EX-99.1 2 sf-ex991_6.htm EX-99.1 sf-ex991_6.htm

Exhibit 99.1

 

October 30, 2019

FOR IMMEDIATE RELEASE

Media Contact:  Neil Shapiro (212) 271-3447

Investor Contact:  Joel Jeffrey  (212) 271-3610

www.stifel.com/investor-relations

 

STIFEL REPORTS THIRD QUARTER 2019 FINANCIAL RESULTS

 

•

Record net revenues of $821.6 million, increased 11.3% compared with the year-ago quarter.

 

•

Record net revenues in Global Wealth Management.

 

•

Net income available to common shareholders of $104.6 million, or $1.34 per diluted common share.

 

•

Non-GAAP net income available to common shareholders of $117.1 million, or $1.50 per diluted common share.

 

•

Record client assets of $311.8 billion, increased 7.8% compared with the year-ago quarter.

 

•

Non-GAAP return on tangible common equity of 24.2%.

 

•

Repurchased approximately 1.0 million shares of the Company’s common stock at an average price of $55.43.

ST. LOUIS, MO – Stifel Financial Corp. (NYSE: SF) today reported net income available to common shareholders of $104.6 million, or $1.34 per diluted common share on record net revenues of $821.6 million for the three months ended September 30, 2019, compared with net income available to common shareholders of $101.5 million, or $1.25 per diluted common share, on net revenues of $738.3 million for the third quarter of 2018.

For the three months ended September 30, 2019, the Company reported non-GAAP net income available to common shareholders of $117.1 million, or $1.50 per diluted common share. The Company’s reported GAAP net income for the three months ended September 30, 2019 was primarily impacted by merger-related expenses. Details discussed below and in the “Non-GAAP Financial Matters” section.

Chairman’s Comments

“I am pleased with our performance in the third quarter. We generated record net revenue of $822 million, a pre-tax margin greater than 20%, and return on tangible common equity of more than 24%. Our record results and the growth in the business validate of our long-term strategy to build a diversified financial services firm that can consistently generate strong performance in various market conditions. This was illustrated by our record wealth management revenue and our second strongest institutional revenues in our history despite less than optimal market conditions. As I look forward, I am optimistic about our business as the investments we’ve made in our firm will continue to drive revenue growth,” stated Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel.

 

Financial Highlights (Unaudited)

 

Three Months Ended

 

($ in 000s, except per share data)

 

GAAP 9/30/19

 

 

GAAP 9/30/18

 

 

% Change

 

 

GAAP 6/30/19

 

 

% Change

 

 

 

Non-GAAP (1) 9/30/19

 

 

Non-GAAP (1) 9/30/18

 

 

% Change

 

Net revenues

 

$

821,572

 

 

$

738,342

 

 

 

11.3

 

 

$

800,787

 

 

 

2.6

 

 

 

$

821,572

 

 

$

738,367

 

 

 

11.3

 

Net income applicable to Stifel Financial Corp.

 

$

109,414

 

 

$

103,858

 

 

 

5.3

 

 

$

109,085

 

 

 

0.3

 

 

 

$

121,990

 

 

$

112,405

 

 

 

8.5

 

Preferred dividends

 

 

4,844

 

 

 

2,343

 

 

 

106.7

 

 

 

5,288

 

 

 

(8.4

)

 

 

 

4,844

 

 

 

2,343

 

 

 

106.7

 

Net income available to common shareholders

 

$

104,570

 

 

$

101,515

 

 

 

3.0

 

 

$

103,797

 

 

 

0.7

 

 

 

$

117,146

 

 

$

110,062

 

 

 

6.4

 

Earnings per diluted common share

 

$

1.40

 

 

$

1.27

 

 

 

10.2

 

 

$

1.38

 

 

 

1.4

 

 

 

$

1.56

 

 

$

1.38

 

 

 

13.0

 

Earnings per diluted common share available to common shareholders

 

$

1.34

 

 

$

1.25

 

 

 

7.2

 

 

$

1.31

 

 

 

2.3

 

 

 

$

1.50

 

 

$

1.35

 

 

 

11.1

 

Compensation ratio

 

 

59.2

%

 

 

57.2

%

 

 

 

 

 

 

58.3

%

 

 

 

 

 

 

 

58.1

%

 

 

56.5

%

 

 

 

 

Non-compensation ratio

 

 

22.5

%

 

 

23.8

%

 

 

 

 

 

 

23.2

%

 

 

 

 

 

 

 

21.7

%

 

 

22.9

%

 

 

 

 

Pre-tax operating margin (2)

 

 

18.3

%

 

 

19.0

%

 

 

 

 

 

 

18.5

%

 

 

 

 

 

 

 

20.2

%

 

 

20.6

%

 

 

 

 

 

1

 

 


 

2

 

For nine months ended September 30, 2019, the Company reported net income available to common shareholders of $305.2 million, or $3.87 per diluted common share on record net revenues of $2.4 billion, compared with net income available to common shareholders of $272.9 million, or $3.35 per diluted common share, on net revenues of $2.2 billion for the nine months ended September 30, 2018.

For the nine months ended September 30, 2019, the Company reported non-GAAP net income available to common shareholders of $333.0 million, or $4.22 per diluted common share.

Financial Highlights (Unaudited)

 

Nine Months Ended

 

($ in 000s, except per share data)

 

GAAP 9/30/19

 

 

GAAP 9/30/18

 

 

% Change

 

 

 

Non-GAAP (1) 9/30/19

 

 

Non-GAAP (1) 9/30/18

 

 

% Change

 

Net revenues

 

$

2,392,779

 

 

$

2,231,432

 

 

 

7.2

 

 

 

$

2,392,779

 

 

$

2,231,457

 

 

 

7.2

 

Net income applicable to Stifel Financial Corp.

 

$

317,706

 

 

$

279,906

 

 

 

13.5

 

 

 

$

345,513

 

 

$

309,683

 

 

 

11.6

 

Preferred dividends

 

 

12,476

 

 

 

7,031

 

 

 

77.4

 

 

 

 

12,476

 

 

 

7,031

 

 

 

77.4

 

Net income available to common shareholders

 

$

305,230

 

 

$

272,875

 

 

 

11.9

 

 

 

$

333,037

 

 

$

302,652

 

 

 

10.0

 

Earnings per diluted common share

 

$

4.03

 

 

$

3.44

 

 

 

17.2

 

 

 

$

4.38

 

 

$

3.80

 

 

 

15.3

 

Earnings per diluted common share available to common shareholders

 

$

3.87

 

 

$

3.35

 

 

 

15.5

 

 

 

$

4.22

 

 

$

3.72

 

 

 

13.4

 

Compensation ratio

 

 

59.0

%

 

 

59.3

%

 

 

 

 

 

 

 

58.3

%

 

 

58.7

%

 

 

 

 

Non-compensation ratio

 

 

22.8

%

 

 

23.8

%

 

 

 

 

 

 

 

22.1

%

 

 

22.5

%

 

 

 

 

Pre-tax operating margin (3)

 

 

18.2

%

 

 

16.9

%

 

 

 

 

 

 

 

19.6

%

 

 

18.8

%

 

 

 

 

 

Brokerage Revenues

Brokerage revenues, defined as commissions and principal transactions, were $261.8 million, an 8.5% increase compared with the third quarter of 2018 and a 0.1% increase compared with the second quarter of 2019.

 

Three Months Ended

 

($ in 000s)

 

9/30/19

 

 

9/30/18

 

 

% Change

 

 

6/30/19

 

 

% Change

 

Global Wealth Management

 

$

160,117

 

 

$

158,818

 

 

 

0.8

 

 

$

162,388

 

 

 

(1.4

)

Institutional brokerage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity capital markets

 

 

41,037

 

 

 

43,904

 

 

 

(6.5

)

 

 

40,670

 

 

 

0.9

 

Fixed income capital markets

 

 

60,613

 

 

 

38,446

 

 

 

57.7

 

 

 

58,387

 

 

 

3.8

 

Total institutional brokerage

 

 

101,650

 

 

 

82,350

 

 

 

23.4

 

 

 

99,057

 

 

 

2.6

 

Total brokerage revenues

 

$

261,767

 

 

$

241,168

 

 

 

8.5

 

 

$

261,445

 

 

 

0.1

 

 

•

Global Wealth Management brokerage revenues were $160.1 million, a 0.8% increase compared with the third quarter of 2018 and a 1.4% decrease compared with the second quarter of 2019.

 

•

Institutional equity brokerage revenues were $41.0 million, a 6.5% decrease compared with the third quarter of 2018 and a 0.9% increase compared with the second quarter of 2019.

 

•

Institutional fixed income brokerage revenues were $60.6 million, a 57.7% increase compared with the third quarter of 2018 and a 3.8% increase compared with the second quarter of 2019.


 

3

 

Investment Banking Revenues

Investment banking revenues were $198.8 million, a 17.6% increase compared with the third quarter of 2018 and a 10.7% increase compared with the second quarter of 2019.

 

Three Months Ended

 

($ in 000s)

 

9/30/19

 

 

 

 

9/30/18

 

 

 

 

% Change

 

 

6/30/19

 

 

% Change

 

Capital raising:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

9,855

 

 

 

 

$

7,722

 

 

 

 

 

27.6

 

 

$

10,559

 

 

 

(6.7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity capital markets

 

 

53,006

 

 

 

 

 

65,000

 

 

 

 

 

(18.5

)

 

 

59,156

 

 

 

(10.4

)

Fixed income capital markets

 

 

31,082

 

 

 

 

 

20,553

 

 

 

 

 

51.2

 

 

 

26,997

 

 

 

15.1

 

Institutional Group

 

 

84,088

 

 

 

 

 

85,553

 

 

 

 

 

(1.7

)

 

 

86,153

 

 

 

(2.4

)

Total capital raising (4)

 

 

93,943

 

 

 

 

 

93,275

 

 

 

 

 

0.7

 

 

 

96,712

 

 

 

(2.9

)

Advisory fees (4)

 

 

104,847

 

 

 

 

 

75,717

 

 

 

 

 

38.5

 

 

 

82,905

 

 

 

26.5

 

Total investment banking (4)

 

$

198,790

 

 

 

 

$

168,992

 

 

 

 

 

17.6

 

 

$

179,617

 

 

 

10.7

 

 

•

Global Wealth Management capital raising revenues were $9.9 million, a 27.6% increase compared with the third quarter of 2018 and a 6.7% decrease compared with the second quarter of 2019.

 

•

Institutional equity capital raising revenues were $53.0 million, an 18.5% decrease compared with the third quarter of 2018 and a 10.4% decrease compared with the second quarter of 2019.

 

•

Institutional fixed income capital raising revenues were $31.1 million, a 51.2% increase compared with the third quarter of 2018 and a 15.1% increase compared with the second quarter of 2019.

 

•

Advisory fee revenues were $104.8 million, a 38.5% increase compared with the third quarter of 2018 and a 26.5% increase compared with the second quarter of 2019.

 

Asset Management and Service Fee Revenues

Asset management and service fee revenues were $217.6 million, an 8.4% increase compared with the third quarter of 2018 and a 3.1% increase compared with the second quarter of 2019. See Asset Management and Service Fee Break-down table.

Net Interest Income

Net interest income of $134.7 million, an 11.0% increase compared with the third quarter of 2018 and a 0.3% decrease compared with the second quarter of 2019. See Net Interest Income Analysis table.

 

•

Interest income was $178.8 million, a 5.3% increase compared with the third quarter of 2018 and a 4.9% decrease compared with the second quarter of 2019.

 

•

Interest expense was $44.1 million, an 8.9% decrease compared with the third quarter of 2018 and a 16.5% decrease compared with the second quarter of 2019.


 

4

 

Compensation and Benefits Expenses

For the quarter ended September 30, 2019, compensation and benefits expenses were $486.2 million, which included $8.8 million of merger-related and severance expenses (non-GAAP adjustments). This compares with $422.3 million in the third quarter of 2018 and $466.9 million in the second quarter of 2019. Excluding the non-GAAP adjustments, compensation and benefits as a percentage of net revenues were 58.1% in the third quarter of 2019 (non-GAAP measure).

 

Three Months Ended

 

 

Nine Months Ended

 

($ in 000s)

 

9/30/19

 

 

9/30/18

 

 

9/30/19

 

 

9/30/18

 

GAAP compensation and benefits

 

$

486,160

 

 

$

422,324

 

 

$

1,411,135

 

 

$

1,322,387

 

As a percentage of net revenues

 

 

59.2

%

 

 

57.2

%

 

 

59.0

%

 

 

59.3

%

Non-GAAP adjustments: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related and severance

 

 

(8,827

)

 

 

(5,475

)

 

 

(16,063

)

 

 

(13,289

)

Non-GAAP compensation and benefits

 

$

477,333

 

 

$

416,849

 

 

$

1,395,072

 

 

$

1,309,098

 

As a percentage of non-GAAP net revenues

 

 

58.1

%

 

 

56.5

%

 

 

58.3

%

 

 

58.7

%

Non-Compensation Operating Expenses

For the quarter ended September 30, 2019, non-compensation operating expenses were $184.7 million, which included $6.0 million of merger-related expenses (non-GAAP adjustments). This compares with $175.5 million in the third quarter of 2018 and $185.9 million in the second quarter of 2019. Excluding the non-GAAP adjustments, non-compensation operating expenses as a percentage of net revenues for the quarter ended September 30, 2019 were 21.7% (non-GAAP measure).

 

Three Months Ended

 

 

Nine Months Ended

 

($ in 000s)

 

9/30/19

 

 

9/30/18

 

 

9/30/19

 

 

9/30/18

 

GAAP non-compensation expenses

 

$

184,658

 

 

$

175,488

 

 

$

545,099

 

 

$

530,614

 

As a percentage of net revenues

 

 

22.5

%

 

 

23.8

%

 

 

22.8

%

 

 

23.8

%

Non-GAAP adjustments: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related

 

 

(6,023

)

 

 

(5,277

)

 

 

(13,699

)

 

 

(20,192

)

Litigation-related

 

 

—

 

 

 

(774

)

 

 

(3,507

)

 

 

(6,774

)

 

 

 

(6,023

)

 

 

(6,051

)

 

 

(17,206

)

 

 

(26,966

)

Non-GAAP non-compensation expenses

 

$

178,635

 

 

$

169,437

 

 

$

527,893

 

 

$

503,648

 

As a percentage of non-GAAP net revenues

 

 

21.7

%

 

 

22.9

%

 

 

22.1

%

 

 

22.5

%

Provision for Income Taxes

The GAAP effective income tax rate for the quarter ended September 30, 2019 was 27.1%. This compares with an effective income tax rate of 26.1% for the third quarter of 2018 and 25.9% for the second quarter of 2019. The adjusted non-GAAP effective income tax rate for the quarter ended September 30, 2019 was 26.0%.

 

Three Months Ended

 

 

Nine Months Ended

 

($ in 000s)

 

9/30/19

 

 

9/30/18

 

 

9/30/19

 

 

9/30/18

 

GAAP provision for income taxes

 

$

40,632

 

 

$

36,672

 

 

$

117,227

 

 

$

98,525

 

GAAP effective tax rate

 

 

27.1

%

 

 

26.1

%

 

 

27.0

%

 

 

26.0

%

Non-GAAP adjustments: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related, litigation-related, and severance

 

 

3,994

 

 

 

3,166

 

 

 

8,949

 

 

 

10,980

 

Other

 

 

(1,720

)

 

 

(162

)

 

 

(3,487

)

 

 

(477

)

 

 

 

2,274

 

 

 

3,004

 

 

 

5,462

 

 

 

10,503

 

Non-GAAP provision for income taxes

 

$

42,906

 

 

$

39,676

 

 

$

122,689

 

 

$

109,028

 

Non-GAAP effective tax rate

 

 

26.0

%

 

 

26.1

%

 

 

26.2

%

 

 

26.0

%

 

 


 

5

 

Conference Call Information

Stifel Financial Corp. will host its third quarter 2019 financial results conference call on Wednesday, October 30, 2019, at 8:00 a.m. Eastern time. The conference call may include forward-looking statements.

All interested parties are invited to listen to Stifel’s Chairman and CEO, Ronald J. Kruszewski, by dialing (888) 676-3684 and referencing conference ID #1347575. 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’s broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated; Keefe Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Century Securities Associates, Inc., and in the United Kingdom and Europe through Stifel Nicolaus Europe Limited. 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 and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer 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.

 

 

6

 

Summary Results of Operations (Unaudited)

 

 

 

Three Months Ended

 

 

 

 

Nine Months Ended

 

($ in 000s, except per share amounts)

 

9/30/19

 

 

 

 

9/30/18

 

 

 

 

% Change

 

 

 

 

6/30/19

 

 

 

 

% Change

 

 

 

 

9/30/19

 

 

 

 

9/30/18

 

 

 

 

% Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

 

$

163,920

 

 

 

 

$

158,016

 

 

 

 

 

3.7

 

 

 

 

$

164,981

 

 

 

 

 

(0.6

)

 

 

 

$

484,350

 

 

 

 

$

490,693

 

 

 

 

 

(1.3

)

Principal transactions

 

 

97,847

 

 

 

 

 

83,152

 

 

 

 

 

17.7

 

 

 

 

 

96,464

 

 

 

 

 

1.4

 

 

 

 

 

298,343

 

 

 

 

 

269,918

 

 

 

 

 

10.5

 

Brokerage revenues

 

 

261,767

 

 

 

 

 

241,168

 

 

 

 

 

8.5

 

 

 

 

 

261,445

 

 

 

 

 

0.1

 

 

 

 

 

782,693

 

 

 

 

 

760,611

 

 

 

 

 

2.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory fees

 

 

104,847

 

 

 

 

 

75,717

 

 

 

 

 

38.5

 

 

 

 

 

82,911

 

 

 

 

 

26.5

 

 

 

 

 

292,648

 

 

 

 

 

260,393

 

 

 

 

 

12.4

 

Capital raising

 

 

93,943

 

 

 

 

 

93,295

 

 

 

 

 

0.7

 

 

 

 

 

96,706

 

 

 

 

 

(2.9

)

 

 

 

 

247,599

 

 

 

 

 

246,044

 

 

 

 

 

0.6

 

Investment banking

 

 

198,790

 

 

 

 

 

169,012

 

 

 

 

 

17.6

 

 

 

 

 

179,617

 

 

 

 

 

10.7

 

 

 

 

 

540,247

 

 

 

 

 

506,437

 

 

 

 

 

6.7

 

Asset management and service fees

 

 

217,628

 

 

 

 

 

200,743

 

 

 

 

 

8.4

 

 

 

 

 

211,171

 

 

 

 

 

3.1

 

 

 

 

 

624,066

 

 

 

 

 

596,112

 

 

 

 

 

4.7

 

Other income

 

 

8,747

 

 

 

 

 

6,127

 

 

 

 

 

42.8

 

 

 

 

 

13,505

 

 

 

 

 

(35.2

)

 

 

 

 

34,461

 

 

 

 

 

18,557

 

 

 

 

 

85.7

 

Operating revenues

 

 

686,932

 

 

 

 

 

617,050

 

 

 

 

 

11.3

 

 

 

 

 

665,738

 

 

 

 

 

3.2

 

 

 

 

 

1,981,467

 

 

 

 

 

1,881,717

 

 

 

 

 

5.3

 

Interest revenue

 

 

178,784

 

 

 

 

 

169,760

 

 

 

 

 

5.3

 

 

 

 

 

187,940

 

 

 

 

 

(4.9

)

 

 

 

 

557,795

 

 

 

 

 

461,915

 

 

 

 

 

20.8

 

Total revenues

 

 

865,716

 

 

 

 

 

786,810

 

 

 

 

 

10.0

 

 

 

 

 

853,678

 

 

 

 

 

1.4

 

 

 

 

 

2,539,262

 

 

 

 

 

2,343,632

 

 

 

 

 

8.3

 

Interest expense

 

 

44,144

 

 

 

 

 

48,468

 

 

 

 

 

(8.9

)

 

 

 

 

52,891

 

 

 

 

 

(16.5

)

 

 

 

 

146,483

 

 

 

 

 

112,200

 

 

 

 

 

30.6

 

Net revenues

 

 

821,572

 

 

 

 

 

738,342

 

 

 

 

 

11.3

 

 

 

 

 

800,787

 

 

 

 

 

2.6

 

 

 

 

 

2,392,779

 

 

 

 

 

2,231,432

 

 

 

 

 

7.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

486,160

 

 

 

 

 

422,324

 

 

 

 

 

15.1

 

 

 

 

 

466,861

 

 

 

 

 

4.1

 

 

 

 

 

1,411,135

 

 

 

 

 

1,322,387

 

 

 

 

 

6.7

 

Occupancy and equipment rental

 

 

58,649

 

 

 

 

 

54,035

 

 

 

 

 

8.5

 

 

 

 

 

61,055

 

 

 

 

 

(3.9

)

 

 

 

 

178,566

 

 

 

 

 

165,226

 

 

 

 

 

8.1

 

Communication and office supplies

 

 

36,817

 

 

 

 

 

33,330

 

 

 

 

 

10.5

 

 

 

 

 

35,069

 

 

 

 

 

5.0

 

 

 

 

 

107,583

 

 

 

 

 

103,468

 

 

 

 

 

4.0

 

Commissions and floor brokerage

 

 

10,542

 

 

 

 

 

11,338

 

 

 

 

 

(7.0

)

 

 

 

 

11,008

 

 

 

 

 

(4.2

)

 

 

 

 

32,506

 

 

 

 

 

30,798

 

 

 

 

 

5.5

 

Provision for loan losses

 

 

929

 

 

 

 

 

6,924

 

 

 

 

 

(86.6

)

 

 

 

 

2,353

 

 

 

 

 

(60.5

)

 

 

 

 

5,565

 

 

 

 

 

13,244

 

 

 

 

 

(58.0

)

Other operating expenses

 

 

77,721

 

 

 

 

 

69,861

 

 

 

 

 

11.3

 

 

 

 

 

76,459

 

 

 

 

 

1.7

 

 

 

 

 

220,879

 

 

 

 

 

217,878

 

 

 

 

 

1.4

 

Total non-interest expenses

 

 

670,818

 

 

 

 

 

597,812

 

 

 

 

 

12.2

 

 

 

 

 

652,805

 

 

 

 

 

2.8

 

 

 

 

 

1,956,234

 

 

 

 

 

1,853,001

 

 

 

 

 

5.6

 

Income before income taxes

 

 

150,754

 

 

 

 

 

140,530

 

 

 

 

 

7.3

 

 

 

 

 

147,982

 

 

 

 

 

1.9

 

 

 

 

 

436,545

 

 

 

 

 

378,431

 

 

 

 

 

15.4

 

Provision for income taxes

 

 

40,632

 

 

 

 

 

36,672

 

 

 

 

 

10.8

 

 

 

 

 

38,225

 

 

 

 

 

6.3

 

 

 

 

 

117,227

 

 

 

 

 

98,525

 

 

 

 

 

19.0

 

Net income

 

 

110,122

 

 

 

 

 

103,858

 

 

 

 

 

6.0

 

 

 

 

 

109,757

 

 

 

 

 

0.3

 

 

 

 

 

319,318

 

 

 

 

 

279,906

 

 

 

 

 

14.1

 

Net income applicable to non-controlling interests

 

 

708

 

 

 

 

 

—

 

 

 

 

n/m

 

 

 

 

 

672

 

 

 

 

 

5.4

 

 

 

 

 

1,612

 

 

 

 

 

—

 

 

 

 

n/m

 

Net income applicable to Stifel Financial Corp.

 

 

109,414

 

 

 

 

 

103,858

 

 

 

 

 

5.3

 

 

 

 

 

109,085

 

 

 

 

 

0.3

 

 

 

 

 

317,706

 

 

 

 

 

279,906

 

 

 

 

 

13.5

 

Preferred dividends

 

 

4,844

 

 

 

 

 

2,343

 

 

 

 

 

106.7

 

 

 

 

 

5,288

 

 

 

 

 

(8.4

)

 

 

 

 

12,476

 

 

 

 

 

7,031

 

 

 

 

 

77.4

 

Net income available to common shareholders

 

$

104,570

 

 

 

 

$

101,515

 

 

 

 

 

3.0

 

 

 

 

$

103,797

 

 

 

 

 

0.7

 

 

 

 

$

305,230

 

 

 

 

$

272,875

 

 

 

 

 

11.9

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.47

 

 

 

 

$

1.41

 

 

 

 

 

4.3

 

 

 

 

$

1.43

 

 

 

 

 

2.8

 

 

 

 

$

4.21

 

 

 

 

$

3.80

 

 

 

 

 

10.8

 

Diluted

 

$

1.34

 

 

 

 

$

1.25

 

 

 

 

 

7.2

 

 

 

 

$

1.31

 

 

 

 

 

2.3

 

 

 

 

$

3.87

 

 

 

 

$

3.35

 

 

 

 

 

15.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.15

 

 

 

 

$

0.12

 

 

 

 

 

25.0

 

 

 

 

$

0.15

 

 

 

 

 

—

 

 

 

 

$

0.45

 

 

 

 

$

0.36

 

 

 

 

 

25.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

71,197

 

 

 

 

 

71,919

 

 

 

 

 

(1.0

)

 

 

 

 

72,519

 

 

 

 

 

(1.8

)

 

 

 

 

72,512

 

 

 

 

 

71,824

 

 

 

 

 

1.0

 

Diluted

 

 

78,144

 

 

 

 

 

81,484

 

 

 

 

 

(4.1

)

 

 

 

 

79,079

 

 

 

 

 

(1.2

)

 

 

 

 

78,826

 

 

 

 

 

81,425

 

 

 

 

 

(3.2

)


 

7

 

Summary Segment Results (Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

($ in 000s)

 

9/30/19

 

 

9/30/18

 

 

 

 

% Change

 

 

6/30/19

 

 

% Change

 

 

9/30/19

 

 

9/30/18

 

 

 

 

% Change

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

534,571

 

 

$

498,161

 

 

 

 

 

7.3

 

 

$

532,433

 

 

 

0.4

 

 

$

1,577,614

 

 

$

1,481,063

 

 

 

 

 

6.5

 

Institutional Group

 

 

290,222

 

 

 

245,952

 

 

 

 

 

18.0

 

 

 

270,602

 

 

 

7.3

 

 

 

822,110

 

 

 

768,855

 

 

 

 

 

6.9

 

Other

 

 

(3,221

)

 

 

(5,771

)

 

 

 

 

44.2

 

 

 

(2,248

)

 

 

(43.3

)

 

 

(6,945

)

 

 

(18,486

)

 

 

 

 

62.4

 

Total net revenues

 

$

821,572

 

 

$

738,342

 

 

 

 

 

11.3

 

 

$

800,787

 

 

 

2.6

 

 

$

2,392,779

 

 

$

2,231,432

 

 

 

 

 

7.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

331,748

 

 

$

314,784

 

 

 

 

 

5.4

 

 

$

340,081

 

 

 

(2.5

)

 

$

987,949

 

 

$

933,020

 

 

 

 

 

5.9

 

Institutional Group

 

 

241,599

 

 

 

211,647

 

 

 

 

 

14.2

 

 

 

231,300

 

 

 

4.5

 

 

 

701,981

 

 

 

653,956

 

 

 

 

 

7.3

 

Other

 

 

97,471

 

 

 

71,381

 

 

 

 

 

36.6

 

 

 

81,424

 

 

 

19.7

 

 

 

266,304

 

 

 

266,025

 

 

 

 

 

0.1

 

Total operating expenses

 

$

670,818

 

 

$

597,812

 

 

 

 

 

12.2

 

 

$

652,805

 

 

 

2.8

 

 

$

1,956,234

 

 

$

1,853,001

 

 

 

 

 

5.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating contribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

202,823

 

 

$

183,377

 

 

 

 

 

10.6

 

 

$

192,352

 

 

 

5.4

 

 

$

589,665

 

 

$

548,043

 

 

 

 

 

7.6

 

Institutional Group

 

 

48,623

 

 

 

34,305

 

 

 

 

 

41.7

 

 

 

39,302

 

 

 

23.7

 

 

 

120,129

 

 

 

114,899

 

 

 

 

 

4.6

 

Other

 

 

(100,692

)

 

 

(77,152

)

 

 

 

 

30.5

 

 

 

(83,672

)

 

 

20.3

 

 

 

(273,249

)

 

 

(284,511

)

 

 

 

 

(4.0

)

Income before income taxes

 

$

150,754

 

 

$

140,530

 

 

 

 

 

7.3

 

 

$

147,982

 

 

 

1.9

 

 

$

436,545

 

 

$

378,431

 

 

 

 

 

15.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

 

49.0

 

 

 

48.5

 

 

 

 

 

 

 

 

 

49.3

 

 

 

 

 

 

 

48.9

 

 

 

48.7

 

 

 

 

 

 

 

Institutional Group

 

 

59.1

 

 

 

59.4

 

 

 

 

 

 

 

 

 

57.6

 

 

 

 

 

 

 

59.2

 

 

 

59.2

 

 

 

 

 

 

 

Non-comp. operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

 

13.1

 

 

 

14.7

 

 

 

 

 

 

 

 

 

14.6

 

 

 

 

 

 

 

13.7

 

 

 

14.3

 

 

 

 

 

 

 

Institutional Group

 

 

24.1

 

 

 

26.7

 

 

 

 

 

 

 

 

 

27.9

 

 

 

 

 

 

 

26.2

 

 

 

25.9

 

 

 

 

 

 

 

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

 

37.9

 

 

 

36.8

 

 

 

 

 

 

 

 

 

36.1

 

 

 

 

 

 

 

37.4

 

 

 

37.0

 

 

 

 

 

 

 

Institutional Group

 

 

16.8

 

 

 

13.9

 

 

 

 

 

 

 

 

 

14.5

 

 

 

 

 

 

 

14.6

 

 

 

14.9

 

 

 

 

 

 

 

Consolidated pre-tax margin

 

 

18.3

 

 

 

19.0

 

 

 

 

 

 

 

 

 

18.5

 

 

 

 

 

 

 

18.2

 

 

 

16.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

Financial metrics (unaudited):

As of and For the Three Months Ended

 

($ in 000s, except percentages and per share amounts)

9/30/19

 

9/30/18

 

6/30/19

 

Total assets

$

24,160,777

 

$

23,760,048

 

$

24,343,597

 

Total Stifel Financial shareholders' equity

 

3,501,715

 

 

3,161,569

 

 

3,429,126

 

Book value per common share (6)

$

46.34

 

$

41.25

 

$

44.68

 

Return on common equity (7)

 

13.2

%

 

13.8

%

 

13.4

%

Non-GAAP return on common equity (1) (7)

 

14.8

%

 

15.0

%

 

14.3

%

Return on tangible common equity (8)

 

21.6

%

 

22.4

%

 

21.5

%

Non-GAAP return on tangible common equity (1) (8)

 

24.2

%

 

24.3

%

 

23.1

%

Tier 1 common capital ratio (9)

 

15.6

%

 

16.6

%

 

15.6

%

Tier 1 risk based capital ratio (9)

 

18.1

%

 

17.9

%

 

18.0

%

Tier 1 leverage capital ratio (9)

 

10.0

%

 

9.6

%

 

10.0

%

Pre-tax margin on net revenues

 

18.3

%

 

19.0

%

 

18.5

%

Non-GAAP pre-tax margin on net revenues (1) (2)

 

20.2

%

 

20.6

%

 

19.8

%

Effective tax rate

 

27.1

%

 

26.1

%

 

25.9

%

Non-GAAP effective tax rate (1)

 

26.0

%

 

26.1

%

 

25.9

%

 

Statistical Information (unaudited):

 

As of and For the Three Months Ended

 

($ in 000s, except financial advisors and locations)

 

9/30/19

 

 

9/30/18

 

 

% Change

 

 

6/30/19

 

 

% Change

 

Financial advisors (10)

 

 

2,097

 

 

 

2,045

 

 

 

2.5

 

 

 

2,097

 

 

 

—

 

Independent contractors

 

 

96

 

 

 

104

 

 

 

(7.7

)

 

 

96

 

 

 

—

 

Total financial advisors

 

 

2,193

 

 

 

2,149

 

 

 

2.0

 

 

 

2,193

 

 

 

—

 

Locations

 

 

426

 

 

 

404

 

 

 

5.4

 

 

 

413

 

 

 

3.1

 

Total client assets

 

$

311,819,000

 

 

$

289,136,000

 

 

 

7.8

 

 

$

305,233,000

 

 

 

2.2

 

Fee-based client assets

 

$

108,138,000

 

 

$

96,008,000

 

 

 

12.6

 

 

$

103,824,000

 

 

 

4.2

 

Client money market and insured product

 

$

14,246,000

 

 

$

15,121,000

 

 

 

(5.8

)

 

$

13,674,000

 

 

 

4.2

 

Secured client lending (11)

 

$

3,299,359

 

 

$

3,185,710

 

 

 

3.6

 

 

$

3,251,723

 

 

 

1.5

 

  

  

 

Asset Management and Service Fee Break-down (unaudited)

 

Asset Management and Service Fee Revenues:

 

Three Months Ended

 

($ in 000s)

 

9/30/19

 

 

9/30/18

 

 

% Change

 

 

6/30/19

 

 

% Change

 

Private Client Group (12)

 

$

172,124

 

 

$

152,021

 

 

 

13.2

 

 

$

164,554

 

 

 

4.6

 

Asset Management

 

 

30,650

 

 

 

27,555

 

 

 

11.2

 

 

 

29,485

 

 

 

4.0

 

Third-party Bank Sweep Program

 

 

4,907

 

 

 

11,029

 

 

 

(55.5

)

 

 

6,869

 

 

 

(28.6

)

Other (13)

 

 

9,947

 

 

 

10,138

 

 

 

(1.9

)

 

 

10,263

 

 

 

(3.1

)

Total asset management and service fee revenues

 

$

217,628

 

 

$

200,743

 

 

 

8.4

 

 

$

211,171

 

 

 

3.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-based Assets:

 

Three Months Ended

 

($ in millions)

 

9/30/19

 

 

9/30/18

 

 

% Change

 

 

6/30/19

 

 

% Change

 

Private Client Group (12)

 

$

85,163

 

 

$

71,463

 

 

 

19.2

 

 

$

80,983

 

 

 

5.2

 

Asset Management

 

 

33,698

 

 

 

31,091

 

 

 

8.4

 

 

 

33,156

 

 

 

1.6

 

Elimination (14)

 

 

(10,723

)

 

 

(6,546

)

 

 

63.8

 

 

 

(10,315

)

 

 

4.0

 

Total fee-based assets

 

$

108,138

 

 

$

96,008

 

 

 

12.6

 

 

$

103,824

 

 

 

4.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individual Program Banks

 

$

1,225

 

 

$

2,953

 

 

 

(58.5

)

 

$

1,459

 

 

 

(16.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROA (bps) (15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private Client Group (12)

 

 

85.0

 

 

 

89.7

 

 

 

 

 

 

 

89.5

 

 

 

 

 

Asset Management

 

 

36.4

 

 

 

35.5

 

 

 

 

 

 

 

35.6

 

 

 

 

 

Individual Program Banks

 

 

145.3

 

 

 

134.0

 

 

 

 

 

 

 

163.6

 

 

 

 

 


 

9

 

Consolidated Net Interest Income Analysis (Unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

 

June 30, 2019

 

($ in millions, except percentages)

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and federal funds sold

 

$

1,056.3

 

 

$

5.7

 

 

 

2.15

%

 

$

387.8

 

 

$

2.3

 

 

 

2.35

%

 

$

750.4

 

 

$

4.3

 

 

 

2.31

%

Financial instruments owned

 

 

1,157.8

 

 

 

5.7

 

 

 

1.96

 

 

 

1,171.4

 

 

 

5.7

 

 

 

1.96

 

 

 

1,320.5

 

 

 

6.4

 

 

 

1.94

 

Margin balances

 

 

1,308.3

 

 

 

13.3

 

 

 

4.08

 

 

 

1,324.0

 

 

 

13.1

 

 

 

3.95

 

 

 

1,291.5

 

 

 

13.7

 

 

 

4.23

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-backed securities

 

 

4,367.8

 

 

 

42.4

 

 

 

3.88

 

 

 

4,967.2

 

 

 

48.2

 

 

 

3.88

 

 

 

4,508.4

 

 

 

46.0

 

 

 

4.08

 

Mortgage-backed securities

 

 

1,253.4

 

 

 

6.6

 

 

 

2.10

 

 

 

1,668.4

 

 

 

9.1

 

 

 

2.18

 

 

 

1,470.9

 

 

 

8.6

 

 

 

2.33

 

Corporate fixed income securities

 

 

743.7

 

 

 

5.7

 

 

 

3.06

 

 

 

1,286.7

 

 

 

9.2

 

 

 

2.85

 

 

 

915.0

 

 

 

6.9

 

 

 

3.02

 

State and municipal securities

 

 

34.3

 

 

 

0.2

 

 

 

2.27

 

 

 

73.2

 

 

 

0.3

 

 

 

1.99

 

 

 

48.0

 

 

 

0.2

 

 

 

1.85

 

Other

 

 

4.5

 

 

 

—

 

 

 

5.98

 

 

 

8.7

 

 

 

—

 

 

 

1.48

 

 

 

—

 

 

 

—

 

 

 

—

 

Total Investments

 

 

6,403.7

 

 

 

54.9

 

 

 

3.43

 

 

 

8,004.2

 

 

 

66.8

 

 

 

3.34

 

 

 

6,942.3

 

 

 

61.7

 

 

 

3.56

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

3,330.2

 

 

 

39.7

 

 

 

4.77

 

 

 

2,950.2

 

 

 

34.1

 

 

 

4.62

 

 

 

3,337.4

 

 

 

41.3

 

 

 

4.95

 

Residential real estate

 

 

3,003.8

 

 

 

23.2

 

 

 

3.08

 

 

 

2,753.7

 

 

 

19.8

 

 

 

2.88

 

 

 

2,953.7

 

 

 

22.5

 

 

 

3.05

 

Securities-based loans

 

 

1,959.3

 

 

 

19.9

 

 

 

4.06

 

 

 

1,848.2

 

 

 

18.2

 

 

 

3.94

 

 

 

1,916.3

 

 

 

20.2

 

 

 

4.21

 

Commercial real estate

 

 

377.2

 

 

 

5.2

 

 

 

5.52

 

 

 

192.4

 

 

 

2.4

 

 

 

4.98

 

 

 

354.3

 

 

 

5.0

 

 

 

5.63

 

Loans held for sale

 

 

209.7

 

 

 

1.7

 

 

 

3.21

 

 

 

224.5

 

 

 

2.5

 

 

 

4.38

 

 

 

178.6

 

 

 

1.8

 

 

 

4.02

 

Other

 

 

444.9

 

 

 

5.7

 

 

 

5.23

 

 

 

142.5

 

 

 

1.8

 

 

 

5.12

 

 

 

377.9

 

 

 

5.1

 

 

 

5.38

 

Total Loans

 

 

9,325.1

 

 

 

95.4

 

 

 

4.09

 

 

 

8,111.5

 

 

 

78.8

 

 

 

3.88

 

 

 

9,118.2

 

 

 

95.9

 

 

 

4.21

 

Other interest-bearing assets

 

 

678.7

 

 

 

3.8

 

 

 

2.19

 

 

 

747.4

 

 

 

3.1

 

 

 

1.66

 

 

 

831.6

 

 

 

5.9

 

 

 

2.86

 

Total interest-earning assets/interest income

 

 

19,929.9

 

 

 

178.8

 

 

 

3.59

 

 

 

19,746.3

 

 

 

169.8

 

 

 

3.44

 

 

 

20,254.5

 

 

 

187.9

 

 

 

3.71

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

21.0

 

 

 

0.1

 

 

 

2.63

 

 

 

35.3

 

 

 

0.3

 

 

 

2.89

 

 

 

29.8

 

 

 

0.2

 

 

 

3.16

 

Senior notes

 

 

1,016.6

 

 

 

11.1

 

 

 

4.38

 

 

 

1,015.7

 

 

 

11.2

 

 

 

4.43

 

 

 

1,016.2

 

 

 

11.1

 

 

 

4.38

 

Deposits

 

 

14,926.2

 

 

 

24.8

 

 

 

0.67

 

 

 

14,003.2

 

 

 

25.9

 

 

 

0.74

 

 

 

14,660.7

 

 

 

29.3

 

 

 

0.80

 

FHLB

 

 

270.1

 

 

 

1.1

 

 

 

1.70

 

 

 

1,028.8

 

 

 

4.2

 

 

 

1.65

 

 

 

550.2

 

 

 

2.9

 

 

 

2.12

 

Other interest-bearing liabilities

 

 

1,673.0

 

 

 

7.0

 

 

 

1.66

 

 

 

1,591.7

 

 

 

6.9

 

 

 

1.73

 

 

 

1,764.4

 

 

 

9.4

 

 

 

2.10

 

Total interest-bearing liabilities/interest expense

 

$

17,906.9

 

 

$

44.1

 

 

 

0.99

%

 

$

17,674.7

 

 

$

48.5

 

 

 

1.10

%

 

$

18,021.3

 

 

$

52.9

 

 

 

1.17

%

Net interest income/margin

 

 

 

 

 

$

134.7

 

 

 

2.70

%

 

 

 

 

 

$

121.3

 

 

 

2.46

%

 

 

 

 

 

$

135.0

 

 

 

2.67

%

 

Stifel Bancorp, Inc. (16) Net Interest Income Analysis (Unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

September 30, 2019

 

 

September 30, 2018

 

 

June 30, 2019

 

($ in millions, except percentages)

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and federal funds sold

 

$

540.8

 

 

$

3.2

 

 

 

2.36

%

 

$

29.4

 

 

$

0.2

 

 

 

2.06

%

 

$

330.6

 

 

$

1.8

 

 

 

2.15

%

Investments

 

 

6,403.7

 

 

 

54.9

 

 

 

3.43

 

 

 

8,004.2

 

 

 

66.8

 

 

 

3.34

 

 

 

6,942.3

 

 

 

61.7

 

 

 

3.56

 

Loans

 

 

9,325.1

 

 

 

95.4

 

 

 

4.09

 

 

 

8,111.5

 

 

 

78.8

 

 

 

3.88

 

 

 

9,118.2

 

 

 

95.9

 

 

 

4.21

 

Other interest-bearing assets

 

 

46.7

 

 

 

0.4

 

 

 

3.04

 

 

 

73.9

 

 

 

0.7

 

 

 

4.19

 

 

 

57.2

 

 

 

0.6

 

 

 

4.38

 

Total interest-earning assets/interest income

 

 

16,316.3

 

 

 

153.9

 

 

 

3.77

 

 

 

16,219.0

 

 

 

146.5

 

 

 

3.61

 

 

 

16,448.3

 

 

 

160.0

 

 

 

3.89

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

14,926.2

 

 

 

24.8

 

 

 

0.67

 

 

 

14,003.2

 

 

 

25.9

 

 

 

0.74

 

 

 

14,660.7

 

 

 

29.3

 

 

 

0.80

 

FHLB

 

 

270.1

 

 

 

1.1

 

 

 

1.70

 

 

 

1,028.8

 

 

 

4.2

 

 

 

1.65

 

 

 

550.2

 

 

 

2.9

 

 

 

2.12

 

Other interest-bearing liabilities

 

 

1.7

 

 

 

0.1

 

 

 

6.49

 

 

 

28.1

 

 

 

0.2

 

 

 

3.17

 

 

 

1.7

 

 

 

0.1

 

 

 

6.73

 

Total interest-bearing liabilities/interest expense

 

$

15,198.0

 

 

 

26.0

 

 

 

0.68

%

 

$

15,060.1

 

 

 

30.3

 

 

 

0.81

%

 

$

15,212.6

 

 

 

32.3

 

 

 

0.85

%

Net interest income/margin

 

 

 

 

 

$

127.9

 

 

 

3.14

%

 

 

 

 

 

$

116.2

 

 

 

2.87

%

 

 

 

 

 

$

127.7

 

 

 

3.11

%

 

 

10

 

Stifel Bancorp, Inc. (16) - a component of Global Wealth Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected operating data (unaudited):

Three Months Ended

 

 

Nine Months Ended

 

($ in 000s, except percentages)

9/30/19

 

 

9/30/18

 

 

%

Change

 

 

6/30/19

 

 

%

Change

 

 

9/30/19

 

 

9/30/18

 

 

%

Change

 

Net interest income

$

127,942

 

 

$

116,204

 

 

 

10.1

 

 

$

127,714

 

 

 

0.2

 

 

$

390,220

 

 

$

338,031

 

 

 

15.4

 

Bank loan loss provision

 

929

 

 

 

6,924

 

 

 

(86.6

)

 

 

2,353

 

 

 

(60.5

)

 

 

5,565

 

 

 

13,244

 

 

 

(58.0

)

Charge-offs

 

56

 

 

 

—

 

 

n/m

 

 

 

54

 

 

 

3.7

 

 

 

166

 

 

 

14

 

 

 

n/m

 

Net interest margin

 

3.14

%

 

 

2.87

%

 

27 bps

 

 

 

3.11

%

 

3 bps

 

 

 

3.14

%

 

 

2.91

%

 

23 bps

 

 

Financial Metrics (unaudited):

 

As of

 

($ in 000s, except percentages)

 

9/30/19

 

 

9/30/18

 

 

6/30/19

 

Total assets

 

$

16,442,707

 

 

$

17,005,070

 

 

$

16,645,984

 

Total shareholders' equity

 

 

1,234,932

 

 

 

1,200,250

 

 

 

1,236,318

 

Total loans, net (includes loans held for sale)

 

 

9,367,233

 

 

 

8,516,052

 

 

 

9,127,836

 

Total deposits

 

 

14,836,646

 

 

 

14,502,952

 

 

 

14,901,061

 

Available-for-sale securities, at fair value

 

 

3,448,207

 

 

 

3,347,819

 

 

 

2,702,211

 

Held-to-maturity securities, at amortized cost

 

 

2,878,516

 

 

 

4,562,021

 

 

 

3,957,629

 

Commercial and industrial

 

 

3,315,706

 

 

 

3,127,435

 

 

 

3,338,127

 

Residential real estate

 

 

3,043,271

 

 

 

2,792,269

 

 

 

2,984,725

 

Securities-based loans

 

 

1,986,339

 

 

 

1,836,450

 

 

 

1,962,528

 

Commercial real estate

 

 

387,868

 

 

 

328,814

 

 

 

367,283

 

Loans held for sale

 

 

265,330

 

 

 

262,063

 

 

 

163,511

 

Stifel Bank & Trust:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital ratio (9)

 

 

13.1

%

 

 

14.2

%

 

 

13.4

%

Tier 1 capital ratio (9)

 

 

13.1

%

 

 

14.2

%

 

 

13.4

%

Total capital ratio (9)

 

 

14.3

%

 

 

15.2

%

 

 

14.5

%

Tier 1 leverage ratio (9)

 

 

7.3

%

 

 

7.0

%

 

 

7.2

%

Stifel Bank:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital ratio (9)

 

 

17.9

%

 

 

13.8

%

 

 

17.7

%

Tier 1 capital ratio (9)

 

 

17.9

%

 

 

13.8

%

 

 

17.7

%

Total capital ratio (9)

 

 

19.1

%

 

 

15.0

%

 

 

18.9

%

Tier 1 leverage ratio (9)

 

 

7.0

%

 

 

12.5

%

 

 

7.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Metrics:

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

$

91,360

 

 

$

80,700

 

 

$

90,472

 

Allowance as a percentage of retained loans

 

 

0.99

%

 

 

0.97

%

 

 

1.00

%

Net charge-offs as a percentage of average loans

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Total nonperforming assets

 

$

18,031

 

 

$

24,352

 

 

$

21,111

 

Nonperforming assets as % of total assets

 

 

0.11

%

 

 

0.14

%

 

 

0.13

%


 

11

 

Global Wealth Management Summary Results of Operations (Unaudited)

 

 

 

Three Months Ended

 

 

 

 

Nine Months Ended

 

($ in 000s)

 

9/30/19

 

 

 

 

9/30/18

 

 

 

 

% Change

 

 

 

 

6/30/19

 

 

% Change

 

 

 

 

9/30/19

 

 

 

 

9/30/18

 

 

 

 

% Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

 

$

118,061

 

 

 

 

$

117,795

 

 

 

 

 

0.2

 

 

 

 

$

120,284

 

 

 

(1.8

)

 

 

 

$

348,272

 

 

 

 

$

355,129

 

 

 

 

 

(1.9

)

Principal transactions

 

 

42,056

 

 

 

 

 

41,023

 

 

 

 

 

2.5

 

 

 

 

 

42,104

 

 

 

(0.1

)

 

 

 

 

127,427

 

 

 

 

 

125,713

 

 

 

 

 

1.4

 

    Brokerage revenues

 

 

160,117

 

 

 

 

 

158,818

 

 

 

 

 

0.8

 

 

 

 

 

162,388

 

 

 

(1.4

)

 

 

 

 

475,699

 

 

 

 

 

480,842

 

 

 

 

 

(1.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset management and service fees

 

 

217,616

 

 

 

 

 

200,735

 

 

 

 

 

8.4

 

 

 

 

 

211,156

 

 

 

3.1

 

 

 

 

 

624,025

 

 

 

 

 

596,081

 

 

 

 

 

4.7

 

Net interest

 

 

137,937

 

 

 

 

 

127,341

 

 

 

 

 

8.3

 

 

 

 

 

137,599

 

 

 

0.2

 

 

 

 

 

420,831

 

 

 

 

 

370,783

 

 

 

 

 

13.5

 

Investment banking

 

 

9,855

 

 

 

 

 

7,722

 

 

 

 

 

27.6

 

 

 

 

 

10,559

 

 

 

(6.7

)

 

 

 

 

28,637

 

 

 

 

 

23,459

 

 

 

 

 

22.1

 

Other income

 

 

9,046

 

 

 

 

 

3,545

 

 

 

 

 

155.2

 

 

 

 

 

10,731

 

 

 

(15.7

)

 

 

 

 

28,422

 

 

 

 

 

9,898

 

 

 

 

 

187.1

 

Net revenues

 

 

534,571

 

 

 

 

 

498,161

 

 

 

 

 

7.3

 

 

 

 

 

532,433

 

 

 

0.4

 

 

 

 

 

1,577,614

 

 

 

 

 

1,481,063

 

 

 

 

 

6.5

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

261,681

 

 

 

 

 

241,713

 

 

 

 

 

8.3

 

 

 

 

 

262,321

 

 

 

(0.2

)

 

 

 

 

771,475

 

 

 

 

 

721,352

 

 

 

 

 

6.9

 

Non-compensation operating expenses

 

 

70,067

 

 

 

 

 

73,071

 

 

 

 

 

(4.1

)

 

 

 

 

77,760

 

 

 

(9.9

)

 

 

 

 

216,474

 

 

 

 

 

211,668

 

 

 

 

 

2.3

 

Total non-interest expenses

 

 

331,748

 

 

 

 

 

314,784

 

 

 

 

 

5.4

 

 

 

 

 

340,081

 

 

 

(2.5

)

 

 

 

 

987,949

 

 

 

 

 

933,020

 

 

 

 

 

5.9

 

Income before income taxes

 

$

202,823

 

 

 

 

$

183,377

 

 

 

 

 

10.6

 

 

 

 

$

192,352

 

 

 

5.4

 

 

 

 

$

589,665

 

 

 

 

$

548,043

 

 

 

 

 

7.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

49.0

 

 

 

 

 

48.5

 

 

 

 

 

 

 

 

 

 

 

49.3

 

 

 

 

 

 

 

 

 

48.9

 

 

 

 

 

48.7

 

 

 

 

 

 

 

Non-compensation operating expenses

 

 

13.1

 

 

 

 

 

14.7

 

 

 

 

 

 

 

 

 

 

 

14.6

 

 

 

 

 

 

 

 

 

13.7

 

 

 

 

 

14.3

 

 

 

 

 

 

 

Income before income taxes

 

 

37.9

 

 

 

 

 

36.8

 

 

 

 

 

 

 

 

 

 

 

36.1

 

 

 

 

 

 

 

 

 

37.4

 

 

 

 

 

37.0

 

 

 

 

 

 

 

 

Institutional Group Summary Results of Operations (Unaudited)

 

 

 

Three Months Ended

 

 

 

 

Nine Months Ended

 

($ in 000s)

 

9/30/19

 

 

 

 

9/30/18

 

 

 

 

% Change

 

 

 

 

6/30/19

 

 

% Change

 

 

 

 

9/30/19

 

 

 

 

9/30/18

 

 

 

 

% Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

 

$

45,859

 

 

 

 

$

40,220

 

 

 

 

 

14.0

 

 

 

 

$

44,697

 

 

 

2.6

 

 

 

 

$

136,078

 

 

 

 

$

135,563

 

 

 

 

 

0.4

 

Principal transactions

 

 

55,791

 

 

 

 

 

42,130

 

 

 

 

 

32.4

 

 

 

 

 

54,360

 

 

 

2.6

 

 

 

 

 

170,916

 

 

 

 

 

144,206

 

 

 

 

 

18.5

 

Brokerage revenues

 

 

101,650

 

 

 

 

 

82,350

 

 

 

 

 

23.4

 

 

 

 

 

99,057

 

 

 

2.6

 

 

 

 

 

306,994

 

 

 

 

 

279,769

 

 

 

 

 

9.7

 

Advisory fees

 

 

104,847

 

 

 

 

 

75,717

 

 

 

 

 

38.5

 

 

 

 

 

82,905

 

 

 

26.5

 

 

 

 

 

292,647

 

 

 

 

 

260,312

 

 

 

 

 

12.4

 

Capital raising

 

 

84,088

 

 

 

 

 

85,553

 

 

 

 

 

(1.7

)

 

 

 

 

86,153

 

 

 

(2.4

)

 

 

 

 

218,963

 

 

 

 

 

222,666

 

 

 

 

 

(1.7

)

Investment banking

 

 

188,935

 

 

 

 

 

161,270

 

 

 

 

 

17.2

 

 

 

 

 

169,058

 

 

 

11.8

 

 

 

 

 

511,610

 

 

 

 

 

482,978

 

 

 

 

 

5.9

 

Other (17)

 

 

(363

)

 

 

 

 

2,332

 

 

 

 

 

(115.6

)

 

 

 

 

2,487

 

 

 

(114.6

)

 

 

 

 

3,506

 

 

 

 

 

6,108

 

 

 

 

 

(42.6

)

Net revenues

 

 

290,222

 

 

 

 

 

245,952

 

 

 

 

 

18.0

 

 

 

 

 

270,602

 

 

 

7.3

 

 

 

 

 

822,110

 

 

 

 

 

768,855

 

 

 

 

 

6.9

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

171,534

 

 

 

 

 

146,187

 

 

 

 

 

17.3

 

 

 

 

 

155,779

 

 

 

10.1

 

 

 

 

 

486,724

 

 

 

 

 

455,515

 

 

 

 

 

6.9

 

Non-compensation operating expenses

 

 

70,065

 

 

 

 

 

65,460

 

 

 

 

 

7.0

 

 

 

 

 

75,521

 

 

 

(7.2

)

 

 

 

 

215,257

 

 

 

 

 

198,441

 

 

 

 

 

8.5

 

Total non-interest expenses

 

 

241,599

 

 

 

 

 

211,647

 

 

 

 

 

14.2

 

 

 

 

 

231,300

 

 

 

4.5

 

 

 

 

 

701,981

 

 

 

 

 

653,956

 

 

 

 

 

7.3

 

Income before income taxes

 

$

48,623

 

 

 

 

$

34,305

 

 

 

 

 

41.7

 

 

 

 

$

39,302

 

 

 

23.7

 

 

 

 

$

120,129

 

 

 

 

$

114,899

 

 

 

 

 

4.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

59.1

 

 

 

 

 

59.4

 

 

 

 

 

 

 

 

 

 

 

57.6

 

 

 

 

 

 

 

 

 

59.2

 

 

 

 

 

59.2

 

 

 

 

 

 

 

Non-compensation operating expenses

 

 

24.1

 

 

 

 

 

26.7

 

 

 

 

 

 

 

 

 

 

 

27.9

 

 

 

 

 

 

 

 

 

26.2

 

 

 

 

 

25.9

 

 

 

 

 

 

 

Income before income taxes

 

 

16.8

 

 

 

 

 

13.9

 

 

 

 

 

 

 

 

 

 

 

14.5

 

 

 

 

 

 

 

 

 

14.6

 

 

 

 

 

14.9

 

 

 

 

 

 

 

 


 

12

 

Non-GAAP Financial Measures

The Company utilized certain non-GAAP calculations as additional measures to aid in understanding and analyzing the Company’s financial results for the three months ended September 30, 2019 and 2018, and June 30, 2019. 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. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. These non-GAAP measures primarily exclude expenses which management believes are, in some instances, non-recurring and not representative of on-going business.

A limitation of utilizing these non-GAAP measures is that the GAAP accounting effects of these 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 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 income and earnings per diluted common share on a GAAP basis for the three and nine months ended September 30, 2019 and 2018, and the three months ended June 30, 2019 to net income and earnings per diluted common share on a non-GAAP basis for the same period.

 

 

Three Months Ended

 

 

Nine Months Ended

 

($ in 000s)

 

9/30/19

 

 

9/30/18

 

 

6/30/19

 

 

9/30/19

 

 

9/30/18

 

GAAP net income applicable to Stifel Financial Corp.

 

$

109,414

 

 

$

103,858

 

 

$

109,085

 

 

$

317,706

 

 

$

279,906

 

Preferred dividend

 

 

4,844

 

 

 

2,343

 

 

 

5,288

 

 

 

12,476

 

 

 

7,031

 

Net income available to common shareholders

 

 

104,570

 

 

 

101,515

 

 

 

103,797

 

 

 

305,230

 

 

 

272,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related and severance (18)

 

 

14,850

 

 

 

10,777

 

 

 

6,721

 

 

 

29,762

 

 

 

33,506

 

Litigation-related (19)

 

 

—

 

 

 

774

 

 

 

3,507

 

 

 

3,507

 

 

 

6,774

 

Provision for income taxes (20)

 

 

(2,274

)

 

 

(3,004

)

 

 

(2,654

)

 

 

(5,462

)

 

 

(10,503

)

Total non-GAAP adjustments

 

 

12,576

 

 

 

8,547

 

 

 

7,574

 

 

 

27,807

 

 

 

29,777

 

Non-GAAP net income available to common shareholders

 

$

117,146

 

 

$

110,062

 

 

$

111,371

 

 

$

333,037

 

 

$

302,652

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

 

 

78,144

 

 

 

81,484

 

 

 

79,079

 

 

 

78,826

 

 

 

81,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings per diluted common share

 

$

1.40

 

 

$

1.27

 

 

$

1.38

 

 

$

4.03

 

 

$

3.44

 

Non-GAAP adjustments

 

 

0.16

 

 

 

0.11

 

 

 

0.10

 

 

 

0.35

 

 

 

0.36

 

Non-GAAP earnings per diluted common share

 

$

1.56

 

 

$

1.38

 

 

$

1.48

 

 

$

4.38

 

 

$

3.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings per diluted common share available to common shareholders

 

$

1.34

 

 

$

1.25

 

 

$

1.31

 

 

$

3.87

 

 

$

3.35

 

Non-GAAP adjustments

 

 

0.16

 

 

 

0.10

 

 

 

0.10

 

 

 

0.35

 

 

 

0.37

 

Non-GAAP earnings per diluted common share available to common shareholders

 

$

1.50

 

 

$

1.35

 

 

$

1.41

 

 

$

4.22

 

 

$

3.72

 


 

13

 

Footnotes

 

(1)

Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures.”

 

(2)

Non-GAAP pre-tax margin for the three months ended September 30, 2019 of 20.2% is calculated by adding non-GAAP adjustments of $14.8 million to our GAAP income before income taxes of $150.8 million and dividing it by non-GAAP net revenues for the quarter of $821.6 million. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is discussed within and under “Non-GAAP Financial Measures.”

 

(3)

Non-GAAP pre-tax margin for the nine months ended September 30, 2019 of 19.6% is calculated by adding non-GAAP adjustments of $33.3 million to our GAAP income before income taxes of $436.5 million and dividing it by non-GAAP net revenues of $2.4 billion. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is discussed within and under “Non-GAAP Financial Measures.”

 

(4)

Excludes revenue included in the Other segment.

 

(5)

See further discussion of non-GAAP adjustments under “Non-GAAP Financial Measures.”

 

(6)

Book value per common share represents shareholders’ equity (excluding preferred stock and non-controlling interests) divided by period end common shares outstanding.

 

(7)

Computed by dividing annualized net income by average common shareholders’ equity or, in the case of non-GAAP return on common equity, computed by dividing non-GAAP net income by average common shareholders’ equity.

 

(8)

Computed by dividing annualized net income by average tangible shareholders' equity or, in the case of non-GAAP return on tangible common equity, computed by dividing non-GAAP net income by average tangible shareholders' equity. Tangible common shareholders' equity equals total common shareholders' equity less goodwill and identifiable intangible assets.

 

(9)

Capital ratios are estimates at time of the Company’s earnings release.

 

(10)

Reflects change in the definition of producing brokers as of January 1, 2019. Prior period amounts have been restated to conform with current period presentation.

 

(11)

Includes client margin balances held by our broker-dealer subsidiaries and securities-based loans held at our bank subsidiaries.

 

(12)

Includes Private Client Group and Trust Business.

 

(13)

Includes fund networking fees, retirement fees, transaction/handling fees, and ACAT fees.

 

(14)

Asset management assets managed in Private Client Group or Trust accounts.

 

(15)

Return on assets (ROA) is calculated based on prior period-end balances for Private Client Group, period-end balances for Asset Management, and average quarterly balances for Individual Program Banks.

 

(16)

Includes Stifel Bank & Trust and Stifel Bank, formerly known as The Business Bank of St. Louis, which was acquired on August 31, 2018, and Stifel Trust Company, N.A.

 

(17)

Includes net interest, asset management and service fees, and other income.

 

(18)

Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards and promissory notes issued as retention, professional fees, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s on-going business.

 

(19)

Primarily related to costs associated with Company’s legal matters.

 

(20)

See details of non-GAAP adjustments under “Provision for Income Taxes.”

 

 

14