Back ANNUAL REPORT Message from the Chairman and CEO Investor Relations Financial Information Annual Reports and Proxy Statement Annual Report Message from the Chairman and CEO Message from the Chairman and CEO Fiscal year 2020 brought incredible challenges, including the COVID-19 pandemic, economic uncertainty and social unrest across the nation. While the year was one of the most difficult years in my career, in many ways it was also the most rewarding, as the response of our associates and advisors during this time of crisis truly reinforced our unique culture at Raymond James. Our associates and advisors remained steadfast in their focus on our core values, including long-term thinking and always putting clients first, in order to continue providing excellent service during these difficult times. As a result of this focus, we generated record revenues during the fiscal year – lifted by record revenues for the Private Client Group, Capital Markets and Asset Management segments – reinforcing the value of having diverse and complementary businesses. Record net revenues of $7.99 billion increased 3%, pre-tax income of $1.05 billion decreased 23%, and net income of $818 million decreased 21% compared to fiscal 2019. Adjusted net income of $858 million,(1) which excludes $46 million associated with reduction in workforce expenses and a $7 million loss associated with the disposition of certain operations in France, decreased 20% compared to the adjusted net income generated in fiscal 2019. Record net revenues were driven by growth of client assets and record brokerage and investment banking revenues; however, lower short-term interest rates and higher loan loss reserves caused net income to decline from the prior year. Client assets under administration increased 11% during the year to $930.1 billion, another record, lifted by equity market appreciation and the net addition of financial advisors in the Private Client Group segment. For the fiscal year, we generated a return on equity of 11.9% and an adjusted return on equity of 12.5%,(1) both strong results, particularly given our robust capital position. We ended the year with shareholders’ equity of $7.1 billion and book value per share of $52.08, which increased 8% and 9%, respectively, over September 2019. During the fiscal year, we increased our quarterly dividend 9% to $0.37 per quarter from $0.34 per quarter. Despite temporarily suspending share repurchases in mid-March due to the significant economic uncertainty surrounding the COVID-19 pandemic, we repurchased 3.35 million shares for $263 million, an average price of $78.50 per share. In total, the firm returned total capital of nearly $470 million to shareholders through the combination of dividends and share repurchases. Subsequent to the fiscal year-end, the board approved a 5% increase of the cash dividend to $0.39 per quarter and a share repurchase authorization of $750 million, which replaces the previous authorization under which $487 million remained available as of September 2020. Our capital ratios remained well above regulatory requirements, with a total capital ratio of 25.4% and Tier 1 leverage ratio of 14.2% at the end of the year, giving us the balance sheet capacity to not only be defensive but also opportunistic during these uncertain times. Segment results Turning to our segment results, the Private Client Group (PCG) generated record net revenues of $5.55 billion, an increase of 4% over fiscal 2019, and pre-tax income of $539 million, a 7% decrease compared to 2019. Record net revenues were driven by strong growth in assets in fee-based accounts and a solid net increase in the number of financial advisors, partially offset by the negative impact of lower short-term interest rates. Fiscal 2020 concluded with records for PCG assets under administration of $883.3 billion, up 11%, and PCG assets in fee-based accounts of $475.3 billion, up 16% over the end of fiscal 2019. The strong client asset growth in the year was predominantly driven by equity market appreciation and our continued success recruiting and retaining financial advisors across all of our affiliation options. We ended the year with a record 8,239 financial advisors affiliated with the firm, up a net 228 advisors. This was a solid result, especially given delays in recruiting and onboarding of advisors during the onset of the COVID-19 pandemic. During the year, financial advisors with over $275 million of trailing 12-month production and over $40 billion of assets at their prior firms affiliated with Raymond James domestically. Our financial advisor recruiting pipeline is strong across all our affiliation options, and a 7% sequential increase of assets in fee-based accounts will be a tailwind to start fiscal 2021. In the Capital Markets segment, record net revenues of $1.29 billion increased 19%, and record pre-tax income of $225 million increased 105% over fiscal 2019. Results in the Capital Markets segment were driven by record fixed income brokerage revenues and record investment banking revenues due to broad-based strength in underwriting and mergers and acquisitions activity. Fixed income brokerage revenues benefited from a high level of client activity, particularly with small- and mid-sized depositories, as these clients are flush with deposits while lending remains muted. These conditions have persisted and should bolster fixed income brokerage revenues in early fiscal 2021. If markets remain conducive, we remain cautiously optimistic on investment banking results in the coming year as activity levels remain strong, and we have continued to enhance our platform by adding senior talent throughout the year. The Asset Management segment drove record net revenues of $715 million, which were up 3%, and record pre-tax income of $284 million, which increased 12% over fiscal 2019. Record net revenues were driven by growth in financial assets under management, which rose 7% to $153.1 billion at the end of the fiscal year. The annual growth in financial assets under management was attributable to strong net inflows in fee-based accounts in the Private Client Group and to equity market appreciation, which more than offset net outflows for Carillon Tower Advisers. Carillon Tower Advisers acquired Portfolio Risk Insights and Solutions Management, an innovative financial risk analytics platform, which will provide additional tools to evaluate risk and enhance reporting and insights for our partner affiliates and their autonomous investment teams. Asset Management results should be positively impacted by higher financial assets under management as long as the equity markets remain resilient. Raymond James Bank net revenues of $765 million decreased 10%, and pre-tax income of $196 million decreased 62%, compared to fiscal 2019. Net loans grew 1% to end the fiscal year at $21.2 billion, as lending to clients of PCG was partially offset by a decline in corporate loans. This was largely due to the proactive sales of nearly $700 million of loans in sectors we believe are most vulnerable to the COVID-19 pandemic. Net interest income declined, primarily due to the decrease in short-term interest rates, which caused the bank’s net interest margin to decline 69 basis points to 2.63% in fiscal 2020 from 3.32% in fiscal 2019. Despite relatively low nonperforming assets of 0.10%, the annual bank loan loss provision grew to $233 million in response to the rapid and widespread economic deterioration caused by COVID-19. Allowance for loan losses as a percent of total loans increased to 1.65% from 1.04% in fiscal 2019. Raymond James Bank should continue to benefit from the attractive growth of mortgages and securities-based loans to PCG clients. Given the high degree of uncertainty, we will continue to be conservative with adding to the corporate loan portfolio, and we will be ready and willing to resume more significant corporate loan growth when there is greater confidence in the economic outlook. 2020 achievements Complementing the strong performance within our businesses, we also achieved several other notable accomplishments during the fiscal year: Giving back to our communities is an essential aspect of our mission, and this commitment was all the more apparent in the midst of the COVID-19 crisis. Between associate contributions and a company match, Raymond James raised nearly $6.5 million for communities across the country through its annual United Way campaign. Additionally, our associates raised more than $540,000 for the American Heart Association through the 2019 Heart Walk. While the firm’s annual Raymond James Cares Month volunteering looked different this year due to the COVID-19 pandemic, it was no less impactful – more than 2,200 advisors and associates volunteered over 4,600 hours to benefit 289 charitable organizations across the United States, Canada and the United Kingdom. Raymond James also donated $2.3 million – including a firm pledge of $1.5 million and more than $800,000 in associate gifts – to aid those impacted by COVID-19 and $100,000 to the American Red Cross to support relief efforts related to several natural disasters. Also, throughout our operating regions associates held food and supply donation drives to benefit local food banks and nonprofit organizations. While we have always worked to ensure we have policies and programs in place that seek to address racial inequality, we recognize we can, and must, do more. In addition to a financial commitment, we released a pledge to the Black community, signed by all members of our Executive Committee, our Operating Committee and our Board of Directors, as well as over 2,500 associates across the firm, in which we commit to increase Black diversity throughout the firm and increase programming to address racial inequality. Our commitment to diversity and inclusion made through this pledge earned recognition in the social justice category in the 2020 MMI/Barron’s Industry Awards. Raymond James was also recognized in other major lists for diversity and for overall corporate reputation, and the number of advisors who were named to industry lists across various categories has grown significantly, to almost 400 advisors. Meanwhile, for the eighth consecutive year, Raymond James was recognized with the Technology Innovation Award by BISA. As part of the firm’s long-term succession plan, Jeff Dowdle, chief administrative officer and president of Asset Management, was named chief operating officer. In addition to his new responsibilities, Jeff will continue as head of Asset Management as well as oversee several of the firm’s corporate administration departments and other budgetary and administrative duties. Additionally, the firm announced the promotion of Erik Fruland to president and Al Caudullo to chief operating officer of Asset Management Services. Chief Audit Executive T.J. Haynes-Morgan was named to the firm’s Operating Committee. With her 25-plus years of experience in global financial services covering banking, consumer finance, internal audit and compliance risk management, T.J. will make a significant impact on the committee’s contribution and vision. These key leadership appointments continue to highlight our longstanding focus on succession planning throughout our businesses. Looking back – and forward Looking back on the past year, I’m so proud of all we have accomplished in the face of such adversity. As we enter fiscal 2021, we will encounter continued headwinds from a full year of lower short-term interest rates, and there is still a high degree of uncertainty given the COVID-19 pandemic and the transition to a new administration. However, we start the year with record client assets and a record number of Private Client Group financial advisors, along with strong capital ratios and tremendous balance sheet flexibility. I believe we are positioned to navigate potential economic challenges and also have significant opportunities for growth as the outlook improves. I want to thank all of our associates and advisors again for their invaluable contributions during these trying times. I’m incredibly proud of our accomplishments and the tireless efforts to support each other and clients. We have something special here at Raymond James, where we have the scale and scope of services to compete with the largest firms in the industry while at the same time providing an advisor- and client-focused culture that is increasingly difficult to find. As long as we preserve that unique competitive advantage, I am confident in our ability to generate attractive relative long-term returns for our shareholders in any market environment. Thank you for your continued trust and confidence in Raymond James. Paul C. Reilly Chairman and Chief Executive Officer Raymond James Financial December 8, 2020 (1) “Adjusted net income” and “adjusted return on equity” are each non-GAAP financial measures. Please see the “Reconciliation of GAAP measures to non-GAAP measures” on page 37 of Form 10-K for a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures, and for other important disclosures. 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