RJF SHAREHOLDERS’ MEETING February 23, 2012
1 SAFE HARBOR DISCLOSURE
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. You are cautioned not to place undue reliance on forward- looking statements that speak only as of the date on which they are made. Forward-looking statements reflect management’s current estimates, projections, expectations and beliefs, and are subject to risks and uncertainties outside of our control that may cause actual results to differ materially from what is indicated in those forward-looking statements. We assume no duty to update the forward-looking statements.
For a discussion of the risks that may affect the future results of Raymond James, please see the risk factors in our annual report on Form 10-K for the fiscal year ended September 30, 2011 and our quarterly report on Form 10-Q for the quarter ended December 31, 2011, filed with the U.S. Securities and Exchange Commission and available on raymondjames.com and sec.gov. In addition to those factors, the following factors, among others, could cause actual results to differ materially from forward-looking or historical performance: the possibility that regulatory and other approvals and conditions to the transaction are not received or satisfied on a timely basis or at all; the possibility that modifications to the terms of the transaction may be required to obtain or satisfy such approvals or conditions; changes in the anticipated timing for closing the transaction; difficulty integrating Raymond James’ and Morgan Keegan’s businesses or realizing the projected benefits of the transaction; the inability to sustain revenue and earnings growth; changes in the capital markets; and diversion of management time on transaction related issues. Annualized, pro forma, projected and estimated numbers used in this presentation are used only for illustrative purposes and are not forecasts and may not reflect actual results.
2 TOM JAMES Executive Chairman, Raymond James Financial
3 REPORT OF SHARES PRESENT
Paul L. Matecki General Counsel/Corporate Secretary, RJF
4 50 YEARS OF PERFORMANCE
5 RJF HIGHLIGHTS
Twelve Months Twelve Months Ended Ended September 2011 September 2010 Increase*
Total Revenues $3.4 billion $3.0 billion 14%
Net Revenues $3.3 billion $2.9 billion 14%
Net Income $278 million $228 million 22%
Net Income Per Share (diluted) $2.19 $1.83 20%
As of Sept. 2011 As of Sept. 2010 Increase*
Shareholders’ Equity $2.6 billion $2.3 billion 13%
Market Capitalization $3.28 billion $3.16 billion 4%
6 * Percentage change in this table reflects calculations from actual numbers and cannot be recalculated from the figures shown due to rounding differences. RJF HIGHLIGHTS
(Excluding Auction Rate Securities)
Twelve Months Twelve Months Ended Ended Sept. 2011 Sept. 2010 Increase*
Total Revenues $3.4 billion $3.0 billion 14%
Net Revenues $3.3 billion $2.9 billion 14%
Net Income $303 million $228 million 33%
Net Income Per Share (diluted) $2.39 $1.83 31%
7 * Percentage change in this table reflects calculations from actual numbers and cannot be recalculated from the figures shown due to rounding differences. RAYMOND JAMES FINANCIAL
Core Business Total Revenue, Twelve Months Ended Sept. 30
Other Other 1% 0%
8 RAYMOND JAMES FINANCIAL
Core Business Pre-Tax Income, Twelve Months Ended Sept. 30
Other Other (17%) (11%)
9 RJF HIGHLIGHTS
Three Months Three Months Ended Ended December 2011 December 2010 Increase*
Total Revenues $799 million $830 million (4%)
Net Revenues $783 million $814 million (4%)
Net Income $67 million $82 million (18%)
Net Income Per Share (diluted) $0.53 $0.65 (18%)
As of Dec. 2011 As of Dec. 2010 Increase*
Shareholders’ Equity $2.6 billion $2.4 billion 10%
Market Capitalization $3.9 billion $4.1 billion (5%)
10 * Percentage change in this table reflects calculations from actual numbers and cannot be recalculated from the figures shown due to rounding differences. RAYMOND JAMES FINANCIAL Balance Sheet Highlights, as of December 31, 2011
Total Assets $18 billion
Total Shareholders’ Equity $2.6 billion
Shares Outstanding 125.8 million
Book Value Per Share $21.34
Leverage (Assets/Equity) 6.8x
Leverage Ex. RJ Bank 5.5x
Corporate Debt $607 million
11 RAYMOND JAMES FINANCIAL
Core Business Total Revenue, Three Months Ended Dec. 31
Other Other 0% 0%
12 RAYMOND JAMES FINANCIAL
Core Business Pre-Tax Income, Three Months Ended Dec. 31
Other Other (16%) (10%)
13 PRIVATE CLIENT GROUP TRENDS
1.9% CAGR 0% CAGR 5-year 2011 5-year 2011
14 PRIVATE CLIENT GROUP TRENDS
256
3.4% CAGR 2.8% CAGR 5-year 2011 5-year 2011
15 CAPITAL MARKETS TRENDS
5.6% CAGR 4.4% CAGR 5-year 2011 5-year 2011
16 ASSET MANAGEMENT GROUP TRENDS
-1.2% CAGR 1% CAGR 5-year 2011 5-year 2011
17 ASSET MANAGEMENT GROUP TRENDS
Assets Under Management: Fee-Based Billions
4.7% CAGR 5-year 2011
Assets as of Sep. 30 of each fiscal year. Eagle’s assets shown here include retail, institutional/sub-advised and long 18 mutual-fund programs, both managed and non-managed, but exclude the Eagle money-market funds. RAYMOND JAMES BANK TRENDS
0.1%CAGR 45.0% CAGR 7.4% CAGR 5-year 2011 5-year 2011 5-year 2011
* Includes $1.9 billion borrowed overnight for regulatory reasons; ** Includes $3.2 billion excess for regulatory 19 reasons; ***Includes $3.5 billion excess for regulatory reasons. RAYMOND JAMES FINANCIAL
Net Interest Earnings
20 RAYMOND JAMES FINANCIAL Transactional vs. Recurring Revenues
Recurring
Transactional
21 RAYMOND JAMES FINANCIAL
RJF Stock Price vs. Sector, Five-Year Change
22 RAYMOND JAMES FINANCIAL
Return on Equity
23 RAYMOND JAMES FINANCIAL Long-Term Stock Performance
$189,778 15.94% Rate of Return, Including Reinvested Dividends
$127,896 14.35% Rate of Return, Excluding Dividends
$41,898 9.96% S&P 500 Index Rate of Return, Including Reinvested Dividends*
*Performance of the S&P 500 was calculated by investing the equivalent amount needed to purchase 200 shares 24 of RJF stock on the IPO date of 7/1/1983, and then multiplying that amount by the close of the S&P 500 at the date of each fiscal year end or quarter end between 1984-2012. Dividends were reinvested quarterly. PAUL REILLY CEO, Raymond James Financial
25 UNDERWRITING COMPANIES – 1983 AND TODAY
Drexel Burnham Eppler, Guerin & Turner D A Davidson Dain Bosworth First of Michigan Davis Scaggs Bear Stearns Gruntal R G Dickinson First Boston Herzfeld Evans & Co AG Becker Paribas Howard, Weil, Labousse First Albany Blyth Eastman Paine Interstate Securities First Equity Webber Johnson Lane First Mid America Oppenheimer Johnston Lemon Furman Selz Alex Brown & Sons Josephthal Gintel Kidder Peabody Legg Mason Heaford & Company Lazard Feres Neward Cook Institutional Equity Merrill Lynch The Ohio Company Corp Prudential Bache Parker/Hunter Edward DJones Jones L F Rothschild Rauscher Pierce John G Kinnard Shearson Robinson Humphrey Laidlaw Adams Piper Jaffray Boenning & Scattergood Cyrus Lawrence Advest Rotan Mosle Manley, Bennet Banque de Paris Schneider, Bernet & McDonald AG Edwards Hickman Moore & Schley Ladenburg,Ladenburg,Thalmann Thalmann Sutro Capital Montgomery Underwood, Neuhaus Morgan Keegan Moseley, Hallgarten Wheat First Morgan Olmstead, Robertson, Colman & Allen & Company Kennedy Stephens Anderson Strudwick NeubergerNeuberger && BermanBerman Thomas McKinnon DH Blair WH Newbold’s and Tucker Anthony Burgess & Leith Son BaconStifel Stifel Nicolaus Nicolaus Carolina Securities Rodman & Renshaw Bateman Eicher Craig-Hallum Rooney, Pace Blunt Ellis Craigie Inc R. Rowland & Co Boettcher & Company JC Bradford Scherck, Stein & Cowen Butcher Franc Whitehead Woodman Kirpatrick Seidler Amdec & Singer Weinrich Zitzmann
26 CHANGING COMPETITIVE LANDSCAPE
BANK OF AMERICA THE BEAR STEARNS COS. INC. FIDELITY MERRILL LYNCH FIRST CHICAGO NBD CORP. PRUDENTIAL SECURITIES INC. CHARLES SCHWAB JP MORGAN & CHASE MIDLAND WALWYN INC. COUNTRYWIDE FINANCIAL CORP. TD AMERITRADE MORGAN STANLEY MARQUETTE FINANCIAL GROUP INC FIRST UNION-WACHOVIA CORP GOLDMAN SACHS COMMONWEALTH U.S. TRUST CORP. INTERSTATE/JOHNSON LANE INC. EDWARD JONES MERRILL LYNCH & CO. J.C. BRADFORD & CO. FLEETBOSTON FINANCIAL CORP. LPL AMERIPRISE CITIGROUP THE ADVEST GROUP INC. LINCOLN FINANCIAL THE BEACON GROUP LLC RBC BANK ONE CORP. H.D. VEST PIPER JAFFRAY COS. INC. PRIVATE RAGEN MACKENZIE GROUP INC. CLIENT BRANCH NETWORK BMO PAINEWEBBER GROUP INC. PIPER JAFFRAY UBS HAMBRECHT & QUIST GROUP EVERGREEN LAZARD KBW BANK OF AMERICA JEFFRIES STRONG FINANCIAL CORP STIFEL HARRIS WILLIAMS MOELIS HERZOG HEINE GEDULD INC. A.G. EDWARDS INC. J.P. MORGAN & CO. INC. COWEN VINING SPARKS GOLDEN WEST FINANCIAL CORP. RW BAIRD
27 VISION FOR GROWTH
THE PREMIER ALTERNATIVE TO WALL STREET WIREHOUSES
RJ INDEPENDENTS
REGIONALS
CUSTODIANS BOUTIQUES SCOPE AND SCALE OF SERVICES SCOPE AND SCALE
CULTURE: SERVICE/CLIENT ORIENTATION
28 MORGAN KEEGAN MERGER
Merger Rationale
1 Culture 2 Strategic Benefit 3 Ability to Integrate 4 Price
29 MERGER RATIONALE: STRONG CULTURAL FIT
1
30 MERGER RATIONALE: STRATEGIC BENEFIT
31 MERGER RATIONALE: STRATEGIC BENEFIT
Private Client Group: Assets Under Administration
Rank Firm AUA ($ bn) FAs Average/FA ($ mil) 1 Morgan Stanley Smith Barney $1,600 17,921 $89.28 2 Bank of America/Merrill Lynch GWM 1,539 17,817 $86.38 3 Wells Fargo & Co. 1,100 15,188 $72.43 4 UBS 724 6,913 $104.73 5 Edward Jones & Co. 557 12,314 $45.23 6Ameriprise 329 11,400 $28.86 7 LPL Financial 316 12,799 $24.69 8 RAYMOND JAMES 256 5,113 $50.07 9 RBC Wealth Management 174 2,029 $85.76 10 Stifel Nicolaus 108 1,961 $55.07 11 MORGAN KEEGAN 70 1,034 $67.70
Sources: Various company reports; company presentations; news releases; estimates Note: The definitions for AUA and FAs may be inconsistent across companies; rankings exclude RIA custodians but include independent B/Ds. 32 MERGER RATIONALE: STRATEGIC BENEFIT
Private Client Group: Assets Under Administration
Rank Firm AUA ($ bn) FAs Average/FA ($ mil) 1 Morgan Stanley Smith Barney $1,600 17,921 $89.28 2 Bank of America/Merrill Lynch GWM 1,539 17,817 $86.38 3 Wells Fargo & Co. 1,100 15,188 $72.43 4 UBS 724 6,913 $104.73 5 Edward Jones & Co. 557 12,314 $45.23 6Ameriprise 329 11,400 $28.86 7 RAYMOND JAMES + MORGAN 326 6,147 $53.03 KEEGAN 8 LPL Financial 316 12,799 $24.69 9 RBC Wealth Management 174 2,029 $85.76 10 Stifel Nicolaus 108 1,961 $55.07
Sources: Various company reports; company presentations; news releases; estimates Note: The definitions for AUA and FAs may be inconsistent across companies; rankings exclude RIA custodians but include independent B/Ds. 33 WHERE WE STAND
U.S. Capital Markets: Offering League Tables (1/1/11 to 12/31/11)*
*Ranked by number of deals. Includes US-based issuers’ IPOs, SECs, Units, and ADRs over $25m, excludes CEFs and 34 SPACs. WHERE WE STAND
U.S. Capital Markets: Offering League Tables (1/1/11 to 12/31/11)*
*Ranked by number of deals. Includes US-based issuers’ IPOs, SECs, Units, and ADRs over $25m, excludes CEFs and 35 SPACs. MERGER RATIONALE: STRATEGIC BENEFIT
Fixed Income: League of Top Municipal Underwriting Firms
Rank Firm Par Amount ($bn) Market Share (%) # of Issues 1 Citi 95.5 13.3 807 2 Bank of America Merrill Lynch 95.3 13.3 945 3 J P Morgan Securities LLC 86.0 12.0 815 4 Morgan Stanley 58.2 8.1 581 5 Barclays Capital 43.9 6.1 343 6 Goldman Sachs & Co 43.2 6.0 259 7 RBC Capital Markets 33.8 4.7 1,201 8 Wells Fargo & Co 27.4 3.8 589 9 Morgan Keegan & Co Inc 22.7 3.2 1,243 10 Stifel Nicolaus & Co Inc 18.2 2.5 1,100 11 Piper Jaffray & Co 14.9 2.1 1,088 12 Robert W Baird & Co Inc 14.5 2.0 1,538 13 Siebert Brandford Shank & Co 14.4 2.0 124 14 Jefferies & Company Inc 8.9 1.2 147 15 Loop Capital Markets 7.9 1.1 78 16 George K Baum & Company Inc 6.4 0.9 511 17 UBS Securities LLC 6.4 0.9 283 18 De La Rosa & Co 6.2 0.9 168 19 Raymond James & Associates Inc 6.1 0.8 340
Source: Thompson Reuters, 1/1/10 – 1/10/12 36 MERGER RATIONALE: STRATEGIC RATIONALE
Fixed Income: League of Top Municipal Underwriting Firms
Rank Firm Par Amount ($bn) Market Share (%) # of Issues 1 Citi 95.5 13.3 807 2 Bank of America Merrill Lynch 95.3 13.3 945 3 J P Morgan Securities LLC 86.0 12.0 815 4 Morgan Stanley 58.2 8.1 581 5 Barclays Capital 43.9 6.1 343 6 Goldman Sachs & Co 43.2 6.0 259 7 RBC Capital Markets 33.8 4.7 1,201 8 Raymond James & Morgan Keegan 28.8 4.0 1,583 9 Wells Fargo & Co 27.4 3.8 589 10 Stifel Nicolaus & Co Inc 18.2 2.5 1,100 11 Piper Jaffray & Co 14.9 2.1 1,088 12 Robert W Baird & Co Inc 14.5 2.0 1,538 13 Siebert Brandford Shank & Co 14.4 2.0 124 14 Jefferies & Company Inc 8.9 1.2 147 15 Loop Capital Markets 7.9 1.1 78
Source: Thompson Reuters, 1/1/10 – 1/10/12 37 MERGER RATIONALE: ABILITY TO INTEGRATE
38 MERGER RATIONALE: FINANCIALLY COMPELLING
39 VISION FOR GROWTH
THE PREMIER ALTERNATIVE TO WALL STREET WIREHOUSES
RJ + MK INDEPENDENTS
REGIONALS
CUSTODIANS BOUTIQUES SCOPE AND SCALE OF SERVICES SCOPE AND SCALE
CULTURE: SERVICE/CLIENT ORIENTATION
40 JEFF JULIEN CFO, Raymond James Financial
41 SUMMARY OF FINANCING PLAN
Estimated Sources and Uses
Sources: Debt issuance (estimated) $590 Equity $358 Internal cash $192 Total Sources $1,140
Uses: Purchase price $930 Transaction/integration charges* $70 Cash retention payment** $140 Total Uses $1,140
* Includes professional fees, severance and one-time contract termination fees in year one. $41 mm of cash transaction/integration expense estimated in FY 2013 for conversion, stay bonuses and contract terminations. 42 ** Estimated range of $130 mm to $150 mm. Cash retention applies to PCG (loan / bonus program with 5-7 year term); all other retention to be in the form of RSUs. EQUITY OFFERING SUMMARY
Issuer • Raymond James Financial, Inc. (NYSE: RJF)
Offering size • 10.5 million shares
Offering composition • 9.5 million primary shares • 1 million secondary shares
Over-allotment option • 1,575,000 additional shares sold by RJF exercised
Market cap • $4.4 billion (as of 2/10/12)
Joint bookrunners • J.P. Morgan, Citigroup, Raymond James
Pricing • Public Offering Price $34.00; Price to Company $32.385; $358 million net proceeds
Use of proceeds • Financing a portion of the $930 million purchase price of Morgan Keegan, in conjunction with the proceeds of an anticipated $600 million debt offering
43 LIQUIDITY ANALYSIS
RJF Cash Balance at 12/31/11 $468 Estimated increase in cash from activities 1/1/12 ‐ 3/31/12 73 Proceeds from equity offering 358 Estimated proceeds from debt offering 590 Estimated cash at 3/31/12, prior to closing of Morgan Keegan transaction 1,489 Estimated "Uses" of cash related to Morgan Keegan transaction (1,140) Estimated RJF cash balance post closing Morgan Keegan transaction $349
Other sources of liquidity for RJF Unsecured credit facilities $100 Anticipated secured line from Regions Financial 200
44 MORGAN KEEGAN SELECTED FINANCIAL DATA
As of and for the year As of and for the nine ended months ended December 30, 2010 September 30, 2011 ($mm) (audited) (unaudited) As reported: Assets $3,006 $3,414 Liabilities 1,694 1,936 Revenues 1,072 762 Pre-tax income (49) 66 Other selected items: Legal expenses and $253 $66 settlements ARS valuation adjustment - $12 Insurance reimbursement ($15) ($20) • As part of the transaction agreement, Raymond James will be indemnified for all claims relating to certain litigation matters1 • Morgan Keegan reported results include legal expenses and settlements referenced above and other items that are considered to be non-recurring
¹ Includes, but not limited to, claims related to the RMK funds, AREI, Fairfax, VRDN, Derivium Capital and 45 auction rate securities SUMMARY COMBINED METRICS
RJF RJF + MK 9/30/11 actuals estimates ($ mm) ($ mm) Balance Sheet Assets $18,007 $20,931 Liabilities 15,095 17,707 Long-Term Debt $612 $1,212 Equity 2,588 2,900 Tangible equity 2,516 2,598 Income Statement (1) Revenues $3,400 $4,212 +812 Pre-tax income 461 587 +126 EBITDA 535 679 +144 Interest Expense (2) 36 75 Leverage Ratios Debt / EBITDA 1.14x 1.79x Assets / Equity 6.96x 7.22x Debt / Total Capitalization 19% 30% EBITDA / Interest Expense 14.7x 9.0x
Note: Excludes non-controlling interests; RJF + MK pro forma includes assumptions primarily related to revenue retention/overlap, adjustments of non-recurring items, and margin adjustments. (1) Results are for fiscal year 2011 for RJF and nine months ended 46 September 30, 2011 (unaudited) for MK, annualized and adjusted (2) Assumes debt issued in 2011 was outstanding for entire fiscal year. Assumes $600mm of debt with average interest rate of 6.5% is outstanding for entire fiscal year 2012 BASIS OF PRESENTATION
For purposes of this presentation, please note:
We have used Raymond James Financial, Inc.'s audited fiscal year ended September 30, 2011 financial information
We have used preliminary, unaudited financial information for Morgan Keegan and MK Holding Inc. for the nine months ended September 30, 2011, which has not been audited by their auditors and may be subject to further changes and adjustments through the audit process in order to reflect adjustments required by GAAP or otherwise
We understand that Regions Financial has announced certain writedowns/impairment charges at the Morgan Keegan/MK Holding Inc. level. We understand audited financial information will be available in late February.
We have further adjusted the Morgan Keegan preliminary, unaudited financial information for Morgan Keegan to address non-recurring revenues and expenses, and, as a result, the presentation is not an S-X compliant pro forma presentation, but rather a presentation we believe illustrates the combined businesses.
Subsequently filed S-X compliant pro formas may differ from the pro forma information included herein.
47 REPORT OF VOTE
Paul L. Matecki General Counsel/Corporate Secretary, RJF
48 RJF SHAREHOLDERS’ MEETING February 23, 2012
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