Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)


$ in millions, except per share amounts	March 31, 2023		September 30, 2022
Assets:
Cash and cash equivalents	$	8,663	$	6,178
Assets segregated for regulatory purposes and restricted cash	4,697		8,481
Collateralized agreements	379		704
Financial instruments, at fair value:
Trading assets ($935 and $1,188 pledged as collateral)	993		1,270
Available-for-sale securities ($26 and $74 pledged as collateral)	9,773		9,885
Derivative assets	91		188
Other investments ($21 and $14 pledged as collateral)	318		292
Brokerage client receivables, net	2,575		2,934
Other receivables, net	1,711		1,615
Bank loans, net	43,683		43,239
Loans to financial advisors, net	1,108		1,152
Deferred income taxes, net	573		630
Goodwill and identifiable intangible assets, net	1,932		1,931
Other assets	2,684		2,452
Total assets	$	79,180	$	80,951

Liabilities and shareholders’ equity:
Bank deposits	$	54,229	$	51,357
Collateralized financings	327		466
Financial instrument liabilities, at fair value:
Trading liabilities	710		836
Derivative liabilities	351		530
Brokerage client payables	6,848		11,446
Accrued compensation, commissions and benefits	1,461		1,787
Other payables	1,597		1,768
Other borrowings	1,650		1,291
Senior notes payable	2,038		2,038
Total liabilities	69,211		71,519
Commitments and contingencies (see Note 16)
Shareholders’ equity
Preferred stock	120		120
Common stock; $.01 par value; 650,000,000 shares authorized; 248,323,901 shares issued and 211,581,156 shares outstanding as of March 31, 2023; 248,018,564 shares issued and 215,122,523 shares outstanding as of September 30, 2022	2		2
Additional paid-in capital	3,035		2,987
Retained earnings	9,590		8,843
Treasury stock, at cost; 36,742,745 and 32,896,041 common shares as of March 31, 2023 and September 30, 2022, respectively	(1,954)		(1,512)
Accumulated other comprehensive loss	(798)		(982)
Total equity attributable to Raymond James Financial, Inc.	9,995		9,458
Noncontrolling interests	(26)		(26)
Total shareholders’ equity	9,969		9,432
Total liabilities and shareholders’ equity	$	79,180	$	80,951

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)


	Three months ended March 31,				Six months ended March 31,
in millions, except per share amounts	2023		2022		2023		2022
Revenues:
Asset management and related administrative fees	$	1,302	$	1,464	$	2,544	$	2,846
Brokerage revenues:
Securities commissions	369		422		721		847
Principal transactions	127		142		259		275
Total brokerage revenues	496		564		980		1,122
Account and service fees	258		179		547		356
Investment banking	154		235		295		660
Interest income	915		242		1,742		467
Other	32		27		76		78
Total revenues	3,157		2,711		6,184		5,529
Interest expense	(284)		(38)		(525)		(75)
Net revenues	2,873		2,673		5,659		5,454
Non-interest expenses:
Compensation, commissions and benefits	1,820		1,852		3,556		3,736
Non-compensation expenses:
Communications and information processing	153		127		292		239
Occupancy and equipment	68		62		134		121
Business development	54		34		110		69
Investment sub-advisory fees	36		40		70		78
Professional fees	38		27		70		55
Bank loan provision for credit losses	28		21		42		10


Other	119		77		176		155
Total non-compensation expenses	496		388		894		727
Total non-interest expenses	2,316		2,240		4,450		4,463
Pre-tax income	557		433		1,209		991
Provision for income taxes	130		110		273		222
Net income	427		323		936		769
Preferred stock dividends	2		—		4		—
Net income available to common shareholders	$	425	$	323	$	932	$	769

Earnings per common share – basic	$	1.97	$	1.56	$	4.33	$	3.71
Earnings per common share – diluted	$	1.93	$	1.52	$	4.23	$	3.61
Weighted-average common shares outstanding – basic	214.3		207.7		214.5		207.0
Weighted-average common and common equivalent shares outstanding – diluted	219.2		213.0		219.7		212.6

Net income	$	427	$	323	$	936	$	769
Other comprehensive income/(loss), net of tax:
Available-for-sale securities	97		(320)		144		(375)
Currency translations, net of the impact of net investment hedges	7		(11)		53		(11)
Cash flow hedges	(11)		29		(13)		38
Total other comprehensive income/(loss), net of tax	93		(302)		184		(348)
Total comprehensive income	$	520	$	21	$	1,120	$	421

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


	Three months ended March 31,				Six months ended March 31,
$ in millions, except per share amounts	2023		2022		2023		2022
Preferred stock:
Balance beginning of period	$	120	$	—	$	120	$	—

Shares issuances	—		—		—		—
Balance end of period	120		—		120		—

Common stock, par value $.01 per share:
Balance beginning of period	2		2		2		2
Share issuances	—		—		—		—
Balance end of period	2		2		2		2

Additional paid-in capital:
Balance beginning of period	2,975		2,055		2,987		2,088


Employee stock purchases	15		14		22		22
Distributions due to vesting of restricted stock units and exercise of stock options, net of forfeitures	(11)		(17)		(110)		(122)
Share-based compensation amortization	56		41		136		105

Balance end of period	3,035		2,093		3,035		2,093

Retained earnings:
Balance beginning of period	9,254		8,003		8,843		7,633
Net income	427		323		936		769
Common and preferred stock cash dividends declared (see Note 17)	(91)		(70)		(189)		(146)


Balance end of period	9,590		8,256		9,590		8,256

Treasury stock:
Balance beginning of period	(1,604)		(1,373)		(1,512)		(1,437)
Purchases/surrenders	(358)		—		(505)		(10)
Reissuances due to vesting of restricted stock units and exercise of stock options	8		13		63		87
Balance end of period	(1,954)		(1,360)		(1,954)		(1,360)

Accumulated other comprehensive loss:
Balance beginning of period	(891)		(87)		(982)		(41)
Other comprehensive income/(loss), net of tax	93		(302)		184		(348)

Balance end of period	(798)		(389)		(798)		(389)
Total equity attributable to Raymond James Financial, Inc.	$	9,995	$	8,602	$	9,995	$	8,602

Noncontrolling interests:
Balance beginning of period	$	(26)	$	52	$	(26)	$	58
Net loss attributable to noncontrolling interests	—		(2)		—		—

Deconsolidations and sales	—		(43)		—		(51)


Balance end of period	(26)		7		(26)		7
Total shareholders’ equity	$	9,969	$	8,609	$	9,969	$	8,609

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six months ended March 31,
$ in millions	2023		2022
Cash flows from operating activities:
Net income	$	936	$	769
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	81		69
Deferred income taxes, net	(4)		12
Premium and discount amortization on available-for-sale securities and bank loans and net unrealized gain/loss on other investments	(23)		24
Provisions for credit losses and legal and regulatory proceedings	78		16
Share-based compensation expense	138		109
Unrealized (gain)/loss on company-owned life insurance policies, net of expenses	(86)		19

Other	(3)		10
Net change in:
Assets segregated for regulatory purposes excluding cash and cash equivalents	—		(8,294)
Collateralized agreements, net of collateralized financings	186		59
Loans (provided to) financial advisors, net of repayments	34		(76)
Brokerage client receivables and other receivables, net	145		(299)
Trading instruments, net	163		160
Derivative instruments, net	(122)		166
Other assets	(65)		(39)
Brokerage client payables and other payables	(4,892)		6,556
Accrued compensation, commissions and benefits	(332)		(278)
Purchases and originations of loans held for sale, net of proceeds from sales of securitizations and loans held for sale	6		(153)
Net cash used in operating activities	(3,760)		(1,170)

Cash flows from investing activities:
Increase in bank loans, net	(621)		(2,850)
Proceeds from sales of loans held for investment	142		134
Purchases of available-for-sale securities	(325)		(1,992)
Available-for-sale securities maturations, repayments and redemptions	639		952

Cash and cash equivalents acquired in business acquisitions, including those segregated for regulatory purposes, net of cash paid for acquisitions	—		1,671
Additions to property and equipment	(69)		(42)
Purchase of Federal Home Loan Bank stock, net	(35)		—

Investment in note receivable	—		(125)
Purchases of other investments, net	(6)		(80)
Other investing activities, net	(44)		(71)
Net cash used in investing activities	(319)		(2,403)

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).


RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Six months ended March 31,
$ in millions	2023		2022
Cash flows from financing activities:


Increase in bank deposits	2,872		2,190
Repurchases of common stock and share-based awards withheld for payment of withholding tax requirements	(558)		(59)
Dividends on preferred and common stock	(174)		(131)
Exercise of stock options and employee stock purchases	25		32

Proceeds from Federal Home Loan Bank advances	1,650		850
Repayments of Federal Home Loan Bank advances and other borrowed funds	(1,291)		(852)
Other financing, net	(2)		(5)
Net cash provided by financing activities	2,522		2,025

Currency adjustment:
Effect of exchange rate changes on cash and cash equivalents, including those segregated for regulatory purposes	258		(49)
Net decrease in cash and cash equivalents, including those segregated for regulatory purposes and restricted cash	(1,299)		(1,597)
Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at beginning of year	14,659		16,449
Cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of period	$	13,360	$	14,852

Cash and cash equivalents	$	8,663	$	5,715
Cash and cash equivalents segregated for regulatory purposes and restricted cash	4,697		9,137
Total cash and cash equivalents, including those segregated for regulatory purposes and restricted cash at end of period	$	13,360	$	14,852

Supplemental disclosures of cash flow information:
Cash paid for interest	$	483	$	76
Cash paid for income taxes, net	$	389	$	293
Cash outflows for lease liabilities	$	60	$	52
Non-cash right-of-use assets recorded for new and modified leases	$	42	$	26

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

March 31, 2023

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 retail banking services, and trust services. 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 unaudited condensed 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 of our Annual Report on Form 10-K (“2022 Form 10-K”) for the year ended September 30, 2022, as filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) and in Note 9 of this Quarterly Report on Form 10-Q (“Form 10-Q”). 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

Certain financial information that is normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) but is not required for interim reporting purposes has been condensed or omitted. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments necessary for a fair presentation of our consolidated financial position and results of operations for the periods presented.

The nature of our business is such that the results of any interim period are not necessarily indicative of results for a full year. These unaudited condensed consolidated financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and Notes thereto included in our 2022 Form 10-K. To prepare condensed consolidated financial statements in accordance with GAAP, we must make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of liabilities at the date of the condensed 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 condensed consolidated financial statements.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period’s presentation.

NOTE 2 – UPDATE OF SIGNIFICANT ACCOUNTING POLICIES

A summary of our significant accounting policies is included in Note 2 of our 2022 Form 10-K. There have been no significant changes in our significant accounting policies since September 30, 2022.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 3 – FAIR VALUE

Our “Financial instruments” and “Financial instrument liabilities” on our Condensed 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 Notes 2 and 4 of our 2022 Form 10-K. 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 Condensed Consolidated Statements of Financial Condition. See Note 5 for additional information.


$ in millions	Level 1		Level 2		Level 3		Netting adjustments		Balance as of March 31, 2023
Assets at fair value on a recurring basis:

Trading assets:
Municipal and provincial obligations	$	—	$	177	$	—	$	—	$	177
Corporate obligations	17		520		—		—		537
Government and agency obligations	40		83		—		—		123
Agency mortgage-backed securities (“MBS”), collateralized mortgage obligations (“CMOs”) and asset-backed securities (“ABS”)	—		27		—		—		27
Non-agency CMOs and ABS	—		106		—		—		106
Total debt securities	57		913		—		—		970
Equity securities	8		2		—		—		10
Brokered certificates of deposit	1		9		—		—		10
Other	—		—		3		—		3
Total trading assets	66		924		3		—		993
Available-for-sale securities (1)	1,021		8,752		—		—		9,773
Derivative assets:
Interest rate	9		361		—		(279)		91




Total derivative assets	9		361		—		(279)		91

All other investments:
Government and agency obligations (2)	97		—		—		—		97
Other	93		1		28		—		122
Total all other investments	190		1		28		—		219
Other assets - fractional shares	92		—		—		—		92
Subtotal	1,378		10,038		31		(279)		11,168
Other investments - private equity - measured at net asset value (“NAV”)									99
Total assets at fair value on a recurring basis	$	1,378	$	10,038	$	31	$	(279)	$	11,267

Liabilities at fair value on a recurring basis:
Trading liabilities:
Municipal and provincial obligations	$	1	$	—	$	—	$	—	$	1
Corporate obligations	—		563		—		—		563
Government and agency obligations	99		2		—		—		101
Non-agency CMOs and ABS	—		4		—		—		4
Total debt securities	100		569		—		—		669
Equity securities	41		—		—		—		41

Total trading liabilities	141		569		—		—		710
Derivative liabilities:
Interest rate	8		408		—		(78)		338


Foreign exchange	—		9		—		—		9
Other	—		—		4		—		4
Total derivative liabilities	8		417		4		(78)		351
Other payables - fractional shares	92		—		—		—		92
Total liabilities at fair value on a recurring basis	$	241	$	986	$	4	$	(78)	$	1,153

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)


$ 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 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	42		484		—		(348)		178


Foreign exchange	—		10		—		—		10
Total derivative assets	42		494		—		(348)		188

All other investments:
Government and agency obligations (2)	79		—		—		—		79
Other	92		2		29		—		123
Total all other investments	171		2		29		—		202
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	40		547		—		(65)		522


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

(1) Our available-for-sale securities primarily consist of agency MBS, agency CMOs and U.S. Treasury securities (“U.S. Treasuries”). See Note 4 for further information.

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

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 Condensed Consolidated Statements of Income and Comprehensive Income.


Three months ended March 31, 2023 Level 3 instruments at fair value
	Financial assets				Financial liabilities
	Trading assets		Other investments			Derivative liabilities
$ in millions	Other		All other			Other
Fair value beginning of period	$	6	$	30		$	(4)
Total gains/(losses) included in earnings	—		(2)			—
Purchases and contributions	11		—			—
Sales and distributions	(14)		—			—
Transfers:
Into Level 3	—		—			—
Out of Level 3	—		—			—
Fair value end of period	$	3	$	28		$	(4)
Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period	$	—	$	(2)		$	—


Six months ended March 31, 2023 Level 3 instruments at fair value
	Financial assets				Financial liabilities
	Trading assets		Other investments			Derivative liabilities
$ in millions	Other		All other			Other
Fair value beginning of period	$	1	$	29		$	(3)
Total gains/(losses) included in earnings	—		(1)			(1)
Purchases and contributions	36		—			—
Sales and distributions	(34)		—			—
Transfers:
Into Level 3	—		—			—
Out of Level 3	—		—			—
Fair value end of period	$	3	$	28		$	(4)
Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period	$	—	$	(1)		$	(1)

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)


Three months ended March 31, 2022 Level 3 instruments at fair value
	Financial assets						Financial liabilities
	Trading assets		Derivative assets		Other investments			Trading liabilities
$ in millions	Other		Other		All other			Other
Fair value beginning of period	$	2	$	1	$	98		$	—
Total gains/(losses) included in earnings	—		(1)		—			(1)
Purchases and contributions	29		—		7			—
Sales, distributions, and deconsolidations	(18)		—		(40)			—
Transfers:
Into Level 3	—		—		—			—
Out of Level 3	—		—		(12)			—
Fair value end of period	$	13	$	—	$	53		$	(1)
Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period	$	(1)	$	(1)	$	—		$	(1)


Six months ended March 31, 2022 Level 3 instruments at fair value
	Financial assets		Financial liabilities
	Trading assets			Other investments		Trading liabilities		Derivative liabilities
$ in millions	Other			All other		Other		Other
Fair value beginning of period	$	14		$	98	$	—	$	(1)
Total gains/(losses) included in earnings	2			—		(1)		1
Purchases and contributions	54			7		—		—
Sales, distributions, and deconsolidations	(57)			(40)		—		—
Transfers:
Into Level 3	—			—		—		—
Out of Level 3	—			(12)		—		—
Fair value end of period	$	13		$	53	$	(1)	$	—
Unrealized gains/(losses) for the period included in earnings for instruments held at the end of the reporting period	$	(1)		$	—	$	(1)	$	—

As of both March 31, 2023 and September 30, 2022, 14% of our assets and 2% of our liabilities were measured at fair value on a recurring basis and 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 more fully described in Note 2 of our 2022 Form 10-K, 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 March 31, 2023 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. Our investments are monetized through the liquidation of underlying assets of fund investments, the timing of which is uncertain.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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


$ in millions	Recorded value		Unfunded commitment
March 31, 2023
Private equity investments measured at NAV	$	99	$	35
Private equity investments not measured at NAV	5
Total private equity investments	$	104

September 30, 2022
Private equity investments measured at NAV	$	90	$	39
Private equity investments not measured at NAV	5
Total private equity investments	$	95

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)
March 31, 2023
Bank loans:
Residential mortgage loans	$	2	$	9	$	11	Collateral or discounted cash flow (1)	Prepayment rate	7 yrs. - 12 yrs. (10.3 yrs.)
Corporate loans	$	—	$	76	$	76	Collateral or discounted cash flow (1)	Recovery rate	44% - 80% (63%)
Loans held for sale	$	93	$	—	$	93	N/A	N/A	N/A


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

(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 Condensed Consolidated Financial Statements (Unaudited)

Financial instruments not recorded at fair value

Many, but not all, of the financial instruments we hold were recorded at fair value on the Condensed 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 Condensed Consolidated Statements of Financial Condition at March 31, 2023 and September 30, 2022. This table excludes financial instruments that are carried at amounts which approximate fair value. Refer to Note 4 of our 2022 Form 10-K for a discussion of the fair value hierarchy classifications of our financial instruments that are not recorded at fair value.


$ in millions	Level 2		Level 3		Total estimated fair value		Carrying amount
March 31, 2023
Financial assets:
Bank loans, net	$	26	$	42,926	$	42,952	$	43,503
Financial liabilities:
Bank deposits - certificates of deposit	$	2,643	$	—	$	2,643	$	2,656
Other borrowings - subordinated notes payable	$	92	$	—	$	92	$	100
Senior notes payable	$	1,779	$	—	$	1,779	$	2,038

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

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 4 – AVAILABLE-FOR-SALE SECURITIES

Refer to Note 2 of our 2022 Form 10-K 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. See Note 3 for additional information regarding the fair value of available-for-sale securities.


$ in millions	Cost basis		Gross unrealized gains		Gross unrealized losses		Fair value
March 31, 2023
Agency residential MBS	$	5,272	$	1	$	(520)	$	4,753
Agency commercial MBS	1,477		—		(178)		1,299
Agency CMOs	1,545		—		(218)		1,327
Other agency obligations	760		—		(23)		737
Non-agency residential MBS	518		—		(39)		479
U.S. Treasuries	1,043		—		(22)		1,021
Corporate bonds	145		—		(5)		140
Other	17		—		—		17
Total available-for-sale securities	$	10,777	$	1	$	(1,005)	$	9,773

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

The amortized costs and fair values in the preceding table exclude $25 million and $24 million of accrued interest on available-for-sale securities as of March 31, 2023 and September 30, 2022, respectively, which was included in “Other receivables, net” on our Condensed Consolidated Statements of Financial Condition.

See Note 6 for more information regarding available-for-sale securities pledged with the Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank of Atlanta (“FRB”).

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 March 31, 2023, the weighted-average life of our available-for-sale securities portfolio was approximately 4.38 years.


	March 31, 2023
$ 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	$	—		$	138		$	2,332		$	2,802		$	5,272
Carrying value	$	—		$	134		$	2,120		$	2,499		$	4,753
Weighted-average yield	—		%	2.47		%	1.30		%	1.90		%	1.65		%
Agency commercial MBS
Amortized cost	$	—		$	876		$	550		$	51		$	1,477
Carrying value	$	—		$	797		$	459		$	43		$	1,299
Weighted-average yield	—		%	1.63		%	1.25		%	1.87		%	1.50		%
Agency CMOs
Amortized cost	$	—		$	11		$	41		$	1,493		$	1,545
Carrying value	$	—		$	10		$	37		$	1,280		$	1,327
Weighted-average yield	—		%	2.28		%	1.51		%	1.61		%	1.61		%
Other agency obligations
Amortized cost	$	35		$	609		$	105		$	11		$	760
Carrying value	$	34		$	594		$	99		$	10		$	737
Weighted-average yield	2.16		%	3.42		%	3.58		%	3.07		%	3.38		%
Non-agency residential MBS
Amortized cost	$	—		$	—		$	—		$	518		$	518
Carrying value	$	—		$	—		$	—		$	479		$	479
Weighted-average yield	—		%	—		%	—		%	4.13		%	4.13		%
U.S. Treasuries
Amortized cost	$	191		$	852		$	—		$	—		$	1,043
Carrying value	$	188		$	833		$	—		$	—		$	1,021
Weighted-average yield	2.28		%	2.78		%	—		%	—		%	2.69		%
Corporate bonds
Amortized cost	$	1		$	116		$	28		$	—		$	145
Carrying value	$	1		$	112		$	27		$	—		$	140
Weighted-average yield	2.88		%	5.80		%	4.95		%	—		%	5.61		%
Other
Amortized cost	$	—		$	5		$	5		$	7		$	17
Carrying value	$	—		$	5		$	4		$	8		$	17
Weighted-average yield	—		%	6.66		%	5.23		%	7.47		%	6.67		%
Total available-for-sale securities
Amortized cost	$	227		$	2,607		$	3,061		$	4,882		$	10,777
Carrying value	$	223		$	2,485		$	2,746		$	4,319		$	9,773
Weighted-average yield	2.27		%	2.66		%	1.42		%	2.06		%	2.03		%

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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
March 31, 2023
Agency residential MBS	$	673	$	(40)	$	4,018	$	(480)	$	4,691	$	(520)
Agency commercial MBS	145		(4)		1,154		(174)		1,299		(178)
Agency CMOs	40		(1)		1,287		(217)		1,327		(218)
Other agency obligations	386		(11)		301		(12)		687		(23)
Non-agency residential MBS	469		(39)		—		—		469		(39)
U.S. Treasuries	749		(16)		247		(6)		996		(22)
Corporate bonds	125		(5)		—		—		125		(5)
Other	13		—		—		—		13		—
Total	$	2,600	$	(116)	$	7,007	$	(889)	$	9,607	$	(1,005)
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)

At March 31, 2023, of the 1,072 available-for-sale securities in an unrealized loss position, 395 were in a continuous unrealized loss position for less than 12 months and 677 securities were in a continuous unrealized loss position for greater than 12 months.

At March 31, 2023, 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 $5.07 billion and $3.05 billion, respectively, and fair values of $4.52 billion and $2.70 billion, respectively.

During the three and six months ended March 31, 2023 and March 31, 2022, there were no sales of available-for-sale securities.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 5 – 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 Condensed Consolidated Statements of Financial Condition. Cash flows related to our derivatives are included within operating activities on the Condensed Consolidated Statements of Cash Flows. The significant accounting policies governing our derivatives, including our methodologies for determining fair value, are described in Note 2 of our 2022 Form 10-K.

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 Condensed 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.


	March 31, 2023						September 30, 2022
$ in millions	Derivative assets		Derivative liabilities		Notional amount		Derivative assets		Derivative liabilities		Notional amount
Derivatives not designated as hedging instruments
Interest rate - other (1)	$	353	$	407	$	16,404	$	462	$	535	$	14,647
Interest rate - matched book	8		8		170		52		52		1,340
Foreign exchange	—		4		1,128		4		5		958
Other	—		4		582		—		3		531
Subtotal	361		423		18,284		518		595		17,476
Derivatives designated as hedging instruments
Interest rate - other (2)	9		1		1,300		12		—		1,050
Foreign exchange	—		5		1,149		6		—		1,092
Subtotal	9		6		2,449		18		—		2,142
Total gross fair value/notional amount	370		429		$	20,733	536		595		$	19,618
Offset on the Condensed Consolidated Statements of Financial Condition
Counterparty netting	(36)		(36)				(35)		(35)
Cash collateral netting	(243)		(42)				(313)		(30)
Total amounts offset	(279)		(78)				(348)		(65)
Net amounts presented on the Condensed Consolidated Statements of Financial Condition	$	91	$	351			$	188	$	530
Gross amounts not offset on the Condensed Consolidated Statements of Financial Condition
Financial instruments (3)	(14)		(8)				(60)		(52)
Total	$	77	$	343			$	128	$	478

(1) Relates to interest rate derivatives entered into as part of our fixed income business operations, including to-be-announced security contracts that are accounted for as derivatives, as well as our banking operations.

(2) During the six months ended March 31, 2023, we entered into an interest rate swap to manage our risk of increases in interest rates associated with certain money market and savings accounts by converting the balances subject to variable interest rates to a fixed interest rate. Such interest rate swap has been designated and accounted for as a cash flow hedge. Refer to Note 13 of this Form 10-Q for information regarding these bank deposits.

(3) 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.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table details the gains/(losses) included in accumulated other comprehensive income/(loss) (“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 period. See Note 17 for additional information.


	Three months ended March 31,				Six months ended March 31,
$ in millions	2023		2022		2023		2022
Interest rate (cash flow hedges)	$	(11)	$	29	$	(13)	$	38
Foreign exchange (net investment hedges)	(3)		(9)		(17)		(10)
Total gains/(losses) included in AOCI, net of taxes	$	(14)	$	20	$	(30)	$	28

There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for each of the three and six months ended March 31, 2023 and 2022. We expect to reclassify $29 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.

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


$ in millions				Three months ended March 31,						Six months ended March 31,
	Location of gain/(loss)		2023			2022			2023			2022
Interest rate		Principal transactions/other revenues		$	5		$	7		$	11		$	10
Foreign exchange		Other revenues		$	(6)		$	(2)		$	(36)		$	(3)
Other		Principal transactions		$	—		$	(2)		$	(1)		$	1

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 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.

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 sensitivity-based and foreign exchange spot limits.

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 $7 million as of March 31, 2023 and $8 million as of September 30, 2022.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 6 – COLLATERALIZED AGREEMENTS AND FINANCINGS

Collateralized agreements are comprised of securities purchased under agreements to resell (“reverse repurchase agreements”) and securities borrowed. Collateralized financings are comprised of securities sold under agreements to repurchase (“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 of our 2022 Form 10-K.

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 Condensed 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
March 31, 2023
Gross amounts of recognized assets/liabilities	$	167	$	212	$	379	$	150	$	177	$	327
Gross amounts offset on the Condensed Consolidated Statements of Financial Condition	—		—		—		—		—		—
Net amounts included in the Condensed Consolidated Statements of Financial Condition	167		212		379		150		177		327
Gross amounts not offset on the Condensed Consolidated Statements of Financial Condition	(167)		(211)		(378)		(150)		(173)		(323)
Net amounts	$	—	$	1	$	1	$	—	$	4	$	4
September 30, 2022
Gross amounts of recognized assets/liabilities	$	367	$	337	$	704	$	294	$	172	$	466
Gross amounts offset on the Condensed Consolidated Statements of Financial Condition	—		—		—		—		—		—
Net amounts included in the Condensed Consolidated Statements of Financial Condition	367		337		704		294		172		466
Gross amounts not offset on the Condensed Consolidated Statements of Financial Condition	(367)		(327)		(694)		(294)		(162)		(456)
Net amounts	$	—	$	10	$	10	$	—	$	10	$	10

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 Condensed Consolidated Statements of Financial Condition.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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
March 31, 2023
Repurchase agreements:
Government and agency obligations	$	115	$	—	$	—	$	—	$	115
Agency MBS and agency CMOs	35		—		—		—		35
Total repurchase agreements	150		—		—		—		150
Securities loaned:
Equity securities	177		—		—		—		177
Total collateralized financings	$	327	$	—	$	—	$	—	$	327
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

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 Condensed 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.


$ in millions	March 31, 2023		September 30, 2022
Collateral we received that was available to be delivered or repledged	$	2,993	$	3,812
Collateral that we delivered or repledged	$	766	$	947

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Encumbered assets

We pledge certain of our assets to collateralize repurchase agreements or other secured borrowings, maintain lines of credit, to maintain our ability to hold certain deposits, 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. We pledge certain of our bank loans and available-for-sale securities with the FHLB as security for both the repayment of certain borrowings and to secure capacity for additional borrowings as needed. We also pledge certain loans and available-for-sale securities with the FRB to be eligible to participate in the Federal Reserve’s discount window program and to participate in certain deposit programs. During the quarter ended March 31, 2023, Raymond James Bank increased its borrowing capacity with the FHLB through the pledge of additional available-for-sale securities. The FHLB does not have the ability to sell or repledge such securities until they are borrowed against. For additional information regarding our outstanding FHLB advances see Note 14.

The following table presents information about our assets that have been pledged for one of the purposes previously described.


$ in millions	March 31, 2023		September 30, 2022
Had the right to deliver or repledge	$	982	$	1,276
Did not have the right to deliver or repledge	$	4,753	$	63
Bank loans, net pledged with the:
FHLB	$	8,768	$	8,009
FRB	793		791
Total bank loans, net pledged with the FHLB and FRB	$	9,561	$	8,800

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 7 – BANK LOANS, NET

Bank client receivables are comprised of loans originated or purchased by our Bank segment and include securities-based loans (“SBL”), corporate loans (commercial and industrial (“C&I”) loans, commercial real estate (“CRE”) loans, and real estate investment trust (“REIT”) loans), residential mortgage 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 of our 2022 Form 10-K for a discussion of accounting policies related to bank loans and the allowance for credit losses.

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 Condensed Consolidated Statements of Financial Condition at amortized cost (or fair value where applicable) less the allowance for credit losses (“ACL”). 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 of our 2022 Form 10-K, 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.


$ in millions	March 31, 2023			September 30, 2022
SBL	$	14,227		$	15,297
C&I loans	11,259			11,173
CRE loans	7,054			6,549
REIT loans	1,717			1,592
Residential mortgage loans	8,079			7,386
Tax-exempt loans	1,643			1,501
Total loans held for investment	43,979			43,498
Held for sale loans	119			137
Total loans held for sale and investment	44,098			43,635
Allowance for credit losses	(415)			(396)
Bank loans, net (1)	$	43,683		$	43,239

ACL as a % of total loans held for investment	0.94		%	0.91		%
Accrued interest receivable on bank loans (included in “Other receivables, net”)	$	192		$	137

(1) Bank loans, net as of March 31, 2023 and September 30, 2022 are presented net of $89 million and $112 million, respectively, of net unamortized discount, unearned income, and deferred loan fees and costs. The net unamortized discount primarily arose from the acquisition date fair value purchase discount on bank loans acquired in the TriState Capital acquisition. See Note 3 of our 2022 Form 10-K for further information.

See Note 6 for more information regarding bank loans, net pledged with the FHLB and FRB and Note 14 for more information regarding borrowings from the FHLB.

Held for sale loans

We originated or purchased $624 million and $1.43 billion of loans held for sale during the three and six months ended March 31, 2023, respectively, and $999 million and $1.97 billion during the three and six months ended March 31, 2022, respectively. The majority of these loans were purchases of the guaranteed portions of Small Business Administration (“SBA”) loans that were initially classified as loans held for sale upon purchase and subsequently transferred to trading instruments once they had been securitized into pools. Proceeds from the sales of these loans held for sale and not securitized amounted to $155 million and $353 million during the three and six months ended March 31, 2023, respectively, and $339 million and $677 million during the three and six months ended March 31, 2022, respectively. Net gains resulting from such sales were insignificant for each of the three and six months ended March 31, 2023 and 2022.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Purchases and sales of loans held for investment

The following table presents purchases and sales of loans held for investment by portfolio segment.


$ in millions	C&I loans		CRE loans		REIT loans		Residential mortgage loans		Total
Three months ended March 31, 2023
Purchases	$	194	$	—	$	—	$	110	$	304
Sales	$	147	$	—	$	—	$	—	$	147
Six months ended March 31, 2023
Purchases	$	357	$	39	$	24	$	300	$	720
Sales	$	147	$	—	$	—	$	—	$	147
Three months ended March 31, 2022
Purchases	$	441	$	—	$	—	$	223	$	664
Sales	$	61	$	—	$	—	$	—	$	61
Six months ended March 31, 2022
Purchases	$	780	$	—	$	—	$	407	$	1,187
Sales	$	112	$	—	$	—	$	—	$	112

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 of our 2022 Form 10-K, 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
March 31, 2023
SBL	$	—	$	—	$	—	$	—	$	—	$	14,227	$	14,227
C&I loans	—		—		—		32		—		11,227		11,259
CRE loans	—		—		—		34		18		7,002		7,054
REIT loans	—		—		—		—		—		1,717		1,717
Residential mortgage loans	4		—		4		—		15		8,060		8,079
Tax-exempt loans	—		—		—		—		—		1,643		1,643
Total loans held for investment	$	4	$	—	$	4	$	66	$	33	$	43,876	$	43,979

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

The preceding table includes $90 million and $63 million at March 31, 2023 and September 30, 2022, respectively, of nonaccrual loans which were current pursuant to their contractual terms. The table also includes troubled debt restructurings of $20 million, $8 million, and $10 million for C&I loans, CRE loans, and residential first mortgage loans, respectively, at March 31, 2023, and $11 million, $9 million, and $10 million for C&I loans, CRE loans and residential first mortgage loans, respectively, at September 30, 2022.

Other real estate owned, included in “Other assets” on our Condensed Consolidated Statements of Financial Condition, was insignificant at both March 31, 2023 and September 30, 2022.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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.


Loan type ($ in millions)	Nature of collateral	March 31, 2023		September 30, 2022

C&I loans	Commercial real estate and other business assets	$	9	$	11
CRE loans	Retail, industrial, office and health care real estate	$	52	$	21

Residential mortgage loans	Single family homes	$	6	$	6

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 at both March 31, 2023 and September 30, 2022.

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 Condensed Consolidated Financial Statements (Unaudited)

The following tables present our held for investment bank loan portfolio by credit quality indicator. Loans classified as special mention, substandard or doubtful are all considered to be “criticized” loans.


	March 31, 2023
	Loans by origination fiscal year
$ in millions	2023		2022		2021		2020		2019		Prior		Revolving loans		Total
SBL
Risk rating:
Pass	$	20	$	18	$	92	$	41	$	26	$	82	$	13,948	$	14,227
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total SBL	$	20	$	18	$	92	$	41	$	26	$	82	$	13,948	$	14,227



C&I loans
Risk rating:
Pass	$	454	$	1,193	$	1,254	$	1,223	$	1,097	$	3,272	$	2,526	$	11,019
Special mention	—		10		29		38		—		1		7		85
Substandard	—		—		—		40		18		84		13		155
Doubtful	—		—		—		—		—		—		—		—
Total C&I loans	$	454	$	1,203	$	1,283	$	1,301	$	1,115	$	3,357	$	2,546	$	11,259



CRE loans
Risk rating:
Pass	$	613	$	2,346	$	1,195	$	784	$	654	$	1,180	$	149	$	6,921
Special mention	7		—		—		36		—		22		—		65
Substandard	—		—		—		2		13		53		—		68
Doubtful	—		—		—		—		—		—		—		—
Total CRE loans	$	620	$	2,346	$	1,195	$	822	$	667	$	1,255	$	149	$	7,054



REIT loans
Risk rating:
Pass	$	266	$	202	$	214	$	101	$	55	$	197	$	682	$	1,717
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total REIT loans	$	266	$	202	$	214	$	101	$	55	$	197	$	682	$	1,717



Residential mortgage loans
Risk rating:
Pass	$	915	$	2,956	$	1,661	$	965	$	455	$	1,057	$	40	$	8,049
Special mention	—		—		1		—		2		5		—		8
Substandard	—		2		—		—		—		20		—		22
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage loans	$	915	$	2,958	$	1,662	$	965	$	457	$	1,082	$	40	$	8,079



Tax-exempt loans
Risk rating:
Pass	$	165	$	298	$	165	$	56	$	108	$	851	$	—	$	1,643
Special mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total tax-exempt loans	$	165	$	298	$	165	$	56	$	108	$	851	$	—	$	1,643

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)


	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 Condensed Consolidated Financial Statements (Unaudited)

We also monitor the credit quality of the residential mortgage loan portfolio utilizing FICO scores and loan-to-value (“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.


	March 31, 2023
	Loans by origination fiscal year
$ in millions	2023		2022		2021		2020		2019		Prior		Revolving loans		Total
FICO score:
Below 600	$	6	$	1	$	3	$	2	$	3	$	55	$	—	$	70
600 - 699	51		155		107		88		31		83		4		519
700 - 799	718		2,383		1,265		700		334		647		25		6,072
800 +	139		416		283		174		84		293		8		1,397
FICO score not available	1		3		4		1		5		4		3		21
Total	$	915	$	2,958	$	1,662	$	965	$	457	$	1,082	$	40	$	8,079

LTV ratio:
Below 80%	$	639	$	2,262	$	1,300	$	755	$	341	$	832	$	36	$	6,165
80%+	276		696		362		210		116		250		4		1,914
Total	$	915	$	2,958	$	1,662	$	965	$	457	$	1,082	$	40	$	8,079


	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

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Allowance for credit losses

The following table presents changes in the allowance for credit losses on held for investment bank loans by portfolio segment.


$ in millions	SBL			C&I loans			CRE loans			REIT loans			Residential mortgage loans			Tax-exempt loans			Total
Three months ended March 31, 2023
Balance at beginning of period	$	4		$	222		$	91		$	15		$	74		$	2		$	408



Provision for credit losses	1			18			9			—			—			—			28

Net (charge-offs)/recoveries:
Charge-offs	—			(20)			—			—			—			—			(20)
Recoveries	—			—			—			—			—			—			—
Net (charge-offs)/recoveries	—			(20)			—			—			—			—			(20)
Foreign exchange translation adjustment	—			(1)			—			—			—			—			(1)
Balance at end of period	$	5		$	219		$	100		$	15		$	74		$	2		$	415
ACL by loan portfolio segment as a % of total ACL	1.2		%	52.8		%	24.1		%	3.6		%	17.8		%	0.5		%	100.0		%

Six months ended March 31, 2023
Balance at beginning of period	$	3		$	226		$	87		$	21		$	57		$	2		$	396



Provision/(benefit) for credit losses	2			18			11			(6)			17			—			42

Net (charge-offs)/recoveries:
Charge-offs	—			(24)			(1)			—			—			—			(25)
Recoveries	—			—			3			—			—			—			3
Net (charge-offs)/recoveries	—			(24)			2			—			—			—			(22)
Foreign exchange translation adjustment	—			(1)			—			—			—			—			(1)
Balance at end of period	$	5		$	219		$	100		$	15		$	74		$	2		$	415
ACL by loan portfolio segment as a % of total ACL	1.2		%	52.8		%	24.1		%	3.6		%	17.8		%	0.5		%	100.0		%

Three months ended March 31, 2022
Balance at beginning of period	$	3		$	179		$	72		$	22		$	30		$	2		$	308

Provision/(benefit) for credit losses	—			17			(1)			3			2			—			21
Net (charge-offs)/recoveries:
Charge-offs	—			(1)			—			—			—			—			(1)
Recoveries	—			—			—			—			—			—			—
Net (charge-offs)/recoveries	—			(1)			—			—			—			—			(1)
Foreign exchange translation adjustment	—			—			—			—			—			—			—
Balance at end of period	$	3		$	195		$	71		$	25		$	32		$	2		$	328
ACL by loan portfolio segment as a % of total ACL	0.9		%	59.5		%	21.6		%	7.6		%	9.8		%	0.6		%	100.0		%

Six months ended March 31, 2022
Balance at beginning of period	$	4		$	191		$	66		$	22		$	35		$	2		$	320

Provision/(benefit) for credit losses	(1)			7			5			3			(4)			—			10
Net (charge-offs)/recoveries:
Charge-offs	—			(3)			—			—			—			—			(3)
Recoveries	—			—			—			—			1			—			1
Net (charge-offs)/recoveries	—			(3)			—			—			1			—			(2)
Foreign exchange translation adjustment	—			—			—			—			—			—			—
Balance at end of period	$	3		$	195		$	71		$	25		$	32		$	2		$	328
ACL by loan portfolio segment as a % of total ACL	0.9		%	59.5		%	21.6		%	7.6		%	9.8		%	0.6		%	100.0		%

The allowance for credit losses on held for investment bank loans increased $7 million and $19 million during the three and six months ended March 31, 2023, respectively, resulting from a $28 million and $42 million provision for credit losses, respectively, partially offset by net charge-offs which were primarily related to two C&I loans. The provision for credit losses for the three months ended March 31, 2023 primarily reflected the impacts of charge-offs of certain loans during the quarter, loan downgrades in the CRE and C&I loan portfolios, and additional volatility in the macroeconomic outlook. The provision for credit losses for the six months ended March 31, 2023 was primarily due to a weaker macroeconomic outlook, net charge-offs, and the impact of loan growth during the period.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The allowance for credit losses on unfunded lending commitments, which is included in “Other payables” on our Condensed Consolidated Statements of Financial Condition, was $21 million at March 31, 2023 and $19 million at both December 31, 2022 and September 30, 2022.

NOTE 8 – 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 of our 2022 Form 10-K 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.


$ in millions	March 31, 2023			September 30, 2022
Affiliated with the firm as of period-end (1)	$	1,130		$	1,173
No longer affiliated with the firm as of period-end (2)	8			8
Total loans to financial advisors	1,138			1,181
Allowance for credit losses	(30)			(29)
Loans to financial advisors, net	$	1,108		$	1,152
Accrued interest receivable on loans to financial advisors (included in “Other receivables, net”)	$	5		$	5
Allowance for credit losses as a percent of total loans to financial advisors	2.64		%	2.46		%

(1) These loans were predominantly current.

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

NOTE 9 – 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 of our 2022 Form 10-K 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 investments in low-income housing tax credit (“LIHTC”) funds and the trust we utilize in connection with restricted stock unit (“RSU”) awards granted to certain employees of one of our Canadian subsidiaries (the “Restricted Stock Trust Fund”) require consolidation in our financial statements, as we are deemed the primary beneficiary of such VIEs. 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
March 31, 2023

LIHTC funds	$	55	$	6
Restricted Stock Trust Fund	26		26
Total	$	81	$	32

September 30, 2022

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

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 Condensed Consolidated Statements of Financial Condition. Intercompany balances are eliminated in consolidation and are not reflected in the following table.


$ in millions	March 31, 2023		September 30, 2022
Assets:
Cash and cash equivalents and assets segregated for regulatory purposes and restricted cash	$	5	$	5


Other assets	50		54
Total assets	$	55	$	59
Liabilities:
Other payables	$	—	$	—

Total liabilities	$	—	$	—
Noncontrolling interests	$	(26)	$	(26)

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

As discussed in Note 2 of our 2022 Form 10-K, 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, our interests in certain limited partnerships which are part of our private equity portfolio (“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.


	March 31, 2023						September 30, 2022
$ in millions	Aggregate assets		Aggregate liabilities		Our risk of loss		Aggregate assets		Aggregate liabilities		Our risk of loss
LIHTC funds	$	8,518	$	2,759	$	73	$	7,752	$	2,584	$	136
Private Equity Interests	2,317		553		99		2,177		448		90
Other	109		70		3		159		101		8
Total	$	10,944	$	3,382	$	175	$	10,088	$	3,133	$	234

NOTE 10 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

Our goodwill and identifiable intangible assets result from various acquisitions. See Notes 2 and 11 of our 2022 Form 10-K for additional information about our goodwill and intangible assets, including the related accounting policies.

We perform goodwill and indefinite-lived intangible asset 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 or indicate that the asset is impaired. We performed our latest annual impairment testing for our goodwill and indefinite-lived intangible assets as of our January 1, 2023 evaluation date, evaluating balances as of December 31, 2022. In that testing, we performed a qualitative impairment assessment for each of our reporting units that had goodwill, as well as for our indefinite-lived intangible assets.

Our qualitative assessments consider macroeconomic indicators and industry and market considerations, such as trends in equity and fixed income markets, gross domestic product, labor markets, interest rates, and housing markets. We also consider regulatory changes, as well as company-specific factors such as 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. Based upon the outcome of our qualitative assessments, no impairment was identified. No events have occurred since such assessments that would cause us to update this impairment testing.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 11 - OTHER ASSETS

The following table details the components of other assets. See Note 2 of our 2022 Form 10-K for a discussion of the accounting polices related to certain of these components.



$ in millions	March 31, 2023		September 30, 2022
Investments in company-owned life insurance policies	$	1,077	$	944
Property and equipment, net	515		503
Lease right of use (“ROU”) assets	476		480
Prepaid expenses	249		173

Investments in FHLB and FRB stock	123		88

All other	244		264
Total other assets	$	2,684	$	2,452

See Note 13 of our 2022 Form 10-K for further information regarding our property and equipment and Note 12 of this Form 10-Q and Note 14 of our 2022 Form 10-K for further information regarding our leases.

NOTE 12 – LEASES

The following table presents the balances related to our leases on our Condensed Consolidated Statements of Financial Condition. See Notes 2 and 14 of our 2022 Form 10-K for additional information related to our leases, including a discussion of our accounting policies.


$ in millions	March 31, 2023		September 30, 2022
ROU assets (included in Other assets)	$	476	$	480
Lease liabilities (included in Other payables)	$	478	$	482

Lease liabilities as of March 31, 2023 excluded $53 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 dates later in fiscal year 2023 and fiscal year 2025 with lease terms ranging from two to 13 years.

Lease expense

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


	Three months ended March 31,				Six months ended March 31,
$ in millions	2023		2022		2023		2022
Lease costs	$	32	$	29	$	63	$	57
Variable lease costs	$	8	$	8	$	15	$	15

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.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 13 – BANK DEPOSITS

Bank deposits include money market and savings accounts, interest-bearing demand deposits, which include Negotiable Order of Withdrawal accounts, certificates of deposit, and non-interest-bearing demand deposits. 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.


	March 31, 2023				September 30, 2022
$ in millions	Balance		Weighted-average rate		Balance		Weighted-average rate
Money market and savings accounts	$	43,136	1.24	%	$	44,446	1.01	%
Interest-bearing demand deposits	7,809		4.45	%	5,286		2.77	%
Certificates of deposit	2,656		4.15	%	999		1.85	%
Non-interest-bearing demand deposits	628		—		626		—
Total bank deposits	$	54,229	1.86	%	$	51,357	1.21	%

Money market and savings accounts in the preceding table included $37.68 billion and $38.71 billion as of March 31, 2023 and September 30, 2022, respectively, of cash balances which were swept to our Bank segment from the client investment accounts maintained at Raymond James & Associates, Inc. (“RJ&A”). Such deposits are held in Federal Deposit Insurance Corporation (“FDIC”)-insured bank accounts through the Raymond James Bank Deposit Program (“RJBDP”). Money market and savings accounts also included direct accounts held by TriState Capital Bank on behalf of third-party clients. Interest-bearing demand deposits in the preceding table included $2.75 billion of deposits as of March 31, 2023 associated with our Enhanced Savings Program, in which Private Client Group clients may deposit cash in a high-yield Raymond James Bank account.

The following table details the estimated amount of total bank deposits that are FDIC-insured, as well as the estimated amount of total bank deposits that exceeded the FDIC insurance limit at each respective period.


$ in millions	March 31, 2023			September 30, 2022
FDIC-insured bank deposits	$	47,475		$	43,520
Bank deposits exceeding FDIC insurance limit	6,754			7,837
Total bank deposits	$	54,229		$	51,357
FDIC-insured bank deposits as a % of total bank deposits	88		%	85		%

The following table sets forth the estimated amount of certificates of deposit that exceeded the FDIC insurance limit by time remaining until maturity as of March 31, 2023.


$ in millions	March 31, 2023
Three months or less	$	38
Over three through six months	23
Over six through twelve months	29
Over twelve months	13
Total estimated certificates of deposit that exceeded the FDIC insurance limit	$	103

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


	Three months ended March 31,				Six months ended March 31,
$ in millions	2023		2022		2023		2022
Money market and savings accounts	$	128	$	1	$	245	$	2
Interest-bearing demand deposits	62		1		109		2
Certificates of deposit	16		3		24		7
Total interest expense on deposits	$	206	$	5	$	378	$	11

We use an interest rate swap to manage the risk of increases in interest rates associated with certain money market and savings accounts by converting the balances subject to variable interest rates to a fixed interest rate. Refer to Note 5 of this Form 10-Q for information regarding this interest rate swap, which has been designated and accounted for as a cash flow hedge.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 14 – 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.


	March 31, 2023					September 30, 2022
$ in millions	Weighted average interest rate		Maturity date	Balance		Weighted average interest rate		Maturity date	Balance
FHLB advances:
Floating rate - term (1)	5.09	%	December 2023 - June 2024	$	850	3.32	%	December 2023	$	850
Floating rate - overnight (1)	N/A		Overnight	—		3.11	%	Overnight	140
Fixed rate	5.13	%	April 2023 - June 2023	700		3.45	%	December 2022	200
Total FHLB advances				1,550					1,190
Subordinated notes - fixed-to-floating (including an unaccreted premium of $2 and $2, respectively) (2)	5.75	%	May 2030	100		5.75	%	May 2030	100
Other				—					1
Total other borrowings				$	1,650				$	1,291

(1) Interest rates on these advances reset daily.

(2) 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, or an appropriate alternative reference rate. 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.

We use interest rate swaps to manage the risk of increases in interest rates associated with the majority our floating-rate FHLB advances by converting the balances subject to variable interest rates to a fixed interest rate. Refer to Note 2 of our 2022 Form 10-K and Note 5 of this Form 10-Q for information regarding these interest rate swaps, which have been designated and accounted for as cash flow hedges. Refer to Note 6 for more information regarding bank loans, net and available-for-sale securities pledged with the FHLB as security for our FHLB borrowings.

For further information on our other borrowing arrangements refer to Note 16 of our 2022 Form 10-K.

NOTE 15 – INCOME TAXES

The income tax provision for interim periods is comprised of tax on ordinary income provided at the most recent estimated annual effective tax rate, adjusted for the tax effect of discrete items. We estimate the annual effective tax rate quarterly based on the forecasted pre-tax results of our U.S. and non-U.S. operations. Items unrelated to current year ordinary income are recognized entirely in the period identified as a discrete item of tax. These discrete items generally relate to changes in tax laws, adjustments to the actual liability determined upon filing tax returns, excess tax benefits related to share-based compensation and adjustments to previously recorded reserves for uncertain tax positions. For discussion of income tax accounting policies and other income tax related information, see Notes 2 and 18 of our 2022 Form 10-K.

Effective tax rate

Our effective income tax rate of 22.6% for the six months ended March 31, 2023 was lower than the 25.4% effective tax rate for our fiscal year 2022. The decrease in the effective income tax rate was primarily due to nontaxable valuation gains associated with our company-owned life insurance policies that were recognized during the current period compared to fiscal year 2022 which had nondeductible losses.

Uncertain tax positions

Although management cannot predict with any degree of certainty the timing of ultimate resolution of matters under review by various taxing jurisdictions, it is reasonably possible that our uncertain tax position liability balance may decrease within the next 12 months by up to $10 million due to expirations of statutes of limitations and the completion of tax examinations.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 16 – 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 March 31, 2023, we had one such open underwriting commitment, which was subsequently settled in an open market transaction and did not result in a significant loss.

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 client’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.

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


$ in millions	March 31, 2023		September 30, 2022
SBL and other consumer lines of credit	$	36,998	$	33,641
Commercial lines of credit	$	4,137	$	3,792
Unfunded lending commitments	$	1,153	$	1,255
Standby letters of credit	$	107	$	94

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 the current expected credit losses (“CECL”) model provides for potential losses related to the unfunded lending commitments. See Note 2 of our 2022 Form 10-K and Note 7 of this Form 10-Q for further information on this allowance for credit losses related to unfunded lending commitments.

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 Note 2 of our 2022 Form 10-K and Note 8 of this Form 10-Q 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 $63 million as of March 31, 2023.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Other commitments

Raymond James Affordable Housing Investments, Inc. (“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 March 31, 2023, RJAHI had committed approximately $149 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 see Note 12 of this Form 10-Q and for information on the maturities of our lease liabilities see Note 14 of our 2022 Form 10-K.

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.

Legal and regulatory matters 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 continuing its cooperation 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.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 March 31, 2023, we estimated the upper end of the range of reasonably possible aggregate loss to be approximately $100 million in excess of the aggregate accruals for such matters. Refer to Note 2 of our 2022 Form 10-K for a discussion of our criteria for recognizing liabilities for contingencies.

NOTE 17 – SHAREHOLDERS’ EQUITY

Preferred stock

The following table details the shares outstanding, carrying value, and aggregate liquidation preference of our preferred stock. For further details regarding our preferred stock see Note 20 of our 2022 Form 10-K.


$ in millions, except share count	March 31, 2023		September 30, 2022
6.75% Fixed-to-Floating Rate Series A Non-Cumulative Perpetual Preferred Stock (“Series A Preferred Stock”):
Shares outstanding	40,250		40,250
Carrying value	$	41	$	41
Aggregate liquidation preference	$	40	$	40
6.375% Fixed-to-Floating Rate Series B Non-Cumulative Perpetual Preferred Stock (“Series B Preferred Stock”):
Shares outstanding	80,500		80,500
Carrying value	$	79	$	79
Aggregate liquidation preference	$	81	$	81

On April 3, 2023, we redeemed all 40,250 outstanding shares of our Series A Preferred Stock, which triggered the redemption of the related depositary shares (“Series A Depositary Shares”), each representing a 1/40th interest of a share of Series A Preferred Stock, for an aggregate redemption value of $40 million. The redemption of the Series A Preferred Stock will be reflected in our condensed consolidated financial statements in our fiscal third quarter of 2023.

The following table details dividends declared and dividends paid on our Series A and Series B preferred stock for the three and six months ended March 31, 2023.


	Three months ended March 31, 2023				Six months ended March 31, 2023
$ in millions, except per share amounts	Total dividends		Per preferred share amount		Total dividends		Per preferred share amount
Dividends declared:
Series A Preferred Stock	$	1	$	16.88	$	2	$	33.76
Series B Preferred Stock	1		$	15.94	2		$	31.88
Total preferred stock dividends declared	$	2			$	4
Dividends paid:
Series A Preferred Stock	$	1	$	16.88	$	2	$	33.76
Series B Preferred Stock	1		$	15.94	2		$	31.88
Total preferred stock dividends paid	$	2			$	4

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 20 of this Form 10-Q and Note 23 of our 2022 Form 10-K for additional information on these programs. We may also reissue treasury shares for such purposes.

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. In December 2022, our Board of Directors authorized common stock repurchases of up to $1.5 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. During the three months ended March 31, 2023, we repurchased 3.75 million shares of our common stock for $350 million at an average price of $93 per share under the Board of Directors’ common stock repurchase authorization. During the six months ended March 31, 2023, we repurchased 5.04 million shares of our common stock for $488 million at an average price of $97 per share under the Board of Directors’ common stock repurchase authorization. As of March 31, 2023, approximately $1.1 billion remained available under such authorization.

Common stock dividends

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


	Three months ended March 31,				Six months ended March 31,
	2023		2022		2023		2022
Dividends per common share - declared	$	0.42	$	0.34	$	0.84	$	0.68
Dividends per common share - paid	$	0.42	$	0.34	$	0.76	$	0.60

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.


	Three months ended March 31,				Six months ended March 31, 2023
	2023		2022		2023		2022
Dividend payout ratio	21.8	%	22.4	%	19.9	%	18.8	%

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 Bank. See Note 21 of this Form 10-Q for additional information on our regulatory capital requirements.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Accumulated other comprehensive income/(loss)

All of the components of other comprehensive income/(loss) (“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
Three months ended March 31, 2023
AOCI as of beginning of period	$	139	$	(216)	$	(77)	$	(855)	$	41	$	(891)
OCI:
OCI before reclassifications and taxes	(4)		11		7		126		(7)		126
Amounts reclassified from AOCI, before tax	—		—		—		—		(8)		(8)
Pre-tax net OCI	(4)		11		7		126		(15)		118
Income tax effect	1		(1)		—		(29)		4		(25)
OCI for the period, net of tax	(3)		10		7		97		(11)		93
AOCI as of end of period	$	136	$	(206)	$	(70)	$	(758)	$	30	$	(798)

Six months ended March 31, 2023
AOCI as of beginning of period	$	153	$	(276)	$	(123)	$	(902)	$	43	$	(982)
OCI:
OCI before reclassifications and taxes	(23)		71		48		211		(5)		254
Amounts reclassified from AOCI, before tax	—		—		—		—		(13)		(13)
Pre-tax net OCI	(23)		71		48		211		(18)		241
Income tax effect	6		(1)		5		(67)		5		(57)
OCI for the period, net of tax	(17)		70		53		144		(13)		184
AOCI as of end of period	$	136	$	(206)	$	(70)	$	(758)	$	30	$	(798)

Three months ended March 31, 2022
AOCI as of beginning of period	$	80	$	(89)	$	(9)	$	(60)	$	(18)	$	(87)
OCI:
OCI before reclassifications and taxes	(12)		(2)		(14)		(433)		35		(412)
Amounts reclassified from AOCI, before tax	—		—		—		—		4		4
Pre-tax net OCI	(12)		(2)		(14)		(433)		39		(408)
Income tax effect	3		—		3		113		(10)		106
OCI for the period, net of tax	(9)		(2)		(11)		(320)		29		(302)
AOCI as of end of period	$	71	$	(91)	$	(20)	$	(380)	$	11	$	(389)

Six months ended March 31, 2022
AOCI as of beginning of period	$	81	$	(90)	$	(9)	$	(5)	$	(27)	$	(41)
OCI:
OCI before reclassifications and taxes	(14)		(1)		(15)		(505)		43		(477)
Amounts reclassified from AOCI, before tax	—		—		—		—		8		8
Pre-tax net OCI	(14)		(1)		(15)		(505)		51		(469)
Income tax effect	4		—		4		130		(13)		121
OCI for the period, net of tax	(10)		(1)		(11)		(375)		38		(348)
AOCI as of end of period	$	71	$	(91)	$	(20)	$	(380)	$	11	$	(389)

Reclassifications from AOCI to net income, excluding taxes, for the three and six months ended March 31, 2023 and 2022 were recorded in “Interest expense” on the Condensed Consolidated Statements of Income and Comprehensive Income.

Our net investment hedges and cash flow hedges relate to derivatives associated with our Bank segment. For further information about our significant accounting policies related to derivatives, see Note 2 of our 2022 Form 10-K. In addition, see Note 5 of this Form 10-Q for additional information on these derivatives.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 18 – 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 of our 2022 Form 10-K. See Note 26 of our 2022 Form 10-K and Note 23 of this Form 10-Q for additional information on our segment results.


	Three months ended March 31, 2023
$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Other and intersegment eliminations		Total
Revenues:
Asset management and related administrative fees	$	1,102	$	—	$	206	$	—	$	(6)	$	1,302
Brokerage revenues:
Securities commissions:
Mutual and other fund products	135		2		1		—		(1)		137
Insurance and annuity products	113		—		—		—		—		113
Equities, exchange traded funds (“ETFs”) and fixed income products	88		32		—		—		(1)		119
Subtotal securities commissions	336		34		1		—		(2)		369
Principal transactions (1)	28		96		—		4		(1)		127
Total brokerage revenues	364		130		1		4		(3)		496
Account and service fees:
Mutual fund and annuity service fees	105		—		1		—		(1)		105
RJBDP fees	411		1		—		—		(312)		100
Client account and other fees	56		1		5		—		(9)		53
Total account and service fees	572		2		6		—		(322)		258
Investment banking:
Merger & acquisition and advisory	—		87		—		—		—		87
Equity underwriting	9		29		—		—		—		38
Debt underwriting	—		29		—		—		—		29
Total investment banking	9		145		—		—		—		154
Other:
Affordable housing investments business revenues	—		23		—		—		—		23
All other (1)	9		1		—		6		(7)		9
Total other	9		24		—		6		(7)		32
Total non-interest revenues	2,056		301		213		10		(338)		2,242
Interest income (1)	117		21		3		749		25		915
Total revenues	2,173		322		216		759		(313)		3,157
Interest expense	(29)		(20)		—		(219)		(16)		(284)
Net revenues	$	2,144	$	302	$	216	$	540	$	(329)	$	2,873

(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 Condensed Consolidated Financial Statements (Unaudited)


	Three months ended March 31, 2022
$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Other and intersegment eliminations		Total
Revenues:
Asset management and related administrative fees	$	1,245	$	1	$	226	$	—	$	(8)	$	1,464
Brokerage revenues:
Securities commissions:
Mutual and other fund products	166		2		2		—		(1)		169
Insurance and annuity products	110		—		—		—		—		110
Equities, ETFs and fixed income products	105		38		—		—		—		143
Subtotal securities commissions	381		40		2		—		(1)		422
Principal transactions (1)	16		126		—		—		—		142
Total brokerage revenues	397		166		2		—		(1)		564
Account and service fees:
Mutual fund and annuity service fees	109		—		—		—		—		109
RJBDP fees	69		—		—		—		(49)		20
Client account and other fees	53		2		6		—		(11)		50
Total account and service fees	231		2		6		—		(60)		179
Investment banking:
Merger & acquisition and advisory	—		139		—		—		—		139
Equity underwriting	9		52		—		—		—		61
Debt underwriting	—		35		—		—		—		35
Total investment banking	9		226		—		—		—		235
Other:
Affordable housing investments business revenues	—		15		—		—		—		15
All other (1)	6		1		—		8		(3)		12
Total other	6		16		—		8		(3)		27
Total non-interest revenues	1,888		411		234		8		(72)		2,469
Interest income (1)	37		5		—		199		1		242
Total revenues	1,925		416		234		207		(71)		2,711
Interest expense	(3)		(3)		—		(10)		(22)		(38)
Net revenues	$	1,922	$	413	$	234	$	197	$	(93)	$	2,673

(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 Condensed Consolidated Financial Statements (Unaudited)


	Six months ended March 31, 2023
$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Other and intersegment eliminations		Total
Revenues:
Asset management and related administrative fees	$	2,155	$	1	$	403	$	—	$	(15)	$	2,544
Brokerage revenues:
Securities commissions:
Mutual and other fund products	263		3		2		—		(1)		267
Insurance and annuity products	217		—		—		—		—		217
Equities, ETFs and fixed income products	173		65		—		—		(1)		237
Subtotal securities commissions	653		68		2		—		(2)		721
Principal transactions (1)	56		196		—		8		(1)		259
Total brokerage revenues	709		264		2		8		(3)		980
Account and service fees:
Mutual fund and annuity service fees	203		—		1		—		(1)		203
RJBDP fees	816		2		—		—		(581)		237
Client account and other fees	116		3		10		—		(22)		107
Total account and service fees	1,135		5		11		—		(604)		547
Investment banking:
Merger & acquisition and advisory	—		189		—		—		—		189
Equity underwriting	18		44		—		—		(1)		61
Debt underwriting	—		45		—		—		—		45
Total investment banking	18		278		—		—		(1)		295
Other:
Affordable housing investments business revenues	—		47		—		—		—		47
All other (1)	15		1		2		19		(8)		29
Total other	15		48		2		19		(8)		76
Total non-interest revenues	4,032		596		418		27		(631)		4,442
Interest income (1)	226		44		5		1,425		42		1,742
Total revenues	4,258		640		423		1,452		(589)		6,184
Interest expense	(51)		(43)		—		(404)		(27)		(525)
Net revenues	$	4,207	$	597	$	423	$	1,048	$	(616)	$	5,659

(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 Condensed Consolidated Financial Statements (Unaudited)


	Six months ended March 31, 2022
$ in millions	Private Client Group		Capital Markets		Asset Management		Bank		Other and intersegment eliminations		Total
Revenues:
Asset management and related administrative fees	$	2,407	$	2	$	453	$	—	$	(16)	$	2,846
Brokerage revenues:
Securities commissions:
Mutual and other fund products	337		4		4		—		(1)		344
Insurance and annuity products	221		—		—		—		—		221
Equities, ETFs and fixed income products	209		73		—		—		—		282
Subtotal securities commissions	767		77		4		—		(1)		847
Principal transactions (1)	27		248		—		—		—		275
Total brokerage revenues	794		325		4		—		(1)		1,122
Account and service fees:
Mutual fund and annuity service fees	223		—		—		—		(1)		222
RJBDP fees	136		—		—		—		(99)		37
Client account and other fees	102		4		12		—		(21)		97
Total account and service fees	461		4		12		—		(121)		356
Investment banking:
Merger & acquisition and advisory	—		410		—		—		—		410
Equity underwriting	22		149		—		—		—		171
Debt underwriting	—		79		—		—		—		79
Total investment banking	22		638		—		—		—		660
Other:
Affordable housing investments business revenues	—		50		—		—		—		50
All other (1)	13		3		1		14		(3)		28
Total other	13		53		1		14		(3)		78
Total non-interest revenues	3,697		1,022		470		14		(141)		5,062
Interest income (1)	70		10		—		386		1		467
Total revenues	3,767		1,032		470		400		(140)		5,529
Interest expense	(6)		(5)		—		(20)		(44)		(75)
Net revenues	$	3,761	$	1,027	$	470	$	380	$	(184)	$	5,454

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

At March 31, 2023 and September 30, 2022, net receivables related to contracts with customers were $540 million and $511 million, respectively.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 19 – INTEREST INCOME AND INTEREST EXPENSE

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


	Three months ended March 31,				Six months ended March 31,
$ in millions	2023		2022		2023		2022
Interest income:
Cash and cash equivalents	$	75	$	3	$	130	$	6
Assets segregated for regulatory purposes and restricted cash	55		7		105		11
Trading assets — debt securities	13		4		27		9
Available-for-sale securities	54		25		107		47
Brokerage client receivables	41		21		82		42
Bank loans, net	657		171		1,256		335
All other	20		11		35		17
Total interest income	$	915	$	242	$	1,742	$	467
Interest expense:
Bank deposits	$	206	$	5	378		$	11
Trading liabilities — debt securities	7		1		17		2
Brokerage client payables	23		—		40		1
Other borrowings	9		4		18		9
Senior notes payable	23		23		46		46
All other	16		5		26		6
Total interest expense	$	284	$	38	$	525	$	75
Net interest income	$	631	$	204	$	1,217	$	392
Bank loan provision for credit losses	(28)		(21)		(42)		(10)
Net interest income after bank loan provision for credit losses	$	603	$	183	$	1,175	$	382

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

NOTE 20 – SHARE-BASED COMPENSATION

We have one share-based compensation plan, the Amended and Restated 2012 Stock Incentive Plan (“the Plan”), for our employees, directors, and independent contractor financial advisors. On February 23, 2023, our shareholders approved an amendment to the Plan to increase the number of shares available for grant by 18 million. Following this amendment, the Plan authorizes us to grant 96.4 million shares (including the shares available for grant under six predecessor plans). As of March 31, 2023, 21.0 million shares remained available for grant under the Plan. We may utilize treasury shares for grants under the Plan; though we are also permitted to issue new shares. Our share-based compensation awards are primarily issued during the first quarter of each fiscal year. Our share-based compensation accounting policies are described in Note 2 of our 2022 Form 10-K. Other information related to our share-based awards is presented in Note 23 of our 2022 Form 10-K.

Restricted stock units

During the three and six months ended March 31, 2023, we granted approximately 203 thousand and 2.1 million RSUs, respectively, with a weighted-average grant-date fair value of $108.39 and $116.75, respectively, compared with approximately 550 thousand and 2.9 million RSUs granted during the three and six months ended March 31, 2022, respectively, with a weighted-average grant-date fair value of $107.06 and $98.86, respectively. For the three and six months ended March 31, 2023, total share-based compensation amortization related to RSUs was $54 million and $130 million, respectively, compared with $41 million and $105 million for the three and six months ended March 31, 2022, respectively.

As of March 31, 2023, there were $430 million of total pre-tax compensation costs not yet recognized (net of estimated forfeitures) related to RSUs, including those granted during the six months ended March 31, 2023. These costs are expected to be recognized over a weighted-average period of 2.8 years.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

Restricted stock awards

Restricted stock awards (“RSAs”) were issued as a component of our total purchase consideration for TriState Capital Holdings, Inc. (“TriState Capital”) on June 1, 2022, in accordance with the terms of the acquisition. See Note 23 of our 2022 Form 10-K for further discussion of these awards. For the three and six months ended March 31, 2023 total share-based compensation amortization related to these RSAs was $2 million and $5 million, respectively. As of March 31, 2023, there were $16 million of total pre-tax compensation costs not yet recognized for these RSAs. These costs are expected to be recognized over a weighted-average period of 2.5 years.

NOTE 21 – 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 Board of Governors of the Federal Reserve System (“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 Wall Street Reform and Consumer Protection 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 March 31, 2023, 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.”

For further discussion of regulatory capital requirements applicable to certain of our businesses and subsidiaries, see Note 24 of our 2022 Form 10-K.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 March 31, 2023:
Tier 1 leverage	$	8,903	11.5	%	$	3,104	4.0	%	$	3,879	5.0	%
Tier 1 capital	$	8,903	20.1	%	$	2,653	6.0	%	$	3,538	8.0	%
CET1	$	8,788	19.9	%	$	1,990	4.5	%	$	2,874	6.5	%
Total capital	$	9,474	21.4	%	$	3,538	8.0	%	$	4,422	10.0	%

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	%

As of March 31, 2023, RJF’s regulatory capital increase compared with September 30, 2022 was driven by an increase in equity due to positive earnings, partially offset by dividends and share repurchases. RJF’s Tier 1 and Total capital ratios increased compared with September 30, 2022 resulting from the increase in regulatory capital, partially offset by a small increase in risk-weighted assets. The increase in risk-weighted assets was primarily driven by increases in our bank loan portfolio, partially offset by a decrease in assets segregated for regulatory purposes.

RJF’s Tier 1 leverage ratio at March 31, 2023 increased compared with September 30, 2022 due to the increase in regulatory capital and lower average assets, primarily driven by a decrease in assets segregated for regulatory purposes.

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 March 31, 2023:
Tier 1 leverage	$	3,303	7.7	%	$	1,725	4.0	%	$	2,156	5.0	%
Tier 1 capital	$	3,303	13.1	%	$	1,512	6.0	%	$	2,016	8.0	%
CET1	$	3,303	13.1	%	$	1,134	4.5	%	$	1,638	6.5	%
Total capital	$	3,619	14.4	%	$	2,016	8.0	%	$	2,520	10.0	%

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’s regulatory capital increased compared with September 30, 2022, driven by positive earnings, partially offset by dividends paid to RJF. Raymond James Bank’s Tier 1 and Total capital ratios increased compared with September 30, 2022 resulting from the increase in regulatory capital, partially offset by an increase in risk-weighted assets due to growth in the bank loan portfolio and higher cash balances. Raymond James Bank’s Tier 1 leverage ratio at March 31, 2023 increased compared with September 30, 2022 due to the increase in regulatory capital, partially offset by an increase in average assets, primarily driven by an increase in the bank loan portfolio and higher cash balances.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)


	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 March 31, 2023:
Tier 1 leverage	$	1,159	7.2	%	$	646	4.0	%	$	808	5.0	%
Tier 1 capital	$	1,159	13.9	%	$	499	6.0	%	$	666	8.0	%
CET1	$	1,159	13.9	%	$	374	4.5	%	$	541	6.5	%
Total capital	$	1,195	14.4	%	$	666	8.0	%	$	832	10.0	%

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	%

TriState Capital Bank’s regulatory capital increased compared with September 30, 2022, driven by positive earnings. TriState Capital Bank’s Tier 1 and Total capital ratios decreased compared with September 30, 2022, due to an increase in risk-weighted assets, primarily resulting from increases in bank loans and available-for-sale securities, partially offset by the increase in regulatory capital. TriState Capital Bank’s Tier 1 leverage ratio at March 31, 2023 decreased slightly compared with September 30, 2022 as the increase in regulatory capital was offset by an increase in average assets, primarily driven by the increases in bank loans and available-for-sale securities.

Our banking subsidiaries 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 banking subsidiaries 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. The following table presents the net capital position of RJ&A.


$ in millions	March 31, 2023			September 30, 2022
Raymond James & Associates, Inc.:
(Alternative Method elected)
Net capital as a percent of aggregate debit items	44.3		%	40.9		%
Net capital	$	1,086		$	1,152
Less: required net capital	(49)			(56)
Excess net capital	$	1,037		$	1,096

As of March 31, 2023, all of our other active regulated domestic and international subsidiaries were in compliance with and exceeded all applicable capital requirements.

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 22 – EARNINGS PER SHARE

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


	Three months ended March 31,				Six months ended March 31,
in millions, except per share amounts	2023		2022		2023		2022
Income for basic earnings per common share:
Net income available to common shareholders	$	425	$	323	$	932	$	769
Less allocation of earnings and dividends to participating securities	(2)		—		(3)		(1)
Net income available to common shareholders after participating securities	$	423	$	323	$	929	$	768
Income for diluted earnings per common share:
Net income available to common shareholders	$	425	$	323	$	932	$	769
Less allocation of earnings and dividends to participating securities	(2)		—		(3)		(1)
Net income available to common shareholders after participating securities	$	423	$	323	$	929	$	768
Common shares:
Average common shares in basic computation	214.3		207.7		214.5		207.0
Dilutive effect of outstanding stock options and certain RSUs	4.9		5.3		5.2		5.6
Average common and common equivalent shares used in diluted computation	219.2		213.0		219.7		212.6
Earnings per common share:
Basic	$	1.97	$	1.56	$	4.33	$	3.71
Diluted	$	1.93	$	1.52	$	4.23	$	3.61
Stock options and certain RSUs excluded from weighted-average diluted common shares because their effect would be antidilutive	1.6		—		1.3		0.5

The allocation of earnings and dividends to participating securities in the preceding table represents dividends paid during the period 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 each of the three and six months ended March 31, 2023 and 2022. 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 Condensed Consolidated Financial Statements (Unaudited)

NOTE 23 – 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. For a further discussion of our segments, see Note 26 of our 2022 Form 10-K.

The following table presents information concerning operations in these segments.


	Three months ended March 31,				Six months ended March 31,
$ in millions	2023		2022		2023		2022
Net revenues:
Private Client Group	$	2,144	$	1,922	$	4,207	$	3,761
Capital Markets	302		413		597		1,027
Asset Management	216		234		423		470
Bank	540		197		1,048		380
Other	10		(18)		19		(33)
Intersegment eliminations	(339)		(75)		(635)		(151)
Total net revenues	$	2,873	$	2,673	$	5,659	$	5,454
Pre-tax income/(loss):
Private Client Group	$	441	$	213	$	875	$	408
Capital Markets	(34)		87		(50)		288
Asset Management	82		103		162		210
Bank	91		83		227		185
Other (1)	(23)		(53)		(5)		(100)
Total pre-tax income	$	557	$	433	$	1,209	$	991

(1) The six months ended March 31, 2023 included the favorable impact of a $32 million insurance settlement received during the period related to a previously settled litigation matter. This item has been reflected as an offset to “Other” expenses on our Condensed Consolidated Statements of Income and Comprehensive income.

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

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


	Three months ended March 31,				Six months ended March 31,
$ in millions	2023		2022		2023		2022
Net interest income/(expense):
Private Client Group	$	88	$	34	$	175	$	64
Capital Markets	1		2		1		5
Asset Management	3		—		5		—
Bank	530		189		1,021		366
Other	9		(21)		15		(43)
Net interest income	$	631	$	204	$	1,217	$	392

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


$ in millions	March 31, 2023		September 30, 2022
Total assets:
Private Client Group	$	13,035	$	17,770
Capital Markets	2,920		3,951
Asset Management	521		556
Bank	60,400		56,737
Other	2,304		1,937
Total	$	79,180	$	80,951

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

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


$ in millions	March 31, 2023		September 30, 2022
Goodwill:
Private Client Group	$	565	$	550
Capital Markets	275		274
Asset Management	69		69
Bank	529		529
Total	$	1,438	$	1,422

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.


	Three months ended March 31,				Six months ended March 31,
$ in millions	2023		2022		2023		2022
Net revenues:
U.S.	$	2,627	$	2,430	$	5,167	$	5,019
Canada	144		129		278		266
Europe	102		114		214		169
Total	$	2,873	$	2,673	$	5,659	$	5,454
Pre-tax income/(loss):
U.S.	$	524	$	406	$	1,133	$	937
Canada	36		14		67		32
Europe	(3)		13		9		22
Total	$	557	$	433	$	1,209	$	991

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


$ in millions	March 31, 2023		September 30, 2022
Total assets:
U.S.	$	72,960	$	74,428
Canada	3,460		3,631
Europe	2,760		2,892
Total	$	79,180	$	80,951

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


$ in millions	March 31, 2023		September 30, 2022
Goodwill:
U.S.	$	1,250	$	1,250
Canada	24		23
Europe	164		149
Total	$	1,438	$	1,422

RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES

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