0001193125-13-074226.txt : 20130225 0001193125-13-074226.hdr.sgml : 20130225 20130225165234 ACCESSION NUMBER: 0001193125-13-074226 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 30 CONFORMED PERIOD OF REPORT: 20130225 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130225 DATE AS OF CHANGE: 20130225 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: 13639692 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 d492909d8k.htm 8-K 8-K

 

 

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 25, 2013

 

 

STIFEL FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-09305   43-1273600
(State of incorporation)  

(Commission

File Number)

  

(IRS Employer

Identification No.)

501 N. Broadway, St. Louis, Missouri 63102-2188

(Address of principal executive offices and zip code)

(314) 342-2000

(Registrant’s telephone number, including area code)

Not Applicable

(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 25, 2013, Stifel Financial Corp. reported its financial results for the three and twelve months ended December 31, 2012. A copy of the related press release is attached hereto as Exhibit 99.1.

Stifel Financial Corp. will hold a conference call on Monday, February 25, 2013, at 5:00 p.m. Eastern time. This call will be webcast 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. All interested parties are invited to participate by dialing (800) 651-2240 and referencing conference ID #12018117. The conference call slide show is attached hereto as Exhibit 99.2.

The exhibits are being furnished pursuant to Item 2.02, and the information contained therein shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
Number

   

Description of Exhibit

99.1    Press release dated February 25, 2013.
99.2    Investor presentation.

 

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    STIFEL FINANCIAL CORP.
Date: February 25, 2013   By:  

/s/ James M. Zemlyak

  Name:   James M. Zemlyak
  Title:   Senior Vice President and Chief Financial Officer

 

3

EXHIBIT INDEX

 

Exhibit
Number

   

Description of Exhibit

99.1    Press release dated February 25, 2013.
99.2    Investor presentation.

 

4

EX-99.1 2 d492909dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

STIFEL REPORTS FOURTH QUARTER AND FULL-YEAR 2012 FINANCIAL RESULTS

17th Consecutive Year of Record Net Revenues

Financial highlights for the three months ended December 31, 2012:

 

  •  

Record revenues of $426.4 million.

 

  •  

Net revenues of $417.8 million.

 

  •  

Net income of $40.0 million, or $0.63 per diluted share.

 

  •  

Stockholders’ equity was $1.49 billion and book value per share was $27.24.

Financial highlights for the year ended December 31, 2012:

 

  •  

Record net revenues of $1.61 billion increased 14% from 2011.

 

  •  

Record net income of $138.6 million, or $2.20 per diluted share.

ST. LOUIS, February 25, 2013 –Stifel Financial Corp. (NYSE: SF) today reported net income of $40.0 million, or $0.63 per diluted share, on net revenues of $417.8 million for the three months ended December 31, 2012, compared with net income of $27.0 million, or $0.43 per diluted share, on net revenues of $356.9 million for the fourth quarter of 2011. The results for the three months ended December 31, 2012 were impacted by gains recognized on the Company’s investment in Knight Capital Group, Inc. offset by merger-related and other unusual expenses. The after-tax impact of these items was a gain of $0.02 per diluted share.

For the year ended December 31, 2012, the Company reported record net income of $138.6 million, or $2.20 per diluted share, on record net revenues of $1.61 billion, compared with net income of $84.1 million, or $1.33 per diluted share1, on net revenues of $1.4 billion during the comparable period in 2011.

“2012 represented Stifel’s 17th consecutive year of record net revenues. This is a significant accomplishment, particularly given past market cycles. We remain focused on our goal of delivering superior client services, which has benefitted all Stifel constituents: clients, shareholders, and associates,” said Ronald J. Kruszewski, Chairman, President and CEO of Stifel.

Kruszewski continued, “Our fourth quarter results finished the year with record revenues. Both segments, Global Wealth Management and Institutional Group, reflected strong underlying performance, even in light of the political and economic uncertainty in the quarter. We continue to selectively add talented professionals to expand our product offerings and gain market share. At the end of last year, we acquired Miller Buckfire, a preeminent franchise in restructuring advisory, and most recently our merger with KBW, a leading financial services investment bank. As we have done in the past, we will continue to position Stifel to take advantage of opportunities.”

 

Summary Results of Operations (Unaudited)

 

  

     Three Months Ended     Year Ended  
(in 000s)    12/31/12      12/31/11      %
Change		      9/30/12      %
Change		     12/31/12      12/31/11      %
Change		  

Net revenues

    $ 417,830       $ 356,878         17.1       $ 420,080         (0.5 )    $ 1,612,650       $ 1,416,562         13.8   

Net income

    $ 39,954       $ 27,016         47.9       $ 37,710         6.0      $ 138,573       $ 84,134         64.7   

Earnings per share:

                       

Basic

    $ 0.74       $ 0.52         42.3       $ 0.70         5.8      $ 2.59       $ 1.61         60.9   

Diluted

    $ 0.63       $ 0.43         46.5       $ 0.60         5.0      $ 2.20       $ 1.33         65.4   

Weighted average number of common shares outstanding:

                       

Basic

      53,835         51,849         3.9         53,601         0.5        53,563         52,418         2.2   

Diluted

      63,301         62,695         1.0         63,054         0.4        62,937         63,058         (0.2 ) 

 

1  Included in the results for the year ended December 31, 2011 were the estimated costs of settlement and litigation-related expenses of $29.4 million after tax, or $0.47 per diluted share, respectively, associated with the civil lawsuit and related regulatory investigation in connection with the previously disclosed matter involving five Southeastern Wisconsin school districts and certain merger-related expenses.

 

1

Business Segment Results

 

Summary Segment Results (Unaudited)

 

  

     Three Months Ended     Year Ended  
(in 000s)    12/31/12     12/31/11     %
Change		     9/30/12     %
Change		     12/31/12     12/31/11     %
Change		  

Net revenues:

                 

Global Wealth Management

    $ 255,084      $ 224,569        13.6      $ 251,728        1.3      $ 995,189      $ 908,158        9.6   

Institutional Group 2

      165,056        134,229        23.0        169,679        (2.7 )      618,536        507,397        21.9   

Other

      (2,310 )      (1,920 )      (20.3 )      (1,327 )      (74.1 )      (1,075 )      1,007        (206.8 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   $ 417,830      $ 356,878        17.1      $ 420,080        (0.5 )    $ 1,612,650      $ 1,416,562        13.8   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Pre-tax operating income:

                 

Global Wealth Management

    $ 69,282      $ 62,872        10.2      $ 68,370        1.3      $ 268,183      $ 235,382        13.9   

Institutional Group 2

      21,490        10,773        99.5        33,427        (35.7 )      96,167        63,269        52.0   

Other 3

      (29,705 )      (28,619 )      3.8        (40,120 )      (26.0 )      (138,478 )      (160,043 )      (13.5 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   $ 61,067      $ 45,026        35.6      $ 61,677        (1.0 )    $ 225,872      $ 138,608        63.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Fourth Quarter

Global Wealth Management

For the quarter ended December 31, 2012, the Global Wealth Management (“GWM”) segment generated pre-tax operating income of $69.3 million, compared with $62.9 million in the fourth quarter of 2011 and $68.4 million in the third quarter of 2012. Net revenues for the quarter were $255.1 million, compared with $224.6 million in the fourth quarter of 2011, and $251.7 million in the third quarter of 2012. The increase in net revenues over the comparable period in 2011 is primarily attributable to: (1) growth in asset management and service fees as a result of an increase in client assets and positive gains in market performance; (2) growth in commissions revenues; (3) higher sales credits from investment banking underwritings; and (4) increased net interest revenues as a result of the growth of net interest-earning assets at Stifel Bank. The increase in net revenues from the third quarter of 2012 was primarily attributable to: (1) growth in asset management and service fees as a result of an increase in client assets and positive gains in market performance; and (2) growth in commissions revenue, offset by (1) a decrease in principal transactions revenues; (2) reduced sales credits from investment banking underwritings; and (3) lower net interest revenues.

 

  •  

The Private Client Group reported net revenues of $232.5 million, a 13% increase compared with the fourth quarter of 2011 and a 1% increase compared with the third quarter of 2012.

 

  •  

Stifel Bank reported net revenues of $22.6 million, a 16% increase compared with the fourth quarter of 2011 and a 1% increase compared with the third quarter of 2012.

Institutional Group

For the quarter ended December 31, 2012, the Institutional Group segment generated pre-tax operating income of $21.5 million, compared with $10.8 million in the fourth quarter of 2011 and $33.4 million in the third quarter of 2012. Net revenues for the quarter were $165.1 million, compared with $134.2 million in the fourth quarter of 2011 and $169.7 million in the third quarter of 2012. The increase in net revenues from the comparable period in 2011 was driven by: (1) an increase in equity and fixed income capital raising revenues; (2) higher fixed income and equity institutional brokerage revenues; and (3) the realized and unrealized gains recognized on the Company’s investment in Knight Capital Group, Inc. Offsetting these increases was a decrease in advisory fees. The decrease in net revenues from the third quarter of 2012 was primarily attributable to: (1) a decrease in unrealized gains recognized on the Company’s investment in Knight Capital Group, Inc. The decrease was offset by: (1) an increase in fixed income and equity capital raising revenues; and (2) an increase in equity institutional brokerage revenues.

 

2  Results for the three and twelve months ended December 31, 2012 includes $13.4 million and $39.0 million, respectively, in realized and unrealized gains recognized on the Company’s investment in Knight Capital Group, Inc.
3  Results for the year ended December 31, 2011 include litigation-related charges and merger-related expenses of $47.5 million pre-tax.

 

2

Institutional brokerage revenues were $84.2 million, a 5% increase compared with the fourth quarter of 2011 and a 2% increase compared with the third quarter of 2012.

 

  •  

Equity brokerage revenues were $41.8 million, a 3% increase compared with the fourth quarter of 2011 and a 10% increase compared with the third quarter of 2012.

 

  •  

Fixed income brokerage revenues were $42.4 million, a 7% increase compared with the fourth quarter of 2011 and a 5% decrease compared with the third quarter of 2012.

Investment banking revenues were $64.9 million, a 25% increase compared with the fourth quarter of 2011 and a 9% increase compared with the third quarter of 2012.

 

  •  

Equity capital raising revenues were $19.8 million, a 96% increase compared with the fourth quarter of 2011 and a 13% increase compared with the third quarter of 2012.

 

  •  

Fixed income capital raising revenues were $18.5 million, a 40% increase compared with the fourth quarter of 2011 and a 24% increase compared with the third quarter of 2012.

 

  •  

Advisory fee revenues were $26.6 million, a 7% decrease compared with the fourth quarter of 2011 and a 2% decrease compared with the third quarter of 2012.

Consolidated Compensation and Benefits Expenses

For the quarter ended December 31, 2012, compensation and benefits expenses were $262.2 million, compared with $228.7 million in the fourth quarter of 2011 and $267.7 million in the third quarter of 2012.

Compensation and benefits as a percentage of net revenues was 62.8% in the fourth quarter of 2012, compared with 64.1% in the fourth quarter of 2011 and 63.7% in the third quarter of 2012. Transition pay, which primarily consists of amortization of upfront notes, signing bonuses and retention awards, as a percentage of net revenues was 5% in the fourth quarter of 2012, consistent with the fourth quarter of 2011 and the third quarter of 2012.

Consolidated Non-Compensation Operating Expenses

For the quarter ended December 31, 2012, non-compensation operating expenses were $94.6 million, compared to $83.1 million in the fourth quarter of 2011 and $90.8 million in the third quarter of 2012. The increase in non-compensation operating expenses for the fourth quarter of 2012 was due to acquisition-related professional fees and other non-recurring expenses.

Non-compensation operating expenses as a percentage of net revenues for the quarter ended December 31, 2012 was 22.6% compared with 23.3% in the fourth quarter of 2011 and 21.6% in the third quarter of 2012.

Provision for Income Taxes

The effective income tax rate for the quarter ended December 31, 2012 was 35% compared with 40% in the fourth quarter of 2011 and 39% in the third quarter of 2012. The decrease in the effective rate for the three months ended December 31, 2012 is primarily attributable to adjustments to the provision as a result of the Miller Buckfire acquisition, offset by an increase in the valuation allowance to adjust the tax benefit of certain state and foreign net operating loss carryforwards to the amount that we have determined is more likely than not to be realized.

 

3

Full-Year 2012

Global Wealth Management

For the year ended December 31, 2012, the GWM segment generated pre-tax operating income of $268.2 million on net revenues of $995.2 million compared with $235.4 million on net revenues of $908.2 million in 2011. The increase in net revenues over the comparable period in 2011 is primarily attributable to: (1) growth in asset management and service fees as a result of an increase in client assets and positive gains in market performance; (2) higher sales credits from investment banking underwritings; (3) increased net interest revenues as a result of the growth of net interest-earning assets at Stifel Bank; and (4) higher principal transactions revenues, offset by a decrease in commissions revenues.

 

  •  

The Private Client Group reported net revenues of $915.3 million, an 8% increase compared to $850.1 million in 2011.

 

  •  

Stifel Bank reported net revenues of $79.9 million, a 38% increase compared to $58.1 million in 2011.

Institutional Group

For the year ended December 31, 2012, the Institutional Group segment generated pre-tax operating income of $96.2 million on net revenues of $618.5 million compared with $63.3 million on net revenues of $507.4 million in 2011. The increase in net revenues from the comparable period in 2011 was driven by: (1) an increase in fixed income capital raising revenues; (2) an increase in advisory fees; (3) higher fixed income institutional brokerage revenues; and (4) the realized and unrealized gains recognized on the Company’s investment in Knight Capital Group, Inc. Offsetting these increases was a decrease in equity institutional brokerage revenues.

Institutional brokerage revenues were $331.4 million, a 3% increase compared with $323.3 million in 2011.

 

  •  

Equity brokerage revenues were $162.4 million, an 11% decrease compared with $181.9 million in 2011.

 

  •  

Fixed income brokerage revenues were $169.0 million, a 20% increase compared with $141.4 million in 2011.

Investment banking revenues were $241.3 million, a 35% increase compared with $179.1 million in 2011.

 

  •  

Equity capital raising revenues were $86.6 million, a 12% increase compared with $77.5 million in 2011.

 

  •  

Fixed income capital raising revenues were $58.7 million, a 122% increase compared with $26.5 million in 2011.

 

  •  

Advisory fee revenues were $96.1 million, a 28% increase compared with $75.1 million in 2011.

Consolidated Compensation and Benefits Expenses

For the year ended December 31, 2012, compensation and benefits expenses were $1.02 billion compared with $900.4 million in 2011.

Compensation and benefits as a percentage of net revenues for the year ended December 31, 2012 was 63.5% compared with 63.6% in 2011. Transition pay as a percentage of net revenues was 5% for the year ended December 31, 2012, the same for 2011.

Consolidated Non-Compensation Operating Expenses

For the year ended December 31, 2012, non-compensation operating expenses were $362.8 million compared to $377.5 million in 2011. Non-compensation operating expenses for the year ended December 31, 2011 included $45.8 million of litigation-related charges and merger-related expenses.

Non-compensation operating expenses as a percentage of net revenues for the year ended December 31, 2012 was 22.5% compared with 26.6% in 2011.

Provision for Income Taxes

For the year ended December 31, 2012, provision for income taxes was $87.3 million, representing an effective tax rate of 39% compared to $54.5 million in 2011, representing an effective tax rate of 39%.

 

4

Statement of Financial Condition (Unaudited)

Total assets increased 40.7% to $7.0 billion as of December 31, 2012 from $5.0 billion as of December 31, 2011. The increase is primarily attributable to growth of Stifel Bank, the Company’s bank subsidiary, which as of December 31, 2012 has grown its assets to $3.7 billion from $2.3 billion as of December 31, 2011. As of December 31, 2012, Stifel Bank’s investment portfolio of $2.3 billion has increased 66% from December 31, 2011, with more than 99% of the investment portfolio comprised of investment grade securities, of which more than 70% were Government-Sponsored Enterprise guaranteed MBS or AAA-rated investments. The Company’s 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 business levels and overall market conditions.

Total stockholders’ equity as of December 31, 2012 increased $192.6 million, or 14.8%, to $1.49 billion from $1.30 billion as of December 31, 2011. Book value per share was $27.24 as of December 31, 2012. The Company repurchased $11.4 million, or 0.4 million shares, of its common stock pursuant to existing Board repurchase authorizations during the year ended December 31, 2012.

As of December 31, 2012, the Company reported total securities owned and investments at fair value of $2.7 billion, which included securities categorized as Level 3 of $206.8 million. The Company’s Level 3 assets include auction rate securities with a fair value of $163.1 million, and private equity, municipal securities and other fixed income securities with a fair value $43.7 million as of December 31, 2012.

Conference Call Information

Stifel Financial Corp. will host its fourth quarter and full-year 2012 financial results conference call on Monday, February 25, 2012, at 5:00 p.m. Eastern time. The conference call may include forward-looking statements.

All interested parties are invited to listen to the Company’s Chairman, President, and CEO, Ronald J. Kruszewski, by dialing (800) 651-2240 and referencing conference ID #12018117. A live audio webcast of the call, as well as a presentation highlighting the Company’s results, will be available through the Company’s web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.

Company Information

Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel clients are served through Stifel, Nicolaus & Company, Incorporated in the U.S., through Stifel Nicolaus Canada Inc. in Canada, through Stifel Nicolaus Europe Limited in the United Kingdom and Europe, and through Keefe, Bruyette & Woods, Inc. in the U.S. and Europe. The Company’s broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, 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. Stifel Trust Company, N.A. offers trust and related services. To learn more about Stifel, please visit the Company’s web site at www.stifel.com.

Forward-Looking Statements

This earnings 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 earnings release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this earnings 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 acquired companies or the branch offices and financial advisors; a material adverse change in 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 Financial Corp. with the Securities and Exchange Commission. Forward-looking statements speak only as to the date they are made. Stifel Financial Corp. disclaims any intent or obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

 

5

Summary Results of Operations (Unaudited)

 

      Three Months Ended     Year Ended  
(in thousands, except per share amounts)    12/31/12      12/31/11      %
Change		      9/30/12      %
Change		     12/31/12      12/31/11      %
Change		  

Revenues:

                       

Commissions

    $ 134,280       $ 123,737         8.5       $ 127,966         4.9      $ 512,976       $ 561,081         (8.6 ) 

Principal transactions

      97,708         93,963         4.0         102,979         (5.1 )      408,484         343,213         19.0   

Investment banking

      75,846         56,075         35.3         72,938         4.0        286,585         199,584         43.6   

Asset management and service fees

      68,971         55,920         23.3         62,881         9.7        257,981         228,834         12.7   

Other income

      19,597         8,379         133.9         31,922         (38.6 )      70,231         19,731         255.9   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Operating revenues

      396,402         338,074         17.3         398,686         (0.6 )      1,536,257         1,352,443         13.6   

Interest revenue

      30,032         25,220         19.1         27,306         10.0        109,776         89,466         22.7   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total revenues

      426,434         363,294         17.4         425,992         0.1        1,646,033         1,441,909         14.2   

Interest expense

      8,604         6,416         34.1         5,912         45.5        33,383         25,347         31.7   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Net revenues

      417,830         356,878         17.1         420,080         (0.5 )      1,612,650         1,416,562         13.8   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Non-interest expenses:

                       

Compensation and benefits

      262,213         228,743         14.6         267,652         (2.0 )      1,023,943         900,421         13.7   

Occupancy and equipment rental

      34,075         31,967         6.6         33,061         3.1        130,247         121,929         6.8   

Communications and office supplies

      19,795         19,391         2.1         19,976         (0.9 )      80,941         75,589         7.1   

Commission and floor brokerage

      7,480         6,097         22.7         8,031         (6.9 )      30,870         27,040         14.2   

Other operating expenses

      33,200         25,654         29.4         29,683         11.8        120,777         152,975         (21.0 ) 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total non-interest expenses

      356,763         311,852         14.4         358,403         (0.5 )      1,386,778         1,277,954         8.5   

Income before income taxes

      61,067         45,026         35.6         61,677         (1.0 )      225,872         138,608         63.0   

Provision for income taxes

      21,113         18,010         17.2         23,967         (11.9 )      87,299         54,474         60.3   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Net income

    $ 39,954       $ 27,016         47.9       $ 37,710         6.0      $ 138,573       $ 84,134         64.7   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Earnings per share:

                       

Basic

    $ 0.74       $ 0.52         42.3       $ 0.70         5.8      $ 2.59       $ 1.61         60.9   

Diluted

    $ 0.63       $ 0.43         46.5       $ 0.60         5.0      $ 2.20       $ 1.33         65.4   

Weighted average number of common shares outstanding:

                       

Basic

      53,835         51,849         3.9         53,601         0.5        53,563         52,418         2.2   

Diluted

      63,301         62,695         1.0         63,054         0.4        62,937         63,058         (0.2 ) 

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

 

     12/31/12      12/31/11      %
Change		      9/30/12      %
Change		  

Statistical Information:

               

Book value per share

    $ 27.24       $ 25.10         8.5       $ 26.62         2.3   

Financial advisors 4

      2,041         1,987         2.7         2,036         0.2   

Full-time associates

      5,343         5,097         4.8         5,266         1.5   

Locations

      340         320         6.3         338         0.6   

Total client assets 5

    $ 137,855,000       $ 122,466,000         12.6       $ 136,015,000         1.4   

 

 

4  Includes 151, 154 and 154 independent contractors at December 31, 2012 and 2011 and September 30, 2012, respectively.
5  Includes money market and FDIC-insured balances. Prior period amounts have been adjusted to conform to the current period presentation.

 

6

Global Wealth Management Summary Results of Operations (Unaudited)

 

  

     Three Months Ended     Year Ended  
(in 000s)    12/31/12      12/31/11      %
Change		     9/30/12      %
Change		     12/31/12      12/31/11      %
Change		  

Revenues:

                      

Commissions

    $ 93,045       $ 83,662         11.2      $ 89,393         4.1      $ 361,884       $ 371,046         (2.5 ) 

Principal transactions

      54,747         53,700         1.9        58,801         (6.9 )      228,221         209,962         8.7   

Asset management and service fees

      68,631         55,691         23.2        62,871         9.2        257,257         228,045         12.8   

Net interest

      21,195         17,602         20.4        22,283         (4.9 )      79,358         57,188         38.8   

Investment banking

      10,906         4,015         171.6        13,347         (18.3 )      45,254         20,475         121.0   

Other income

      6,560         9,899         (33.7 )      5,033         30.3        23,215         21,442         8.3   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Net revenues

      255,084         224,569         13.6        251,728         1.3        995,189         908,158         9.6   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Non-interest expenses:

                      

Compensation and benefits

      147,029         125,053         17.6        146,882         0.1        578,652         528,835         9.4   

Non-compensation operating expenses

      38,773         36,644         5.8        36,476         6.3        148,354         143,941         3.1   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total non-interest expenses

      185,802         161,697         14.9        183,358         1.3        727,006         672,776         8.1   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Income before income taxes

    $ 69,282       $ 62,872         10.2      $ 68,370         1.3      $ 268,183       $ 235,382         13.9   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

As a percentage of net revenues:

                      

Compensation and benefits

      57.6         55.7           58.3           58.1         58.2      

Non-compensation operating expenses

      15.2         16.3           14.5           14.9         15.8      

Income before income taxes

      27.2         28.0           27.2           27.0         26.0      

 

Stifel Bank & Trust (Unaudited)

 

  

Key Statistical Information   
(in 000s, except percentages)    12/31/12     12/31/11     %
Change		      9/30/12     %
Change		  

Other information:

            

Assets

    $ 3,652,633      $ 2,275,729        60.5       $ 3,228,021        13.2   

Investment securities

      2,332,058        1,403,522        66.2         2,133,494        9.3   

Retained loans

      822,711        631,173        30.3         746,120        10.3   

Loans held for sale

      214,531        131,754        62.8         209,358        2.5   

Deposits

      3,346,133        2,071,738        61.5         2,923,671        14.4   

Allowance as a percentage of loans

      0.99 %      0.83 %         0.85 %   

Non-performing assets as a percentage of total assets

      0.06 %      0.14 %         0.07 %   

 

7

Institutional Group Summary Results of Operations (Unaudited)

 

     Three Months Ended     Year Ended  
(in 000s)    12/31/12      12/31/11      %
Change		     9/30/12      %
Change		     12/31/12      12/31/11      %
Change		  

Revenues:

                      

Commissions

    $ 41,235       $ 40,076         2.9      $ 38,574         6.9      $ 151,093       $ 190,036         (20.5 ) 

Principal transactions

      42,961         40,263         6.7        44,178         (2.8 )      180,263         133,251         35.3   

Capital raising

      38,296         23,331         64.1        32,386         18.2        145,247         103,985         39.7   

Advisory fees

      26,644         28,728         (7.3 )      27,205         (2.1 )      96,084         75,123         27.9   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Investment banking

      64,940         52,059         24.7        59,591         9.0        241,331         179,108         34.7   

Other 6

      15,920         1,831         *        27,336         (41.8 )      45,849         5,002         *   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Net revenues

      165,056         134,229         23.0        169,679         (2.7 )      618,536         507,397         21.9   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Non-interest expenses:

                      

Compensation and benefits

      108,371         89,497         21.1        104,913         3.3        392,062         323,503         21.2   

Non-compensation operating expenses

      35,195         33,959         3.6        31,339         12.3        130,307         120,625         8.0   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total non-interest expenses

      143,566         123,456         16.3        136,252         5.4        522,369         444,128         17.6   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Income before income taxes

    $ 21,490       $ 10,773         99.5      $ 33,427         (35.7 )    $ 96,167       $ 63,269         52.0   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

As a percentage of net revenues:

                      

Compensation and benefits

      65.7         66.7           61.8           63.4         63.8      

Non-compensation operating expenses

      21.3         25.3           18.5           21.1         23.7      

Income before income taxes

      13.0         8.0           19.7           15.5         12.5      

 

* Percentage not meaningful.

Institutional Group Brokerage & Investment Banking Revenues (Unaudited)

 

     Three Months Ended     Year Ended  
(in 000s)    12/31/12      12/31/11      %
Change		     9/30/12      %
Change		     12/31/12      12/31/11      %
Change		  

Institutional brokerage:

                      

Equity

    $ 41,805       $ 40,598         3.0      $ 37,956         10.1      $ 162,399       $ 181,876         (10.7 ) 

Fixed income

      42,391         39,741         6.7        44,796         (5.4 )      168,957         141,411         19.5   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Institutional brokerage

      84,196         80,339         4.8        82,752         1.7        331,356         323,287         2.5   

Investment banking:

                      

Capital raising:

                      

Equity

      19,830         10,109         96.2        17,527         13.1        86,558         77,495         11.7   

Fixed income

      18,466         13,222         39.7        14,859         24.3        58,689         26,490         121.6   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Capital raising

      38,296         23,331         64.1        32,386         18.2        145,247         103,985         39.7   

Advisory fees

      26,644         28,728         (7.3 )      27,205         (2.1 )      96,084         75,123         27.9   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Investment banking

    $ 64,940       $ 52,059         24.7      $ 59,591         9.0      $ 241,331       $ 179,108         34.7   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Investor Relations Contact

Sarah Anderson, (415) 364-2500, investorrelations@stifel.com

 

6  Includes net interest and other income. Other income for the three and twelve months ended December 31, 2012 includes $13.4 million and $39.0 million, respectively, in realized and unrealized gains recognized on the Company’s investment in Knight Capital Group, Inc.

 

8

EX-99.2 3 d492909dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

 

4th Quarter and Full-Year 2012 Financial Results Presentation

February 25, 2013

LOGO

 

Disclaimer

Forward-Looking Statements

This presentation may contain “forward-looking statements“within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks, assumptions, and uncertainties, including statements relating to the market opportunity and future business prospects of Stifel Financial Corp., as well as Stifel, Nicolaus & Company, Incorporated and its subsidiaries (collectively, “SF” or the “Company”). These statements can be identified by the use of the words “may,”“will,”“should,”“could,”“would,”“plan,”“potential,”“estimate,”“project,”“believe,” “intend,”“anticipate,”“expect,” and similar expressions. In particular, these statements may refer to our goals, intentions, and expectations, our business plans and growth strategies, our ability to integrate and manage our acquired businesses, estimates of our risks and future costs and benefits, and forecasted demographic and economic trends relating to our industry.

You should not place undue reliance on any forward-looking statements, which speak only as of the date they were made. We will not update these forward-looking statements, even though our situation may change in the future, unless we are obligated to do so under federal securities laws.

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 and include, among other things, changes ingeneral economicand business conditions, actions of competitors, regulatory and legal actions, changes in legislation, and technology changes.

Use of Non-GAAP Financial Measures

The company utilized non-GAAP calculations of presented net revenues, compensation and benefits, non-compensation operating expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expense ratios, pre-tax margin and diluted earnings per share as an additional measure to aid in understanding and analyzing the company’s financial results for the year ended December 31, 2012. Specifically, the company believes that the non-GAAP measures provide useful information by excluding certain items that may not be indicative of the company’s core operating results and business outlook. The company believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate a meaningful comparison of the company’sresults in the current period to those in prior periods and future periods. 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 the company’s financial performance.

1

 

LOGO

 

Chairman’s Comments

“2012 represented Stifel’s 17th consecutive year of record net revenues. This is a significant accomplishment, particularly given past market cycles. We remain focused on our goal of delivering superior client services, which has benefitted all Stifel constituents: clients, shareholders, and associates. Our fourth quarter results finished the year with record revenues. Both segments, Global Wealth Management and Institutional Group, reflected strong underlying performance, even in light of the political and economic uncertainty in the quarter. We continue to selectively add talented professionalstoexpand our product offerings and gainmarket share. Atthe end of last year, we acquired Miller Buckfire, a preeminent franchise in restructuring advisory, and and most recently our merger with KBW, a leading financial services investment bank. As we have done in the past, we will continue to position Stifel to take advantage of opportunities.”

2

 

LOGO

 

Financial Results

LOGO

 

Stifel Financial Corp. Results

Three months ended December 31, 2012

Three Months Ended

12/31/12 (1) 12/31/11 % Change 9/30/12 % Change

($ in thousands, except per share amounts)

Net revenues $ 417,830 $ 356,878 17.1% $ 420,080 (0.5%)

Compensation and benefits 262,213 228,743 14.6% 267,652 (2.0%) Non-comp operating expenses 94,550 83,109 13.8% 90,751 4.2%

Total non-interest expenses 356,763 311,852 14.4% 358,403 (0.5%) Income before income taxes 61,067 45,026 35.6% 61,677 (1.0%)

Provision for income taxes 21,113 18,010 17.2% 23,967 (11.9%)

Net income $ 39,954 $ 27,016 47.9% $ 37,710 6.0%

Earnings per share:

Diluted $ 0.63 $ 0.43 46.5% $ 0.60 5.0%

Weighted average number of shares outstanding:

Diluted 63,301 62,695 1.0% 63,054 0.4%

Ratios to net revenues :

Compensation and benefits 62.8% 64.1% 63.7% Non-comp operating expenses 22.6% 23.3% 21.6% Income before income taxes 14.6% 12.6% 14.7%

(1) Results for the three months ended December 31, 2012 included realized and unrealized gains on the Company’s investment in

Knight Capital Group, Inc. of $13.4 million.

The after-tax impact was $0.05 per diluted share.

4

LOGO

 

Stifel Financial Corp. Results

Year ended December 31, 2012

Year Ended

12/31/12 (1) 12/31/11 % Change

($ in thousands, except per share amounts)

Net revenues $ 1,612,650 $ 1,416,562 13.8%

Compensation and benefits 1,023,943 900,421 13.7% Non-comp operating expenses 362,835 377,533 (3.9%)

Total non-interest expenses 1,386,778 1,277,954 85% . Income before income taxes 225,872 138,608 63.0%

Provision for income taxes 87,299 54,474 60.3%

Net income $ 138,573 $ 84,134 64.7%

Earnings per share:

Diluted $ 2.20 $ 1.33 (2) 65.4%

Weighted average number of shares outstanding:

Diluted 62,937 63,058 (0.2%)

Ratios to net revenues :

Compensation and benefits 63.5% 63.6% Non-comp operating expenses 22.5% 26.6% Income before income taxes 14.0% 9.8%

(1) Results for the year ended December 31, 2012 included realized and unrealized gains on the Company’s investment in Knight Capital

Group, Inc. of $39.0 million. The after-tax impact was $0.14 per  diluted share.

(2) Results for the year ended December 31, 2011 include previously disclosed litigation-related charges and merger-related expenses of $0.47 per diluted share.

5

 

LOGO

 

2012 Legacy Business vs. Investments

2012 Investments include hiring 152 financial advisors and 77 fixed income sales and trading professionals YTD1.

($ in thousands, except per share amounts) 12M2012

Legacy 2 Investments Total

Net revenues 1,567,133 45,517 1,612,650

Compensation and benefits 981,111 42,832 1,023,943

Non-compensation operating expenses 341,701 21,134 362,835

Total non-interest expenses 1,322,812 63,966 1,386,778

Income before income taxes 244,321 (18,449) 225,872

Provision for income taxes 3 94,429 (7,130) 87,299

Net income 149,892 (11,319) 138,573

Earnings per share $ 2.38 $ (0.18) $ 2.20

Ratios to net revenues:

Compensation and benefits 62.6 63.5

Non-compensation operating expenses 21.8 22.5

Income before income taxes 15.6 14.0

¹As of December 31, 2012.

2Legacy revenues and expense s exclude new business and investments.

3Legacy provision for income taxes is calculated using the tax rate for the nine month period 2012  of 40.2%.

6

 

LOGO

 

Source of Revenues

Quarter Ended Year Ended

% %

($ in thousands) 12/31/12 12/31/11 Change 9/30/12 % Change 12/31/12 12/31/11 Change

Commissions $ 134,280 $ 123,737 8.5% $ 127,966 4.9% $ 512,976 $ 561,081 (8.6%)

Principal transactions 97,708 93,963 4.0% 102,979 (5.1%) 408,484 343,213 19.0%

Capital raising 49,203 27,347 79.9% 45,733 7.6% 190,502 124,648 52.8%

Advisory 26,643 28,728 (7.3%) 27,205 (2.1%) 96,083 74,936 28.2%

Investment banking 75,846 56,075 35.3% 72,938 4.0% 286,585 199,584 43.6%d

Asset mgt and service fees 68,971 55,920 23.3% 62,881 9.7% 257,981 228,834 12.7%

(1)

Other 19,597 8,379 133.9% 31,922 (38.6%) 70,231 19,731 255.9%

Total operating revenues 396,402 338,074 17.3% 398,686 (0.6%) 1,536,257 1,352,443 13.6%

Interest revenue 30,032 25,220 19.1% 27,306 10.0% 109,776 89,466 22.7%

Total revenues 426,434 363,294 17.4% 425,992 0.1% 1,646,033 1,441,909 14.2%

Interest expense 8,604 6,416 34.1% 5,912 45.5% 33,383 25,347 31.7%

Net revenues $ 417,830 $ 356,878 17.1% $ 420,080 (0.5%) $ 1,612,650 $ 1,416,562 13.8%

(1) Results for the three and twelve months ended December 31, 2012 included realized and unrealized gains on the Company’s

investment in Knight Capital Group, Inc.

of $13.4 million and $39.0 million, respectively. The after-tax impact  was $0.05 and $0.14 per diluted share, respectively.

7

 

LOGO

 

Brokerage Revenues

Quarter Ended Year Ended

($ in thousands) 12/31/12 12/31/11 % Change 9/30/12 % Change 12/31/12 12/31/11 % Change

Principal transactions:

Taxable debt $ 51,621 $ 48,882 5.6% $ 55,908 (7.7%) $ 216,793 $ 185,192 17.1%

Municipal debt 21,130 25,731 (17.9%) 24,412 (13.4%) 91,219 83,454 9.3%

Equities 11,527 7,920 45.5% 10,959 5.2% 52,057 34,837 49.4%

Other 13,430 11,430 17.5% 11,700 14.8% 48,415 39,730 21.9%

Total principal transactions $ 97,708 $ 93,963 4.0% $ 102,979 (5.1%) $ 408,484 $ 343,213 19.0%

Commissions 134,280 123,737 8.5% 127,966 4.9% 512,976 561,081 (8.6%)

Total brokerage revenues $ 231,988 $ 217,700 6.6% $ 230,945 0.5% $ 921,460 $ 904,294 1.9%

8

LOGO

 

Non-Interest Expenses

Three months ended December 31, 2012

Quarter Ended % of Net revenues

($ in thousands) 12/31/12 12/31/11 % Change 9/30/12 % Change 12/31/12 12/31/11 9/30/12

Compensation and benefits 239,714 210,924 13.6% 247,964 (3.3%) 57.4% 59.1% 59.0%

Transitional pay (1) 22,499 17,819 26.3% 19,688 14.3% 5.4% 5.0% 4.7%

Total compensation and benefits 262,213 228,743 14.6% 267,652 (2.0%) 62.8% 64.1% 63.7%

Occupancy and equipment rental 34,075 31,967 6.6% 33,061 3.1% 8.2% 9.0% 7.9%

Communication and office supplies 19,795 19,391 2.1% 19,976 (0.9%) 4.7% 5.4% 4.8%

Commissions and floor brokerage 7,480 6,097 22.7% 8,031 (6.9%) 1.8% 1.7% 1.9%

Other operating expenses 33,200 25,654 29.4% 29,683 11.8% 7.9% 7.2% 7.0%

Total non-comp operating expenses 94,550 83,109 13.8% 90,751 4.2% 22.6% 23.3% 21.6%

Total non-interest expense 356,763 311,852 14.4% 358,403 (0.5%) 85.4% 87.4% 85.3%

(1)

 

Transition pay includes amortization of upfront notes, signing bonuses and retention  awards.

[Graphic Appears Here]

9

LOGO

 

Non-Interest Expenses

Year ended December 31, 2012

Year Ended % of Net revenues

($ in thousands) 12/31/12 12/31/11 % Change 12/31/12 12/31/11

Compensation and benefits 943,014 829,480 13.7% 58.5% 58.7%

Transitional pay (1) 80,929 70,941 14.1% 5.0% 5.0%

Total compensation and benefits 1,023,943 900,421 13.7% 63.5% 63.6%

Occupancy and equipment rental 130,247 121,929 6.8% 8.1% 8.6%

Communication and office supplies 80,941 75,589 7.1% 5.0% 5.3%

Commissions and floor brokerage 30,870 27,040 14.2% 1.9% 1.9%

Other operating expenses (2) 120,777 152,975 (21.0%) 7.5% 10.8%

Total non-comp operating expenses 362,835 377,533 (3.9%) 22.5% 26.6%

Total non-interest expense 1,386,778 1,277,954 8.5% 86.0% 90.2%

(1)

 

Transition pay includes amortization of upfront notes, signing bonuses and retention  awards.

(2) Results for the year ended December 31, 2011 include litigation-related charges and merger-related expenses of $47.5 million pre-tax.

10

LOGO

 

Segment Comparison

Quarter Ended Year Ended

% % % ($ in thousands) 12/31/12 12/31/11 Change 9/30/12 Change 12/31/12 12/31/11 Change Net revenues:

Global Wealth Management $ 255,084 $ 224,569 13.6% $ 251,728 1.3% $ 995,189 $ 908,158 9.6% Institutional Group (1) 165,056 134,229 23.0% 169,679 (2.7%) 618,536 507,397 21.9%

Other (2,310) (1,920) (20.3%) (1,327) (74.1%) (1,075) 1,007 (206.8%)

$ 417,830 $ 356,878 17.1% $ 420,080 (0.5%) $ 1,612,650 $ 1,416,562 13.8%

Operating contribution:

Global Wealth Management $ 69,282 $ 62,872 10.2% $ 68,370 1.3% $ 268,183 $ 235,382 13.9% Institutional Group (1) 21,490 10,773 99.5% 33,427 (35.7%) 96,167 63,269 52.0%

Other (2) (29,705) (28,619) 3.8% (40,120) (26.0%) (138,478) (160,043) (13.5%) $ 61,067 $ 45,026 35.6% $ 61,677 (1.0%) $ 225,872 $ 138,608 63.0%

(1)Results for the three and twelve months ended December 31, 2012  included realized and unrealized gains on the

Company’s investment in Knight Capital Group, Inc. of $13.4 million and $39.0 million, respectively. The after-tax impact was $0.05 and $0.14 per diluted share, respectively.

(2) Results for the year ended December 31, 2011 include previously disclosed litigation-related charges and merger-related expenses of $47.5 million pre-tax.

11

LOGO

 

Global Wealth Management

Quarter Ended Year Ended

($ in thousands) 12/31/12 12/31/11 % Change 9/30/12 % Change 12/31/12 12/31/11 % Change

Commissions $ 93,045 $ 83,662 11.2% $ 89,393 4.1% $ 361,884 $ 371,046 (2.5%)

Principal transactions 54,747 53,700 1.9% 58,801 (6.9%) 228,221 209,962 8.7%

Asset management & service fees 68,631 55,691 23.2% 62,871 9.2% 257,257 228,045 12.8%

Net interest 21,195 17,602 20.4% 22,283 (4.9%) 79,358 57,188 38.8%

Investment banking 10,906 4,015 171.6% 13,347 (18.3%) 45,254 20,475 121.0%

Other income 6,560 9,899 (33.7%) 5,033 30.3% 23,215 21,442 8.3%

Net revenues 255,084 224,569 13.6% 251,728 1.3% 995,189 908,158 9.6%

Compensation and benefits 147,029 125,053 17.6% 146,882 0.1% 578,652 528,835 9.4%

Non-comp operating expenses 38,773 36,644 5.8% 36,476 6.3% 148,354 143,941 3.1%

Total non-interest expenses 185,802 161,697 14.9% 183,358 1.3% 727,006 672,776 8.1%

Income before income taxes $ 69,282 $ 62,872 10.2% $ 68,370 1.3% $ 268,183 $ 235,382 13.9%

Ratios to net revenues :

Compensation and benefits 57.6% 55.7% 58.3% 58.1% 58.2%

Non-comp operating expenses 15.2% 16.3% 14.5% 14.9% 15.8%

Income before income taxes 27.2% 28.0% 27.2% 27.0% 26.0%

12

LOGO

 

Stifel Bank & Trust

(an operating unit of GWM)

For the Three Months Ended Year Ended

12/31/12 12/31/11 % Change 9/30/12 % Change 12/31/12 12/31/11 % Change

(in 000s, except percentages)

Net revenues $ 22,551 $ 19,449 15.9 $ 22,310 1.1 $ 79,877 $ 58,054 37.6

Income before income taxes 15,977 14,621 9.3 18,063 (11.5) 60,212 40,943 47.1

As of As of

12/31/12 12/31/11 % Change 9/30/12 % Change

Assets $ 3,652,633 $ 2,275,729 60.5 $ 3,228,021 13.2

Investment securities 2,332,058 1,403,522 66.2 2,133,494 9.3

Retained loans, net 822,711 631,173 30.3 746,120 10.3

Loans held for sale 214,531 131,754 62.8 209,358 2.5

Deposits 3,346,133 2,071,738 61.5 2,923,671 14.4

Allowance as a percentage of loans 0.99 % 0.83 % 0.85 %

Non-performing assets as a percentage of

total assets 0.06 % 0.14 % 0.07 %

13

LOGO

 

Institutional Group

Quarter Ended Year Ended

($ in thousands) 12/31/12 12/31/11 % Change 9/30/12 % Change 12/31/12 12/31/11 % Change

Commissions $ 41,235 $ 40,076 2.9% $ 38,574 6.9% $ 151,093 $ 190,036 (20.5%)

Principal transactions 42,961 40,263 6.7% 44,178 (2.8%) 180,263 133,251 35.3%

Investment banking 64,940 52,059 24.7% 59,591 9.0% 241,331 179,108 34.7%

Other (1) 15,920 1,831 * 27,336 (41.8%) 45,849 5,002 *

Net revenues 165,056 134,229 23.0% 169,679 (2.7%) 618,536 507,397 21.9%

Compensation and benefits 108,371 89,497 21.1% 104,913 3.3% 392,062 323,503 21.2%

Non -comp operating expenses 35,195 33,959 3.6% 31,339 12.3% 130,307 120,625 8.0%

Total non-interest expenses 143,566 123,456 16.3% 136,252 5.4% 522,369 444,128 17.6%

Income before income taxes $ 21,490 $ 10,773 99.5% $ 33,427 (35.7%) $ 96,167 $ 63,269 52.0%

Ratios to net revenues :

Compensation and benefits 65.7% 66.7% 61.8% 63.4% 63.8%

Non -comp operating expenses 21.3% 25.3% 18.5% 21.1% 23.7%

Income before income taxes 13.0% 8.0% 19.7% 15.5% 12.5%

* Percentage not meaningful.

(1) Includes net interest and other income. Other income for the three and twelve months ended December 31, 2012 included realized and

unrealized gains on the Company’s investment in Knight Capital  Group, Inc. of $13.4 million and $39.0 million pre-tax, respectively,.

14

LOGO

 

Institutional Group Revenues

Quarter Ended Year Ended

($ in thousands) 12/31/12 12/31/11 % Change 9/30/12 % Change 12/31/12 12/31/11 % Change

Institutional brokerage:

Equity $ 41,805 $ 40,598 3.0% $ 37,956 10.1% $ 162,399 $ 181,876 (10.7%)

Fixed income 42,391 39,741 6.7% 44,796 (5.4%) 168,957 141,411 19.5%

84,196 80,339 4.8% 82,752 1.7% 331,356 323,287 2.5%

Investment Banking:

Capital raising

Equity 19,830 10,109 96.2% 17,527 13.1% 86,558 77,495 11.7%

Fixed income 18,466 13,222 39.7% 14,859 24.3% 58,689 26,490 121.6%

38,296 23,331 64.1% 32,386 18.2% 145,247 103,985 39.7%

Advisory fees 26,644 28,728 (7.3%) 27,205 (2.1%) 96,084 75,123 27.9%

Investment banking 64,940 52,059 24.7% 59,591 9.0% 241,331 179,108 34.7%

Other (1) 15,920 1,831 * 27,336 (41.8%) 45,849 5,002 *

Total net revenue $ 165,056 $ 134,229 23.0% $ 169,679 (2.7%) $ 618,536 $ 507,397 21.9%

* Percentage not meaningful.

(1) Includes net interest and other income. Other income for the three and twelve months ended December 31, 2012 included

realized and unrealized gains on the Company’s investment in Knight  Capital Group, Inc.

of $13.4 million and $39.0 million pre-tax, respectively.

15

LOGO

 

Financial Condition

LOGO

 

Capital Structure

As of December 31, 2012

(in thousands, except ratios)

($ in thousands)

Total Assets $ 6,966,140

Stockholders’ Equity $ 1,494,661

Corporate indebtedness 383,992

Debentures to Stifel Financial Capital Trusts II, III, & IV 82,500

Total Capitalization $ 1,961,153

Ratios:

Debt to Equity(1) 31.2%

Leverage Ratio(2) 3.6x

Equity Capitalization(3) 4.7x

(1) Debt to equity ratio includes the debentures to Stifel Financial Capital Trusts ($82.5m), non-recourse debt ($59.0m), and Senior Notes ($325.0m) divided by stockholders’equity.

(2) Leverage ratio = total assets divided by total capitalization. (3) Equity capitalization = total assets divided by stockholders’equity.

17

LOGO

 

Other Financial Data

As of As of

12/31/12 12/31/11 % Change 9/30/12 % Change

Total assets (000s):

Stifel Nicolaus & Stifel Financial $ 3,313,507 $ 2,676,171 23.8% $ 2,911,509 13.8%

Stifel Bank 3,652,633 2,275,729 60.5% 3,228,021 13.2%

Total assets $ 6,966,140 $ 4,951,900 40.7% $ 6,139,530 13.5%

Total shareholders’ equity (000s):

Stifel Nicolaus & Stifel Financial $ 1,226,824 $ 1,108,063 10.7% $ 1,176,935 4.2%

Stifel Bank 267,837 194,042 38.0% 250,189 7.1%

Total shareholders’ equity $ 1,494,661 $ 1,302,105 14.8% $ 1,427,124 4.7%

Leverage ratio:

Stifel Nicolaus & Stifel Financial 2.0 2.2 (12.9%) 2.0 (3.6%)

Stifel Bank 13.6 11.7 16.2% 12.9 5.7%

Total leverage ratio 3.6 3.6 (0.7%) 3.6 (2.5%)

Book value per share $ 27.24 $ 25.10 8.5% $ 26.62 2.3%

Financial advisors 2,041 1,987 2.7% 2,036 0.2%

Full -time associates 5,343 5,097 4.8% 5,266 1.5%

Locations 340 320 6.3% 338 0.6%

Total client assets (000s) $ 137,855,000 $ 122,466,000 12.6% $ 136,015,000 1.4%

(1) Includes 151, 154 and 154 independent contractors as of December 31, 2012, December 31, 2011 and September 30, 2012.

(2) Includes money-market and FDIC-insured balances. Prior period amounts have been adjusted to conform to the current period presentation.

19

LOGO

 

Level 3 Assets

Carrying Value

($ in thousands) 12/31/12 12/31/11

(1)

 

Auction Rate Securities (ARS) $ 163,112 $ 181,801

Stifel Bank & Trust Investments 5,839 12,000

Trading Securities 583 3,742

Other Investments (2) 37,297 37,033

Level 3 assets (excluding ARS) 43,719 52,775

Total Level 3 assets $ 206,831 $ 234,576

Percentage of Equity 14.3% 18.0%

Percentage of Equity (excluding ARS) 3.0% 4.1%

(1) Includes $84.6 million and $66.9 million, respectively, of ARS held at Stifel Bank & Trust. (2) Includes $30.5 million and $30.2 million, respectively, of investments in private equity funds.

19

LOGO

 

KBW

Merger

LOGO

 

KBW Merger

Integration Update

Closed the merger February 15, 2013

Tom Michaud and Michael Zimmerman joined Stifel’s Board of Directors

Key employees remain with the firm

Report core vs. non?core going forward as contracts roll off until  the integration is complete

21

LOGO

 

KBW Merger

(Private Client) (Bank & Trust) (Institutional)

Global Wealth Management Middle-Market Experts

Private Client Award-winning Research

Stifel Bank & Trust Institutional Equity & Fixed

Income Brokerage

Customer Financing Equity & Fixed Income Capital

Asset Management Raising

M&A Advisory

Revenues ($MM) Global Wealth Institutional KBW

4Q12 $ 255.1 $ 165.1 $ 70.6

2012 $ 995.2 $ 618.5 $ 245.8

[Graphic Appears Here]

Financial Institution Experts

Focused Research

Focused M&A Advisory

Focused Institutional Equity Brokerage

Focused Equity & Fixed Income Capital Raising

Pro Forma Total

$490.8

$1,859.5

22

LOGO

 

Stifel Branding

LOGO

 

Branding

Stifel.com Redesign Commercials

Target:

Stifel Clients and Financial Advisors

Channels:

CNBC and Bloomberg TV

Commencing:

February 25, 2013

24

LOGO

 

Q&A

GRAPHIC 4 g492909g04w89.jpg GRAPHIC begin 644 g492909g04w89.jpg M_]C_X0`817AI9@``24DJ``@``````````````/_L`!%$=6-K>0`!``0```!D M``#_X01!:'1T<#HO+VYS+F%D;V)E+F-O;2]X87`O,2XP+P`\/WAP86-K970@ M8F5G:6X](N^[OR(@:60](EG)E4WI.5&-Z:V,Y9"(_/B`\ M>#IX;7!M971A('AM;&YS.G@](F%D;V)E.FYS.FUE=&$O(B!X.GAM<'1K/2)! M9&]B92!835`@0V]R92`U+C,M8S`Q,2`V-BXQ-#4V-C$L(#(P,3(O,#(O,#8M M,30Z-38Z,C<@("`@("`@("(^(#QR9&8Z4D1&('AM;&YS.G)D9CTB:'1T<#HO M+W=W=RYW,RYO7!E+U)E&UL M;G,Z>&UP/2)H='1P.B\O;G,N861O8F4N8V]M+WAA<"\Q+C`O(B!X;6QN&UP34TZ1&5R:79E9$9R;VT@"UD969A=6QT(CY-:6-R;W-O9G0@4&]W97)0;VEN="`M(#(P M,3(@430@16%R;FEN9W,@4VQI9&5S7W9F:6YA;"YP<'0@6T-O;7!A=&EB:6QI M='D@36]D95T\+W)D9CIL:3X@/"]R9&8Z06QT/B`\+V1C.G1I=&QE/B`\+W)D M9CI$97-C&UP;65T83X@/#]X<&%C M:V5T(&5N9#TB"\T8C0'6'?K_^X` M#D%D;V)E`&3``````?_;`(0``0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$!`0$! M`0$!`0$!`0$!`0$!`0$!`0("`@("`@("`@("`P,#`P,#`P,#`P$!`0$!`0$" M`0$"`@(!`@(#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,#`P,# M`P,#`P,#`P,#`P,#_\``$0@"J`-P`P$1``(1`0,1`?_$`/```0`"`P`"`P$` M```````````'"`4&"00*`0(#"P$!``("`P$```````````````4&`P0!`@<( M$```!@,``0`$"0<(!P,'`1D"`P0%!@<``0@)$1(3%"$5U=875Y<8F-&24Q:6 M6!DQ(M-4E-19"D$C5;?7.'@DV#E1<9$R0K,E=V&!,R9V&C8G-SK!\7)#9$5U MI;6&MBA(N"H1`0`!`@,#!P<'"00(!0(&`P`!`@,1!`4AT08Q$I+2DQ0605%2 M4U24%6&1(A.C51=Q@3+39296!R>RLW0VH;'!0G(C,S5BC>O3F:,MF)C&+=,OZ='2C>?2C67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;SZ4 M:R^L6"?M='_E#'=,OZ='2C>?2C67UBP3]KH_\`*&.ZYGU=SHSN M.\9?TZ.E&\^E&LOK%@G[71_Y0QW7,^KN=&=QWC+^G1THWGTHUE]8L$_:Z/\` MRACNN9]7,OZ='2C>?2C67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;SZ4:R^L6"?M='_E M#'=,OZ='2C>?2C67UBP3]KH_\`*&.ZYGU=SHSN.\9?TZ.E&\^E M&LOK%@G[71_Y0QW7,^KN=&=QWC+^G1THWGTHUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2 MC67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;SZ4:R^L6"?M='_E#'=,OZ='2C>?2C67UBP3]KH_\`*&.ZYGU=SHSN.\9?TZ.E&\^E&LOK%@G[71_Y M0QW7,^KN=&=QWC+^G1THWGTHUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2C67UBP3]KH_\ MH8[KF?5W.C.X[QE_3HZ4;SZ4:R^L6"?M='_E#'=,OZ='2C>?2C M67UBP3]KH_\`*&.ZYGU=SHSN.\9?TZ.E&\^E&LOK%@G[71_Y0QW7,^KN=&=Q MWC+^G1THWGTHUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2C67UBP3]KH_\H8[KF?5W.C.X M[QE_3HZ4;SZ4:R^L6"?M='_E#'=,OZ='2C>?2C67UBP3]KH_\` M*&.ZYGU=SHSN.\9?TZ.E&\^E&LOK%@G[71_Y0QW7,^KN=&=QWC+^G1THWGTH MUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2C67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;SZ4 M:R^L6"?M='_E#'=,OZ='2C>?2C67UBP3]KH_\`*&.ZYGU=SHSN M.\9?TZ.E&\^E&LOK%@G[71_Y0QW7,^KN=&=QWC+^G1THWGTHUE]8L$_:Z/\` MRACNN9]7,OZ='2C>?2C67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;SZ4:R^L6"?M='_E M#'=,OZ='2C>?2C67UBP3]KH_\`*&.ZYGU=SHSN.\9?TZ.E&\^E M&LOK%@G[71_Y0QW7,^KN=&=QWC+^G1THWGTHUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2 MC67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;SZ4:R^L6"?M='_E#'=,OZ='2C>?2C67UBP3]KH_\`*&.ZYGU=SHSN.\9?TZ.E&\^E&LOK%@G[71_Y M0QW7,^KN=&=QWC+^G1THWGTHUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2C67UBP3]KH_\ MH8[KF?5W.C.X[QE_3HZ4;SZ4:R^L6"?M='_E#'=,OZ='2C>?2C M67UBP3]KH_\`*&.ZYGU=SHSN.\9?TZ.E&\^E&LOK%@G[71_Y0QW7,^KN=&=Q MWC+^G1THWGTHUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2C67UBP3]KH_\H8[KF?5W.C.X M[QE_3HZ4;SZ4:R^L6"?M='_E#'=,OZ='2C>?2C67UBP3]KH_\` M*&.ZYGU=SHSN.\9?TZ.E&\^E&LOK%@G[71_Y0QW7,^KN=&=QWC+^G1THWGTH MUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2C67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;SZ4 M:R^L6"?M='_E#'=,OZ='2C>?2C67UBP3]KH_\`*&.ZYGU=SHSN M.\9?TZ.E&\^E&LOK%@G[71_Y0QW7,^KN=&=QWC+^G1THWGTHUE]8L$_:Z/\` MRACNN9]7,OZ='2C>?2C67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;SZ4:R^L6"?M='_E M#'=,OZ='2C>?2C67UBP3]KH_\`*&.ZYGU=SHSN.\9?TZ.E&\^E M&LOK%@G[71_Y0QW7,^KN=&=QWC+^G1THWGTHUE]8L$_:Z/\`RACNN9]7,OZ='2C>?2 MC67UBP3]KH_\H8[KF?5W.C.X[QE_3HZ4;VX(%Z!T1IW%L6I'%O5EZ.2+D"DE M8C5$B]/JFIU*<9A)Q8O1\`@BWK>8:J:J9YM43%4>266FJFJ.=3,33/F>7G#D MP&`P&`P&`P&!_(([73D;[-Z\WLDO>]]0W]O>]@#Z=[W:TL].]_!GUUHLS\&R MG^%M?V*7S)JO_=[)_P!`5^8'\F,9#W9/^@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"O MS`_DQC(>[)_T!7Y@?R8QD/=D_P"@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS` M_DQC(>[)_P!`5^8'\F,9#W9/^@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_D MQC(>[)_T!7Y@?R8QD/=D_P"@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC M(>[)_P!`5^8'\F,9#W9/^@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(> M[)_T!7Y@?R8QD/=D_P"@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[) M_P!`5^8'\F,9#W9/^@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_T M!7Y@?R8QD/=D_P"@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_P!` M5^8'\F,9#W9/^@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_T!7Y@ M?R8QD/=D_P"@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_P!`5^8' M\F,9#W9/^@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_T!7Y@?R8Q MD/=D_P"@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_P!`5^8'\F,9 M#W9/^@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_T!7Y@?R8QD/=D M_P"@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_P!`5^8'\F,9#W9/ M^@*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_T!7Y@?R8QD/=D_P"@ M*_,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_P!`5^8'\F,9#W9/^@*_ M,#^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_T!7Y@?R8QD/=D_P"@*_,# M^3&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_P!`5^8'\F,9#W9/^@*_,#^3 M&,A[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_T!7Y@?R8QD/=D_P"@*_,#^3&, MA[LG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_P!`5^8'\F,9#W9/^@*_,#^3&,A[ MLG_0%?F!_)C&0]V3_H"OS`_DQC(>[)_T!7Y@?R8QD/=D_P"@*_,#^3&,A[LG M_0%?F!_)C&0]V3_H"OS`_DQC(>[)_P!`5^8'\F,9#W9/^@*_,#^3&,A[LG_0 M%?F!_)C&0]V3_H"OS`_DQC(>[)_T!7Y@?R8QD/=D_P"@*_,#^3&,A[LG_0%? MF!_)C&0]V3_H"OS`_DQC(_JI>%G6@^*CA/0=:UK7/\4]&M:]&M?ZQ=GRSQG_ M`)JS_P#B*GT3PKMX=R6 M-PB;2W-3VM0AI]T5L[B@-U[0I84H]& MM>CTA,"((@;$`01;DK%^SF;%.9R]=->7KIBJFJ)QB8GRQ+0NV;MB]5E[U,TW MJ*L)IG9,3'DE-/2?'?3G'KM#V+ING)-3SO/V1;(H3Y=JM62;0,!@,!@6HKGB'K&W* M%G_4-;4=+)?0-7"D09[9K:KC9;+'?U0:TCW*1'(5SZCD"XN/M"XI0J$D1GA+ M+%Z?3Z="UJ*S&MZ3E,_;TO,WZ*,_=PYM$\[&>=.%.V(PC&8PC&82%C2=2S.3 MKU#+V:J\E;QYU<881S8QGRX[(Y<(E5?^7X=?Z8&;9(S)Y,:J(C$8DLG/ M0I]JUQ$:C[Q(#D*36_5VK6E,Z):8D2^M\'M#-!!Z?@].8Z[MJUA-VJFF)Y,9 MB,?R8X.U%NY:)G_`%,+_P#BWK?P;UO7\NMZ_P!&]9D=7Q@,!@,! M@,#(-;4[/B],U,;2ZOCLL$("-J9&U:[NBP80",$!(W-Q"E:J&`L&Q;T6`6]! MUO>_@UO.M5=%%,UUS%-$P&`"+6M_R8IJIKIBJB8FF> M28G&)_),%5-5,S35$Q5'DG9/S/*86)YE+\QQ>.-JMZD4F>FF.1YF0%^V7O#\ M^N"=J9FE"3Z=>U6.3DK*(*#Z=>L8/6O3K.+ERBU;JNW)BFW33,S,\D1$8S,_ MDC:YHHJN5Q;HB9KJF(B(\LS.$1^>74O7@Q\M&]:W]R>POAUZ?AF-/ZW_`//U MNR-;UO*MXYX3]MM]&YU%A\(\2^R5]*CK*.](?76B_]FRG^%M? MV*7S)JO_`'7-?XBY_;E67)-HF`P&`P&`P&`P&`P&`P&`P&`P&`P&`P&`P&`P M&`P&`P&`P/=)_P`N=;R_G[Q=^2.]6QL*>UE-V#)[0`RG;%H#P5!J%BLE5-6A M!$'99KDE;1D@'Z?YHQZW_HSQC^8F3IU#BC3`D9GNYKVQ[U''/8]!]@L2-Q(_P#6F#S=_EWJM[+3F>$] M1QIS67FN;<3\DS]91'Y)^G3YXFJ>1J<<:;9OQ8XER/TLO?BB*YCY8CF5S^6/ MHSYIBF&0_P`UHR/,FZ"\?T9CC8L>Y%):LL*/1]E;RO;.#P^ODYKIK9VE"3Z= M>U6.3DK*)*#Z=:V,>OAUG7^55=%K3M0NW)BFW3=HF9GDB(IKF9G\D;7/\QJ* M[F=R5NW$SMW[OA7 M3Z;N2M3A-=R9QGS?[]$1,\L4Q-56'*PU<(Z'I-FWXBSM5O-W(V4T1LC_`/37 M,Q')SIPB9Y%!/+GX?U?CGC%8WS4=MZZ"Y7N@04D.GJE$W)GQ@?%\?/EL9;GM M;'S!QR2,4RC*8]6U.R$*8)^DII9A`-^Q,.G^$N+XXBNW)>&)T.W;SF6N_7Z==_1JV8Q,QSHB<-DQ5&V M)C#DG9R8].Y?_ER^3JDAM/="7QWNOI?F%WK2.R*U9#81<%8Y8KL.6HV1?'(? M7"T]O)8D#6K2*EHSA*B'ARUL@H)))@1''$UBS_,75LW>O:?D,A%[4Z;LQ1%' M.FGF4XQ-5<8XS/)R"?3Z?3Z/1Z/7]/I].>A>'NG^*G_`.]K/(I_^5V7_N4A>>+\4_\`R3IW_P#'_O*GJO#G^0\]_P#O M_P!W2YK^-#P;QWR*\+SCI)MOQUJRT(]=3K7#:VOS8RJ*G;HC%2:]>)7*9.=[ MN"3'KTD8D[B>042L2)Q*4A!9@RRQFG`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`T.Q[Q#3VES3F[5EI%)! M^RA'%^R&.=KXRHO<(W.)LC;B;MN8IJMUS.%-?/IIF)F,)F,*N=3.S&)C'#:A MZ.%J[7$U&@9RY,6ZXFJ*Z8VS3S:JHF(G&(G&G"8VX3CACL6X[%\)7#'"U,]" MJ[R[WTEZ90Q2R[&Y7I83U`6-SF4-BPU94$0S./JV<]]D,DG"E)[`T;:-J2@/ M&,I*$\2,CD,=,FNBB_7;SIPVSAC" M3U3A+2-(RE^P'*E81C$25MY_B_5,SK-S0N%LK;S.9LX_65UU841-,X51'TJ8PB?HXS M5MJV1'EG6R7#&GV-*HUCB+,5V,O=PYE%$8U3$[8QV53C,1SL(C9&V9\B)_)/ MXF*RYIYEJKOCC._7;I/C6UU[:T@>9*TI&Z;P]>^"<4S"K5G-[,MK-J)G"F<::HC#&-LSA,1 M,51A55%5.,Q.S;K:]PWE\AI]O6=*O3?TNY,1C,854S..'DC&,8F)QB)B=DQY MK;R#PV>.;BRCN?YAY1.U+AJ^VND6(;O%XG3$("[QB(GIVME=7MO6J2*[L=V? M2X@1)$);@N-VW$G*#=A3$B+#[3<3;XQXBUK/9BSPODK-W*9:K"JJY5A55MF( MG].B(YV$X1MG#EE)U\+:%I63LW>(2 M$O>"[F/A^`^4RR5<)[52VE+Z3>U;5R4B9TK*W-_2,!L*BI&X6%(U)&T:U0-S MK5&ZG)%9:!0E"6J0F"-+]4>B@:?'.IZWF.%[47\E-JS?IQOXXS-FNB[3%$KN_P`O-1UR[DK&0S&4BC1J+-1J\<9'2+>;NYRSF9JU6N[3%5K9LCFX8\F/)$>7#:]?_DO_FPY8_ZEZ"_W MM1#+]JW_`&G-?X:[_=U*7IO_`'++_P"(M_VZ7O9>;N,^9A\O2F#_`!I++M35 M@34SF58P:NE-9,+6*>;F"X:+;DGG+J@7'N'ZO;*]`R0B*T7Z->GUO3K/"^"; MO!MO(WHXEBS.9^MCF<^FN9YO-CDYL3LQ>P<6T<4UYJU\!^M^H^K^ES)ICZ6, M^E,>3#_1AY7JRPNJ+0Z^\G,.Y8\P-XWO7UK.3>@IU)+G=7`WN6Q.7.:(N8U/ M!G):-([Q)+%9>;*#M)SD@#]B<75-K8PA,,$#U*]F\MI'#->J<(6+%S*1,W.; M'.BFJF)YMRJ(V56G"K'9AY9ARRVUO.7A(]491>X:Y_,3+QPQ1K%%%$ZI5=^J^IQG" M*XVS/IZNM5,UP8Z4V2L:)8S0=2Z.!1K3MA!$ MU[VH6*&\:=.0>J;])S!;*$,6LWM>XJU30-"R>I9G+V>_9BN(KHQJYM$33-6$ M;<>=$81.,S$3CRM+1N'=/UK6`3QVRR9.W(-C>2-2^>01HC:QYE%:T^9#116#N2)&4M`QP3;>&UT]@$1QB1&#T^I`Y[C[B&U9C5\MIL4\/S5A372>;-..S&I-9/@O1+MR=-OYZ9UJ*<:J:.;A3/+AA,3-4QY8YT3AMPAR&K'P MZ=(6/Y*IOXVOC5D9I76"]P>;#MD;:O5Q)EJ!(F975KM!&T:.(7K?UM:9.U@; M&P9Q0Q.*\*(2[ M[DFW$M`>1NXG;M2#I)2B.#((8R+ZP>Y;!BCOUP9F@I/!8XVOPHTI3FZ<$C9) MU"I.42<(`SO8';#5[O&7%V1R=&MY_3K,:+7-,[*IBN*:OT9GZ4S'.\DU41$X MQR8PL5OA;AG-YJO26(KF8V\N$J#>.KQ`AZA M\@'1G"/2MYBNF(BO&,(JIJJG'FS^E$T\V8QP MQQ0VA\,_$-:OZ/GZZK=RQ15,S3A.,TU4QLQCDF*L8V,D>S0 MIR$^P&[JV=_F)KM-J-4R>G8:'SN;%RY%?TI_XHF*:<9QB-E48[,9G8L65X&T M>JY.GYG/8ZOS<9HHFGZ/_P"68F9V;9VQ.&W"(VN0U`>&RV[A\GUE^-Z03YIB M:BE3Y%(+*MA$SF.)`JO9PQM4QRF+1E4N3"4O,V0S1H]U1J%.BT1BLS9PS`IQ M!,MVH<8Y3)\,6N([=N:XOX11;F1,'7_$GAIK6!=%1KG;R"6VZ]41 MSMV=1L8_1KI^C753.$TTSS*=OY)G\\/PX=\1-,3CCIV\BWD+Z,?.9.3M.A[7 M`T$*9"':QK&TG?#8L6[)#%;-)MI4KW*2#4#2@1-+@O<-IS5(MITP0#,YUSB[ M.6-8CAWA_+TYG5L,:IJG"BC9SL.6GDIVU3-41&,1MDTCAG*WM+G7-;OU9?3< M<*8IC&JK"<,>2>6<8B(B9G"9V0S/9OB)YU:.(3/(WXXNEI7T5SA&G;379T:L MEC2-,\AB<#VBC3DZDJ$K##U7O,9?'),%T:U[.G4%(CPK23S2->@731N+M1KU MOP[Q'EJ,MJ-48T543C35LQB.6KEB)YM453&,&D6OF^+M;SNM MW]%X8REJ]7EL>?5RR)39,JOJV5R.4SDVM-O\`>,I-,515AA.W MEIF-FV/+LC\D*E9+(TP&`P&`P&`P&`P&`P&`P&`P&`P&`P&`P&`P&`P&`P&` MP&!_5-\+7_A4\*?_`"`13_WBW/EGC/\`S5G_`/$5/HGA3_+F3_\`)C_:Z?96 M%@,!@,!@,!@,!@?R#NUO^M*\^NM%_[-E/\+:_L4OF35?^ZYK_ M`!%S^W*LN2;1,!@,!@,!@,!@,!@,!@,!@,!@,!@,!@,!@,!@,!@,!@,!@>W; MX3O_``1/,=_^QKL__P!5FW/(^-?\[:/^6W_?R]+X4_REJGY+G]S#;O\`+VW] M!.RN2>B/#[T:NTX-1\+D,KI<:TT)BT$`D+@2LE#.P>\'`U\@I'\&+^8.GW]&U;+\7Z=&%?/BFYAR<^(PIF?DN48T5?D\\LO!.=LZ MIIM_AC/3C3S9FW_PS.V(^6BK"J/R^:$[>=R7Q2J/*?X5YO8JY(5#(%,FYXE[ MLN``E`D:&FZJHTO>E@3-C*3HV[T>]F;%O82RRM[WOT:].:/`MF[FN%=:L9>) M^NN43%,1RXS;N81^?D;G&%VUEN(M*O7Y_P"517$U3Y,(N48S^2.55C_,Y\?= M2V?V=3-QU93%KW)74HH>-ULT+:RA,DGY3!-H_.)PZK8XY)8R@=#V8Y]12I(J M2&G@*(5_ZW0![$29H,I_++5]+RNC7LGFKUJSF*;\US%=44XTS33$3'.F,<)I MF)PVQL\Z.X_TO47\R2O,^W+ M.9O\O]P?R7J)5.S096=?/SM./A+&:$:>%A>$3*><7L1.C ME98`BV$8?3K<&54ZGQ]G]6R>W(1]9/.\D\^N(IZ6$U1^26QQ53.G\%Y/3