income and Comprehensive Income. Where our LIHTC investments do not qualify for such treatment, we account for such LIHTC and other fund investments under the equity method, with any losses recorded in “Other” expenses. The federal tax credits that result from these investments reduce our provision for income taxes in the year the investment’s activity is included in our taxable income. As a result, inclusion of these credits may not align to the period in which we recognize the losses on the related investments in our financial statements.

Earnings per share (“EPS”)

Basic EPS is calculated by dividing earnings attributable to common shareholders by the weighted-average common shares outstanding. Earnings attributable to common shareholders represents net income reduced by preferred stock dividends as well as the allocation of earnings and dividends to participating securities. Diluted EPS is similar to basic EPS, but adjusts for the dilutive effect of outstanding stock options, restricted stock awards (“RSAs”), and certain restricted stock units (“RSUs”) by application of the treasury stock method.

Evaluation of VIEs to determine whether consolidation is required

A VIE requires consolidation by the entity’s primary beneficiary. Examples of entities that may be VIEs include certain legal entities structured as corporations, partnerships or LLCs.

We evaluate all of the entities in which we are involved to determine if the entity is a VIE and if so, whether we hold a variable interest and are the primary beneficiary. We hold variable interests primarily in the following VIEs: certain private equity investments, a trust fund established for employee retention purposes (“Restricted Stock Trust Fund”) and certain LIHTC funds or funds of a similar nature. See Note 10 for further information on our VIEs.

Determination of the primary beneficiary of a VIE

We consolidate VIEs that are subject to assessment when we are deemed to be the primary beneficiary of the VIE. The process for determining whether we are the primary beneficiary of the VIE is to conclude whether we are a party to the VIE holding a variable interest that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE, and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

LIHTC funds

RJAHI is the managing member or general partner in a number of LIHTC funds having one or more investor members or limited partners. These LIHTC funds are organized as LLCs or limited partnerships for the purpose of investing in a number of project partnerships, which are limited partnerships or LLCs that purchase and develop, or hold, low-income housing properties qualifying for tax credits and/or provide a mechanism for banks and other institutions to meet their Community Reinvestment Act obligations throughout the U.S.

Our determination of the primary beneficiary of each fund in which RJAHI has a variable interest requires judgment and is based on an analysis of all relevant facts and circumstances, including: (1) an assessment of the characteristics of RJAHI’s variable interest and other involvement it has with the fund, including involvement of related parties and any de facto agents, as well as the involvement of other variable interest holders, namely, limited partners or investor members, and (2) the fund’s purpose and design, including the risks that the fund was designed to create and pass through to its variable interest holders. In the design of most tax credit fund VIEs, the investor members invest solely for tax attributes associated with the portfolio of low-income housing properties held by the fund. However, certain fund VIEs which invest and hold project partnerships that have already delivered most of the tax credits to their investors hold the projects to monetize anticipated future tax benefits for which the project may ultimately qualify. In both instances, RJAHI, as the managing member or general partner of the fund, is responsible for overseeing the fund’s operations.

RJAHI sponsors two general types of tax credit funds designed to deliver tax benefits to the investors. Generally, neither type meets the VIE consolidation criteria. These types of funds include single investor funds and multi-investor funds. RJAHI does not typically provide guarantees related to the delivery or funding of tax credits or other tax attributes to the investor members or limited partners of tax credit funds. The investor member(s) or limited partner(s) of the VIEs bear the risk of loss on their investment. Additionally, under the tax credit funds’ designed structure, the investor member(s) or limited partner(s) receive nearly all of the tax credits and tax-deductible loss benefits designed to be delivered by the fund entity, as well as a majority of any proceeds upon a sale of a project partnership held by a tax credit fund (fund level residuals). RJAHI earns fees from the fund for its services in organizing the fund, identifying and acquiring the project partnership investments and ongoing asset management, and receives a share of any residuals arising from sale of project partnerships upon the termination of the fund.

In single investor funds that deliver tax benefits, RJAHI has concluded that the one single investor member or limited partner in such funds, in nearly all instances, has significant participating rights over the activities that most significantly impact the economics of the fund. Therefore RJAHI, as managing member or general partner of such funds, is not the one party with power over such activities and resultantly is not deemed to be the primary beneficiary of such single investor funds and, in nearly all cases, these funds are not consolidated.

In multi-investor funds that deliver tax benefits, RJAHI has concluded that since the participating rights over the activities that most significantly impact the economics of the fund are not held by one single investor member or limited partner, RJAHI is deemed to have the power over such activities. RJAHI then assesses whether its projected benefits to be received from the multi-investor funds, primarily its share of any residuals upon the termination of the fund, are potentially significant to the fund. As such residuals received upon termination are not expected to be significant to the funds, in nearly all cases, these funds are not consolidated.

RJAHI may also sponsor other funds designed to hold projects to monetize future tax benefits for which the projects may qualify in either single investor or multi-investor form. In single investor form, the limited partner has significant participating rights over the activities that most significantly impact the economics of the fund, and therefore RJAHI is not the primary beneficiary of such funds and such funds are not consolidated. In multi-investor form, we have concluded that we meet the power criteria since participating rights are not held by any one single investor and thus RJAHI is deemed to have the power over such activities; however, we have concluded that we do not meet the benefits criteria given we do not expect the benefits to be potentially significant and therefore we are not the primary beneficiary and we do not consolidate the funds.

Direct investments in LIHTC project partnerships

Raymond James Bank and TriState Capital Bank are the investor members of LIHTC funds that deliver tax benefits which we have determined to be VIEs, and in which RJAHI, or its subsidiary, is the managing member. For Raymond James Bank, we have determined that it is the primary beneficiary of this VIE and therefore, we consolidate the fund. TriState Capital Bank also holds investments in other LIHTC funds for which we have determined that we are not the primary beneficiary. LIHTC funds which we consolidate are investor members in certain LIHTC project partnerships. Since unrelated third parties are the managing members of the investee project partnerships, we have determined that consolidation of these project partnerships is not required and the funds account for their project partnership investments under the equity method. The carrying values of

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

the funds’ project partnership investments are included in “Other assets” on our Consolidated Statements of Financial Condition. Any losses on such equity method investments are included in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income. See “Income taxes” section of this Note 2 for a discussion of our accounting for the tax benefits related to such investments.

Private Equity Interests

As part of our private equity investments, at one time we held interests in a number of limited partnerships (our “Private Equity Interests”). We concluded that the Private Equity Interests are VIEs, primarily as a result of the treatment of limited partner kick-out and participation rights as a simple majority of the limited partners cannot initiate an action to kick-out the general partner without cause and the limited partners with equity at-risk lack substantive participating rights.

In our analysis of the criteria to determine whether we were the primary beneficiary of the Private Equity Interests VIEs, we analyzed the power and benefits criteria. As of September 30, 2021, we had concluded that we were the primary beneficiary in certain of these entities as we met the power and benefits criteria. In such instances, we consolidated the Private Equity Interests VIE. However, as of September 30, 2022 we had sold or restructured such investments such that we were no longer deemed the primary beneficiary and therefore did not consolidated these entities. In our remaining Private Equity Interests, we are a passive limited partner investor, and thus, we do not have the power to make decisions that most significantly affect the economic performance of such VIEs. Accordingly, in such circumstances, we have determined we are not the primary beneficiary and therefore we do not consolidate the VIE.

Restricted Stock Trust Fund

We utilize a trust in connection with certain of our RSU awards. This trust fund was established and funded for the purpose of acquiring our common stock in the open market to be used to settle RSUs granted as a retention vehicle for certain employees of our Canadian subsidiaries. We are deemed to be the primary beneficiary and, accordingly, consolidate this trust fund.

Acquisitions

Our financial statements include the operations of acquired businesses starting from the completion of the acquisition. Acquisitions are generally recorded as business combinations, whereby the assets acquired and liabilities assumed are recorded on the date of acquisition at their respective estimated fair values, including any identifiable intangible assets. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

Significant judgment is required in estimating the fair value of certain acquired assets and liabilities. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management, but are inherently uncertain as they pertain to forward-looking views of our businesses, client behavior, and market conditions. We consider the income, market and cost approaches and place reliance on the approach or approaches deemed most appropriate to estimate the fair value of intangible assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates and profitability) and the discount rate applied to the cash flows.

Determining the useful life of an intangible asset also requires judgment. With the exception of certain customer relationships, the majority of our acquired intangible assets (e.g., customer relationships, trade names and non-compete agreements) are expected to have determinable useful lives. We estimate the useful lives of these intangible assets based on a number of factors including competitive environment, market share, trademark, brand history, underlying demand, and operating plans. Finite-lived intangible assets are amortized over their estimated useful life. Refer to Note 3 and our goodwill and intangible assets policies above for additional information.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 3 – ACQUISITIONS

TriState Capital

On June 1, 2022, we completed our acquisition of all the outstanding shares of TriState Capital, including its wholly-owned subsidiaries, TriState Capital Bank and Chartwell Investment Partners, LLC (“Chartwell”), in a cash and stock transaction valued at $1.4 billion. TriState Capital Bank serves the commercial banking needs of middle-market businesses and financial services providers and focused private banking needs of high-net-worth individuals. Chartwell, a registered investment adviser, provides investment management services primarily to institutional investors, mutual funds, and individual investors. TriState Capital Bank will continue to operate as a separately branded firm and as an independently-chartered bank. TriState Capital Bank and Chartwell have been integrated into our Bank and Asset Management segments, respectively, and their results of operations have been included in our results prospectively from the closing date of June 1, 2022.

Under the terms of the acquisition agreement, TriState Capital common stockholders received $6.00 cash and 0.25 shares of RJF common stock for each share of TriState Capital common stock. Additionally, the TriState Capital Series C Perpetual Non-Cumulative Convertible Non-Voting Preferred Stock (“Series C Convertible Preferred Stock”) was converted to common shares at the prescribed exchange ratio and cashed out at $30 per share and each share of TriState Capital’s 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock and TriState Capital’s 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock was converted, respectively, into the right to receive one share of a newly created series A and series B preferred stock of RJF. The fair values of these newly created RJF series A and series B preferred stock were estimated as of the June 1, 2022 acquisition date based on quoted market prices for the instruments. See Note 20 for further details on these new classes of preferred stock.

Furthermore, as a component of our total purchase consideration for TriState Capital on June 1, 2022, in accordance with the terms of the acquisition agreement, 551 thousand RJF RSAs were issued at terms that mirrored RSAs of TriState Capital which were outstanding as of the acquisition date. In accordance with the terms of the acquisition agreement, the TriState Capital RSAs were converted to RJF RSAs using an exchange ratio that considered the RJF volume weighted average price for 10 trading days ending on the third business day prior to the closing of the acquisition. The fair value of the RSAs upon completion of the transaction was calculated as of the June 1, 2022 acquisition date based on the June 1, 2022 closing share price of our common stock and was allocated between the pre-acquisition service period ($28 million treated as purchase consideration) and the post-acquisition requisite service period, over which we will recognize share-based compensation amortization. See Note 23 for further details on these RSAs.

On December 15, 2021, during the period between announcement of the intent to acquire TriState Capital and the acquisition closing date, we had loaned TriState Capital $125 million under an unsecured fixed-to-floating rate note (the “Note”). The Note was set to mature on December 15, 2024 and bore interest at a fixed annual rate of 2.25%. Upon acquisition, the Note reverted to an intercompany instrument and subsequent to the closing date, the Note was forgiven. In accordance with GAAP, as of the acquisition date the Note was considered to have been effectively settled and the acquisition-date fair value of $123 million was treated as purchase consideration and included in the purchase price. The fair value of the Note on the acquisition date was determined using a discounted cash flow analysis based on the incremental borrowing rates for similar types of instruments at the acquisition date.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We accounted for our completed acquisition of TriState Capital as a business combination in accordance with GAAP. Accordingly, the purchase price attributable to this acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The following table summarizes the purchase consideration, fair value estimates of the assets acquired and liabilities assumed, and resulting goodwill as of the June 1, 2022 acquisition date.


	TriState Capital
$ in millions, except share and per share amounts	June 1, 2022
Fair value of consideration transferred:
Fair value of common stock issued:
Shares of RJF common stock issued	7,861,189
RJF share price as of June 1, 2022	$	97.74
Fair value of RJF common stock issued for TriState Capital common stock	$	768
Other common stock consideration	10
Total fair value of common stock issued	778
Cash consideration (1)	359
Effective settlement of the Note	123
Preferred stock issued	120
RSAs issued	28
Total purchase price	$	1,408
Fair value of assets acquired:
Cash and cash equivalents	$	457
Available-for-sale securities	1,524
Derivative assets	51

Bank loans, net	11,549
Deferred income taxes, net	26
Identifiable intangible assets	197
Other assets	226
All other assets acquired	59
Total assets acquired	$	14,089
Fair value of liabilities assumed:
Bank deposits	$	12,593
Derivative liabilities	125
Other borrowings	375
All other liabilities assumed	117
Total liabilities assumed	$	13,210
Fair value of net identifiable assets acquired	$	879
Goodwill (2)	$	529

(1) Cash consideration includes $6 per TriState Capital common share outstanding (for a total of $189 million) and $30 per TriState Capital Series C Convertible Preferred Stock outstanding (for a total of $154 million), as well as other cash amounts paid to settle TriState Capital warrants and options outstanding as of the closing and cash paid in lieu of fractional shares. We utilized our cash on hand to fund the cash component of the purchase consideration.

(2) The goodwill associated with this acquisition, which has been allocated to our Bank segment and primarily represents synergies from combining TriState Capital with our existing businesses, is not deductible for tax purposes.

Our Consolidated Statements of Income and Comprehensive Income included net revenues and pre-tax income attributable to TriState Capital of $141 million and $38 million, respectively, for the year ended September 30, 2022. The pre-tax income included an initial provision for credit losses on loans and lending commitments acquired as part of the acquisition of $26 million (included in “Bank loan provision/(benefit) for credit losses”) and $5 million (included in “Other” expense), respectively. These provisions were required under GAAP to be recorded in earnings in the reporting period following the acquisition date.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

All other acquisitions

On January 21, 2022, we completed our acquisition of U.K.-based Charles Stanley Group PLC (“Charles Stanley”) using cash on hand as of the acquisition date. The acquisition enables us to accelerate our financial planning, investment advisory and securities transaction services growth in the U.K. and, through Charles Stanley’s multiple affiliation options, gives us the ability to offer wealth management affiliation choices to financial advisors in the U.K. consistent with our PCG model in the U.S. and Canada. Charles Stanley has been integrated into our PCG segment and its results of operations have been included in our results prospectively from the closing date of January 21, 2022.

On July 1, 2022, we completed our acquisition of SumRidge Partners, LLC (“SumRidge Partners”) using cash on hand as of the acquisition date. SumRidge Partners is a technology-driven fixed income market maker specializing in investment-grade and high-yield corporate bonds, municipal bonds, and institutional preferred securities. The acquisition of SumRidge Partners added an institutional market-making operation, as well as additional trading technologies and risk management tools to our existing fixed income operations. SumRidge Partners has been integrated into our Capital Markets segment and its results of operations have been included in our results prospectively from the closing date of July 1, 2022.

We accounted for our completed acquisitions of Charles Stanley and SumRidge Partners as business combinations in accordance with GAAP. Accordingly, the aggregate purchase price attributable to each acquisition was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values. The following table summarizes the aggregate purchase consideration, fair value estimates of the assets acquired and liabilities assumed, and resulting goodwill as of their respective acquisition dates.


$ in millions	Charles Stanley (1) and SumRidge Partners
Aggregate purchase consideration	$	686
Fair value of assets acquired:
Cash and cash equivalents	$	156
Assets segregated for regulatory purposes	1,890
Trading assets	631
Brokerage client receivables	91
Other receivables	440
Identifiable intangible assets	137
All other assets acquired	38
Total assets acquired	$	3,383
Fair value of liabilities assumed:
Trading liabilities	$	552
Brokerage client payables	2,064

All other liabilities assumed	347
Total liabilities assumed	$	2,963
Fair value of net identifiable assets acquired	$	420
Goodwill	$	266

Goodwill by segment:
PCG (2)	$	164
Capital Markets (3)	102
Total goodwill	$	266

(1) The fair values of assets acquired and liabilities assumed associated with the Charles Stanley acquisition were denominated in British pounds sterling (“GBP”) and converted to U.S. dollars using the spot rate of 1.3554 as of January 21, 2022.

(2) The goodwill associated with the Charles Stanley acquisition, which has been allocated to our PCG segment, primarily represents synergies from combining Charles Stanley with our existing businesses and is not deductible for tax purposes.

(3) The goodwill associated with the SumRidge Partners acquisition, which has been allocated to our Capital Markets segment, primarily represents synergies from combining SumRidge Partners with our existing businesses and is deductible for tax purposes over 15 years.

Our Consolidated Statements of Income and Comprehensive Income included combined net revenues attributable to Charles Stanley and SumRidge Partners of $187 million and an insignificant amount of pre-tax income for the year ended September 30, 2022.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Determination of fair value

The following is a description of the methods used to determine the fair values of significant assets and liabilities acquired:

Cash and cash equivalents; Assets segregated for regulatory purposes; Brokerage client receivables; Other receivables; and Brokerage client payables: The pre-close carrying amount of these assets and liabilities was a reasonable estimate of fair value based on the short-term nature of these assets and liabilities.

Trading assets and liabilities: The pre-close carrying amount of trading assets and liabilities as of the acquisition date were used as reasonable estimates of fair value. We utilized prices from third-party pricing services to corroborate these estimates of fair value.

Available-for-sale securities: The fair values of available-for-sale securities were based on quoted market prices for the same or similar securities, recently executed transactions or third-party pricing models.

Derivatives assets and liabilities: The pre-close carrying amount of derivative assets and liabilities, which utilized valuations from third-party pricing services, were used as reasonable estimates of fair value.

Bank loans: Fair values for bank loans were determined using a discounted cash flow methodology that considered loan type and related collateral, credit loss expectations, classification status, market interest rates and other market factors from the perspective of a market participant. Loans were segregated into specific pools according to similar characteristics, including risk, interest rate type (i.e., fixed or floating), underlying benchmark rate, and payment type and were treated in the aggregate when determining the fair value of each pool. The discount rates were derived using a build-up method inclusive of the weighted average cost of funding, estimated servicing costs and an adjustment for liquidity and then compared to current origination rates and other relevant market data.

Purchased loans were evaluated and classified as either purchased credit deteriorated (“PCD”), which indicates that the loan has experienced more than insignificant credit deterioration since origination, or non-PCD loans. For PCD loans, the sum of the loan’s purchase price and allowance for credit losses, which was determined as of the acquisition date using the same allowance methodology applied to the TriState Capital Bank loan portfolio as of September 30, 2022, became its initial amortized cost basis. The initial allowance for credit losses on PCD loans is established in purchase accounting, with a corresponding offset to goodwill (i.e., is not recorded in earnings). As required under GAAP, an initial allowance for credit losses on non-PCD loans is required to be established through a provision for credit losses (i.e., recorded in earnings) in the first reporting period following the acquisition. Subsequent changes in the allowance for credit losses for PCD and non-PCD loans are recognized in the bank loan provision/(benefit) for credit losses. For non-PCD loans, the difference between the fair value and the unpaid principal balance was considered the fair value mark. The non-credit discount or premium related to PCD loans and the fair value mark on non-PCD loans will be accreted or amortized into interest income over the weighted average life of the underlying loans, which may vary based on prepayments.

Of the total bank loans acquired in the TriState Capital acquisition with an unpaid principal balance of $11.70 billion, $11.36 billion were considered non-PCD loans and $337 million were considered PCD loans. The following table reconciles the difference between the unpaid principal balance and purchase price of PCD loans at acquisition.


$ in millions	June 1, 2022
Unpaid principal balance of PCD loans	$	337
Allowance for credit losses on PCD loans	(3)
Non-credit discount on PCD loans	(10)
Purchase price of PCD loans	$	324

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Identifiable intangible assets: The fair values of the significant identifiable intangible assets were estimated using the following income approaches.

Customer relationships — The fair values of customer relationships were estimated using a multi-period excess earnings approach that considered future period post-tax earnings, as well as a discount rate.
Trade names — The fair values of trade names were estimated using a relief from royalty approach which was based on a forecast of the after-tax royalties we would save by ownership of the intangible assets rather than licensing the use of those assets.
Core deposit intangible (“CDI”) — The fair value of the CDI asset was estimated using a discounted cash flow approach, specifically the favorable source of funds method, that considered the servicing and interest costs of the acquired deposit base, an estimate of the cost associated with alternative funding sources, expected client attrition rates, deposit growth rates, and a discount rate.
Developed technology — The fair value of developed technology was estimated primarily using a multi-period excess earnings approach which was based on a forecast of the expected future net cash flows attributable to the assets over the estimated remaining lives of the assets.

These cash flow forecasts were then adjusted to present value by applying appropriate discount rates based on current market rates that reflect the risks associated with the cash flow streams.

The following table summarizes the fair value and weighted average estimated useful life of identifiable intangibles assets acquired as of the respective acquisition dates.



	TriState Capital			Charles Stanley and SumRidge Partners
$ in millions	Estimated fair value		Weighted average estimated useful life		Estimated fair value		Weighted average estimated useful life
Fair value of identifiable intangible assets acquired:
Core deposit intangible	$	89	10 years		$	—	—
Customer relationships	54		17 years		80		12 years
Trade names	33		20 years		17		9 years
Developed technology	16		10 years		40		8 years
Non-amortizing customer relationships	5		N/A		—		N/A
Total identifiable intangibles assets acquired	$	197			$	137

Other assets: Other assets primarily include company-owned life insurance policies, ROU assets, investments in FHLB stock, and investments in LIHTC funds. The pre-close historical carrying values of company-owned life insurance policies, investments in FHLB stock and investments in LIHTC funds were used as a reasonable estimate of fair value. ROU lease assets were measured at the same amount as the lease liability, as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms (see “Other payables” section below for additional details regarding acquired lease liabilities).

Bank deposits: The fair values used for demand and savings deposits equaled the amounts payable on demand at the acquisition date. The fair values for time deposits were estimated by applying a discounted cash flow method to discount the principal and interest payments from maturity at the yields offered by similar banks as of the acquisition date.

Other borrowings: Other borrowings was comprised of 5.75% fixed-to-floating subordinated notes due 2030 and short-term FHLB advances (see Note 16 for further details on these borrowings). The fair value of the subordinated note was estimated based on quoted market prices as of the valuation date. The carrying amount of the FHLB advances was a reasonable estimate of fair value based on the short-term nature of these instruments and that the vast majority are floating-rate advances.

All other liabilities assumed: All other liabilities assumed primarily included payables to brokers, dealers, and clearing organizations, lease liabilities, accrued compensation, commissions, and benefits, and the fair value of unfunded lending commitments. The pre-close historical carrying amount of payables to brokers, dealers, and clearing organizations and accrued compensation, commissions, and benefits was a reasonable estimate of fair value based on the short-term nature of these liabilities. Lease liabilities were measured at the present value of the remaining lease payments determined using a discounted cash flow method based on our cost of borrowing, as if the acquired lease were a new lease at the acquisition date. The fair value of unfunded lending commitments was estimated using a discounted cash flow approach.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Pro forma financial information (unaudited)

The following table presents unaudited pro forma RJF consolidated net revenues and pre-tax income as if the TriState Capital, Charles Stanley, and SumRidge Partners acquisitions had occurred on October 1, 2020. The unaudited pro forma results reflect adjustments for amortization of acquired identifiable intangible assets, the initial provision for credit losses on non-PCD loans and lending commitments, acquisition-related retention expense, and accretion of the purchase accounting fair value adjustments to loans, available-for-sale securities, lending commitments, deposits, and other borrowings, with accretion generally recognized over the weighted average life of the underlying asset or liability. Legal and other professional fees and other costs incurred to effect these acquisitions are treated as if they were incurred on October 1, 2020. The pro forma amounts do not reflect potential revenue growth or cost savings that may be realized as a result of these acquisitions. The unaudited pro forma financial information is presented for informational purposes only, and is not necessarily indicative of future operations or results had these acquisitions been completed as of October 1, 2020.


	Year ended September 30,
$ in millions	2022		2021
Net revenues	$	11,364	$	10,395
Pre-tax income	$	2,195	$	1,872

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 4 – FAIR VALUE

Our “Financial instruments” and “Financial instrument liabilities” on our Consolidated Statements of Financial Condition are recorded at fair value. For further information about such instruments and our significant accounting policies related to fair value see Note 2. The following tables present assets and liabilities measured at fair value on a recurring basis. Netting adjustments represent the impact of counterparty and collateral netting on our derivative balances included on our Consolidated Statements of Financial Condition. See Note 6 for additional information.


$ in millions	Level 1		Level 2		Level 3		Netting adjustments		Balance as of September 30, 2022
Assets at fair value on a recurring basis:

Trading assets:
Municipal and provincial obligations	$	—	$	269	$	—	$	—	$	269
Corporate obligations	16		579		—		—		595
Government and agency obligations	86		85		—		—		171
Agency MBS, CMOs, and asset-backed securities (“ABS”)	—		123		—		—		123
Non-agency CMOs and ABS	—		61		—		—		61
Total debt securities	102		1,117		—		—		1,219
Equity securities	20		—		—		—		20
Brokered certificates of deposit	—		30		—		—		30
Other	—		—		1		—		1
Total trading assets	122		1,147		1		—		1,270
Available-for-sale securities (1)	986		8,899		—		—		9,885
Derivative assets:
Interest rate - matched book	—		52		—		—		52
Interest rate - other	42		432		—		(348)		126
Foreign exchange	—		10		—		—		10

Total derivative assets	42		494		—		(348)		188
Other investments - private equity - not measured at NAV	—		—		5		—		5
All other investments:
Government and agency obligations (2)	79		—		—		—		79
Other	92		2		24		—		118
Total all other investments	171		2		24		—		197
Other assets - fractional shares	78		—		—		—		78
Subtotal	1,399		10,542		30		(348)		11,623
Other investments - private equity - measured at NAV									90
Total assets at fair value on a recurring basis	$	1,399	$	10,542	$	30	$	(348)	$	11,713

Liabilities at fair value on a recurring basis:
Trading liabilities:
Municipal and provincial obligations	$	5	$	—	$	—	$	—	$	5
Corporate obligations	—		555		—		—		555
Government and agency obligations	249		—		—		—		249

Total debt securities	254		555		—		—		809
Equity securities	27		—		—		—		27

Total trading liabilities	281		555		—		—		836
Derivative liabilities:
Interest rate - matched book	—		52		—		—		52
Interest rate - other	40		495		—		(65)		470
Foreign exchange	—		5		—		—		5
Other	—		—		3		—		3
Total derivative liabilities	40		552		3		(65)		530
Other payables - fractional shares	78		—		—		—		78
Total liabilities at fair value on a recurring basis	$	399	$	1,107	$	3	$	(65)	$	1,444

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements


$ in millions	Level 1		Level 2		Level 3		Netting adjustments		Balance as of September 30, 2021
Assets at fair value on a recurring basis:
Assets segregated for regulatory purposes (3)	$	2,100	$	—	$	—	$	—	$	2,100
Trading assets:
Municipal and provincial obligations	—		155		—		—		155
Corporate obligations	16		63		—		—		79
Government and agency obligations	15		94		—		—		109
Agency MBS, CMOs, and ABS	—		211		—		—		211
Non-agency CMOs and ABS	—		14		—		—		14
Total debt securities	31		537		—		—		568
Equity securities	8		4		—		—		12
Brokered certificates of deposit	—		16		—		—		16
Other	—		—		14		—		14
Total trading assets	39		557		14		—		610
Available-for-sale securities (1)	15		8,300		—		—		8,315
Derivative assets:
Interest rate - matched book	—		193		—		—		193
Interest rate - other	16		128		—		(87)		57
Foreign exchange	—		5		—		—		5
Total derivative assets	16		326		—		(87)		255
Other investments - private equity - not measured at NAV	—		—		75		—		75
All other investments:
Government and agency obligations (2)	86		—		—		—		86
Other	77		2		23		—		102
Total all other investments	163		2		23		—		188
Subtotal	2,333		9,185		112		(87)		11,543
Other investments - private equity - measured at NAV									94
Total assets at fair value on a recurring basis	$	2,333	$	9,185	$	112	$	(87)	$	11,637

Liabilities at fair value on a recurring basis:
Trading liabilities:
Municipal and provincial obligations	$	2	$	—	$	—	$	—	$	2
Corporate obligations	—		6		—		—		6
Government and agency obligations	137		—		—		—		137

Total debt securities	139		6		—		—		145
Equity securities	28		3		—		—		31

Total trading liabilities	167		9		—		—		176
Derivative liabilities:
Interest rate - matched book	—		193		—		—		193
Interest rate - other	16		106		—		(88)		34

Other	—		—		1		—		1
Total derivative liabilities	16		299		1		(88)		228
Total liabilities at fair value on a recurring basis	$	183	$	308	$	1	$	(88)	$	404

(1) Our available-for-sale securities primarily consist of agency MBS and agency CMOs. See Note 5 for further information.

(2) These assets are comprised of U.S. Treasuries primarily purchased to meet certain deposit requirements with clearing organizations.

(3) These assets consisted of U.S. Treasuries with maturities greater than 3 months as of our date of purchase. These assets did not include U.S. Treasuries with maturities of less than 3 months as of our date of purchase with a fair value of $3.55 billion at September 30, 2021 which were considered cash equivalents segregated for regulatory purposes. These assets are classified as Level 1. Such cash equivalents were $500 million at September 30, 2022.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Level 3 recurring fair value measurements

The following tables present the changes in fair value for Level 3 assets and liabilities measured at fair value on a recurring basis. The realized and unrealized gains and losses in the tables may include changes in fair value that were attributable to both observable and unobservable inputs. In the following tables, gains/(losses) on trading and derivative instruments are reported in “Principal transactions” and gains/(losses) on other investments are reported in “Other” revenues on our Consolidated Statements of Income and Comprehensive Income.


Year ended September 30, 2022 Level 3 instruments at fair value
	Financial assets						Financial liabilities
	Trading assets		Other investments					Derivative liabilities
$ in millions	Other		Private equity investments		All other			Other
Fair value beginning of year	$	14	$	75	$	23		$	(1)
Total gains/(losses) included in earnings	1		12		(3)			(2)
Purchases and contributions	108		—		7			—
Sales, distributions, and deconsolidations	(122)		(70)		(3)			—
Transfers:
Into Level 3	—		—		—			—
Out of Level 3	—		(12)		—			—
Fair value end of year	$	1	$	5	$	24		$	(3)
Unrealized gains/(losses) for the year included in earnings for instruments held at the end of the year	$	—	$	1	$	1		$	(2)


Year ended September 30, 2021 Level 3 instruments at fair value
	Financial assets								Financial liabilities
	Trading assets		Derivative assets		Other investments				Derivative liabilities
$ in millions	Other		Other		Private equity investments		All other		Other
Fair value beginning of year	$	12	$	—	$	37	$	22	$	(5)
Total gains/(losses) included in earnings	(1)		1		37		1		5
Purchases and contributions	49		—		1		—		—
Sales, distributions, and deconsolidations	(46)		(1)		—		—		(1)
Transfers:
Into Level 3	—		—		—		—		—
Out of Level 3	—		—		—		—		—
Fair value end of year	$	14	$	—	$	75	$	23	$	(1)
Unrealized gains/(losses) for the year included in earnings for instruments held at the end of the year	$	—	$	—	$	37	$	1	$	(1)

As of September 30, 2022, 14% of our assets and 2% of our liabilities were measured at fair value on a recurring basis. In comparison, as of September 30, 2021, 19% of our assets and 1% of our liabilities were measured at fair value on a recurring basis. As of both September 30, 2022 and 2021, Level 3 assets represented less than 1% of our assets measured at fair value on a recurring basis.

Investments in private equity measured at net asset value per share

As a practical expedient, we utilize NAV or its equivalent to determine the recorded value of a portion of our private equity investments portfolio. We utilize NAV when the fund investment does not have a readily determinable fair value and the NAV of the fund is calculated in a manner consistent with the measurement principles of investment company accounting, including measurement of the investments at fair value.

Our private equity portfolio as of September 30, 2022 primarily included investments in third-party funds, including growth equity, venture capital, and mezzanine lending fund investments. Our investments cannot be redeemed directly with the funds.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Our investments are monetized through the liquidation of underlying assets of fund investments, the timing of which is uncertain.

The following table presents the recorded value and unfunded commitments related to our private equity investments portfolio.


$ in millions	Recorded value		Unfunded commitment
September 30, 2022
Private equity investments measured at NAV	$	90	$	39
Private equity investments not measured at NAV	5
Total private equity investments	$	95

September 30, 2021
Private equity investments measured at NAV	$	94	$	24
Private equity investments not measured at NAV	75
Total private equity investments (1)	$	169

(1) Of the total private equity investments at September 30, 2021, the portion we owned was $120 million, while the portion that we did not own was $49 million and was included as a component of noncontrolling interests on our Consolidated Statements of Financial Condition.

As a financial holding company, we are subject to holding period limitations for our merchant banking activities. As a result of such holding limitations, we exited or restructured certain of our private equity investments during fiscal 2022 to conform with such regulatory deadlines, which resulted in a decline in private equity investments not measured at NAV compared to September 30, 2021 and a decline in noncontrolling interests on our Consolidated Statements of Financial Condition related to the portion of such investments we did not own. Additionally, many of our private equity fund investments met the definition of prohibited covered funds as defined by the Volcker Rule enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). We received approval from the Fed to continue to hold the majority of our covered fund investments until July 2022. As a result, we have exited or restructured our covered fund investments to conform to such regulatory deadlines.

Financial instruments measured at fair value on a nonrecurring basis

The following table presents assets measured at fair value on a nonrecurring basis along with the valuation techniques and significant unobservable inputs used in the valuation of the assets classified as level 3. These inputs represent those that a market participant would take into account when pricing these instruments. Weighted averages are calculated by weighting each input by the relative fair value of the related financial instrument.


$ in millions	Level 2		Level 3		Total fair value		Valuation technique(s)	Unobservable input	Range (weighted-average)
September 30, 2022
Bank loans:
Residential mortgage loans	$	2	$	10	$	12	Collateral or discounted cash flow (1)	Prepayment rate	7 yrs. - 12 yrs. (10.4 yrs.)
Corporate loans	$	—	$	57	$	57	Collateral or discounted cash flow (1)	Recovery rate	24% - 66% (47%)
Loans held for sale	$	3	$	—	$	3	N/A	N/A	N/A


September 30, 2021
Bank loans:
Residential mortgage loans	$	3	$	11	$	14	Collateral or discounted cash flow (1)	Prepayment rate	7 yrs. - 12 yrs. (10.5 yrs.)
Corporate loans	$	—	$	49	$	49	Collateral or discounted cash flow (1)	Recovery rate	74	%
Loans held for sale	$	29	$	—	$	29	N/A	N/A	N/A

(1) The valuation techniques used to estimate the fair values are based on collateral value less selling costs for the collateral-dependent loans and discounted cash flows for loans that are not collateral-dependent. Unobservable inputs used in the collateral valuation technique are not meaningful and unobservable inputs used in the discounted cash flow valuation technique are presented in the table.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Financial instruments not recorded at fair value

Many, but not all, of the financial instruments we hold were recorded at fair value on the Consolidated Statements of Financial Condition. The following table presents the estimated fair value and fair value hierarchy of financial assets and liabilities that are not recorded at fair value on the Consolidated Statements of Financial Condition at September 30, 2022 and 2021. This table excludes financial instruments that are carried at amounts which approximate fair value.


$ in millions	Level 2		Level 3		Total estimated fair value		Carrying amount
September 30, 2022
Financial assets:
Bank loans, net	$	134	$	42,336	$	42,470	$	43,167
Financial liabilities:
Bank deposits - certificates of deposit	$	400	$	579	$	979	$	999
Other borrowings - subordinated notes payable	$	95	$	—	$	95	$	100
Senior notes payable	$	1,706	$	—	$	1,706	$	2,038

September 30, 2021
Financial assets:
Bank loans, net	$	116	$	24,839	$	24,955	$	24,902
Financial liabilities:
Bank deposits - certificates of deposit	$	—	$	898	$	898	$	878
Senior notes payable	$	2,459	$	—	$	2,459	$	2,037

Short-term financial instruments: The carrying value of short-term financial instruments, such as cash and cash equivalents, including amounts segregated for regulatory purposes and restricted cash, and the majority of collateralized agreements and collateralized financings, are recorded at amounts that approximate the fair value of these instruments. These financial instruments generally expose us to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market rates. Under the fair value hierarchy, cash and cash equivalents, including amounts segregated for regulatory purposes and restricted cash, are classified as Level 1 and collateralized agreements and financings are classified as Level 2.

Bank loans, net: These financial instruments are primarily comprised of loans originated or purchased by our Bank segment and include SBL, C&I loans, commercial and residential real estate loans, REIT loans, and tax-exempt loans intended to be held until maturity or payoff. These financial instruments are primarily recorded at amounts that result from the application of the methodologies for loans held for investment summarized in Note 2. Certain bank loans are held for sale, which are carried at the lower of cost or market value. A portion of these loans held for sale, as well as certain held for investment loans which have been written-down, are recorded at fair value as nonrecurring fair value measurements and therefore are excluded from the preceding table.

The fair values for both variable and fixed-rate loans held for investment are estimated using a discounted cash flow analysis based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality, which includes our estimate of future credit losses expected to be incurred. The majority of these loans are classified as Level 3 under the fair value hierarchy. Refer to Note 2 for information regarding the fair value policies specific to loans held for sale.

Receivables and other assets: Brokerage client receivables, other receivables, and certain other assets are recorded at amounts that approximate fair value and are classified as Levels 2 and 3 under the fair value hierarchy. As specified under GAAP, the FHLB and FRB stock are recorded at cost, which we have determined to approximate their estimated fair value, and are classified as Level 2 under the fair value hierarchy.

Loans to financial advisors, net: These financial instruments are primarily comprised of loans to financial advisors, primarily offered for recruiting and retention purposes. Loans to financial advisors, net are recorded at amounts that approximate fair value and are classified as Level 2 under the fair value hierarchy. Refer to Note 2 for information regarding loans to financial advisors, net.

Bank deposits: The carrying amounts of variable-rate money market and savings accounts approximate their fair values as these are short-term in nature. Due to their short-term nature, variable-rate money market and savings accounts are classified as Level 2 under the fair value hierarchy. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

flow calculation that applies interest rates currently being offered on certificates of deposit to a schedule of expected monthly maturities on time deposits. These fixed-rate certificates of deposit are classified as Levels 2 and 3 under the fair value hierarchy.

Payables: Brokerage client payables and other payables are recorded at amounts that approximate fair value and are classified as Level 2 under the fair value hierarchy.

Other borrowings: Other borrowings primarily include 5.75% fixed-to-floating subordinated notes due 2030 and our Bank segment’s borrowings from the FHLB. The fair value of the subordinated notes is estimated by discounting scheduled cash flows through the estimated maturity using market rates for borrowings of similar maturities and is classified as Level 2 under the fair value hierarchy. FHLB advances reflect terms that approximate current market rates for similar loans and therefore, their carrying value approximates fair value. Our FHLB advances are classified as Level 2 under the fair value hierarchy.

Senior notes payable: The fair value of our senior notes payable is calculated based upon recent trades of those debt securities in the market. Our senior notes payable are classified as Level 2 under the fair value hierarchy.

NOTE 5 – AVAILABLE-FOR-SALE SECURITIES

We own available-for-sale securities at Raymond James Bank and TriState Capital Bank. Refer to Note 2 for a discussion of our accounting policies applicable to our available-for-sale securities.

The following table details the amortized costs and fair values of our available-for-sale securities.


$ in millions	Cost basis		Gross unrealized gains		Gross unrealized losses		Fair value
September 30, 2022
Agency residential MBS	$	5,662	$	—	$	(668)	$	4,994
Agency commercial MBS	1,518		—		(208)		1,310
Agency CMOs	1,637		—		(233)		1,404
Other agency obligations	613		—		(31)		582
Non-agency residential MBS	492		—		(41)		451
U.S. Treasuries	1,014		—		(28)		986
Corporate bonds	146		—		(5)		141
Other	18		—		(1)		17
Total available-for-sale securities	$	11,100	$	—	$	(1,215)	$	9,885

September 30, 2021
Agency residential MBS	$	5,168	$	46	$	(25)	$	5,189
Agency commercial MBS	1,285		7		(28)		1,264
Agency CMOs	1,854		9		(16)		1,847
U.S Treasuries	15		—		—		15

Total available-for-sale securities	$	8,322	$	62	$	(69)	$	8,315

The amortized costs and fair values in the preceding table exclude $24 million and $14 million of accrued interest on available-for-sale securities as of September 30, 2022 and September 30, 2021, respectively, which was included in “Other receivables, net” on our Consolidated Statements of Financial Condition.

See Note 4 for additional information regarding the fair value of available-for-sale securities.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table details the contractual maturities, amortized costs, carrying values and current yields for our available-for-sale securities. Weighted-average yields are calculated on a taxable-equivalent basis based on estimated annual income divided by the average amortized cost of these securities. Since our MBS and CMO available-for-sale securities are backed by mortgages, actual maturities may differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment penalties. As a result, as of September 30, 2022, the weighted-average life of our available-for-sale securities portfolio was approximately 4.65 years.


	September 30, 2022
$ in millions	Within one year			After one but within five years			After five but within ten years			After ten years			Total
Agency residential MBS
Amortized cost	$	—		$	147		$	2,516		$	2,999		$	5,662
Carrying value	$	—		$	140		$	2,242		$	2,612		$	4,994
Weighted-average yield	—		%	2.45		%	1.25		%	1.76		%	1.55		%
Agency commercial MBS
Amortized cost	$	15		$	714		$	716		$	73		$	1,518
Carrying value	$	15		$	644		$	588		$	63		$	1,310
Weighted-average yield	1.91		%	1.70		%	1.22		%	1.69		%	1.47		%
Agency CMOs
Amortized cost	$	—		$	12		$	30		$	1,595		$	1,637
Carrying value	$	—		$	12		$	27		$	1,365		$	1,404
Weighted-average yield	—		%	2.08		%	1.54		%	1.48		%	1.49		%
Other agency obligations
Amortized cost	$	—		$	487		$	114		$	12		$	613
Carrying value	$	—		$	464		$	107		$	11		$	582
Weighted-average yield	—		%	2.16		%	3.55		%	2.99		%	2.43		%
Non-agency residential MBS
Amortized cost	$	—		$	—		$	—		$	492		$	492
Carrying value	$	—		$	—		$	—		$	451		$	451
Weighted-average yield	—		%	—		%	—		%	4.13		%	4.13		%
U.S. Treasuries
Amortized cost	$	6		$	1,006		$	2		$	—		$	1,014
Carrying value	$	6		$	978		$	2		$	—		$	986
Weighted-average yield	1.91		%	2.64		%	1.30		%	—		%	2.63		%
Corporate bonds
Amortized cost	$	—		$	83		$	63		$	—		$	146
Carrying value	$	—		$	81		$	60		$	—		$	141
Weighted-average yield	—		%	4.12		%	4.91		%	—		%	4.46		%
Other
Amortized cost	$	—		$	5		$	—		$	13		$	18
Carrying value	$	—		$	5		$	—		$	12		$	17
Weighted-average yield	—		%	4.19		%	—		%	5.33		%	4.95		%
Total available-for-sale securities
Amortized cost	$	21		$	2,454		$	3,441		$	5,184		$	11,100
Carrying value	$	21		$	2,324		$	3,026		$	4,514		$	9,885
Weighted-average yield	1.91		%	2.31		%	1.39		%	1.91		%	1.84		%

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table details the gross unrealized losses and fair values of securities that were in a loss position at the reporting period end, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position.


	Less than 12 months				12 months or more				Total
$ in millions	Estimated fair value		Unrealized losses		Estimated fair value		Unrealized losses		Estimated fair value		Unrealized losses
September 30, 2022
Agency residential MBS	$	2,165	$	(226)	$	2,829	$	(442)	$	4,994	$	(668)
Agency commercial MBS	494		(41)		816		(167)		1,310		(208)
Agency CMOs	337		(32)		1,067		(201)		1,404		(233)
Other agency obligations	582		(31)		—		—		582		(31)
Non-agency residential MBS	451		(41)		—		—		451		(41)
U.S. Treasuries	982		(28)		4		—		986		(28)
Corporate bonds	128		(5)		—		—		128		(5)
Other	17		(1)		—		—		17		(1)
Total	$	5,156	$	(405)	$	4,716	$	(810)	$	9,872	$	(1,215)
September 30, 2021
Agency residential MBS	$	3,155	$	(25)	$	18	$	—	$	3,173	$	(25)
Agency commercial MBS	645		(13)		353		(15)		998		(28)
Agency CMOs	918		(12)		231		(4)		1,149		(16)
U.S. Treasuries	3		—		—		—		3		—
Total	$	4,721	$	(50)	$	602	$	(19)	$	5,323	$	(69)

At September 30, 2022, of the 1,071 available-for-sale securities in an unrealized loss position, 734 were in a continuous unrealized loss position for less than 12 months and 337 securities were in a continuous unrealized loss position for greater than 12 months.

At September 30, 2022, debt securities we held in excess of ten percent of our equity included those issued by the Federal National Home Mortgage Association and Federal Home Loan Mortgage Corporation with amortized costs of $5.42 billion and $3.21 billion, respectively, and fair values of $4.74 billion and $2.80 billion, respectively.

We received proceeds of $52 million, $969 million, and $222 million, respectively, from sales of available-for-sale securities for the years ended September 30, 2022, 2021, and 2020, respectively, resulting in insignificant gains.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 6 – DERIVATIVE ASSETS AND DERIVATIVE LIABILITIES

Our derivative assets and derivative liabilities are recorded at fair value and are included in “Derivative assets” and “Derivative liabilities” on our Consolidated Statements of Financial Condition. Cash flows related to our derivatives are included within operating activities on the Consolidated Statements of Cash Flows. The significant accounting policies governing our derivatives, including our methodologies for determining fair value, are described in Note 2.

Derivative balances included on our financial statements

The following table presents the gross fair values and notional amounts of derivatives by product type, the amounts of counterparty and cash collateral netting on our Consolidated Statements of Financial Condition, as well as collateral posted and received under credit support agreements that do not meet the criteria for netting under GAAP.


	September 30, 2022						September 30, 2021
$ in millions	Derivative assets		Derivative liabilities		Notional amount		Derivative assets		Derivative liabilities		Notional amount
Derivatives not designated as hedging instruments
Interest rate - matched book	$	52	$	52	$	1,340	$	193	$	193	$	1,736
Interest rate - other (1)	462		535		14,647		144		122		15,087
Foreign exchange	4		5		958		3		—		826
Other	—		3		531		—		1		551
Subtotal	518		595		17,476		340		316		18,200
Derivatives designated as hedging instruments
Interest rate - other	12		—		1,050		—		—		850
Foreign exchange	6		—		1,092		2		—		939
Subtotal	18		—		2,142		2		—		1,789
Total gross fair value/notional amount	536		595		$	19,618	342		316		$	19,989
Offset on the Consolidated Statements of Financial Condition
Counterparty netting	(35)		(35)				(46)		(46)
Cash collateral netting	(313)		(30)				(41)		(42)
Total amounts offset	(348)		(65)				(87)		(88)
Net amounts presented on the Consolidated Statements of Financial Condition	188		530				255		228
Gross amounts not offset on the Consolidated Statements of Financial Condition
Financial instruments (2)	(60)		(52)				(205)		(193)
Total	$	128	$	478			$	50	$	35

(1) Relates to interest rate derivatives entered into as part of our fixed income business operations, including TBA security contracts that are accounted for as derivatives, as well as our banking operations, including those of TriState Capital Bank which was acquired on June 1, 2022.

(2) Although the matched book derivative arrangements do not meet the definition of a master netting arrangement as specified by GAAP, the agreement with the third-party intermediary includes terms that are similar to a master netting agreement. As a result, we present the matched book amounts net in the preceding table.

The following table details the gains/(losses) included in AOCI, net of income taxes, on derivatives designated as hedging instruments. These gains/(losses) included any amounts reclassified from AOCI to net income during the year. See Note 20 for additional information.


	Year ended September 30,
$ in millions	2022		2021		2020
Interest rate (cash flow hedges)	$	70	$	26	$	(34)
Foreign exchange (net investment hedges)	72		(34)		5
Total gains/(losses) included in AOCI, net of taxes	$	142	$	(8)	$	(29)

There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for each of the years ended September 30, 2022, 2021 or 2020. We expect to reclassify $25 million of interest expense out of AOCI and into earnings within the next 12 months. The maximum length of time over which forecasted transactions are or will be hedged is five years.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table details the gains/(losses) on derivatives not designated as hedging instruments recognized on the Consolidated Statements of Income and Comprehensive Income. These amounts do not include any offsetting gains/(losses) on the related hedged item.


		Year ended September 30,
$ in millions	Location of gain/(loss)	2022		2021		2020
Interest rate	Principal transactions/other revenues	$	22	$	13	$	7
Foreign exchange	Other revenues	$	102	$	(21)	$	—
Other	Principal transactions	$	(1)	$	4	$	(5)

Risks associated with our derivatives and related risk mitigation

Credit risk

We are exposed to credit losses primarily in the event of nonperformance by the counterparties to derivatives that are not cleared through a clearing organization. Where we are subject to credit exposure, we perform a credit evaluation of counterparties prior to entering into derivative transactions and we continue to monitor their credit standings on an ongoing basis. We may require initial margin or collateral from counterparties, generally in the form of cash or other marketable securities to support certain of these obligations as established by the credit threshold specified by the agreement and/or as a result of monitoring the credit standing of the counterparties. We also enter into derivatives with clients to which Raymond James Bank and TriState Capital Bank have provided loans. Such derivatives are generally collateralized by marketable securities or other assets of the client.

Our only exposure to credit risk on matched book derivatives is related to our uncollected derivative transaction fee revenues, which were insignificant as of both September 30, 2022 and 2021. We are not exposed to market risk on these derivatives due to the pass-through transaction structure described in Note 2.

Interest rate and foreign exchange risk

We are exposed to interest rate risk related to certain of our interest rate derivatives. We are also exposed to foreign exchange risk related to our forward foreign exchange derivatives. On a daily basis, we monitor our risk exposure on our derivatives based on established limits with respect to a number of factors, including interest rate, foreign exchange spot and forward rates, spread, ratio, basis and volatility risks, both for the total portfolio and by maturity period.

Derivatives with credit-risk-related contingent features

Certain of our derivative contracts contain provisions that require our debt to maintain an investment-grade rating from one or more of the major credit rating agencies or contain provisions related to default on certain of our outstanding debt. If our debt were to fall below investment-grade or we were to default on certain of our outstanding debt, the counterparties to the derivative instruments could terminate the derivative and request immediate payment, or demand immediate and ongoing overnight collateralization on our derivative instruments in liability positions. The aggregate fair value of all derivative instruments with such credit-risk-related contingent features that were in a liability position was $8 million as of September 30, 2022 and was insignificant as of September 30, 2021.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 7 – COLLATERALIZED AGREEMENTS AND FINANCINGS

Collateralized agreements are comprised of reverse repurchase agreements and securities borrowed. Collateralized financings are comprised of repurchase agreements and securities loaned. We enter into these transactions in order to facilitate client activities, acquire securities to cover short positions and finance certain firm activities. The significant accounting policies governing our collateralized agreements and financings are described in Note 2.

Our reverse repurchase agreements, repurchase agreements, securities borrowing and securities lending transactions are governed by master agreements that are widely used by counterparties and that may allow for net settlements of payments in the normal course, as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the parties to the transaction. For financial statement purposes, we do not offset our reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned because the conditions for netting as specified by GAAP are not met. Although not offset on the Consolidated Statements of Financial Condition, these transactions are included in the following table.


	Collateralized agreements						Collateralized financings
$ in millions	Reverse repurchase agreements		Securities borrowed		Total		Repurchase agreements		Securities loaned		Total
September 30, 2022
Gross amounts of recognized assets/liabilities	$	367	$	337	$	704	$	294	$	172	$	466
Gross amounts offset on the Consolidated Statements of Financial Condition	—		—		—		—		—		—
Net amounts included in the Consolidated Statements of Financial Condition	367		337		704		294		172		466
Gross amounts not offset on the Consolidated Statements of Financial Condition	(367)		(327)		(694)		(294)		(162)		(456)
Net amounts	$	—	$	10	$	10	$	—	$	10	$	10
September 30, 2021
Gross amounts of recognized assets/liabilities	$	279	$	201	$	480	$	205	$	72	$	277
Gross amounts offset on the Consolidated Statements of Financial Condition	—		—		—		—		—		—
Net amounts included in the Consolidated Statements of Financial Condition	279		201		480		205		72		277
Gross amounts not offset on the Consolidated Statements of Financial Condition	(279)		(195)		(474)		(205)		(68)		(273)
Net amounts	$	—	$	6	$	6	$	—	$	4	$	4

The total amount of collateral received under reverse repurchase agreements and the total amount of collateral posted under repurchase agreements exceeds the carrying value of these agreements on our Consolidated Statements of Financial Condition.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Repurchase agreements and securities loaned accounted for as secured borrowings

The following table presents the remaining contractual maturity of repurchase agreements and securities lending transactions accounted for as secured borrowings.


$ in millions	Overnight and continuous		Up to 30 days		30-90 days		Greater than 90 days		Total
September 30, 2022
Repurchase agreements:
Government and agency obligations	$	183	$	—	$	—	$	—	$	183
Agency MBS and agency CMOs	111		—		—		—		111
Total repurchase agreements	294		—		—		—		294
Securities loaned:
Equity securities	172		—		—		—		172
Total collateralized financings	$	466	$	—	$	—	$	—	$	466

September 30, 2021
Repurchase agreements:
Government and agency obligations	$	122	$	—	$	—	$	—	$	122
Agency MBS and agency CMOs	83		—		—		—		83
Total repurchase agreements	205		—		—		—		205
Securities loaned:
Equity securities	72		—		—		—		72
Total collateralized financings	$	277	$	—	$	—	$	—	$	277

Collateral received and pledged

We receive cash and securities as collateral, primarily in connection with reverse repurchase agreements, securities borrowing agreements, derivative transactions, and client margin loans. The collateral we receive reduces our credit exposure to individual counterparties.

In many cases, we are permitted to deliver or repledge financial instruments we have received as collateral to satisfy our collateral requirements under our repurchase agreements, securities lending agreements or other secured borrowings, to satisfy deposit requirements with clearing organizations, or to otherwise meet either our or our clients’ settlement requirements.

The following table presents financial instruments at fair value that we received as collateral, were not included on our Consolidated Statements of Financial Condition, and that were available to be delivered or repledged, along with the balances of such instruments that were delivered or repledged, to satisfy one of our purposes previously described.


	September 30,
$ in millions	2022		2021
Collateral we received that was available to be delivered or repledged	$	3,812	$	3,429
Collateral that we delivered or repledged	$	947	$	830

Encumbered assets

We pledge certain of our assets to collateralize either repurchase agreements or other secured borrowings, maintain lines of credit, or to satisfy our collateral or settlement requirements with counterparties or clearing organizations who may or may not have the right to deliver or repledge such instruments. The following table presents information about our assets that have been pledged for one of the purposes previously described.


	September 30,
$ in millions	2022		2021
Had the right to deliver or repledge	$	1,276	$	368
Did not have the right to deliver or repledge	$	63	$	65
Bank loans, net pledged at the FHLB and the Federal Reserve Bank of Atlanta	$	8,800	$	5,716

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 8 – BANK LOANS, NET

Bank client receivables are comprised of loans originated or purchased by our Bank segment and include SBL, C&I loans, commercial and residential real estate loans, REIT loans, and tax-exempt loans. These receivables are collateralized by first and, to a lesser extent, second mortgages on residential or other real property, other assets of the borrower, a pledge of revenue, securities or are unsecured. We segregate our loan portfolio into six loan portfolio segments: SBL, C&I, CRE, REIT, residential mortgage, and tax-exempt. See Note 2 for a discussion of accounting policies related to bank loans.

Loan balances in the following tables are presented at amortized cost (outstanding principal balance net of unamortized purchase discounts or premiums, unearned income, and deferred origination fees and costs), except for certain held for sale loans recorded at fair value. Bank loans are presented on our Consolidated Statements of Financial Condition at amortized cost (or fair value where applicable) less the allowance for credit losses. As it pertains to TriState Capital Bank’s loans acquired as of June 1, 2022, the amortized cost of such purchased loans reflects the fair value of the loans on the acquisition date, and as described further in Note 3, the purchase discount on such loans is accreted to interest income over the weighted-average life of the underlying loans, which may vary based on prepayments.

The following table presents the balances for held for investment loans by portfolio segment and held for sale loans.


	September 30,
$ in millions	2022			2021

SBL	$	15,297		$	6,106
C&I loans	11,173			8,440
CRE loans	6,549			2,872
REIT loans	1,592			1,112
Residential mortgage loans	7,386			5,318
Tax-exempt loans	1,501			1,321

Total loans held for investment	43,498			25,169
Held for sale loans	137			145
Total loans held for sale and investment	43,635			25,314
Allowance for credit losses	(396)			(320)
Bank loans, net (1)	$	43,239		$	24,994

ACL as a % of total loans held for investment	0.91		%	1.27		%
Accrued interest receivable on bank loans (included in “Other receivables, net”)	$	137		$	48

(1) Bank loans, net as of September 30, 2022 are presented net of $112 million of net unamortized discount, unearned income, and deferred loan fees and costs. The net unamortized discount primarily arose from the acquisition date fair value purchased discount on bank loans acquired in the TriState Capital acquisition. See Note 3 for further information. Bank loans, net as of September 30, 2021 are presented net of $1 million of unearned income and deferred loan fees and costs.

At September 30, 2022, we had pledged $6.58 billion of residential mortgage loans and $1.43 billion of CRE loans with the FHLB as security for both the repayment of certain borrowings and to secure capacity for additional borrowings as needed. Additionally, as of September 30, 2022, we had pledged $791 million of C&I loans with the FRB to be eligible to participate in the Federal Reserve’s discount window program. See Notes 7 and 16 for more information regarding borrowings from the FHLB and bank loans pledged with the FHLB and FRB.

Held for sale loans

Exclusive of the loans acquired on June 1, 2022 in our acquisition of TriState Capital Bank, we originated or purchased $3.38 billion, $2.15 billion, and $1.79 billion of loans held for sale during the years ended September 30, 2022, 2021 and 2020, respectively. Of these loans purchased during the years ended September 30, 2022, 2021 and 2020, $2.09 billion, $1.19 billion, and $1.03 billion, respectively, related to the guaranteed portions of SBA loans that were initially classified as loans for held sale upon purchase and subsequently transferred to trading instruments once they had been securitized into pools. Proceeds from the sales of all other loans held for sale and not securitized amounted to $1.29 billion, $973 million, and $776 million for the years ended September 30, 2022, 2021 and 2020, respectively. Net gains resulting from such sales were insignificant for each of the years ended September 30, 2022, 2021, and 2020.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Purchases and sales of loans held for investment

The following table presents purchases and sales of loans held for investment by portfolio segment. Purchases do not include loans obtained from the acquisition of TriState Capital Bank.


$ in millions	C&I loans		CRE loans		Residential mortgage loans		Total
Year ended September 30, 2022
Purchases	$	1,288	$	—	$	1,207	$	2,495
Sales	$	147	$	—	$	1	$	148
Year ended September 30, 2021
Purchases	$	1,528	$	—	$	524	$	2,052
Sales	$	297	$	—	$	—	$	297
Year ended September 30, 2020
Purchases	$	589	$	5	$	402	$	996
Sales	$	598	$	27	$	2	$	627

Sales in the preceding table represent the recorded investment (i.e., net of charge-offs and discounts or premiums) of loans held for investment that were transferred to loans held for sale and subsequently sold to a third party during the respective period. As more fully described in Note 2, corporate loan sales generally occur as part of our credit management activities.

Aging analysis of loans held for investment

The following table presents information on delinquency status of our loans held for investment.


$ in millions	30-89 days and accruing		90 days or more and accruing		Total past due and accruing		Nonaccrual with allowance		Nonaccrual with no allowance		Current and accruing		Total loans held for investment
September 30, 2022
SBL	$	—	$	—	$	—	$	—	$	—	$	15,297	$	15,297
C&I loans	—		—		—		32		—		11,141		11,173
CRE loans	—		—		—		12		16		6,521		6,549
REIT loans	—		—		—		—		—		1,592		1,592
Residential mortgage loans	4		—		4		—		14		7,368		7,386
Tax-exempt loans	—		—		—		—		—		1,501		1,501

Total loans held for investment	$	4	$	—	$	4	$	44	$	30	$	43,420	$	43,498

September 30, 2021
SBL	$	—	$	—	$	—	$	—	$	—	$	6,106	$	6,106
C&I loans	—		—		—		39		—		8,401		8,440
CRE loans	—		—		—		—		20		2,852		2,872
REIT loans	—		—		—		—		—		1,112		1,112
Residential mortgage loans	2		—		2		2		13		5,301		5,318
Tax-exempt loans	—		—		—		—		—		1,321		1,321

Total loans held for investment	$	2	$	—	$	2	$	41	$	33	$	25,093	$	25,169

The preceding table includes $63 million and $61 million at September 30, 2022 and 2021, respectively, of nonaccrual loans which were current pursuant to their contractual terms. The table also includes TDRs of $11 million, $9 million, and $10 million for C&I loans, CRE loans, and residential first mortgage loans, respectively, at September 30, 2022, and $12 million and $13 million for CRE loans and residential first mortgage loans, respectively, at September 30, 2021.

Other real estate owned, included in “Other assets” on our Consolidated Statements of Financial Condition, was insignificant at both September 30, 2022 and 2021.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Collateral-dependent loans

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the underlying collateral. Collateral-dependent loans are recorded based upon the fair value of the collateral less the estimated selling costs. At September 30, 2022, we had $11 million of collateral-dependent C&I loans, which were collateralized by commercial real estate and other business assets and $21 million of collateral-dependent CRE loans which were collateralized by retail, industrial, and health care real estate. At September 30, 2021, we had $20 million of collateral-dependent CRE loans which were collateralized by retail and industrial real estate. We had $6 million and $5 million of collateral-dependent residential mortgage loans at September 30, 2022 and September 30, 2021, respectively, which were collateralized by single family homes. The recorded investment in residential mortgage loans secured by one-to-four family residential properties for which formal foreclosure proceedings were in process was $5 million and $4 million at September 30, 2022 and 2021, respectively.

Credit quality indicators

The credit quality of our bank loan portfolio is summarized monthly by management using internal risk ratings, which align with the standard asset classification system utilized by bank regulators. These classifications are divided into three groups: Not Classified (Pass), Special Mention, and Classified or Adverse Rating (Substandard, Doubtful, and Loss). These terms are defined as follows:

Pass – Loans which are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less costs to acquire and sell, of any underlying collateral and generally are performing in accordance with the contractual terms.

Special Mention – Loans which have potential weaknesses that deserve management’s close attention. These loans are not adversely classified and do not expose us to sufficient risk to warrant an adverse classification.

Substandard – Loans which are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans with this classification are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans which have all the weaknesses inherent in loans classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently-known facts, conditions and values.

Loss – Loans which are considered by management to be uncollectible and of such little value that their continuance on our books as an asset, without establishment of a specific valuation allowance or charge-off, is not warranted. We do not have any loan balances within this classification because, in accordance with our accounting policy, loans, or a portion thereof considered to be uncollectible are charged-off prior to the assignment of this classification.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following tables present our held for investment bank loan portfolio by credit quality indicator.


	September 30, 2022
	Loans by origination fiscal year
$ in millions	2022		2021		2020		2019		2018		Prior		Revolving loans		Total
SBL
Risk rating:
Pass	$	14	$	27	$	72	$	44	$	36	$	41	$	15,063	$	15,297
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total SBL	$	14	$	27	$	72	$	44	$	36	$	41	$	15,063	$	15,297


C&I loans
Risk rating:
Pass	$	1,011	$	1,448	$	1,301	$	1,124	$	1,389	$	2,200	$	2,380	$	10,853
Special mention	10		28		3		37		—		82		6		166
Substandard	1		—		60		28		40		6		14		149
Doubtful	—		—		—		—		5		—		—		5
Total C&I loans	$	1,022	$	1,476	$	1,364	$	1,189	$	1,434	$	2,288	$	2,400	$	11,173


CRE loans
Risk rating:
Pass	$	1,916	$	1,345	$	892	$	707	$	816	$	551	$	176	$	6,403
Special mention	—		1		—		—		36		2		—		39
Substandard	—		—		14		17		46		30		—		107
Doubtful	—		—		—		—		—		—		—		—
Total CRE loans	$	1,916	$	1,346	$	906	$	724	$	898	$	583	$	176	$	6,549


REIT loans
Risk rating:
Pass	$	169	$	230	$	96	$	53	$	40	$	222	$	782	$	1,592
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total REIT loans	$	169	$	230	$	96	$	53	$	40	$	222	$	782	$	1,592


Residential mortgage loans
Risk rating:
Pass	$	2,984	$	1,704	$	1,023	$	477	$	290	$	843	$	35	$	7,356
Special mention	1		1		—		2		—		4		—		8
Substandard	1		—		—		—		1		20		—		22
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage loans	$	2,986	$	1,705	$	1,023	$	479	$	291	$	867	$	35	$	7,386


Tax-exempt loans
Risk rating:
Pass	$	264	$	169	$	56	$	115	$	192	$	705	$	—	$	1,501
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total tax-exempt loans	$	264	$	169	$	56	$	115	$	192	$	705	$	—	$	1,501

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements


	September 30, 2021
	Loans by origination fiscal year
$ in millions	2021		2020		2019		2018		2017		Prior		Revolving loans		Total
SBL
Risk rating:
Pass	$	3	$	45	$	12	$	—	$	—	$	—	$	6,046	$	6,106
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total SBL	$	3	$	45	$	12	$	—	$	—	$	—	$	6,046	$	6,106



C&I loans
Risk rating:
Pass	$	999	$	1,273	$	1,180	$	1,408	$	935	$	1,633	$	739	$	8,167
Special mention	—		—		41		—		26		54		1		122
Substandard	—		—		24		84		—		28		—		136
Doubtful	—		—		15		—		—		—		—		15
Total C&I loans	$	999	$	1,273	$	1,260	$	1,492	$	961	$	1,715	$	740	$	8,440



CRE loans
Risk rating:
Pass	$	533	$	459	$	442	$	652	$	223	$	174	$	62	$	2,545
Special mention	—		45		58		36		—		—		—		139
Substandard	—		—		32		98		8		50		—		188
Doubtful	—		—		—		—		—		—		—		—
Total CRE loans	$	533	$	504	$	532	$	786	$	231	$	224	$	62	$	2,872



REIT loans
Risk rating:
Pass	$	235	$	95	$	75	$	60	$	46	$	167	$	237	$	915
Special mention	—		—		13		11		33		106		6		169
Substandard	—		—		21		—		4		—		3		28
Doubtful	—		—		—		—		—		—		—		—
Total REIT loans	$	235	$	95	$	109	$	71	$	83	$	273	$	246	$	1,112



Residential mortgage loans
Risk rating:
Pass	$	1,861	$	1,266	$	640	$	386	$	451	$	666	$	20	$	5,290
Special mention	—		—		—		—		—		5		—		5
Substandard	—		—		—		1		2		20		—		23
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage loans	$	1,861	$	1,266	$	640	$	387	$	453	$	691	$	20	$	5,318



Tax-exempt loans
Risk rating:
Pass	$	158	$	57	$	124	$	204	$	272	$	506	$	—	$	1,321
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total tax-exempt loans	$	158	$	57	$	124	$	204	$	272	$	506	$	—	$	1,321

Loans classified as special mention, substandard or doubtful are all considered to be “criticized” loans.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We also monitor the credit quality of the residential mortgage loan portfolio utilizing FICO scores and LTV ratios. A FICO score measures a borrower’s creditworthiness by considering factors such as payment and credit history. LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan. The following table presents the held for investment residential mortgage loan portfolio by FICO score and by LTV ratio at origination.


	September 30, 2022
	Loans by origination fiscal year
$ in millions	2022		2021		2020		2019		2018		Prior		Revolving loans		Total
FICO score:
Below 600	$	1	$	3	$	2	$	3	$	1	$	54	$	—	$	64
600 - 699	155		112		90		32		20		68		4		481
700 - 799	2,403		1,301		744		353		219		470		22		5,512
800 +	424		284		184		87		48		273		6		1,306
FICO score not available	3		5		3		4		3		2		3		23
Total	$	2,986	$	1,705	$	1,023	$	479	$	291	$	867	$	35	$	7,386

LTV ratio:
Below 80%	$	2,287	$	1,333	$	797	$	358	$	226	$	661	$	31	$	5,693
80%+	699		372		226		121		65		206		4		1,693
Total	$	2,986	$	1,705	$	1,023	$	479	$	291	$	867	$	35	$	7,386


	September 30, 2021
	Loans by origination fiscal year
$ in millions	2021		2020		2019		2018		2017		Prior		Revolving loans		Total
FICO score:
Below 600	$	3	$	2	$	4	$	1	$	46	$	11	$	—	$	67
600 - 699	134		114		46		32		16		73		1		416
700 - 799	1,420		921		483		294		252		386		16		3,772
800 +	303		228		107		59		138		220		3		1,058
FICO score not available	1		1		—		1		1		1		—		5
Total	$	1,861	$	1,266	$	640	$	387	$	453	$	691	$	20	$	5,318

LTV ratio:
Below 80%	$	1,451	$	990	$	480	$	304	$	378	$	500	$	20	$	4,123
80%+	410		276		160		83		75		191		—		1,195
Total	$	1,861	$	1,266	$	640	$	387	$	453	$	691	$	20	$	5,318

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Allowance for credit losses

The following table presents changes in the allowance for credit losses on held for investment bank loans by portfolio segment. The allowance for credit losses on held for investment bank loans and related provision for fiscal 2020 were calculated under the incurred loss model.


$ in millions	SBL			C&I loans			CRE loans			REIT loans			Residential mortgage loans			Tax-exempt loans			Total
Year ended September 30, 2022
Balance at beginning of year	$	4		$	191		$	66		$	22		$	35		$	2		$	320
Initial allowance on acquired PCD loans	—			1			2			—			—			—			3
Provision/(benefit) for credit losses:
Initial provision for credit losses on non-PCD loans acquired with TriState Capital	2			5			19			—			—			—			26
Provision/(benefit) for credit losses	(3)			57			—			(1)			21			—			74
Total provision/(benefit) for credit losses	(1)			62			19			(1)			21			—			100
Net (charge-offs)/recoveries:
Charge-offs	—			(28)			(4)			—			—			—			(32)
Recoveries	—			—			5			—			1			—			6
Net (charge-offs)/recoveries	—			(28)			1			—			1			—			(26)
Foreign exchange translation adjustment	—			—			(1)			—			—			—			(1)
Balance at end of year	$	3		$	226		$	87		$	21		$	57		$	2		$	396
ACL by loan portfolio segment as a % of total ACL	0.8		%	57.0		%	22.0		%	5.3		%	14.4		%	0.5		%	100.0		%

Year ended September 30, 2021
Balance at beginning of year	$	5		$	200		$	81		$	36		$	18		$	14		$	354
Impact of CECL adoption	(2)			19			(11)			(9)			24			(12)			9
Provision/(benefit) for credit losses	1			(25)			5			(5)			(8)			—			(32)
Net (charge-offs)/recoveries:
Charge-offs	—			(4)			(10)			—			—			—			(14)
Recoveries	—			—			—			—			1			—			1
Net (charge-offs)/recoveries	—			(4)			(10)			—			1			—			(13)
Foreign exchange translation adjustment	—			1			1			—			—			—			2
Balance at end of year	$	4		$	191		$	66		$	22		$	35		$	2		$	320
ACL by loan portfolio segment as a % of total ACL	1.3		%	59.7		%	20.6		%	6.9		%	10.9		%	0.6		%	100.0		%

Year ended September 30, 2020
Balance at beginning of year	$	5		$	139		$	34		$	15		$	16		$	9		$	218
Provision/(benefit) for credit losses	—			157			48			23			—			5			233
Net (charge-offs)/recoveries:
Charge-offs	—			(96)			(2)			(2)			—			—			(100)
Recoveries	—			—			—			—			2			—			2
Net (charge-offs)/recoveries	—			(96)			(2)			(2)			2			—			(98)
Foreign exchange translation adjustment	—			—			1			—			—			—			1
Balance at end of year	$	5		$	200		$	81		$	36		$	18		$	14		$	354
ACL by loan portfolio segment as a % of total ACL	1.4		%	56.4		%	22.9		%	10.2		%	5.1		%	4.0		%	100.0		%

The allowance for credit losses on held for investment bank loans increased $76 million during the year ended September 30, 2022 resulting from a $100 million provision for credit losses, primarily due to the impacts of loan growth at Raymond James Bank and a weakener economic outlook, as well as the initial provision for credit losses of $26 million recorded on non-PCD loans acquired as part of the TriState Capital acquisition. These increases in the allowance for credit losses on held for investment bank loans were partially offset by net charge-offs during the year of $26 million, primarily related to a specific C&I loan.

The allowance for credit losses on unfunded lending commitments, which is included in “Other payables” on our Consolidated Statements of Financial Condition, was $19 million, $13 million, and $12 million at September 30, 2022, 2021, and 2020, respectively. The increase in the allowance for credit losses on unfunded lending commitments for the year ended September 30, 2022 included $5 million related to the initial provision for credit losses on lending commitments assumed as a result of the

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

acquisition of TriState Capital which was included in “Other” expenses on our Consolidated Statements of Income and Comprehensive Income.

NOTE 9 – LOANS TO FINANCIAL ADVISORS, NET

Loans to financial advisors are primarily comprised of loans originated as a part of our recruiting activities. See Note 2 for a discussion of our accounting policies related to loans to financial advisors and the related allowance for credit losses. The following table presents the balances for our loans to financial advisors and the related accrued interest receivable.


	September 30,
$ in millions	2022			2021
Affiliated with the firm as of year-end (1)	$	1,173		$	1,074
No longer affiliated with the firm as of year-end (2)	8			10
Total loans to financial advisors	1,181			1,084
Allowance for credit losses	(29)			(27)
Loans to financial advisors, net	$	1,152		$	1,057
Accrued interest receivable on loans to financial advisors (included in “Other receivables, net”)	$	5		$	4
Allowance for credit losses as a percent of total loans to financial advisors	2.46		%	2.49		%

(1) These loans were predominantly current.

(2) These loans were predominantly past due for a period of 180 days or more.

NOTE 10 – VARIABLE INTEREST ENTITIES

A VIE requires consolidation by the entity’s primary beneficiary. We evaluate all of the entities in which we are involved to determine if the entity is a VIE and if so, whether we hold a variable interest and are the primary beneficiary. Refer to Note 2 for a discussion of our principal involvement with VIEs and the accounting policies regarding determination of whether we are deemed to be the primary beneficiary of VIEs.

VIEs where we are the primary beneficiary

Of the VIEs in which we hold an interest, we have determined that certain LIHTC funds and the Restricted Stock Trust Fund require consolidation in our financial statements, as we are deemed the primary beneficiary of such VIEs. As of September 30, 2022, we are not the primary beneficiary of any Private Equity Interests. During the year ended September 30, 2022, we exited or restructured our Private Equity Interests VIEs for which we had been deemed to be the primary beneficiary and therefore were previously consolidated. See Note 4 for further information. The aggregate assets and liabilities of the VIEs we consolidate are provided in the following table. Aggregate assets and aggregate liabilities may differ from the consolidated carrying value of assets and liabilities due to the elimination of intercompany assets and liabilities held by the consolidated VIE.


$ in millions	Aggregate assets		Aggregate liabilities
September 30, 2022

LIHTC funds	$	59	$	6
Restricted Stock Trust Fund	17		17
Total	$	76	$	23

September 30, 2021
LIHTC funds	$	111	$	52
Private Equity Interests	66		4
Restricted Stock Trust Fund	15		15
Total	$	192	$	71

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents information about the carrying value of the assets and liabilities of the VIEs which we consolidate and which are included on our Consolidated Statements of Financial Condition. Intercompany balances are eliminated in consolidation and are not reflected in the following table.


	September 30,
$ in millions	2022		2021
Assets:
Cash and cash equivalents and assets segregated for regulatory purposes and restricted cash	$	5	$	10
Other investments	—		63

Other assets	54		105
Total assets	$	59	$	178
Liabilities:
Other payables	$	—	$	45
Total liabilities	$	—	$	45
Noncontrolling interests	$	(26)	$	58

VIEs where we hold a variable interest but are not the primary beneficiary

As discussed in Note 2, we have concluded that for certain VIEs we are not the primary beneficiary and therefore do not consolidate these VIEs. Such VIEs include certain LIHTC funds, certain Private Equity Interests, and other limited partnerships. Our risk of loss for these VIEs is limited to our investments in, advances to, and/or receivables due from these VIEs.

Aggregate assets, liabilities and risk of loss

The aggregate assets, liabilities, and our exposure to loss from those VIEs in which we hold a variable interest, but as to which we have concluded we are not the primary beneficiary, are provided in the following table.


	September 30,
	2022						2021
$ in millions	Aggregate assets		Aggregate liabilities		Our risk of loss		Aggregate assets		Aggregate liabilities		Our risk of loss
LIHTC funds	$	7,752	$	2,584	$	136	$	7,032	$	2,280	$	71
Private Equity Interests	2,177		448		90		7,318		47		82
Other	159		101		8		519		155		10
Total	$	10,088	$	3,133	$	234	$	14,869	$	2,482	$	163

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 11 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

Our goodwill and identifiable intangible assets result from various acquisitions. See Note 2 for a discussion of our goodwill and intangible assets accounting policies. The following table presents our goodwill and net identifiable intangible asset balances as of the dates indicated.


	September 30,
$ in millions	2022		2021
Goodwill	$	1,422	$	660
Identifiable intangible assets, net	509		222
Total goodwill and identifiable intangible assets, net	$	1,931	$	882

Goodwill

The following table summarizes our goodwill by segment and the balances and activity for the years indicated.


$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Total
Year ended September 30, 2022
Goodwill as of beginning of year	$	417	$	174	$	69	$	—	$	660
Additions	164		102		—		529		795
Foreign currency translations	(31)		(2)		—		—		(33)

Goodwill as of end of year	$	550	$	274	$	69	$	529	$	1,422

Year ended September 30, 2021
Goodwill as of beginning of year	$	277	$	120	$	69	$	—	$	466
Additions	139		54		—		—		193
Foreign currency translations	1		—		—		—		1

Goodwill as of end of year	$	417	$	174	$	69	$	—	$	660

The additions to goodwill during the year ended September 30, 2022 arose from our acquisitions of Charles Stanley in the Private Client Group, TriState Capital in our Bank segment, and SumRidge Partners in our Capital Markets segment. See Note 3 for additional discussion of these acquisitions.

Qualitative assessments

As described in Note 2, we perform goodwill impairment testing on an annual basis or when an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We performed our latest annual goodwill impairment testing as of our January 1, 2022 evaluation date, evaluating balances as of December 31, 2021. In that testing, we performed a qualitative impairment assessment for each of our reporting units that had goodwill. Based upon the outcome of our qualitative assessments, no impairment was identified. No events have occurred since our annual assessment date that would cause us to update this impairment testing.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Identifiable intangible assets, net

The following table sets forth our identifiable intangible asset balances by segment, net of accumulated amortization, and activity for the years indicated.


$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Total
Year ended September 30, 2022
Net identifiable intangible assets as of beginning of year	$	120	$	17	$	85	$	—	$	222
Additions	85		52		61		136		334
Amortization expense	(13)		(9)		(7)		(4)		(33)
Foreign currency translations	(14)		—		—		—		(14)

Net identifiable intangible assets as of end of year	$	178	$	60	$	139	$	132	$	509

Year ended September 30, 2021
Net identifiable intangible assets as of beginning of year	$	31	$	13	$	90	$	—	$	134
Additions	96		13		—		—		109
Amortization expense	(7)		(9)		(5)		—		(21)


Net identifiable intangible assets as of end of year	$	120	$	17	$	85	$	—	$	222

The additions of identifiable intangible assets during the year ended September 30, 2022 arose from our acquisitions of Charles Stanley in the Private Client Group segment, TriState Capital in our Bank and Asset Management segments, and SumRidge Partners in our Capital Markets segment. See Note 3 for additional discussion of these acquisitions.

The following table summarizes our identifiable intangible assets by type.


	September 30,
	2022				2021
$ in millions	Gross carrying value		Accumulated amortization		Gross carrying value		Accumulated amortization
Customer relationships	$	361	$	(103)	$	238	$	(79)
Core deposit intangible	89		(3)		—		—
Developed technology	58		(4)		3		(2)
Non-amortizing customer relationships	57		—		52		—
Trade names	57		(5)		12		(5)
All other	6		(4)		7		(4)
Total	$	628	$	(119)	$	312	$	(90)

The following table sets forth the projected amortization expense by fiscal year associated with our identifiable intangible assets with finite lives.


Fiscal year ended September 30,	$ in millions
2023	$	43
2024	42
2025	40
2026	38
2027	37
Thereafter	252
Total	$	452

Qualitative assessments

As described in Note 2, we perform impairment testing for our non-amortizing customer relationships intangible asset on an annual basis or when an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. We performed our latest annual impairment testing as of our January 1, 2022 evaluation date, evaluating the balance as of December 31, 2021. In that testing, we performed a qualitative assessment for our non-amortizing customer relationships intangible asset. Based upon the outcome of our qualitative assessment, no impairment was identified. No events have occurred since such assessment that would cause us to update this impairment testing.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 12 - OTHER ASSETS

The following table details the components of other assets. See Note 2 for a discussion of the accounting polices related to certain of these components.


	September 30,
$ in millions	2022		2021
Investments in company-owned life insurance policies	$	944	$	952
Property and equipment, net	503		499
Lease ROU assets	480		446
Prepaid expenses	173		127

Investments in FHLB and FRB stock	88		72

All other	264		161
Total other assets	$	2,452	$	2,257

See Note 13 for further information regarding our property and equipment and Note 14 for further information regarding our leases.

NOTE 13 - PROPERTY AND EQUIPMENT, NET

The following table presents the components of our property and equipment, net as of the dates indicated.


	September 30,
	2022						2021
$ in millions	Gross carrying value		Accumulated depreciation/ software amortization		Property and equipment, net		Gross carrying value		Accumulated depreciation/ software amortization		Property and equipment, net
Land	$	29	$	—	$	29	$	29	$	—	$	29
Software, including development in progress	660		(422)		238		606		(362)		244
Buildings, building components, leasehold and land improvements	413		(239)		174		397		(225)		172
Furniture, fixtures and equipment	356		(294)		62		321		(267)		54
Total	$	1,458	$	(955)	$	503	$	1,353	$	(854)	$	499

Depreciation expense associated with property and equipment was $50 million, $51 million, and $52 million for the years ended September 30, 2022, 2021, and 2020, respectively, and is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income. Amortization expense associated with computer software was $62 million, $62 million, and $54 million for the years ended September 30, 2022, 2021, and 2020, respectively, and is included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income. We also incur software licensing fees, which are included in “Communications and information processing” expense on our Consolidated Statements of Income and Comprehensive Income.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 14 - LEASES

The following table presents the balances related to our leases on our Consolidated Statements of Financial Condition. See Note 2 for a discussion of our accounting policies related to leases.


	September 30,
$ in millions	2022		2021
ROU assets (included in Other assets)	$	480	$	446
Lease liabilities (included in Other payables)	$	482	$	450

The weighted-average remaining lease term and discount rate for our leases is presented in the following table.


	September 30,
	2022		2021
Weighted-average remaining lease term	6.8 years		6.7 years
Weighted-average discount rate	3.95	%	3.45	%

Lease expense

The following table details the components of lease expense, which is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income.


	Year ended September 30,
$ in millions	2022		2021		2020
Lease costs	$	118	$	110	$	98
Variable lease costs	$	28	$	27	$	26

Variable lease costs in the preceding table include payments required under lease arrangements for common area maintenance charges and other variable costs that are not reflected in the measurement of ROU assets and lease liabilities.

Lease liabilities

The maturities by fiscal year of our lease liabilities as of September 30, 2022 are presented in the following table.


Fiscal year ended September 30,	$ in millions
2023	$	117
2024	97
2025	76
2026	62
2027	47
Thereafter	160
Gross lease payments	559
Less: interest	(77)
Present value of lease liabilities	$	482

Lease liabilities as of September 30, 2022 excluded $66 million of minimum lease payments related to lease arrangements that were legally binding but had not yet commenced. These leases are estimated to commence between fiscal year 2023 through fiscal year 2025 with lease terms ranging from three to 13 years.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 15 – BANK DEPOSITS

Bank deposits include money market and savings accounts, certificates of deposit, interest-bearing checking accounts, which include Negotiable Order of Withdrawal accounts, and non-interest-bearing checking accounts. The following table presents a summary of bank deposits, as well as the weighted-average interest rates on such deposits. The calculation of the weighted-average rates was based on the actual deposit balances and rates at each respective period end.


	September 30,
	2022				2021
$ in millions	Balance		Weighted-average rate		Balance		Weighted-average rate
Money market and savings accounts	$	44,446	1.01	%	$	31,415	0.01	%
Interest-bearing checking accounts	5,286		2.77	%	164		1.84	%
Certificates of deposit	999		1.85	%	878		1.87	%
Non-interest-bearing checking accounts	626		—		38		—
Total bank deposits	$	51,357	1.21	%	$	32,495	0.07	%

At September 30, 2022 and 2021, money market and savings accounts in the preceding table included $38.71 billion and $31.41 billion, respectively, of deposits that are cash balances swept to our Bank segment from the client investment accounts maintained at Raymond James & Associates, Inc. (“RJ&A”), which are held in FDIC-insured bank accounts through the RJBDP. As of September 30, 2022, money market and savings accounts also included direct accounts held by TriState Capital Bank on behalf of third-party clients.

As of September 30, 2022 and September 30, 2021, the estimated amount of total bank deposits that exceeded the FDIC insurance limit was $7.84 billion and $3.08 billion, respectively. The following table sets forth the amount of estimated certificates of deposit that exceeded the FDIC insurance limit by time remaining until maturity as of September 30, 2022.


$ in millions	September 30, 2022
Three months or less	$	45
Over three through six months	14
Over six through twelve months	9
Over twelve months	9
Total estimated certificates of deposit that exceeded the FDIC insurance limit	$	77

The maturities by fiscal year of our certificates of deposit as of September 30, 2022 are presented in the following table.


Fiscal year ended September 30,	$ in millions
2023	$	600
2024	253
2025	129
2026	11
2027	6

Total certificates of deposit	$	999

Interest expense on deposits, excluding interest expense related to affiliated deposits, is summarized in the following table.


	Year ended September 30,
$ in millions	2022		2021		2020
Money market and savings accounts	$	78	$	3	$	19
Interest-bearing checking accounts	38		3		2
Certificates of deposit	15		17		20
Total interest expense on deposits	$	131	$	23	$	41

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 16 – OTHER BORROWINGS

The following table details the components of our other borrowings, which are primarily comprised of short-term and long-term FHLB advances and subordinated notes.


	September 30,
$ in millions	2022		2021
FHLB advances	$	1,190	$	850


5.75% fixed-to-floating subordinated notes, due 2030 (including premium of $2 and $0, respectively)	100		—
Other	1		8
Total other borrowings	$	1,291	$	858

FHLB advances

We have entered into advances from the FHLB at Raymond James Bank and TriState Capital Bank, which are secured by certain residential mortgage and CRE loans. As of September 30, 2022, our FHLB borrowings consisted of $850 million of floating-rate advances at interest rates which reset daily and mature in December 2023, $140 million of overnight floating-rate advances, which are available for borrowing through May 2023 at interest rates which reset daily, and $200 million of fixed-rate advances which incur a weighted-average interest rate of 3.45% and mature in December 2022. As of September 30, 2021 our FHLB borrowings consisted of $850 million of floating-rate advances. The interest rates on our floating-rate advances are generally based on a Secured Overnight Financing Rate. The weighted-average interest rate on our floating-rate FHLB advances as of September 30, 2022 and September 30, 2021 was 3.29% and 0.26%, respectively. We use interest rate swaps to manage the risk of increases in interest rates associated with the majority of our FHLB advances. Refer to Note 2 for information regarding these interest rate swaps, which are accounted for as hedging instruments.

Subordinated notes

As part of the assets acquired and liabilities assumed in the TriState Capital acquisition, we assumed, as of the closing date, TriState Capital’s subordinated notes due 2030, with an aggregate principal amount of $98 million. The subordinated notes incur interest at a fixed rate of 5.75% until May 2025 and thereafter at a variable interest rate based on London Interbank Offered Rate (“LIBOR”), or an appropriate alternative reference rate at the time LIBOR ceases to be published. We may redeem these subordinated notes beginning in August 2025 at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest thereon to the redemption date.

Other

RJF and RJ&A are parties to an unsecured revolving credit facility agreement (the “Credit Facility”) with a syndicate of lenders. This committed unsecured borrowing facility has a term through April 2026 and 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 of RJF. The interest rates on borrowings under the Credit Facility are variable and were based on LIBOR as of September 30, 2022, as adjusted for RJF’s credit rating; however, the administrative agent has the right to select an industry-accepted alternative reference rate at the time LIBOR ceases to be published. There were no borrowings outstanding on the Credit Facility as of September 30, 2022 or September 30, 2021. There is a facility fee associated with the Credit Facility, which also varies with RJF’s credit rating. Based upon RJF’s credit rating as of September 30, 2022, the variable rate facility fee, which is applied to the committed amount, was 0.150% per annum.

In addition to the Credit Facility, we maintain various secured and unsecured lines of credit, which are generally utilized to finance certain fixed income securities or for cash management purposes. Borrowings during the year were generally day-to-day and there were no borrowings outstanding on these arrangements as of September 30, 2022 or September 30, 2021. The interest rates for these arrangements are variable and are based on a daily bank quoted rate, which may reference LIBOR, the Fed funds rate, a lender’s prime rate, the Canadian prime rate, or another commercially available rate, as applicable.

A portion of our fixed income transactions are cleared and executed through a third-party clearing organization, which provides financing for the purchase of trading instruments to support such transactions. The amount of financing is based on the amount of trading inventory financed, as well as any deposits held at the clearing organization. Amounts outstanding under this financing arrangement, which are collateralized by a portion of our trading inventory and accrue interest based on market rates, are included in “Other payables” in our Consolidated Statements of Financial Condition. We also have other collateralized

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

financings included in “Collateralized financings” on our Consolidated Statements of Financial Condition. See Note 7 for information regarding our other collateralized financing arrangements.

NOTE 17 – SENIOR NOTES PAYABLE

The following table summarizes our senior notes payable.


	September 30,
$ in millions	2022		2021
4.65% senior notes, due 2030	$	500	$	500
4.95% senior notes, due 2046	800		800
3.75% senior notes, due 2051	750		750


Total principal amount	2,050		2,050
Unaccreted premiums/(discounts)	5		5
Unamortized debt issuance costs	(17)		(18)
Total senior notes payable	$	2,038	$	2,037

In March 2020, we sold $500 million in aggregate principal amount of 4.65% senior notes due April 2030 in a registered underwritten public offering. Interest on these senior notes is payable semi-annually. We may redeem some or all of these senior notes at any time prior to January 1, 2030, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S. Treasury rate, plus 50 basis points; and on or after January 1, 2030, at 100% of the principal amount of the notes redeemed; plus, in each case, accrued and unpaid interest thereon to the redemption date.

In July 2016, we sold $300 million in aggregate principal amount of 4.95% senior notes due July 2046 in a registered underwritten public offering. In May 2017, we reopened the offering and sold, in a registered underwritten public offering, an additional $500 million in aggregate principal amount of 4.95% senior notes due July 2046. These additional senior notes were consolidated, formed into a single series, and are fully fungible with the $300 million in aggregate principal amount of 4.95% senior notes issued in July 2016. Interest on these senior notes is payable semi-annually. We may redeem some or all of these senior notes at any time prior to their maturity, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S. Treasury rate, plus 45 basis points, plus accrued and unpaid interest thereon to the redemption date.

In April 2021, we sold $750 million in aggregate principal amount of 3.75% senior notes due April 2051 in a registered underwritten public offering. Interest on these senior notes is payable semi-annually. We may redeem some or all of these senior notes at any time prior to October 1, 2050, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon, discounted to the redemption date at a discount rate equal to a designated U.S. Treasury rate, plus 20 basis points; and on or after October 1, 2050, at 100% of the principal amount of the notes redeemed; plus, in each case, accrued and unpaid interest thereon to the redemption date. We utilized the proceeds from this 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 which was presented in “Losses on extinguishment of debt” in our Consolidated Statements of Income and Comprehensive Income for the year ended September 30, 2021.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 18 – INCOME TAXES

For a discussion of our income tax accounting policies and other income tax-related information see Note 2.

Income taxes

The following table details the total income tax provision/(benefit) allocation for each respective period.


	Year ended September 30,
$ in millions	2022		2021		2020
Recorded in:
Net income	$	513	$	388	$	234
Equity, arising from available-for-sale securities recorded through OCI	(311)		(32)		23
Equity, arising from currency translations, net of the impact of net investment hedges recorded through OCI	23		(10)		2
Equity, arising from cash flow hedges recorded through OCI	24		8		(12)
Total provision for income taxes	$	249	$	354	$	247

The following table details our provision/(benefit) for income taxes included in net income for each respective period.


	Year ended September 30,
$ in millions	2022		2021		2020
Current:
Federal	$	406	$	321	$	215
State and local	91		79		49
Foreign	32		25		9
Total current	$	529	$	425	$	273
Deferred:
Federal	(10)		(28)		(36)
State and local	(3)		(6)		(3)
Foreign	(3)		(3)		—
Total deferred	$	(16)	$	(37)	$	(39)
Total provision for income taxes	$	513	$	388	$	234

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is detailed in the following table.


	Year ended September 30,
	2022		2021		2020
Provision calculated at statutory rate	21.0	%	21.0	%	21.0	%
State income tax, net of federal benefit	3.6	%	3.6	%	3.7	%
(Gains)/losses on company-owned life insurance policies which are not subject to tax	1.8	%	(1.8)	%	(1.0)	%
Nondeductible compensation	0.4	%	0.3	%	0.4	%
Change in uncertain tax positions	0.3	%	(0.1)	%	0.2	%
Foreign tax rate differential	0.2	%	0.2	%	0.2	%
Tax credits	(1.2)	%	(1.0)	%	(1.6)	%
Excess tax benefits related to share-based compensation	(1.1)	%	(0.2)	%	(0.6)	%


Other, net	0.4	%	(0.3)	%	(0.1)	%
Total provision for income tax	25.4	%	21.7	%	22.2	%

The following table presents our U.S. and foreign components of pre-tax income for each respective period.


	Year ended September 30,
$ in millions	2022		2021		2020
U.S.	$	1,907	$	1,701	$	1,019
Foreign	115		90		33
Pre-tax income	$	2,022	$	1,791	$	1,052

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The cumulative effects of temporary differences that give rise to significant portions of the deferred tax asset/(liability) items are detailed in the following table.


	September 30,
$ in millions	2022		2021
Deferred tax assets:
Unrealized loss associated with available-for-sale securities	$	343	$	2
Deferred compensation	272		287
Lease liabilities	121		115
Allowances for credit losses	106		81
Accrued expenses	54		46
Unrealized loss associated with loan portfolios	34		—
Unrealized loss associated with foreign currency translations	27		3


Partnership investments	2		9
Unrealized loss associated with cash flow hedges	—		9
Other	31		18


Total deferred tax assets	$	990	$	570
Deferred tax liabilities:
Goodwill and identifiable intangible assets	(126)		(64)
Lease ROU assets	(118)		(114)
Property and equipment	(110)		(85)

Unrealized gain associated with cash flow hedges	(15)		—

Other	(5)		(2)
Total deferred tax liabilities	$	(374)	$	(265)
Net deferred tax assets	$	616	$	305

Classified as follows in the Consolidated Statements of Financial Condition:
Deferred income taxes, net	$	630	$	305
Other payables	(14)		—
Net deferred tax assets	$	616	$	305

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred income tax assets are subject to a valuation allowance if, in management’s opinion, it is more likely than not that these benefits will not be realized. As of September 30, 2022, total deferred tax assets, net of an insignificant valuation allowance, aggregated to $990 million. We continue to believe that the realization of our deferred tax assets is more likely than not based on expectations of future taxable income. Our net deferred tax assets principally related to a net unrealized loss associated with available-for-sale securities, deferred compensation, lease liabilities, and allowances for credit losses, partially offset by deferred tax liabilities related to goodwill and identifiable intangible assets and lease ROU assets.

The $14 million of net deferred tax liabilities included in “Other payables” on our Consolidated Statements of Financial Condition as of September 30, 2022, primarily arose from entities in the U.K., and accordingly were not netted against balances arising from our U.S. entities.

As of September 30, 2022, we considered substantially all undistributed earnings of non-U.S. subsidiaries to be permanently reinvested. The Tax Cut and Jobs Act (“TCJA”), enacted in December 2017, reduced our incremental tax cost of repatriating offshore earnings. As a result, we have not provided for any U.S. deferred income taxes related to such subsidiaries. The TCJA instituted a territorial system of international taxation. Under the system, dividends received by a U.S. corporation from its 10%-or-greater-owned foreign subsidiaries are generally exempt from U.S. tax if attributable to non-U.S. source earnings, but are subject to tax on “Global intangible low-taxed income” which is applicable regardless of whether the income is repatriated. As of September 30, 2022, we had approximately $431 million of cumulative undistributed earnings attributable to foreign subsidiaries. Because the time and manner of repatriation is uncertain, we cannot determine the impact of local taxes, withholding taxes, and foreign tax credits associated with the future repatriation of such earnings, and therefore, cannot quantify the tax liability that would be payable in the event all such foreign earnings are repatriated.

As of September 30, 2022, the current tax receivable, which was included in “Other receivables, net” on our Consolidated Statements of Financial Condition, was $7 million, and the current tax payable, which was included in “Other payables,” was $28 million. As of September 30, 2021, the current tax receivable was $12 million and the current tax payable was $7 million.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Uncertain tax positions

We recognize the accrual of interest and penalties related to income tax matters in interest expense and other expense, respectively. As of September 30, 2022 and 2021, accrued interest and penalties were $9 million and $7 million, respectively.

The following table presents the aggregate changes in the balances for uncertain tax positions.


	Year ended September 30,
$ in millions	2022		2021		2020
Uncertain tax positions beginning of year	$	36	$	45	$	42
Increases for tax positions related to the current year	5		5		5
Increases for tax positions related to prior years	10		2		3
Decreases for tax positions related to prior years	(1)		(7)		(1)
Decreases due to lapsed statute of limitations	(7)		(5)		(4)
Decreases related to settlements	—		(4)		—
Uncertain tax positions end of year	$	43	$	36	$	45

The total amount of uncertain tax positions that, if recognized, would impact the effective tax rate (the items included in the preceding table after considering the federal tax benefit associated with any state tax provisions) was $38 million, $31 million, and $40 million at September 30, 2022, 2021 and 2020, respectively. We anticipate that the uncertain tax position liability balance will decrease by approximately $11 million over the next 12 months due to expiration of statutes of limitations of federal and state tax returns.

RJF and its domestic subsidiaries are included in the consolidated income tax returns of RJF in the U.S. federal jurisdiction and various consolidated states. Our subsidiaries also file separate income tax returns in various state and local and foreign jurisdictions. With few exceptions, we are generally no longer subject to U.S. federal, state and local, or foreign income tax examination by tax authorities for fiscal years prior to fiscal 2019, with the fiscal year 2018 limited by a provision of the TCJA described as follows. Certain state and local and foreign tax returns are currently under various stages of audit and appeals processes. Our fiscal 2018 federal tax return remains open for limited examination under the TCJA. The TCJA provides the Internal Revenue Service a six year limitation period to assess the net transition tax liability reported by the firm.

NOTE 19 – COMMITMENTS, CONTINGENCIES AND GUARANTEES

Commitments and contingencies

Underwriting commitments

In the normal course of business, we enter into commitments for debt and equity underwritings. As of September 30, 2022, we had two such open underwriting commitments, which were subsequently settled in open market transactions and did not result in significant losses.

Lending commitments and other credit-related financial instruments

We have outstanding, at any time, a significant number of commitments to extend credit and other credit-related off-balance-sheet financial instruments, such as standby letters of credit and loan purchases, which then extend over varying periods of time. These arrangements are subject to strict underwriting assessments and each customer’s credit worthiness is evaluated on a case-by-case basis. Fixed-rate commitments are subject to market risk resulting from fluctuations in interest rates and our exposure is limited to the replacement value of those commitments.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents our commitments to extend credit and other credit-related off-balance sheet financial instruments outstanding at our Bank segment.


	September 30,
$ in millions	2022		2021
SBL and other consumer lines of credit	$	33,641	$	17,515
Commercial lines of credit	$	3,792	$	2,075
Unfunded lending commitments	$	1,255	$	548
Standby letters of credit	$	94	$	22

SBL and other consumer lines of credit primarily represent the unfunded amounts of bank loans to consumers that are secured by marketable securities or other liquid collateral at advance rates consistent with industry standards. The proceeds from repayment or, if necessary, the liquidation of collateral, which is monitored daily, are expected to satisfy the amounts drawn against these existing lines of credit. These lines of credit are primarily uncommitted, as we reserve the right to not make any advances or may terminate these lines at any time.

Because many of our lending commitments expire without being funded in whole or in part, the contractual amounts are not estimates of our actual future credit exposure or future liquidity requirements. The allowance for credit losses calculated under CECL provides for potential losses related to the unfunded lending commitments. See Notes 2 and 8 for further discussion of this allowance for credit losses related to unfunded lending commitments. See Note 3 for a discussion of the initial provision for credit losses on loans and lending commitments acquired as part of the TriState Capital acquisition.

RJ&A enters into margin lending arrangements which allow customers to borrow against the value of qualifying securities. Margin loans are collateralized by the securities held in the customer’s account at RJ&A. Collateral levels and established credit terms are monitored daily and we require customers to deposit additional collateral or reduce balances as necessary.

We offer loans to prospective financial advisors for recruiting and retention purposes (see Notes 2 and 9 for further discussion of our loans to financial advisors). These offers are contingent upon certain events occurring, including the individuals joining us and meeting certain other conditions outlined in their offer.

Investment commitments

We had unfunded commitments to various investments, primarily held by Raymond James Bank and TriState Capital Bank, of $51 million as of September 30, 2022.

Other commitments

RJAHI sells investments in project partnerships to various LIHTC funds, which have third-party investors, and for which RJAHI serves as the managing member or general partner. RJAHI typically sells investments in project partnerships to LIHTC funds within 90 days of their acquisition. Until such investments are sold to LIHTC funds, RJAHI is responsible for funding investment commitments to such partnerships. As of September 30, 2022, RJAHI had committed approximately $53 million to project partnerships that had not yet been sold to LIHTC funds. Because we expect to sell these project partnerships to LIHTC funds and the equity funding events arise over future periods, the contractual commitments are not expected to materially impact our future liquidity requirements. RJAHI may also make short-term loans or advances to project partnerships and LIHTC funds.

For information regarding our lease commitments, including the maturities of our lease liabilities, see Note 14.

Guarantees

Our U.S. broker-dealer subsidiaries are required by federal law to be members of the Securities Investors Protection Corporation (“SIPC”). The SIPC fund provides protection up to $500 thousand per client for securities and cash held in client accounts, including a limitation of $250 thousand on claims for cash balances. We have purchased excess SIPC coverage through various syndicates of Lloyd’s of London. For RJ&A, our clearing broker-dealer, the additional protection currently provided has an aggregate firm limit of $750 million for cash and securities, including a sub-limit of $1.9 million per client for cash above basic SIPC. Account protection applies when a SIPC member fails financially and is unable to meet its obligations to clients. This coverage does not protect against market fluctuations. RJF has provided an indemnity to Lloyd’s of London against any and all losses they may incur associated with the excess SIPC policies.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Legal and regulatory matter contingencies

In the normal course of our business, we have been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with our activities as a diversified financial services institution.

RJF and certain of its subsidiaries are subject to regular reviews and inspections by regulatory authorities and self-regulatory organizations. Reviews can result in the imposition of sanctions for regulatory violations, ranging from non-monetary censures to fines and, in serious cases, temporary or permanent suspension from conducting business, or limitations on certain business activities. In addition, regulatory agencies and self-regulatory organizations institute investigations from time to time, among other things, into industry practices, which can also result in the imposition of such sanctions. For example, the firm is currently cooperating with the SEC in connection with an investigation of the firm’s investment advisory business’ compliance with records preservation requirements relating to business communications sent over electronic messaging channels that have not been approved by the firm. The SEC is reportedly conducting similar investigations of record preservation practices at other financial institutions.

We may contest liability and/or the amount of damages, as appropriate, in each pending matter. The level of litigation and investigatory activity (both formal and informal) by government and self-regulatory agencies in the financial services industry continues to be significant. There can be no assurance that material losses will not be incurred from claims that have not yet been asserted or are not yet determined to be material.

For many legal and regulatory matters, we are unable to estimate a range of reasonably possible loss as we cannot predict if, how or when such proceedings or investigations will be resolved or what the eventual settlement, fine, penalty or other relief, if any, may be. A large number of factors may contribute to this inherent unpredictability: the proceeding is in its early stages; the damages sought are unspecified, unsupported or uncertain; it is unclear whether a case brought as a class action will be allowed to proceed on that basis; the other party is seeking relief other than or in addition to compensatory damages (including, in the case of regulatory and governmental proceedings, potential fines and penalties); the matters present significant legal uncertainties; we have not engaged in settlement discussions; discovery is not complete; there are significant facts in dispute; and numerous parties are named as defendants (including where it is uncertain how liability might be shared among defendants). Subject to the foregoing, after consultation with counsel, we believe that the outcome of such litigation and regulatory proceedings will not have a material adverse effect on our consolidated financial condition. However, the outcome of such litigation and regulatory proceedings could be material to our operating results and cash flows for a particular future period, depending on, among other things, our revenues or income for such period.

There are certain matters for which we are unable to estimate the upper end of the range of reasonably possible loss. With respect to legal and regulatory matters for which management has been able to estimate a range of reasonably possible loss as of September 30, 2022, we estimated the upper end of the range of reasonably possible aggregate loss to be approximately $90 million in excess of the aggregate accruals for such matters. Refer to Note 2 for a discussion of our criteria for recognizing liabilities for contingencies.

Subsequent to our fiscal year ended September 30, 2022, we entered into an agreement with certain third-party insurance carriers to settle claims triggered by a previously settled litigation matter. Our fiscal first quarter of 2023 results will include this $32 million insurance settlement, which we considered a gain contingency as of September 30, 2022.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 20 – SHAREHOLDERS’ EQUITY

Preferred stock

On June 1, 2022, we completed our acquisition of TriState Capital. As a component of our total purchase consideration for TriState Capital on June 1, 2022, we issued two series of preferred stock, each described below, to replace previously issued and, as of the acquisition date, outstanding preferred stock of TriState Capital. See Note 3 for further information about the acquisition.

On June 1, 2022, we issued 1.61 million depositary shares, each representing a 1/40th interest in a share of 6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock, par value of $0.10 per share (“Series A Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent of $25 per depositary share). Dividends on the Series A Preferred Stock are non-cumulative and, if declared, payable quarterly at a rate of 6.75% per annum from original issue date up to, but excluding, April 1, 2023, and thereafter at a floating rate equal to 3-month LIBOR, or industry-accepted alternative reference rate at the time LIBOR ceases to be published, plus a spread of 3.985% per annum. Subject to requisite regulatory approvals, we may redeem the Series A Preferred Stock on or after April 1, 2023, in whole or in part, at our option, at the liquidation preference plus declared and unpaid dividends. As of September 30, 2022, there were 40,250 shares of Series A Preferred Stock issued and outstanding with a carrying value and aggregate liquidation preference of $41 million and $40 million, respectively.

We also issued 3.22 million depositary shares on June 1, 2022, each representing a 1/40th interest in a share of 6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock, par value of $0.10 per share (“Series B Preferred Stock”), with a liquidation preference of $1,000 per share (equivalent of $25 per depositary share). Dividends on the Series B Preferred Stock are non-cumulative and, if declared, payable quarterly at a rate of 6.375% per annum from original issue date up to, but excluding, July 1, 2026, and thereafter at a floating rate equal to 3-month LIBOR, or industry-accepted alternative reference rate at the time LIBOR ceases to be published, plus a spread of 4.088% per annum. Under certain circumstances, the aforementioned fixed rate may apply in lieu of the floating rate. Subject to requisite regulatory approvals, we may redeem the Series B Preferred Stock on or after July 1, 2024, in whole or in part, at our option, at the liquidation preference plus declared and unpaid dividends. As of September 30, 2022, there were 80,500 shares of Series B Preferred Stock issued and outstanding with a carrying value and aggregate liquidation preference of $79 million and $81 million, respectively.

The following table details dividends declared and dividends paid on our preferred stock for the year ended September 30, 2022.


	Year ended September 30, 2022
$ in millions, except per share amounts	Total dividends		Per preferred share amount
Dividends declared:
Series A Preferred Stock	$	1	$	33.75
Series B Preferred Stock	3		$	31.88
Total preferred stock dividends declared	$	4
Dividends paid:
Series A Preferred Stock	$	1	$	16.88
Series B Preferred Stock	1		$	15.94
Total preferred stock dividends paid	$	2

Common equity

Common stock issuance

We issue shares from time-to-time during the year to satisfy obligations under certain of our share-based compensation programs, see Note 23 for additional information on these programs. We may also reissue treasury shares for such purposes.

Additionally, on June 1, 2022, we issued 7.97 million shares of common stock as a component of the consideration in the settlement of TriState Capital common stock, and 551 thousand RSAs, in conjunction with our acquisition of TriState Capital. See Note 3 for further information on the TriState Capital acquisition and Note 23 for further information on the RSAs and common stock issuances made under our share-based compensation programs.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Share repurchases

We repurchase shares of our common stock from time to time for a number of reasons, including to offset dilution from share-based compensation or share issuances arising from an acquisition. In December 2021, our Board of Directors authorized share repurchases of up to $1 billion, which replaced the previous authorization. Our share repurchases are effected primarily through regular open-market purchases, typically under a SEC Rule 10b-18 plan, the amounts and timing of which are determined primarily by our current and projected capital position, applicable law and regulatory constraints, general market conditions and the price and trading volumes of our common stock. Following the acquisition of TriState Capital on June 1, 2022, we repurchased 1.74 million shares of our common stock for $162 million at an average price of $94 per share. As of September 30, 2022, $838 million remained available under the Board of Directors’ share repurchase authorization.

Common stock dividends

Dividends per common share declared and paid are detailed in the following table for each respective period.


	Year ended September 30,
	2022		2021		2020
Dividends per common share - declared	$	1.36	$	1.04	$	0.99
Dividends per common share - paid	$	1.28	$	1.03	$	0.97

Our dividend payout ratio is detailed in the following table for each respective period and is computed by dividing dividends declared per common share by earnings per diluted common share.


	Year ended September 30,
	2022		2021		2020
Dividend payout ratio	19.5	%	15.7	%	25.4	%

RJF expects to continue paying cash dividends. However, the payment and rate of dividends on our common stock are subject to several factors including our operating results, financial and regulatory requirements or restrictions, and the availability of funds from our subsidiaries, including our broker-dealer and bank subsidiaries, which may also be subject to restrictions under regulatory capital rules. The availability of funds from subsidiaries may also be subject to restrictions contained in loan covenants of certain broker-dealer loan agreements and restrictions by bank regulators on dividends to the parent from Raymond James Bank and TriState Capital. See Note 24 for additional information on our regulatory capital requirements.

Other

In fiscal 2021, our Board of Directors approved a three-for-two stock split, effected in the form of a 50% stock dividend, paid on September 21, 2021. All share and per share information was retroactively adjusted in fiscal 2021 to reflect this stock split.

During fiscal 2022, we amended our Restated Articles of Incorporation, as filed with the Secretary of State of Florida on November 25, 2008, to increase the number of authorized shares of capital stock from 360 million shares to 660 million shares, consisting of 650 million shares of common stock, par value of $0.01 per share, and 10 million shares of preferred stock, par value of $0.10 per share. The Amended and Restated Articles of Incorporation, which were filed with the Secretary of State of Florida on February 28, 2022, were approved by our Board of Directors and our shareholders on December 1, 2021 and February 24, 2022, respectively.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Accumulated other comprehensive income/(loss)

All of the components of OCI, net of tax, were attributable to RJF. The following table presents the net change in AOCI as well as the changes, and the related tax effects, of each component of AOCI.


$ in millions	Net investment hedges		Currency translations		Subtotal: net investment hedges and currency translations		Available-for-sale securities		Cash flow hedges		Total
Year ended September 30, 2022
AOCI as of beginning of year	$	81	$	(90)	$	(9)	$	(5)	$	(27)	$	(41)
OCI:
OCI before reclassifications and taxes	95		(186)		(91)		(1,208)		85		(1,214)
Amounts reclassified from AOCI, before tax	—		—		—		—		9		9
Pre-tax net OCI	95		(186)		(91)		(1,208)		94		(1,205)
Income tax effect	(23)		—		(23)		311		(24)		264
OCI for the year, net of tax	72		(186)		(114)		(897)		70		(941)
AOCI as of end of year	$	153	$	(276)	$	(123)	$	(902)	$	43	$	(982)

Year ended September 30, 2021
AOCI as of beginning of year	$	115	$	(140)	$	(25)	$	89	$	(53)	$	11
OCI:
OCI before reclassifications and taxes	(44)		48		4		(119)		19		(96)
Amounts reclassified from AOCI, before tax	—		2		2		(7)		15		10
Pre-tax net OCI	(44)		50		6		(126)		34		(86)
Income tax effect	10		—		10		32		(8)		34
OCI for the year, net of tax	(34)		50		16		(94)		26		(52)
AOCI as of end of year	$	81	$	(90)	$	(9)	$	(5)	$	(27)	$	(41)

Year ended September 30, 2020
AOCI as of beginning of year	$	110	$	(135)	$	(25)	$	21	$	(19)	$	(23)

OCI:
OCI before reclassifications and taxes	7		(5)		2		94		(51)		45
Amounts reclassified from AOCI, before tax	—		—		—		(3)		5		2
Pre-tax net OCI	7		(5)		2		91		(46)		47
Income tax effect	(2)		—		(2)		(23)		12		(13)
OCI for the year, net of tax	5		(5)		—		68		(34)		34
AOCI as of end of year	$	115	$	(140)	$	(25)	$	89	$	(53)	$	11

Reclassifications from AOCI to net income, excluding taxes, for the year ended September 30, 2022 were recorded in “Interest expense” on the Consolidated Statements of Income and Comprehensive Income. Reclassifications from AOCI to net income, excluding taxes, for the years ended September 30, 2021 and 2020 were primarily recorded in “Other” revenue and “Interest expense” on the Consolidated Statements of Income and Comprehensive Income.

Our net investment hedges and cash flow hedges relate to derivatives associated with our Bank segment. See Notes 2 and 6 for additional information on these derivatives.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 21 - REVENUES

The following tables present our sources of revenues by segment. For further information about our significant accounting policies related to revenue recognition, see Note 2. See Note 26 for additional information on our segment results.


	Year ended September 30, 2022
$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Other and intersegment eliminations		Total
Revenues:
Asset management and related administrative fees	$	4,710	$	3	$	882	$	—	$	(32)	$	5,563
Brokerage revenues:
Securities commissions:
Mutual and other fund products	620		6		7		—		(2)		631
Insurance and annuity products	438		—		—		—		—		438
Equities, ETFs and fixed income products	382		138		—		—		—		520
Subtotal securities commissions	1,440		144		7		—		(2)		1,589
Principal transactions (1)	76		446		—		5		—		527
Total brokerage revenues	1,516		590		7		5		(2)		2,116
Account and service fees:
Mutual fund and annuity service fees	428		—		1		—		(2)		427
RJBDP fees	559		1		—		—		(358)		202
Client account and other fees	220		7		21		—		(44)		204
Total account and service fees	1,207		8		22		—		(404)		833
Investment banking:
Merger & acquisition and advisory	—		709		—		—		—		709
Equity underwriting	38		210		—		—		—		248
Debt underwriting	—		143		—		—		—		143
Total investment banking	38		1,062		—		—		—		1,100
Other:
Affordable housing investments business revenues	—		127		—		—		—		127
All other (1)	32		10		1		26		(8)		61
Total other	32		137		1		26		(8)		188
Total non-interest revenues	7,503		1,800		912		31		(446)		9,800
Interest income (1)	249		36		2		1,209		12		1,508
Total revenues	7,752		1,836		914		1,240		(434)		11,308
Interest expense	(42)		(27)		—		(156)		(80)		(305)
Net revenues	$	7,710	$	1,809	$	914	$	1,084	$	(514)	$	11,003

(1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements


	Year ended September 30, 2021
$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Other and intersegment eliminations		Total
Revenues:
Asset management and related administrative fees	$	4,056	$	4	$	837	$	—	$	(29)	$	4,868
Brokerage revenues:
Securities commissions:
Mutual and other fund products	670		6		10		—		(3)		683
Insurance and annuity products	438		—		—		—		—		438
Equities, ETFs and fixed income products	388		143		—		—		(1)		530
Subtotal securities commissions	1,496		149		10		—		(4)		1,651
Principal transactions (1)	50		511		—		—		—		561
Total brokerage revenues	1,546		660		10		—		(4)		2,212
Account and service fees:
Mutual fund and annuity service fees	408		—		—		—		(2)		406
RJBDP fees	259		1		—		—		(184)		76
Client account and other fees	157		7		18		—		(29)		153
Total account and service fees	824		8		18		—		(215)		635
Investment banking:
Merger & acquisition and advisory	—		639		—		—		—		639
Equity underwriting	47		285		—		—		—		332
Debt underwriting	—		172		—		—		—		172
Total investment banking	47		1,096		—		—		—		1,143
Other:
Affordable housing investments business revenues	—		105		—		—		—		105
All other (1)	25		6		2		30		61		124
Total other	25		111		2		30		61		229
Total non-interest revenues	6,498		1,879		867		30		(187)		9,087
Interest income (1)	123		16		—		684		—		823
Total revenues	6,621		1,895		867		714		(187)		9,910
Interest expense	(10)		(10)		—		(42)		(88)		(150)
Net revenues	$	6,611	$	1,885	$	867	$	672	$	(275)	$	9,760

(1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements


	Year ended September 30, 2020
$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Other and intersegment eliminations		Total
Revenues:
Asset management and related administrative fees	$	3,162	$	7	$	688	$	—	$	(23)	$	3,834
Brokerage revenues:
Securities commissions:
Mutual and other fund products	567		7		8		—		(3)		579
Insurance and annuity products	397		—		—		—		—		397
Equities, ETFs and fixed income products	355		137		—		—		—		492
Subtotal securities commissions	1,319		144		8		—		(3)		1,468
Principal transactions (1)	64		427		—		1		(4)		488
Total brokerage revenues	1,383		571		8		1		(7)		1,956
Account and service fees:
Mutual fund and annuity service fees	348		—		1		—		(1)		348
RJBDP fees	330		1		—		—		(181)		150
Client account and other fees	129		5		15		—		(23)		126
Total account and service fees	807		6		16		—		(205)		624
Investment banking:
Merger & acquisition and advisory	—		290		—		—		—		290
Equity underwriting	41		185		—		—		1		227
Debt underwriting	—		133		—		—		—		133
Total investment banking	41		608		—		—		1		650
Other:
Affordable housing investments business revenues	—		83		—		—		—		83
All other (1)	27		7		2		26		(41)		21
Total other	27		90		2		26		(41)		104
Total non-interest revenues	5,420		1,282		714		27		(275)		7,168
Interest income (1)	155		25		1		800		19		1,000
Total revenues	5,575		1,307		715		827		(256)		8,168
Interest expense	(23)		(16)		—		(62)		(77)		(178)
Net revenues	$	5,552	$	1,291	$	715	$	765	$	(333)	$	7,990

(1) These revenues are generally not in scope of the accounting guidance for revenue from contracts with customers.

At September 30, 2022 and September 30, 2021, net receivables related to contracts with customers were $511 million and $416 million, respectively.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 22 – INTEREST INCOME AND INTEREST EXPENSE

The following table details the components of interest income and interest expense.


	Year ended September 30,
$ in millions	2022		2021		2020
Interest income:
Cash and cash equivalents	$	48	$	12	$	41
Assets segregated for regulatory purposes and restricted cash	96		15		28
Trading assets — debt securities	27		13		18
Available-for-sale securities	136		85		83
Brokerage client receivables	100		77		84
Bank loans, net	1,051		593		702
All other	50		28		44
Total interest income	1,508		823		1,000
Interest expense:
Bank deposits	131		23		41
Trading liabilities — debt securities	12		2		3
Brokerage client payables	24		3		11
Other borrowings	21		19		20
Senior notes payable	93		96		85
All other	24		7		18
Total interest expense	305		150		178
Net interest income	1,203		673		822
Bank loan (provision)/benefit for credit losses	(100)		32		(233)
Net interest income after bank loan (provision)/benefit for credit losses	$	1,103	$	705	$	589

Interest expense related to bank deposits in the preceding table excludes interest expense associated with affiliate deposits, which has been eliminated in consolidation.

NOTE 23 - SHARE-BASED AND OTHER COMPENSATION

Share-based compensation plan

We have one share-based compensation plan, the Raymond James Financial, Inc., Amended and Restated 2012 Stock Incentive Plan (“the Plan”), for our employees, Board of Directors, and independent contractor financial advisors. The Plan authorizes us to grant 78.4 million new shares, including the shares available for grant under six predecessor plans. As of September 30, 2022, 8.7 million shares were available under the Plan. Generally, we reissue our treasury shares under the Plan; however, we are also permitted to issue new shares. Our share-based compensation accounting policies are described in Note 2.

Restricted stock units

We may grant RSU awards under the Plan in connection with initial employment or under various retention programs for individuals who are responsible for contributing to our management, growth, and/or profitability. Through our Canadian subsidiary, we utilize the Restricted Stock Trust Fund, which we funded to enable the trust fund to acquire our common stock in the open market to be used to settle RSUs granted as a retention vehicle for certain employees of our Canadian subsidiaries. We may also grant awards to officers and certain other employees in lieu of cash for portions ranging from 10% to 50% of annual bonus amounts in excess of $250,000. Under the plan, the awards are generally restricted for a three- to five-year period, during which time the awards are generally forfeitable in the event of termination other than for death, disability, or qualifying retirement.

We grant RSUs annually to non-employee members of our Board of Directors. The RSUs granted to these Directors vest over a 1-year period from their grant date or upon retirement from our Board.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the RSU award activity, which includes grants to employees, independent contractor financial advisors, and members of our Board of Directors, for the year ended September 30, 2022.


	Shares/Units (in millions)	Weighted- average grant date fair value (per share)
Non-vested as of beginning of year	8.2	$	56.59
Granted (1)	3.4	$	98.52
Vested	(2.4)	$	50.55
Forfeited	(0.2)	$	68.45
Non-vested as of end of year	9.0	$	73.73

(1) Includes RSUs granted as part of acquisition-related retention initiatives. See Note 3 for additional information regarding our acquisitions.

The following table presents expense and income tax benefits related to our RSUs granted to our employees, independent contractor financial advisors, and members of our Board of Directors for the periods indicated.


	Year ended September 30,
$ in millions	2022		2021		2020
RSU share-based compensation amortization	$	179	$	126	$	110
Income tax benefits related to share-based expense	$	41	$	29	$	25

For the year ended September 30, 2022, we realized $101 million of excess tax benefits related to our RSUs, which favorably impacted income tax expense on our Consolidated Statements of Income and Comprehensive Income. See Note 18 for additional information regarding income taxes.

As of September 30, 2022, there was $319 million of total pre-tax compensation costs not yet recognized (net of estimated forfeitures) related to RSUs granted to employees, independent contractor financial advisors, and members of our Board of Directors. These costs are expected to be recognized over a weighted-average period of approximately three years. The following RSU activity occurred for the periods indicated.


	Year ended September 30,
$ in millions, except per unit award amounts	2022		2021		2020
Weighted-average grant date fair value per unit award	$	98.52	$	63.86	$	58.20
Total fair value of RSUs vested	$	115	$	87	$	83

Restricted stock awards

As a component of our total purchase consideration for TriState Capital on June 1, 2022, in accordance with the terms of the acquisition, 551 thousand RJF RSAs were issued at terms that mirrored RSAs of TriState Capital which were outstanding as of the acquisition date. The fair value of the RJF RSAs was calculated as of the June 1, 2022 acquisition date and was allocated between the pre-acquisition service period ($28 million treated as purchase consideration) and the post-acquisition requisite service period, over which we will recognize share-based compensation amortization. For the year ended September 30, 2022, we recorded shared-based compensation expense of $4 million related to these awards. As of September 30, 2022, there were $21 million of total pre-tax compensation costs not yet recognized for these RJF restricted shares. These costs are expected to be recognized over a weighted-average period of three years. See Note 3 for further discussion of our acquisition of TriState Capital.

Employee stock purchase plan

Under the 2003 Employee Stock Purchase Plan, we are authorized to issue up to 13.1 million shares of common stock to eligible employees. Under the terms of the plan, share purchases in any calendar year are limited to the lesser of 1,000 shares or shares with a fair value of $25,000. The purchase price of the stock is 85% of the average high and low market price on the day prior to the purchase date. Under the plan, we sold approximately 416 thousand, 393 thousand and 699 thousand shares to employees during the years ended September 30, 2022, 2021 and 2020, respectively. The related compensation expense is calculated as the value of the 15% discount from market value and was $6 million, $5 million, and $5 million for the years ended September 30, 2022, 2021 and 2020, respectively.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Stock options

We had stock options outstanding as of September 30, 2022 which had been issued to our employees and independent contractor financial advisors. Effective in fiscal 2017, we stopped issuing stock options to our employees and effective in fiscal 2021, we stopped issuing stock options to our independent contractor financial advisors. Stock options granted to our independent contractor financial advisors, as well as the related expense was insignificant for the years ended September 30, 2022, 2021, and 2020. Cash received from stock options exercised by our employees and independent contractor financial advisors during the year ended September 30, 2022 was $15 million.

Employee other compensation

Our profit sharing plan and employee stock ownership plan (“ESOP”) are qualified plans that provide certain death, disability, or retirement benefits for all employees who meet certain service requirements. The plans are noncontributory and our contributions, if any, are determined annually by our Board of Directors, or a committee thereof, on a discretionary basis and are recognized as compensation expense throughout the year. Benefits become fully vested after five years of qualified service, age 65, or if a participant separates from service due to death or disability.

All shares owned by the ESOP are included in earnings per share calculations. Cash dividends paid to the ESOP are reflected as a reduction of retained earnings. The number of shares of our common stock held by the ESOP at September 30, 2022 and 2021 was 6.6 million and 6.7 million, respectively. The market value of our common stock held by the ESOP at September 30, 2022 was $651 million, of which $7 million was unearned (not yet vested) by ESOP plan participants.

We also offer a plan pursuant to section 401(k) of the Internal Revenue Code, which is a qualified plan that may provide for a discretionary contribution or a matching contribution each year. Matching contributions are 75% of the first $1,000 and 25% of the next $1,000 of eligible compensation deferred by each participant annually.

Our LTIP is a non-qualified deferred compensation plan that provides benefits to certain employees who meet certain compensation or production requirements. We have purchased and hold life insurance on the lives of certain current and former employee participants to earn a competitive rate of return for participants and to provide the primary source of funds available to satisfy our obligations under this plan. See Note 12 for information regarding the carrying value of these company-owned life insurance policies.

Contributions to the qualified plans and the LTIP are approved annually by the Board of Directors or a committee thereof.

The VDCP is a non-qualified deferred compensation plan for certain employees, in which eligible participants may elect to defer a percentage or specific dollar amount of their compensation. Company-owned life insurance is the primary source of funding for this plan.

Compensation expense associated with all of the qualified and non-qualified plans previously described totaled $195 million, $175 million and $149 million for the fiscal years ended September 30, 2022, 2021 and 2020, respectively.

Non-employee deferred payment plans

We offer non-qualified deferred payment plans that provide benefits to our independent contractor financial advisors who meet certain production requirements. Company-owned life insurance is the primary source of funding for these plans. The contributions are made in amounts approved annually by management.

Certain independent contractor financial advisors are also eligible to participate in our VDCP. Eligible participants may elect to defer a percentage or specific dollar amount of their commissions into the VDCP. Company-owned life insurance is the primary source of funding for this plan.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 24 – REGULATORY CAPITAL REQUIREMENTS

RJF, as a bank holding company and financial holding company, as well as Raymond James Bank, TriState Capital Bank, our broker-dealer subsidiaries, and our trust subsidiaries are subject to capital requirements by various regulatory authorities. Capital levels of each entity are monitored to ensure compliance with our various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions, by regulators that, if undertaken, could have a direct material effect on our financial results.

As a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), that has made an election to be a financial holding company, RJF is subject to supervision, examination and regulation by the Fed. We are subject to the Fed’s capital rules which establish an integrated regulatory capital framework and implement, in the U.S., the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act. The FDIC’s capital rules, which are substantially similar to the Fed’s rules, apply to TriState Capital Bank. We apply the standardized approach for calculating risk-weighted assets and are also subject to the market risk provisions of the Fed’s capital rules (“market risk rule”).

Under these rules, minimum requirements are established for both the quantity and quality of capital held by banking organizations. RJF, Raymond James Bank, and TriState Capital Bank are required to maintain minimum leverage ratios (defined as tier 1 capital divided by adjusted average assets), as well as minimum ratios of tier 1 capital, common equity tier 1 (“CET1”), and total capital to risk-weighted assets. These capital ratios incorporate quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under the regulatory capital rules and are subject to qualitative judgments by the regulators about components, risk-weightings, and other factors. We calculate these ratios in order to assess compliance with both regulatory requirements and internal capital policies. In order to maintain our ability to take certain capital actions, including dividends and common equity repurchases, and to make bonus payments, we must hold a capital conservation buffer above our minimum risk-based capital requirements. As of September 30, 2022, capital levels at RJF, Raymond James Bank, and TriState Capital Bank exceeded the capital conservation buffer requirement and each entity was categorized as “well-capitalized.”

To meet requirements for capital adequacy or to be categorized as “well-capitalized,” RJF must maintain minimum Tier 1 leverage, Tier 1 capital, CET1, and Total capital amounts and ratios as set forth in the following table.


	Actual				Requirement for capital adequacy purposes				To be well-capitalized under regulatory provisions
$ in millions	Amount		Ratio		Amount		Ratio		Amount		Ratio
RJF as of September 30, 2022:
Tier 1 leverage	$	8,480	10.3	%	$	3,304	4.0	%	$	4,130	5.0	%
Tier 1 capital	$	8,480	19.2	%	$	2,651	6.0	%	$	3,534	8.0	%
CET1	$	8,380	19.0	%	$	1,988	4.5	%	$	2,871	6.5	%
Total capital	$	9,031	20.4	%	$	3,534	8.0	%	$	4,418	10.0	%

RJF as of September 30, 2021:
Tier 1 leverage	$	7,428	12.6	%	$	2,363	4.0	%	$	2,954	5.0	%
Tier 1 capital	$	7,428	25.0	%	$	1,783	6.0	%	$	2,377	8.0	%
CET1	$	7,428	25.0	%	$	1,337	4.5	%	$	1,932	6.5	%
Total capital	$	7,780	26.2	%	$	2,377	8.0	%	$	2,972	10.0	%

As of September 30, 2022, RJF’s regulatory capital increase compared to September 30, 2021 was driven by an increase in equity primarily due to common and preferred stock issued in connection with the TriState Capital acquisition and positive earnings, partially offset by an increase in goodwill and intangible assets arising from the TriState Capital, Charles Stanley, and SumRidge Partners acquisitions (see Note 3 for further information) as well as dividends paid to our investors and share repurchases. RJF’s Tier 1 and Total capital ratios decreased compared to September 30, 2021, resulting from an increase in risk-weighted assets, partially offset by the increase in regulatory capital. The increase in risk-weighted assets was primarily driven by increases in bank loans and available-for-sale securities and unfunded lending commitments resulting from the TriState Capital acquisition and growth at Raymond James Bank, and an increase in trading assets resulting from the SumRidge Partners acquisition.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

RJF’s Tier 1 leverage ratio at September 30, 2022 decreased compared to September 30, 2021, due to higher average assets, driven by increases in bank loans, available-for-sale securities, goodwill and intangible assets, as well as trading assets. The increase in average assets was partially offset by the increase in regulatory capital.

To meet the requirements for capital adequacy or to be categorized as “well-capitalized,” Raymond James Bank and TriState Capital Bank must maintain Tier 1 leverage, Tier 1 capital, CET1, and Total capital amounts and ratios as set forth in the following tables. Our intention is to maintain Raymond James Bank’s and TriState Capital Bank’s “well-capitalized” status. In the unlikely event that Raymond James Bank or TriState Capital Bank failed to maintain their “well-capitalized” status, the consequences could include a requirement to obtain a waiver from the FDIC prior to acceptance, renewal, or rollover of brokered deposits and result in higher FDIC premiums, but would not significantly impact our operations.


	Actual				Requirement for capital adequacy purposes				To be well-capitalized under regulatory provisions
$ in millions	Amount		Ratio		Amount		Ratio		Amount		Ratio
Raymond James Bank as of September 30, 2022:
Tier 1 leverage	$	2,998	7.1	%	$	1,695	4.0	%	$	2,119	5.0	%
Tier 1 capital	$	2,998	12.1	%	$	1,485	6.0	%	$	1,979	8.0	%
CET1	$	2,998	12.1	%	$	1,113	4.5	%	$	1,608	6.5	%
Total capital	$	3,308	13.4	%	$	1,979	8.0	%	$	2,474	10.0	%

Raymond James Bank as of September 30, 2021:
Tier 1 leverage	$	2,626	7.4	%	$	1,411	4.0	%	$	1,763	5.0	%
Tier 1 capital	$	2,626	13.4	%	$	1,177	6.0	%	$	1,569	8.0	%
CET1	$	2,626	13.4	%	$	883	4.5	%	$	1,275	6.5	%
Total capital	$	2,873	14.6	%	$	1,569	8.0	%	$	1,962	10.0	%

Raymond James Bank’s regulatory capital increased compared to September 30, 2021, driven by an increase in equity due to positive earnings, offset by dividends paid to RJF. Raymond James Bank’s Tier 1 and Total capital ratios decreased compared to September 30, 2021, due to an increase in risk-weighted assets, primarily resulting from increases in bank loans, available-for-sale securities, and deferred tax assets, partially offset by the increase in regulatory capital. Raymond James Bank’s Tier 1 leverage ratio at September 30, 2022 decreased compared to September 30, 2021 due to higher average assets, driven primarily by the increases in bank loans and available-for-sale securities.

On June 1, 2022, we completed our acquisition of TriState Capital, including TriState Capital Bank. See Note 3 for additional information on this acquisition.


	Actual				Requirement for capital adequacy purposes				To be well-capitalized under regulatory provisions
$ in millions	Amount		Ratio		Amount		Ratio		Amount		Ratio
TriState Capital Bank as of September 30, 2022:
Tier 1 leverage	$	1,093	7.3	%	$	601	4.0	%	$	752	5.0	%
Tier 1 capital	$	1,093	14.1	%	$	463	6.0	%	$	618	8.0	%
CET1	$	1,093	14.1	%	$	348	4.5	%	$	502	6.5	%
Total capital	$	1,122	14.5	%	$	618	8.0	%	$	772	10.0	%

Our banks may pay dividends to RJF without prior approval of their respective regulators subject to certain restrictions including retained net income and targeted regulatory capital ratios. Dividends paid to RJF from our banks may be limited to the extent that capital is needed to support their balance sheet growth.

Certain of our broker-dealer subsidiaries are subject to the requirements of the Uniform Net Capital Rule (Rule 15c3-1) under the Securities 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 balances. 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. As of September 30, 2022, RJ&A had excess net capital available to remit dividends

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

to RJF, some of which may be remitted without prior regulatory approval and the remainder may be remitted in conformity with all required regulatory rules or approvals. The following table presents the net capital position of RJ&A.


	September 30,
$ in millions	2022			2021

Raymond James & Associates, Inc.:
(Alternative Method elected)
Net capital as a percent of aggregate debit items	40.9		%	72.1		%
Net capital	$	1,152		$	2,035
Less: required net capital	(56)			(56)
Excess net capital	$	1,096		$	1,979

The decrease in RJ&A’s net capital and excess net capital as of September 30, 2022 as compared to September 30, 2021 reflected the impact of significant dividends from RJ&A to RJF during the year ended September 30, 2022.

As of September 30, 2022, all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.

NOTE 25 – EARNINGS PER SHARE

All share and earnings per share information has been retroactively adjusted to reflect the September 21, 2021 three-for-two stock split described in Note 20.

The following table presents the computation of basic and diluted earnings per common share.


	Year ended September 30,
$ in millions, except per share amounts	2022		2021		2020
Income for basic earnings per common share:
Net income available to common shareholders	$	1,505	$	1,403	$	818
Less allocation of earnings and dividends to participating securities	(3)		(2)		(1)
Net income available to common shareholders after participating securities	$	1,502	$	1,401	$	817
Income for diluted earnings per common share:
Net income available to common shareholders	$	1,505	$	1,403	$	818
Less allocation of earnings and dividends to participating securities	(3)		(2)		(1)
Net income available to common shareholders after participating securities	$	1,502	$	1,401	$	817
Common shares:
Average common shares in basic computation	209.9		205.7		206.4
Dilutive effect of outstanding stock options and certain RSUs	5.4		5.5		3.9
Average common and common equivalent shares used in diluted computation	215.3		211.2		210.3
Earnings per common share:
Basic	$	7.16	$	6.81	$	3.96
Diluted	$	6.98	$	6.63	$	3.88
Stock options and certain RSUs excluded from weighted-average diluted common shares because their effect would be antidilutive	0.1		0.1		2.3

The allocation of earnings and dividends to participating securities in the preceding table represents dividends paid during the year to participating securities, consisting of certain RSUs, as well as the RSAs granted as part of our acquisition of TriState Capital, plus an allocation of undistributed earnings to such participating securities. Participating securities and related dividends paid on these participating securities were insignificant for the years ended September 30, 2022, 2021 and 2020. Undistributed earnings are allocated to participating securities based upon their right to share in earnings if all earnings for the period had been distributed.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 26 – SEGMENT INFORMATION

We currently operate through the following five segments: PCG; Capital Markets; Asset Management; Bank; and Other.

The segments are determined based upon factors such as the services provided and the distribution channels served and are consistent with how we assess performance and determine how to allocate our resources. The financial results of our segments are presented using the same policies as those described in Note 2. Segment results include allocations of most corporate expenses to each segment. Refer to the following discussion of the Other segment for a description of the corporate expenses that are not allocated to segments. Intersegment revenues, expenses, receivables and payables are eliminated upon consolidation.

The PCG segment provides financial planning, investment advisory and securities transaction services in the U.S., Canada, and the U.K. for which we generally charge either asset-based fees or sales commissions. The PCG segment also earns revenues for distribution and related support services performed related to mutual funds, fixed and variable annuities and insurance products. The segment includes servicing fee revenues from third-party mutual fund and annuity companies whose products we distribute and from banks to which we sweep a portion of our clients’ cash deposits as part of the RJBDP, our multi-bank sweep program. The segment also includes net interest earnings primarily on client margin loans, cash balances, and assets segregated for regulatory purposes, net of interest paid to clients on cash balances in the CIP.

Our Capital Markets segment conducts investment banking, institutional sales, securities trading, equity research, and the syndication and management of investments in low-income housing funds and funds of a similar nature. We primarily conduct these activities in the U.S., Canada, and Europe.

Our Asset Management segment earns asset management and related administrative fees for providing asset management, portfolio management and related administrative services to retail and institutional clients. This segment oversees a portion of our fee-based assets under administration for our PCG clients through our Asset Management Services division and through Raymond James Trust, N.A. This segment also provides asset management services through Raymond James Investment Management for certain retail accounts managed on behalf of third-party institutions, institutional accounts and proprietary mutual funds that we manage.

Our Bank segment provides various types of loans, including SBL, corporate loans, residential mortgage loans, and tax-exempt loans. This segment is active in corporate loan syndications and participations and lending directly to clients. This segment also provides FDIC-insured deposit accounts, including to clients of our broker-dealer subsidiaries, as well as other deposit and liquidity management products and services. This segment generates net interest income principally through the interest income earned on loans and an investment portfolio of available-for-sale securities, which is offset by the interest expense it pays on client deposits and on its borrowings.

The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, certain acquisition-related expenses, primarily comprised of professional fees, and certain corporate overhead costs of RJF that are not allocated to operating segments, including the interest costs on our public debt and any losses on the extinguishment of such debt. The Other segment also includes the reduction in workforce expenses, primarily the result of the elimination of certain positions, that occurred in our fiscal fourth quarter of 2020 in response to the economic environment at that time.

Refer to Notes 3 and 11 for additional information regarding our fiscal year 2022 acquisitions of Charles Stanley, TriState Capital, and SumRidge Partners.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents information concerning operations in these segments, inclusive of our acquisitions.


	Year ended September 30,
$ in millions	2022		2021		2020
Net revenues:
Private Client Group	$	7,710	$	6,611	$	5,552
Capital Markets	1,809		1,885		1,291
Asset Management	914		867		715
Bank	1,084		672		765
Other	(50)		(8)		(82)
Intersegment eliminations	(464)		(267)		(251)
Total net revenues	$	11,003	$	9,760	$	7,990
Pre-tax income/(loss):
Private Client Group	$	1,030	$	749	$	539
Capital Markets	415		532		225
Asset Management	386		389		284
Bank	382		367		196
Other	(191)		(246)		(192)
Total pre-tax income	$	2,022	$	1,791	$	1,052

No individual client accounted for more than ten percent of revenues in any of the years presented.

The following table presents our net interest income on a segment basis.


	Year ended September 30,
$ in millions	2022		2021		2020
Net interest income/(expense):
Private Client Group	$	207	$	113	$	132
Capital Markets	9		6		9
Asset Management	2		—		1
Bank	1,053		642		738
Other	(68)		(88)		(58)
Net interest income	$	1,203	$	673	$	822

The following table presents our total assets on a segment basis.


	September 30,
$ in millions	2022		2021
Total assets:
Private Client Group	$	17,770	$	20,270
Capital Markets	3,951		2,457
Asset Management	556		476
Bank	56,737		36,154
Other	1,937		2,534
Total	$	80,951	$	61,891

The following table presents goodwill, which was included in our total assets, on a segment basis.


	September 30,
$ in millions	2022		2021
Goodwill:
Private Client Group	$	550	$	417
Capital Markets	274		174
Asset Management	69		69
Bank	529		—
Total	$	1,422	$	660

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We have operations in the U.S., Canada, and Europe. Substantially all long-lived assets are located in the U.S. The following table presents our net revenues and pre-tax income classified by major geographic area in which they were earned.


	Year ended September 30,
$ in millions	2022		2021		2020
Net revenues:
U.S.	$	10,065	$	9,067	$	7,446
Canada	542		485		386
Europe	396		208		158
Total	$	11,003	$	9,760	$	7,990
Pre-tax income/(loss):
U.S.	$	1,907	$	1,701	$	1,028
Canada	83		53		29
Europe	32		37		(5)
Total	$	2,022	$	1,791	$	1,052

The following table presents our total assets by major geographic area in which they were held.


	September 30,
$ in millions	2022		2021
Total assets:
U.S.	$	74,428	$	57,952
Canada	3,631		3,724
Europe	2,892		215
Total	$	80,951	$	61,891

The following table presents goodwill, which was included in our total assets, classified by major geographic area in which it was held.


	September 30,
$ in millions	2022		2021
Goodwill:
U.S.	$	1,250	$	619
Canada	23		25
Europe	149		16
Total	$	1,422	$	660

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 27 – CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

As more fully described in Note 1, RJF (or the “Parent”) is a financial holding company whose subsidiaries are engaged in various financial services activities. The Parent’s primary activities include investments in subsidiaries and corporate investments, including cash management, company-owned life insurance policies and private equity investments. The primary source of operating cash available to the Parent is provided by dividends from its subsidiaries.

The broker-dealer subsidiaries of the Parent, including RJ&A our principal domestic broker-dealer, and certain other subsidiaries are required to maintain a minimum amount of net capital due to regulatory requirements. RJ&A is further required by certain covenants in its borrowing agreements to maintain minimum net capital equal to 10% of aggregate debit balances. At September 30, 2022, each of these subsidiaries exceeded their minimum net capital requirements (see Note 24 for further information).

Of the Parent’s net assets as of September 30, 2022, approximately $125 million of its investment in RJ&A and RJFS was available for distribution to the Parent without further regulatory approvals. As of September 30, 2022, approximately $5.1 billion of net assets of our U.S. broker-dealers and bank subsidiaries were restricted from distributions to the parent due to regulatory or other restrictions without prior approval of the respective entity’s regulator. In addition, a large portion of our non-U.S. subsidiaries’ net assets was held to meet regulatory requirements and was not available for use by the parent.

Cash and cash equivalents of $1.91 billion and $1.16 billion as of September 30, 2022 and 2021, respectively, were held directly by RJF in depository accounts at third-party financial institutions, held in depository accounts at Raymond James Bank, or were loaned by the Parent to RJ&A, which RJ&A had invested on behalf of RJF, or otherwise deployed in its normal business activities. The loan to RJ&A, which totaled $1.30 billion and $649 million as of September 30, 2022 and 2021, respectively, is included in “Intercompany receivables from subsidiaries” in the table below. The amount held in depository accounts at Raymond James Bank was $260 million as of September 30, 2022, of which $230 million was available on demand without restriction. As of September 30, 2021, $229 million was held in depository accounts at Raymond James Bank, of which $152 million was available on demand without restriction.

See Notes 16, 17, 19 and 24 for more information regarding borrowings, commitments, contingencies and guarantees, and regulatory capital requirements of the Parent and its subsidiaries.

In the following tables, “bank subsidiaries” refers to Raymond James Bank and TriState Capital Bank, including its holding company which is a subsidiary of RJF. The following table presents the Parent’s statements of financial condition.


	September 30,
$ in millions	2022		2021
Assets:
Cash and cash equivalents	$	629	$	527
Assets segregated for regulatory purposes and restricted cash ($1 and $1 at fair value)	31		478
Intercompany receivables from subsidiaries (primarily non-bank subsidiaries)	1,624		877
Investments in consolidated subsidiaries:
Bank subsidiaries	3,549		2,594
Non-bank subsidiaries	5,611		5,703
Goodwill and identifiable intangible assets, net	32		32
All other	907		1,055
Total assets	$	12,383	$	11,266
Liabilities and equity:
Accrued compensation, commissions and benefits	$	715	$	798
Intercompany payables to subsidiaries:
Bank subsidiaries	—		2
Non-bank subsidiaries	17		33
Senior notes payable	2,038		2,037
All other	155		151
Total liabilities	2,925		3,021
Equity	9,458		8,245
Total liabilities and equity	$	12,383	$	11,266

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the Parent’s statements of income.


	Year ended September 30,
$ in millions	2022		2021		2020
Revenues:
Dividends from non-bank subsidiaries	$	2,002	$	257	$	634
Dividends from bank subsidiaries	60		—		130
Interest from subsidiaries	23		9		18
Interest income	3		1		3
All other	17		21		23
Total revenues	2,105		288		808
Interest expense	(93)		(97)		(87)
Net revenues	2,012		191		721
Non-interest expenses:
Compensation, commissions and benefits (1)	98		81		63
Non-compensations expenses:
Communications and information processing	6		5		6
Occupancy and equipment	1		1		1
Business development	20		19		18
Losses on extinguishment of debt	—		98		—
Intercompany allocations and charges	(8)		(14)		(16)
Other	64		30		23
Total non-compensation expenses	83		139		32
Total non-interest expenses	181		220		95
Pre-tax income/(loss) before equity in undistributed net income of subsidiaries	1,831		(29)		626
Income tax benefit	(20)		(99)		(58)
Income before equity in undistributed net income of subsidiaries	1,851		70		684
Equity in undistributed net income of subsidiaries (2)	(342)		1,333		134
Net income	1,509		1,403		818
Preferred stock dividends	4		—		—
Net income available to common shareholders	$	1,505	$	1,403	$	818

(1) The year ended September 30, 2020 included the portion of the reduction in workforce expenses incurred during the fiscal fourth quarter of 2020 that related to the Parent.

(2) The year ended September 30, 2022 included significant dividends from RJ&A to RJF, which were in excess of net income for the period.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table presents the Parent’s statements of cash flows.


	Year ended September 30,
$ in millions	2022		2021		2020
Cash flows from operating activities:
Net income	$	1,509	$	1,403	$	818
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on investments	1		5		4
Unrealized (gain)/loss on company-owned life insurance policies, net of expenses	159		(157)		(50)
Equity in undistributed net income of subsidiaries	342		(1,333)		(134)
Losses on extinguishment of debt	—		98		—
Other	161		94		102
Net change in:

Intercompany receivables	(23)		(14)		126
Other assets	40		(35)		24
Intercompany payables	(18)		(14)		(70)
Other payables	3		38		43
Accrued compensation, commissions and benefits	(82)		202		73
Net cash provided by operating activities	2,092		287		936

Cash flows from investing activities:

Investments in subsidiaries	(1,092)		(420)		(106)
(Advances to)/repayments from subsidiaries, net	(723)		1,039		(885)
Investment in note receivable	(125)		—		—
Proceeds from sales of investments	7		2		9
Purchase of investments in company-owned life insurance policies, net	(63)		(36)		(55)
Net cash provided by/(used in) investing activities	(1,996)		585		(1,037)

Cash flows from financing activities:
Repurchases of common stock and share-based awards withheld for payment of withholding tax requirements	(216)		(151)		(291)
Dividends on preferred and common stock	(277)		(218)		(205)
Exercise of stock options and employee stock purchases	52		53		62
Proceeds from senior note issuances, net of debt issuance costs paid	—		737		494
Extinguishment of senior notes payable	—		(844)		—



Net cash provided by/(used in) financing activities	(441)		(423)		60
Net increase/(decrease) in cash and cash equivalents, including those segregated for regulatory purposes and restricted cash	(345)		449		(41)
Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at beginning of year	1,004		555		596
Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of year	$	659	$	1,004	$	555

Cash and cash equivalents	$	629	$	527	$	478
Cash and cash equivalents segregated for regulatory purposes and restricted cash	30		477		77
Total cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of year	$	659	$	1,004	$	555

Supplemental disclosures of cash flow information:
Cash paid for interest	$	117	$	89	$	72
Cash paid for income taxes, net	$	24	$	35	$	32

Common stock issued as consideration for TriState Capital acquisition	$	778	$	—	$	—
Restricted stock awards issued as consideration for TriState Capital acquisition	$	28	$	—	$	—
Preferred stock issued as consideration for TriState Capital acquisition	$	120	$	—	$	—
Effective settlement of note receivable for TriState Capital acquisition	$	123	$	—	$	—

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

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