EX-99.2 3 rjf1231q122supplement.htm EX-99.2 FINANCIAL SUPPLEMENT FISCAL FIRST QUARTER 2022 OF RJF

EARNINGS RELEASE FINANCIAL SUPPLEMENT

FIRST QUARTER

OF FISCAL 2022 RESULTS

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RAYMOND JAMES FINANCIAL, INC.             

Consolidated Statements of Income (Unaudited)

						Three months ended																														% change from
in millions, except per share amounts						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Revenues:
Asset management and related administrative fees						$	1,067					$	1,173					$	1,262					$	1,366					$	1,382					30		%				1		%
Brokerage revenues:
Securities commissions						381						443						415						412						425						12		%				3		%
Principal transactions						147						148						137						129						133						(10)		%				3		%
Total brokerage revenues						528						591						552						541						558						6		%				3		%
Account and service fees						145						159						161						170						177						22		%				4		%
Investment banking						261						242						276						364						425						63		%				17		%
Interest income						203						200						205						215						225						11		%				5		%
Other (1)						56						44						55						74						51						(9)		%				(31)		%
Total revenues						2,260						2,409						2,511						2,730						2,818						25		%				3		%
Interest expense						(38)						(37)						(40)						(35)						(37)						(3)		%				6		%
Net revenues						2,222						2,372						2,471						2,695						2,781						25		%				3		%
Non-interest expenses:
Compensation, commissions and benefits						1,500						1,648						1,661						1,774						1,884						26		%				6		%
Non-compensation expenses:
Communications and information processing						99						107						109						114						112						13		%				(2)		%
Occupancy and equipment						57						57						58						60						59						4		%				(2)		%
Business development						23						21						31						36						35						52		%				(3)		%
Investment sub-advisory fees						28						31						34						37						38						36		%				3		%
Professional fees						30						24						26						32						26						(13)		%				(19)		%
Bank loan provision/(benefit) for credit losses						14						(32)						(19)						5						(11)						NM						NM
Losses on extinguishment of debt (2)						—						—						98						—						—						—		%				—		%
Acquisition-related expenses (3)						2						—						7						10						6						200		%				(40)		%
Other (1)						70						69						81						67						74						6		%				10		%
Total non-compensation expenses						323						277						425						361						339						5		%				(6)		%
Total non-interest expenses						1,823						1,925						2,086						2,135						2,223						22		%				4		%
Pre-tax income						399						447						385						560						558						40		%				—		%
Provision for income taxes						87						92						78						131						112						29		%				(15)		%
Net income						$	312					$	355					$	307					$	429					$	446					43		%				4		%
Earnings per common share – basic (4) (5)						$	1.52					$	1.72					$	1.49					$	2.08					$	2.16					42		%				4		%
Earnings per common share – diluted (4) (5)						$	1.48					$	1.68					$	1.45					$	2.02					$	2.10					42		%				4		%
Weighted-average common shares outstanding – basic (5)						205.2						206.7						205.8						205.5						206.3						1		%				—		%
Weighted-average common and common equivalent shares outstanding – diluted (5)						209.6						211.8						211.7						211.7						212.4						1		%				—		%

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

2

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RAYMOND JAMES FINANCIAL, INC.             

Consolidated Selected Key Metrics (Unaudited)

						As of																														% change from
$ in millions, except per share amounts						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Total assets						$	53,657					$	56,066					$	57,161					$	61,891					$	68,461					28		%				11		%
Total equity attributable to Raymond James Financial, Inc.						$	7,363					$	7,592					$	7,863					$	8,245					$	8,600					17		%				4		%
Book value per share (5) (6)						$	35.73					$	36.89					$	38.28					$	40.08					$	41.45					16		%				3		%
Tangible book value per share (5) (6) (7)						$	31.95					$	32.94					$	34.36					$	36.11					$	37.55					18		%				4		%
Capital ratios:
Tier 1 capital						23.4		%				23.6		%				24.4		%				25.0		%				25.8		%	(8)
Total capital						24.6		%				24.7		%				25.6		%				26.2		%				26.9		%	(8)
Tier 1 leverage						12.9		%				12.2		%				12.6		%				12.6		%				12.1		%	(8)

						Three months ended																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Adjusted pre-tax income (7)						$	401					NA						$	490					$	570					$	564					41		%				(1)		%
Adjusted net income (7)						$	314					NA						$	386					$	437					$	451					44		%				3		%
Adjusted earnings per common share - basic (4) (5) (7)						$	1.53					NA						$	1.88					$	2.12					$	2.18					42		%				3		%
Adjusted earnings per common share - diluted (4) (5) (7)						$	1.49					NA						$	1.82					$	2.06					$	2.12					42		%				3		%
Return on equity (9)						17.2		%				19.0		%				15.9		%				21.3		%				21.2		%
Adjusted return on equity (7) (9)						17.3		%				NA						19.9		%				21.7		%				21.4		%
Return on tangible common equity (7) (9)						19.0		%				21.2		%				17.7		%				23.7		%				23.4		%
Adjusted return on tangible common equity (7) (9)						19.1		%				NA						22.2		%				24.1		%				23.7		%
Pre-tax margin (10)						18.0		%				18.8		%				15.6		%				20.8		%				20.1		%
Adjusted pre-tax margin (7) (10)						18.0		%				NA						19.8		%				21.2		%				20.3		%
Total compensation ratio (11)						67.5		%				69.5		%				67.2		%				65.8		%				67.7		%
Effective tax rate						21.8		%				20.6		%				20.3		%				23.4		%				20.1		%

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

3

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RAYMOND JAMES FINANCIAL, INC.             

Consolidated Selected Key Metrics (Unaudited)

						As of																																	% change from
						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021									December 31, 2020						September 30, 2021
Client asset metrics ($ in billions):
Client assets under administration						$	1,024.8					$	1,085.4					$	1,165.0					$	1,178.7					$	1,257.8								23		%				7		%
Private Client Group assets under administration						$	974.2					$	1,028.1					$	1,102.9					$	1,115.4					$	1,199.8								23		%				8		%
Private Client Group assets in fee-based accounts						$	532.7					$	567.6					$	616.7					$	627.1					$	677.8								27		%				8		%
Financial assets under management						$	169.6					$	178.2					$	191.0					$	191.9					$	203.2								20		%				6		%
Clients' domestic cash sweep balances ($ in millions):
Raymond James Bank Deposit Program (“RJBDP”): (12)
Raymond James Bank						$	26,697					$	28,174					$	29,253					$	31,410					$	33,097								24		%				5		%
Third-party banks						26,142						25,110						25,080						24,496						24,316									(7)		%				(1)		%
Subtotal RJBDP						52,839						53,284						54,333						55,906						57,413									9		%				3		%
Client Interest Program						8,769						9,517						8,610						10,762						16,065									83		%				49		%
Total clients’ domestic cash sweep balances						$	61,608					$	62,801					$	62,943					$	66,668					$	73,478								19		%				10		%

						Three months ended
						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
Average yield on RJBDP - third-party banks (13)						0.31		%				0.30		%				0.29		%				0.29		%				0.28		%

						As of																																	% change from
						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021									December 31, 2020						September 30, 2021
Private Client Group financial advisors:
Employees						3,387						3,375						3,423						3,461						3,447									2		%				—		%
Independent contractors						4,846						4,952						4,990						5,021						5,017									4		%				—		%
Total advisors						8,233						8,327						8,413						8,482						8,464									3		%				—		%

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

4

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RAYMOND JAMES FINANCIAL, INC.        

Segment Results - Private Client Group (Unaudited)

						Three months ended																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Revenues:
Asset management and related administrative fees						$	885					$	979					$	1,050					$	1,142					$	1,162					31		%				2		%
Brokerage revenues:
Mutual and other fund products						148						183						167						172						171						16		%				(1)		%
Insurance and annuity products						98						109						113						118						111						13		%				(6)		%
Equities, ETFs, and fixed income products						107						121						110						100						115						7		%				15		%
Total brokerage revenues						353						413						390						390						397						12		%				2		%
Account and service fees:
Mutual fund and annuity service fees						94						99						105						110						114						21		%				4		%
RJBDP fees: (12)
Third-party banks						21						19						18						18						17						(19)		%				(6)		%
Raymond James Bank						43						44						47						49						50						16		%				2		%
Client account and other fees						32						42						39						44						49						53		%				11		%
Total account and service fees						190						204						209						221						230						21		%				4		%
Investment banking						6						16						11						14						13						117		%				(7)		%
Interest income						30						30						31						32						33						10		%				3		%
All other						5						8						7						5						7						40		%				40		%
Total revenues						1,469						1,650						1,698						1,804						1,842						25		%				2		%
Interest expense						(2)						(3)						(2)						(3)						(3)						50		%				—		%
Net revenues						1,467						1,647						1,696						1,801						1,839						25		%				2		%
Non-interest expenses:
Financial advisor compensation and benefits						931						1,040						1,082						1,151						1,187						27		%				3		%
Administrative compensation and benefits						249						260						251						255						283						14		%				11		%
Total compensation, commissions and benefits						1,180						1,300						1,333						1,406						1,470						25		%				5		%
Non-compensation expenses						147						155						168						173						174						18		%				1		%
Total non-interest expenses						1,327						1,455						1,501						1,579						1,644						24		%				4		%
Pre-tax income						$	140					$	192					$	195					$	222					$	195					39		%				(12)		%

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

5

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RAYMOND JAMES FINANCIAL, INC.             

Segment Results - Capital Markets (Unaudited)

						Three months ended																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Revenues:
Brokerage revenues:
Fixed income						$	131					$	142					$	124					$	118					$	120					(8)		%				2		%
Equity						42						34						36						33						39						(7)		%				18		%
Total brokerage revenues						173						176						160						151						159						(8)		%				5		%
Investment banking:
Merger & acquisition and advisory						149						122						153						215						271						82		%				26		%
Equity underwriting						60						67						69						89						97						62		%				9		%
Debt underwriting						46						37						43						46						44						(4)		%				(4)		%
Total investment banking						255						226						265						350						412						62		%				18		%
Interest income						3						5						4						4						5						67		%				25		%
Tax credit fund revenues						16						24						17						48						35						119		%				(27)		%
All other						7						4						3						4						5						(29)		%				25		%
Total revenues						454						435						449						557						616						36		%				11		%
Interest expense						(2)						(2)						(3)						(3)						(2)						—		%				(33)		%
Net revenues						452						433						446						554						614						36		%				11		%
Non-interest expenses:
Compensation, commissions and benefits						252						259						256						288						331						31		%				15		%
Acquisition-related expenses (3)						—						—						3						3						4						NM						33		%
Other non-compensation expenses						71						69						72						80						78						10		%				(3)		%
Total non-interest expenses						323						328						331						371						413						28		%				11		%
Pre-tax income						$	129					$	105					$	115					$	183					$	201					56		%				10		%

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

6

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RAYMOND JAMES FINANCIAL, INC.             

Segment Results - Asset Management (Unaudited)

						Three months ended																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Revenues:
Asset management and related administrative fees:
Managed programs						$	129					$	137					$	148					$	156					$	151					17		%				(3)		%
Administration and other						59						64						70						74						76						29		%				3		%
Total asset management and related administrative fees						188						201						218						230						227						21		%				(1)		%
Account and service fees						4						5						4						5						6						50		%				20		%
All other						3						3						3						3						3						—		%				—		%
Net revenues						195						209						225						238						236						21		%				(1)		%
Non-interest expenses:
Compensation, commissions and benefits						45						50						43						44						46						2		%				5		%
Non-compensation expenses						67						72						77						80						83						24		%				4		%
Total non-interest expenses						112						122						120						124						129						15		%				4		%
Pre-tax income						$	83					$	87					$	105					$	114					$	107					29		%				(6)		%

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

7

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RAYMOND JAMES FINANCIAL, INC.             

Segment Results - Raymond James Bank (Unaudited)

						Three months ended																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Revenues:
Interest income						$	168					$	165					$	172					$	179					$	187					11		%				4		%
Interest expense						(11)						(10)						(11)						(10)						(10)						(9)		%				—		%
Net interest income						157						155						161						169						177						13		%				5		%
All other						10						5						8						7						6						(40)		%				(14)		%
Net revenues						167						160						169						176						183						10		%				4		%
Non-interest expenses:
Compensation and benefits						12						13						13						13						13						8		%				—		%
Non-compensation expenses:
Bank loan provision/(benefit) for credit losses						14						(32)						(19)						5						(11)						NM						NM
RJBDP fees to Private Client Group (12)						43						44						47						49						50						16		%				2		%
All other						27						24						24						28						29						7		%				4		%
Total non-compensation expenses						84						36						52						82						68						(19)		%				(17)		%
Total non-interest expenses						96						49						65						95						81						(16)		%				(15)		%
Pre-tax income						$	71					$	111					$	104					$	81					$	102					44		%				26		%

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

8

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RAYMOND JAMES FINANCIAL, INC.             

Segment Results - Other (14) (Unaudited)

						Three months ended																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Revenues:
Interest income						$	3					$	3					$	—					$	2					$	1					(67)		%				(50)		%
Gains/(losses) on private equity investments (1)						24						8						24						18						5						(79)		%				(72)		%
All other						1						2						4						(1)						2						100		%				NM
Total revenues						28						13						28						19						8						(71)		%				(58)		%
Interest expense						(24)						(25)						(26)						(21)						(23)						(4)		%				10		%
Net revenues						4						(12)						2						(2)						(15)						NM						(650)		%
Non-interest expenses:
Compensation and all other (1)						26						36						34						31						30						15		%				(3)		%
Losses on extinguishment of debt (2)						—						—						98						—						—						—		%				—		%
Acquisition-related expenses (3)						2						—						4						7						2						—		%				(71)		%
Total non-interest expenses						28						36						136						38						32						14		%				(16)		%
Pre-tax loss						$	(24)					$	(48)					$	(134)					$	(40)					$	(47)					(96)		%				(18)		%

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

9

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RAYMOND JAMES FINANCIAL, INC.             

Raymond James Bank Selected Key Metrics (Unaudited)

The following metrics are attributable to our Raymond James Bank banking subsidiary, which is a component of our Raymond James Bank segment.

						As of																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Total assets						$	31,580					$	33,221					$	34,576					$	36,481					$	38,107					21		%				4		%
Total equity						$	2,364					$	2,409					$	2,532					$	2,594					$	2,597					10		%				—		%
Bank loans, net						$	21,957					$	22,879					$	23,896					$	24,994					$	26,132					19		%				5		%
Bank loan allowance for credit losses						$	378					$	345					$	322					$	320					$	308					(19)		%				(4)		%
Bank loan allowance for credit losses as a % of loans held for investment						1.71		%				1.50		%				1.34		%				1.27		%				1.18		%
Total nonperforming assets						$	28					$	31					$	43					$	74					$	74					164		%				—		%
Nonperforming assets as a % of total assets						0.09		%				0.09		%				0.12		%				0.20		%				0.19		%
Total criticized loans						$	899					$	1,001					$	980					$	824					$	735					(18)		%				(11)		%
Criticized loans as a % of loans held for investment						4.06		%				4.35		%				4.07		%				3.27		%				2.75		%
Capital ratios:
Tier 1 capital						13.1		%				13.1		%				13.5		%				13.4		%				13.3		%	(8)
Total capital						14.4		%				14.4		%				14.7		%				14.6		%				14.6		%	(8)
Tier 1 leverage						7.5		%				7.5		%				7.5		%				7.4		%				7.2		%	(8)

						As of																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Commercial and industrial loans						$	7,499					$	7,816					$	8,011					$	8,440					$	8,608					15		%				2		%
Commercial real estate loans						2,664						2,710						2,728						2,872						2,992						12		%				4		%
Real estate investment trust loans						1,254						1,380						1,270						1,112						1,189						(5)		%				7		%
Tax-exempt loans						1,237						1,223						1,320						1,321						1,290						4		%				(2)		%
Residential mortgage loans						4,928						5,001						5,170						5,318						5,568						13		%				5		%
Securities-based loans and other						4,544						4,891						5,582						6,106						6,563						44		%				7		%
Total loans held for investment						22,126						23,021						24,081						25,169						26,210						18		%				4		%
Held for sale loans						209						203						137						145						230						10		%				59		%
Total loans held for sale and investment						22,335						23,224						24,218						25,314						26,440						18		%				4		%
Allowance for credit losses						(378)						(345)						(322)						(320)						(308)						(19)		%				(4)		%
Bank loans, net						$	21,957					$	22,879					$	23,896					$	24,994					$	26,132					19		%				5		%

						Three months ended																														% change from
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						December 31, 2020						September 30, 2021
Bank loan provision/(benefit) for credit losses						$	14					$	(32)					$	(19)					$	5					$	(11)					NM						NM
Net charge-offs						$	—					$	2					$	4					$	7					$	1					NM						(86)		%
Net interest margin (net yield on interest-earning assets)						2.02		%				1.94		%				1.92		%				1.92		%				1.92		%

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

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RAYMOND JAMES FINANCIAL, INC.

Reconciliation of non-GAAP financial measures to 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 tables, 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
$ in millions						December 31, 2020												June 30, 2021						September 30, 2021						December 31, 2021
Net income						$	312											$	307					$	429					$	446
Non-GAAP adjustments:
Losses on extinguishment of debt (2)						—												98						—						—
Acquisition-related expenses (3)						2												7						10						6
Pre-tax impact of non-GAAP adjustments						2												105						10						6
Tax effect of non-GAAP adjustments						—												(26)						(2)						(1)
Total non-GAAP adjustments, net of tax						2												79						8						5
Adjusted net income						$	314											$	386					$	437					$	451
Pre-tax income						$	399											$	385					$	560					$	558
Pre-tax impact of non-GAAP adjustments (as detailed above)						2												105						10						6
Adjusted pre-tax income						$	401											$	490					$	570					$	564
Pre-tax margin (10)						18.0		%										15.6		%				20.8		%				20.1		%
Non-GAAP adjustments:
Losses on extinguishment of debt (2)						—		%										3.9		%				—		%				—		%
Acquisition-related expenses (3)						—		%										0.3		%				0.4		%				0.2		%
Total non-GAAP adjustments, net of tax						—		%										4.2						0.4		%				0.2		%
Adjusted pre-tax margin (10)						18.0		%										19.8		%				21.2		%				20.3		%

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

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RAYMOND JAMES FINANCIAL, INC.

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

(Continued from previous page)

						Three months ended
Earnings per common share (4)						December 31, 2020												June 30, 2021						September 30, 2021						December 31, 2021
Basic						$	1.52											$	1.49					$	2.08					$	2.16
Non-GAAP adjustments:
Losses on extinguishment of debt (2)						—												0.48						—						—
Acquisition-related expenses (3)						0.01												0.03						0.05						0.03
Tax effect of non-GAAP adjustments						—												(0.12)						(0.01)						(0.01)
Total non-GAAP adjustments, net of tax						0.01												0.39						0.04						0.02
Adjusted basic						$	1.53											$	1.88					$	2.12					$	2.18
Diluted						$	1.48											$	1.45					$	2.02					$	2.10
Non-GAAP adjustments:
Losses on extinguishment of debt (2)						—												0.46						—						—
Acquisition-related expenses (3)						0.01												0.03						0.05						0.03
Tax effect of non-GAAP adjustments						—												(0.12)						(0.01)						(0.01)
Total non-GAAP adjustments, net of tax						0.01												0.37						0.04						0.02
Adjusted diluted						$	1.49											$	1.82					$	2.06					$	2.12

Book value per share						As of
$ in millions, except per share amounts						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
Total equity attributable to Raymond James Financial, Inc.						$	7,363					$	7,592					$	7,863					$	8,245					$	8,600
Less non-GAAP adjustments:
Goodwill and identifiable intangible assets, net						834						868						862						882						874
Deferred tax liabilities, net						(56)						(56)						(56)						(64)						(65)
Tangible common equity attributable to Raymond James Financial, Inc.						$	6,585					$	6,780					$	7,057					$	7,427					$	7,791
Common shares outstanding (5)						206.1						205.8						205.4						205.7						207.5
Book value per share (5) (6)						$	35.73					$	36.89					$	38.28					$	40.08					$	41.45
Tangible book value per share (5) (6) (7)						$	31.95					$	32.94					$	34.36					$	36.11					$	37.55

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

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RAYMOND JAMES FINANCIAL, INC.

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

(Continued from previous page)

Return on equity						Three months ended
$ in millions						December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021
Average equity (15)						$	7,239					$	7,478					$	7,728					$	8,054					$	8,423
Impact on average equity of non-GAAP adjustments:
Losses on extinguishment of debt (2)						—						NA						49						—						—
Acquisition-related expenses (3)						1						NA						4						5						3
Tax effect of non-GAAP adjustments						—						NA						(13)						(1)						(1)
Adjusted average equity (15)						$	7,240					NA						$	7,768					$	8,058					$	8,425
Average equity (15)						$	7,239					$	7,478					$	7,728					$	8,054					$	8,423
Less:
Average goodwill and identifiable intangible assets, net						717						851						865						872						878
Average deferred tax liabilities, net						(45)						(56)						(56)						(60)						(64)
Average tangible common equity (15)						$	6,567					$	6,683					$	6,919					$	7,242					$	7,609
Impact on average equity of non-GAAP adjustments:
Losses on extinguishment of debt (2)						—						NA						49						—						—
Acquisition-related expenses (3)						1						NA						4						5						3
Tax effect of non-GAAP adjustments						—						NA						(13)						(1)						(1)
Adjusted average tangible common equity (15)						$	6,568					NA						$	6,959					$	7,246					$	7,611
Return on equity (9)						17.2		%				19.0		%				15.9		%				21.3		%				21.2		%
Adjusted return on equity (9)						17.3		%				NA						19.9		%				21.7		%				21.4		%
Return on tangible common equity (9)						19.0		%				21.2		%				17.7		%				23.7		%				23.4		%
Adjusted return on tangible common equity (9)						19.1		%				NA						22.2		%				24.1		%				23.7		%

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

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RAYMOND JAMES FINANCIAL, INC.

Footnotes

(1)						Other revenues included $24 million, $8 million, $24 million, $18 million, and $5 million of private equity gains for the three months ended December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021 respectively, which were included in our Other segment. Of these amounts, $10 million, an insignificant amount, $10 million, $5 million, and $1 million for three months ended December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021 respectively, were attributable to noncontrolling interests and were offset in Other expenses.
(2)						Losses on extinguishment of debt include make-whole premiums, the accelerated amortization of debt issuance costs, and certain legal and other professional fees associated with the redemptions of our $250 million of 5.625% senior notes due 2024 and our $500 million of 3.625% senior notes due 2026 which occurred during our fiscal third quarter of 2021.
(3)						Acquisition-related expenses in our Other segment for the three months ended December 31, 2021 and September 30, 2021 primarily included professional and integration expenses associated with our acquisition of Charles Stanley Group PLC, which was completed in January 2022, and our announced acquisition of TriState Capital Holdings, Inc., which we expect to close in fiscal 2022. Acquisition-related expenses in our Other segment for the three months ended June 30, 2021 primarily included professional expenses associated with the Charles Stanley Group and Cebile Capital acquisitions. Acquisition-related expenses in our Other segment for the three months ended December 30, 2020 primarily included professional expenses associated with the NWPS and Financo LLC acquisitions, as well as representation & warranty premium costs associated with NWPS. Acquisition-related expenses in our Capital Markets segment included amortization expense related to intangible assets with short useful lives primarily associated with our Financo, LLC and Cebile Capital acquisitions, which were completed in fiscal 2021.
(4)						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 common 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.
(5)						During our fiscal fourth quarter of 2021 the Board of Directors approved a 3-for-2 stock split, effected in the form of a 50% stock dividend, paid on September 21, 2021. All share and per share information has been retroactively adjusted to reflect this stock split.
(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 for a reconciliation of 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 March 31, 2021.
(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 the 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, acquisition-related expenses, and certain corporate overhead costs of RJF, including the interest costs on our public debt and any losses on extinguishment of such 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. 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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