EX-99.1 2 rexv99x1.htm EX 99.1 rexv99x1

Exhibit 99.1

 


FOR IMMEDIATE RELEASE

Stifel Financial Corp. Announces Record Results

Record Quarterly Results:

• Net Income of $24.7 million, up 54%.

• Net Revenues of $319.5 million, up 38%.

• Diluted Earnings Per Share of $0.71, up 34%.

Record Year-to-Date Results:

• Net Income of $75.8 million, up 37%.

• Net Revenues of $1,090.6 million, up 25%.

• Diluted Earnings Per Share of $2.35, up 19%.

 

St. Louis, Missouri - February 9, 2010 - Stifel Financial Corp. (NYSE: "SF") today announced unaudited record quarterly net income of $24.7 million, or $0.71 per diluted share, on record net revenues of $319.5 million for the fourth quarter ended December 31, 2009, compared to $16.0 million, or $0.53 per diluted share, on net revenues of $231.0 million reported for the same period last year.  For the year ended December 31, 2009, we posted record net income of $75.8 million, or $2.35 per diluted share, on record net revenues of $1,090.6 million, compared with $55.5 million, or $1.98 per diluted share, on net revenues of $870.3 million, in the prior year period.

The three and twelve month periods ended December 31, 2008 include acquisition-related charges, primarily compensation, of $4.0 million, or $0.13 per diluted share, and $15.9 million, or $0.56 per diluted share, respectively.  Our 2009 year-to-date effective tax rate is reduced due to the recognition of a tax benefit related to an investment and jobs creation tax credit in the third quarter of 2009.

At December 31, 2009, our stockholders' equity was $873.4 million, resulting in book value per share of $28.86. During the year ended December 31, 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, "In a year of change for our Firm and the entire financial services industry, our associates delivered significantly improved financial performance, which is evident by our achievement of the fourteenth consecutive year of record net revenues and exceeding $1 billion in net revenues for the first time in our history. This was accomplished while also making substantial progress in the implementation of new platforms and capabilities that will direct our business in the years ahead. While economic conditions remain fragile and unpredictable, we are confident the steps we have taken this year will ensure that we remain well-positioned to serve our clients, seize new opportunities in the marketplace, and continue to grow our market share in the years ahead."

Stifel Financial Corp.

Summary Results of Operations (Unaudited)

(in thousands, except per share amounts)

 

Three Months Ended

 

Year Ended

 

12/31/09

 

12/31/08

 

Change

 

9/30/09

 

Change

 

12/31/09

 

12/31/08

 

Change

Results of operations data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$ 

323,399

 

$ 

233,756

 

38.3

% 

 

$

292,589

 

10.5

%

 

$

1,102,870

 

$

888,847

 

24.1

%

Net revenues

$

319,467

 

$ 

230,986

 

38.3

% 

 

$

289,683

 

10.3

% 

 

$

1,090,636

 

$

870,337

 

25.3

% 

Net income

$

24,668

 

$

16,046

 

53.7

% 

 

$

22,138

 

11.4

% 

 

$

75,798

 

$

55,502

 

36.6

% 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$ 

0.82

 

$

0.62

 

32.3

% 

 

$

0.77

 

6.5

% 

 

$

2.68

 

$

2.31

 

16.0

% 

Diluted

$

0.71

 

$

0.53

 

34.0

% 

 

$

0.67

 

6.0

% 

 

$

2.35

 

$

1.98

 

18.7

% 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

30,209

 

 

25,706

 

17.5

% 

 

 

28,708

 

5.2

% 

 

 

28,297

 

 

24,069

 

17.6

% 

Diluted

 

34,706

 

 

30,215

 

14.9

%

 

 

32,817

 

5.8

%

 

 

32,294

 

 

28,073

 

15.0

%
                                               

 

Stifel Financial Corp.

Summary Results of Operations (Unaudited)

(in thousands, except per share amounts)

 

Three Months Ended

 

Year Ended

 

12/31/09

 

12/31/08

 

Change

 

9/30/09

 

Change

 

12/31/09

 

12/31/08

 

Change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal transactions

$

116,410

 

$

92,492

 

25.9

%

 

$

123,238

 

(5.5)

%

 

$

458,188

 

$

293,285

 

56.2

%

Commissions

 

99,285

 

 

83,599

 

18.8

 

 

 

90,905

 

9.2

 

 

 

345,520

 

 

341,090

 

1.3

 

Investment banking

 

50,545

 

 

15,775

 

220.4

 

 

 

35,056

 

44.2

 

 

 

125,807

 

 

83,710

 

50.3

 

Asset management and service fees

 

37,732

 

 

29,346

 

28.6

 

 

 

25,498

 

48.0

 

 

 

112,706

 

 

119,926

 

(6.0

)

Other income

 

4,349

 

 

1,571

 

176.9

 

 

 

6,586

 

(34.0

)

 

 

13,789

 

 

688

 

*

 

Operating revenues

 

308,321

 

 

222,783

 

38.4

 

 

 

281,283

 

9.6

 

 

 

1,056,010

 

 

838,699

 

25.9

 

Interest revenue

 

15,078

 

 

10,973

 

37.4

 

 

 

11,306

 

33.4

 

 

 

46,860

 

 

50,148

 

(6.6

)

Total revenues

 

323,399

 

 

233,756

 

38.3

 

 

 

292,589

 

10.5

 

 

 

1,102,870

 

 

888,847

 

24.1

 

Interest expense

 

3,932

 

 

2,770

 

42.0

 

 

 

2,906

 

35.3

 

 

 

12,234

 

 

18,510

 

(33.9

)

Net revenues

 

319,467

 

 

230,986

 

38.3

 

 

 

289,683

 

10.3

 

 

 

1,090,636

 

 

870,337

 

25.3

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

201,263

 

 

141,750

 

42.0

 

 

 

193,131

 

4.2

 

 

 

718,115

 

 

582,778

 

23.2

 

Occupancy and equipment rental

 

26,430

 

 

18,972

 

39.3

 

 

 

24,730

 

6.9

 

 

 

89,741

 

 

67,984

 

32.0

 

Communications and office supplies

 

15,342

 

 

12,734

 

20.5

 

 

 

14,429

 

6.3

 

 

 

54,745

 

 

45,621

 

20.0

 

Commission and floor brokerage

 

6,249

 

 

4,972

 

25.7

 

 

 

6,486

 

(3.7

)

 

 

23,416

 

 

13,287

 

76.2

 

Other non-interest expenses

 

28,869

 

 

25,958

 

11.2

 

 

 

20,071

 

43.8

 

 

 

84,205

 

 

68,898

 

22.2

 

Total non-interest expenses

 

278,153

 

 

204,386

 

36.1

 

 

 

258,847

 

7.5

 

 

 

970,222

 

 

778,568

 

24.6

 

Income before income taxes

 

41,314

 

 

26,600

 

55.3

 

 

 

30,836

 

34.0

 

 

 

120,414

 

 

91,769

 

31.2

 

Provision for income taxes

 

16,646

 

 

10,554

 

57.7

 

 

 

8,698

 

91.4

 

 

 

44,616

 

 

36,267

 

23.0

 

Net income

$

24,668

 

$

16,046

 

53.7

%

 

$

22,138

 

11.4

%

 

$

75,798

 

$

55,502

 

36.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.82

 

$

0.62

 

32.3

%

 

$

0.77

 

6.5

%

 

$

2.68

 

$

2.31

 

16.0

%

Diluted

$

0.71

 

$

0.53

 

34.0

%

 

$

0.67

 

6.0

%

 

$

2.35

 

$

1.98

 

18.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

30,209

 

 

25,706

 

17.5

%

 

 

28,708

 

5.2

%

 

 

28,297

 

 

24,069

 

17.6

%

Diluted

 

34,706

 

 

30,215

 

14.9

%

 

 

32,817

 

5.8

%

 

 

32,294

 

 

28,073

 

15.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Percentage is not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stifel Financial Corp.

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

 

December 31,
 2009

 

December 31,
 2008

 

Change

 

September 30,
 2009

 

Change

Statistical Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

$

28.86

 

$

22.68

 

27.2

%

 

$

27.63

 

4.4

%

Financial advisors

 

1,885

 

 

1,315

 

43.3

%

 

 

1,823

 

3.4

%

Full-time associates

 

4,434

 

 

3,371

 

31.5

%

 

 

4,289

 

3.4

%

Locations

 

294

 

 

225

 

30.7

%

 

 

281

 

4.6

%

Total client assets

$

91,342,000

 

$

51,828,000

 

76.2

%

 

$

83,501,000

 

9.4

%

 

 

 

 

2

Review of Business Highlights

Fourth Quarter Highlights

For the three months ended December 31, 2009, we posted record net revenues of $319.5 million, a 38% increase over the fourth quarter of 2008 and a 10% increase over the third quarter of 2009. Our revenue growth was primarily derived from increased investment banking, principal transactions, commissions and asset management and service fees. Net income of $24.7 million, or $0.71 per diluted share, increased 54% over the fourth quarter of 2008 and increased 11% over the third quarter of 2009.

Revenues

  • Principal transactions revenue of $116.4 million increased 26% over the fourth quarter of 2008 and decreased 6% from the third quarter of 2009. Principal transactions increased in the Global Wealth Management ("GWM") and Capital Markets ("CM") segments, primarily in over-the-counter equity, corporate and municipal debt and market making.

  • Commission revenue of $99.3 million increased 19% over the fourth quarter of 2008 and increased 9% over the third quarter of 2009.

  • Investment banking revenue increased $34.8 million from the fourth quarter of 2008 to $50.5 million and increased 44% over the third quarter of 2009. Capital raising revenues increased $25.2 million to $34.5 million as compared to the fourth quarter of 2008 and increased 55% from the third quarter of 2009. Strategic advisory fees increased $9.5 million to $16.0 million as compared to the fourth quarter of 2008 and increased 26% from the third quarter of 2009.

  • Asset management and service fees revenue increased 29% from the fourth quarter of 2008 to $37.7 million and increased 48% from the third quarter of 2009, primarily as a result of an increase in the number of managed accounts and the value of assets in fee based client accounts.

  • Net interest of $11.1 million increased 36% from the fourth quarter of 2008 and increased 33% from the third quarter of 2009.

Non-interest expenses

  • Compensation and benefits expense increased 42% to $201.3 million from the fourth quarter of 2008 and increased 4% over the third 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 December 31, 2009, compensation and benefits expense includes transition pay of $15.4 million, or 5% of net revenues, which primarily consist of upfront notes, signing bonuses and retention awards in connection with our continuing expansion efforts, compared to $8.8 million, or 4% of net revenues, for the comparable period in 2008 and $14.8 million, or 5% of net revenues, for the third quarter of 2009.

  • Non-compensation operating expenses increased 23% to $76.9 million from the fourth quarter of 2008, and increased 17% from the third quarter of 2009 primarily due to the aforementioned expansion of our GWM and CM segments.

Provision for income taxes

  • Provision for income taxes was $16.6 million, representing an effective tax rate of 40%, compared to $10.6 million for the comparable period in 2008, representing an effective tax rate of 40%.

YTD Highlights

For the year ended December 31, 2009, we posted record net revenues of $1,090.6 million, a 25% increase over the comparable period in 2008, which represents our fourteenth consecutive year of annual increases. Our revenue growth was primarily derived from increased principal transactions and investment banking offset by a decline in asset management and service fees. For the year ended December 31, 2009, we posted record net income of $75.8 million, or $2.35 per diluted share, a 37% increase over the comparable period in 2008.

Revenues

  • Principal transactions revenue for the year ended December 31, 2009 increased 56% to $458.2 million from the comparable period in 2008. Principal transactions increased in the GWM and CM segments, primarily in over-the-counter equity, corporate, municipal debt and mortgage-backed bonds.

  • Commission revenue of $345.5 million for the year ended December 31, 2009 increased 1% from the comparable period in 2008.

  • Investment banking revenue for the year ended December 31, 2009 increased 50% to $125.8 million from the comparable period in 2008. For the year ended December 31, 2009, capital raising revenues increased 69% to $76.6 million while strategic advisory fees increased 28% to $49.2 million as compared to the prior year.

3

  • Asset management and service fees revenue for the year ended December 31, 2009 decreased 6% to $112.7 million from the comparable period in 2008.

  • Net interest for the year ended December 31, 2009 increased 9% to $34.6 million from the comparable period in 2008.

Non-interest expenses

  • For the year ended December 31, 2009, compensation and benefits expense increased 23% to $718.1 million from the comparable period in 2008, primarily due to increased production and headcount associated with the expansion of our GWM and CM segments during 2009. For the year ended December 31, 2009, compensation and benefits expense includes $56.2 million, or 5% of net revenues, of transition pay compared to $34.3 million, or 4% of net revenues, for the comparable period in 2008.

  • Non-compensation operating expenses for the year ended December 31, 2009 increased 29% to $252.1 million from the comparable period in 2008, primarily due to the aforementioned expansion of our GWM and CM segments during 2009.

Provision for income taxes

  • Provision for income taxes was $44.6 million, representing an effective tax rate of 37%, compared to $36.3 million for the comparable period in 2008, representing an effective tax rate of 40%. Our current year effective tax rate was reduced due to the recognition of a tax benefit related to an investment and jobs creation tax credit in the third quarter of 2009.

Business Segment Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Segment Results (Unaudited)

(in thousands)

 

Three Months Ended

 

Year Ended

 

12/31/09

 

12/31/08

 

Change

 

9/30/09

 

Change

 

12/31/09

 

12/31/08

 

Change

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

$

184,704

 

$

112,683

 

63.9

%

 

$

157,145

 

17.5

%

 

$

591,323

 

$

471,005

 

25.5

%

Capital Markets

 

133,305

 

 

113,178

 

17.8

 

 

 

130,179

 

2.4

 

 

 

494,092

 

 

390,726

 

26.5

 

Other

 

1,458

 

 

5,125

 

(71.5

)

 

 

2,359

 

(38.2

)

 

 

5,221

 

 

8,606

 

(39.3

)

Net revenues

$

319,467

 

 

230,986

 

38.3

%

 

$

289,683

 

10.3

%

 

$

1,090,636

 

$

870,337

 

25.3

%

Operating contribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

$

32,967

 

 

18,372

 

79.4

%

 

$

27,540

 

19.7

%

 

$

100,048

 

$

98,097

 

2.0

%

Capital Markets

 

37,816

 

 

30,893

 

22.4

 

 

 

33,433

 

13.1

 

 

 

129,133

 

 

91,892

 

40.5

 

Other

 

(29,469

) 

 

(22,665

)

30.0

 

 

 

(30,137

)

(2.2

) 

 

 

(108,767

)

 

(98,220

)

10.7

 

Income before income taxes

$ 

41,314

 

$ 

26,600

 

55.3

%

 

$

30,836

 

34.0

% 

 

$ 

120,414

 

$

91,769

 

31.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

Global Wealth Management Segment

Fourth Quarter Highlights

  • Net revenues of $184.7 million, a 64% increase over the fourth quarter of 2008 and an 18% increase over the third 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 $177.0 million, a 59% increase over the fourth quarter of 2008 and a 16% increase over the third quarter of 2009. Stifel Bank had net revenues of $7.7 million, a $6.6 million increase over the fourth quarter of 2008 and a 56% increase over the third quarter of 2009.

  • Commission revenue increased 69% over the fourth quarter of 2008 and increased 20% over the third quarter of 2009.

  • Principal transactions revenue increased 60% over the fourth quarter of 2008 and increased 2% over the third quarter of 2009.

  • Asset management and service fees revenue increased 30% over the fourth quarter of 2008 and increased 48% over the third quarter of 2009.

  • Investment banking revenues, which represents sales commissions on investment banking underwritings, increased $3.9 million from the fourth quarter of 2008 and increased 34% over the third quarter of 2009.

  • For the three months ended December 31, 2009, compensation and benefits expense was 63% of net revenues compared to 63% for the fourth quarter of 2008 and 62% for the third quarter of 2009.

  • Income before income taxes of $33.0 million increased 79% over the fourth quarter of 2008 and increased 20% over the third quarter of 2009.

  • During the fourth quarter of 2009, we entered into an agreement providing for the sale of Stifel Bank's branch office. The transaction, which is subject to regulatory approvals and certain closing conditions, is expected to be completed during the first quarter of 2010.

YTD Highlights

  • Net revenues of $591.3 million for the year ended December 31, 2009, a 26% increase over the comparable period in 2008. PCG and Stifel Bank had net revenues of $570.9 million and $20.4 million, respectively, for the year ended December 31, 2009, a 24% and 113% increase, respectively, over the comparable period in 2008.

  • Commission revenue and principal transactions revenue for the year ended December 31, 2009 increased 22% and 56%, respectively, over the comparable period in 2008.

  • Investment banking revenue, which represents sales commissions on investment banking underwritings, decreased 4% from the comparable period in 2008.

  • Asset management and service fees revenue decreased 6% from the comparable period in 2008.

  • For the year ended December 31, 2009, compensation and benefits expense was 63% of net revenues compared to 61% for the comparable period in 2008.

  • For the year ended December 31, 2009, income before income taxes increased 2% to $100.0 million from $98.1 million for the comparable period in 2008.

  • We successfully completed the integrations of the UBS and Butler Wick PCG offices during 2009. We completed the UBS acquisition during the fourth quarter of 2009 and acquired Butler Wick on December 31, 2008.

  • We added 99 PCG offices and 645 Financial Advisors, including 56 offices and 321 Financial Advisors from UBS and 17 offices and 67 Financial Advisors from Butler Wick, during 2009 as part of our ongoing footprint expansion efforts.

  • Stifel Bank's investment portfolio increased $528.1 million over the fourth quarter of 2008 primarily due to purchases of agency mortgage-backed securities, as we continued to expand our investment strategy at Stifel Bank during 2009.

  • Stifel Bank's retained loan portfolio increased 80% over the fourth quarter of 2008, driven by the addition of stock-secured loans acquired in the UBS transaction.

  • Bank deposits increased 268% over the fourth quarter of 2008, driven by the addition of customer deposits acquired in the UBS transaction.

    • 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management Results and Statistical Information (Unaudited)

(in thousands)

 

Three Months Ended

 

Year Ended

 

12/31/09

 

12/31/08

 

Change

 

9/30/09

 

Change

 

12/31/09

 

12/31/08

 

Change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

$

75,584

 

$

44,682

 

69.2

%

 

$

63,161

 

19.7

%

 

$

234,052

 

$

191,542

 

22.2

%

Principal transactions

 

54,136

 

 

33,914

 

59.6

 

 

 

53,052

 

2.0

 

 

 

194,384

 

 

124,577

 

56.0

 

Asset management and service fees

 

37,477

 

 

28,848

 

29.9

 

 

 

25,406

 

47.5

 

 

 

112,166

 

 

119,047

 

(5.8

)

Net interest

 

9,065

 

 

5,688

 

59.3

 

 

 

7,186

 

26.1

 

 

 

27,189

 

 

21,498

 

26.5

 

Investment banking

 

5,730

 

 

1,825

 

214.0

 

 

 

4,263

 

34.4

 

 

 

14,906

 

 

15,515

 

(3.9

)

Other income/(loss)

 

2,712

 

 

(2,274

)

*

 

 

 

4,077

 

(33.5

)

 

 

8,626

 

 

(1,174

)

*

 

Net revenues

 

184,704

 

 

112,683

 

63.9

 

 

 

157,145

 

17.5

 

 

 

591,323

 

 

471,005

 

25.5

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

116,988

 

 

70,546

 

65.8

 

 

 

96,711

 

21.0

 

 

 

370,157

 

 

289,207

 

28.0

 

Other non-interest expenses

 

34,749

 

 

23,765

 

46.2

 

 

 

32,894

 

5.6

 

 

 

121,118

 

 

83,701

 

44.7

 

Total non-interest expenses

 

151,737

 

 

94,311

 

60.9

 

 

 

129,605

 

17.1

 

 

 

491,275

 

 

372,908

 

31.7

 

Income before income taxes

$ 

32,967

 

$ 

18,372

 

79.4

%

 

$

27,540

 

19.7

% 

 

$ 

100,048

 

$

98,097

 

2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

63.3

%

 

62.6

%

 

 

 

 

61.5

%

 

 

 

 

62.6

%

 

61.4

%

 

 

Other non-interest expenses

 

18.9

%

 

21.1

%

 

 

 

 

21.0

%

 

 

 

 

20.5

%

 

17.8

%

 

 

Net margin

 

17.8

%

 

16.3

%

 

 

 

 

17.5

%

 

 

 

 

16.9

%

 

20.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Percentage is not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stifel Bank & Trust

(in thousands)

 

December 31,
 2009

 

September 30,
 2009

 

Change

 

December 31,
 2008

 

Change

Other information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

$

1,142,008

 

$

965,569

 

18.3

%

 

$

333,784

 

242.1

%

Investment securities

$

578,488

 

$

300,623

 

92.4

%

 

$

50,397

 

*

%

Retained loans, net

$

333,547

 

$

325,443

 

2.5

%

 

$

185,147

 

80.2

%

Loans held for sale, net (1)

$

91,117

 

$

30,947

 

194.4

%

 

$

31,246

 

191.6

%

Deposits (2)

$

1,047,211

 

$

875,028

 

19.7

%

 

$

284,798

 

267.7

%

Allowance as a percentage of loans (3)

 

0.51

%

 

0.76

%

 

 

 

 

1.23

%

 

 

Non-performing loans as a percentage of assets

 

0.12

%

 

0.18

%

 

 

 

 

0.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Percentage not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes loans of $33.1 million held for sale as part of the branch sale.

 

(2) Includes deposits of $20.8 million held for sale as par to the branch sale.

 

(3) Excluding acquired loans of $171.0 million and $140.0 million, the allowance as a percentage of gross loans totaled 0.99% and 1.25% as of December 31, 2009 and September 30, 2009, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

Capital Markets Segment

Fourth Quarter Highlights

  • Net revenues of $133.3 million, an 18% increase over the fourth quarter of 2008 and a 2% increase over the third 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 $86.0 million, a 12% decrease from the fourth quarter of 2008 and the third quarter of 2009, respectively. ECM institutional brokerage revenues were $38.7 million, a 13% decrease from the fourth quarter of 2008 and a 3% decrease from the third quarter of 2009. FICM institutional brokerage revenues were $47.3 million, an 11% decrease from the fourth quarter of 2008 and a 19% decrease from the third quarter 2009.

  • Investment banking revenues were $44.8 million, a $30.9 million increase over the fourth quarter of 2008 and a 46% increase over the third quarter of 2009. ECM investment banking revenues were $38.6 million, a $28.4 million increase over the fourth quarter of 2008 and a 57% increase over the third quarter of 2009. FICM investment banking revenues were $6.2 million, a 65% increase over the fourth quarter of 2008 and a 1% increase from the third quarter of 2009.

    • Capital raising revenues were $28.8 million, a $21.3 million increase over the fourth quarter of 2008 and a 59% increase over the third quarter of 2009. ECM capital raising revenues were $23.2 million, an $18.1 million increase over the fourth quarter of 2008 and a 76% increase over the third quarter of 2009. FICM capital raising revenues were $5.6 million, a $3.3 million increase over the fourth quarter of 2008 and a 14% increase over the third quarter of 2009.

    • Advisory fees were $16.0 million, a $9.5 million increase from the fourth quarter of 2008 and a 26% increase over the third quarter of 2009. ECM advisory fees were $15.3 million, a $10.3 million increase over the fourth quarter of 2008 and a 35% increase over the third quarter of 2009. FICM advisory fees were $0.7 million, a 53% decrease from the fourth quarter of 2008 and a 48% decrease from the third quarter of 2009.

  • For the three months ended December 31, 2009, compensation and benefits expense was 55% of net revenues compared to 55% for the fourth quarter of 2008 and 60% for the third quarter of 2009.

  • For the three months ended December 31, 2009, income before income taxes increased 22% over the fourth quarter of 2008 to $37.8 million and increased 13% over the third quarter of 2009.

  • Net margins for the three months ended December 31, 2009 were 28% compared to 27% for the fourth quarter of 2008 and 26% in the third quarter 2009.

YTD Highlights

  • Net revenues of $494.1 million for the year ended December 31, 2009, a 27% increase over the comparable period in 2008.

  • Institutional brokerage revenues were $375.3 million, an 18% increase over the comparable period in 2008. ECM and FICM institutional brokerage revenues were $153.3 million and $222.0 million, a 4% decrease and 40% increase, respectively, over the comparable period in 2008.

  • Investment banking revenues were $110.9 million, a 63% increase over the comparable period in 2008. ECM and FICM investment banking revenues were $90.7 million and $20.2 million, a 66% and 48% increase, respectively, over the comparable period in 2008.

    • Capital raising revenues were $61.7 million, a 108% increase over the comparable period in 2008. ECM and FICM capital raising revenues were $44.6 million and $17.1 million, a 104% and 118% increase, respectively, over the comparable period in 2008.

    • Advisory fees were $49.2 million, a 28% increase over the comparable period in 2008. ECM and FICM advisory fees were $46.0 million and $3.2 million, a 41% increase and a 45% decrease, respectively, over the comparable period in 2008.

  • For the year ended December 31, 2009, compensation and benefits expense was 58% of net revenues compared to 60% for the comparable period in 2008.

  • For the year ended December 31, 2009, income before income taxes increased 41% over the comparable period in 2008 to $129.1 million.

  • Net margins for the year ended December 31, 2009 were 26% compared to 24% for the comparable period in 2008.

  • We added 34 and 29 revenue producers in our ECM and FICM reporting units, respectively, during 2009.

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Markets Results and Statistical Information (Unaudited)

(in thousands)

 

Three Months Ended

 

Year Ended

 

12/31/09

 

12/31/08

 

Change

 

9/30/09

 

Change

 

12/31/09

 

12/31/08

 

Change

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal transactions

$

62,275

 

$

58,577

 

6.3

%

 

$

70,186

 

(10.5)

%

 

$

263,804

 

$

168,706

 

56.4

%

Commissions

 

23,701

 

 

38,917

 

(39.1

)

 

 

27,743

 

(14.6

)

 

 

111,469

 

 

149,548

 

(25.5

)

Capital raising

 

28,768

 

 

7,433

 

287.0

 

 

 

18,070

 

59.2

 

 

 

61,657

 

 

29,690

 

107.7

 

Advisory fees

 

16,047

 

 

6,518

 

146.2

 

 

 

12,724

 

26.1

 

 

 

49,244

 

 

38,506

 

27.9

 

Investment banking

 

44,815

 

 

13,951

 

221.3

 

 

 

30,794

 

45.5

 

 

 

110,901

 

 

68,196

 

62.6

 

Other income *

 

2,514

 

 

1,733

 

45.1

 

 

 

1,456

 

72.7

 

 

 

7,918

 

 

4,276

 

85.2

 

Net revenues

 

133,305

 

 

113,178

 

17.8

 

 

 

130,179

 

2.4

 

 

 

494,092

 

 

390,726

 

26.5

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

73,584

 

 

61,804

 

19.1

 

 

 

77,483

 

(5.0

) 

 

 

287,835

 

 

233,679

 

23.2

 

Other non-interest expenses

 

21,905

 

 

20,481

 

7.0

 

 

 

19,263

 

13.7

 

 

 

77,124

 

 

65,155

 

18.4

 

Total non-interest expenses

 

95,489

 

 

82,285

 

16.0

 

 

 

96,746

 

(1.3

) 

 

 

364,959

 

 

298,834

 

22.1

 

Income before income taxes

$ 

37,816

 

$ 

30,893

 

22.4

%

 

$

33,433

 

13.1

% 

 

$ 

129,133

 

$

91,892

 

40.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

55.2

%

 

54.6

%

 

 

 

 

59.5

%

 

 

 

 

58.3

%

 

59.8

%

 

 

Other non-interest expenses

 

16.4

%

 

18.1

%

 

 

 

 

14.8

%

 

 

 

 

15.6

%

 

16.7

%

 

 

Net margin

 

28.4

%

 

27.3

%

 

 

 

 

25.7

%

 

 

 

 

26.1

%

 

23.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Includes net interest and other income.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

8

 

Statement of Financial Condition Highlights (Unaudited)

Total assets increased 103% to $3.2 billion at December 31, 2009 from $1.6 billion at December 31, 2008. The increase is primarily attributable to increased receivables, including the Reg T loans added as part of the UBS transaction, trading inventory, financial instruments, bank loans, including the stock-secured loans added as part of the UBS transaction, loans and advances to financial advisors and the recognition of goodwill and intangible assets associated with our acquisition of UBS, which was completed in the fourth quarter of 2009. 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 $280.3 million, or 47%, to $873.4 million at December 31, 2009, principally due to proceeds from our two equity offerings, net income, and amortization of stock-based awards.

At December 31, 2009, we reported total securities owned and investments at fair value of $1.1 billion, which included securities categorized as level III of $65.4 million. Our level III assets include auction rate securities, of which the auctions have failed, with a fair value of $56.0 million at December 31, 2009.

Conference Call Information

Stifel Financial Corp. will hold a conference call Tuesday, February 9, 2010, at 5:00 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 866-612-8471 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 296 offices in 42 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