-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ar6SzatH4PUxlJrzY5XiggUJnjTMrC2YerWezif1UtDJs63oCWjfn+M80c43YkIS WFls9OkJ6vR3gFMlKmpZ0A== 0000720672-97-000014.txt : 19970812 0000720672-97-000014.hdr.sgml : 19970812 ACCESSION NUMBER: 0000720672-97-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970627 FILED AS OF DATE: 19970811 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STIFEL FINANCIAL CORP CENTRAL INDEX KEY: 0000720672 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 431273600 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09305 FILM NUMBER: 97654855 BUSINESS ADDRESS: STREET 1: 500 N. BROADWAY STREET 2: 14TH FLOOR CITY: ST LOUIS STATE: MO ZIP: 63102-2188 BUSINESS PHONE: 3143422000 MAIL ADDRESS: STREET 1: 500 N BROADWAY CITY: ST LOUIS STATE: MO ZIP: 63102-2188 10-Q 1 FORM 10-Q; DATED JUNE 27, 1997 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) /x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 27, 1997 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-9305 STIFEL FINANCIAL CORP. (Exact name of registrant as specified in its charter) DELAWARE 43-1273600 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 500 N. Broadway, St. Louis, Missouri 63102-2188 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 314-342-2000 (Former name, former address, and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / Shares of common stock outstanding at June 27, 1997: 4,692,189 par value $.15. Exhibit Index is on page 17. 2 Stifel Financial Corp. And Subsidiaries Form 10-Q Index June 27, 1997 PAGE PART I. FINANCIAL CONDITION Item 1. Financial Statements (Unaudited) Consolidated Statements of Financial Condition -- June 27, 1997 and December 31, 1996 3-4 Consolidated Statements of Operations -- Three Months Ended June 27, 1997 and June 28, 1996 5 Consolidated Statements of Operations -- Six Months Ended June 27, 1997 and June 28, 1996 6 Consolidated Statements of Cash Flows-- Six Months Ended June 27, 1997 and June 28, 1996 7-8 Notes to Consolidated Financial Statements 9-10 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 11-14 PART II. OTHER INFORMATION Item 1. Legal Proceedings 15 Item 6. Exhibits and Reports on Form 8-K 15 Signatures 16 3 PART I. FINANCIAL CONDITION Item 1. Financial Statements (Unaudited) STIFEL FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (In thousands) June 27, December 31, 1997 1996 -------- ------------ ASSETS Cash and cash equivalents $ 6,853 $ 7,960 Cash segregated for the exclusive benefit of customers 260 483 Receivable from brokers and dealers 17,817 14,836 Receivable from customers, net of allowance for doubtful accounts of $579 and $582, respectively 310,530 235,216 Securities owned, at fair value 20,055 18,913 Membership in exchanges, at cost 513 513 Office equipment and leasehold improvements, at cost, net of allowances for depreciation and amortization of $10,300 and $10,125, respectively 2,407 2,233 Goodwill, net of accumulated amortization of $1,261 and $1,107, respectively 4,334 4,488 Notes receivable from and advances to officers and employees, net of allowance for doubtful receivables of $2,166 and $2,552, respectively 3,239 3,373 Refundable income taxes 862 358 Deferred tax asset 2,950 3,671 Other assets 7,623 9,005 -------- -------- $377,443 $301,049 ======== ======== See Notes to Consolidated Financial Statements. 4 STIFEL FINANCIAL CORP. AND SECURITIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED) (UNAUDITED) (In thousands) June 27, December 31, 1997 1997 -------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Short-term borrowings from banks $180,575 $132,400 Payable to brokers and dealers 89,683 47,148 Payable to customers 21,452 32,095 Securities sold, but not yet purchased, at fair value 3,507 3,229 Drafts payable 11,488 15,287 Accrued employee compensation 12,716 14,756 Obligations under capital leases 598 581 Accounts payable and accrued expenses 7,371 7,801 Convertible debt 10,000 10,000 -------- -------- Total Liabilities 337,390 263,297 Stockholders' Equity Preferred stock -- $1 par value; authorized 3,000,000 shares; none issued Common stock -- $.15 par value; authorized 10,000,000 shares; issued 4,767,715 shares; outstanding 4,692,189 and 4,632,260 shares, respectively 715 715 Additional paid-in capital 21,106 21,403 Retained earnings 19,017 16,733 -------- -------- 40,838 38,851 Less treasury stock, at cost 75,526 and 135,455 shares, respectively 614 892 Less unamortized expense of restricted stock awards 171 207 -------- -------- Total Stockholders' Equity 40,053 37,752 -------- -------- $377,443 $301,049 ======== ======== See Notes to Consolidated Financial Statements. 5 STIFEL FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts) Three Months Ended June 27, 1997 June 28, 1996 ------------- ------------- REVENUES Commissions $ 11,879 $ 11,496 Principal transactions 4,850 5,229 Investment banking 4,028 3,837 Interest 6,002 3,369 Other 3,901 6,776 --------- --------- 30,660 30,707 EXPENSES Employee compensation and benefits 17,380 18,192 Commissions and floor brokerage 739 667 Communications and office supplies 1,787 1,659 Occupancy and equipment rental 1,905 1,792 Interest 4,132 2,065 Other operating expenses 3,153 4,091 --------- --------- 29,096 28,466 --------- --------- INCOME BEFORE INCOME TAXES 1,564 2,241 Provision for income taxes 643 880 --------- --------- NET INCOME $ 921 $ 1,361 ========= ========= Net income per share: Primary $ 0.19 $ 0.28 Fully diluted $ 0.16 $ 0.25 Dividends declared per share $ 0.03 $ 0.03 Average common equivalent shares outstanding: Primary 4,875 4,796 Fully Diluted 6,433 6,248 See Notes to Consolidated Financial Statements. 6 STIFEL FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts) Six Months Ended June 27, 1997 June 28, 1996 ------------- ------------- REVENUES Commissions $ 23,299 $ 22,538 Principal transactions 10,117 10,017 Investment banking 11,723 5,050 Interest 10,047 6,559 Other 7,318 9,980 -------- -------- 62,504 54,144 EXPENSES Employee compensation and benefits 37,595 32,718 Commissions and floor brokerage 1,434 1,332 Communications and office supplies 3,445 3,356 Occupancy and equipment rental 3,347 3,612 Interest 6,483 4,008 Other operating expenses 5,884 6,619 -------- -------- 58,188 51,645 -------- -------- INCOME BEFORE INCOME TAXES 4,316 2,499 Provision for income taxes 1,748 988 -------- -------- NET INCOME $ 2,568 $ 1,511 ======== ======== Net income per share: Primary $ 0.53 $ 0.32 Fully diluted $ 0.44 $ 0.30 Dividends declared per share $ 0.06 $ 0.06 Average common equivalent shares outstanding: Primary 4,868 4,757 Fully Diluted 6,434 6,233 See Notes to Consolidated Financial Statements. 7 STIFEL FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(In thousands) Six Months Ended June 27, 1997 June 28, 1996 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,568 $ 1,511 Noncash items included in earnings: Depreciation and amortization 775 788 Provision for litigation and bad debts 467 1,561 Net gains on investments (47) (13) Bonus notes amortization 578 500 Deferred compensation 439 293 Deferred tax provision (benefit) 721 (288) Amortization of restricted stock awards 57 27 -------- -------- 5,558 4,379 (Increase) decrease in operating receivables: Customers (75,314) (5,866) Brokers and dealers (2,981) 8,982 (Decrease) increase in operating payables: Customers (10,643) (10,673) Brokers and dealers 42,535 39,469 Decrease (increase) in assets: Cash segregated for the exclusive benefit of customers 223 296 Securities owned (1,142) (5,201) Notes receivable from officers and employees (468) (878) Other assets 1,573 (1,005) Increase (decrease) in liabilities: Securities sold, not yet purchased 278 (473) Drafts payable, accounts payable and accrued expenses, and accrued employee compensation (6,716) (7,390) -------- -------- Cash (Used For) Provided By Operating Activities $(47,097) $ 21,640 -------- -------- See Notes to Consolidated Financial Statements. 8 STIFEL FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (UNAUDITED)(In thousands) Six Months Ended June 27, 1997 June 28, 1996 Cash (Used For) Provided By Operating Activities - from previous page $(47,097) $ 21,640 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Short-term borrowings, net 48,175 (21,225) Proceeds from: Temporary subordinated debt 8,000 - - Employee stock purchase plan 727 617 Exercised stock options 53 - - Dividend reinvestment plan 3 7 Payments for: Temporary subordinated debt (8,000) - - Settlement of long-term debt - - (760) Purchases of stock for treasury (1,110) (95) Principal payments under capital lease obligation (208) (154) Cash dividends (284) (269) -------- -------- Cash Provided By (Used For) Financing Activities 47,356 (21,879) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from: Sale of office equipment and leasehold improvements 3 8 Sale of investments - - 3,510 Payments for: Acquisition of office equipment and leasehold improvements (571) (178) Acquisition of investments (798) (751) -------- -------- Cash (Used For) Provided By Investing Activities (1,366) 2,589 -------- -------- (Decrease) increase in cash and cash equivalents (1,107) 2,350 Cash and cash equivalents - beginning of period 7,960 6,344 -------- -------- Cash and Cash Equivalents - end of period $ 6,853 $ 8,694 ======== ======== Supplemental disclosure of cash flow information: Income tax payments $ 1,864 $ 884 Interest payments $ 5,866 $ 4,084 Schedule of noncash investing and financing activities: Fixed assets acquired under capital lease $ 292 $ 240 Employee stock ownership plan shares issued $ 287 - - Assumption of debt for investment - - $ 150 See Notes to Consolidated Financial Statements. 9 STIFEL FINANCIAL CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The consolidated financial statements include the accounts of Stifel Financial Corp. and its subsidiaries (collectively referred to as "the Company"). The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 27, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. For further information, refer to the financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1996. Where appropriate, prior years' financial information has been reclassified to conform with the current year presentation. NOTE B - NET CAPITAL REQUIREMENT The Company's principal subsidiary, Stifel, Nicolaus & Company, Incorporated ("SN & Co."), is subject to the Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934 (the "rule"), which requires the maintenance of minimum net capital, as defined. SN & Co. has elected to use the alternative method permitted by the rule which requires maintenance of minimum net capital equal to the greater of $250,000 or 2 percent of aggregate debit items arising from customer transactions, as defined. The rule also provides that equity capital may not be withdrawn or cash dividends paid if resulting net capital would be less than 5 percent of aggregate debit items. At June 27, 1997, SN & Co. had net capital of $26,501,000 which was 8.08% of its aggregate debit items and $19,944,000 in excess of the minimum required net capital. 10 NOTE C - RECENT ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board has issued SFAS 128, "Earnings per Share," and SFAS 129, "Disclosure of Information about Capital Structure," which are to be implemented by companies whose fiscal year ends after December 15, 1997. The adoption of these accounting standards will not have a material impact on the Company's reported earnings per share or consolidated financial statements. Additionally, the Financial Accounting Standards Board has issued SFAS 130, "Reporting Comprehensive Income," and SFAS 131, "Disclosures about Segments of an Enterprise and Related Information," which are to be implemented by companies whose fiscal year begins after December 15, 1997. Management has not determined the impact, if any, of the accounting standards adoption on the Company's consolidated financial statements. NOTE D - SUBSEQUENT EVENT On July 22, 1997, the Company's Board of Directors declared a regular quarterly dividend of $0.03 per share, payable on August 19, 1997 to stockholders of record August 5, 1997. ****** 11 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition Results of Operations Three months ended June 1997 and June 1996 The Company recorded net earnings of $921,000, or $0.19 per primary share on total revenues of $30,660,000 for the second quarter ended June 27, 1997, compared to net earnings of $1,361,000 or $0.28 per primary share on total revenues of $30,707,000 for the same period one year earlier. Net income for the same quarter in the previous year included a gain on investment, which contributed additional net income of $1,042,000, or $0.22 per share. The gain resulted from the exercise of warrants generated by the corporate finance department related to an underwriting and the ultimate sale of the shares received for the exercise of the warrants. Net income for the second quarter of 1996, without the contribution from the gain on investment, was $319,000, or $0.06 per share. Excluding the gain on investment, the Company's net income for the second quarter of 1997 increased 188.7 percent over the same quarter in 1996. Total revenues decreased $47,000 (0.2%) from $30,707,000 to $30,660,000. All categories of revenue remained relatively unchanged except for interest revenue and other revenue. Interest revenue increased $2,633,000 (78.2%) from $3,369,000 to $6,002,000 primarily as a result of increased borrowings by individual investors. The average customer receivables increased $144,621,000 (94.9%) from $152,417,000 for the quarter ended June 28, 1996 to $297,038,000 for the quarter ended June 27, 1997, due largely to increases in borrowings by certain customers. Other revenue decreased $2,875,000 (42.4%) from $6,776,000 to $3,901,000 principally due to the gain on an investment of $3,297,000 recorded in 1996 as previously discussed with no like revenue in 1997. The decrease in the other revenue was partially offset by continued growth of the managed account fees and money market distribution fees which increased $464,000 and $217,000, respectively. Total expenses increased $630,000 (2.2%) from $28,466,000 to $29,096,000. Employee compensation and benefits decreased $812,000 (4.5%) from $18,192,000 to $17,380,000. The variable component of compensation and benefits decreased $1,430,000 (10.4%) from $13,768,000 to $12,338,000 as a result of the decrease in compensation associated with the gain included in other revenue previously mentioned. This decrease was partially offset by the increase in the fixed portion of compensation and benefits, which increased $618,000 (14.0%) from $4,424,000 to $5,042,000, resulting from increased staffing and normal year-to-year pay increases. 12 Interest expense increased $2,067,000 (100.1%) from $2,065,000 to $4,132,000 as a result of increased borrowings for customer trading activity and increased borrowings by the firm for underwriting activity and increased level of securities owned. Average borrowings for the firm increased $110,507,000 (168.0%) from $65,777,000 for the second quarter of 1996 to $176,284,000 for the second quarter of 1997. Other expenses decreased $938,000 (22.9%) from $4,091,000 to $3,153,000 predominantly as a result of the reduction of legal expenses and settlements for litigation. Six months ended June 1997 and June 1996 The Company recorded net earnings of $2,568,000, or $0.53 per primary share on total revenues of $62,504,000 for the first six months ended June 27, 1997, compared to net earnings of $1,511,000 or $0.32 per primary share on total revenues of $54,144,000 for the same period one year earlier. The increase in the first six months net income of 1997 over the first six months net income of 1996 can be attributed primarily to the increase in revenues. Total revenues increased $8,360,000 (15.4%) from $54,144,000 to $62,504,000 as retail investor activity remained strong coupled with a solid investment banking performance. Investment banking revenues increased $6,673,000 (132.1%) from $5,050,000 to $11,723,000 as a result of underwriting a number of secondary offerings of trust preferred stocks for financial institutions and REITs for mortgage banking companies. Interest revenues increased $3,488,000 (53.2%) from $6,559,000 to $10,047,000 primarily as a result of increased secured borrowings by individual investors, as noted in the three months ended discussion. The average customer receivables increased $106,541,000 (70.8%) from $150,457,000 for the six months ended June 28, 1996 to $256,998,000 for the six months ended June 27, 1997, due largely to increases in borrowings by certain customers. Other revenue decreased $2,662,000 (26.7%) from $9,980,000 to $7,318,000 principally due to the gain on an investment, as noted in the three months ended discussion. Total expenses increased $6,543,000 (12.7%) from $51,645,000 to $58,188,000, primarily as a result of increased compensation and benefits which increased $4,877,000 (14.9%) from $32,718,000 to $37,595,000. The variable component of compensation and benefits increased $4,028,000 (16.8%) from $23,929,000 to $27,957,000 correspondingly to increased revenue production and increased profitability. The fixed portion of compensation and benefits increased $849,000 (9.7%) from $8,789,000 to $9,638,000 due principally to normal year to year salary adjustments and increased staffing levels. 13 Interest expense increased $2,475,000 (61.8%) from $4,008,000 to $6,483,000 as a result of increased borrowings for customer trading activity and increased borrowings by the firm for underwriting activity and increased level of securities owned. Average borrowings for the firm increased $67,285,000 (100.8%) from $66,729,000 for the first half of 1996 to $134,014,000 for the first half of 1997. Other expenses decreased $735,000 (11.1%) from $6,619,000 to $5,884,000 predominantly as a result of the reduction of legal expenses and settlements for litigation. Occupancy and equipment rental decreased $265,000 (7.3%) from $3,612,000 to $3,347,000, primarily as a result of a renegotiated long-term office space lease which had been previously recognized as an expense. Liquidity and Capital Resources The Company's assets are highly liquid, consisting mainly of cash or assets readily convertible into cash. These assets are financed primarily by the Company's equity capital, customer credit balances, short-term bank loans, proceeds from securities lending, long-term senior convertible notes, and other payables. Changes in securities market volumes, related customer borrowing demands, underwriting activity, and levels of securities inventory affect the amount of the Company's financing requirements. Because of the nature of the Company's business, the changes in operating assets and liability account balances relative to net income for any particular accounting period can be quite large and somewhat arbitrary and therefore are not very useful indicators of long-term trends in the Company's cash flow from operations. In the six months ended June 27, 1997, cash and cash equivalents decreased $1,107,000 (13.9%) to $6,853,000 from $7,960,000 at December 31, 1996. The decrease in cash was substantially a result of cash used by operating activities of $47,097,000, offset by cash provided by financing activities of $47,356,000. The cash used for operating activities was principally attributed to increases in operating receivables and securities inventory owned of $78,295,000 and $1,142,000, respectively, and decreases of drafts payable, accounts payable and accrued expenses, and accrued employee compensation of $6,716,000. The cash used for operating activities was partly offset by cash provided by net income, adjusted for noncash charges, of $5,558,000 and an increase in operating payables of $31,892,000. The cash provided from financing activity primarily consisted of proceeds for the short-term borrowings from banks of $48,175,000. The Company used $1,369,000 for the acquisition of investments and fixed assets. SN & Co. is subject to requirements of the Securities and Exchange Commission with regard to liquidity and capital requirements (see Note B of the Notes to Consolidated Financial Statements). At June 27, 1997, SN & Co. had net capital of $26,501,000 which was 8.08% of its aggregate debit items and $19,944,000 in excess of the minimum required net capital. 14 During the first quarter ended March 27, 1997, SN & Co. obtained and repaid a temporary subordinated note in the amount of $8,000,000. The subordinated note was used to finance underwritings. The first installment of the company's convertible debt is due September 1, 1997, in the amount of $2,500,000. The holder of the debt has the option to convert the $2,500,000 installment into 354,429 shares of common stock. Management believes if the debt is not converted, funds from operations and available informal short-term credit arrangements of $79,425,000 at June 27, 1997, will provide sufficient resources to meet the present and anticipated financing needs. 15 PART II. OTHER INFORMATION Item 1. Legal Proceedings There were no material changes, during the six months ended June 27, 1997, in the legal proceedings previously reported in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. Such information is hereby incorporated by reference. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit No. (Reference to Item 601(b) of Regulation S-K) Description ------------------------- ----------- 11 Computation of Earnings Per Share 27 Financial Data Schedule (furnished to the Securities and Exchange Commission for Electronic Data Gathering, Analysis, and Retrieval [EDGAR] purposes only) (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended June 27, 1997. The Company filed a report on Form 8-K dated July 2, 1997. This report Form 8-K contained information under Item 5. Other Events. On July 2, 1997, the Company announced that Gregory F. Taylor, Director, President and Chief Executive Officer of both Stifel Financial Corp. and Stifel, Nicolaus & Company, Incorporated (the Registrant's wholly-owned broker-dealer subsidiary) resigned as of July 31, 1997. A search committee has been appointed to select the successor CEO and planned to begin its work immediately after the announcement. In the interim period, the Company will be managed by its six-person Operating Committee of which Mr. Lawrence E. Somraty will serve as Chairman. 16 SIGNATURES Pursuant to the requirement of Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. STIFEL FINANCIAL CORP. (Registrant) Date: August 8, 1997 By /s/ George H. Walker III George H. Walker III (Chairman of the Board) Date: August 8, 1997 By /s/ Stephen J. Bushmann Stephen J. Bushmann (Principal Financial and Accounting Officer) 17 STIFEL FINANCIAL CORP. AND SUBSIDIARIES EXHIBIT INDEX June 27, 1997 Exhibit Number Description -------- ----------- 11 Computation of Earnings Per Share 27 Financial Data Schedule (furnished to the Securities and Exchange Commission for Electronic Data Gathering, Analysis, and Retrieval [EDGAR] purposes only) EX-11 2 EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE EXHIBIT 11 STIFEL FINANCIAL CORP. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In Thousands, Except Per Share Amounts) (UNAUDITED) Three Months Ended June 27, 1997 June 28, 1996 Fully Fully Primary Diluted Primary Diluted ------- ------- ------- ------- Net income $ 921 $ 921 $1,361 $1,361 After-tax interest savings assuming conversion of Senior Convertible Notes (1) - - 128 - - 172 ------ ------ ------ ------ Net income adjusted for after- tax interest savings $ 921 $1,049 $1,361 $1,533 ====== ====== ====== ====== Average number of common shares outstanding during the period 4,704 4,704 4,694 4,694 Additional shares assuming exercise of stock options (2) 171 311 102 136 Additional Shares assuming conversion of Senior Convertible Notes (3) - - 1,418 - - 1,418 ------ ------ ------ ------ Average number of common shares used to calculate earnings per share 4,875 6,433 4,796 6,248 ====== ====== ====== ====== Net earnings per share $ 0.19 $ 0.16 $ 0.28 $ 0.25 ====== ====== ====== ====== Six Months Ended June 27, 1997 June 28, 1996 Fully Fully Primary Diluted Primary Diluted ------- ------- ------- ------- Net income $2,568 $2,568 $1,511 $1,511 After-tax interest savings assuming conversion of Senior Convertible Notes (1) - - 257 - - 343 ------ ------ ------ ------ Net income adjusted for after- tax interest savings $2,568 $2,825 $1,511 $1,854 ====== ====== ====== ====== Average number of common shares outstanding during the period 4,704 4,704 4,679 4,679 Additional shares assuming exercise of stock options (2) 164 311 78 136 Additional Shares assuming conversion of Senior Convertible Notes (3) - - 1,418 - - 1,418 ------ ------ ------ ------ Average number of common shares used to calculate earnings per share 4,868 6,433 4,757 6,233 ====== ====== ====== ====== Net earnings per share $ 0.53 $ 0.44 $ 0.32 $ 0.30 ====== ====== ====== ====== (1) Represents the after-tax interest savings resulting from assumed conversion of $10,000,000 aggregate principal 11.25% Senior Convertible Notes. (2) Represents the number of shares of common stock issuable on the exercise of dilutive employee stock options less the number of shares of common stock which could have been purchased with the proceeds from the exercise of such options and assumed purchases of stock from the Employee Stock Purchase Plan (ESPP). For primary earnings per share computations, these purchases were assumed to have been made at the average market price of the common stock during the period or that part of the period for which the option was outstanding or shares assumed purchased through the ESPP. For fully diluted earnings per share computations, these purchases were assumed to have been made at the greater of the market price of the common stock at the end of the period or average market price of the common stock during the period or that part of the period for which the option was outstanding or shares assumed purchased through the ESPP. (3) Represents the number of shares of common stock issuable upon conversion of $10,000,000 aggregate principal 11.25% Senior Convertible Notes at a conversion price of $7.0536 per share. EX-27 3 EXHIBIT 27 - FINANCIAL DATA SCHEDULE - ARTICLE BD
BD THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENT OF FINANCIAL CONDITION DATED JUNE 27, 1997 AND THE STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 27, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-27-1997 7,113 319,037 0 12,549 20,054 2,407 377,443 180,575 54,195 0 89,113 3,507 10,000 715 0 0 39,338 377,443 10,116 10,047 23,299 11,723 1,346 6,483 37,595 4,316 4,316 0 0 2,568 0.53 0.44
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