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0000720672-09-000016.txt : 20090212
0000720672-09-000016.hdr.sgml : 20090212
20090212105823
ACCESSION NUMBER: 0000720672-09-000016
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 30
CONFORMED PERIOD OF REPORT: 20081231
ITEM INFORMATION: Results of Operations and Financial Condition
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20090212
DATE AS OF CHANGE: 20090212
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: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-09305
FILM NUMBER: 09592609
BUSINESS ADDRESS:
STREET 1: ATTN: JAMES G. LASCHOBER
STREET 2: 501 N. BROADWAY
CITY: ST. LOUIS
STATE: MO
ZIP: 63102-2102
BUSINESS PHONE: 314-342-2000
MAIL ADDRESS:
STREET 1: ATTN: JAMES G. LASCHOBER
STREET 2: 501 N. BROADWAY
CITY: ST. LOUIS
STATE: MO
ZIP: 63102-2102
8-K
1
r8k_2008q48k.htm
FORM 8-K DATED FEBRUARY 12, 2009
SECURITIES AND EXCHANGE COMMISSION
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date
of earliest event reported): February 12, 2009
STIFEL FINANCIAL CORP.
(Exact name of
registrant as specified in its charter)
Delaware
(State
of incorporation)
|
1-9305
(Commission
File Number)
|
43-1273600
(IRS
Employer
Identification No.)
|
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___________________________
(Former name or former address, if changed since last report)
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))
Item 2.02 Results of
Operations and Financial Condition.
On
February 12, 2009 Stifel Financial Corp. announced its results for the three and
twelve months ended December 31, 2008. A copy of the related press release is
attached hereto as Exhibit 99.1.
Stifel
Financial Corp. will hold a conference call on Thursday, February 12, 2009, 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 February 12, 2009.
Exhibit 99.2: Stifel Financial Corp.'s Investor
Presentation.
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.
STIFEL FINANCIAL CORP.
Date:
February 12, 2009
|
By:
/s/ James M. Zemlyak
|
|
Name: James
M. Zemlyak
|
|
Title: Chief
Financial Officer
|
Exhibit Index
|
|
|
Exhibit No.
|
|
Description
|
99.1
|
|
Stifel
Financial Corp.'s press release dated February 12, 2009.
|
99.2
|
|
Stifel
Financial Corp.'s Investor Presentation.
|
EX-99.1
2
r2008q4eredgar1.htm
PRESS RELEASE
For further information contact:
STIFEL
FINANCIAL CORP.
Form 8-K Dated February 12, 2009
Exhibit 99: Press Release
[Stifel Financial Corp. logo] Stifel
Financial News
One Financial Plaza
501 North Broadway
St. Louis, MO 63102
(314) 342-2000
|
For further information contact:
James M. Zemlyak, Chief Financial Officer
(314) 342-2228 zemlyakj@stifel.com
For Immediate Release
Stifel Financial
Corp. Reports Record Annual and Fourth Quarter Results
Thirteenth Consecutive Year of Record Net Revenue
Record Annual and Quarterly Net Income
Quarterly Core Diluted EPS $0.72, Quarterly GAAP Diluted EPS $0.59
Year to Date Core Diluted EPS $2.60, Year to Date GAAP Diluted EPS $2.04
St. Louis, Missouri
- - February 12, 2009 - Stifel Financial Corp. (NYSE: "SF ")
today reported unaudited quarterly net income of $17.8 million, or $0.59 per
diluted share, on record net revenues of $228.2 million for the quarter ended December
31, 2008. For the comparable quarter of 2007, net income was $13.8 million, or
$0.51 per diluted share, on net revenues of $212.2 million. For the year ended December 31, 2008, we posted record
net income of $57.2 million, or $2.04 per diluted share, on record net revenues
of $867.5 million, compared with $32.2 million, or $1.25 per diluted share, on net
revenues of $763.1 million, for the same period one year earlier. All prior period
share and earnings per share amounts have been retroactively restated to
reflect the three-for-two stock split distributed in June 2008.
After adjusting for
acquisition related charges, non-GAAP net income, our "Core
earnings ", and non-GAAP earnings per diluted share were $21.7
million and $0.72, respectively, for the fourth quarter of 2008 compared to 2007
fourth quarter non-GAAP earnings of $20.5 million and non-GAAP earnings per
diluted share of $0.76. For the year
ended December 31, 2008, our non-GAAP
earnings and non-GAAP earnings per diluted share were $73.1 million and $2.60,
respectively, compared to 2007 prior year non-GAAP earnings of $66.8 million
and non-GAAP earnings per diluted share of $2.60. A reconciliation between our
GAAP results and non-GAAP measures is included in this release.
Our 2008 fourth quarter results include an after
tax gain of approximately $0.11 per diluted share and after tax charges of
approximately $0.12 per diluted share. The after tax gain resulted from the
previously announced extinguishment of $12.5 million of 6.78% Stifel Financial
Capital Trust IV Cumulative Trust Preferred Securities. The after tax charge
includes approximately $0.10 per diluted share from unrealized losses on
investments and after tax charges of approximately $0.02 per diluted share for
the establishment of a charitable foundation. Our 2007 fourth quarter results
include an approximate $0.07 per diluted share gain for the extinguishment of $
10.0 million of 6.78% Stifel Financial Capital Trust IV Cumulative Trust
Preferred Securities. Excluding the aforementioned items 2008 fourth quarter
non-GAAP earnings per diluted share increased 6% over prior year non-GAAP
earnings per diluted share to $0.73 per diluted share.
Our results include
the operations of Ryan Beck and Company and Stifel Bank and Trust for the year
ended December 31, 2008, compared to the prior year results, which include Ryan
Beck operations for ten months and Stifel Bank and Trust for nine months, as
the acquisitions were made on February 28, 2007 and April 2, 2007,
respectively. Prior year results also include a significant investment banking
transaction that contributed $24.7 million in revenues in the second quarter of
2007.
At December 31, 2008,
our equity was $594.9 million, resulting in book value per share of $22.75.
During 2008, the Company repurchased 567,953 shares of its common stock, at an
average price of $27.96 per share. On September 29, 2008, the Company completed
the public offering of 1,495,000 new shares of Company common stock.
Chairman's
Comments
Chairman and Chief Executive Officer, Ronald J.
Kruszewski, commented, "Simply put, 2008 was uniquely challenging for the
financial services industry. Our Company has been fortunate to have sidestepped
many of the issues which plagued a number of our brethren. While we are mindful
of this environment, we consider this a time of unparalleled opportunity for our
Company."
"Going forward, we will continue to focus on the
long-term building of shareholder value, primarily through the addition of
talented and entrepreneurial people." Mr. Kruszewski concluded, "I would like
to congratulate and thank our hard-working associates for our record results in
2008 and also thank our clients for their continued confidence in Stifel
Financial."
Stifel Financial Corp.
|
Summary of Results of Operations(Unaudited)
|
($ In Thousands, Except Per Share Amounts)
|
|
Three Months Ended
|
Percent Change From
|
Nine Months Ended
|
Change
|
|
12/31/2008
|
9/30/2008
|
12/31/2007
|
9/30/2008
|
12/31/2007
|
12/31/2008
|
12/31/2007
|
Percent
|
Total
Revenues
|
$ 230,930
|
$ 223,829
|
$ 219,122
|
3%
|
5%
|
$ 886,021
|
$ 793,090
|
12%
|
Net
Revenues
|
$ 228,160
|
$ 218,923
|
$ 212,186
|
4%
|
8%
|
$ 867,511
|
$ 763,065
|
14%
|
Non-GAAP Net Income (1)
|
$ 17,756
|
$ 12,777
|
$ 13,835
|
39%
|
28%
|
$ 57,212
|
$ 32,170
|
78%
|
Net Income
|
$ 21,738
|
$ 16,714
|
$ 20,491
|
30%
|
6%
|
$ 73,090
|
$ 66,787
|
9%
|
Per Share Information
|
|
Three Months Ended
|
Percent Change From
|
Nine Months Ended
|
Change
|
|
12/31/2008
|
9/30/2008
|
12/31/2007
|
9/30/2008
|
12/31/2007
|
12/31/2008
|
12/31/2007
|
Percent
|
Non-GAAP Earnings Per Share:
Diluted (1)
|
$ 0.59
|
$ 0.46
|
$ 0.51
|
28%
|
16%
|
$ 2.04
|
$ 1.25
|
63%
|
Earnings Per Share: Diluted
|
$ 0.72
|
$ 0.60
|
$ 0.76
|
20%
|
-5%
|
$ 2.60
|
$ 2.60
|
0%
|
Weighed average common
equivalent share Computations: Diluted shares
|
30,215
|
28,045
|
27,033
|
8%
|
12%
|
28,073
|
25,723
|
9%
|
(1See"Reconciliationof
Core Earnings" table
|
Business Highlights
YTD Highlights
-
Record net revenues of $867.5 million, a 14% increase for 2008 as
compared to 2007.
-
Thirteenth consecutive annual increase in net revenues.
-
Record GAAP net income of $57.2 million, or $2.04 per diluted share, a 78%
increase for 2008 as compared to 2007.
-
Book value per common share increased to $22.75 as of December 31,
2008, a 24% increase from December 31, 2007.
-
Core net income of $73.1 million, or $2.60 per diluted share, a 9%
increase from the prior year core net income.
-
Our Private Client Group ("PCG") and Fixed Income Capital
Markets ("FICM") net revenues increased 6% and 170%, respectively, in
2008 as compared to 2007.
-
Commissions and principal transactions revenue increased 39% to $634.4
million from the prior year.
-
Investment banking revenues declined 51% to $83.7 million from the prior
year.
-
Prior year results include our largest investment banking transaction,
which contributed $24.7 million in revenues.
-
Asset management and service fees revenue increased 18% to $119.9
million from the prior year.
-
For the year ended December 31, 2008 and 2007, utilizing Core earnings,
pre-tax margin was 14%.
-
For the year ended December 31, 2008, utilizing Core earnings, annualized
return on average equity was 15% compared to 18% from the prior year.
-
We paid a 50% stock dividend in the form of a 3-for-2 stock split
distributed on June 12, 2008 to shareholders of record May 29, 2008.
-
On September 29, 2008, we successfully completed our public offering of
1,495,000 new shares of Company common stock at an offering price of $45.00 per
share. The net proceeds to the Company after consideration of the underwriters
discount and before any expenses were $64.4 million.
-
We closed on the acquisition of Butler Wick & Company, Inc. adding
18 private client branch offices and 75 financial advisors.
Quarterly
Highlights
-
Record net revenues of $228.2 million, an 8% increase from the prior
year fourth quarter and a 4% increase from the third quarter of 2008.
-
GAAP net income of $17.8 million, or $0.59 per diluted share, a 28%
increase over the prior year fourth quarter and a 39% increase from the third
quarter 2008.
-
Core net income of $21.7 million, or $0.72 per diluted
share, a 6% increase from the prior year fourth quarter and a 30% increase from
the third quarter 2008.
-
Commission and principal transactions revenue of $176.1 million increased
27% over the previous year fourth quarter and increased 12% from the third
quarter of 2008.
-
Investment banking revenues declined 50% to $15.8 million from the prior
year fourth quarter and decreased 37% from the third quarter of 2008.
-
Asset management and service fees revenue decreased 1% to $29.3 million
as compared to the prior year fourth quarter and down 3% from the third quarter
2008.
-
The PCG segment recorded net revenues of $111.6 million, a 6% decrease
over the fourth quarter 2007 and a 2% decrease from the third quarter 2008.
-
The FICM segment recorded net revenues of $58.3 million, a 145%
increase over the fourth quarter 2007 and a 53% increase from the third quarter
2008.
-
The Equity Capital Markets ("ECM") commissions and principal
transactions of $44.3 million, a 26% increase over the prior year fourth
quarter and a 1% decrease from the third quarter 2008
-
The ECM segment net revenues decreased 8% over the fourth quarter 2007
and 13% from the third quarter 2008 resulting from decreased investment banking
revenues which declined 58% from the prior year fourth quarter and decreased
44% from the third quarter 2008.
-
We recorded an after tax gain of approximately $0.11 per diluted share
for the extinguishment of $12.5 million of 6.78% Stifel Financial Capital Trust
IV Cumulative Trust Preferred Securities in December 2008.
-
For the three months ended December 31, 2008, utilizing Core earnings, pre-tax
margin was 16% compared to 16% from the previous year fourth quarter and 13%
from the third quarter 2008.
-
For the three months ended December 31, 2008, utilizing Core earnings, annualized
return on average equity was 15% compared to 20% from the previous year fourth
quarter and 14% from the third quarter 2008.
Stifel Financial Corp.
|
Summary of Results of Operations(Unaudited)
|
($ In Thousands, Except Per Share Amounts)
|
|
Three Months Ended
|
Percent Change From
|
Net
Revenues
|
12/31/2008
|
% of Net Revenues
|
9/30/2008
|
% of Net Revenues
|
12/31/2007
|
% of Net Revenues
|
9/30/2008
|
12/31/2007
|
Commissions
|
$ 83,599
|
36.7%
|
$ 88,727
|
40.5%
|
$ 90,584
|
42.7%
|
-6%
|
-8%
|
Principal transactions
|
92,492
|
40.5%
|
68,182
|
31.1%
|
47,670
|
22.5%
|
36%
|
94%
|
Investment banking
|
15,775
|
6.9%
|
25,156
|
11.5%
|
31,449
|
14.8%
|
-37%
|
-50%
|
Asset management and service
fees
|
29,346
|
12.9%
|
30,336
|
13.9%
|
29,592
|
13.9%
|
-3%
|
-1%
|
Other
|
(1,255)
|
-0.6%
|
(1,391)
|
-0.6%
|
4,127
|
2.0%
|
n/a
|
n/a
|
Total operating
revenues
|
219,957
|
96.4%
|
211,010
|
96.4%
|
203,422
|
95.9%
|
4%
|
8%
|
Interest revenue
|
10,973
|
4.8%
|
12,819
|
5.9%
|
15,700
|
7.4%
|
-14%
|
-30%
|
Total revenues
|
230,930
|
101.2%
|
223,829
|
102.3%
|
219,122
|
103.3%
|
3%
|
5%
|
Less: Interest expense
|
2,770
|
1.2%
|
4,906
|
2.3%
|
6,936
|
3.3%
|
-44%
|
-60%
|
Net revenues
|
228,160
|
100.0%
|
218,923
|
100.0%
|
212,186
|
100.0%
|
4%
|
8%
|
Non-Interest Expenses
|
|
|
|
|
|
|
|
|
Employee compensation and
benefits
|
141,750
|
62.1%
|
150,203
|
68.6%
|
141,758
|
66.8%
|
-6%
|
0%
|
Occupancy and equipment
rental
|
18,972
|
8.3%
|
17,286
|
7.9%
|
17,029
|
8.0%
|
10%
|
11%
|
Communication and office
supplies
|
12,734
|
5.6%
|
11,192
|
5.1%
|
11,052
|
5.2%
|
14%
|
15%
|
Commissions and floor
brokerage
|
4,972
|
2.2%
|
4,348
|
2.0%
|
2,675
|
1.3%
|
14%
|
86%
|
Other operating expenses
|
20,632
|
9.0%
|
14,800
|
6.7%
|
16,579
|
7.8%
|
39%
|
24%
|
Total non-interest
expenses
|
199,060
|
87.2%
|
197,829
|
90.4%
|
189,093
|
89.1%
|
1%
|
5%
|
Income before
income taxes
|
29,100
|
12.8%
|
21,094
|
9.6%
|
23,093
|
10.9%
|
38%
|
26%
|
Provision for income taxes
|
11,344
|
5.0%
|
8,317
|
3.8%
|
9,258
|
4.4%
|
36%
|
23%
|
Net
income
|
$ 17,756
|
7.8%
|
$ 12,777
|
5.8%
|
$ 13,835
|
6.5%
|
39%
|
28%
|
Per Share information
|
Earnings
Per Share:
|
|
|
|
|
|
|
|
|
Basic
|
$ 0.69
|
|
$ 0.54
|
|
$ 0.61
|
|
28%
|
13%
|
Diluted
|
$ 0.59
|
|
$ 0.46
|
|
$ 0.51
|
|
28%
|
16%
|
|
|
|
|
|
|
|
|
|
Weighted average common equivalent shares
|
|
|
|
|
|
|
|
Basic shares
|
25,706
|
|
23,830
|
|
22,634
|
|
8%
|
14%
|
Diluted shares
|
30,215
|
|
28,045
|
|
27,033
|
|
8%
|
12%
|
Statistical Information
|
Book Value Per Share
|
$ 22.75
|
|
$ 22.21
|
|
$ 18.36
|
|
2%
|
24%
|
Investment Executives
|
1,315
|
|
1,235
|
|
1,163
|
|
6%
|
13%
|
Full-Time Employees
|
3,371
|
|
3,038
|
|
2,834
|
|
11%
|
19%
|
Locations
|
225 |
|
194
|
|
175
|
|
16%
|
29%
|
Total Client Assets (in
thousands)
|
$ 51,828,000
|
|
$ 56,860,000
|
|
$59,299,000
|
|
-9%
|
-13%
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
|
|
Net Revenues
|
12/31/2008
|
% of Net Revenues
|
12/31/2007
|
% of Net Revenues
|
% Change
|
Commissions
|
$ 341,090
|
39.3%
|
$ 315,514
|
41.4%
|
8%
|
Principal transactions
|
293,285
|
33.8%
|
139,248
|
18.2%
|
111%
|
Investment banking
|
83,710
|
9.6%
|
169,413
|
22.2%
|
-51%
|
Asset management and service
fees
|
119,926
|
13.8%
|
101,610
|
13.3%
|
18%
|
Other
|
(2,138)
|
-0.2%
|
8,234
|
1.1%
|
n/a
|
Total operating
revenues
|
835,873
|
96.3%
|
734,019
|
96.2%
|
14%
|
Interest revenue
|
50,148
|
5.8%
|
59,071
|
7.7%
|
-15%
|
Total revenues
|
886,021
|
102.1%
|
793,090
|
103.9%
|
12%
|
Less: Interest expense
|
18,510
|
2.1%
|
30,025
|
3.9%
|
-38%
|
Net revenues
|
867,511
|
100.0%
|
763,065
|
100.0%
|
14%
|
Non-Interest Expenses
|
|
|
|
|
|
Employee compensation and
benefits
|
582,778
|
67.2%
|
543,021
|
71.2%
|
7%
|
Occupancy and equipment
rental
|
67,984
|
7.8%
|
57,796
|
7.6%
|
18%
|
Communication and office
supplies
|
45,621
|
5.3%
|
42,355
|
5.5%
|
8%
|
Commissions and floor
brokerage
|
13,287
|
1.5%
|
9,921
|
1.3%
|
34%
|
Other operating expenses
|
63,572
|
7.3%
|
56,126
|
7.4%
|
13%
|
Total non-interest
expenses
|
773,242
|
89.1%
|
709,219
|
93.0%
|
9%
|
Income before
income taxes
|
94,269
|
10.9%
|
53,846
|
7.0%
|
75%
|
Provision for income taxes
|
37,057
|
4.3%
|
21,676
|
2.8%
|
71%
|
Net
income
|
$ 57,212
|
6.6%
|
$ 32,170
|
4.2%
|
78%
|
Per Share information
|
Revenues:
|
12/31/2008
|
|
12/31/2007
|
|
% Change
|
Earnings
Per Share:
|
|
|
|
|
|
Basic
|
$ 2.38
|
|
$ 1.48
|
|
61%
|
Diluted
|
$ 2.04
|
|
$ 1.25
|
|
63%
|
Weighted average common equivalent shares
|
|
|
|
|
Basic shares
|
24,069
|
|
21,754
|
|
11%
|
Diluted shares
|
28,073
|
|
25,723
|
|
9%
|
|
|
|
|
|
|
|
Business
Segment Results
Stifel Financial Corp.
|
Summary of Segment Data & Statistical Information
(Unaudited)
|
Segment Data ($ In Thousands)
|
|
Three Months Ended
|
Percent Change From
|
Years Ended
|
|
Net Revenues
|
12/31/2008
|
9/30/2008
|
12/31/2007
|
9/30/2008
|
12/31/2007
|
12/31/2008
|
12/31/2007
|
% Change
|
Private
Client
|
$ 111,603
|
$ 113,976
|
$ 119,260
|
-2%
|
-6%
|
$ 461,431
|
$ 435,711
|
6%
|
Equity capital markets
|
54,902
|
63,405
|
59,421
|
-13%
|
-8%
|
215,546
|
238,064
|
-9%
|
Fixed
income capital markets
|
58,276
|
38,193
|
23,794
|
53%
|
145%
|
175,180
|
64,867
|
170%
|
Stifel
Bank
|
1,080
|
3,175
|
1,871
|
-66%
|
-42%
|
9,574
|
4,800
|
99%
|
Other
|
2,299
|
174
|
7,840
|
1221%
|
-71%
|
5,780
|
19,623
|
-71%
|
Total net revenues
|
$ 228,160
|
$ 218,923
|
$ 212,186
|
4%
|
8%
|
$ 867,511
|
$ 763,065
|
14%
|
Operating Contribution
|
|
|
|
|
|
|
|
|
Private Client
|
$ 19,216
|
$ 22,801
|
$ 27,484
|
-16%
|
-30%
|
$ 97,478
|
$ 95,353
|
2%
|
Equity capital markets
|
7,171
|
11,775
|
10,213
|
-39%
|
-30%
|
29,457
|
52,658
|
-44%
|
Fixed income capital markets
|
23,722
|
12,014
|
4,785
|
97%
|
396%
|
62,435
|
8,191
|
662%
|
Stifel Bank
|
(844)
|
732
|
347
|
n/a
|
n/a
|
619
|
990
|
-37%
|
Other/unallocated
overhead
|
(20,165)
|
(26,228)
|
(19,736)
|
n/a
|
n/a
|
(95,720)
|
(103,346)
|
n/a
|
Income before income taxes
|
$ 29,100
|
$ 21,094
|
$ 23,093
|
38%
|
26%
|
$ 94,269
|
$ 53,846
|
75%
|
Private
Client Group Segment- Year Highlights
-
Net revenues of $461.4 million, a 6% increase over the prior year.
-
Operating contribution of $97.5 million, a 2% increase over the same
period last year.
-
Commission and principal transactions revenue increased 12% over the
previous year.
-
Investment banking revenues, which represents sales commissions on
capital raising activities, declined 61% from the prior year.
-
Asset management and service fees revenue increased 18% to $119.0
million as compared to the prior year.
-
For the year ended December 31, 2008, employee compensation and
benefits was 62% of net revenues compared to 63% for the same period last year.
-
We added 34 PCG offices and 194 Financial Advisors in 2008 as part of
our ongoing footprint expansion efforts.
Private
Client Group Segment- Fourth Quarter Highlights
-
Net revenues of $111.6 million, a 6% decrease over the prior year fourth
quarter and a 2% decrease from the third quarter of 2008.
-
Operating contribution of $19.2 million, a 30% decrease over the
previous year fourth quarter and a 16% decrease from the third quarter this
year.
-
Commission and principal transactions revenue decreased 4% over the
previous year fourth quarter.
-
Investment banking revenues declined 61% from the prior year fourth
quarter.
-
Asset management and service fees revenue decreased 2% to $28.8 million
as compared to the prior year fourth quarter and decreased 4% from the third
quarter of 2008.
-
For the three months ended December 31, 2008, employee compensation and
benefits was 63% of net revenues compared to 60% for the same period last year.
Stifel Financial Corp.
|
Private Client Group Segment Data & Statistical
Information (Unaudited)
|
($ in thousands)
|
|
Three Months Ended
|
Percent Change From
|
Years Ended
|
Change
|
Revenues:
|
12/31/2008
|
9/30/2008
|
12/31/2007
|
9/30/2008
|
12/31/2007
|
12/31/2008
|
12/31/2007
|
Percent
|
Commissions
and principal transactions
|
$ 78,597
|
$ 78,031
|
$ 81,929
|
1%
|
-4%
|
$ 316,120
|
$ 281,350
|
12%
|
Investment
banking
|
1,825
|
3,371
|
4,705
|
-46%
|
-61%
|
15,515
|
40,071
|
-61%
|
Asset
management and service fees
|
28,848
|
30,111
|
29,578
|
-4%
|
-2%
|
119,047
|
101,128
|
18%
|
Net
interest & other
|
2,333
|
2,463
|
3,048
|
-5%
|
-23%
|
10,749
|
13,162
|
-18%
|
Total Net Revenues
|
111,603
|
113,976
|
119,260
|
-2%
|
-6%
|
461,431
|
435,711
|
6%
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
Employee
compensation and benefits
|
69,762
|
70,343
|
72,151
|
-1%
|
-3%
|
285,641
|
274,115
|
4%
|
Other
non-interest expenses
|
22,625
|
20,832
|
19,625
|
9%
|
15%
|
78,312
|
66,243
|
18%
|
Total non-interest expenses
|
92,387
|
91,175
|
91,776
|
1%
|
1%
|
363,953
|
340,358
|
7%
|
Income before income taxes
|
$ 19,216
|
$ 22,801
|
$ 27,484
|
-16%
|
-30%
|
$ 97,478
|
$ 95,353
|
2%
|
Ratios to Net Revenues
|
|
|
|
|
|
|
|
|
Employee
compensation and benefits
|
63%
|
62%
|
60%
|
|
|
62%
|
63%
|
|
Other
non-interest expenses
|
20%
|
18%
|
16%
|
|
|
17%
|
15%
|
|
Net
Margins
|
17%
|
20%
|
23%
|
|
|
21%
|
22%
|
|
|
|
|
|
|
|
|
|
|
Equity
Capital Markets Segment - Year Highlights
-
Net revenues of $215.5 million, a 9% decrease over the prior year.
-
Commission and principal transactions revenue increased 33% over the
same period last year.
-
Investment banking revenues decreased 53% from the prior year.
-
Prior year investment banking included a significant transaction, which
contributed $24.7 million in revenue in the 2007 second quarter.
-
We added 86 revenue producers in 2008.
Equity
Capital Markets Segment - Fourth Quarter Highlights
-
Net revenues of $54.9 million, an 8% decrease over the prior year fourth
quarter and a 13% decrease from the third quarter 2008.
-
Commission and principal transactions revenue increased 26% over the prior
year fourth quarter and decreased 1% from the third quarter 2008.
-
Investment banking revenues decreased 58% over the prior year fourth
quarter and decreased 44% from the third quarter of this year.
-
For the three months ended December 31, 2008, employee compensation and
benefits was 59% of net revenues compared to 64% for the prior year fourth
quarter.
Stifel Financial Corp.
|
Equity Capital Markets Group Segment Data &
Statistical Information (Unaudited)
|
($ in thousands)
|
|
Three Months Ended
|
Percent Change From
|
Years Ended
|
Change
|
Revenues:
|
12/31/2008
|
9/30/2008
|
12/31/2007
|
9/30/2008
|
12/31/2007
|
12/31/2008
|
12/31/2007
|
Percent
|
Commissions
and principal transactions
|
$ 44,268
|
$ 44,827
|
$ 35,100
|
-1%
|
26%
|
$ 159,629
|
$ 120,204
|
33%
|
Capital raising
|
5,142
|
5,408
|
7,850
|
-5%
|
-34%
|
21,867
|
45,371
|
-52%
|
Advisory fees
|
5,026
|
12,827
|
16,322
|
-61%
|
-69%
|
32,671
|
71,555
|
-54%
|
Investment
banking
|
10,168
|
18,235
|
24,172
|
-44%
|
-58%
|
54,538
|
116,926
|
-53%
|
Other
|
466
|
343
|
149
|
36%
|
213%
|
1,379
|
934
|
48%
|
Total Net Revenues
|
54,902
|
63,405
|
59,421
|
-13%
|
-8%
|
215,546
|
238,064
|
-9%
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
Employee
compensation and benefits
|
32,137
|
39,139
|
38,099
|
-18%
|
-16%
|
135,520
|
143,718
|
-6%
|
Other
non-interest expenses
|
15,594
|
12,491
|
11,109
|
25%
|
40%
|
50,569
|
41,688
|
21%
|
Total non-interest expenses
|
47,731
|
51,630
|
49,208
|
-8%
|
-3%
|
186,089
|
185,406
|
0%
|
Income before income taxes
|
$ 7,171
|
$ 11,775
|
$ 10,213
|
-39%
|
-30%
|
$ 29,457
|
$ 52,658
|
-44%
|
Ratios to Net Revenues
|
|
|
|
|
|
|
|
|
Employee
compensation and benefits
|
59%
|
62%
|
64%
|
|
|
63%
|
60%
|
|
Other
non-interest expenses
|
28%
|
20%
|
19%
|
|
|
23%
|
18%
|
|
Net
Margins
|
13%
|
19%
|
17%
|
|
|
14%
|
22%
|
|
|
|
|
|
|
|
|
|
|
Fixed
Income Capital Markets Segment-Year Highlights
-
Record net revenues of $175.2 million, a 170% increase over the prior
year.
-
Operating contribution of $62.4 million, a 662% increase over the prior
year.
-
Commissions and principal transactions revenue increased 198% over the
prior year.
-
For the year ended December 31, 2008, employee compensation and benefits
was 56% of net revenues compared to 68% for the prior year.
-
Net margins were 36% compared to 13% in the prior year.
-
We added 52 revenue producers in 2008.
Fixed
Income Capital Markets Segment -Fourth Quarter Highlights
-
Net revenues of $58.3 million, a 145% increase over the prior year fourth
quarter and a 53% increase from the third quarter 2008.
-
Operating contribution of $23.7 million, a 396% increase over the prior
year fourth quarter and a 97% increase from the third quarter 2008.
-
Commissions and principal transactions revenue increased 151% over the
prior year fourth quarter and increased 56% from the third quarter of this year.
-
For the three months ended December 31, 2008, employee compensation and
benefits was 51% of net revenues compared to 66% for the prior year fourth
quarter.
Stifel Financial Corp.
|
Fixed Income Capital Markets Segment Data &
Statistical Information (Unaudited)
|
($ in thousands)
|
|
Three Months Ended
|
Percent Change From
|
Years Ended
|
Change
|
Revenues:
|
12/31/2008
|
9/30/2008
|
12/31/2007
|
9/30/2008
|
12/31/2007
|
12/31/2008
|
12/31/2007
|
Percent
|
Commissions and principal
transactions
|
$ 53,226
|
$ 34,050
|
$ 21,225
|
56%
|
151%
|
$ 158,625
|
$ 53,164
|
198%
|
Investment banking
|
3,783
|
3,550
|
2,571
|
7%
|
47%
|
13,658
|
12,647
|
8%
|
Other
|
1,267
|
593
|
(2)
|
114%
|
n/a
|
2,897
|
(944)
|
n/a
|
Total
Net Revenues
|
58,276
|
38,193
|
23,794
|
53%
|
145%
|
175,180
|
64,867
|
170%
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
Employee compensation and
benefits
|
29,667
|
22,891
|
15,804
|
30%
|
88%
|
98,159
|
44,427
|
121%
|
Operating expenses
|
4,887
|
3,288
|
3,205
|
49%
|
52%
|
14,586
|
12,249
|
19%
|
Total
non-interest expenses
|
34,554
|
26,179
|
19,009
|
32%
|
82%
|
112,745
|
56,676
|
99%
|
Income
before income taxes
|
$ 23,722
|
$ 12,014
|
$ 4,785
|
97%
|
396%
|
$ 62,435
|
$ 8,191
|
662%
|
Ratios to Net
Revenues
|
|
|
|
|
|
|
|
|
Employee
compensation and benefits
|
51%
|
60%
|
66%
|
|
|
56%
|
68%
|
|
Other
non-interest expenses
|
8%
|
9%
|
13%
|
|
|
8%
|
19%
|
|
Net
Margins
|
41%
|
31%
|
20%
|
|
|
36%
|
13%
|
|
|
|
|
|
|
|
|
|
|
Stifel
Bank Segment-Year Highlights
Current year results
include the operations of Stifel Bank and Trust for the full twelve months
compared to the prior year results, which include Stifel Bank and Trust for
only nine months, as the acquisition was made on April 2, 2007.
-
Net revenues of $9.6 million increased 99% over the prior year.
-
Total retained loans, net, increased 49% over the prior year.
-
Non-performing loans as a percentage of total loans decreased from 1.51%
as of December 31, 2007 to 0.30%.
-
Total assets increased 38% over the prior year.
-
Total deposits increased 48% over the prior year.
-
We added 15 revenue producers in 2008.
Stifel
Bank Segment-Fourth Quarter Highlights
Stifel Financial Corp.
|
Stifel Bank & Trust Segment Data &
Statistical Information (Unaudited)
|
($ in thousands)
|
|
Three Months Ended
|
Percent Change From
|
Years Ended
|
Change
|
Revenues:
|
12/31/2008
|
9/30/2008
|
12/31/2007
|
9/30/2008
|
12/31/2007
|
12/31/2008
|
12/31/2007
|
Percent
|
Interest
|
$ 3,763
|
$ 4,129
|
$ 3,645
|
-9%
|
3%
|
$ 15,253
|
$ 9,542
|
60%
|
Other
|
(1,961)
|
493
|
218
|
n/a
|
n/a
|
(358)
|
704
|
n/a
|
Total Revenues
|
1,802
|
4,622
|
3,863
|
-61%
|
-53%
|
14,895
|
10,246
|
45%
|
Less: Interest expense
|
722
|
1,447
|
1,992
|
-50%
|
-64%
|
5,321
|
5,446
|
-2%
|
Total
Net Revenues
|
1,080
|
3,175
|
1,871
|
-66%
|
-42%
|
9,574
|
4,800
|
99%
|
Non-interest expenses:
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
784
|
1,045
|
749
|
-25%
|
5%
|
3,566
|
1,613
|
121%
|
Other non-interest expenses
|
1,140
|
1,398
|
775
|
-18%
|
47%
|
5,389
|
2,197
|
145%
|
Total
non-interest expenses
|
1,924
|
2,443
|
1,524
|
-21%
|
26%
|
8,955
|
3,810
|
135%
|
Income
before income taxes
|
$ (844)
|
$ 732
|
$ 347
|
n/a
|
n/a
|
$ 619
|
$ 990
|
-37%
|
As of
|
12/31/2008
|
9/30/2008
|
12/31/2007
|
|
|
|
|
|
Total assets
|
$ 343,417
|
$ 327,279
|
$ 248,982
|
5%
|
38%
|
|
|
|
Total retained loans, net
|
$ 192,819
|
$ 203,181
|
$ 129,206
|
-5%
|
49%
|
|
|
|
Total loans held for sale,
net
|
$ 37,348
|
$ 11,370
|
$ 3,433
|
228%
|
988%
|
|
|
|
Total deposits
|
$ 284,798
|
$ 261,018
|
$ 192,487
|
9%
|
48%
|
|
|
|
Allowance for loan losses as
a % of loans
|
1.23%
|
1.22%
|
1.32%
|
|
|
|
|
|
Total Non-Performing Loans
as a % of Loans
|
0.30%
|
0.09%
|
1.51%
|
|
|
|
|
|
Prior year to date results include nine months as Stifel
Bank& Trust was purchased on April 2, 2007.
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 as an additional measure to aid in understanding and
analyzing our financial results for the three months and years ended.
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 substitute
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, our management believes that both 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 and years ended to the aforementioned captions on a non-GAAP basis
for the same respective period.
Stifel Financial Corp.
|
Reconciliation of Core Earnings (Unaudited)
|
($ In Thousands)
|
|
Three Months Ended December 31, 2008
|
Three Months Ended December 31, 2007
|
|
GAAP
|
Acquisition Related
|
|
Core Business
|
% of Revenues
|
GAAP
|
Acquisition Related
|
|
Core Business
|
% of Revenues
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Net
Revenues
|
$ 228,160
|
$ 1
|
a
|
$ 228,161
|
100%
|
$ 212,186
|
($26)
|
a
|
$ 212,160
|
100%
|
Non interest expenses:
|
|
|
|
|
|
|
|
|
|
|
Compensation
and Benefits
|
141,750
|
(6,474)
|
b
|
135,276
|
59%
|
141,758
|
(8,740)
|
b
|
133,018
|
63%
|
Operating
Expenses
|
57,310
|
(32)
|
c
|
57,278
|
25%
|
47,335
|
(1,160)
|
c
|
46,175
|
21%
|
Total
non-interest expenses
|
199,060
|
(6,506)
|
|
192,554
|
84%
|
189,093
|
(9,900)
|
|
179,193
|
84%
|
Income before income taxes
|
29,100
|
6,507
|
|
35,607
|
16%
|
23,093
|
9,874
|
|
32,967
|
16%
|
Provision
for income taxes
|
11,344
|
2,525
|
e
|
13,869
|
6%
|
9,258
|
3,218
|
e
|
12,476
|
6%
|
Net income
|
$ 17,756
|
$ 3,982
|
f
|
$ 21,738
|
10%
|
$ 13,835
|
$ 6,656
|
f
|
$ 20,491
|
10%
|
Compensation Ratios (g)
|
62%
|
|
|
59%
|
|
67%
|
|
|
63%
|
|
Annualized return on average
equity (h)
|
12%
|
|
|
15%
|
|
13%
|
|
|
20%
|
|
Pre-tax Margin (i)
|
13%
|
|
|
16%
|
|
11%
|
|
|
16%
|
|
Earnings
per share: Diluted (j)
|
$0.59
|
$0.13
|
|
$0.72
|
|
$0.51
|
$0.25
|
|
$0.76
|
|
|
Year Ended December 31, 2008
|
Year Ended December 31, 2007
|
|
GAAP
|
Acquisition Related
|
|
Core Business
|
% of Revenues
|
GAAP
|
Acquisition Related
|
|
Core Business
|
% of Revenues
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Net
Revenues
|
$ 867,511
|
$ 5
|
a
|
$ 867,516
|
100%
|
$ 763,065
|
$ 304
|
a
|
$ 763,369
|
100%
|
Non interest expenses:
|
|
|
|
|
|
|
|
|
|
|
Compensation
and Benefits
|
582,778
|
(25,599)
|
b
|
557,179
|
64%
|
543,021
|
(49,113)
|
d
|
493,908
|
65%
|
Operating
Expenses
|
190,464
|
(555)
|
c
|
189,909
|
22%
|
166,198
|
(7,357)
|
c
|
158,841
|
21%
|
Total
non-interest expenses
|
773,242
|
(26,154)
|
|
747,088
|
86%
|
709,219
|
(56,470)
|
|
652,749
|
86%
|
Income before income taxes
|
94,269
|
26,159
|
|
120,428
|
14%
|
53,846
|
56,774
|
|
110,620
|
14%
|
Provision
for income taxes
|
37,057
|
10,281
|
e
|
47,338
|
6%
|
21,676
|
22,157
|
e
|
43,833
|
6%
|
Net income
|
$ 57,212
|
$ 15,878
|
f
|
$ 73,090
|
8%
|
$ 32,170
|
$ 34,617
|
f
|
$ 66,787
|
8%
|
Compensation Ratios (g)
|
67%
|
|
|
64%
|
|
71%
|
|
|
65%
|
|
Annualized return on average
equity (h)
|
12%
|
|
|
15%
|
|
9%
|
|
|
18%
|
|
Pre-tax Margin (i)
|
11%
|
|
|
14%
|
|
7%
|
|
|
14%
|
|
Earnings
per share: Diluted (j)
|
$2.04
|
$0.56
|
|
$2.60
|
|
$1.25
|
$1.35
|
|
$2.60
|
|
(a)
The adjustment represents the revenues
for recognition of pre-acquisition investment banking backlog.
(b)
The adjustment primarily represents
the expense with respect to the amortization of the stock-based awards to LM
Capital Markets associates in January 2006.
(c)
The adjustment represents the
adjustment for operating expenses related to the LM Capital Markets and the
Ryan Beck acquisitions.
(d)
The adjustment primarily represents
the adjustment for the amortization of the stock-based awards to the LM Capital
Markets associates and compensation expenses principally for the acceleration
of the vesting for Ryan Beck deferred compensation plans.
(e)
The adjustment to provision for
income taxes represents the tax effect resulting from the additions or
deductions from a-d above.
(f)
The adjustment to net income is the
after-tax adjustments for items a-e above.
(g)
The three months and years ended December
31, 2008 and 2007 compensation ratios were calculated by dividing compensation
and benefits by net revenues.
(h)
The three months and years ended December
31, 2008 and 2007 annualized returns on average equity were calculated by
dividing net income by average equity.
(i)
The three months and years ended December
31, 2008 and 2007 pre-tax margins were calculated by dividing income before
income taxes expense by net revenues.
(j)
The three months and years ended December
31, 2008 and 2007 diluted earnings per share were calculated by dividing the
Net Income by the diluted weighted averages of common equivalent shares.
Statement
of Financial Condition Highlights (Unaudited)
Total assets increased 4% to $1.6 billion
at December 31, 2008 from $1.5 billion at December 31, 2007. Total stockholders'
equity increased $170.3 million, or 40%, to $594.9 million at December 31, 2008,
principally due to funds from our public offering, net income, and amortization
of stock-based awards.
At December 31, 2008, the Company
reported total securities owned and investments at fair
value of $248.4 million, which included trading securities categorized as level
3 of $38.2 million.
Conference
Call Information
Stifel Financial Corp. will hold a conference call Thursday, February 12,
2009, 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 204 offices in 35 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 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 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.
# # # # # #
EX-99.2
3
r8k_200812exh992.htm
INVESTOR PRESENTATION
Stifel Financial Corp. - 4th Quarter 2008 Fiscal Year Earnings Conference Call February 12, 2009
Stifel Financial Corp.
4th Quarter 2008 Fiscal Year
Earnings Conference Call
February 12, 2009
|
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.
|
4th Quarter 2008 Business Highlights
Record net revenues of $228.2 million, a 8% increase from 2007.
Balanced business model drives record revenues in uncertain markets.
Core net income of $21.7 million, or $0.72 per diluted share, a 6% increase from the prior year fourth quarter.
Core earnings pre-tax margin was 16% compared to 16% from 4Q07
GAAP net income of $17.8 million, or $0.59 per diluted share, a 28% increase over the prior year fourth quarter.
Book value per common share increased to $22.75 as of December 31, 2008, a 24% increase from December 31, 2007.
Closed the acquisition of Butler Wick & Company, Inc.
18 private client branch offices and 75 financial advisors
Core earnings annualized return on average equity was 15%.
|
YTD Highlights
Record net revenues of $867.5 million, a 14% increase over 2007.
13th consecutive annual increase in net revenue is driven by record revenues from FICM, PCG, and Stifel Bank.
Core net income of $73.1 million, or $2.60 per diluted share, a 9% increase from the prior year core net income.
Core earnings pre-tax margin was 14% and average return on equity was 15%.
Record GAAP net income of $57.2 million, or $2.04 per diluted share, a 78% increase for 2008 as compared to 2007.
Book value per common share increased to $22.75 as of December 31, 2008, a 24% increase from December 31, 2007.
A 3-for-2 stock split distributed on June 12, 2008 to shareholders of record May 29, 2008.
|
Summary Income Statement
Core Net Revenues
GAAP Net Revenues
|
Unusual Items in the Fourth Quarter
|
Stifel Outlook
Unstable conditions in the Private Client market presents opportunity for Stifel to continue to grow organically and through M&A
The uncertainty surrounding the largest domestic and European private client platforms impacts thousands of US-based Financial Advisors.
Balanced business mix facilitates growth during volatile markets
53% of 2008 revenues generated by PCG and 45% by Capital Markets.
Capital Markets turmoil creates a pool of very qualified candidates
All segments of Capital Markets continued to build out platform and hire in 4Q08.
Well capitalized to fund expansion
Successful equity follow-on offering in 3Q08 raised $63.9 million before expenses.
While eligible, Stifel Financial did not participate in the TARP program
|
2008 Growth
Total
2008 As of
Business Units Additions 12/31/2008
Private Client Group
Financial Advisors* . . . 269 1,315
Offices . . . . . . . . . 52 204
Equity Capital Markets
Equity Sales & Trading Professionals . . . 23 115
Investment Banking Professionals . . . . . 40 137
Fixed Income Capital Markets
Fixed Income Sales & Trading Professionals.. . 32 142
Public Finance Professionals . . . . . . . . . 20 46
Banking
Stifel Bank & Trust Associates . . . . . . . . 51 70
|
Market Turmoil = Opportunity
|
2008 YTD Segment Comparison (excluding Acquisitions)
Balanced business model facilitates growth during volatile markets
Stable PCG business is augmented by profitable and growing Capital Markets.
|
Segment Comparison excluding acquisitions
Total net revenues increased 8% despite rapidly deteriorating economic conditions in 4Q08.
Weakness in PCG & ECM were more than offset by FICM results
|
Private Client Group - Income Statement
Commission & fee growth impacted by 4Q08 market uncertainty
Margins were modestly lower due to the opening of 52 new offices and 269 FA's in 2008, including the 18 offices and 75 FA's from Butler Wick which joined us on 12/31/08.
|
Equity Capital Markets - Income Statement
Commissions & principal transactions increased 26% during the quarter
Continued weakness in capital raising
|
Fixed Income Capital Markets - Income Statement
Distribution model and scale drove revenue growth and margin expansion
Opened more than 450 new institutional accounts in 2008
|
Stifel Bank - Income Statement
Continued build-out to serve Stifel Nicolaus clients and potential clients.
|
Reconciliation of GAAP to Core Earnings
|
Balance Sheet Graphs
Total Assets
Total Capitalization
Capitalization Ratio
Book Value Per Share |
Q&A - Questions and Answers
|