We are consistently reminded of the importance of keeping a long-term, clientfocused approach. And it is in years like this one, when the financial system was challenged once again, that our philosophy not only carries us through, but enables us to thrive. While remaining focused on the long term has not always been without challenge, or fully appreciated in the good times, it has served us well throughout our history. This strategy has led to our differentiated positioning that benefits the firm and our stakeholders, especially during times of turmoil.

• Strong capital ratios: Total capital ratio of 22.8% and Tier 1 leverage ratio of 11.9%, over two times the regulatory requirement to be considered well-capitalized
• Among the highest in providing FDIC coverage for clients: 89% of our bank segment deposits are FDIC-insured, including nearly 97% at Raymond James Bank
• Strong credit ratings: “A-level” issuer ratings with all three credit agencies: A3 rating by Moody’s, A- rating by Standard & Poor’s, and A- by Fitch
• Balance sheet flexibility: Diverse funding sources including Private Client Group (PCG) domestic clients’ sweep cash, Enhanced Savings Program balances, TriState Capital Bank’s deposit franchise, and other initiatives

In fiscal 2023, despite the challenging and often volatile market and economic environments, Raymond James achieved strong financial results driven by record revenues in the Private Client Group and Bank segments and record pre-tax income in the Private Client Group. Record net revenues of $11.6 billion increased 6%, record pre-tax income of $2.3 billion increased 13%, and record net income available to common shareholders of $1.73 billion increased 15% compared to fiscal 2022. Adjusted net income available to common shareholders of $1.81⁽¹⁾ billion, which excludes the impact of $98 million of acquisition-related expenses and a favorable insurance settlement received, increased 12% compared to adjusted net income available to common shareholders in fiscal 2022.

The benefit of higher short-term interest rates drove record net revenues in fiscal 2023. We generated a return on common equity of 17.7% and an adjusted return on tangible common equity of 22.5%⁽¹⁾, both strong results particularly given our robust capital position. We ended the year with total common equity attributable to RJF of $10.1 billion and book value per share of $48.54, which increased 9% and 12%, respectively, over September 2022. Our capital ratios remained well above regulatory requirements, with a total capital ratio of 22.8% and Tier 1 leverage ratio of 11.9% at the end of the year, providing us significant flexibility to continue to be opportunistic and invest in growth.

We made meaningful progress deploying capital during the year and through the combination of common dividends and share repurchases, the firm returned total capital of $1.1 billion to shareholders. In the fiscal year, we increased our quarterly dividend approximately 24% to $0.42 per quarter from $0.34 per quarter and we repurchased 8.4 million shares for $788 million, an average price of approximately $94 per share. Subsequent to the fiscal year end, the Board approved a 7.1% increase of the common cash dividend to $0.45 per quarter and a share repurchase authorization of $1.5 billion, which replaces the previous authorization under which approximately $700 million remained available as of November 30, 2023. Over the long-term, our longstanding capital deployment priorities remain investing in organic growth, which we believe delivers the best returns for our shareholders over time: selectively making acquisitions, paying an ongoing dividend, and repurchasing our common stock. We maintain our focus on driving long-term growth and are committed to deploying excess capital to generate attractive returns to our shareholders.

Reviewing our segment results, the Private Client Group, our largest business, generated record net revenues of $8.7 billion, an increase of 12% over fiscal 2022, and record pre-tax income of $1.8 billion, a 71% increase over 2022. Record net revenues were driven by the benefit of higher short-term interest rates on Raymond James Bank Deposit Program (RJBDP) fees and net interest income. Fiscal 2023 concluded with PCG assets under administration of $1.2 trillion and PCG assets in fee-based accounts of $683 billion, up 16% and 17%, respectively, compared to the end of fiscal 2022. In addition to higher equity markets, client assets were boosted by strong net inflows, which included robust domestic PCG net new assets of $73 billion, or 7.7% of beginning-of-period assets, driven by strong financial advisor retention and recruiting results.

We ended the year with over 8,700 financial advisors affiliated with the firm. Despite a competitive environment, our regrettable attrition remained extremely low at around 1% in fiscal 2023. Meanwhile, financial advisors with approximately $250 million of trailing 12-month production and approximately $38 billion of assets at their prior firms joined Raymond James’ domestic employee and independent contractor channels during the year. Our recruiting pipeline is strong across all affiliation options as our client-first values, leading technology, and product offerings continue to resonate with current and prospective advisors.

The Capital Markets segment results were weak given the extremely challenging market environment. The segment generated net revenues of $1.2 billion, down 33% compared to prior-year results, and a pre-tax loss of $91 million. Heightened market volatility and geopolitical concerns throughout the fiscal year reduced investment banking activity levels across the industry. Further, compensation expenses were more fixed due primarily to growth investments and deferred compensation amortization owing to very strong M&A and advisory results the preceding two years. Despite weak investment banking results, we are encouraged by improvement in our fiscal fourth quarter, and importantly, believe we are well positioned long-term with our continued investment in our people and platform.

Fixed income brokerage revenues decreased due to lower levels of client activity, particularly with small- and mid-sized depositories, as these clients are experiencing  declines in deposits and have less cash available to invest in securities. We hope that when interest rates and cash balances stabilize, this business will begin to see improved results. SumRidge Partners, in its first full year as part of Raymond James, generated strong results as its technology-enabled corporate trading business thrives on rate volatility. While headwinds exist for our traditional fixed income brokerage activity, we expect SumRidge Partners to continue to enhance our position in the rapidly evolving fixed income and trading technology marketplace.

The Asset Management Group generated net revenues of $885 million, which decreased 3%, and pre-tax income of $351 million, which decreased 9% compared to fiscal 2022. Financial assets under management ended the year at $196.4 billion, representing a 13% increase year-over-year, driven by strong net inflows in fee-based accounts in the Private Client Group and net inflows at Raymond James Investment Management, as well as market appreciation over the prior year.

Bank segment record net revenues of $2.01 billion increased 86%, while pre-tax income of $371 million decreased 3% compared to fiscal 2022. Despite strong growth in net revenues driven primarily by higher short-term interest rates and incremental revenues from TriState Capital Bank, pre-tax income declined primarily due to higher RJBDP fees paid to the Private Client Group, largely resulting from rising interest rates, along with a higher bank loan provision for credit losses. Launched in March 2023, the Enhanced Savings Program offers clients a competitive rate and robust FDIC insurance for deposits at a time when clients were seeking safe, higher-yielding alternatives. The program grew rapidly to $13.6 billion by fiscal year-end, providing an important source of diversified funding to the firm as domestic cash sweep balances declined throughout the year. Net bank loans increased 1% to $43.8 billion, driven primarily by the growth of residential mortgage loans to Private Client Group clients. Reflecting higher short-term interest rates and the relatively high concentration of floating-rate assets, the Bank segment’s net interest margin (NIM) increased 89 basis points during the fiscal year to 3.28%. The credit quality of the loan portfolio remained strong, with criticized loans as a percent of total loans held for investment ending the fiscal year at 1.17%, up slightly from 1.14% in September 2022. The bank loan allowance for credit losses as a percent of total loans held for investment was 1.07%, and the bank loan allowance for credit losses on corporate loans as a percent of corporate loans held for investment was 2.03%. In its first full year with Raymond James, TriState Capital Bank contributed excellent results largely driven by the benefit of higher short-term interest rates. We remain focused on fortifying the balance sheet in our Bank segment with diversified funding sources and prudently growing assets to support client demand.

Complementing the performance within our businesses, we also achieved several other notable accomplishments during the fiscal year:

• Our associates and advisors continue to give back and support the communities where we live and work. This year during Raymond James Cares Month, an annual tradition of month-long focused giving, more than 3,600 volunteers across the United States, Canada and the U.K. volunteered over 9,600 hours to benefit approximately 250 charitable organizations. Additionally, between associate contributions and a company match, Raymond James raised $7.4 million for communities across the United States through its 2022 United Way campaign and our associates raised more than $390,000 for the American Heart Association through the 2022 Heart Walk.
• In the three years since signing a pledge to the Black community, we successfully met our pledge goal of $1.5 million and have built strong partnerships with charitable, educational, and professional organizations that continue to shape our community, campus and professional network engagements.
• In the three years since signing a pledge to the Black Community, we successfully met our pledge goal of $1.5 million and have built strong partnerships with charitable, educational and professional organizations that continue to shape our community, campus and professional network engagements.
• In addition to our six firmwide associate inclusion networks, in partnership with business units across the firm, we have established over 20 department-specific Diversity, Equity & Inclusion Councils. Our goal across all inclusion networks is to raise cultural awareness, develop leaders, build networks and be a valuable resource to our businesses.
• Raymond James was honored with more than a dozen awards in technology, practice management support, diversity and overall corporate reputation, while more than 500 financial advisors earned awards and were named to industry lists across multiple categories.
• We renewed and expanded our five-year committed corporate revolver to $750 million with enhanced terms, a reflection of our strong balance sheet and longstanding banking relationships.

Our technology platform for advisors is one of the best in the industry. This year, we continued to enhance the tools for advisors and clients, including fully integrating our Enhanced Savings Program platform to support our cash management strategy, and delivering a new modernized Client Access mobile application, enhancing the client's experience.

This month, after 48 years on the Raymond James Financial Board of Directors, Tom James shared his decision to not stand for re-election and will retire from the Board at the end of the February 2024 shareholder meeting. It’s difficult to adequately describe how deeply grateful we are for Tom’s tenure and the client-first culture he so thoughtfully and deliberately established. Thankfully, he will remain Chairman Emeritus and active and visible in our offices, while also spending more time with his wife, Mary.

To maintain productive Board refreshment, which promotes diversity of thought and expertise, our Board of Directors appointed two new directors this year, Art Garcia, former executive vice president and chief financial officer of Ryder System, Inc., and Ray McDaniel, former chairman of Moody’s Corporation. Art and Ray have built impressive careers serving on the front lines of their companies’ domestic and international expansions. We look forward to continuing to integrate their experience and expertise with our current Board to help inform Raymond James’ continued innovation and growth strategy in service to advisors and their clients.

Reflecting the firm’s longstanding commitment to strategic succession planning, Shannon Reid, current senior vice president and Northeast division director in Raymond James Financial Services’ Independent Contractor Division (ICD), will become ICD president and join the firm’s Executive Committee. Shannon has an impressive background and has been a stellar leader in an important market for ICD. She succeeds current ICD president Jodi Perry, who has elected to leave her post for the newly created role of national head of advisor recruiting. Jodi has generated outstanding results in every role she has held in her nearly 30-year career at Raymond James and I’m confident she will continue to strengthen this key growth engine for the firm. This key leadership appointment continues to highlight our focus on succession planning throughout our businesses.