Raymond James Financial Inc (RJF) 8-K Earnings Release



October 24, 2018		FOR IMMEDIATE RELEASE
		Media Contact: Steve Hollister, 727.567.2824
		Investor Contact: Paul Shoukry, 727.567.5133
		raymondjames.com/news-and-media/press-releases

RAYMOND JAMES FINANCIAL REPORTS 4TH QUARTER AND

FISCAL YEAR 2018 RESULTS


•	Record quarterly net revenues of $1.90 billion, up 12% over the prior year’s fiscal fourth quarter and 3% over the preceding quarter


•	Record quarterly net income of $262.7 million, or $1.76 per diluted share, and adjusted quarterly net income of $250.8 million⁽¹⁾, or $1.68 per diluted share⁽¹⁾


•	Record annual net revenues of $7.27 billion, record annual net income of $856.7 million, or $5.75 per diluted share, and adjusted annual net income of $964.8 million⁽¹⁾, or $6.47 per diluted share⁽¹⁾


•	Quarter-end records for client assets under administration of $790.4 billion, financial assets under management of $140.9 billion and net loans at Raymond James Bank of $19.5 billion


•	Record number of Private Client Group financial advisors of 7,813, net increases of 467⁽²⁾ over September 2017 and 94 over June 2018

ST. PETERSBURG, Fla - Raymond James Financial, Inc. (NYSE: RJF) today reported net revenues of $1.90 billion and net income of $262.7 million, or $1.76 per diluted share, for the fiscal fourth quarter ended September 30, 2018. Excluding an $11.9 million adjustment to the estimated impact of the Tax Cuts and Jobs Act (the “Tax Act”), adjusted quarterly net income was $250.8 million⁽¹⁾, or $1.68 per diluted share⁽¹⁾. The record quarterly revenues and net income were driven by growth of Private Client Group assets in fee-based accounts, higher net interest income and record investment banking revenues. Results during the quarter were negatively impacted by $11.9 million of unrealized losses on private equity investments and an increase in other expenses, largely attributable to elevated legal and regulatory reserves.

For fiscal year 2018, record net revenues of $7.27 billion increased 14%, record net income of $856.7 million increased 35%, and adjusted net income of $964.8 million⁽¹⁾ increased 26% compared to fiscal year 2017. Pre-tax income for fiscal year 2018 of $1.31 billion increased 42% over the prior year’s GAAP pre-tax income, and adjusted pre-tax income increased 17% over the prior year. Return on equity for fiscal year 2018 was 14.4%, and the adjusted return on equity was 16.0%⁽¹⁾.

“Our focus on attracting and retaining client-centric financial advisors and providing them with industry-leading tools and resources continues to produce record results,” said Chairman and CEO Paul Reilly. “It is especially gratifying to deliver shareholders an attractive return on equity in fiscal 2018, particularly given our strong capital position and the significant investments we made during the year.”

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

Segment Results

Private Client Group


•	Record quarterly net revenues of $1.31 billion, up 12% over the prior year’s fiscal fourth quarter and 2% over the preceding quarter


•	Quarterly pre-tax income of $131.2 million, down 8% compared to the prior year’s fiscal fourth quarter and down 1% compared to the preceding quarter


•	Record annual net revenues of $5.09 billion and record annual pre-tax income of $576.1 million


•	Record Private Client Group assets under administration of $755.7 billion, growth of 15% over September 2017 and 5% over June 2018


•	Private Client Group assets in fee-based accounts of $366.3 billion, an increase of 24% over September 2017 and 7% over June 2018


•	Record number of Private Client Group financial advisors of 7,813, net increases of 467⁽²⁾ over September 2017 and 94 over June 2018

Record net revenues for both the quarter and fiscal year were primarily driven by growth of assets in fee-based accounts, which represented 48% of the segment’s total client assets under administration at the end of the quarter. While the segment generated record pre-tax income for the fiscal year, the quarterly pre-tax income was down compared to the prior year’s fiscal fourth quarter and the preceding quarter, largely due to higher compensation expense as well as elevated legal and regulatory reserves.

“Fiscal year 2018 was a record year for financial advisor recruiting, and retention of advisors remained excellent,” said Reilly. “Our focus on serving advisors and their clients continues to resonate with high-quality financial advisors across all of our affiliation options.”

Capital Markets


•	Quarterly net revenues of $274.8 million, up 3% over the prior year’s fiscal fourth quarter and 14% over the preceding quarter


•	Quarterly pre-tax income of $47.9 million, up 9% over the prior year’s fiscal fourth quarter and 120% over the preceding quarter


•	Annual net revenues of $963.8 million and annual pre-tax income of $90.6 million


•	Record quarterly and annual investment banking revenues of $155.0 million and $440.8 million, respectively

Record M&A results drove record total investment banking revenues for the fiscal fourth quarter and fiscal year 2018, despite declines in both equity and fixed income underwriting. Investment banking revenues during the quarter were also helped by a surge in tax credit funds syndication fees, which ended the year down just 5% compared to fiscal year 2017 despite significant disruption following corporate tax reform. The market environment for institutional equity and fixed income commissions remained difficult during the quarter.

“Record M&A results muted the declines in underwriting revenues and institutional commissions during the fiscal year,” said Reilly. “While the M&A pipeline remains robust, we continue to expect industry headwinds for institutional equity and fixed income commissions.”

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

Asset Management


•	Record quarterly net revenues of $172.4 million, up 31% over the prior year’s fiscal fourth quarter and 3% over the preceding quarter


•	Record quarterly pre-tax income of $63.8 million, up 31% over the prior year’s fiscal fourth quarter and 9% over the preceding quarter


•	Record annual net revenues of $654.4 million and record annual pre-tax income of $235.3 million, representing increases of 34% and 37% over fiscal 2017, respectively


•	Quarter-end record for financial assets under management of $140.9 billion, representing growth of 46% over September 2017 and 4% over June 2018

Record quarterly and annual results for the Asset Management segment were attributable to the growth of financial assets under management, which reflected net inflows into fee-based accounts in the Private Client Group, equity market appreciation and the addition of $27 billion of assets from the Scout and Reams acquisition in November 2017.

Raymond James Bank


•	Record quarterly net revenues of $194.9 million, up 20% over the prior year’s fiscal fourth quarter and 4% over the preceding quarter


•	Record quarterly pre-tax income of $130.4 million, up 15% over the prior year’s fiscal fourth quarter and 1% over the preceding quarter


•	Record annual net revenues of $726.7 million and record annual pre-tax income of $491.8 million, representing increases of 23% and 20% over fiscal 2017, respectively


•	Record net loans of $19.5 billion, representing growth of 15% over September 2017 and 3% over June 2018


•	Net interest margin of 3.27% for the quarter, up 16 basis points over the prior year’s fiscal fourth quarter and down 3 basis points compared to the preceding quarter

Record results were lifted by broad-based loan growth and the year-over-year expansion of the net interest margin, which improved 12 basis points from 3.10% in fiscal 2017 to 3.22% in fiscal year 2018. Credit metrics continued to improve, with criticized loans decreasing 12% compared to September 2017 and 2% compared to June 2018. Criticized loans as a percentage of total loans of 1.18% improved from 1.54% in September 2017 and 1.24% in June 2018.

Other

Quarterly revenues in the Other segment were negatively impacted by $11.9 million of unrealized losses associated with private equity investments, of which $4.6 million is attributable to noncontrolling interests. During the quarter, there was an $11.9 million reduction to the estimated impact of the Tax Act, which lowered the effective tax rate for the quarter to 25.4%. The effective tax rate for fiscal year 2018 was 34.8%, which reflected the impact of the Tax Act. Excluding the impact of the Tax Act, the adjusted effective tax rate was 28.8%⁽¹⁾ for the quarter and 26.7%⁽¹⁾for fiscal year 2018. During the quarter, the firm repurchased approximately 401,000 shares of common stock for $36.4 million, or approximately $90.60 per share.

“I am proud of our advisors and associates for their unwavering dedication to helping clients achieve their financial objectives,” said Reilly. “Our continued focus on serving clients has enabled Raymond James to generate record revenues and earnings in fiscal year 2018. We are well positioned entering fiscal year 2019, with records for almost all key business drivers, high levels of satisfaction from our financial advisors and strong interest from prospective financial advisors. However, the heightened market volatility in October and the industrywide pressure on client cash balances serve as a reminder that we should always remain prepared for potential headwinds.”

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

A conference call to discuss the results will take place tomorrow morning, Thursday, October 25th, at 8:15 a.m. ET. For a listen-only connection, please call: 877-671-8037 (conference code: 5589865), or visit www.raymondjames.com/investor-relations/earnings/earnings-conference-call for a live audio webcast. An audio replay of the call will be available until January 25, 2019, on the Investor Relations page of our website at www.raymondjames.com.

About Raymond James Financial, Inc.

Raymond James Financial, Inc. (NYSE: RJF) is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. The company has approximately 7,800 financial advisors in 3,100 locations throughout the United States, Canada and overseas. Total client assets are $790 billion. Public since 1983, the firm is listed on the New York Stock Exchange under the symbol RJF. Additional information is available at www.raymondjames.com.

Forward Looking Statements

Certain statements made in this press release and the associated conference call may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions, demand for and pricing of our products, acquisitions and divestitures, anticipated results of litigation, changes in tax rules, regulatory developments, and general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the “SEC”) from time to time, including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.

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



Raymond James Financial, Inc. Selected financial highlights (Unaudited)

Summary results of operations
	Three months ended						% change from
$ in thousands, except per share amounts	September 30, 2018		September 30, 2017		June 30, 2018		September 30, 2017	June 30, 2018
Net revenues	$	1,898,930	$	1,690,111	$	1,836,595	12%	3%
Pre-tax income ⁽³⁾	$	349,983	$	278,440	$	318,058	26%	10%
Net income ⁽³⁾	$	262,748	$	193,489	$	232,258	36%	13%

Earnings per common share:
Basic	$	1.80	$	1.34	$	1.59	34%	13%
Diluted	$	1.76	$	1.31	$	1.55	34%	14%

Non-GAAP measures: ⁽¹⁾
Adjusted pre-tax income ⁽³⁾	$	349,983	$	316,781	⁽¹⁾		10%	10%
Adjusted net income ⁽³⁾	$	250,833	$	217,260	⁽¹⁾		15%	8%
Adjusted basic earnings per common share	$	1.72	$	1.51	⁽¹⁾		14%	8%
Adjusted diluted earnings per common share	$	1.68	$	1.47	⁽¹⁾		14%	8%



	Twelve months ended
$ in thousands, except per share amounts	September 30, 2018		September 30, 2017		% change
Net revenues	$	7,274,318	$	6,371,097	14%
Pre-tax income ⁽³⁾	$	1,310,655	$	925,346	42%
Net income ⁽³⁾	$	856,695	$	636,235	35%

Earnings per common share:
Basic	$	5.89	$	4.43	33%
Diluted	$	5.75	$	4.33	33%

Non-GAAP measures: ⁽¹⁾
Adjusted pre-tax income ⁽³⁾	$	1,314,582	$	1,119,087	17%
Adjusted net income ⁽³⁾	$	964,776	$	768,107	26%
Adjusted basic earnings per common share	$	6.63	$	5.35	24%
Adjusted diluted earnings per common share	$	6.47	$	5.23	24%

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



Raymond James Financial, Inc. Consolidated Statements of Income (Unaudited)

	Three months ended									% change from
$ in thousands, except per share amounts	September 30, 2018			September 30, 2017			June 30, 2018			September 30, 2017	June 30, 2018
Revenues:
Securities commissions and fees	$	1,146,729		$	1,026,505		$	1,115,465		12%	3%
Investment banking	155,025			130,682			115,069			19%	35%
Investment advisory and related administrative fees	158,551			127,088			153,627			25%	3%
Interest income	292,076			222,576			271,342			31%	8%
Account and service fees	193,956			181,418			201,264			7%	(4)%
Net trading profit	11,444			22,110			11,371			(48)%	1%
Other	4,312			22,307			22,764			(81)%	(81)%
Total revenues	1,962,093			1,732,686			1,890,902			13%	4%
Interest expense	(63,163		)	(42,575		)	(54,307		)	48%	16%
Net revenues	1,898,930			1,690,111			1,836,595			12%	3%
Non-interest expenses:
Compensation, commissions and benefits	1,238,448			1,103,824			1,207,512			12%	3%
Communications and information processing	93,812			84,914			91,651			10%	2%
Occupancy and equipment costs	52,925			50,680			49,503			4%	7%
Business development	47,927			38,740			56,944			24%	(16)%
Investment sub-advisory fees	23,918			21,450			23,028			12%	4%
Bank loan loss provision/(benefit)	6,690			(110		)	5,226			NM	28%
Acquisition-related expenses	—			877			—			(100)%	—
Losses on extinguishment of debt	—			37,464			—			(100)%	—
Other	91,148			70,053			84,689			30%	8%
Total non-interest expenses	1,554,868			1,407,892			1,518,553			10%	2%
Income including noncontrolling interests and before provision for income taxes	344,062			282,219			318,042			22%	8%
Provision for income taxes	87,235			84,951			85,800			3%	2%
Net income including noncontrolling interests	256,827			197,268			232,242			30%	11%
Net income/(loss) attributable to noncontrolling interests	(5,921		)	3,779			(16		)	NM	NM
Net income attributable to Raymond James Financial, Inc.	$	262,748		$	193,489		$	232,258		36%	13%
Earnings per common share – basic	$	1.80		$	1.34		$	1.59		34%	13%
Earnings per common share – diluted	$	1.76		$	1.31		$	1.55		34%	14%
Weighted-average common shares outstanding – basic	145,620			143,913			145,634			1%	—
Weighted-average common and common equivalent shares outstanding – diluted	149,463			147,761			149,447			1%	—

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



Raymond James Financial, Inc. Consolidated Statements of Income (Unaudited)

	Twelve months ended
$ in thousands, except per share amounts	September 30, 2018			September 30, 2017			% change
Revenues:
Securities commissions and fees	$	4,483,040		$	4,020,910		11%
Investment banking	440,811			398,675			11%
Investment advisory and related administrative fees	605,634			462,989			31%
Interest income	1,043,993			802,126			30%
Account and service fees	771,012			667,274			16%
Net trading profit	56,722			81,880			(31)%
Other	74,609			91,021			(18)%
Total revenues	7,475,821			6,524,875			15%
Interest expense	(201,503		)	(153,778		)	31%
Net revenues	7,274,318			6,371,097			14%
Non-interest expenses:
Compensation, commissions and benefits	4,795,375			4,228,387			13%
Communications and information processing	365,879			310,961			18%
Occupancy and equipment costs	201,943			190,737			6%
Business development	181,470			154,926			17%
Investment sub-advisory fees	92,388			78,656			17%
Bank loan loss provision	20,481			12,987			58%
Acquisition-related expenses	3,927			17,995			(78)%
Losses on extinguishment of debt	—			45,746			(100)%
Other	307,978			402,724			(24)%
Total non-interest expenses	5,969,441			5,443,119			10%
Income including noncontrolling interests and before provision for income taxes	1,304,877			927,978			41%
Provision for income taxes	453,960			289,111			57%
Net income including noncontrolling interests	850,917			638,867			33%
Net income/(loss) attributable to noncontrolling interests	(5,778		)	2,632			NM
Net income attributable to Raymond James Financial, Inc.	$	856,695		$	636,235		35%

Earnings per common share – basic	$	5.89		$	4.43		33%
Earnings per common share – diluted	$	5.75		$	4.33		33%
Weighted-average common shares outstanding – basic	145,271			143,275			1%
Weighted-average common and common equivalent shares outstanding – diluted	148,838			146,647			1%

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



Raymond James Financial, Inc. Segment Results (Unaudited)

	Three months ended									% change from
$ in thousands	September 30, 2018			September 30, 2017			June 30, 2018			September 30, 2017	June 30, 2018
Net revenues:
Private Client Group	$	1,309,044		$	1,169,082		$	1,279,120		12%	2%
Capital Markets	274,806			265,587			241,686			3%	14%
Asset Management	172,437			131,432			168,155			31%	3%
RJ Bank	194,932			162,797			187,820			20%	4%
Other ⁽⁴⁾	(11,833		)	(4,958		)	(2,235		)	(139)%	(429)%
Intersegment eliminations	(40,456		)	(33,829		)	(37,951		)
Total net revenues	$	1,898,930		$	1,690,111		$	1,836,595		12%	3%

Pre-tax income/(loss): ⁽³⁾
Private Client Group	$	131,171		$	142,269		$	132,274		(8)%	(1)%
Capital Markets	47,850			43,934			21,787			9%	120%
Asset Management	63,799			48,760			58,272			31%	9%
RJ Bank	130,384			113,281			129,154			15%	1%
Other ⁽⁴⁾	(23,221		)	(69,804		)	(23,429		)	67%	1%
Pre-tax income	$	349,983		$	278,440		$	318,058		26%	10%



	Twelve months ended
$ in thousands	September 30, 2018			September 30, 2017			% change
Net revenues:
Private Client Group	$	5,093,030		$	4,421,633		15%
Capital Markets	963,773			1,013,683			(5)%
Asset Management	654,377			487,658			34%
RJ Bank	726,675			592,670			23%
Other ⁽⁴⁾	(15,156		)	(29,870		)	49%
Intersegment eliminations	(148,381		)	(114,677		)
Total net revenues	$	7,274,318		$	6,371,097		14%

Pre-tax income/(loss): ⁽³⁾
Private Client Group	$	576,094		$	372,950		54%
Capital Markets	90,647			141,236			(36)%
Asset Management	235,336			171,736			37%
RJ Bank	491,779			409,303			20%
Other ⁽⁴⁾	(83,201		)	(169,879		)	51%
Pre-tax income	$	1,310,655		$	925,346		42%

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



Raymond James Financial, Inc. Selected Operating Data (Unaudited)

	Three months ended									% change from
$ in thousands	September 30, 2018			September 30, 2017			June 30, 2018			September 30, 2017	June 30, 2018
Securities commissions and fees by segment:
Private Client Group	$	1,052,825		$	933,720		$	1,014,665		13%	4%
Capital Markets:
Equity	46,481			40,112			56,793			16%	(18)%
Fixed Income	52,378			61,895			49,908			(15)%	5%
Intersegment eliminations	(4,955		)	(9,222		)	(5,901		)
Total securities commissions and fees	$	1,146,729		$	1,026,505		$	1,115,465		12%	3%

Investment banking revenues:
Equity:
Underwritings	$	14,931		$	16,425		$	16,614		(9)%	(10)%
Mergers & acquisitions and advisory fees	96,397			84,503			84,737			14%	14%
Fixed Income	10,139			11,540			9,947			(12)%	2%
Tax credit funds syndication fees	33,558			18,214			3,771			84%	790%
Total investment banking revenues	$	155,025		$	130,682		$	115,069		19%	35%

Account and service fees:
Mutual fund and annuity service fees ⁽⁵⁾	$	86,181		$	80,091		$	85,239		8%	1%
RJBDP fees - third party banks ⁽⁶⁾	64,680			61,139			70,381			6%	(8)%
Other	43,095			40,188			45,644			7%	(6)%
Total account and service fees	$	193,956		$	181,418		$	201,264		7%	(4)%

Other revenues:
Realized/unrealized gains/(losses) - private equity investments	$	(11,943	)	$	6,696		$	4,106		NM	NM
Other	16,255			15,611			18,658			4%	(13)%
Total other revenues	$	4,312		$	22,307		$	22,764		(81)%	(81)%

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



Raymond James Financial, Inc. Selected Operating Data (Unaudited)

	Twelve months ended
$ in thousands	September 30, 2018			September 30, 2017			% change
Securities commissions and fees by segment:
Private Client Group	$	4,080,753		$	3,566,304		14%
Capital Markets:
Equity	202,809			222,942			(9)%
Fixed Income	221,684			267,749			(17)%
Intersegment eliminations	(22,206		)	(36,085		)
Total securities commissions and fees	$	4,483,040		$	4,020,910		11%

Investment banking revenues:
Equity:
Underwritings	$	53,311		$	72,921		(27)%
Mergers & acquisitions and advisory fees	296,606			228,422			30%
Fixed Income	39,430			43,234			(9)%
Tax credit funds syndication fees	51,464			54,098			(5)%
Total investment banking revenues	$	440,811		$	398,675		11%

Account and service fees:
Mutual fund and annuity service fees ⁽⁵⁾	$	335,430		$	296,386		13%
RJBDP fees - third party banks ⁽⁶⁾	262,424			202,048			30%
Other	173,158			168,840			3%
Total account and service fees	$	771,012		$	667,274		16%

Other revenues:
Realized/unrealized gains - private equity investments	$	9,744		$	31,386		(69)%
Other	64,865			59,635			9%
Total other revenues	$	74,609		$	91,021		(18)%

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



Raymond James Financial, Inc. Selected Key Metrics (Unaudited)



	For the period ended
Total company	September 30, 2018				September 30, 2017			June 30, 2018
Total assets	$	37.4	bil.	⁽⁷⁾	$	34.9	bil.	$	36.4	bil.
Total equity ⁽³⁾	$	6.4	bil.		$	5.6	bil.	$	6.2	bil.
Book value per share ⁽⁸⁾	$	43.73			$	38.74		$	42.24
Tangible book value per share ^{(1) (8)}	$	39.52			$	35.58		$	38.06
Return on equity - quarter ⁽⁹⁾	16.8		%		14.1		%	15.4		%
Adjusted return on equity - quarter ^{(1) (9)}	16.0		%		15.8		%	NA
Return on equity - year to date ⁽⁹⁾	14.4		%		12.2		%	13.6		%
Adjusted return on equity - year to date ^{(1) (9)}	16.0		%		14.5		%	16.0		%
Total compensation ratio - quarter ⁽¹⁰⁾	65.2		%		65.3		%	65.7		%
Total compensation ratio - year to date ⁽¹⁰⁾	65.9		%		66.4		%	66.2		%
Pre-tax margin on net revenues - quarter ⁽¹¹⁾	18.4		%		16.5		%	17.3		%
Adjusted pre-tax margin on net revenues - quarter ^{(1) (11)}	NA				18.7		%	NA
Pre-tax margin on net revenues - year to date ⁽¹¹⁾	18.0		%		14.5		%	17.9		%
Adjusted pre-tax margin on net revenues - year to date ^{(1) (11)}	18.1		%		17.6		%	17.9		%
Effective tax rate - quarter	25.4		%		30.1		%	27.0		%
Adjusted effective tax rate - quarter ⁽¹⁾	28.8		%		NA			NA
Effective tax rate - year to date	34.8		%		31.2		%	38.2		%
Adjusted effective tax rate - year to date ⁽¹⁾	26.7		%		NA			26.0		%

Total company capital ratios:
Tier 1 capital ratio	24.3		%	⁽⁷⁾	23.0		%	23.8		%
Total capital ratio	25.3		%	⁽⁷⁾	23.9		%	24.8		%
Tier 1 leverage ratio	15.8		%	⁽⁷⁾	15.0		%	15.6		%



Client asset metrics ($ in billions)	As of						% change from
	September 30, 2018		September 30, 2017		June 30, 2018		September 30, 2017	June 30, 2018
Client assets under administration	$	790.4	$	692.9	$	754.3	14%	5%
Private Client Group assets under administration	$	755.7	$	659.5	$	719.5	15%	5%
Private Client Group assets in fee-based accounts	$	366.3	$	294.5	$	343.1	24%	7%
Financial assets under management	$	140.9	$	96.4	$	135.5	46%	4%



Private Client Group financial advisors	As of
	September 30, 2018	September 30, 2017	June 30, 2018
Employees	3,167	3,041	3,126
Independent contractors ⁽²⁾	4,646	4,305	4,593
Total advisors	7,813	7,346	7,719

(continued on next page)

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



Raymond James Financial, Inc. Selected Key Metrics (Unaudited)

(continued from previous page)



Clients’ domestic cash sweep balances ($ in millions) ⁽¹²⁾	As of
	September 30, 2018		September 30, 2017		June 30, 2018
RJBDP
RJ Bank	$	19,446	$	17,387	$	19,014
Third-party banks	15,564		20,704		16,971
Subtotal RJBDP	35,010		38,091		35,985
Money Market Funds	3,240		1,818		2,687
Client Interest Program	2,807		3,101		2,784
Total clients’ domestic cash sweep balances	$	41,057	$	43,010	$	41,456



Raymond James Bank ($ in thousands)	As of
	September 30, 2018			September 30, 2017			June 30, 2018
Total assets ⁽¹³⁾	$	23,204,762		$	20,882,722		$	22,987,118
Total equity	$	2,020,709		$	1,823,342		$	1,967,577
Bank loans, net	$	19,518,100		$	17,006,795		$	18,987,806
Allowance for loan losses	$	202,750		$	190,442		$	196,157
Allowance for loan losses (as % of loans)	1.04		%	1.11		%	1.03		%
Total nonperforming assets	$	27,969		$	43,699		$	37,168
Nonperforming assets (as % of total assets)	0.12		%	0.21		%	0.16		%
Total criticized loans ⁽¹⁴⁾	$	233,377		$	264,664		$	238,120
Criticized loans (as % of loans)	1.18		%	1.54		%	1.24		%



($ in thousands)	Three months ended							% change from				Twelve months ended
	September 30, 2018		September 30, 2017			June 30, 2018		September 30, 2017		June 30, 2018		September 30, 2018		September 30, 2017		% change
Bank loan loss provision/ (benefit)	$	6,690	$	(110	)	$	5,226	NM		28	%	$	20,481	$	12,987	58	%
Net charge-offs	$	317	$	1,606		$	3,646	(80	)%	(91	)%	$	7,678	$	20,652	(63	)%



	As of
	September 30, 2018			September 30, 2017		June 30, 2018
RJ Bank capital ratios:
Tier 1 capital ratio	12.7	%	⁽⁷⁾	12.5	%	12.5	%
Total capital ratio	13.9	%	⁽⁷⁾	13.8	%	13.8	%
Tier 1 leverage ratio	8.8	%	⁽⁷⁾	8.9	%	8.9	%

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



Raymond James Bank Net Interest Analysis (Unaudited)
	Three months ended
	September 30, 2018						September 30, 2017						June 30, 2018
$ in thousands	Average balance		Interest inc./exp.		Average yield/ cost		Average balance		Interest inc./exp.		Average yield/ cost		Average balance		Interest inc./exp.		Average yield/ cost
Interest-earning banking assets:
Cash	$	707,585	$	3,460	1.94	%	$	992,646	$	3,100	1.24	%	$	659,563	$	2,949	1.79	%
Available-for-sale securities	2,641,208		14,302		2.17	%	2,018,890		9,433		1.87	%	2,534,373		13,369		2.11	%
Bank loans, net of unearned income:
Loans held for investment:
Commercial and industrial (“C&I”) loans	7,860,372		88,959		4.43	%	7,326,719		72,247		3.86	%	7,647,502		85,120		4.40	%
Commercial real estate (“CRE”) construction loans	165,050		2,216		5.25	%	120,400		1,455		4.73	%	181,571		2,401		5.23	%
CRE loans	3,443,414		37,702		4.28	%	3,042,657		29,472		3.79	%	3,258,551		34,188		4.15	%
Tax-exempt loans ⁽¹⁵⁾	1,207,656		7,833		3.44	%	984,786		6,362		3.98	%	1,190,878		7,673		3.41	%
Residential mortgage loans	3,700,160		31,035		3.35	%	3,047,822		23,126		3.03	%	3,514,327		27,257		3.10	%
Securities-based loans	2,972,354		33,200		4.37	%	2,332,112		21,452		3.60	%	2,740,641		29,511		4.26	%
Loans held for sale	133,543		1,514		4.49	%	173,527		1,440		3.35	%	109,449		1,185		4.34	%
Total loans, net	19,482,549		202,459		4.14	%	17,028,023		155,554		3.67	%	18,642,919		187,335		4.04	%
Federal Home Loan Bank stock (“FHLB”), Federal Reserve Bank of Atlanta (“FRB”) stock and other	143,991		1,778		4.90	%	185,559		1,250		2.68	%	133,586		1,508		4.53	%
Total interest-earning banking assets	22,975,333		221,999		3.85	%	20,225,118		169,337		3.36	%	21,970,441		205,161		3.75	%
Total interest-bearing banking liabilities	20,991,250		33,316		0.63	%	18,483,961		12,845		0.27	%	20,082,655		24,645		0.49	%
Excess of interest-earning banking assets over interest-bearing banking liabilities/net interest income	$	1,984,083	$	188,683			$	1,741,157	$	156,492			$	1,887,786	$	180,516
Net interest margin (net yield on interest-earning banking assets)					3.27	%					3.11	%					3.30	%



	Twelve months ended September 30,
	2018						2017
$ in thousands	Average balance		Interest inc./exp.		Average yield/cost		Average balance		Interest inc./exp.		Average yield/cost
Interest-earning banking assets:
Cash	$	956,567	$	14,996	1.57	%	$	859,020	$	7,696	0.90	%
Available-for-sale securities	2,429,718		49,628		2.04	%	1,462,938		25,970		1.78	%
Bank loans, net of unearned income
Loans held for investment:
C&I loans	7,618,949		326,042		4.22	%	7,340,052		281,274		3.78	%
CRE construction loans	165,780		8,547		5.08	%	129,073		6,184		4.73	%
CRE loans	3,231,369		132,898		4.06	%	2,831,870		100,563		3.50	%
Tax-exempt loans ⁽¹⁵⁾	1,146,493		29,567		3.42	%	891,922		23,057		3.98	%
Residential mortgage loans	3,447,710		108,825		3.16	%	2,803,464		83,537		2.94	%
Securities-based loans	2,689,612		111,403		4.09	%	2,123,189		72,400		3.36	%
Loans held for sale	125,970		5,057		4.01	%	159,384		5,156		3.34	%
Total loans, net	18,425,883		722,339		3.93	%	16,278,954		572,171		3.55	%
FHLB stock, FRB stock and other	138,635		6,007		4.33	%	157,395		4,134		2.63	%
Total interest-earning banking assets	21,950,803		792,970		3.62	%	18,758,307		609,971		3.28	%
Total interest-bearing banking liabilities	20,088,204		88,609		0.44	%	17,089,491		35,175		0.20	%
Excess of interest-earning banking assets over interest-bearing banking liabilities/net interest income	$	1,862,599	$	704,361			$	1,668,816	$	574,796
Net interest margin (net yield on interest-earning banking assets)					3.22	%					3.10	%

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

Raymond James Financial, Inc.

Reconciliation of GAAP measures to non-GAAP measures

(Unaudited)

We utilize certain non-GAAP calculations as additional measures to aid in, and enhance, the understanding of our financial results and related measures. We believe that the non-GAAP measures provide useful information by excluding certain material items that may not be indicative of our core operating results. We believe that these non-GAAP measures will allow for better evaluation of the operating performance of the business and facilitate a meaningful comparison of our results in the current period to those in prior and future periods. In the case of tangible book value per share, we believe that this measure is meaningful as it is a measure we and investors use to assess capital strength. The non-GAAP financial information should be considered in addition to, not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, our non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies. The following table provides a reconciliation of GAAP measures to non-GAAP measures for the periods which include non-GAAP adjustments.



	Three months ended				Twelve months ended
$ in thousands, except per share amounts	September 30, 2018		September 30, 2017		September 30, 2018		September 30, 2017
Net income: ⁽³⁾	$	262,748	$	193,489	$	856,695	$	636,235
Non-GAAP adjustments:
Acquisition-related expenses ⁽¹⁶⁾	—		877		3,927

Raymond James Financial Inc (RJF) SEC Filing 8-K Material Event for the period ending Wednesday, October 24, 2018

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