REGULATORY CAPITAL REQUIREMENTS

RJF, as a financial holding company, RJ Bank, and our broker-dealer subsidiaries are subject to oversight by various regulatory authorities. Capital levels of each entity are monitored to assess the capital positions to ensure compliance with our various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial results.

Under capital adequacy guidelines, RJF and RJ Bank must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. RJF’s and RJ Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

RJF and RJ Bank report regulatory capital under Basel III under the standardized approach. Various aspects of the Basel III rules are subject to multi-year transition periods through December 31, 2018.

RJF and RJ Bank are required to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), Tier 1 capital to average assets (as defined), and under rules defined in Basel III, Common equity Tier 1 capital (“CET1”) to risk-weighted assets. RJF and RJ Bank each calculate these ratios in order to assess compliance with both regulatory requirements and their internal capital policies. Effective January 1, 2016, the minimum CET1, Tier 1 Capital, and Total Capital ratios of RJF and RJ Bank are supplemented by an incremental capital conservation buffer, consisting entirely of capital that qualifies as CET1, that phases in beginning on January 1, 2016 in increments of 0.625% per year until it reaches 2.5% of risk weighted assets on January 1, 2019. The capital conservation buffer is intended to be used to absorb potential losses in times of financial or economic stress. If not maintained, we could be limited in the amount of certain discretionary bonuses that may be paid and the amount of capital that may be distributed, including dividends and common equity repurchases. As of March 31, 2016, RJF’s and RJ Bank’s capital conservation buffers were 13.9% and 6.0%, respectively. The applicable required capital conservation buffer for each as of March 31, 2016 was 0.625%.

At current capital levels, RJF and RJ Bank are each categorized as “well capitalized.”

For further discussion of regulatory capital requirements applicable to certain of our businesses and subsidiaries, see Note 26 on pages 181 - 183 of our 2015 Form 10-K.

To meet requirements for capital adequacy purposes or to be categorized as “well capitalized,” RJF must maintain minimum Common equity Tier 1, Tier 1 risk-based, Total risk-based, and Tier 1 leverage amounts and ratios as set forth in the table below.



	Actual				Requirement for capital adequacy purposes				To be well capitalized under regulatory provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	($ in thousands)
RJF as of March 31, 2016:
Common equity Tier 1 capital	$	4,230,105	20.9	%	$	909,661	4.5	%	$	1,313,954	6.5	%
Tier 1 capital	$	4,230,105	20.9	%	$	1,212,881	6.0	%	$	1,617,174	8.0	%
Total capital	$	4,437,111	21.9	%	$	1,617,174	8.0	%	$	2,021,468	10.0	%
Tier 1 leverage	$	4,230,105	15.3	%	$	1,107,051	4.0	%	$	1,383,814	5.0	%

RJF as of September 30, 2015:
Common equity Tier 1 capital	$	4,101,353	22.1	%	$	834,677	4.5	%	$	1,205,644	6.5	%
Tier 1 capital	$	4,101,353	22.1	%	$	1,112,902	6.0	%	$	1,483,869	8.0	%
Total capital	$	4,290,431	23.1	%	$	1,483,869	8.0	%	$	1,854,837	10.0	%
Tier 1 leverage	$	4,101,353	16.1	%	$	1,018,859	4.0	%	$	1,273,574	5.0	%

The decrease in RJF’s Total capital and Tier 1 capital ratios at March 31, 2016 compared to September 30, 2015 was primarily the result of the significant growth of RJ Bank’s corporate loan portfolio, and the repurchase of our common stock in open market transactions.

To meet the requirements for capital adequacy or to be categorized as “well capitalized,” RJ Bank must maintain Common equity Tier 1, Tier 1 risk-based, Total risk-based, and Tier 1 leverage amounts and ratios as set forth in the table below.



	Actual				Requirement for capital adequacy purposes				To be well capitalized under regulatory provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	($ in thousands)
RJ Bank as of March 31, 2016:
Common equity Tier 1 capital	$	1,601,813	12.7	%	$	567,873	4.5	%	$	820,260	6.5	%
Tier 1 capital	$	1,601,813	12.7	%	$	757,163	6.0	%	$	1,009,551	8.0	%
Total capital	$	1,760,104	14.0	%	$	1,009,551	8.0	%	$	1,261,939	10.0	%
Tier 1 leverage	$	1,601,813	10.1	%	$	636,870	4.0	%	$	796,088	5.0	%

RJ Bank as of September 30, 2015:
Common equity Tier 1 capital	$	1,525,942	13.0	%	$	526,577	4.5	%	$	760,611	6.5	%
Tier 1 capital	$	1,525,942	13.0	%	$	702,103	6.0	%	$	936,137	8.0	%
Total capital	$	1,672,577	14.3	%	$	936,137	8.0	%	$	1,170,171	10.0	%
Tier 1 leverage	$	1,525,942	10.9	%	$	558,829	4.0	%	$	698,536	5.0	%

The slight decrease in RJ Bank’s Total and Tier 1 capital ratios at March 31, 2016 compared to September 30, 2015 was primarily due to significant growth in corporate loans.

Certain of our broker-dealer subsidiaries are subject to the requirements of the Uniform Net Capital Rule (Rule 15c3-1) under the Securities Exchange Act of 1934.

The net capital position of our wholly owned broker-dealer subsidiary RJ&A is as follows:



	As of
	March 31, 2016			September 30, 2015
	($ in thousands)
Raymond James & Associates, Inc.:
(Alternative Method elected)
Net capital as a percent of aggregate debit items	21.52		%	20.85		%
Net capital	$	383,995		$	411,222
Less: required net capital	(35,684		)	(39,452		)
Excess net capital	$	348,311		$	371,770

The net capital position of our wholly owned broker-dealer subsidiary RJFS is as follows:



	As of
	March 31, 2016			September 30, 2015
	(in thousands)
Raymond James Financial Services, Inc.:
(Alternative Method elected)
Net capital	$	24,783		$	25,828
Less: required net capital	(250		)	(250		)
Excess net capital	$	24,533		$	25,578

The risk adjusted capital of RJ Ltd. is as follows (in Canadian dollars):



	As of
	March 31, 2016			September 30, 2015
	(in thousands)
Raymond James Ltd.:
Risk adjusted capital before minimum	$	121,839		$	127,097
Less: required minimum capital	(250		)	(250		)
Risk adjusted capital	$	121,589		$	126,847

At March 31, 2016, all of our other active regulated domestic and international subsidiaries are in compliance with and met all capital requirements.