-----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,
GNJdJ+zqk5KZtCN/WUQuMirkm2RJ+V15Y4pJUw6Gpof2ETsIgNXXvYSM/ANxsvEZ
dYt2o2D5FUydTWvoAlcUtQ==
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): May 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 May 12, 2008 Stifel Financial Corp. announced its results for the three months ended March 30, 2008. A copy of the related press release is attached hereto as Exhibit 99.1.
Stifel Financial Corp. will hold a conference call on Monday, May 12, 2008, at 11:00 a.m. EST. 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, 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 conference call slide show is attached hereto as Exhibit 99.2.
The exhibits are "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 exhibits are "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 May 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: May 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 May 12, 2008. |
99.2 |
Stifel Financial Corp.'s Investor Presentation. |
Page 4
STIFEL FINANCIAL CORP.
[Stifel Financial Corp. logo]
Stifel Financial News
One Financial Plaza |
For further information contact:
Chief Financial OfficerJames M. Zemlyak,
For Immediate Release
Stifel Financial Corp. Reports First Quarter Results
Revenue of $211.4 million, up 35%
Net Income increased 62%
EPS up 40%, Core EPS up 20%
Board authorizes three-for-two stock split
St. Louis, Missouri - May 12, 2008 - Stifel Financial Corp. (NYSE: "SF") today reported unaudited quarterly net income of $14.3 million, or $0.81 per diluted share, on revenue of $211.4 million for the quarter ended March 31, 2008. For the comparable quarter of 2007, net income was $8.8 million, or $0.58 per diluted share, on revenue of $157.0 million.
At March 31, 2008, our equity was $436.8 million, resulting in book value per share of $28.07.
After adjusting for acquisition related charges, non-GAAP net income, our "Core earnings", and non-GAAP earnings per diluted share were $18.3 million and $1.03, respectively for the first quarter of 2008 compared to 2007 first quarter non-GAAP earnings of $13.2 million and non-GAAP earnings per diluted share of $0.86. A reconciliation between our GAAP results and non-GAAP measures is included.
Current year first quarter results include the operations of Ryan Beck and Company and Stifel Bank and Trust for the full three months compared to the prior year first quarter results which include Ryan Beck operations for one month and no activity for Stifel Bank and Trust, as the acquisitions were made on February 28, 2007 and April 2, 2007, respectively.
Stifel Financial Corp. |
|||||
Summary of Results of Operations (Unaudited) |
|||||
($ In Thousands, Except Per Share Amounts) |
|||||
Three Months Ended |
Percent Change From |
||||
3/31/2008 |
12/31/2007 |
3/31/2007 |
12/31/2007 |
3/31/2007 |
|
Total Revenues |
$ 217,242 |
$ 219,122 |
$ 162,498 |
-1% |
34% |
Net Revenues |
$ 211,477 |
$ 212,186 |
$ 156,961 |
0% |
35% |
Non-GAAP Net Income (1) |
$ 18,318 |
$ 20,491 |
$ 13,179 |
-11% |
39% |
Net Income |
$ 14,347 |
$ 13,835 |
$ 8,829 |
4% |
62% |
Per Share Information |
|||||
Three Months Ended |
Percent Change From |
||||
3/31/2008 |
12/31/2007 |
3/31/2007 |
12/31/2007 |
3/31/2007 |
|
Non-GAAP Earnings Per Share: Diluted (1) |
$ 1.03 |
$ 1.14 |
$ 0.86 |
-10% |
20% |
Earnings Per Share: Diluted |
$ 0.81 |
$ 0.77 |
$ 0.58 |
5% |
40% |
Weighed average common equivalent share Computations: Diluted shares |
17,763 |
18,022 |
15,315 |
-1% |
168% |
(1) See "Reconciliation of Core Earnings" table |
Page 1
First Quarter Business Highlights
Stock Split
The board of Stifel Financial Corp. authorized a 50% stock dividend which will be made in the form of a three-for-two stock split. The additional shares will be distributed on June 12, 2008, to shareholders of record May 29, 2008. Each shareholder will receive one additional share for every two shares owned. Cash will be distributed in lieu of fractional shares. The Company has approximately 15.7 million shares outstanding and, after the split, will have approximately 23.5 million shares outstanding.
Chairman's Comments
Chairman and Chief Executive Officer, Ronald J. Kruszewski, commented, "Despite turbulent and difficult markets, Stifel Financial achieved its second best quarter ever in terms of net revenue and third all-time with respect to core net income. Our ability to avoid many of the difficulties experienced in our industry is a result of our conservative balance sheet with assets of $1.6 billion supported by $532 million of equity and subordinated trust preferred. Despite our conservative leverage, we achieved a 17% annualized return on average equity, utilizing core earnings."
Mr. Kruszewski continued, "As compared to the first quarter of 2007, net revenue increased 35% driven by the addition of Ryan Beck's private client business and an exceptional quarter for Fixed Income Capital Markets, offset by a difficult quarter for investment banking industry-wide from which we were not immune. Excluding Ryan Beck private client revenue, net revenues increased 12% from the first quarter of 2007. Principal transactions increased 152% driven in large part by the record quarter in fixed income. Other revenue was a negative $1.2 million due primarily to mark to market losses of $2.4 million in the quarter as compared to investment gains of $400,000 and $1.9 million for the first and fourth quarter of 2007, respectively. Looking forward, while the current market for investment banking remains challenging, we see the environment and, consequently, our banking results improving in the second half of the year.
"During the quarter, we completed a secondary offering of our common stock selling the majority of BankAtlantic's position in Stifel Financial. We would like to welcome our new shareholder's and thank them for their investment in our company. We are also pleased to announce a 50% stock dividend, which underscores our confidence and will serve to add liquidity to our common stock."
Page 2
Stifel Financial Corp. |
|||||||||
Summary of Results of Operations (Unaudited) |
|||||||||
($ In Thousands, Except Per Share Amounts) |
|||||||||
Three Months Ended |
Percent Change From |
||||||||
Net Revenues |
3/31/2008 |
% of Net revenue |
12/31/2007 |
% of Net revenue |
3/31/2007 |
% of Net revenue |
12/31/2007 |
3/31/2007 |
|
Commissions |
$ 85,701 |
40.5% |
$ 90,584 |
42.7% |
$ 61,376 |
39.1% |
-5% |
40% |
|
Principal transactions |
66,937 |
31.7% |
47,670 |
22.5% |
26,566 |
16.9% |
40% |
152% |
|
Investment banking |
21,844 |
10.3% |
31,449 |
14.8% |
43,066 |
27.4% |
-31% |
-49% |
|
Asset management and service fees |
30,278 |
14.3% |
29,592 |
13.9% |
19,373 |
12.3% |
2% |
56% |
|
Other |
(1,207) |
-0.6% |
4,127 |
1.9% |
1,417 |
0.9% |
n/a |
n/a |
|
|
203,553 |
96.3% |
203,422 |
95.9% |
151,798 |
96.7% |
0% |
34% |
|
Interest revenue |
13,689 |
6.5% |
15,700 |
7.4% |
10,700 |
6.8% |
-13% |
28% |
|
|
217,242 |
102.7% |
219,122 |
103.3% |
162,498 |
103.5% |
-1% |
34% |
|
Less: Interest expense |
5,765 |
2.7% |
6,936 |
3.3% |
5,537 |
3.5% |
-17% |
4% |
|
|
211,477 |
100.0% |
212,186 |
100.0% |
156,961 |
100.0% |
0% |
35% |
|
Non-Interest Expenses |
|||||||||
Employee compensation and benefits |
146,030 |
69.1% |
141,758 |
66.8% |
110,834 |
70.6% |
3% |
32% |
|
Occupancy and equipment rental |
15,716 |
7.4% |
17,029 |
8.0% |
10,608 |
6.8% |
-8% |
48% |
|
Communication and office supplies |
11,947 |
5.6% |
11,052 |
5.2% |
8,094 |
5.2% |
8% |
48% |
|
Commissions and floor brokerage |
481 |
0.2% |
2,675 |
1.3% |
1,615 |
1.0% |
-82% |
-70% |
|
Other operating expenses |
13,378 |
6.3% |
16,579 |
7.8% |
10,993 |
7.0% |
-19% |
22% |
|
|
187,552 |
88.7% |
189,093 |
89.1% |
142,144 |
90.6% |
-1% |
32% |
|
Income before income taxes |
23,925 |
11.3% |
23,093 |
10.9% |
14,817 |
9.4% |
4% |
61% |
|
Provision for income taxes |
9,578 |
4.5% |
9,258 |
4.4% |
5,988 |
3.8% |
3% |
60% |
|
|
$ 14,347 |
6.8% |
$ 13,835 |
6.5% |
$ 8,829 |
5.6% |
4% |
62% |
|
Per Share information |
|||||||||
Earnings Per Share: |
|||||||||
|
$ 0.92 |
$ 0.92 |
$ 0.67 |
2% |
40% |
||||
|
$ 0.81 |
$ 0.77 |
$ 0.58 |
5% |
40% |
||||
Weighted average common equivalent shares |
|||||||||
|
15,517 |
15,089 |
13,107 |
3% |
18% |
||||
|
17,763 |
18,022 |
15,315 |
-1% |
16% |
||||
Balance Sheet Information |
|||||||||
Total Assets (in thousands) |
$ 1,613,215 |
$ 1,499,440 |
$ 1,427,407 |
8% |
13% |
||||
Total Liabilities & Sub Debt (in thousands) |
$ 1,176,176 |
$ 1,074,803 |
$ 1,084,766 |
9% |
8% |
||||
Stockholders' Equity (in thousands) |
$ 437,038 |
$ 424,637 |
$ 342,641 |
3% |
28% |
||||
Statistical Information |
|||||||||
Book Value Per Share |
$ 28.07 |
$ 27.54 |
$ 23.16 |
2% |
21% |
||||
Financial Advisors |
972 |
966 |
956 |
1% |
2% |
||||
Employees |
2,882 |
2,834 |
2,766 |
2% |
4% |
||||
Locations |
179 |
175 |
178 |
2% |
1% |
||||
Total Client Assets (in thousands) |
$ 57,283,000 |
$ 59,299,000 |
$36,464,000 |
-3% |
57% |
Business Segment Results
Stifel Financial Corp. |
|||||
Summary of Segment Data & Statistical Information (Unaudited) |
|||||
Segment Data ($ In Thousands) |
|||||
Three Months Ended |
Percent Change From |
||||
Net Revenues |
3/31/2008 |
12/31/2007 |
3/31/2007 |
12/31/2007 |
3/31/2007 |
Private client |
$ 114,853 |
$ 119,260 |
$ 85,527 |
-4% |
34% |
Equity capital markets |
49,228 |
59,421 |
52,530 |
-17% |
-6% |
Fixed income capital markets |
44,002 |
23,794 |
14,615 |
85% |
201% |
Stifel bank |
2,082 |
1,871 |
0 |
11% |
n/a |
Other |
1,312 |
7,840 |
4,289 |
-83% |
-69% |
Total net revenues |
$ 211,477 |
$ 212,186 |
$ 156,961 |
0% |
35% |
Operating Contribution |
|||||
Private client |
$ 25,605 |
$ 27,484 |
$ 18,091 |
-7% |
42% |
Equity capital markets |
6,927 |
10,213 |
13,418 |
-32% |
-48% |
Fixed income capital markets |
14,913 |
4,785 |
1,887 |
212% |
690% |
Stifel bank |
309 |
347 |
0 |
-11% |
n/a |
Other/unallocated overhead |
(23,829) |
(19,736) |
(18,579) |
n/a |
n/a |
|
$ 23,925 |
$ 23,093 |
$ 14,817 |
4% |
61% |
Page 3
Private Client Group Segment First Quarter Highlights
Mr. Kruszewski, commented, "Our Private Client Group (PCG) continued its growth in the 1st quarter of 2008 as evidenced by the addition of 32 financial advisors and the opening of five new offices in: Oconomowoc, WI; Brevard, NC; Memphis, TN; Lincoln Hills, CA; and Oxnard, CA. PCG revenue increased 34% from the 1st quarter of 2007 reflecting our successful integration of Ryan Beck. The increase in revenue was driven by a 57% increase in asset management and service fees and a 51% increase in commissions and principal transactions which offset a 67% decline in investment banking revenue. The decline in investment banking was due to both the difficult market conditions and to a decline in closed-end fund offerings as compared to the 1st quarter of 2007. Sequentially, while revenue and pre-tax income declined 4% and 7%, respectively, from the record preceding quarter, our results were outstanding given market conditions."
Stifel Financial Corp. |
|||||
Private Client Group Segment Data & Statistical Information (Unaudited) |
|||||
($ in thousands) |
|||||
Three Months Ended |
Percent Change From |
||||
Revenues: |
3/31/2008 |
12/31/2007 |
3/31/2007 |
12/31/2007 |
3/31/2007 |
Commissions and principal transactions |
$ 77,952 |
$ 81,929 |
$ 51,730 |
-5% |
51% |
Investment banking |
4,103 |
4,705 |
12,288 |
-13% |
-67% |
Asset management and service fees |
30,147 |
29,578 |
19,227 |
2% |
57% |
Net interest & other |
2,651 |
3,048 |
2,282 |
-13% |
16% |
|
114,853 |
119,260 |
85,527 |
-4% |
34% |
Non-interest expenses: |
|||||
Employee compensation & benefits |
72,845 |
72,151 |
54,956 |
1% |
33% |
Other non-interest expenses |
16,403 |
19,625 |
12,480 |
-16% |
31% |
Total non-interest expenses |
89,248 |
91,776 |
67,436 |
-3% |
32% |
|
$ 25,605 |
$ 27,484 |
$ 18,091 |
-7% |
42% |
Ratios to Net Revenues |
|||||
Employee compensation & benefits |
63% |
60% |
64% |
||
Other non-interest expenses |
15% |
17% |
15% |
||
Net Margins |
22% |
23% |
21% |
Page 4
Equity Capital Markets Segment First Quarter Highlights
Mr. Kruszewski, commented, "Our results in Equity Capital Markets reflect the difficult environment in investment banking. On the other hand, our research driven flow business, as measured by commissions and principal transactions, increased 41% over the comparable quarter of 2007. Despite the difficult quarter for banking our pipeline remains strong and, as previously stated, we see this business improving in the second half of the year."
Stifel Financial Corp. |
||||||||
Equity Capital Markets Segment Data & Statistical Information (Unaudited) |
||||||||
(in thousands) |
||||||||
Three Months Ended |
Percent Change From |
|||||||
Revenues: |
3/31/2008 |
12/31/2007 |
3/31/2007 |
12/31/2007 |
3/31/2007 |
|||
Commissions and principal transactions |
$ 34,654 |
$ 35,100 |
$ 24,621 |
-1% |
41% |
|||
|
6,758 |
7,850 |
11,828 |
-14% |
-43% |
|||
|
7,509 |
16,322 |
15,654 |
-54% |
-52% |
|||
Investment banking |
14,267 |
24,172 |
27,482 |
-41% |
-48% |
|||
Other |
307 |
149 |
427 |
106% |
-28% |
|||
|
49,228 |
59,421 |
52,530 |
-17% |
-6% |
|||
Non-interest expenses: |
||||||||
Employee compensation & benefits |
31,294 |
38,099 |
30,889 |
-18% |
1% |
|||
Other non-interest expenses |
11,007 |
11,109 |
8,223 |
-1% |
34% |
|||
Total non-interest expenses |
42,301 |
49,208 |
39,112 |
-14% |
8% |
|||
|
$ 6,927 |
$ 10,213 |
$ 13,418 |
-32% |
-48% |
|||
Ratios to Net Revenues |
||||||||
Employee compensation & benefits |
64% |
64% |
59% |
|||||
Other non-interest expenses |
22% |
19% |
15% |
|||||
Net Margins |
14% |
17% |
26% |
Page 5
Fixed Income Capital Markets Segment First Quarter Highlights
Mr. Kruszewski, commented, "Our Fixed Income Capital Markets Group recorded outstanding results with a 201% increase in net revenue and a 690% increase in pre-tax income. Our flow business, primarily in corporate debt and mortgage backed securities, was the primary driver of our records results. In addition, the successful integration of Ryan Beck contributed to our record quarter."
Stifel Financial Corp. |
|||||||
Fixed Income Capital Markets Segment Data & Statistical Information (Unaudited) |
|||||||
(in thousands) |
|||||||
Three Months Ended |
Percent Change From |
||||||
Revenues: |
3/31/2008 |
12/31/2007 |
3/31/2007 |
12/31/2007 |
3/31/2007 |
||
Commissions and principal transactions |
$ 40,033 |
$ 21,225 |
$ 11,592 |
89% |
245% |
||
Investment banking |
3,474 |
2,571 |
3,296 |
35% |
5% |
||
Other |
495 |
(2) |
(273) |
n/a |
n/a |
||
|
44,002 |
23,794 |
14,615 |
85% |
201% |
||
Non-interest expenses: |
|||||||
Employee compensation & benefits |
25,936 |
15,804 |
10,154 |
64% |
155% |
||
Other non-interest expenses |
3,153 |
3,205 |
2,574 |
-2% |
22% |
||
Total non-interest expenses |
29,089 |
19,009 |
12,728 |
53% |
129% |
||
|
$ 14,913 |
$ 4,785 |
$ 1,887 |
212% |
690% |
||
Ratios to Net Revenues |
|||||||
Employee compensation & benefits |
59% |
66% |
69% |
||||
Other non-interest expenses |
7% |
14% |
18% |
||||
Net Margins |
34% |
20% |
13% |
Page 6
Stifel Bank Segment First Quarter Highlights
Mr. Kruszewski, commented, "We continue to grow Stifel Bank & Trust in a balanced and prudent manner. Our strategic rational for our bank is to provide a full range of banking products to our clients."
Stifel Financial Corp. |
|||
Stifel Bank & Trust Segment Data & Statistical Information (Unaudited) |
|||
($ in thousands) |
|||
Three Months Ended |
Percent Change |
||
Revenues |
3/31/2008 |
12/31/2007 |
|
Interest |
$ 3,551 |
$ 3,625 |
-2% |
Other |
247 |
238 |
4% |
Total Revenues |
3,798 |
3,863 |
-2% |
Less: Interest expense |
1,716 |
1,992 |
-14% |
Net revenues |
2,082 |
1,871 |
11% |
Employee compensation & benefits |
759 |
749 |
1% |
Provision for loan losses |
135 |
81 |
67% |
Other non-interest expenses |
879 |
692 |
27% |
Total non-interest expenses |
1,773 |
1,522 |
16% |
Income before income taxes |
$ 309 |
$ 349 |
-11% |
AS OF |
|||
3/31/2008 |
12/31/2007 |
Percent Change |
|
Total Assets |
$ 287,993 |
$ 248,982 |
16% |
Total Loans, net |
$ 150,106 |
$ 129,206 |
16% |
Total Deposits |
$ 229,660 |
$ 192,487 |
19% |
Total Capital |
$ 56,134 |
$ 55,773 |
1% |
Allowance for Loan Losses as a % of Loans |
1.15% |
1.32% |
|
Total Non-Performing Loans as a % of Loans |
1.42% |
1.51% |
Prior year quarter results are not presented as the results of operations related to Stifel Bank & Trust, acquired on April 2, 2007, are included from the date of acquisition
Page 7
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 ended March 31, 2008. 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 a 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 substitu te 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 compensation 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.
A limitation of utilizing these non-GAAP measures of 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 acquisitions 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.
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 ended March 31, 2008 to the aforementioned captions on a non-GAAP basis in the same respective period.
Reconciliation of Core Earnings (Unaudited) |
||||||||||
($ In Thousands) |
||||||||||
Three Months Ended March 31, 2008 |
Three Months Ended March 31, 2007 |
|||||||||
GAAP |
Acquisition Related |
Core Business |
% of Revenue |
GAAP |
Acquisition Related |
Core Business |
% of Revenue |
|||
Revenue |
||||||||||
Net Revenue |
$211,477 |
- - |
$211,477 |
100% |
$156,961 |
- - |
$156,961 |
100% |
||
Non Interest Expenses |
||||||||||
Compensation and Benefits |
146,030 |
(6,298) |
a |
139,732 |
66% |
110,834 |
(6,162) |
a |
104,672 |
67% |
Operating Expenses |
41,522 |
(333) |
b |
41,189 |
19% |
31,310 |
(1,138) |
b |
30,172 |
19% |
Total non-interest expenses |
187,552 |
(6,631) |
180,921 |
85% |
142,144 |
(7,300) |
134,844 |
86% |
||
Income before income taxes |
23,925 |
6,631 |
30,556 |
14% |
14,817 |
7,300 |
22,117 |
14% |
||
Provision for income taxes |
9,578 |
2,660 |
c |
12,238 |
6% |
5,988 |
2,950 |
c |
8,938 |
6% |
Net income |
$14,347 |
$3,971 |
d |
$18,318 |
9% |
$8,829 |
$4,350 |
d |
$13,179 |
8% |
Compensation Ratios (e) |
69% |
66% |
70% |
67% |
||||||
Annualized return on average equity (h) |
13% |
17% |
14% |
21% |
||||||
Pretax Margin(f) |
11% |
14% |
9% |
14% |
||||||
Earnings per share-Diluted (g) |
$0.81 |
$0.22 |
$1.03 |
$0.58 |
$0.28 |
$0.86 |
Page 8
Statement of Financial Condition Highlights
Total assets increased 13% to $1.6 billion from $1.4 billion at March 31, 2007, principally as a result of the Stifel Bank & Trust acquisition. Total stockholders' equity increased $94.4 million, or 28%, to $437.0 million, principally due to the acquisition, unit amortization, the conversion of the Ryan Beck deferred compensation plan, and net income.
At March 31, 2008, the Company reported total securities owned at fair value of $238.6 million which included trading securities categorized as level 3 of $15.1 million and available for sale securities categorized as level 3 of $19.0 million. These securities, primarily auction rate securities, were moved from level 2 to level 3 as a result of the upheaval in the auction rate securities markets.
Conference Call Information
Stifel Financial Corp. will hold a conference call Monday, May 12, 2008, at 11:00 a.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, as 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 179 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. Stifel Bank & Trust offers a full range of consumer and commercial lending solutions. 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 cond itions; 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 9
Stifel Financial Corp. 1st Quarter 2008 Fiscal Year Earnings Conference Call May 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. |
Business Highlights Net revenue of $211.5 million a 35% increase over the prior year first quarter and down slightly from the fourth quarter 2007. GAAP net income of $14.3 million, or $0.81 per diluted share, a 62% increase over the prior year first quarter and a 4% increase from the fourth quarter 2007. Core net income of $18.3 million, or $1.03 per diluted share, a 39% increase over the prior year first quarter and a 11% decrease from the fourth quarter 2007 Commission and principal transactions increased $64.7 million, 74% over the previous year first quarter. Asset management and service fees increased 56% to $30.3 million as compared to the prior year first quarter. For the three months ended March 31, 2008, utilizing Core earnings, pretax margin was 14%. For the three months ended March 31, 2008, utilizing Core earnings, annualized return on average equity was 17%. The number of Financial Advisors increased to 972 from 956. The Fixed Income Capital Markets segment recorded record net revenues of $44.0 million and record income before income taxes of $14.9 million. |
Stifel Income Statement-Core Revenues |
Stifel Income Statements |
Segment Comparison-Excluding Acquisitions |
Private Client Group Income Statement |
Equity Capital Markets Income Statement |
Fixed Income Capital Markets Income Statement |
Banking Segment Income Statement |
Other Segment Analysis |
Reconciliation of GAAP to Core Earnings |
GAAP to Core Earnings |
Estimated/Actual Yealy Impact of Acquisition charges on Income statement |
Estimated/Actual Quarterly Impact of Acquisition charges on Income statement |
Balance Sheet Graphs |
Capital Structure |
Other Financial Data |
Questions and Answers |