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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 12, 2008
STIFEL FINANCIAL CORP.
Delaware |
1-9305 |
43-1273600 |
One Financial Plaza
501 North Broadway
St. Louis, Missouri 63102-2102
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code
(314) 342-2000
___________________________N/A___________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Page 1
Item 2.02 Results of Operations and Financial Condition.
On February 12, 2008, Stifel Financial Corp. announced its results for the three and year ended December 31, 2007. A copy of the related press release is attached hereto as Exhibit 99.1.
Stifel Financial Corp. will hold a conference call on Tuesday, February 12, 2008, at 1:00 p.m. Eastern. This call will be a web cast and slides can be accessed on the Investor Relations portion of the Stifel Financial Corp. website at www.stifel.com, as well as on all sites within Thomson/CCBN's Investor Distribution Network. To participate on the call, please dial 888-676-3684 and request the Stifel Financial Corp. earnings call.
The exhibit 99.1 is "furnished" pursuant to Item 2.02 "Results of Operations and Financial Condition," is not to be considered "filed" under the Securities Exchange Act of 1934, as amended, ("Exchange Act") and shall not be incorporated by reference into any filing by Stifel Financial Corp. under the Securities Act of 1933, as amended, ("Securities Act") or the Exchange Act.
Items 9.01 Financial Statements and Exhibits.
(c) Exhibits:
The following exhibit is "furnished" pursuant to Item 12 "Disclosure of Results of Operations and Financial Condition," is not to be considered "filed" under the Securities Exchange Act of 1934, as amended, ("Exchange Act") and shall not be incorporated by reference into any filing by Stifel Financial Corp. under the Securities Act of 1933, as amended, ("Securities Act") or the Exchange Act.
Exhibit 99.1: Stifel Financial Corp.'s press release dated February 12, 2008.
Exhibit 99.2: Stifel Financial Corp.'s Investor Presentation.
Page 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 12, 2008 |
STIFEL FINANCIAL CORP. By: /s/ James M. Zemlyak |
Name: James M. Zemlyak |
Page 3
Exhibit Index
Exhibit No. |
Description |
|
99.1 |
|
Stifel Financial Corp.'s press release dated February 12, 2008. |
99.2 |
Stifel Financial Corp.'s Investor Presentation. |
Page 4
STIFEL FINANCIAL CORP.
[Stifel Financial Corp. logo]
Stifel Financial NewsOne Financial Plaza | 501 North Broadway | St. Louis, MO 63102 |(314) 342-2000
For further information contact:
James M. Zemlyak, Chief Financial Officer
(314) 342-2228 zemlyakj@stifel.com
For Immediate Release
Stifel Financial Corp. Reports Record Fourth Quarter and Record Annual Results
Quarterly Revenue of $219.1 million, up 62%
Annual Revenue of $793.1 million up 68%
Record Quarterly and Annual Earnings and EPS
Twelfth Consecutive Year of Increased Net Revenues
St. Louis, Missouri - February 12, 2008 - Stifel Financial Corp. (NYSE: "SF") today reported unaudited quarterly net income of $13.8 million, or $0.77 per diluted share, on revenue of $219.1 million for the quarter ended December 31, 2007. For the comparable quarter of 2006, net income was $7.2 million, or $0.51 per diluted share, on revenue of $135.2 million. For the year ended December 31, 2007, we posted net income of $32.2 million, or $1.88 per diluted share, on revenue of $793.1 million, compared with $15.4 million, or $1.11 per diluted share, on revenue of $471.4 million, for the same period one year earlier.
At December 31, 2007, our equity was $424.6 million, resulting in book value per share of $27.54.
After adjusting for acquisition related charges, non-GAAP net income, our "Core earnings", and non-GAAP earnings per diluted share were $20.5 million and $1.14, respectively for the fourth quarter of 2007 compared to 2006 fourth quarter non-GAAP earnings of $11.8 million and non-GAAP earnings per diluted share of $0.84. For the year ended December 31, 2007, non-GAAP net income and non-GAAP earnings per diluted share, were $66.8 million and $3.90 per diluted share, respectively, compared to $39.6 million or $2.85 per diluted share for the year ended December 31, 2006. A reconciliation between our GAAP results and non-GAAP measures is included.
The 2007 fourth quarter and year to date GAAP and non-GAAP results includes an after tax gain of approximately $0.10 per diluted share for the extinguishment of $10.0 million of 6.78% Stifel Financial Capital Trust IV
Cumulative Trust Preferred Securities in December 2007. The 2006 year to date GAAP and non-GAAP results includes an after tax gain of approximately $0.16 per diluted share for the gain on the Company's New York Stock Exchange membership seat.
Stifel Financial Corp. |
||||||||
Summary of Results of Operations (Unaudited) |
||||||||
($ In Thousands, Except Per Share Amounts) |
||||||||
Three Months Ended |
Percent Change From |
Year Ended |
Change |
|||||
12/31/2007 |
9/30/2007 |
12/31/2006 |
9/30/2007 |
12/31/2006 |
12/31/2007 |
12/31/2006 |
Percent |
|
Total Revenues |
$ 219,122 |
$ 190,839 |
$ 135,205 |
15% |
62% |
$ 435,711 |
$ 231,364 |
88% |
Net Revenues |
$ 212,186 |
$ 182,983 |
$ 129,793 |
16% |
63% |
238,064 |
150,038 |
59% |
Non-GAAP Net Income (1) |
$ 20,491 |
$ 14,266 |
$ 11,849 |
44% |
73% |
64,867 |
53,570 |
21% |
Net Income |
$ 13,835 |
$ 8,058 |
$ 7,233 |
72% |
91% |
4,800 |
0 |
n/a |
Per Share Information |
||||||||
Three Months Ended |
Percent Change From |
Year Ended |
Change |
|||||
12/31/2007 |
9/30/2007 |
12/31/2006 |
9/30/2007 |
12/31/2006 |
12/31/2007 |
12/31/2006 |
Percent |
|
Non-GAAP Earnings Per Share: Diluted (1) |
$ 1.14 |
$ 0.80 |
$ 0.84 |
43% |
36% |
$ 3.90 |
$ 2.85 |
37% |
Earnings Per Share: Diluted |
$ 0.77 |
$ 0.45 |
$ 0.51 |
71% |
51% |
$ 1.88 |
$ 1.11 |
69% |
Weighed average common equivalent share Computations: Diluted shares |
18,022 |
17,877 |
14,057 |
1% |
28% |
17,149 |
13,909 |
23% |
(1) See "Reconciliation of Core Earnings" table |
Page 1
Business Highlights
Annual Highlights
Quarterly Highlights
Chairman and Chief Executive Officer, Ronald J. Kruszewski, commented, "Despite the well chronicled difficult environment for financial services companies, we recorded record quarterly and annual results. 2007 marked our 12th consecutive year of record net revenue and all of our business segments achieved record revenue for the year. Since 2002, through the end of 2007, Stifel Financial's share price has had a compound annual growth rate of 45% as compared to 13% for the S&P 500. The talent of our people and their focus on our clients were the primary drivers of these results. Looking forward, our Company is very well positioned to continue to deliver superior returns to our shareholders."
Page 2
Stifel Financial Corp. |
|||||||||
Summary of Results of Operations(Unaudited) |
|||||||||
($ In Thousands, Except Per Share Amounts) |
|||||||||
Three Months Ended |
Percent Change From |
||||||||
Net Revenues |
12/31/2007 |
% of Net revenue |
9/30/2007 |
% of Net revenue |
12/31/2006 |
% of Net revenue |
9/30/2007 |
12/31/2006 |
|
Commissions |
$ 90,584 |
42.7% |
$ 82,917 |
45.3% |
$ 54,245 |
41.8% |
9% |
67% |
|
Principal transactions |
47,670 |
22.5% |
31,711 |
17.3% |
22,515 |
17.3% |
50% |
112% |
|
Investment banking |
31,449 |
14.8% |
30,966 |
16.9% |
31,682 |
24.4% |
2% |
-1% |
|
Asset management and service fees |
29,592 |
13.9% |
27,108 |
14.8% |
15,416 |
11.9% |
9% |
92% |
|
Other |
4,127 |
2.0% |
2,165 |
1.3% |
1,287 |
1.0% |
91% |
221% |
|
|
203,422 |
95.9% |
174,867 |
95.6% |
125,145 |
96.4% |
16% |
63% |
|
Interest revenue |
15,700 |
7.4% |
15,972 |
8.7% |
10,060 |
7.8% |
-2% |
56% |
|
|
219,122 |
103.3% |
190,839 |
104.3% |
135,205 |
104.2% |
15% |
62% |
|
Less: Interest expense |
6,936 |
3.3% |
7,856 |
4.3% |
5,412 |
4.2% |
-12% |
28% |
|
|
212,186 |
100.0% |
182,983 |
100.0% |
129,793 |
100.0% |
16% |
63% |
|
Non-Interest Expenses |
|||||||||
Employee compensation and benefits |
141,758 |
66.8% |
126,652 |
69.2% |
91,158 |
70.2% |
12% |
56% |
|
Occupancy and equipment rental |
17,029 |
8.0% |
14,492 |
7.9% |
8,204 |
6.3% |
18% |
108% |
|
Communication and office supplies |
11,052 |
5.2% |
11,528 |
6.3% |
7,238 |
5.6% |
-4% |
53% |
|
Commissions and floor brokerage |
2,675 |
1.3% |
2,527 |
1.4% |
1,417 |
1.1% |
6% |
89% |
|
Other operating expenses |
16,579 |
7.8% |
14,512 |
7.9% |
9,404 |
7.3% |
14% |
76% |
|
|
189,093 |
89.1% |
169,711 |
92.7% |
117,421 |
90.5% |
11% |
61% |
|
Income before income taxes |
23,093 |
10.9% |
13,272 |
7.3% |
12,372 |
9.5% |
74% |
87% |
|
Provision for income taxes |
9,258 |
4.4% |
5,214 |
2.8% |
5,139 |
4.0% |
78% |
80% |
|
|
$ 13,835 |
6.5% |
$ 8,058 |
4.4% |
$ 7,233 |
5.6% |
72% |
91% |
|
Per Share information |
|||||||||
Earnings Per Share: |
|||||||||
|
$ 0.92 |
$ 0.54 |
$ 0.63 |
70% |
46% |
||||
|
$ 0.77 |
$ 0.45 |
$ 0.51 |
71% |
51% |
||||
Weighted average common equivalent shares: |
|||||||||
|
15,089 |
14,929 |
11,507 |
1% |
31% |
||||
|
18,022 |
17,877 |
14,057 |
1% |
28% |
||||
Statistical Information |
|||||||||
Stockholders' Equity (in thousands) |
$ 424,637 |
$ 406,646 |
$ 220,265 |
4% |
92% |
||||
Book Value Per Share |
$ 27.54 |
$ 27.12 |
$ 18.53 |
1% |
48% |
||||
Total Assets (in thousands) |
$ 1,489,534 |
$1,517,826 |
$ 1,084,774 |
-2% |
37% |
||||
Investment Executives |
966 |
959 |
556 |
1% |
74% |
||||
Full-Time Employees |
2,834 |
2,721 |
1,801 |
4% |
57% |
||||
Locations |
175 |
174 |
135 |
1% |
30% |
||||
Total Client Assets (in thousands) |
$ 59,299,000 |
$ 61,120,000 |
$35,446,000 |
-3% |
67% |
Years Ended |
||||||||||
Net Revenues |
12/31/2007 |
% of Net Revenues |
12/31/2006 |
% of Net Revenues |
% Change |
|||||
Commissions |
$ 315,514 |
41.3% |
$ 199,056 |
44.1% |
59% |
|||||
Principal transactions |
139,248 |
18.2% |
86,365 |
19.1% |
61% |
|||||
Investment banking |
169,413 |
22.2% |
82,856 |
18.3% |
104% |
|||||
Asset management and service fees |
101,610 |
13.3% |
57,713 |
12.8% |
76% |
|||||
Other |
8,234 |
1.2% |
9,594 |
2.1% |
-14% |
|||||
|
734,019 |
96.2% |
435,584 |
96.4% |
69% |
|||||
Interest revenue |
59,071 |
7.7% |
35,804 |
7.9% |
65% |
|||||
|
793,090 |
103.9% |
471,388 |
104.3% |
68% |
|||||
Less: Interest expense |
30,025 |
3.9% |
19,581 |
4.3% |
53% |
|||||
|
763,065 |
100.0% |
451,807 |
100.0% |
69% |
|||||
Non-Interest Expenses |
||||||||||
Employee compensation and benefits |
543,021 |
71.2% |
329,703 |
73.0% |
65% |
|||||
Occupancy and equipment rental |
57,796 |
7.6% |
30,751 |
6.8% |
88% |
|||||
Communication and office supplies |
42,355 |
5.5% |
26,666 |
5.9% |
59% |
|||||
Commissions and floor brokerage |
9,921 |
1.3% |
6,388 |
1.4% |
55% |
|||||
Other operating expenses |
56,126 |
7.3% |
31,930 |
7.1% |
76% |
|||||
|
709,219 |
92.9% |
425,438 |
94.2% |
67% |
|||||
Income before income taxes |
53,846 |
7.1% |
26,369 |
5.8% |
104% |
|||||
Provision for income taxes |
21,676 |
2.8% |
10,938 |
2.4% |
98% |
|||||
|
$ 32,170 |
4.2% |
$ 15,431 |
3.4% |
108% |
|||||
Per Share information |
||||||||||
|
12/31/2007 |
12/31/2006 |
% Change |
|||||||
Earnings Per Share: |
||||||||||
|
$ 2.22 |
$ 1.34 |
66% |
|||||||
|
$ 1.88 |
$ 1.11 |
69% |
|||||||
Weighted average common equivalent shares |
||||||||||
|
14,503 |
11,513 |
26% |
|||||||
|
17,149 |
13,909 |
23% |
Page 3
Stifel Financial Corp. |
||||||||
Summary of Segment Data & Statistical Information (Unaudited) |
||||||||
Segment Data ($ In Thousands) |
||||||||
Three Months Ended |
Percent Change From |
Year Ended |
Change |
|||||
Net Revenues |
12/31/2007 |
9/30/2007 |
12/31/2006 |
9/30/2007 |
12/31/2006 |
12/31/2007 |
12/31/2006 |
Percent |
Private Client |
$ 119,260 |
$ 112,650 |
$ 63,990 |
6% |
86% |
$ 435,711 |
$ 231,364 |
88% |
Equity capital markets |
59,421 |
47,703 |
44,152 |
25% |
35% |
238,064 |
150,038 |
59% |
Fixed income capital markets |
23,794 |
15,962 |
17,636 |
49% |
35% |
64,867 |
53,570 |
21% |
Banking |
1,871 |
1,839 |
0 |
2% |
n/a |
4,800 |
0 |
n/a |
Other |
7,840 |
4,829 |
4,015 |
62% |
95% |
19,623 |
16,835 |
17% |
|
$ 212,186 |
$ 182,983 |
$ 129,793 |
16% |
63% |
$ 763,065 |
$ 451,807 |
69% |
Operating Contribution |
||||||||
Private Client |
$ 27,484 |
$ 23,401 |
$ 14,118 |
17% |
95% |
$ 95,353 |
$ 50,218 |
90% |
Equity capital markets |
10,213 |
8,499 |
7,628 |
20% |
34% |
52,658 |
31,959 |
65% |
Fixed income capital markets |
4,785 |
2,133 |
4,745 |
124% |
1% |
8,191 |
10,620 |
-23% |
Banking |
347 |
369 |
0 |
-6% |
n/a |
990 |
0 |
n/a |
Other/unallocated overhead |
(19,736) |
(21,130) |
(14,119) |
n/a |
n/a |
(103,346) |
(66,428) |
n/a |
|
$ 23,093 |
$ 13,272 |
$ 12,372 |
74% |
87% |
$ 53,846 |
$ 26,369 |
104% |
Segment Data |
||||||||
Private Client Group Segment (in thousands) |
||||||||
Revenues: |
||||||||
Commissions and principal transactions |
$ 81,929 |
$ 71,766 |
$ 40,873 |
14% |
100% |
$ 281,350 |
$ 152,059 |
85% |
Investment banking |
4,705 |
10,068 |
5,815 |
-53% |
-19% |
40,071 |
13,294 |
201% |
Asset management and service fees |
29,578 |
26,833 |
15,407 |
10% |
92% |
101,128 |
57,657 |
75% |
Net interest & other |
3,048 |
3,983 |
1,895 |
-23% |
61% |
13,162 |
8,354 |
58% |
|
119,260 |
112,650 |
63,990 |
6% |
86% |
435,711 |
231,364 |
88% |
Non-interest expenses: |
||||||||
Employee compensation & benefits |
72,151 |
72,177 |
39,993 |
0% |
80% |
274,115 |
144,390 |
90% |
Other non-interest expenses |
19,625 |
17,072 |
9,879 |
15% |
99% |
66,243 |
36,756 |
80% |
|
91,776 |
89,249 |
49,872 |
3% |
84% |
340,358 |
181,146 |
88% |
|
$ 27,484 |
$ 23,401 |
$ 14,118 |
17% |
95% |
$ 95,353 |
$ 50,218 |
90% |
Ratios to Net Revenues |
||||||||
Employee compensation & benefits |
61% |
64% |
63% |
63% |
62% |
|||
Other non-interest expenses |
17% |
15% |
15% |
15% |
16% |
|||
Net Margins |
23% |
21% |
22% |
22% |
22% |
|||
Equity Capital Markets Segment (in thousands) |
||||||||
Revenues: |
||||||||
Commissions and principal transactions |
$ 35,100 |
$ 31,020 |
$ 24,237 |
13% |
45% |
$ 120,204 |
$ 91,547 |
31% |
|
7,850 |
7,641 |
12,342 |
3% |
-36% |
45,371 |
20,105 |
126% |
|
16,322 |
9,017 |
7,305 |
81% |
123% |
71,555 |
37,128 |
93% |
Investment banking |
24,172 |
16,658 |
19,647 |
45% |
23% |
116,926 |
57,233 |
104% |
Other |
149 |
25 |
268 |
496% |
-44% |
934 |
1,258 |
-26% |
|
59,421 |
47,703 |
44,152 |
25% |
35% |
238,064 |
150,038 |
59% |
Non-interest expenses: |
||||||||
Employee compensation & benefits |
38,099 |
28,235 |
27,750 |
35% |
37% |
143,718 |
87,840 |
64% |
Other non-interest expenses |
11,109 |
10,969 |
8,774 |
1% |
27% |
41,688 |
30,239 |
38% |
|
49,208 |
39,204 |
36,524 |
26% |
35% |
185,406 |
118,079 |
57% |
|
$ 10,213 |
$ 8,499 |
$ 7,628 |
20% |
34% |
$ 52,658 |
$ 31,959 |
65% |
Ratios to Net Revenues |
||||||||
Employee compensation & benefits |
64% |
59% |
63% |
60% |
59% |
|||
Other non-interest expenses |
19% |
23% |
20% |
18% |
20% |
|||
Net Margins |
17% |
18% |
17% |
22% |
21% |
|||
Fixed Income Capital Markets Segment (in thousands) |
||||||||
Revenues: |
||||||||
Commissions and principal transactions |
$ 21,225 |
$ 11,840 |
$ 11,652 |
79% |
82% |
$ 53,164 |
$ 41,816 |
27% |
Investment banking |
2,571 |
4,241 |
6,220 |
-39% |
-59% |
12,647 |
12,330 |
3% |
Other |
(2) |
(119) |
(236) |
N/A |
N/A |
(944) |
(576) |
N/A |
|
23,794 |
15,962 |
17,636 |
49% |
35% |
64,867 |
53,570 |
|
Non-interest expenses: |
||||||||
Employee compensation & benefits |
15,804 |
10,576 |
10,638 |
49% |
49% |
44,427 |
33,163 |
34% |
Other non-interest expenses |
3,205 |
3,253 |
2,253 |
-1% |
42% |
12,249 |
9,787 |
25% |
|
19,009 |
13,829 |
12,891 |
37% |
47% |
56,676 |
42,950 |
32% |
|
$ 4,785 |
$ 2,133 |
$ 4,745 |
124% |
1% |
$ 8,191 |
$ 10,620 |
-23% |
Ratios to Net Revenues |
||||||||
Employee compensation & benefits |
66% |
66% |
60% |
69% |
62% |
|||
Other non-interest expenses |
13% |
20% |
13% |
19% |
18% |
|||
Net Margins |
20% |
13% |
27% |
13% |
20% |
Page 4
Non-GAAP Financial Measures
Our management has utilized non-GAAP calculations of presented net revenues, compensation and benefits, operating expenses, income before income taxes, provision for income taxes, net income, compensation ratio, pre-tax margin and basic and diluted earnings per share that are adjusted in the manner presented below as an additional measure to aid in understanding and analyzing our financial results for the three months and year ended December 31, 2007. Specifically, our management believes that the non-GAAP measures provide useful information by excluding certain items that may not be indicative of our core operating results and business outlook. Our management believes that these non-GAAP measures will allow for a better evaluation of the operating performance of our business and facilitate meaningful comparison of our results in the current period to those in prior periods and future periods. Our reference to these non-GAAP measures should not be considered as a subst itute for results that are presented in a manner consistent with GAAP. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance. The non-GAAP amounts exclude net revenues, compensation expense, and operating expenses associated with the LM Capital Markets and Ryan Beck acquisitions, principally stock based awards offered to key associates of the LM Capital Markets in January 2006 and the acceleration of vesting of the Ryan Beck deferred compensation plans in June 2007.
A limitation of utilizing these non-GAAP measures of net revenues, compensation and benefits, operating expenses, income before income taxes, provision for income taxes, net income, compensation ratio, pre-tax margin and basic and diluted earnings per share is that the GAAP accounting effects of these events do in fact reflect the underlying financial results of our business and these effects should not be ignored in evaluating and analyzing our financial results. Therefore, management believes that both our GAAP measures of net revenues, compensation and benefits operating expenses, income before income taxes, income taxes, net income, compensation ratio, pre-tax margin and basic and diluted earnings per share and the same respective non-GAAP measures of our financial performance should be considered together.
We expect to grant stock based awards and other share-based compensation in the future. We do not expect to make such substantial grants to employees outside of our regular compensation and hiring process, as we did when we granted the restricted stock units in connection with our LM Capital Markets acquisition or conversion of the Ryan Beck deferred compensation plan and accelerated vesting of that plan.
The following provides details with respect to reconciling net revenues, compensation and benefits, operating expenses, income before income taxes, provision for income taxes, net income, compensation ratio, pre-tax margin and basic and diluted earnings per share on a GAAP basis for the three months and year ended December 31, 2007 to the aforementioned captions on a non-GAAP basis in the same respective period.
Page 5
Reconciliation of Core Earnings (Unaudited) |
||||||||||
($ In Thousands) |
||||||||||
Three Months Ended December 31, 2007 |
Three Months Ended December 31, 2006 |
|||||||||
GAAP |
Acquisition Related |
Core Business |
% of Revenue |
GAAP |
Acquisition Related |
Core Business |
% of Revenue |
|||
Revenue |
||||||||||
Net Revenue |
$212,186 |
($26) |
a |
$212,160 |
100% |
$129,793 |
$1 |
a |
$129,794 |
100% |
Non Interest Expenses |
||||||||||
Compensation and Benefits |
141,758 |
(8,740) |
b |
133,018 |
63% |
91,158 |
(7,439) |
b |
83,719 |
65% |
Operating Expenses |
47,335 |
(1,160) |
c |
46,175 |
22% |
26,263 |
(390) |
d |
25,873 |
20% |
Total non-interest expenses |
189,093 |
(9,900) |
179,193 |
85% |
117,421 |
(7,829) |
109,592 |
85% |
||
|
23,093 |
9,874 |
32,967 |
15% |
12,372 |
7,830 |
20,202 |
15% |
||
Provision for income taxes |
9,258 |
3,218 |
f |
12,476 |
6% |
5,139 |
3,214 |
f |
8,353 |
6% |
Net income |
$13,835 |
$6,656 |
g |
$20,491 |
9% |
$7,233 |
$4,616 |
g |
$11,849 |
9% |
Compensation Ratios (h) |
67% |
63% |
70% |
65% |
||||||
Annualized return on average equity (k) |
13% |
20% |
13% |
22% |
||||||
Pretax Margin (i) |
11% |
16% |
10% |
16% |
||||||
Earnings per share-Diluted (j) |
$0.77 |
$0.37 |
$1.14 |
$0.51 |
$0.33 |
$0.84 |
Year Ended December 31, 2007 |
Year Ended December 31, 2006 |
|||||||||
GAAP |
Acquisition Related |
Core Business |
% of Revenue |
GAAP |
Acquisition Related |
Core Business |
% of Revenue |
|||
Revenue |
||||||||||
Net Revenue |
$763,065 |
$304 |
a |
$763,369 |
100% |
$451,807 |
154 |
a |
$451,961 |
100% |
Non Interest Expenses |
||||||||||
Compensation and Benefits |
543,021 |
(49,113) |
e |
493,908 |
65% |
329,703 |
(39,760) |
b |
289,943 |
63% |
Operating Expenses |
166,198 |
(7,358) |
c |
158,840 |
21% |
95,735 |
(1,475) |
d |
94,260 |
22% |
Total non-interest expenses |
709,219 |
(56,471) |
652,748 |
86% |
425,438 |
(41,235) |
384,203 |
85% |
||
Income before income taxes |
53,846 |
56,775 |
110,621 |
14% |
26,369 |
41,389 |
67,758 |
15% |
||
Provision for income taxes |
21,676 |
22,157 |
f |
43,833 |
6% |
10,938 |
17,230 |
f |
28,168 |
6% |
Net income |
$32,170 |
$34,618 |
g |
$66,788 |
8% |
$15,431 |
$24,159 |
g |
$39,590 |
9% |
Compensation Ratios (h) |
71% |
65% |
73% |
64% |
||||||
Return on average equity (k) |
9% |
18% |
8% |
20% |
||||||
Pretax Margin (i) |
7% |
14% |
6% |
15% |
||||||
Earnings per share-Diluted (j) |
$1.88 |
$2.02 |
$3.90 |
$1.11 |
$1.74 |
$2.85 |
Page 6
Statement of Financial Condition
Total assets increased 37% to $1.5 billion from $1.1 billion at December 31, 2006, principally as a result recent acquisitions. Total stockholders' equity increased $204.4 million, or 93%, to $424.6 million. The increase in equity exceeded net income due to the amortization of stock-based awards and the acquisition of Ryan Beck and the resultant increase in net book value, partially offset by repurchase of common stock for treasury.
Conference Call Information
Stifel Financial Corp. will hold a conference call Tuesday, February 12, 2008, at 1:00 p.m. Eastern. This call will be Web cast and slides can be accessed on the Investor Relations portion of the Stifel Financial Corp. website at www.stifel.com well as on all sites within Thomson/CCBN's Investor Distribution Network. Questions may be posed to management by participants on the call, and in response the company may disclose additional material information. To participate in the question and answer portion on the call, please dial 888-676-3684 and request the Stifel Financial Corp. earnings call. The subjects to be covered may also contain forward-looking information.
Company Information
Stifel Financial Corp. operates 172 offices in 28 states and the District of Columbia through its principal subsidiary, Stifel Nicolaus and Company, Inc., and 3 European offices through Stifel Nicolaus Limited. Stifel Nicolaus provides securities brokerage, investment banking, trading, investment advisory, commercial and retail banking and related financial services to individual investors, professional money managers, businesses, and municipalities. To learn more about Stifel, please visit the Company's web site at www.stifel.com.
Forward-Looking Statements
This press 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 press release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this press 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 the acquired companies; a material adverse change in the financial condition,; the risk of borrower, depositor and other customer attrition; a change in general business and economic c onditions; 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 with the Securities and Exchange Commission. Forward-looking statements speak only as to the date they are made. Stifel does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Stifel disclaims any intent or obligation to update these forward-looking statements.
# # # # # #
Page 7
STIFEL FINANCIAL CORP. 2007 Fiscal Year -- 4th Quarter Earnings Conference Call February 12, 2008 |
Forward Statements This presentation may contain "forward-looking statements" that involve risks and uncertainties, including statements relating to the market opportunity and future business prospects of Stifel Financial Corp. and Stifel Nicolaus ("SF" or the "Company"). Actual results may differ materially and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ are included in the Company's Annual and Quarterly Reports and from time to time in other reports filed by the Company with the Securities and Exchange Commission. To supplement our financial statements presented in accordance with GAAP, the management uses certain non-GAAP measures of financial performance and liquidity. These non-GAAP measures are in addition to results prepared by the Company in accordance with GAAP, and should only be considered together with the Company's GAAP results. Certain statements in the following presentation relate to future results that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. |
Annual Highlights Record net revenue of $763.1 million, a 69% increase for 2007 as compared to 2006, making 2007 the twelfth consecutive year of record net revenues. Record GAAP net income of $32.2 million, or $1.88 per diluted share, a 108% increase for 2007 as compared to 2006. Book value per common share increased 49% to $27.54 in 2007. Record Core net income of $66.8 million, or $3.90 per diluted share, a 69% increase for the year as compared to 2006. Our Private Client Group ("PCG"), and Equity Capital Markets ("ECM"), achieved record revenue and profits for the year ended December 31, 2007. Our Fixed Income Capital Markets achieved record revenues in 2007, increasing 21%. Investment banking revenue increased 104% to $169.4 million. Asset management and service fees increased 76% to $101.6 million. For the year ended December 31, 2007, utilizing Core earnings, pretax margin was 14%. For the year ended December 31, 2007, utilizing Core earnings, return on average equity was 18%. |
4th Quarter Highlights Record net revenue of $212.2 million a 63% increase over the prior year fourth quarter and 16% from the third quarter. Record GAAP net income of $13.8 million, or $0.77 per diluted share, a 91% increase over the prior year fourth quarter and 72% from the third quarter. Record Core net income of $20.5 million, or $1.14 per diluted share, a 73% over the prior year fourth quarter and 44% increase from the third quarter. Commission and principal transactions increased $61.5 million, 80% over the previous year fourth quarter. Asset management and service fees increased 92% to $29.6 million as compared to the prior year fourth quarter. For the three months ended December 31, 2007, utilizing Core earnings, pretax margin was 16%. For the three months ended December 31, 2007, utilizing Core earnings, annualized return on average equity was 20%. |
Stifel Income Statements Core Revenues |
Stifel Income Statements |
Segment Comparison Excluding Acquisitions |
Private Client Group Income Statements |
Equity Capital Markets Income Statements |
Fixed Income Capital Markets Income Statements |
Reconciliation of GAAP to Core Earnings |
GAAP to Core Earnings |
Annual Income Statement Impact |
Quarterly Income Statement Impact |
Stifel Financial Balance Sheet Graphs |
Capital Structure |
Other Financial Data |
Questions and Answers |