Stifel Reports Third Quarter 2013 Financial Results

Marketwired

ST. LOUIS, MO--(Marketwired - Nov 7, 2013) - Stifel Financial Corp. (NYSE: SF)

  • Net revenues of $478.6 million, increased 16% compared with the year-ago quarter.
  • Net income from continuing operations of $74.9 million, or $1.00 per diluted share.
  • Non-GAAP net income of $39.6 million, or $0.53 per diluted share.

Stifel Financial Corp. (NYSE: SF) today reported net income from continuing operations of $74.9 million, or $1.00 per diluted common share on net revenues of $478.6 million for the three months ended September 30, 2013, compared with net income of $37.4 million, or $0.60 per diluted share, on net revenues of $414.2 million for the third quarter of 2012. Included in net revenues for the three months ended September 30, 2012 is $25.6 million in realized and unrealized gains recognized on the Company's investment in Knight Capital Group, Inc. The after-tax impact of these gains was $0.09 per diluted share.

On August 21, 2013, the Company announced its intention to discontinue the business operations of its Canadian subsidiary, Stifel Nicolaus Canada, Inc. ("SN Canada"), which is expected to be completed by the end of the second quarter of 2014. The results of SN Canada, previously reported in the Institutional Group segment, are classified as discontinued operations for all periods presented. As a result of discontinuing the business operations of SN Canada during the current quarter, the Company recorded a U.S. tax benefit of $58.2 million.

For the three months ended September 30, 2013, the Company reported non-GAAP net income of $39.6 million, or $0.53 per diluted share. These non-GAAP results exclude merger-related expenses associated with the acquisitions of the Knight Capital Fixed Income business, KBW, and Miller Buckfire of $22.9 million (after-tax), and the tax benefit described above. A reconciliation of the Company's GAAP results to these non-GAAP measures is discussed below under "Non-GAAP Financial Measures."

   
Summary Results of Operations (Unaudited)  
    Three Months Ended     Nine Months Ended  
(in 000s)   9/30/13     9/30/12   % Change     6/30/13     % Change     9/30/13     9/30/12     % Change  
  Net revenues   $ 478,639     $ 414,157   15.6     $ 493,678     (3.0 )   $ 1,410,921     $ 1,182,830     19.3  
  Net income from continuing operations   $ 74,929     $ 37,434   100.2     $ 30,916     142.4     $ 120,782     $ 102,012     18.4  
  Net income   $ 69,690     $ 37,710   84.8     $ 29,435     136.8     $ 113,745     $ 98,619     15.3  
  Non-GAAP net income (1)   $ 39,649     $ 37,434   5.9     $ 45,133     (12.2 )   $ 124,840     $ 102,012     22.4  
Earnings per basic share:                                                        
  Income from continuing operations   $ 1.16     $ 0.70   65.7     $ 0.48     141.7     $ 1.91     $ 1.91     --  
  Loss from discontinued operations     (0.08 )     --   *       (0.02 )   300.0       (0.11 )     (0.07 )   57.1  
  Earnings per basic common share   $ 1.08     $ 0.70   54.3     $ 0.46     134.8     $ 1.80     $ 1.84     (2.2 )
  Non-GAAP diluted 1   $ 0.53     $ 0.60   (11.7 )   $ 0.70     (24.3 )   $ 1.71     $ 1.62     5.6  
Earnings per diluted share:                                                        
  Income from continuing operations   $ 1.00     $ 0.60   66.7     $ 0.42     138.1     $ 1.66     $ 1.62     2.5  
  Loss from discontinued operations     (0.07 )     --   *       (0.02 )   250.0       (0.10 )     (0.05 )   100.0  
  Earnings per diluted common share   $ 0.93     $ 0.60   55.0     $ 0.40     132.5     $ 1.56     $ 1.57     (0.6 )
  Non-GAAP diluted 1   $ 0.53     $ 0.60   (11.7 )   $ 0.61     (13.1 )   $ 1.71     $ 1.62     5.6  
Weighted average number of common shares outstanding:                                      
  Basic     64,706       53,601   20.7       64,505     0.3       63,133       53,471     18.1  
  Diluted     75,191       63,054   19.2       74,090     1.5       72,851       62,817     16.0  
                                                           
                                                           

Nine Months Results

  • Record net revenues of $1.41 billion, increased 19% compared with the year-ago period.
  • Net income from continuing operations of $120.8 million, or $1.66 per diluted share.
  • Non-GAAP net income of $124.8 million, or $1.71 per diluted share.

For the nine months ended September 30, 2013, the Company reported net income from continuing operations of $120.8 million, or $1.66 per diluted common share on record net revenues of $1.41 billion, compared with net income of $102.0 million, or $1.62 per diluted share, on net revenues of $1.18 billion for the comparable period in 2012. For the nine months ended September 30, 2013, the Company reported non-GAAP net income of $124.8 million, or $1.71 per diluted share. A reconciliation of the Company's GAAP results to these non-GAAP measures is discussed below under "Non-GAAP Financial Measures."

Chairman's Comments

Ronald J. Kruszewski, Chairman, President and CEO of Stifel said, "Despite the fact that the industry reflected muted client activity during the summer months, we are pleased with our third quarter results. Year over year, revenues are up 19% and core net income from continuing operations is up 18%, both reflecting the strength of our balanced business model."

Kruszewski continued, "We have had a very encouraging start to our 4th quarter. We remain focused on serving our clients and are well positioned to capitalize on the opportunities ahead."

Business Segment Results

 
Summary Segment Results (Unaudited)
    Three Months Ended     Nine Months Ended
(in 000s)   9/30/13     9/30/12     % Change     6/30/13     % Change     9/30/13     9/30/12     % Change
Net revenues:                                                        
  Global Wealth Management   $ 274,669     $ 250,914     9.5     $ 282,717     (2.8 )   $ 824,344     $ 737,822     11.7
  Institutional Group     205,132       164,611     24.6       215,443     (4.7 )     593,875       443,961     33.8
  Other     (1,162 )     (1,368 )   (15.1 )     (4,482 )   (74.1 )     (7,298 )     1,047     *
    $ 478,639     $ 414,157     15.6     $ 493,678     (3.0 )   $ 1,410,921     $ 1,182,830     19.3
Operating contribution: (2)                                                        
  Global Wealth Management   $ 72,128     $ 68,020     6.0     $ 78,924     (8.6 )   $ 220,551     $ 197,933     11.4
  Institutional Group     34,986       33,201     5.4       31,082     12.6       94,298       79,809     18.2
  Other     (41,669 )     (40,047 )   4.1       (34,784 )   19.8       (110,192 )     (108,346 )   1.7
    $ 65,443     $ 61,174     7.0     $ 75,222     (13.0 )   $ 204,657     $ 169,396     20.8
                                                         
* Percentage not meaningful.
 
 

Global Wealth Management

For the quarter ended September 30, 2013, the Global Wealth Management ("GWM") segment generated pre-tax operating income of $72.1 million, compared with $68.0 million in the third quarter of 2012 and $78.9 million in the second quarter of 2013. Net revenues for the quarter were $274.7 million, compared with $250.9 million in the third quarter of 2012, and $282.7 million in the second quarter of 2013. The increase in net revenues from the third quarter of 2012 is primarily attributable to (1) an increase in commission revenues; (2) growth in asset management and service fees; and (3) increased net interest revenues.

  • The Private Client Group reported net revenues of $248.5 million, a 9% increase compared with the third quarter of 2012 and a 3% decrease compared with the second quarter of 2013.
  • Stifel Bank reported net revenues of $26.1 million, a 17% increase compared with the third quarter of 2012 and a 3% increase compared with the second quarter of 2013.

Institutional Group

For the quarter ended September 30, 2013, the Institutional Group segment generated pre-tax operating income of $35.0 million, compared with $33.2 million in the third quarter of 2012 and $31.1 million in the second quarter of 2013. Net revenues for the quarter were $205.1 million, compared with $164.6 million in the third quarter of 2012 and $215.4 million in the second quarter of 2013. The increase in net revenues from the third quarter of 2012 was primarily attributable to (1) an increase in equity capital raising revenues; (2) an increase in advisory fees; and (3) higher institutional brokerage revenues, offset by a reduction in other revenues as a result of gains recorded on our investment in Knight Capital during the third quarter of 2012.

The decrease in net revenues from the second quarter of 2013 was primarily attributable to (1) a decline in capital raising revenues; and (2) a decrease in equity institutional brokerage revenues, offset by (1) higher fixed income institutional brokerage revenues. Net revenue growth, on a year-over-year basis, is attributable to the acquisitions of KBW and the Knight Capital Fixed Income business and, to a lesser extent, Miller Buckfire.

Institutional brokerage revenues were $110.3 million, a 37% increase compared with the third quarter of 2012 and a 5% increase compared with the second quarter of 2013.

  • Equity brokerage revenues were $58.7 million, a 68% increase compared with the third quarter of 2012 and an 8% decrease compared with the second quarter of 2013.
  • Fixed income brokerage revenues were $51.7 million, a 13% increase compared with the third quarter of 2012 and a 26% increase compared with the second quarter of 2013.

Investment banking revenues were $83.5 million, a 43% increase compared with the third quarter of 2012 and a 19% decrease compared with the second quarter of 2013.

  • Equity capital raising revenues were $30.7 million, an 88% increase compared with the third quarter of 2012 and a 26% decrease compared with the second quarter of 2013.
  • Fixed income capital raising revenues were $13.5 million, a 9% decrease compared with the third quarter of 2012 and a 5% decrease compared with the second quarter of 2013.
  • Advisory fee revenues were $39.2 million, a 44% increase compared with the third quarter of 2012 and an 18% decrease compared with the second quarter of 2013.

Consolidated Compensation and Benefits Expenses

For the quarter ended September 30, 2013, compensation and benefits expenses were $326.0 million, which included merger-related expenses of $28.6 million, compared with $264.5 million in the third quarter of 2012 and $317.2 million in the second quarter of 2013, which included merger-related expenses of $6.0 million.

Excluding merger-related expenses, compensation and benefits as a percentage of net revenues was 62.0% in the third quarter of 2013, compared with 63.8% in the third quarter of 2012 and 63.0% in the second quarter of 2013. Transition pay, which primarily consists of amortization of upfront notes, signing bonuses and retention awards, as a percentage of net revenues was 4.6% in the second quarter of 2013, compared with 4.3% in the third quarter of 2012 and 4.2% in the second quarter of 2013.

Consolidated Non-Compensation Operating Expenses

For the quarter ended September 30, 2013, non-compensation operating expenses were $121.6 million, which included $4.8 million of merger-related expenses, compared with $88.5 million in the third quarter of 2012 and $123.9 million in the second quarter of 2013, which included $15.0 million in merger-related expenses.

Excluding merger-related expenses, non-compensation operating expenses as a percentage of net revenues for the quarter ended September 30, 2013 was 24.4%, compared with 21.4% in the third quarter of 2012 and 22.2% in the second quarter of 2013.

Provision for Income Taxes

As a result of discontinuing the business operations of SN Canada during the current quarter, the Company recorded a $58.2 million U.S. tax benefit arising out of its investment in SN Canada, primarily resulting from a non-deductible impairment charge on this investment during the third quarter of 2008.

Assets and Capital

Assets

  • Assets increased 42% to $8.7 billion as of September 30, 2013 from $6.1 billion as of September 30, 2012. The increase is primarily attributable to growth of Stifel Bank, the Company's bank subsidiary, which as of September 30, 2013 has grown its assets to $4.5 billion from $3.2 billion as of September 30, 2012.
  • At September 30, 2013, the Company's Level 3 assets of $252.3 million, or 3% of total assets, consisted of $144.4 million of auction rate securities and $107.9 million of private equity, municipal securities, and other fixed income securities. The Company's Level 3 assets as a percentage of total assets measured at fair value was 10% at September 30, 2013.
  • Non-performing assets as a percentage of total assets as of September 30, 2013 was 0.17%.
  • LTM net charge-offs of $0.4 million.

Capital

  • The Company's Tier 1 leverage capital ratio was 14.8% at September 30, 2013 and Tier 1 risk-based capital ratio was 23.2% at September 30, 2013.
  • At September 30, 2013, book value per common share was $31.46 based on approximately 63.4 million shares outstanding.
  • Stockholders' equity as of September 30, 2013 increased $467.3 million, or 40%, to $2.0 billion from $1.4 billion as of September 30, 2012.

Non-GAAP Financial Measures

The Company utilized non-GAAP calculations of presented net revenues, compensation and benefits, non-compensation operating expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expense ratios, pre-tax margin and diluted earnings per share as additional measures to aid in understanding and analyzing the Company's financial results for the three and nine months ended September 30, 2013. Specifically, the Company believes that the non-GAAP measures provide useful information by excluding certain items that may not be indicative of the Company's core operating results and business outlook. The Company believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate a meaningful comparison of the Company's results in the current period to those in prior and future periods. Reference to these non-GAAP measures should not be considered as a substitute for results that are presented in a manner consistent with GAAP. These non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance. These non-GAAP amounts exclude compensation expense related to the granting of stock awards with no continuing service requirement issued as retention as part of the acquisitions of the Knight Capital Fixed Income business and KBW and certain compensation and non-compensation operating expenses associated with the acquisitions of KBW, Miller Buckfire, the Knight Capital Fixed Income business, and the U.S. tax benefit arising out of the Company's investment in SN Canada.

A limitation of utilizing these non-GAAP measures of net revenues, compensation and benefits, non-compensation operating expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expenses ratios, pre-tax margin and diluted earnings per share is that the GAAP accounting effects of these merger-related charges do in fact reflect the underlying financial results of the Company's business and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that GAAP measures of net revenues, compensation and benefits, non-compensation operating expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expense ratios, pre-tax margin and diluted earnings per share and the same respective non-GAAP measures of the Company's financial performance should be considered together.

The following table provides details with respect to reconciling net revenues, compensation and benefits, non-compensation operating expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expense ratios, pre-tax margin and diluted earnings per share on a GAAP basis for the three and nine months ended September 30, 2013 to the aforementioned expenses on a non-GAAP basis for the same period.

             
    Three Months Ended September 30, 2013     Nine Months Ended September 30, 2013  
(in 000s, except per share amounts)   Non-GAAP   Non-Core     GAAP     Non-GAAP   Non-Core     GAAP  
Net revenues   $ 479,634   $ (995 )   $ 478,639     $ 1,413,660   $ (2,739 )   $ 1,410,921  
                                             
Non-interest expenses:                                            
  Compensation and benefits     297,374     28,646       326,020       889,728     68,451       958,179  
  Non-compensation operating expenses     116,817     4,795       121,611       319,275     26,226       345,501  
    Total non-interest expenses     414,191     33,441       447,631       1,209,003     94,677       1,303,680  
  Income from continuing operations before income taxes     65,443     (34,436 )     31,008       204,657     (97,416 )     107,241  
  Provision for income taxes     25,795     (69,716 )     (43,921 )     79,817     (93,358 )     (13,541 )
  Net income from continuing operations   $ 39,649   $ 35,280     $ 74,929     $ 124,840   $ (4,058 )   $ 120,782  
                                             
Earnings per share:                                            
  Basic   $ 0.61   $ 0.55     $ 1.16     $ 1.98   $ (0.06 )   $ 1.91  
  Diluted   $ 0.53   $ 0.47     $ 1.00     $ 1.71   $ (0.05 )   $ 1.66  
                                             
As a percentage of net revenues:                                            
  Compensation and benefits     62.0             68.1       62.9             67.9  
  Non-compensation operating expenses     24.4             25.4       22.6             24.5  
  Income before income taxes     13.6             6.5       14.5             7.6  
                                             
                                             

Conference Call Information

Stifel Financial Corp. will host its third quarter 2013 financial results conference call on Thursday, November 7, 2013, at 5:00 p.m. Eastern time. The conference call may include forward-looking statements.

All interested parties are invited to listen to Stifel's Chairman, President, and CEO, Ronald J. Kruszewski, by dialing (888) 676-3684 and referencing conference ID #95677827. A live audio webcast of the call, as well as a presentation highlighting the Company's results, will be available through the Company's web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.

Company Information

Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel clients are served through Stifel, Nicolaus & Company, Incorporated in the U.S., through Stifel Nicolaus Europe Limited in the United Kingdom and Europe, and through Keefe, Bruyette & Woods, Inc. in the U.S. and Europe. The Company's broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank & Trust offers a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. offers trust and related services. To learn more about Stifel, please visit the Company's web site at www.stifel.com.

Forward-Looking Statements

This earnings release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this earnings release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this earnings release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to successfully integrate acquired companies or the branch offices and financial advisors; a material adverse change in financial condition; the risk of borrower, depositor, and other customer attrition; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies' operations, pricing, and services; and other risk factors referred to from time to time in filings made by Stifel Financial Corp. with the Securities and Exchange Commission. Forward-looking statements speak only as to the date they are made. Stifel Financial Corp. disclaims any intent or obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

   
Summary Results of Operations (Unaudited)  
    Three Months Ended     Nine Months Ended  
(in thousands, except per share amounts)   9/30/13     9/30/12   % Change     6/30/13     % Change     9/30/13     9/30/12     % Change  
Revenues:                                                        
  Commissions   $ 145,837     $ 125,509   16.2     $ 154,795     (5.8 )   $ 446,498     $ 370,107     20.6  
  Principal transactions     122,583       102,474   19.6       111,306     10.1       341,153       311,420     9.5  
  Investment banking     92,851       71,743   29.4       119,443     (22.3 )     289,199       208,342     38.8  
  Asset management and service fees     76,710       62,881   22.0       76,088     0.8       221,711       189,010     17.3  
  Other income     13,063       31,094   (58.0 )     11,787     10.8       45,269       49,991     (9.4 )
    Operating revenues     451,044       393,701   14.6       473,419     (4.7 )     1,343,830       1,128,870     19.0  
  Interest revenue     39,130       26,360   48.4       32,893     19.0       101,829       78,728     29.3  
    Total revenues     490,174       420,061   16.7       506,312     (3.2 )     1,445,659       1,207,598     19.7  
  Interest expense     11,535       5,904   95.4       12,634     (8.7 )     34,738       24,768     40.3  
    Net revenues     478,639       414,157   15.6       493,678     (3.0 )     1,410,921       1,182,830     19.3  
                                                         
Non-interest expenses:                                                        
  Compensation and benefits     326,020       264,458   23.3       317,247     2.8       958,179       751,992     27.4  
  Occupancy and equipment rental     41,288       32,596   26.7       41,282     --       116,090       94,776     22.5  
  Communications and office supplies     26,122       19,561   33.5       25,456     2.6       74,034       60,115     23.2  
  Commission and floor brokerage     10,150       7,842   29.4       9,790     3.7       28,777       22,339     28.8  
  Other operating expenses     44,051       28,526   54.4       47,328     (1.8 )     126,600       84,212     50.3  
    Total non-interest expenses     447,631       352,983   26.8       441,103     1.5       1,303,680       1,013,434     28.6  
                                                         
Income from continuing operations before income taxes     31,008       61,174   (49.3 )     52,575     (41.0 )     107,241       169,396     (36.7 )
  Provision for income taxes     (43,921 )     23,740   *       21,659     *       (13,541 )     67,384     *  
Net income from continuing operations     74,929       37,434   100.2       30,916     142.4       120,782       102,012     18.4  
                                                         
Discontinued operations:                                                        
  Income/(loss) from discontinued operations, net of tax     (5,239 )     276   *       (1,481 )   253.7       (7,037 )     (3,393 )   107.4  
Net income   $ 69,690     $ 37,710   84.8     $ 29,435     136.8     $ 113,745     $ 98,619     15.3  
                                                         
Earnings per basic common share:                                                        
  Income from continuing operations   $ 1.16     $ 0.70   65.7     $ 0.48     141.7     $ 1.91     $ 1.91     --  
  Income/(loss) from discontinued operations     (0.08 )     --   *       (0.02 )   300.0       (0.11 )     (0.07 )   57.1  
  Earnings per basic common share   $ 1.08     $ 0.70   54.3     $ 0.46     134.8     $ 1.80     $ 1.84     (2.2 )
                                                         
Earnings per diluted common share:                                                        
  Income from continuing operations   $ 1.00     $ 0.60   66.7     $ 0.42     138.1     $ 1.66     $ 1.62     2.5  
  Income/(loss) from discontinued operations     (0.07 )     --   *       (0.02 )   250.0       (0.10 )     (0.05 )   100.0  
  Earnings per diluted common share   $ 0.93     $ 0.60   55.0     $ 0.40     132.5     $ 1.56     $ 1.57     (0.6 )
                                                         
Weighted average number of common shares outstanding:                                                        
  Basic     64,706       53,601   20.7       64,505     0.3       63,133       53,471     18.1  
  Diluted     75,191       63,054   19.2       74,090     1.5       72,851       62,817     16.0  
                                                         
* Percentage not meaningful.  
   
   
 
(in thousands, except per share, employee and location amounts)
    9/30/13   9/30/12   % Change   6/30/13   % Change
Statistical Information:                            
  Book value per share   $ 31.46   $ 26.62   18.2   $ 30.05   4.7  
  Financial advisors (3)     2,075     2,042   1.6     2,069   0.3  
  Full-time associates     5,780     5,266   9.8     5,759   0.4  
  Locations     355     338   5.0     357   (0.6 )
  Total client assets   $ 153,901,000   $ 136,015,000   13.2   $ 150,628,000   2.2  
                               
                               
   
Global Wealth Management Summary Results of Operations (Unaudited)  
    Three Months Ended     Nine Months Ended  
(in 000s)   9/30/13   9/30/12   % Change     6/30/13   % Change     9/30/13   9/30/12   % Change  
Revenues:                                                
  Commissions   $ 99,427   $ 89,390   11.2     $ 104,576   (4.9 )   $ 306,089   $ 268,827   13.9  
  Principal transactions     58,658     58,027   1.1       56,313   4.2       171,278     171,466   (0.1 )
  Asset management and service fees     76,667     62,871   21.9       75,976   0.9       221,577     188,626   17.5  
  Net interest     27,665     22,277   24.5       24,505   12.9       73,657     58,146   26.7  
  Investment banking     9,394     13,315   (29.4 )     15,334   (38.7 )     35,832     34,101   5.1  
  Other income     2,858     5,034   (43.2 )     6,013   (52.5 )     15,911     16,656   (4.5 )
    Net revenues     274,669     250,914   9.5       282,717   (2.8 )     824,344     737,822   11.7  
Non-interest expenses:                                                
  Compensation and benefits     159,949     146,452   9.2       163,156   (2.0 )     480,701     430,432   11.7  
  Non-compensation operating expenses     42,592     36,442   16.9       40,637   4.8       123,092     109,457   12.5  
    Total non-interest expenses     202,541     182,894   10.7       203,793   (0.6 )     603,793     539,889   11.8  
Income before income taxes   $ 72,128   $ 68,020   6.0     $ 78,924   (8.6 )   $ 220,551   $ 197,933   11.4  
                                                 
As a percentage of net revenues:                                                
  Compensation and benefits     58.2     58.4           57.7           58.3     58.3      
  Non-compensation operating expenses     15.5     14.5           14.4           14.9     14.9      
  Income before income taxes     26.3     27.1           27.9           26.8     26.8      
                                                   
                                                   
                                     
                                     
Stifel Bank & Trust (Unaudited)  
Key Statistical Information  
(in 000s, except percentages)   9/30/13     9/30/12     % Change     6/30/13     % Change  
Other information:                                    
  Assets   $ 4,547,071     $ 3,228,021     40.9     $ 4,306,447     5.6  
  Investment securities     2,949,080       2,128,752     38.5       2,956,073     (0.2 )
  Retained loans, net     1,061,313       746,120     42.2       983,788     7.9  
  Loans held for sale     75,440       209,358     (64.0 )     152,246     (50.4 )
  Deposits     4,228,405       2,923,671     44.6       4,007,050     5.5  
                                     
  Allowance as a percentage of loans     1.23 %     0.85 %           1.10 %      
  Non-performing assets as a percentage of total assets     0.32 %     0.07 %           0.03 %      
                                     
                                     
                                     
 
Institutional Group Summary Results of Operations (Unaudited)
    Three Months Ended     Nine Months Ended
(in 000s)   9/30/13   9/30/12   % Change     6/30/13   % Change     9/30/13   9/30/12   % Change
Revenues:                                              
  Commissions   $ 46,410   $ 36,119   28.5     $ 50,218   (7.2 )   $ 140,409   $ 101,280   38.6
  Principal transactions     63,925     44,447   43.8       54,966   16.2       169,875     139,954   21.4
                                               
  Capital raising     44,270     31,247   41.7       56,431   (21.6 )     139,420     105,339   32.5
  Advisory fees     39,186     27,180   44.2       47,705   (17.9 )     113,947     68,902   65.4
  Investment banking     83,456     58,427   42.8       104,136   (19.9 )     253,367     174,241   45.5
  Other (4)     11,341     25,618   (55.7 )     6,123   85.2       30,224     28,486   6.1
    Net revenues     205,132     164,611   24.6       215,443   (4.8 )     593,875     443,961   33.8
Non-interest expenses:                                              
  Compensation and benefits     119,874     102,148   17.4       132,396   (9.5 )     359,091     275,159   30.5
  Non-compensation operating expenses     50,272     29,262   71.8       51,965   (3.3 )     140,486     88,993   57.9
    Total non-interest expenses     170,146     131,410   29.5       184,361   (7.7 )     499,577     364,152   37.2
Income before income taxes   $ 34,986   $ 33,201   5.4     $ 31,082   12.6     $ 94,298   $ 79,809   18.2
                                               
As a percentage of net revenues:                                              
  Compensation and benefits     58.4     62.1           61.5           60.5     62.0    
  Non-compensation operating expenses     24.5     17.8           24.1           23.6     20.0    
  Income before income taxes     17.1     20.1           14.4           15.9     18.0    
                                                 
                                                 
 
Institutional Group Brokerage & Investment Banking Revenues (Unaudited)
    Three Months Ended     Nine Months Ended
(in 000s)   9/30/13   9/30/12   % Change     6/30/13   % Change     9/30/13   9/30/12   % Change
Institutional brokerage:                                              
  Equity   $ 58,677   $ 34,994   67.7     $ 64,245   (8.7 )   $ 172,187   $ 112,648   52.9
  Fixed income     51,658     45,572   13.4       40,939   26.2       138,097     128,586   7.4
Institutional brokerage     110,335     80,566   36.9       105,184   4.9       310,284     241,234   28.6
                                               
Investment banking:                                              
  Capital raising:                                              
    Equity     30,739     16,357   87.9       42,258   (27.3 )     96,001     64,780   48.2
    Fixed income     13,531     14,890   (9.1 )     14,173   (4.5 )     43,419     40,469   7.3
      Capital raising     44,270     31,247   41.7       56,431   (21.6 )     139,420     105,339   32.5
  Advisory fees:     39,186     27,180   44.2       47,705   (17.9 )     113,947     68,902   65.4
Investment banking   $ 83,456   $ 58,427   42.8     $ 104,136   (19.9 )   $ 253,367   $ 174,241   45.5
                                               
                                               
                                               

(1) A reconciliation of the Company's GAAP results to these non-GAAP measures is discussed under "Non-GAAP Financial Measures."

* Percentage not meaningful.

(2) A reconciliation of the Company's GAAP results to these non-GAAP measures is discussed under "Non-GAAP Financial Measures."

(3) Includes 145, 154 and 145 independent contractors at September 30, 2013 and 2012 and June 30, 2013, respectively.

(4) Includes net interest and other income.

Contact:
Investor Relations
James M. Zemlyak
(314) 342-2000
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