EX-99.1 2 rexv99x1.htm EX-99.1 Stifel Financial Q3 2009 Earnings Release

Exhibit 99.1

 


 

FOR IMMEDIATE RELEASE

Stifel Financial Corp. Announces Record Results

Record Quarterly Results:

• Net Income of $22.1 million, up 73%.

• Net Revenues of $289.7 million, up 32%.

• Diluted Earnings Per Share of $0.67, up 46%.

Record Year-to-Date Results:

• Net Income of $51.1 Million, up 30%.

• Net Revenues of $771.2 million, up 21%.

• Diluted Earnings Per Share of $1.62, up 13%.

St. Louis, Missouri - November 9, 2009 - Stifel Financial Corp. (NYSE: "SF") today announced unaudited record quarterly net income of $22.1 million, or $0.67 per diluted share, on record net revenues of $289.7 million for its third quarter ended September 30, 2009, compared to $12.8 million, or $0.46 per diluted share, on net revenues of $218.9 million reported for the same period last year.

Net income for the nine months ended September 30, 2009 was $51.1 million, or $1.62 per diluted share, on record net revenues of $771.2 million, compared with $39.4 million, or $1.44 per diluted share, on net revenues of $639.4 million, in the prior year period. The three and nine month periods ended September 30, 2008, include acquisition-related charges, primarily compensation, of $3.9 million, or $0.14 per diluted share, and $11.9 million, or $0.44 per diluted share, respectively.  Our current year third quarter and year-to-date effective tax rates were reduced due to the recognition of a tax benefit related to an investment and jobs creation tax credit.

At September 30, 2009, our stockholders' equity was $833.6 million, resulting in book value per share of $27.63. During the nine months ended September 30, 2009, we completed two public offerings of our $0.15 par value common stock totaling 2,725,000 shares for total net proceeds of $135.6 million.

Chairman's Comments

Chairman and Chief Executive Officer Ronald J. Kruszewski commented, "We are pleased with our quarterly results.  Our company is on pace for its 14th consecutive year of record net revenues and, despite significant investment in our platform and capabilities, is also on track to post record net income for the year.  Our quarterly results were positively impacted by a $0.10 earnings per share tax benefit, which was offset by approximately $0.07 earnings per share in transitional expenses, including $1.9 million in duplicate rent for our New York offices and $2.5 million in conversion expenses related to our UBS transaction.  During the quarter, we raised approximately $92 million in equity capital to support our plans to become the premier middle-market investment bank and brokerage firm."

Stifel Financial Corp.

Summary Results of Operations (Unaudited)

(in thousands, except per share amounts)

 

Three Months Ended

 

Nine Months Ended

 

9/30/09

 

9/30/08

 

Change

 

6/30/09

 

Change

 

9/30/09

 

9/30/08

 

Change

Results of operations data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$ 

292,589

 

$ 

223,829

 

30.7

% 

 

$

264,550

 

10.6

%

 

$

779,471

 

$

655,091

 

19.0

%

Net revenues

$

289,683

 

$

218,923

 

32.3

% 

 

$

261,505

 

10.8

%

 

$

771,169

 

$

639,351

 

20.6

%

Net income

$

22,138

 

$

12,777

 

73.3

% 

 

$

15,815

 

40.0

%

 

$

51,130

 

$

39,456

 

29.6

%

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$ 

0.77

 

$

0.54

 

42.6

% 

 

$

0.58

 

32.8

%

 

$

1.85

 

$

1.68

 

10.1

%

Diluted

$

0.67

 

$

0.46

 

45.7

% 

 

$

0.51

 

31.4

%

 

$

1.62

 

$

1.44

 

12.5

%

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

28,708

 

 

23,830

 

20.5

% 

 

 

27,455

 

4.6

%

 

 

27,652

 

 

23,520

 

17.6

%

Diluted

 

32,817

 

 

28,045

 

17.0

%

 

 

31,270

 

4.9

%

 

 

31,468

 

 

27,335

 

15.1

%

 

Stifel Financial Corp.

Summary Results of Operations (Unaudited)

(in thousands, except per share amounts)

 

Three Months Ended

 

Nine Months Ended

 

9/30/09

 

9/30/08

 

Change

 

6/30/09

 

Change

 

9/30/09

 

9/30/08

 

Change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal transactions

$

123,238

 

$

68,182

 

80.7

%

 

$

121,261

 

12.6

%

 

$

341,777

 

$

200,793

 

70.2

%

Commissions

 

90,905

 

 

88,727

 

2.5

 

 

 

80,721

 

1.6

 

 

 

246,236

 

 

257,491

 

(4.4

)

Investment banking

 

35,056

 

 

25,156

 

39.4

 

 

 

24,702

 

41.9

 

 

 

75,262

 

 

67,935

 

10.8

 

Asset management and service fees

 

25,498

 

 

30,336

 

(15.9

)

 

 

24,543

 

3.9

 

 

 

74,974

 

 

90,580

 

(17.2

)

Other income/(loss)

 

6,586

 

 

(1,391

)

*

 

 

 

2,739

 

*

 

 

 

9,440

 

 

(883

)

*

 

Operating revenues

 

281,283

 

 

211,010

 

33.3

 

 

 

253,966

 

10.8

 

 

 

747,689

 

 

615,916

 

21.4

 

Interest revenue

 

11,306

 

 

12,819

 

(11.8

)

 

 

10,584

 

6.8

 

 

 

31,782

 

 

39,175

 

(18.9

)

Total revenues

 

292,589

 

 

223,829

 

30.7

 

 

 

264,550

 

10.6

 

 

 

779,471

 

 

655,091

 

19.0

 

Interest expense

 

2,906

 

 

4,906

 

(40.8

)

 

 

3,045

 

(4.6

)

 

 

8,302

 

 

15,740

 

(47.3

)

Net revenues

 

289,683

 

 

218,923

 

32.3

 

 

 

261,505

 

10.8

 

 

 

771,169

 

 

639,351

 

20.6

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

193,131

 

 

150,203

 

28.6

 

 

 

175,881

 

9.8

 

 

 

516,852

 

 

441,028

 

17.2

 

Occupancy and equipment rental

 

24,730

 

 

17,286

 

43.1

 

 

 

20,714

 

19.4

 

 

 

63,311

 

 

49,012

 

29.2

 

Communications and office supplies

 

14,429

 

 

11,192

 

28.9

 

 

 

13,129

 

9.9

 

 

 

39,403

 

 

32,887

 

19.8

 

Commission and floor brokerage

 

6,486

 

 

4,348

 

49.2

 

 

 

6,321

 

2.6

 

 

 

17,167

 

 

8,315

 

106.5

 

Other non-interest expenses

 

20,071

 

 

14,800

 

35.6

 

 

 

19,351

 

3.7

 

 

 

55,336

 

 

42,940

 

28.9

 

Total non-interest expenses

 

258,847

 

 

197,829

 

30.8

 

 

 

235,396

 

10.0

 

 

 

692,069

 

 

574,182

 

20.5

 

Income before income taxes

 

30,836

 

 

21,094

 

46.2

 

 

 

26,109

 

18.1

 

 

 

79,100

 

 

65,169

 

21.4

 

Provision for income taxes

 

8,698

 

 

8,317

 

4.6

 

 

 

10,294

 

(15.5

)

 

 

27,970

 

 

25,713

 

8.8

 

Net income

$

22,138

 

$

12,777

 

73.3

%

 

$

15,815

 

40.0

%

 

$

51,130

 

$

39,456

 

29.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.77

 

$

0.54

 

42.6

%

 

$

0.58

 

32.8

%

 

$

1.85

 

$

1.68

 

10.1

%

Diluted

$

0.67

 

$

0.46

 

45.7

%

 

$

0.51

 

31.4

%

 

$

1.62

 

$

1.44

 

12.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

28,708

 

 

23,830

 

20.5

%

 

 

27,455

 

4.6

%

 

 

27,652

 

 

23,520

 

17.6

%

Diluted

 

32,817

 

 

28,045

 

17.0

%

 

 

31,270

 

4.9

%

 

 

31,468

 

 

27,335

 

15.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Percentage is not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stifel Financial Corp.

(in thousands, except per share, employee and location amounts)

 

September 30,
 2009

 

September 30,
 2008

 

Change

 

June 30,
 2009

 

Change

Statistical Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

$

27.63

 

$

22.21

 

24.4

%

 

$

24.86

 

11.1

%

Financial advisors

 

1,823

 

 

1,219

 

49.5

%

 

 

1,562

 

16.7

%

Full-time employees

 

4,289

 

 

3,038

 

41.2

%

 

 

3,849

 

11.4

%

Locations

 

281

 

 

194

 

44.8

%

 

 

239

 

17.6

%

Total client assets

$

83,501,000

 

$

58,860,000

 

41.9

%

 

$

64,653,000

 

29.2

%

2

Review of Business Highlights

Third Quarter Highlights

For the three months ended September 30, 2009, we posted record net revenues of $289.7 million, a 32% increase over the third quarter of 2008 and an 11% increase over the second quarter of 2009. Our revenue growth was primarily derived from increased principal transactions and investment banking offset by a decline in asset management fees. Net income of $22.1 million, or $0.67 per diluted share, increased 73% over the third quarter of 2008 and increased 40% over the second quarter of 2009.

Revenues

  • Principal transactions revenue of $123.3 million increased 81% over the third quarter of 2008 and increased 13% from the second quarter of 2009. Principal transactions increased in the Global Wealth Management ("GWM") and Capital Markets ("CM") segments, primarily in over-the-counter equity, corporate, government and municipal debt and mortgage-backed bonds.

  • Commission revenue of $90.9 million increased 3% from the third quarter of 2008 and increased 2% from the second quarter of 2009.

  • Investment banking revenue increased 39% from the third quarter of 2008 to $35.1 million and increased 42% from the second quarter of 2009. Capital raising revenues increased $11.3 million to $22.4 million as compared to the third quarter of 2008 and increased 57% from the second quarter of 2009. Strategic advisory fees decreased 9% to $12.7 million as compared to the third quarter of 2008 and increased 22% from the second quarter of 2009.

  • Asset management and service fees revenue decreased 16% to $25.5 million from the third quarter of 2008 primarily as a result of a 10% decrease in the value of assets in fee based client accounts, and increased 4% from the second quarter of 2009, primarily as a result of a 23% increase in the value of assets in fee based client accounts.

Non-interest expenses

  • Compensation and benefits expense increased 29% to $193.1 million from the third quarter of 2008 and increased 10% from the second quarter of 2009, primarily due to increased production and headcount associated with the expansion of our GWM and CM segments. For the three months ended September 30, 2009, compensation and benefits expense includes $14.8 million, or 5% of net revenues, of transition pay, which primarily consist of upfront notes, signing bonuses and retention awards in connection with our continuing expansion efforts, compared to $9.7 million, or 4% of net revenues, for the comparable period in 2008 and $13.9 million, or 5% of net revenues, for the second quarter of 2009.

  • Non-compensation operating expenses increased 38% to $65.7 million from the third quarter of 2008, and increased 10% from the second quarter of 2009 primarily due to the aforementioned expansion of our GWM and CM segments.

Provision for income taxes

  • Provision for income taxes was $8.7 million, representing an effective tax rate of 28%, compared to $8.3 million for the comparable period in 2008, representing an effective tax rate of 39%. Our current year third quarter effective tax rate was reduced due to the recognition of a tax benefit of $3.4 million related to an investment and jobs creation tax credit.

YTD Highlights

For the nine months ended September 30, 2009, we posted record net revenues of $771.2 million, a 21% increase over the comparable period in 2008. Our revenue growth was primarily derived from increased principal transactions and investment banking offset by a decline in commissions and asset management fees. Net income increased 30% to $51.1 million, or $1.62 per diluted share.

Revenues

  • Principal transactions revenue for the nine months ended September 30, 2009 increased 70% to $341.8 million from the comparable period in 2009. Principal transactions increased in the GWM and CM segments, primarily in over-the-counter equity, corporate, government and municipal debt and mortgage-backed bonds.

  • Commission revenue of $246.2 million for the nine months ended September 30, 2009 decreased 4% from the comparable period in 2008.

    • 3

  • Investment banking revenue for the nine months ended September 30, 2009 increased 11% to $75.3 million from the comparable period in 2008. For the nine months ended September 30, 2009, capital raising revenues increased 17% to $42.1 million while strategic advisory fees increased 4% to $33.2 million as compared to the prior year.

  • Asset management and service fees revenue for the nine months ended September 30, 2009 decreased 17% to $75.0 million from the comparable period in 2008, primarily as a result of a 10% decrease in the value of assets in fee based client accounts.

  • Customer margin interest revenue for the nine months ended September 30, 2009 decreased $8.6 million or 49% from the comparable period in 2008, primarily as a result of a decrease in the margin receivables due to market volatility.

Non-interest expenses

  • For the nine months ended September 30, 2009, compensation and benefits expense increased 17% to $516.9 million from the comparable period in 2008, primarily due to increased production and headcount associated with the expansion of our GWM and CM segments in the first nine months of 2009. For the nine months ended September 30, 2009, compensation and benefits expense includes $40.9 million, or 5% of net revenues, of transition pay compared to $25.5 million, or 4% of net revenues, for the comparable period in 2008.

  • Non-compensation operating expenses for the nine months ended September 30, 2009 increased 32% to $175.2 million from the comparable period in 2008, primarily due to the aforementioned expansion of our GWM and CM segments during the first nine months of 2009.

Provision for income taxes

  • Provision for income taxes was $28.0 million, representing an effective tax rate of 35%, compared to $25.7 million for the comparable period in 2008, representing an effective tax rate of 39%. The reduction of our year-to-date effective tax rate is attributable to the previously mentioned tax benefit recognized in the third quarter of 2009.

Business Segment Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Segment Results (Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

9/30/09

 

9/30/08

 

Change

 

6/30/09

 

Change

 

9/30/09

 

9/30/08

 

Change

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

$

157,145

 

$

117,151

 

34.1

%

 

$

135,310

 

16.1

%

 

$

406,619

 

$

358,322

 

13.5

%

Capital Markets

 

130,179

 

 

101,598

 

28.1

 

 

 

125,136

 

4.0

 

 

 

360,787

 

 

277,548

 

30.0

 

Other

 

2,359

 

 

174

 

*

 

 

 

1,059

 

122.8

 

 

 

3,763

 

 

3,481

 

8.1

 

Net revenues

$

289,683

 

 

218,923

 

32.3

%

 

$

261,505

 

10.8

%

 

$

771,169

 

$

639,351

 

20.6

%

Operating contribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

$

27,540

 

 

23,533

 

17.0

%

 

$

22,307

 

23.5

%

 

$

67,081

 

$

 79,725

 

(15.9)

%

Capital Markets

 

33,433

 

 

23,789

 

40.5

 

 

 

31,850

 

5.0

 

 

 

91,317

 

 

 60,999

 

49.7

 

Other

 

(30,137

) 

 

(26,228

)

14.9

 

 

 

(28,048

)

7.4

 

 

 

(79,298

)

 

 (75,555

)

5.0

 

Income before income taxes

$ 

30,836

 

$ 

21,094

 

46.2

%

 

$

 26,109

 

18.1

% 

 

$ 

79,100

 

$

65,169

 

21.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Percentage is not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

    Global Wealth Management Segment

The UBS branch acquisition and related customer account conversion to our platform has enabled us to leverage our customers' assets, which allows us the ability to provide a full array of financial products to both our Private Client Group and Stifel Bank customers. As a result, we have changed how we manage these reporting units and consequently they will be combined to form the Global Wealth Management segment effective September 30, 2009.

    Third Quarter Highlights

  • Net revenues of $157.1 million, a 34% increase over the third quarter of 2008 and a 16% increase from the second quarter of 2009. Our Global Wealth Management segment consists of the Private Client Group ("PCG") and Stifel Bank & Trust ("Stifel Bank") reporting units. PCG had net revenues of $152.2 million, a 34% increase over the third quarter of 2008 and a 16% increase from the second quarter of 2009. Stifel Bank had net revenues of $4.9 million, a 55% increase over the third quarter of 2008 and a 19% increase from the second quarter of 2009.

  • Commission revenue increased 27% over the third quarter of 2008 and increased 21% from the second quarter of 2009.

  • Principal transactions revenue increased 86% over the third quarter of 2008 and increased 9% from the second quarter of 2009.

  • Investment banking revenues, which represents sales commissions on investment banking underwritings, increased 26% from the third quarter of 2008 and increased 50% from the second quarter of 2009.

  • Asset management and service fees revenue decreased 16% from the third quarter of 2008 and increased 4% from the second quarter of 2009.

  • For the three months ended September 30, 2009, compensation and benefits expense was 62% of net revenues compared to 61% for the comparable period in 2008 and 62% for the second quarter of 2009.

  • Operating contribution of $27.5 million, a 17% increase from the third quarter of 2008 and a 24% increase from the second quarter of 2009.

  • Stifel Bank's investment portfolio increased 358% over the third quarter of 2008 and increased 126% from the second quarter of 2009, primarily due to purchases of agency mortgage-backed securities.

  • Stifel Bank's retained loan portfolio increased 66% over the third quarter of 2008 and increased 86% from the second quarter of 2009, driven by the addition of Reg U loans acquired in the UBS transaction.

  • Bank deposits increased 235% over the third quarter of 2008 and increased 86% from the second quarter of 2009.

    • YTD Highlights

  • Net revenues of $406.6 million for the nine months ended September 30, 2009, a 14% increase over the comparable period in 2008. PCG and Stifel Bank had net revenues of $393.9 million and $12.7 million for the nine months ended September 30, 2009, a 13% and 50% increase, respectively, over the comparable period in 2008.

  • Commission revenue and principal transactions revenue for the nine months ended September 30, 2009 increased 8% and 55%, respectively, over the comparable period in 2008.

  • Investment banking revenue, which represents sales commissions on investment banking underwritings, decreased 33% from the comparable period in 2008.

  • Asset management and service fees revenue decreased 17% from the comparable period in 2008.

  • For the nine months ended September 30, 2009, compensation and benefits expense was 62% of net revenues compared to 61% for the comparable period in 2008.

  • Operating contribution of $67.1 million for the nine months ended September 30, 2009, a 16% decrease from the comparable period in 2008.

  • We completed the integration of Butler Wick PCG offices we acquired on December 31, 2008.

  • We completed three waves of the UBS acquisition during the third quarter.  The final wave closed on October 16, 2009.

  • We added 83 PCG offices and 583 Financial Advisors, including 40 offices and 245 Financial Advisors from UBS and 17 offices and 67 Financial Advisors from Butler Wick, in the first nine months as part of our ongoing footprint expansion efforts.

    •  

    5

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Global Wealth Management Results and Statistical Information (Unaudited)

     

    Three Months Ended

     

    Nine Months Ended

     

    9/30/09

     

    9/30/08

     

    Change

     

    6/30/09

     

    Change

     

    9/30/09

     

    9/30/08

     

    Change

    Revenues:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Commissions

    $

    63,161

     

    $

    49,563

     

    27.4

    %

     

    $

    52,091

     

    21.3

    %

     

    $

    158,468

     

    $

    146,860

     

    7.9

    %

    Principal transactions

     

    53,052

     

     

    28,468

     

    86.4

     

     

     

    48,759

     

    8.8

     

     

     

    140,248

     

     

    90,663

     

    54.7

     

    Asset management and service fees

     

    25,406

     

     

    30,111

     

    (15.6

    )

     

     

    24,452

     

    3.9

     

     

     

    74,689

     

     

    90,199

     

    (17.2

    )

    Investment banking

     

    4,263

     

     

    3,371

     

    26.4

     

     

     

    2,843

     

    49.9

     

     

     

    9,176

     

     

    13,690

     

    (33.0

    )

    Net interest

     

    7,186

     

     

    5,397

     

    33.2

     

     

     

    5,531

     

    29.9

     

     

     

    18,124

     

     

    15,810

     

    14.6

     

    Other income/(loss)

     

    4,077

     

     

    241

     

    *

     

     

     

    1,634

     

    *

     

     

     

    5,914

     

     

    1,100

     

    *

     

    Net revenues

     

    157,145

     

     

    117,151

     

    34.1

     

     

     

    135,310

     

    16.1

     

     

     

    406,619

     

     

    358,322

     

    13.5

     

    Non-interest expenses:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Compensation and benefits

     

    96,711

     

     

    71,388

     

    35.5

     

     

     

    83,829

     

    15.4

     

     

     

    253,169

     

     

    218,661

     

    15.8

     

    Other non-interest expenses

     

    32,894

     

     

    22,230

     

    48.0

     

     

     

    29,174

     

    12.8

     

     

     

    86,369

     

     

    59,936

     

    44.1

     

    Total non-interest expenses

     

    129,605

     

     

    93,618

     

    38.4

     

     

     

    113,003

     

    14.7

     

     

     

    339,538

     

     

    278,597

     

    21.9

     

    Income before income taxes

    $ 

    27,540

     

    $ 

    23,533

     

    17.0

    %

     

    $

    22,307

     

    23.5

    % 

     

    $ 

    67,081

     

    $

    79,725

     

    (15.9)

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    As a percentage of net revenues:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Compensation and benefits

     

    61.5

    %

     

    60.9

    %

     

     

     

     

    62.0

    %

     

     

     

     

    62.3

    %

     

    61.0

    %

     

     

    Other non-interest expenses

     

    21.0

    %

     

    19.0

    %

     

     

     

     

    21.6

    %

     

     

     

     

    21.2

    %

     

    16.8

    %

     

     

    Net margin

     

    17.5

    %

     

    20.1

    %

     

     

     

     

    16.4

    %

     

     

     

     

    16.5

    %

     

    22.2

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    * Percentage is not meaningful.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Stifel Bank & Trust

    (in thousands)

     

    September 30,
     2009

     

    June 30,
     2009

     

    Change

     

    September 30,
     2008

     

    Change

    Other information:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Assets

    $

    965,569

     

    $

    532,308

     

    81.4

    %

     

    $

    327,729

     

    195.0

    %

    Investment securities

    $

    300,623

     

    $

    133,238

     

    125.6

    %

     

    $

    65,592

     

    358.3

    %

    Retained loans, net

    $

    336,865

     

    $

    181,580

     

    85.5

    %

     

    $

    203,181

     

    65.7

    %

    Loans held for sale, net

    $

    30,947

     

    $

    43,320

     

    (28.6)

    %

     

    $

    11,370

     

    172.2

    %

    Deposits

    $

    875,028

     

    $

    470,430

     

    86.0

    %

     

    $

    261,018

     

    235.2

    %

    Allowance as a percentage of loans (1)

     

    0.73

    %

     

    1.66

    %

     

     

     

     

    1.22

    %

     

     

    Non performing loans as a percentage of assets

     

    0.18

    %

     

    0.84

    %

     

     

     

     

    0.06

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (1) Excluding acquired loans of $140.0 million, the allowance as a percentage of gross loans totaled 1.25% as of 9/30/09.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    6

    Capital Markets Segment

    Third Quarter Highlights

  • Net revenues of $130.2 million, a 28% increase over the third quarter of 2008 and a 4% increase from the second quarter of 2009. Our Capital Markets segment consists of our Equity Capital Markets ("ECM") and Fixed Income Capital Markets ("FICM") reporting units.

  • Institutional brokerage revenues were $97.9 million, a 24% increase over the third quarter of 2008 and a 3% decrease from the second quarter of 2009. ECM institutional brokerage revenues were $39.7 million, an 11% decrease over the third quarter of 2008 and a 4% increase from the second quarter of 2009. FICM institutional brokerage revenues were $58.2 million, a 71% increase over the third quarter of 2008 and an 8% decrease from the second quarter 2009.

  • Investment banking revenues were $30.8 million, a 41% increase over the third quarter of 2008 and a 41% increase over the second quarter of 2009. ECM investment banking revenues were $24.6 million, a 35% increase over the third quarter of 2008 and a 41% increase over the second quarter of 2009. FICM investment banking revenues were $6.2 million, a 76% increase over the third quarter of 2008 and a 42% increase over the second quarter of 2009.

    • Capital raising revenues were $18.1 million, a 134% increase over the third quarter of 2008 and a 59% increase over the second quarter of 2009. ECM capital raising revenues were $13.2 million, a 144% increase over the third quarter of 2008 and a 75% increase over the second quarter of 2009. FICM capital raising revenues were $4.9 million, a 110% increase over the third quarter of 2008 and a 27% increase over the second quarter of 2009.

    • Advisory fees were $12.7 million, a 10% decrease from the third quarter of 2008 and a 22% increase over the second quarter of 2009. ECM advisory fees were $11.4 million, an 11% decrease from the third quarter of 2008 and a 15% increase over the second quarter of 2009. FICM advisory fees were $1.3 million, an 11% increase over the third quarter of 2008 and a 142% increase over the second quarter of 2009.

  • For the three months ended September 30, 2009, compensation and benefits expense was 60% of net revenues compared to 61% for the third quarter of 2008 and 59% for the second quarter of 2009.

  • Operating contribution of $33.4 million, a 41% increase over the third quarter of 2008 and a 5% increase from the second quarter of 2009.

  • Net margins were 26% compared to 23% for the third quarter of 2008 and 25% in the second quarter 2009.

    • YTD Highlights

  • Net revenues of $360.8 million for the nine months ended September 30, 2009, a 30% increase over the comparable period in 2008.

  • Institutional brokerage revenues were $289.3 million, a 31% increase over the comparable period in 2008. ECM and FICM institutional brokerage revenues were $114.6 million and $174.7 million, a 1% decrease and 66% increase, respectively, over the comparable period in 2008.

  • Investment banking revenues were $66.1 million, a 22% increase over the comparable period in 2008. ECM and FICM investment banking revenues were $52.1 million and $14.0 million, a 17% and 42% increase, respectively, over the comparable period in 2008.

    • Capital raising revenues were $32.9 million, a 48% increase over the comparable period in 2008. ECM and FICM capital raising revenues were $21.4 million and $11.5 million, a 28% and 107% increase, respectively, over the comparable period in 2008.

    • Advisory fees were $33.2 million, a 4% increase over the comparable period in 2008. ECM and FICM advisory fees were $30.7 million and $2.5 million, an 11% increase and a 42% decrease, respectively, over the comparable period in 2008.

  • For the nine months ended September 30, 2009, compensation and benefits expense was 59% of net revenues compared to 62% for the comparable period in 2008.

  • Net margins for the nine months ended September 30, 2009 were 25% compared to 22% for the comparable period in 2008.

  • We added 63 revenue producers in the first nine months of 2009.

    • 7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Markets Results and Statistical Information (Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

9/30/09

 

9/30/08

 

Change

 

6/30/09

 

Change

 

9/30/09

 

9/30/08

 

Change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal transactions

$

70,186

 

$

39,713

 

76.7

%

 

$

72,502

 

(3.2)

%

 

$

201,529

 

$

110,129

 

83.0

%

Commissions

 

27,743

 

 

39,164

 

(29.2

)

 

 

28,630

 

(3.1

)

 

 

87,767

 

 

110,631

 

(20.7

)

Capital raising

 

18,070

 

 

7,733

 

133.7

 

 

 

11,391

 

58.6

 

 

 

32,890

 

 

22,257

 

47.8

 

Advisory fees

 

12,724

 

 

14,052

 

(9.5

)

 

 

10,467

 

21.6

 

 

 

33,197

 

 

31,988

 

 3.8

 

Investment banking

 

30,794

 

 

21,785

 

41.4

 

 

 

21,858

 

40.9

 

 

 

66,087

 

 

54,245

 

21.8

 

Other income

 

1,456

 

 

936

 

55.6

 

 

 

2,146

 

(32.2

)

 

 

5,404

 

 

2,543

 

112.5

 

Net revenues

 

130,179

 

 

101,598

 

28.1

 

 

 

125,136

 

4.0

 

 

 

360,787

 

 

277,548

 

30.0

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

77,483

 

 

62,030

 

24.9

 

 

 

74,250

 

4.4

 

 

 

214,251

 

 

171,875

 

24.7

 

Other non-interest expenses

 

19,263

 

 

15,779

 

22.1

 

 

 

19,036

 

1.2

 

 

 

55,219

 

 

44,674

 

23.6

 

Total non-interest expenses

 

96,746

 

 

77,809

 

24.3

 

 

 

93,286

 

3.7

 

 

 

269,470

 

 

216,549

 

24.4

 

Income before income taxes

$ 

33,433

 

$ 

23,789

 

40.5

%

 

$

31,850

 

5.0

% 

 

$ 

91,317

 

$

60,999

 

49.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

59.5

%

 

61.0

%

 

 

 

 

59.3

%

 

 

 

 

59.4

%

 

61.9

%

 

 

Other non-interest expenses

 

14.8

%

 

15.6

%

 

 

 

 

15.3

%

 

 

 

 

15.3

%

 

16.1

%

 

 

Net margin

 

25.7

%

 

23.4

%

 

 

 

 

25.4

%

 

 

 

 

25.3

%

 

22.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

    Statement of Financial Condition Highlights (Unaudited)

Total assets increased 42% to $2.9 billion at September 30, 2009 from $2.0 billion at September 30, 2008. The increase is primarily attributable to increased receivables, trading inventory, financial instruments, loans and advances to financial advisors and the recognition of goodwill associated with our acquisition of UBS, which is based on preliminary estimates and is subject to change upon the final valuation. Our broker-dealer subsidiary's gross assets and liabilities, including trading inventory, stock loan/borrow, receivables and payables from/to brokers, dealers and clearing organizations and clients, fluctuate with our business levels and overall market conditions. The increase in assets is primarily attributable to the growth of our company, both organically and through the acquisition of UBS. Total stockholders' equity increased $268.2 million, or 47%, to $833.6 million at September 30, 2009, principally due to proceeds from our two equity offerings, net income, and amortization of stock-based awards.

At September 30, 2009, we reported total securities owned and investments at fair value of $990.2 million, which included securities categorized as level III of $73.3 million. Our level III assets include $55.8 million of auction rate securities, of which the auctions have failed.

    Conference Call Information

Stifel Financial Corp. will hold a conference call Monday, November 9, 2009, at 4:45 p.m. Eastern. This call will be Web cast and slides can be accessed on the Investor Relations portion of the Stifel Financial Corp. website at www.stifel.com, 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 297 offices in 41 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 our 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 or the branch offices and financial advisors as part of the our transaction with UBS; 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. 

     

    # # # # # #

For further information contact:

James M. Zemlyak, Chief Financial Officer

(314) 342-2228 zemlyakj@stifel.com