RAYMOND JAMES FINANCIAL INC - FORM 8-K - EX-99.2 - EX-99.2 FINANCIAL SUPPLEMENT FISCAL FOURTH QUARTER YEAR 2020 OF RJF

Attached files

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EX-99.3 - EX-99.3 EARNINGS PRESENTATION FISCAL FOURTH QUARTER YEAR 2020 OF RJF - RAYMOND JAMES FINANCIAL INC	a4qfy20earningspresentat.htm
EX-99.1 - EX-99.1 PRESS RELEASE DATED OCTOBER 28, 2020 - RAYMOND JAMES FINANCIAL INC	rjf20200930q420earnings.htm
8-K - 8-K - RAYMOND JAMES FINANCIAL INC	rjf-20201028.htm

EARNINGS RELEASE FINANCIAL SUPPLEMENT

FOURTH QUARTER AND

FISCAL YEAR 2020 RESULTS

RAYMOND JAMES FINANCIAL, INC.

Consolidated Statements of Income (Unaudited)


	Three months ended										% change from				Twelve months ended
in millions, except per share amounts	September 30, 2019		December 31, 2019		March 31, 2020		June 30, 2020		September 30, 2020		September 30, 2019		June 30, 2020		September 30, 2019		September 30, 2020		% change
Revenues:
Asset management and related administrative fees	$	924	$	955	$	1,006	$	867	$	1,006	9	%	16	%	$	3,451	$	3,834	11	%
Brokerage revenues:
Securities commissions	355		363		410		343		352		(1)	%	3	%	1,450		1,468		1	%
Principal transactions	95		97		105		143		143		51	%	—		357		488		37	%
Total brokerage revenues	450		460		515		486		495		10	%	2	%	1,807		1,956		8	%
Account and service fees	179		178		172		134		140		(22)	%	4	%	738		624		(15)	%
Investment banking	157		141		148		139		222		41	%	60	%	596		650		9	%
Interest income	320		297		285		217		201		(37)	%	(7)	%	1,281		1,000		(22)	%
Other (1)	55		29		(15)		33		57		4	%	73	%	150		104		(31)	%
Total revenues	2,085		2,060		2,111		1,876		2,121		2	%	13	%	8,023		8,168		2	%
Interest expense	(62)		(51)		(43)		(42)		(42)		(32)	%	—		(283)		(178)		(37)	%
Net revenues	2,023		2,009		2,068		1,834		2,079		3	%	13	%	7,740		7,990		3	%
Non-interest expenses:
Compensation, commissions and benefits	1,320		1,351		1,422		1,277		1,415		7	%	11	%	5,087		5,465		7	%
Non-compensation expenses:
Communications and information processing	95		94		99		100		100		5	%	—		373		393		5	%
Occupancy and equipment	59		57		56		55		57		(3)	%	4	%	218		225		3	%
Business development	53		44		41		21		28		(47)	%	33	%	194		134		(31)	%
Investment sub-advisory fees	24		26		26		23		26		8	%	13	%	94		101		7	%
Professional fees	24		21		23		24		23		(4)	%	(4)	%	85		91		7	%
Bank loan loss provision/(benefit)	6		(2)		109		81		45		650	%	(44)	%	22		233		959	%
Acquisition and disposition-related expenses (2)	—		—		—		—		7		NM		NM		15		7		(53)	%
Reduction in workforce expenses (3)	—		—		—		—		46		NM		NM		—		46		NM
Other (1) (4)	88		59		53		55		76		(14)	%	38	%	277		243		(12)	%
Total non-compensation expenses	349		299		407		359		408		17	%	14	%	1,278		1,473		15	%
Total non-interest expenses	1,669		1,650		1,829		1,636		1,823		9	%	11	%	6,365		6,938		9	%
Pre-tax income	354		359		239		198		256		(28)	%	29	%	1,375		1,052		(23)	%
Provision for income taxes	89		91		70		26		47		(47)	%	81	%	341		234		(31)	%
Net income	$	265	$	268	$	169	$	172	$	209	(21)	%	22	%	$	1,034	$	818	(21)	%

Earnings per common share – basic (5)	$	1.90	$	1.93	$	1.22	$	1.25	$	1.53	(19)	%	22	%	$	7.32	$	5.94	(19)	%
Earnings per common share – diluted (5)	$	1.86	$	1.89	$	1.20	$	1.23	$	1.50	(19)	%	22	%	$	7.17	$	5.83	(19)	%
Weighted-average common shares outstanding – basic	138.6		138.3		138.4		137.1		136.9		(1)	%	—		141.0		137.6		(2)	%
Weighted-average common and common equivalent shares outstanding – diluted	141.8		141.5		141.1		139.4		139.6		(2)	%	—		144.0		140.2		(3)	%

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

RAYMOND JAMES FINANCIAL, INC.

Consolidated Selected Key Metrics (Unaudited)


	As of																% change from
$ in millions, except per share amounts	September 30, 2019			December 31, 2019			March 31, 2020			June 30, 2020			September 30, 2020				September 30, 2019		June 30, 2020
Total assets	$	38,830		$	40,154		$	49,809		$	44,682		$	47,482			22	%	6	%
Total equity attributable to Raymond James Financial, Inc.	$	6,581		$	6,842		$	6,798		$	6,965		$	7,114			8	%	2	%
Book value per share (6)	$	47.76		$	49.26		$	49.69		$	50.84		$	52.08			9	%	2	%
Tangible book value per share (6) (7)	$	43.53		$	45.10		$	45.50		$	46.69		$	47.94			10	%	3	%

Capital ratios:
Tier 1 capital	24.8		%	24.8		%	24.1		%	24.8		%	24.2		%	(8)
Total capital	25.8		%	25.7		%	25.3		%	26.0		%	25.4		%	(8)
Tier 1 leverage	15.7		%	15.8		%	14.2		%	14.5		%	14.2		%	(8)














	Three months ended												% change from				Twelve months ended
$ in millions	September 30, 2019			December 31, 2019		March 31, 2020		June 30, 2020		September 30, 2020			September 30, 2019		June 30, 2020		September 30, 2019			September 30, 2020			% change
Adjusted pre-tax income (7)	$	373		NA		NA		NA		$	309		(17)	%	56	%	$	1,409		$	1,105		(22)	%
Adjusted net income (7)	$	284		NA		NA		NA		$	249		(12)	%	45	%	$	1,068		$	858		(20)	%
Adjusted earnings per common share - basic (5) (7)	$	2.04		NA		NA		NA		$	1.82		(11)	%	46	%	$	7.56		$	6.23		(18)	%
Adjusted earnings per common share - diluted (5) (7)	$	2.00		NA		NA		NA		$	1.78		(11)	%	45	%	$	7.40		$	6.11		(17)	%
Return on equity (9)	16.2		%	16.0	%	9.9	%	10.0	%	11.9		%					16.2		%	11.9		%
Adjusted return on equity (7) (9)	17.3		%	NA		NA		NA		14.1		%					16.7		%	12.5		%
Return on tangible common equity (7) (9)	17.8		%	17.5	%	10.8	%	10.9	%	12.9		%					17.8		%	13.0		%
Adjusted return on tangible common equity (7) (9)	19.1		%	NA		NA		NA		15.3		%					18.4		%	13.6		%
Pre-tax margin (10)	17.5		%	17.9	%	11.6	%	10.8	%	12.3		%					17.8		%	13.2		%
Adjusted pre-tax margin (7) (10)	18.4		%	NA		NA		NA		14.9		%					18.2		%	13.8		%
Total compensation ratio (11)	65.2		%	67.2	%	68.8	%	69.6	%	68.1		%					65.7		%	68.4		%
Effective tax rate	25.1		%	25.3	%	29.3	%	13.1	%	18.4		%					24.8		%	22.2		%

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

RAYMOND JAMES FINANCIAL, INC.

Consolidated Selected Key Metrics (Unaudited)


	As of															% change from
	September 30, 2019			December 31, 2019			March 31, 2020			June 30, 2020			September 30, 2020			September 30, 2019		June 30, 2020
Client asset metrics ($ in billions):
Client assets under administration	$	838.3		$	896.0		$	773.9		$	876.9		$	930.1		11	%	6	%
Private Client Group assets under administration	$	798.4		$	855.2		$	734.0		$	833.1		$	883.3		11	%	6	%
Private Client Group assets in fee-based accounts	$	409.1		$	444.2		$	383.5		$	443.0		$	475.3		16	%	7	%
Financial assets under management	$	143.1		$	151.7		$	128.2		$	145.4		$	153.1		7	%	5	%

Clients' domestic cash sweep balances ($ in millions):
Raymond James Bank Deposit Program (“RJBDP”): (12)
Raymond James Bank	$	21,649		$	21,891		$	28,711		$	24,101		$	25,599		18	%	6	%
Third-party banks	14,043			15,061			20,379			24,661			25,998			85	%	5	%
Subtotal RJBDP	35,692			36,952			49,090			48,762			51,597			45	%	6	%

Client Interest Program	2,022			2,528			3,782			3,157			3,999			98	%	27	%
Total clients’ domestic cash sweep balances	$	37,714		$	39,480		$	52,872		$	51,919		$	55,596		47	%	7	%

	Three months ended															Twelve months ended
	September 30, 2019			December 31, 2019			March 31, 2020			June 30, 2020			September 30, 2020			September 30, 2019		September 30, 2020
Average yield on RJBDP - third-party banks (13)	1.83		%	1.64		%	1.33		%	0.33		%	0.33		%	1.88	%	0.77	%

	As of															% change from
	September 30, 2019			December 31, 2019			March 31, 2020			June 30, 2020			September 30, 2020			September 30, 2019		June 30, 2020
Private Client Group financial advisors:
Employees	3,301			3,331			3,376			3,379			3,404			3	%	1	%
Independent contractors	4,710			4,729			4,772			4,776			4,835			3	%	1	%
Total advisors	8,011			8,060			8,148			8,155			8,239			3	%	1	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Private Client Group (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2019		December 31, 2019		March 31, 2020		June 30, 2020		September 30, 2020		September 30, 2019		June 30, 2020		September 30, 2019		September 30, 2020		% change
Revenues:
Asset management and related administrative fees	$	757	$	782	$	833	$	715	$	832	10	%	16	%	$	2,820	$	3,162	12	%
Brokerage revenues:
Mutual and other fund products	150		144		163		131		129		(14)	%	(2)	%	599		567		(5)	%
Insurance and annuity products	104		101		99		88		109		5	%	24	%	412		397		(4)	%
Equities, ETFs, and fixed income products	87		102		122		100		95		9	%	(5)	%	378		419		11	%
Total brokerage revenues	341		347		384		319		333		(2)	%	4	%	1,389		1,383		—
Account and service fees:
Mutual fund and annuity service fees	84		90		88		82		88		5	%	7	%	334		348		4	%
RJBDP fees: (12)
Third-party banks	65		58		51		20		21		(68)	%	5	%	280		150		(46)	%
Raymond James Bank	46		47		48		43		42		(9)	%	(2)	%	173		180		4	%
Client account and other fees	30		29		35		32		33		10	%	3	%	122		129		6	%
Total account and service fees	225		224		222		177		184		(18)	%	4	%	909		807		(11)	%
Investment banking	7		11		11		7		12		71	%	71	%	32		41		28	%
Interest income	55		49		45		31		30		(45)	%	(3)	%	225		155		(31)	%
All other	7		9		7		4		7		—		75	%	26		27		4	%
Total revenues	1,392		1,422		1,502		1,253		1,398		—		12	%	5,401		5,575		3	%
Interest expense	(11)		(8)		(7)		(4)		(4)		(64)	%	—		(42)		(23)		(45)	%
Net revenues	1,381		1,414		1,495		1,249		1,394		1	%	12	%	5,359		5,552		4	%
Non-interest expenses:
Financial advisor compensation and benefits	832		857		915		783		873		5	%	11	%	3,190		3,428		7	%
Administrative compensation and benefits	233		247		245		235		244		5	%	4	%	933		971		4	%
Total compensation, commissions and benefits	1,065		1,104		1,160		1,018		1,117		5	%	10	%	4,123		4,399		7	%
Non-compensation expenses	173		157		165		140		152		(12)	%	9	%	657		614		(7)	%
Total non-interest expenses	1,238		1,261		1,325		1,158		1,269		3	%	10	%	4,780		5,013		5	%
Pre-tax income	$	143	$	153	$	170	$	91	$	125	(13)	%	37	%	$	579	$	539	(7)	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Capital Markets (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2019		December 31, 2019		March 31, 2020		June 30, 2020		September 30, 2020		September 30, 2019		June 30, 2020		September 30, 2019		September 30, 2020		% change
Revenues:
Brokerage revenues:
Fixed income	$	82	$	81	$	90	$	125	$	125	52	%	—		$	283	$	421	49	%
Equity	26		34		40		41		35		35	%	(15)	%	131		150		15	%
Total brokerage revenues	108		115		130		166		160		48	%	(4)	%	414		571		38	%
Investment banking:
Merger & acquisition and advisory	93		60		72		60		98		5	%	63	%	379		290		(23)	%
Equity underwriting	28		39		43		35		68		143	%	94	%	100		185		85	%
Debt underwriting	29		31		22		37		43		48	%	16	%	85		133		56	%
Total investment banking	150		130		137		132		209		39	%	58	%	564		608		8	%
Interest income	9		8		10		4		3		(67)	%	(25)	%	38		25		(34)	%
Tax credit fund revenues	37		18		12		20		33		(11)	%	65	%	86		83		(3)	%
All other	6		3		7		3		7		17	%	133	%	15		20		33	%
Total revenues	310		274		296		325		412		33	%	27	%	1,117		1,307		17	%
Interest expense	(8)		(6)		(6)		(2)		(2)		(75)	%	—		(34)		(16)		(53)	%
Net revenues	302		268		290		323		410		36	%	27	%	1,083		1,291		19	%
Non-interest expenses:
Compensation, commissions and benefits	179		166		184		195		229		28	%	17	%	665		774		16	%
Non-compensation expenses (2) (4)	90		73		78		66		75		(17)	%	14	%	308		292		(5)	%
Total non-interest expenses	269		239		262		261		304		13	%	16	%	973		1,066		10	%
Pre-tax income	$	33	$	29	$	28	$	62	$	106	221	%	71	%	$	110	$	225	105	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Asset Management (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2019		December 31, 2019		March 31, 2020		June 30, 2020		September 30, 2020		September 30, 2019		June 30, 2020		September 30, 2019		September 30, 2020		% change
Revenues:
Asset management and related administrative fees:
Managed programs	$	121	$	125	$	124	$	109	$	123	2	%	13	%	$	467	$	481	3	%
Administration and other	49		51		53		48		55		12	%	15	%	178		207		16	%
Total asset management and related administrative fees	170		176		177		157		178		5	%	13	%	645		688		7	%
Account and service fees	4		5		4		3		4		—		33	%	31		16		(48)	%
All other	4		3		3		3		2		(50)	%	(33)	%	15		11		(27)	%
Net revenues	178		184		184		163		184		3	%	13	%	691		715		3	%
Non-interest expenses:
Compensation, commissions and benefits	44		45		45		44		43		(2)	%	(2)	%	179		177		(1)	%
Non-compensation expenses	65		66		66		59		63		(3)	%	7	%	259		254		(2)	%
Total non-interest expenses	109		111		111		103		106		(3)	%	3	%	438		431		(2)	%
Pre-tax income	$	69	$	73	$	73	$	60	$	78	13	%	30	%	$	253	$	284	12	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Raymond James Bank (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2019		December 31, 2019		March 31, 2020		June 30, 2020		September 30, 2020		September 30, 2019		June 30, 2020		September 30, 2019		September 30, 2020		% change
Revenues:
Interest income	$	243	$	231	$	223	$	181	$	165	(32)	%	(9)	%	$	975	$	800	(18)	%
Interest expense	(33)		(21)		(18)		(12)		(11)		(67)	%	(8)	%	(155)		(62)		(60)	%
Net interest income	210		210		205		169		154		(27)	%	(9)	%	820		738		(10)	%
All other	6		6		5		9		7		17	%	(22)	%	26		27		4	%
Net revenues	216		216		210		178		161		(25)	%	(10)	%	846		765		(10)	%
Non-interest expenses:
Compensation and benefits	13		12		13		13		13		—		—		49		51		4	%
Non-compensation expenses:
Loan loss provision/(benefit)	6		(2)		109		81		45		650	%	(44)	%	22		233		959	%
RJBDP fees to Private Client Group (12)	46		47		48		43		42		(9)	%	(2)	%	173		180		4	%
All other	20		24		26		27		28		40	%	4	%	87		105		21	%
Total non-compensation expenses	72		69		183		151		115		60	%	(24)	%	282		518		84	%
Total non-interest expenses	85		81		196		164		128		51	%	(22)	%	331		569		72	%
Pre-tax income	$	131	$	135	$	14	$	14	$	33	(75)	%	136	%	$	515	$	196	(62)	%

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

RAYMOND JAMES FINANCIAL, INC.

Segment Results - Other (14) (Unaudited)


	Three months ended										% change from				Twelve months ended
$ in millions	September 30, 2019		December 31, 2019		March 31, 2020		June 30, 2020		September 30, 2020		September 30, 2019		June 30, 2020		September 30, 2019		September 30, 2020		% change
Revenues:
Interest income	$	21	$	12	$	12	$	3	$	3	(86)	%	—		$	63	$	30	(52)	%
Gains/(losses) on private equity investments (1)	6		(2)		(39)		1		12		100	%	1,100	%	14		(28)		NM
All other	(2)		2		—		2		—		100	%	(100)	%	3		4		33	%
Total revenues	25		12		(27)		6		15		(40)	%	150	%	80		6		(93)	%
Interest expense	(18)		(20)		(17)		(26)		(25)		39	%	(4)	%	(75)		(88)		17	%
Net revenues	7		(8)		(44)		(20)		(10)		NM		50	%	5		(82)		NM
Non-interest expenses:
Compensation and all other (1)	29		23		2		9		30		3	%	233	%	87		64		(26)	%
Reduction in workforce expenses (3)	—		—		—		—		46		NM		NM		—		46		NM
Total non-interest expenses	29		23		2		9		76		162	%	744	%	87		110		26	%
Pre-tax loss	$	(22)	$	(31)	$	(46)	$	(29)	$	(86)	(291)	%	(197)	%	$	(82)	$	(192)	(134)	%

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

RAYMOND JAMES FINANCIAL, INC.

Raymond James Bank Selected Key Metrics (Unaudited)


	As of																% change from
$ in millions	September 30, 2019			December 31, 2019			March 31, 2020			June 30, 2020			September 30, 2020				September 30, 2019		June 30, 2020
Total assets	$	25,705		$	26,469		$	33,656		$	29,066		$	30,610			19	%	5	%
Total equity	$	2,248		$	2,300		$	2,263		$	2,279		$	2,315			3	%	2	%
Bank loans, net	$	20,891		$	21,296		$	21,788		$	21,223		$	21,195			1	%	—	%
Allowance for loan losses	$	218		$	216		$	324		$	334		$	354			62	%	6	%
Allowance for loan losses as a % of loans held for investment	1.04		%	1.01		%	1.47		%	1.56		%	1.65		%
Total nonperforming assets	$	46		$	41		$	27		$	23		$	32			(30)	%	39	%
Nonperforming assets as a % of total assets	0.18		%	0.16		%	0.08		%	0.08		%	0.10		%
Total criticized loans	$	285		$	349		$	387		$	733		$	933			227	%	27	%
Criticized loans as a % of loans held for investment	1.36		%	1.64		%	1.76		%	3.41		%	4.35		%

Capital ratios:
Tier 1 capital	13.2		%	13.3		%	12.7		%	12.8		%	13.0		%	(8)
Total capital	14.5		%	14.5		%	13.9		%	14.1		%	14.3		%	(8)
Tier 1 leverage	8.8		%	8.8		%	8.1		%	7.6		%	7.7		%	(8)


	Three months ended															% change from				Twelve months ended
$ in millions	September 30, 2019			December 31, 2019			March 31, 2020			June 30, 2020			September 30, 2020			September 30, 2019		June 30, 2020		September 30, 2019			September 30, 2020			% change
Bank loan loss provision/(benefit)	$	6		$	(2)		$	109		$	81		$	45		650	%	(44)	%	$	22		$	233		959	%
Net charge-offs	$	2		$	—		$	—		$	72		$	26		1,200	%	(64)	%	$	6		$	98		1,533	%
Net interest margin (net yield on interest-earning assets)	3.30		%	3.23		%	3.02		%	2.29		%	2.09		%					3.32		%	2.63		%

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

RAYMOND JAMES FINANCIAL, INC.

Reconciliation of GAAP measures to non-GAAP financial measures (Unaudited)

We utilize certain non-GAAP financial measures as additional measures to aid in, and enhance, the understanding of our financial results and related measures. These non-GAAP financial measures have been separately identified in this document. We believe certain of these non-GAAP financial measures provides useful information to management and investors by excluding certain material items that may not be indicative of our core operating results. We utilize these non-GAAP financial measures in assessing the financial performance of the business, as they facilitate a comparison of current- and prior-period results. We believe that return on tangible common equity and tangible book value per share are meaningful to investors as they facilitate comparisons of our results to the results of other companies. In the following table, the tax effect of non-GAAP adjustments reflects the statutory rate associated with each non-GAAP item. These non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other companies. The following tables provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures for those periods which include non-GAAP adjustments.


	Three months ended			Twelve months ended
$ in millions	September 30, 2019				September 30, 2020			September 30, 2019			September 30, 2020
Net income	$	265			$	209		$	1,034		$	818
Non-GAAP adjustments:
Acquisition and disposition-related expenses (2)	—				7			15			7
Reduction in workforce expenses (3)	—				46			—			46
Goodwill impairment (4)	19				—			19			—
Pre-tax impact of non-GAAP adjustments	19				53			34			53
Tax effect of non-GAAP adjustments	—				(13)			—			(13)
Total non-GAAP adjustments, net of tax	19				40			34			40
Adjusted net income	$	284			$	249		$	1,068		$	858

Pre-tax income	$	354			$	256		$	1,375		$	1,052
Pre-tax impact of non-GAAP adjustments (as detailed above)	19				53			34			53
Adjusted pre-tax income	$	373			$	309		$	1,409		$	1,105

Pre-tax margin (10)	17.5		%		12.3		%	17.8		%	13.2		%
Non-GAAP adjustments:
Acquisition and disposition-related expenses (2)	—				0.4		%	0.2		%	0.1		%
Reduction in workforce expenses (3)	—				2.2		%	—			0.5		%
Goodwill impairment (4)	0.9		%		—			0.2		%	—
Total non-GAAP adjustments, net of tax	0.9		%		2.6		%	0.4		%	0.6		%
Adjusted pre-tax margin (10)	18.4		%		14.9		%	18.2		%	13.8		%

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

RAYMOND JAMES FINANCIAL, INC.

Reconciliation of GAAP measures to non-GAAP financial measures (Unaudited)

(Continued from previous page)


	Three months ended		Twelve months ended
Earnings per common share (5)	September 30, 2019			September 30, 2020		September 30, 2019		September 30, 2020





















Basic	$	1.90		$	1.53	$	7.32	$	5.94
Non-GAAP adjustments:
Acquisition and disposition-related expenses (2)	—			0.05		0.11		0.05
Reduction in workforce expenses (3)	—			0.34		—		0.33
Goodwill impairment (4)	0.14			—		0.13		—
Tax effect of non-GAAP adjustments	—			(0.10)		—		(0.09)
Total non-GAAP adjustments, net of tax	0.14			0.29		0.24		0.29
Adjusted basic	$	2.04		$	1.82	$	7.56	$	6.23

Diluted	$	1.86		$	1.50	$	7.17	$	5.83
Non-GAAP adjustments:
Acquisition and disposition-related expenses (2)	—			0.05		0.10		0.05
Reduction in workforce expenses (3)	—			0.33		—		0.32
Goodwill impairment (4)	0.14			—		0.13		—
Tax effect of non-GAAP adjustments	—			(0.10)		—		(0.09)
Total non-GAAP adjustments, net of tax	0.14			0.28		0.23		0.28
Adjusted diluted	$	2.00		$	1.78	$	7.40	$	6.11


Book value per share	As of
$ in millions, except per share amounts	September 30, 2019		December 31, 2019		March 31, 2020		June 30, 2020		September 30, 2020
Total equity attributable to Raymond James Financial, Inc.	$	6,581	$	6,842	$	6,798	$	6,965	$	7,114
Less non-GAAP adjustments:
Goodwill and identifiable intangible assets, net	611		609		603		602		600
Deferred tax liabilities, net	(28)		(31)		(30)		(33)		(34)
Tangible common equity attributable to Raymond James Financial, Inc.	$	5,998	$	6,264	$	6,225	$	6,396	$	6,548
Common shares outstanding	137.8		138.9		136.8		137.0		136.6
Book value per share (6)	$	47.76	$	49.26	$	49.69	$	50.84	$	52.08
Tangible book value per share (6)	$	43.53	$	45.10	$	45.50	$	46.69	$	47.94

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

RAYMOND JAMES FINANCIAL, INC.

Reconciliation of GAAP measures to non-GAAP financial measures (Unaudited)

(Continued from previous page)


Return on equity	Three months ended															Twelve months ended
$ in millions	September 30, 2019			December 31, 2019			March 31, 2020			June 30, 2020			September 30, 2020			September 30, 2019			September 30, 2020

Average equity (15)	$	6,542		$	6,712		$	6,820		$	6,882		$	7,040		$	6,392		$	6,860
Impact on average equity of non-GAAP adjustments:
Acquisition and disposition-related expenses (2)	—			NA			NA			NA			4			12			1
Reduction in workforce expenses (3)	—			NA			NA			NA			23			—			9
Goodwill impairment (4)	9			NA			NA			NA			—			4			—
Tax effect of non-GAAP adjustments	—			NA			NA			NA			(7)			—			(2)
Adjusted average equity (15)	$	6,551		NA			NA			NA			$	7,060		$	6,408		$	6,868

Average equity (15)	$	6,542		$	6,712		$	6,820		$	6,882		$	7,040		$	6,392		$	6,860
Less:
Average goodwill and identifiable intangible assets, net	623			610			606			603			601			630			605
Average deferred tax liabilities, net	(27)			(30)			(31)			(32)			(33)			(31)			(31)

Average tangible common equity (15)	$	5,946		$	6,132		$	6,245		$	6,311		$	6,472		$	5,793		$	6,286
Impact on average equity of non-GAAP adjustments:
Acquisition and disposition-related expenses (2)	—			NA			NA			NA			4			12			1
Reduction in workforce expenses (3)	—			NA			NA			NA			23			—			9
Goodwill impairment (4)	9			NA			NA			NA			—			4			—
Tax effect of non-GAAP adjustments	—			NA			NA			NA			(7)			—			(2)
Adjusted average tangible common equity (15)	$	5,955		NA			NA			NA			$	6,492		$	5,809		$	6,294

Return on equity (9)	16.2		%	16.0		%	9.9		%	10.0		%	11.9		%	16.2		%	11.9		%
Adjusted return on equity (9)	17.3		%	NA			NA			NA			14.1		%	16.7		%	12.5		%
Return on tangible common equity (9)	17.8		%	17.5		%	10.8		%	10.9		%	12.9		%	17.8		%	13.0		%
Adjusted return on tangible common equity (9)	19.1		%	NA			NA			NA			15.3		%	18.4		%	13.6		%

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

RAYMOND JAMES FINANCIAL, INC.

Footnotes

1.Other revenues included approximately $40 million of private equity valuation losses, $12 million of private equity valuation gains and $28 million of private equity valuation losses for the three months ended March 31, 2020, three months ended September 30, 2020 and twelve months ended September 30, 2020, respectively, which are included in our Other segment. Of these amounts, $23 million of the losses for the three months ended March 31, 2020, $3 million of the gains for the three months ended September 30, 2020 and $20 million of the losses for the twelve months ended September 30, 2020 were attributable to noncontrolling interests and are offset in Other expenses.

2.The three and twelve months ended September 30, 2020 included a $7 million loss in our Capital Markets segment related to the pending sale of our interests in certain entities that operate predominantly in France. The twelve months ended September 30, 2019 included a $15 million loss in our Capital Markets segment on the sale of our operations related to research, sales and trading of European equities.

3.Reduction in workforce expenses for the three and twelve months ended September 30, 2020 are associated with position eliminations that occurred in our fiscal fourth quarter of 2020 in response to the economic environment. These expenses primarily consist of severance and related payroll expenses, as well as expenses related to company-paid benefits. These expenses are included in our Other segment.

4.The three and twelve months ended September 30, 2019 included a $19 million goodwill impairment charge associated with our Canadian Capital Markets business.

5.Earnings per common share is computed by dividing net income (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period or, in the case of adjusted earnings per share, computed by dividing adjusted net income (less allocation of earnings and dividends to participating securities) by weighted-average common shares outstanding (basic or diluted as applicable) for each respective period.

6.Book value per share is computed by dividing total equity attributable to Raymond James Financial, Inc. by the number of common shares outstanding at the end of each respective period or, in the case of tangible book value per share, computed by dividing tangible common equity by the number of common shares outstanding at the end of each respective period. Tangible common equity is defined as total equity attributable to Raymond James Financial, Inc. less goodwill and intangible assets, net of related deferred taxes.

7.These are non-GAAP financial measures. See the schedules on the previous pages of this document for a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures and for more information on these measures. There were no non-GAAP adjustments to earnings for the three months ended December 31, 2019, March 31, 2020, and June 30, 2020; therefore, percent changes for earnings-related non-GAAP financial measures are calculated based on non-GAAP results for the three months ended September 30, 2020 as compared to GAAP results for the three months ended June 30, 2020.

8.Estimated.

9.Return on equity is computed by dividing annualized net income by average equity for each respective period or, in the case of return on tangible common equity, computed by dividing annualized net income by average tangible common equity for each respective period. Adjusted return on equity is computed by dividing annualized adjusted net income by adjusted average equity for each respective period, or in the case of adjusted return on tangible common equity, computed by dividing annualized adjusted net income by adjusted average tangible common equity for each respective period.

10.Pre-tax margin is computed by dividing pre-tax income by net revenues for each respective period or, in the case of adjusted pre-tax margin, computed by dividing adjusted pre-tax income by net revenues for each respective period.

11.Total compensation ratio is computed by dividing compensation, commissions and benefits expense by net revenues for each respective period.

12.We earn fees from RJBDP, a multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into interest-bearing deposit accounts at Raymond James Bank and various third-party banks. Fees earned by Private Client Group on Raymond James Bank deposits are eliminated in consolidation.

13.Average yield on RJBDP - third-party banks is computed by dividing annualized RJBDP fees - third-party banks, which are net of the interest expense paid to clients by the third-party banks, by the average daily RJBDP balances at third-party banks.

14.The Other segment includes the results of our private equity investments, interest income on certain corporate cash balances, and certain corporate overhead costs of Raymond James Financial, Inc., including the interest costs on our public debt.

15.Average equity is computed by adding the total equity attributable to Raymond James Financial, Inc. as of the date indicated to the prior quarter-end total, and dividing by two, or in the case of average tangible common equity, computed by adding tangible common equity as of the date indicated to the prior quarter-end total, and dividing by two. For the annual period, computed by adding the total equity attributable to Raymond James Financial, Inc. as of each quarter-end date during the indicated period to the beginning of year total, and dividing by five, or in the case of average tangible common equity, computed by adding tangible common equity as of each quarter-end date during the indicated period to the beginning of year total, and dividing by five. Adjusted average equity is computed by adjusting for the impact on average equity of the non-GAAP adjustments, as applicable for each respective period. Adjusted average tangible common equity is computed by adjusting for the impact on average tangible common equity of the non-GAAP adjustments, as applicable for each respective period.

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