EX-99.1 2 sf-ex991_6.htm EX-99.1 sf-ex991_6.htm

Exhibit 99.1

 

July 30, 2019

FOR IMMEDIATE RELEASE

Media Contact:  Neil Shapiro (212) 271-3447

Investor Contact:  Joel Jeffrey  (212) 271-3610

www.stifel.com/investor-relations

 

STIFEL REPORTS SECOND QUARTER 2019 FINANCIAL RESULTS

 

•

Net revenues of $800.8 million, increased 7.8% compared with the year-ago quarter.

 

•

Record net revenues in Global Wealth Management.

 

•

Net income available to common shareholders of $103.8 million, or $1.31 per diluted common share.

 

•

Non-GAAP net income available to common shareholders of $111.4 million, or $1.41 per diluted common share.

 

•

Record client assets of $305.2 billion, increased 9.9% compared with the year-ago quarter.

 

•

Non-GAAP return on tangible common equity of 23.1%.

 

•

Repurchased approximately 1.3 million shares of the Company’s common stock at an average price of $56.32.

ST. LOUIS, MO – Stifel Financial Corp. (NYSE: SF) today reported net income available to common shareholders of $103.8 million, or $1.31 per diluted common share on net revenues of $800.8 million for the three months ended June 30, 2019, compared with net income available to common shareholders of $84.9 million, or $1.04 per diluted common share, on net revenues of $742.7 million for the second quarter of 2018.

For the three months ended June 30, 2019, the Company reported non-GAAP net income available to common shareholders of $111.4 million, or $1.41 per diluted common share. The Company’s reported GAAP net income for the three months ended June 30, 2019 was primarily impacted by merger-related expenses. Details discussed below and in the “Non-GAAP Financial Matters” section.

Chairman’s Comments

“I’m very pleased with our second quarter results. The $801 million in net revenue in the second quarter was the second highest quarterly revenue in our history and, through the first half of 2019, we have generated a record $1.6 billion of net revenue. In addition to our revenue growth, our expense discipline contributed to margins of nearly 20% in the quarter which drove non-GAAP return on tangible common equity of 23% and non-GAAP earnings per share of $1.41, up nearly 16% over 2018. We repurchased approximately 2.3 million shares in the first half of the year while maintaining our commitment to growing our business both organically and through accretive acquisitions. In the first half of 2019, we recruited 80 financial advisors and our pipeline remains very strong. Additionally, we announced two acquisitions in the first half of 2019 and closed another. As I look forward, I am optimistic about the second half of 2019 as well as our longer-term future,” stated Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel.

 

Financial Highlights (Unaudited)

 

Three Months Ended

 

($ in 000s, except per share data)

 

GAAP 6/30/19

 

 

GAAP 6/30/18

 

 

% Change

 

 

GAAP 3/31/19

 

 

% Change

 

 

 

Non-GAAP (1) 6/30/19

 

 

Non-GAAP (1) 6/30/18

 

 

% Change

 

Net revenues

 

$

800,787

 

 

$

742,732

 

 

 

7.8

 

 

$

770,420

 

 

 

3.9

 

 

 

$

800,787

 

 

$

742,541

 

 

 

7.8

 

Net income applicable to Stifel Financial Corp.

 

$

109,085

 

 

$

87,287

 

 

 

25.0

 

 

$

99,207

 

 

 

10.0

 

 

 

$

116,659

 

 

$

101,131

 

 

 

15.4

 

Preferred dividend

 

 

5,288

 

 

 

2,344

 

 

 

125.6

 

 

 

2,344

 

 

 

125.6

 

 

 

 

5,288

 

 

 

2,344

 

 

 

125.6

 

Net income available to common shareholders

 

$

103,797

 

 

$

84,943

 

 

 

22.2

 

 

$

96,863

 

 

 

7.2

 

 

 

$

111,371

 

 

$

98,787

 

 

 

12.7

 

Earnings per diluted common share

 

$

1.38

 

 

$

1.07

 

 

 

29.0

 

 

$

1.25

 

 

 

10.4

 

 

 

$

1.48

 

 

$

1.24

 

 

 

19.4

 

Earnings per diluted common share available to common shareholders

 

$

1.31

 

 

$

1.04

 

 

 

26.0

 

 

$

1.22

 

 

 

7.4

 

 

 

$

1.41

 

 

$

1.22

 

 

 

15.6

 

Compensation ratio

 

 

58.3

%

 

 

59.5

%

 

 

 

 

 

 

59.5

%

 

 

 

 

 

 

 

57.9

%

 

 

59.0

%

 

 

 

 

Non-compensation ratio

 

 

23.2

%

 

 

24.5

%

 

 

 

 

 

 

22.6

%

 

 

 

 

 

 

 

22.3

%

 

 

22.5

%

 

 

 

 

Pre-tax operating margin (2)

 

 

18.5

%

 

 

16.0

%

 

 

 

 

 

 

17.9

%

 

 

 

 

 

 

 

19.8

%

 

 

18.5

%

 

 

 

 

 

1

 

 

For six months ended June 30, 2019, the Company reported net income available to common shareholders of $200.7 million, or $2.53 per diluted common share on net revenues of $1.6 billion, compared with net income available to common shareholders of $171.4 million, or $2.10 per diluted common share, on net revenues of $1.5 billion for the six months ended June 30, 2018.

For the six months ended June 30, 2019, the Company reported non-GAAP net income available to common shareholders of $215.9 million, or $2.73 per diluted common share.

Financial Highlights (Unaudited)

 

Six Months Ended

 

($ in 000s, except per share data)

 

GAAP 6/30/19

 

 

GAAP 6/30/18

 

 

% Change

 

 

 

Non-GAAP (1) 6/30/19

 

 

Non-GAAP (1) 6/30/18

 

 

% Change

 

Net revenues

 

$

1,571,207

 

 

$

1,493,090

 

 

 

5.2

 

 

 

$

1,571,207

 

 

$

1,493,090

 

 

 

5.2

 

Net income applicable to Stifel Financial Corp.

 

$

208,292

 

 

$

176,048

 

 

 

18.3

 

 

 

$

223,523

 

 

$

197,278

 

 

 

13.3

 

Preferred dividend

 

 

7,632

 

 

 

4,688

 

 

 

62.8

 

 

 

 

7,632

 

 

 

4,688

 

 

 

62.8

 

Net income available to common shareholders

 

$

200,660

 

 

$

171,360

 

 

 

17.1

 

 

 

$

215,891

 

 

$

192,590

 

 

 

12.1

 

Earnings per diluted common share

 

$

2.63

 

 

$

2.16

 

 

 

21.8

 

 

 

$

2.82

 

 

$

2.42

 

 

 

16.5

 

Earnings per diluted common share available to common shareholders

 

$

2.53

 

 

$

2.10

 

 

 

20.5

 

 

 

$

2.73

 

 

$

2.36

 

 

 

15.7

 

Compensation ratio

 

 

58.9

%

 

 

60.3

%

 

 

 

 

 

 

 

58.4

%

 

 

59.8

%

 

 

 

 

Non-compensation ratio

 

 

22.9

%

 

 

23.8

%

 

 

 

 

 

 

 

22.2

%

 

 

22.4

%

 

 

 

 

Pre-tax operating margin (3)

 

 

18.2

%

 

 

15.9

%

 

 

 

 

 

 

 

19.4

%

 

 

17.8

%

 

 

 

 

 

Brokerage Revenues

Brokerage revenues, defined as commissions and principal transactions, were $261.4 million, a 2.2% increase compared with the second quarter of 2018 and a 0.8% increase compared with the first quarter of 2019.

 

 

Three Months Ended

 

($ in 000s)

 

6/30/19

 

 

6/30/18

 

 

% Change

 

 

3/31/19

 

 

% Change

 

Global Wealth Management

 

$

162,388

 

 

$

159,290

 

 

 

1.9

 

 

$

153,194

 

 

 

6.0

 

Institutional brokerage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity capital markets

 

 

40,670

 

 

 

45,266

 

 

 

(10.2

)

 

 

38,881

 

 

 

4.6

 

Fixed income capital markets

 

 

58,387

 

 

 

51,330

 

 

 

13.7

 

 

 

67,406

 

 

 

(13.4

)

Total institutional brokerage

 

 

99,057

 

 

 

96,596

 

 

 

2.5

 

 

 

106,287

 

 

 

(6.8

)

Total brokerage revenues

 

$

261,445

 

 

$

255,886

 

 

 

2.2

 

 

$

259,481

 

 

 

0.8

 

 

•

Global Wealth Management brokerage revenues were $162.4 million, a 1.9% increase compared with the second quarter of 2018 and a 6.0% increase compared with the first quarter of 2019.

 

•

Institutional equity brokerage revenues were $40.7 million, a 10.2% decrease compared with the second quarter of 2018 and a 4.6% increase compared with the first quarter of 2019.

 

•

Institutional fixed income brokerage revenues were $58.4 million, a 13.7% increase compared with the second quarter of 2018 and a 13.4% decrease compared with the first quarter of 2019.


 

2

 

Investment Banking Revenues

Investment banking revenues were $179.6 million, an 11.5% increase compared with the second quarter of 2018 and an 11.0% increase compared with the first quarter of 2019.

 

 

Three Months Ended

 

($ in 000s)

 

6/30/19

 

 

 

 

6/30/18

 

 

 

 

% Change

 

 

3/31/19

 

 

% Change

 

Capital raising:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

10,559

 

 

 

 

$

7,968

 

 

 

 

 

32.5

 

 

$

8,223

 

 

 

28.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity capital markets

 

 

59,156

 

 

 

 

 

44,087

 

 

 

 

 

34.2

 

 

 

27,859

 

 

 

112.3

 

Fixed income capital markets

 

 

26,997

 

 

 

 

 

22,025

 

 

 

 

 

22.6

 

 

 

20,863

 

 

 

29.4

 

Institutional Group

 

 

86,153

 

 

 

 

 

66,112

 

 

 

 

 

30.3

 

 

 

48,722

 

 

 

76.8

 

Total capital raising (4)

 

 

96,712

 

 

 

 

 

74,080

 

 

 

 

 

30.6

 

 

 

56,945

 

 

 

69.8

 

Advisory fees (4)

 

 

82,905

 

 

 

 

 

87,004

 

 

 

 

 

(4.7

)

 

 

104,895

 

 

 

(21.0

)

Total investment banking (4)

 

$

179,617

 

 

 

 

$

161,084

 

 

 

 

 

11.5

 

 

$

161,840

 

 

 

11.0

 

 

•

Global Wealth Management capital raising revenues were $10.6 million, a 32.5% increase compared with the second quarter of 2018 and a 28.4% increase compared with the first quarter of 2019.

 

•

Institutional equity capital raising revenues were $59.2 million, a 34.2% increase compared with the second quarter of 2018 and a 112.3% increase compared with the first quarter of 2019.

 

•

Institutional fixed income capital raising revenues were $27.0 million, a 22.6% increase compared with the second quarter of 2018 and a 29.4% increase compared with the first quarter of 2019.

 

•

Advisory fee revenues were $82.9 million, a 4.7% decrease compared with the second quarter of 2018 and a 21.0% decrease compared with the first quarter of 2019.

 

Asset Management and Service Fee Revenues

Asset management and service fee revenues were $211.2 million, a 5.8% increase compared with the second quarter of 2018 and an 8.1% increase compared with the first quarter of 2019. See Asset Management and Service Fee Break-down table.

Net Interest Income

Net interest income of $135.0 million, a 15.3% increase compared with the second quarter of 2018 and a 4.6% decrease compared with the first quarter of 2019. See Net Interest Income Analysis table.

 

•

Interest income was $187.9 million, a 21.7% increase compared with the second quarter of 2018 and a 1.6% decrease compared with the first quarter of 2019.

 

•

Interest expense was $52.9 million, a 41.9% increase compared with the second quarter of 2018 and a 7.0% increase compared with the first quarter of 2019.


 

3

 

Compensation and Benefits Expenses

For the quarter ended June 30, 2019, compensation and benefits expenses were $466.9 million, which included $3.3 million of merger-related and severance expenses (non-GAAP adjustments). This compares with $442.2 million in the second quarter of 2018 and $458.1 million in the first quarter of 2019. Excluding the non-GAAP adjustments, compensation and benefits as a percentage of net revenues were 57.9% in the second quarter of 2019 (non-GAAP measure).

 

 

Three Months Ended

 

 

Six Months Ended

 

($ in 000s)

 

6/30/19

 

 

6/30/18

 

 

6/30/19

 

 

6/30/18

 

GAAP compensation and benefits

 

$

466,861

 

 

$

442,170

 

 

$

924,975

 

 

$

900,063

 

As a percentage of net revenues

 

 

58.3

%

 

 

59.5

%

 

 

58.9

%

 

 

60.3

%

Non-GAAP adjustments: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related and severance

 

 

(3,304

)

 

 

(4,075

)

 

 

(7,236

)

 

 

(7,814

)

Non-GAAP compensation and benefits

 

$

463,557

 

 

$

438,095

 

 

$

917,739

 

 

$

892,249

 

As a percentage of non-GAAP net revenues

 

 

57.9

%

 

 

59.0

%

 

 

58.4

%

 

 

59.8

%

Non-Compensation Operating Expenses

For the quarter ended June 30, 2019, non-compensation operating expenses were $185.9 million, which included $6.9 million of merger-related and litigation-related expenses (non-GAAP adjustments). This compares with $182.2 million in the second quarter of 2018 and $174.5 million in the first quarter of 2019. Excluding the non-GAAP adjustments, non-compensation operating expenses as a percentage of net revenues for the quarter ended June 30, 2019 were 22.3% (non-GAAP measure).

 

 

Three Months Ended

 

 

Six Months Ended

 

($ in 000s)

 

6/30/19

 

 

6/30/18

 

 

6/30/19

 

 

6/30/18

 

GAAP non-compensation expenses

 

$

185,944

 

 

$

182,215

 

 

$

360,441

 

 

$

355,126

 

As a percentage of net revenues

 

 

23.2

%

 

 

24.5

%

 

 

22.9

%

 

 

23.8

%

Non-GAAP adjustments: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related

 

 

(3,417

)

 

 

(8,892

)

 

 

(7,676

)

 

 

(14,915

)

Litigation-related

 

 

(3,507

)

 

 

(6,000

)

 

 

(3,507

)

 

 

(6,000

)

 

 

 

(6,924

)

 

 

(14,892

)

 

 

(11,183

)

 

 

(20,915

)

Non-GAAP non-compensation expenses

 

$

179,020

 

 

$

167,323

 

 

$

349,258

 

 

$

334,211

 

As a percentage of non-GAAP net revenues

 

 

22.3

%

 

 

22.5

%

 

 

22.2

%

 

 

22.4

%

Provision for Income Taxes

The GAAP effective income tax rate for the quarter ended June 30, 2019 was 25.9%. This compares with an effective income tax rate of 26.2% for the second quarter of 2018 and 27.9% for the first quarter of 2019. The adjusted non-GAAP effective income tax rate for the quarter ended June 30, 2019 was 25.9%.

 

 

Three Months Ended

 

 

Six Months Ended

 

($ in 000s)

 

6/30/19

 

 

6/30/18

 

 

6/30/19

 

 

6/30/18

 

GAAP provision for income taxes

 

$

38,225

 

 

$

31,060

 

 

$

76,595

 

 

$

61,853

 

GAAP effective tax rate

 

 

25.9

%

 

 

26.2

%

 

 

26.9

%

 

 

26.0

%

Non-GAAP adjustments: (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related, litigation-related, and severance

 

 

2,752

 

 

 

5,102

 

 

 

4,955

 

 

 

7,814

 

Other

 

 

(98

)

 

 

(170

)

 

 

(1,767

)

 

 

(315

)

 

 

 

2,654

 

 

 

4,932

 

 

 

3,188

 

 

 

7,499

 

Non-GAAP provision for income taxes

 

$

40,879

 

 

$

35,992

 

 

$

79,783

 

 

$

69,352

 

Non-GAAP effective tax rate

 

 

25.9

%

 

 

26.2

%

 

 

26.3

%

 

 

26.0

%

 

 


 

4

 

Conference Call Information

Stifel Financial Corp. will host its second quarter 2019 financial results conference call on Tuesday, July 30, 2019, at 8:00 a.m. Eastern time. The conference call may include forward-looking statements.

All interested parties are invited to listen to Stifel’s Chairman and CEO, Ronald J. Kruszewski, by dialing (877) 876-9938 and referencing conference ID #8069647. 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’s broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated; Keefe Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Century Securities Associates, Inc., and in the United Kingdom and Europe through Stifel Nicolaus Europe Limited. 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 and Stifel Bank offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer 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

 

 

 

 

Six Months Ended

 

($ in 000s, except per share amounts)

 

6/30/19

 

 

 

 

6/30/18

 

 

 

 

% Change

 

 

 

 

3/31/19

 

 

 

 

% Change

 

 

 

 

6/30/19

 

 

 

 

6/30/18

 

 

 

 

% Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

 

$

164,981

 

 

 

 

$

166,902

 

 

 

 

 

(1.2

)

 

 

 

$

155,449

 

 

 

 

 

6.1

 

 

 

 

$

320,430

 

 

 

 

$

332,677

 

 

 

 

 

(3.7

)

Principal transactions

 

 

96,464

 

 

 

 

 

88,984

 

 

 

 

 

8.4

 

 

 

 

 

104,032

 

 

 

 

 

(7.3

)

 

 

 

 

200,496

 

 

 

 

 

186,766

 

 

 

 

 

7.4

 

Brokerage revenues

 

 

261,445

 

 

 

 

 

255,886

 

 

 

 

 

2.2

 

 

 

 

 

259,481

 

 

 

 

 

0.8

 

 

 

 

 

520,926

 

 

 

 

 

519,443

 

 

 

 

 

0.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advisory fees

 

 

82,911

 

 

 

 

 

87,004

 

 

 

 

 

(4.7

)

 

 

 

 

104,890

 

 

 

 

 

(21.0

)

 

 

 

 

187,801

 

 

 

 

 

184,676

 

 

 

 

 

1.7

 

Capital raising

 

 

96,706

 

 

 

 

 

74,059

 

 

 

 

 

30.6

 

 

 

 

 

56,950

 

 

 

 

 

69.8

 

 

 

 

 

153,656

 

 

 

 

 

152,749

 

 

 

 

 

0.6

 

Investment banking

 

 

179,617

 

 

 

 

 

161,063

 

 

 

 

 

11.5

 

 

 

 

 

161,840

 

 

 

 

 

11.0

 

 

 

 

 

341,457

 

 

 

 

 

337,425

 

 

 

 

 

1.2

 

Asset management and service fees

 

 

211,171

 

 

 

 

 

199,568

 

 

 

 

 

5.8

 

 

 

 

 

195,267

 

 

 

 

 

8.1

 

 

 

 

 

406,438

 

 

 

 

 

395,369

 

 

 

 

 

2.8

 

Other income

 

 

13,505

 

 

 

 

 

9,073

 

 

 

 

 

48.8

 

 

 

 

 

12,209

 

 

 

 

 

10.6

 

 

 

 

 

25,714

 

 

 

 

 

12,430

 

 

 

 

 

106.9

 

Operating revenues

 

 

665,738

 

 

 

 

 

625,590

 

 

 

 

 

6.4

 

 

 

 

 

628,797

 

 

 

 

 

5.9

 

 

 

 

 

1,294,535

 

 

 

 

 

1,264,667

 

 

 

 

 

2.4

 

Interest revenue

 

 

187,940

 

 

 

 

 

154,421

 

 

 

 

 

21.7

 

 

 

 

 

191,071

 

 

 

 

 

(1.6

)

 

 

 

 

379,011

 

 

 

 

 

292,155

 

 

 

 

 

29.7

 

Total revenues

 

 

853,678

 

 

 

 

 

780,011

 

 

 

 

 

9.4

 

 

 

 

 

819,868

 

 

 

 

 

4.1

 

 

 

 

 

1,673,546

 

 

 

 

 

1,556,822

 

 

 

 

 

7.5

 

Interest expense

 

 

52,891

 

 

 

 

 

37,279

 

 

 

 

 

41.9

 

 

 

 

 

49,448

 

 

 

 

 

7.0

 

 

 

 

 

102,339

 

 

 

 

 

63,732

 

 

 

 

 

60.6

 

Net revenues

 

 

800,787

 

 

 

 

 

742,732

 

 

 

 

 

7.8

 

 

 

 

 

770,420

 

 

 

 

 

3.9

 

 

 

 

 

1,571,207

 

 

 

 

 

1,493,090

 

 

 

 

 

5.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

466,861

 

 

 

 

 

442,170

 

 

 

 

 

5.6

 

 

 

 

 

458,114

 

 

 

 

 

1.9

 

 

 

 

 

924,975

 

 

 

 

 

900,063

 

 

 

 

 

2.8

 

Occupancy and equipment rental

 

 

61,055

 

 

 

 

 

53,596

 

 

 

 

 

13.9

 

 

 

 

 

58,862

 

 

 

 

 

3.7

 

 

 

 

 

119,917

 

 

 

 

 

111,191

 

 

 

 

 

7.8

 

Communication and office supplies

 

 

35,069

 

 

 

 

 

36,639

 

 

 

 

 

(4.3

)

 

 

 

 

35,697

 

 

 

 

 

(1.8

)

 

 

 

 

70,766

 

 

 

 

 

70,138

 

 

 

 

 

0.9

 

Commissions and floor brokerage

 

 

11,008

 

 

 

 

 

10,095

 

 

 

 

 

9.0

 

 

 

 

 

10,956

 

 

 

 

 

0.5

 

 

 

 

 

21,964

 

 

 

 

 

19,460

 

 

 

 

 

12.9

 

Provision for loan losses

 

 

2,353

 

 

 

 

 

4,277

 

 

 

 

 

(45.0

)

 

 

 

 

2,283

 

 

 

 

 

3.1

 

 

 

 

 

4,636

 

 

 

 

 

6,320

 

 

 

 

 

(26.6

)

Other operating expenses

 

 

76,459

 

 

 

 

 

77,608

 

 

 

 

 

(1.5

)

 

 

 

 

66,699

 

 

 

 

 

14.6

 

 

 

 

 

143,158

 

 

 

 

 

148,017

 

 

 

 

 

(3.3

)

Total non-interest expenses

 

 

652,805

 

 

 

 

 

624,385

 

 

 

 

 

4.6

 

 

 

 

 

632,611

 

 

 

 

 

3.2

 

 

 

 

 

1,285,416

 

 

 

 

 

1,255,189

 

 

 

 

 

2.4

 

Income before income taxes

 

 

147,982

 

 

 

 

 

118,347

 

 

 

 

 

25.0

 

 

 

 

 

137,809

 

 

 

 

 

7.4

 

 

 

 

 

285,791

 

 

 

 

 

237,901

 

 

 

 

 

20.1

 

Provision for income taxes

 

 

38,225

 

 

 

 

 

31,060

 

 

 

 

 

23.1

 

 

 

 

 

38,370

 

 

 

 

 

(0.4

)

 

 

 

 

76,595

 

 

 

 

 

61,853

 

 

 

 

 

23.8

 

Net income

 

 

109,757

 

 

 

 

 

87,287

 

 

 

 

 

25.7

 

 

 

 

 

99,439

 

 

 

 

 

10.4

 

 

 

 

 

209,196

 

 

 

 

 

176,048

 

 

 

 

 

18.8

 

Net income applicable to non-controlling interests

 

 

672

 

 

 

 

 

—

 

 

 

 

n/m

 

 

 

 

 

232

 

 

 

 

 

189.7

 

 

 

 

 

904

 

 

 

 

 

—

 

 

 

 

n/m

 

Net income applicable to Stifel Financial Corp.

 

 

109,085

 

 

 

 

 

87,287

 

 

 

 

 

25.0

 

 

 

 

 

99,207

 

 

 

 

 

10.0

 

 

 

 

 

208,292

 

 

 

 

 

176,048

 

 

 

 

 

18.3

 

Preferred dividends

 

 

5,288

 

 

 

 

 

2,344

 

 

 

 

 

125.6

 

 

 

 

 

2,344

 

 

 

 

 

125.6

 

 

 

 

 

7,632

 

 

 

 

 

4,688

 

 

 

 

 

62.8

 

Net income available to common shareholders

 

$

103,797

 

 

 

 

$

84,943

 

 

 

 

 

22.2

 

 

 

 

$

96,863

 

 

 

 

 

7.2

 

 

 

 

$

200,660

 

 

 

 

$

171,360

 

 

 

 

 

17.1

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.43

 

 

 

 

$

1.18

 

 

 

 

 

21.2

 

 

 

 

$

1.35

 

 

 

 

 

5.9

 

 

 

 

$

2.74

 

 

 

 

$

2.39

 

 

 

 

 

14.6

 

Diluted

 

$

1.31

 

 

 

 

$

1.04

 

 

 

 

 

26.0

 

 

 

 

$

1.22

 

 

 

 

 

7.4

 

 

 

 

$

2.53

 

 

 

 

$

2.10

 

 

 

 

 

20.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.15

 

 

 

 

$

0.12

 

 

 

 

 

25.0

 

 

 

 

$

0.15

 

 

 

 

 

—

 

 

 

 

$

0.30

 

 

 

 

$

0.24

 

 

 

 

 

25.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

72,519

 

 

 

 

 

71,692

 

 

 

 

 

1.2

 

 

 

 

 

71,700

 

 

 

 

 

1.1

 

 

 

 

 

73,180

 

 

 

 

 

71,843

 

 

 

 

 

1.9

 

Diluted

 

 

79,079

 

 

 

 

 

81,299

 

 

 

 

 

(2.7

)

 

 

 

 

79,210

 

 

 

 

 

(0.2

)

 

 

 

 

79,160

 

 

 

 

 

81,548

 

 

 

 

 

(2.9

)


 

6

 

Summary Segment Results (Unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

($ in 000s)

 

6/30/19

 

 

6/30/18

 

 

 

 

% Change

 

 

3/31/19

 

 

% Change

 

 

6/30/19

 

 

6/30/18

 

 

 

 

% Change

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

532,433

 

 

$

497,327

 

 

 

 

 

7.1

 

 

$

510,610

 

 

 

4.3

 

 

$

1,043,043

 

 

$

982,902

 

 

 

 

 

6.1

 

Institutional Group

 

 

270,602

 

 

 

252,825

 

 

 

 

 

7.0

 

 

 

261,286

 

 

 

3.6

 

 

 

531,888

 

 

 

522,903

 

 

 

 

 

1.7

 

Other

 

 

(2,248

)

 

 

(7,420

)

 

 

 

 

69.7

 

 

 

(1,476

)

 

 

(52.3

)

 

 

(3,724

)

 

 

(12,715

)

 

 

 

 

70.7

 

Total net revenues

 

$

800,787

 

 

$

742,732

 

 

 

 

 

7.8

 

 

$

770,420

 

 

 

3.9

 

 

$

1,571,207

 

 

$

1,493,090

 

 

 

 

 

5.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

340,081

 

 

$

309,432

 

 

 

 

 

9.9

 

 

$

316,120

 

 

 

7.6

 

 

$

656,201

 

 

$

618,236

 

 

 

 

 

6.1

 

Institutional Group

 

 

231,300

 

 

 

216,801

 

 

 

 

 

6.7

 

 

 

229,082

 

 

 

1.0

 

 

 

460,382

 

 

 

442,309

 

 

 

 

 

4.1

 

Other

 

 

81,424

 

 

 

98,152

 

 

 

 

 

(17.0

)

 

 

87,409

 

 

 

(6.8

)

 

 

168,833

 

 

 

194,644

 

 

 

 

 

(13.3

)

Total operating expenses

 

$

652,805

 

 

$

624,385

 

 

 

 

 

4.6

 

 

$

632,611

 

 

 

3.2

 

 

$

1,285,416

 

 

$

1,255,189

 

 

 

 

 

2.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating contribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

192,352

 

 

$

187,895

 

 

 

 

 

2.4

 

 

$

194,490

 

 

 

(1.1

)

 

$

386,842

 

 

$

364,666

 

 

 

 

 

6.1

 

Institutional Group

 

 

39,302

 

 

 

36,024

 

 

 

 

 

9.1

 

 

 

32,204

 

 

 

22.0

 

 

 

71,506

 

 

 

80,594

 

 

 

 

 

(11.3

)

Other

 

 

(83,672

)

 

 

(105,572

)

 

 

 

 

(20.7

)

 

 

(88,885

)

 

 

(5.9

)

 

 

(172,557

)

 

 

(207,359

)

 

 

 

 

(16.8

)

Income before income taxes

 

$

147,982

 

 

$

118,347

 

 

 

 

 

25.0

 

 

$

137,809

 

 

 

7.4

 

 

$

285,791

 

 

$

237,901

 

 

 

 

 

20.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

 

49.3

 

 

 

47.8

 

 

 

 

 

 

 

 

 

48.5

 

 

 

 

 

 

 

48.9

 

 

 

48.8

 

 

 

 

 

 

 

Institutional Group

 

 

57.6

 

 

 

59.3

 

 

 

 

 

 

 

 

 

61.0

 

 

 

 

 

 

 

59.3

 

 

 

59.2

 

 

 

 

 

 

 

Non-comp. operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

 

14.6

 

 

 

14.4

 

 

 

 

 

 

 

 

 

13.4

 

 

 

 

 

 

 

14.0

 

 

 

14.1

 

 

 

 

 

 

 

Institutional Group

 

 

27.9

 

 

 

26.5

 

 

 

 

 

 

 

 

 

26.7

 

 

 

 

 

 

 

27.3

 

 

 

25.4

 

 

 

 

 

 

 

Income before income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

 

36.1

 

 

 

37.8

 

 

 

 

 

 

 

 

 

38.1

 

 

 

 

 

 

 

37.1

 

 

 

37.1

 

 

 

 

 

 

 

Institutional Group

 

 

14.5

 

 

 

14.2

 

 

 

 

 

 

 

 

 

12.3

 

 

 

 

 

 

 

13.4

 

 

 

15.4

 

 

 

 

 

 

 

Consolidated pre-tax margin

 

 

18.5

 

 

 

16.0

 

 

 

 

 

 

 

 

 

17.9

 

 

 

 

 

 

 

18.2

 

 

 

15.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Financial metrics (unaudited):

As of and For the Three Months Ended

 

($ in 000s, except percentages and per share amounts)

6/30/19

 

6/30/18

 

3/31/19

 

Total assets

$

24,343,597

 

$

22,608,169

 

$

24,183,559

 

Total Stifel Financial shareholders' equity

 

3,429,126

 

 

2,954,362

 

 

3,376,623

 

Book value per common share (6)

$

44.68

 

$

39.34

 

$

43.18

 

Return on common equity (7)

 

13.4

%

 

12.1

%

 

12.7

%

Non-GAAP return on common equity (1) (7)

 

14.3

%

 

14.1

%

 

13.7

%

Return on tangible common equity (8)

 

21.5

%

 

20.0

%

 

20.6

%

Non-GAAP return on tangible common equity (1) (8)

 

23.1

%

 

23.3

%

 

22.3

%

Tier 1 common capital ratio (9)

 

15.6

%

 

16.4

%

 

15.9

%

Tier 1 risk based capital ratio (9)

 

18.0

%

 

18.4

%

 

18.5

%

Tier 1 leverage capital ratio (9)

 

10.0

%

 

9.5

%

 

9.8

%

Pre-tax margin on net revenues

 

18.5

%

 

16.0

%

 

17.9

%

Non-GAAP pre-tax margin on net revenues (1) (2)

 

19.8

%

 

18.5

%

 

19.0

%

Effective tax rate

 

25.9

%

 

26.2

%

 

27.9

%

Non-GAAP effective tax rate (1)

 

25.9

%

 

26.2

%

 

26.7

%

 

Statistical Information (unaudited):

 

As of and For the Three Months Ended

 

($ in 000s, except financial advisors and locations)

 

6/30/19

 

 

6/30/18

 

 

% Change

 

 

3/31/19

 

 

% Change

 

Financial advisors (10)

 

 

2,097

 

 

 

2,012

 

 

 

4.2

 

 

 

2,061

 

 

 

1.7

 

Independent contractors

 

 

96

 

 

 

106

 

 

 

(9.4

)

 

 

99

 

 

 

(3.0

)

Total financial advisors

 

 

2,193

 

 

 

2,118

 

 

 

3.5

 

 

 

2,160

 

 

 

1.5

 

Locations

 

 

413

 

 

 

398

 

 

 

3.8

 

 

 

407

 

 

 

1.5

 

Total client assets

 

$

305,233,000

 

 

$

277,708,000

 

 

 

9.9

 

 

$

299,993,000

 

 

 

1.7

 

Fee-based client assets

 

$

103,824,000

 

 

$

91,275,000

 

 

 

13.7

 

 

$

99,579,000

 

 

 

4.3

 

Client money market and insured product

 

$

13,674,000

 

 

$

15,703,000

 

 

 

(12.9

)

 

$

14,928,000

 

 

 

(8.4

)

Secured client lending (11)

 

$

3,251,723

 

 

$

3,174,639

 

 

 

2.4

 

 

$

3,175,240

 

 

 

2.4

 

  

 

 

Asset Management and Service Fee Break-down (unaudited)

 

Asset Management and Service Fee Revenues:

 

Three Months Ended

 

($ in 000s)

 

6/30/19

 

 

6/30/18

 

 

% Change

 

 

3/31/19

 

 

% Change

 

Private Client Group (12)

 

$

164,554

 

 

$

149,457

 

 

 

10.1

 

 

$

148,092

 

 

 

11.1

 

Asset Management

 

 

29,485

 

 

 

27,606

 

 

 

6.8

 

 

 

28,469

 

 

 

3.6

 

Third-party Bank Sweep Program

 

 

6,869

 

 

 

11,601

 

 

 

(40.8

)

 

 

8,562

 

 

 

(19.8

)

Other (13)

 

 

10,263

 

 

 

10,904

 

 

 

(5.9

)

 

 

10,144

 

 

 

1.2

 

Total asset management and service fee revenues

 

$

211,171

 

 

$

199,568

 

 

 

5.8

 

 

$

195,267

 

 

 

8.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-based Assets:

 

Three Months Ended

 

($ in millions)

 

6/30/19

 

 

6/30/18

 

 

% Change

 

 

3/31/19

 

 

% Change

 

Private Client Group (12)

 

$

80,983

 

 

$

67,807

 

 

 

19.4

 

 

$

73,553

 

 

 

10.1

 

Asset Management

 

 

33,156

 

 

 

29,679

 

 

 

11.7

 

 

 

32,952

 

 

 

0.6

 

Elimination (14)

 

 

(10,315

)

 

 

(6,211

)

 

 

66.1

 

 

 

(6,926

)

 

 

48.9

 

Total fee-based assets

 

$

103,824

 

 

$

91,275

 

 

 

13.7

 

 

$

99,579

 

 

 

4.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individual Program Banks

 

$

1,459

 

 

$

3,153

 

 

 

(53.7

)

 

$

1,875

 

 

 

(22.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROA (bps) (15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private Client Group (12)

 

 

89.5

 

 

 

90.2

 

 

 

 

 

 

 

89.6

 

 

 

 

 

Asset Management

 

 

35.6

 

 

 

37.2

 

 

 

 

 

 

 

34.6

 

 

 

 

 

Individual Program Banks

 

 

163.6

 

 

 

134.0

 

 

 

 

 

 

 

153.3

 

 

 

 

 


 

8

 

Consolidated Net Interest Income Analysis (Unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

 

June 30, 2018

 

 

March 31, 2019

 

($ in millions, except percentages)

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and federal funds sold

 

$

750.4

 

 

$

4.3

 

 

 

2.31

%

 

$

396.2

 

 

$

2.1

 

 

 

2.11

%

 

$

1,124.9

 

 

$

7.8

 

 

 

2.78

%

Financial instruments owned

 

 

1,320.5

 

 

 

6.4

 

 

 

1.94

 

 

 

1,230.0

 

 

 

5.0

 

 

 

1.62

 

 

 

1,277.4

 

 

 

6.3

 

 

 

1.98

 

Margin balances

 

 

1,291.5

 

 

 

13.7

 

 

 

4.23

 

 

 

1,311.1

 

 

 

12.3

 

 

 

3.75

 

 

 

1,258.5

 

 

 

13.4

 

 

 

4.27

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset-backed securities

 

 

4,508.4

 

 

 

46.0

 

 

 

4.08

 

 

 

4,692.7

 

 

 

45.4

 

 

 

3.87

 

 

 

4,698.9

 

 

 

49.0

 

 

 

4.17

 

Mortgage-backed securities

 

 

1,470.9

 

 

 

8.6

 

 

 

2.33

 

 

 

1,684.7

 

 

 

9.0

 

 

 

2.15

 

 

 

1,531.4

 

 

 

9.0

 

 

 

2.35

 

Corporate fixed income securities

 

 

915.0

 

 

 

6.9

 

 

 

3.02

 

 

 

1,273.2

 

 

 

8.7

 

 

 

2.74

 

 

 

954.5

 

 

 

7.2

 

 

 

3.01

 

State and municipal securities

 

 

48.0

 

 

 

0.2

 

 

 

1.85

 

 

 

73.6

 

 

 

0.4

 

 

 

1.98

 

 

 

50.1

 

 

 

0.3

 

 

 

2.38

 

Total Investments

 

 

6,942.3

 

 

 

61.7

 

 

 

3.56

 

 

 

7,724.2

 

 

 

63.5

 

 

 

3.29

 

 

 

7,234.9

 

 

 

65.5

 

 

 

3.62

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

3,337.4

 

 

 

41.3

 

 

 

4.95

 

 

 

2,641.2

 

 

 

28.8

 

 

 

4.36

 

 

 

3,419.8

 

 

 

40.8

 

 

 

4.78

 

Residential real estate

 

 

2,953.7

 

 

 

22.5

 

 

 

3.05

 

 

 

2,703.4

 

 

 

18.8

 

 

 

2.78

 

 

 

2,927.9

 

 

 

22.5

 

 

 

3.07

 

Securities-based loans

 

 

1,916.3

 

 

 

20.2

 

 

 

4.21

 

 

 

1,835.4

 

 

 

17.2

 

 

 

3.74

 

 

 

1,799.5

 

 

 

19.1

 

 

 

4.25

 

Commercial real estate

 

 

354.3

 

 

 

5.0

 

 

 

5.63

 

 

 

103.8

 

 

 

1.1

 

 

 

4.33

 

 

 

336.5

 

 

 

4.7

 

 

 

5.60

 

Loans held for sale

 

 

178.6

 

 

 

1.8

 

 

 

4.02

 

 

 

189.6

 

 

 

1.9

 

 

 

3.94

 

 

 

179.0

 

 

 

1.8

 

 

 

4.09

 

Other

 

 

377.9

 

 

 

5.1

 

 

 

5.38

 

 

 

59.7

 

 

 

0.6

 

 

 

4.51

 

 

 

319.0

 

 

 

4.4

 

 

 

5.36

 

Total Loans

 

 

9,118.2

 

 

 

95.9

 

 

 

4.21

 

 

 

7,533.1

 

 

 

68.4

 

 

 

3.63

 

 

 

8,981.7

 

 

 

93.3

 

 

 

4.15

 

Other interest-bearing assets

 

 

831.6

 

 

 

5.9

 

 

 

2.86

 

 

 

810.9

 

 

 

3.1

 

 

 

1.54

 

 

 

736.3

 

 

 

4.8

 

 

 

2.61

 

Total interest-earning assets/interest income

 

 

20,254.5

 

 

 

187.9

 

 

 

3.71

 

 

 

19,005.5

 

 

 

154.4

 

 

 

3.25

 

 

 

20,613.7

 

 

 

191.1

 

 

 

3.71

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings

 

 

29.8

 

 

 

0.2

 

 

 

3.16

 

 

 

101.4

 

 

 

0.7

 

 

 

2.71

 

 

 

68.2

 

 

 

0.5

 

 

 

3.10

 

Senior notes

 

 

1,016.2

 

 

 

11.1

 

 

 

4.38

 

 

 

1,015.5

 

 

 

11.1

 

 

 

4.38

 

 

 

1,016.1

 

 

 

11.1

 

 

 

4.38

 

Deposits

 

 

14,660.7

 

 

 

29.3

 

 

 

0.80

 

 

 

13,441.3

 

 

 

15.3

 

 

 

0.46

 

 

 

15,282.3

 

 

 

28.1

 

 

 

0.73

 

FHLB

 

 

550.2

 

 

 

2.9

 

 

 

2.12

 

 

 

844.6

 

 

 

3.1

 

 

 

1.47

 

 

 

461.4

 

 

 

1.7

 

 

 

1.45

 

Other interest-bearing liabilities

 

 

1,764.4

 

 

 

9.4

 

 

 

2.10

 

 

 

1,678.0

 

 

 

7.1

 

 

 

1.68

 

 

 

1,588.3

 

 

 

8.0

 

 

 

2.03

 

Total interest-bearing liabilities/interest expense

 

$

18,021.3

 

 

$

52.9

 

 

 

1.17

%

 

$

17,080.8

 

 

$

37.3

 

 

 

0.87

%

 

$

18,416.3

 

 

$

49.4

 

 

 

1.07

%

Net interest income/margin

 

 

 

 

 

$

135.0

 

 

 

2.67

%

 

 

 

 

 

$

117.1

 

 

 

2.47

%

 

 

 

 

 

$

141.7

 

 

 

2.75

%

 

Stifel Bancorp, Inc. (16) Net Interest Income Analysis (Unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

 

June 30, 2018

 

 

March 31, 2019

 

($ in millions, except percentages)

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

 

Average Balance

 

 

Interest Income/ Expense

 

 

Average Interest Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and federal funds sold

 

$

330.6

 

 

$

1.8

 

 

 

2.15

%

 

$

35.4

 

 

$

0.2

 

 

 

1.96

%

 

$

732.6

 

 

$

4.6

 

 

 

2.49

%

Investments

 

 

6,942.3

 

 

 

61.7

 

 

 

3.56

 

 

 

7,724.2

 

 

 

63.5

 

 

 

3.29

 

 

 

7,234.9

 

 

 

65.5

 

 

 

3.62

 

Loans

 

 

9,118.2

 

 

 

95.9

 

 

 

4.21

 

 

 

7,533.1

 

 

 

68.4

 

 

 

3.63

 

 

 

8,981.7

 

 

 

93.3

 

 

 

4.15

 

Other interest-bearing assets

 

 

57.2

 

 

 

0.6

 

 

 

4.38

 

 

 

64.5

 

 

 

0.7

 

 

 

4.43

 

 

 

52.3

 

 

 

1.0

 

 

 

8.45

 

Total interest-earning assets/interest income

 

 

16,448.3

 

 

 

160.0

 

 

 

3.89

 

 

 

15,357.2

 

 

 

132.8

 

 

 

3.46

 

 

 

17,001.5

 

 

 

164.4

 

 

 

3.87

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

14,660.7

 

 

 

29.3

 

 

 

0.80

 

 

 

13,441.3

 

 

 

15.3

 

 

 

0.46

 

 

 

15,282.3

 

 

 

28.1

 

 

 

0.73

 

FHLB

 

 

550.2

 

 

 

2.9

 

 

 

2.12

 

 

 

844.6

 

 

 

3.1

 

 

 

1.47

 

 

 

461.4

 

 

 

1.7

 

 

 

1.45

 

Other interest-bearing liabilities

 

 

1.7

 

 

 

0.1

 

 

 

6.73

 

 

 

16.1

 

 

 

0.2

 

 

 

4.35

 

 

 

1.7

 

 

 

—

 

 

 

9.16

 

Total interest-bearing liabilities/interest expense

 

$

15,212.6

 

 

 

32.3

 

 

 

0.85

%

 

$

14,302.0

 

 

 

18.6

 

 

 

0.52

%

 

$

15,745.4

 

 

 

29.8

 

 

 

0.76

%

Net interest income/margin

 

 

 

 

 

$

127.7

 

 

 

3.11

%

 

 

 

 

 

$

114.2

 

 

 

2.97

%

 

 

 

 

 

$

134.6

 

 

 

3.17

%

 

 

9

 

Stifel Bancorp, Inc. - a component of Global Wealth Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected operating data (unaudited):

Three Months Ended

 

 

Six Months Ended

 

($ in 000s, except percentages)

6/30/19

 

 

6/30/18

 

 

% Change

 

 

3/31/19

 

 

% Change

 

 

6/30/19

 

 

6/30/18

 

 

% Change

 

Net interest income

$

127,714

 

 

$

114,200

 

 

 

11.8

 

 

$

134,564

 

 

 

(5.1

)

 

$

262,278

 

 

$

221,827

 

 

 

18.2

 

Bank loan loss provision

 

2,353

 

 

 

4,277

 

 

 

(45.0

)

 

 

2,283

 

 

 

3.1

 

 

 

4,636

 

 

 

6,320

 

 

 

(26.6

)

Charge-offs

 

54

 

 

 

—

 

 

n/m

 

 

 

56

 

 

 

(3.6

)

 

 

110

 

 

 

14

 

 

 

685.7

 

Net interest margin

 

3.11

%

 

 

2.97

%

 

14 bps

 

 

 

3.17

%

 

(6) bps

 

 

 

3.14

%

 

 

2.93

%

 

21 bps

 

 

Financial Metrics (unaudited):

 

As of

 

($ in 000s, except percentages)

 

6/30/19

 

 

6/30/18

 

 

3/31/19

 

Total assets

 

$

16,645,984

 

 

$

15,859,681

 

 

$

16,822,599

 

Total shareholders' equity

 

 

1,236,318

 

 

 

1,103,625

 

 

 

1,242,760

 

Total loans, net (includes loans held for sale)

 

 

9,127,836

 

 

 

7,557,982

 

 

 

8,850,905

 

Total deposits

 

 

14,901,061

 

 

 

13,890,849

 

 

 

15,049,877

 

Available-for-sale securities, at fair value

 

 

2,702,211

 

 

 

3,473,366

 

 

 

3,002,751

 

Held-to-maturity securities, at amortized cost

 

 

3,957,629

 

 

 

4,516,441

 

 

 

4,100,357

 

Commercial and industrial

 

 

3,338,127

 

 

 

2,677,096

 

 

 

3,314,564

 

Residential real estate

 

 

2,984,725

 

 

 

2,703,935

 

 

 

2,928,228

 

Securities-based loans

 

 

1,962,528

 

 

 

1,845,592

 

 

 

1,860,989

 

Commercial real estate

 

 

367,283

 

 

 

127,253

 

 

 

361,950

 

Loans held for sale

 

 

163,511

 

 

 

210,611

 

 

 

144,216

 

Stifel Bank & Trust:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital ratio (9)

 

 

13.4

%

 

 

14.4

%

 

 

13.7

%

Tier 1 capital ratio (9)

 

 

13.4

%

 

 

14.4

%

 

 

13.8

%

Total capital ratio (9)

 

 

14.5

%

 

 

15.4

%

 

 

14.9

%

Tier 1 leverage ratio (9)

 

 

7.2

%

 

 

7.2

%

 

 

7.1

%

Stifel Bank:

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital ratio (9)

 

 

17.7

%

 

n/a

 

 

 

17.5

%

Tier 1 capital ratio (9)

 

 

17.7

%

 

n/a

 

 

 

17.5

%

Total capital ratio (9)

 

 

18.9

%

 

n/a

 

 

 

18.6

%

Tier 1 leverage ratio (9)

 

 

7.3

%

 

n/a

 

 

 

7.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Metrics:

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

$

90,472

 

 

$

73,775

 

 

$

88,172

 

Allowance as a percentage of retained loans

 

 

1.00

%

 

 

0.99

%

 

 

1.00

%

Net charge-offs as a percentage of average loans

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Total nonperforming assets

 

$

21,111

 

 

$

18,696

 

 

$

21,276

 

Nonperforming assets as % of total assets

 

 

0.13

%

 

 

0.12

%

 

 

0.13

%


 

10

 

Global Wealth Management Summary Results of Operations (Unaudited)

 

 

 

Three Months Ended

 

 

 

 

Six Months Ended

 

($ in 000s)

 

6/30/19

 

 

 

 

6/30/18

 

 

 

 

% Change

 

 

 

 

3/31/19

 

 

% Change

 

 

 

 

6/30/19

 

 

 

 

6/30/18

 

 

 

 

% Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

 

$

120,284

 

 

 

 

$

118,129

 

 

 

 

 

1.8

 

 

 

 

$

109,927

 

 

 

9.4

 

 

 

 

$

230,211

 

 

 

 

$

237,334

 

 

 

 

 

(3.0

)

Principal transactions

 

 

42,104

 

 

 

 

 

41,161

 

 

 

 

 

2.3

 

 

 

 

 

43,267

 

 

 

(2.7

)

 

 

 

 

85,371

 

 

 

 

 

84,690

 

 

 

 

 

0.8

 

    Brokerage revenues

 

 

162,388

 

 

 

 

 

159,290

 

 

 

 

 

1.9

 

 

 

 

 

153,194

 

 

 

6.0

 

 

 

 

 

315,582

 

 

 

 

 

322,024

 

 

 

 

 

(2.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset management and service fees

 

 

211,156

 

 

 

 

 

199,557

 

 

 

 

 

5.8

 

 

 

 

 

195,253

 

 

 

8.1

 

 

 

 

 

406,409

 

 

 

 

 

395,346

 

 

 

 

 

2.8

 

Net interest

 

 

137,599

 

 

 

 

 

124,987

 

 

 

 

 

10.1

 

 

 

 

 

145,295

 

 

 

(5.3

)

 

 

 

 

282,894

 

 

 

 

 

243,442

 

 

 

 

 

16.2

 

Investment banking

 

 

10,559

 

 

 

 

 

8,049

 

 

 

 

 

31.2

 

 

 

 

 

8,223

 

 

 

28.4

 

 

 

 

 

18,782

 

 

 

 

 

15,737

 

 

 

 

 

19.3

 

Other income

 

 

10,731

 

 

 

 

 

5,444

 

 

 

 

 

97.1

 

 

 

 

 

8,645

 

 

 

24.1

 

 

 

 

 

19,376

 

 

 

 

 

6,353

 

 

 

 

 

205.0

 

Net revenues

 

 

532,433

 

 

 

 

 

497,327

 

 

 

 

 

7.1

 

 

 

 

 

510,610

 

 

 

4.3

 

 

 

 

 

1,043,043

 

 

 

 

 

982,902

 

 

 

 

 

6.1

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

262,321

 

 

 

 

 

237,879

 

 

 

 

 

10.3

 

 

 

 

 

247,473

 

 

 

6.0

 

 

 

 

 

509,794

 

 

 

 

 

479,639

 

 

 

 

 

6.3

 

Non-compensation operating expenses

 

 

77,760

 

 

 

 

 

71,553

 

 

 

 

 

8.7

 

 

 

 

 

68,647

 

 

 

13.3

 

 

 

 

 

146,407

 

 

 

 

 

138,597

 

 

 

 

 

5.6

 

Total non-interest expenses

 

 

340,081

 

 

 

 

 

309,432

 

 

 

 

 

9.9

 

 

 

 

 

316,120

 

 

 

7.6

 

 

 

 

 

656,201

 

 

 

 

 

618,236

 

 

 

 

 

6.1

 

Income before income taxes

 

$

192,352

 

 

 

 

$

187,895

 

 

 

 

 

2.4

 

 

 

 

$

194,490

 

 

 

(1.1

)

 

 

 

$

386,842

 

 

 

 

$

364,666

 

 

 

 

 

6.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

49.3

 

 

 

 

 

47.8

 

 

 

 

 

 

 

 

 

 

 

48.5

 

 

 

 

 

 

 

 

 

48.9

 

 

 

 

 

48.8

 

 

 

 

 

 

 

Non-compensation operating expenses

 

 

14.6

 

 

 

 

 

14.4

 

 

 

 

 

 

 

 

 

 

 

13.4

 

 

 

 

 

 

 

 

 

14.0

 

 

 

 

 

14.1

 

 

 

 

 

 

 

Income before income taxes

 

 

36.1

 

 

 

 

 

37.8

 

 

 

 

 

 

 

 

 

 

 

38.1

 

 

 

 

 

 

 

 

 

37.1

 

 

 

 

 

37.1

 

 

 

 

 

 

 

 

Institutional Group Summary Results of Operations (Unaudited)

 

 

 

Three Months Ended

 

 

 

 

Six Months Ended

 

($ in 000s)

 

6/30/19

 

 

 

 

6/30/18

 

 

 

 

% Change

 

 

 

 

3/31/19

 

 

% Change

 

 

 

 

6/30/19

 

 

 

 

6/30/18

 

 

 

 

% Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

 

$

44,697

 

 

 

 

$

48,773

 

 

 

 

 

(8.4

)

 

 

 

$

45,522

 

 

 

(1.8

)

 

 

 

$

90,219

 

 

 

 

$

95,343

 

 

 

 

 

(5.4

)

Principal transactions

 

 

54,360

 

 

 

 

 

47,823

 

 

 

 

 

13.7

 

 

 

 

 

60,765

 

 

 

(10.5

)

 

 

 

 

115,125

 

 

 

 

 

102,076

 

 

 

 

 

12.8

 

Brokerage revenues

 

 

99,057

 

 

 

 

 

96,596

 

 

 

 

 

2.5

 

 

 

 

 

106,287

 

 

 

(6.8

)

 

 

 

 

205,344

 

 

 

 

 

197,419

 

 

 

 

 

4.0

 

Advisory fees

 

 

82,905

 

 

 

 

 

86,922

 

 

 

 

 

(4.6

)

 

 

 

 

104,895

 

 

 

(21.0

)

 

 

 

 

187,800

 

 

 

 

 

184,595

 

 

 

 

 

1.7

 

Capital raising

 

 

86,153

 

 

 

 

 

66,112

 

 

 

 

 

30.3

 

 

 

 

 

48,722

 

 

 

76.8

 

 

 

 

 

134,875

 

 

 

 

 

137,113

 

 

 

 

 

(1.6

)

Investment banking

 

 

169,058

 

 

 

 

 

153,034

 

 

 

 

 

10.5

 

 

 

 

 

153,617

 

 

 

10.1

 

 

 

 

 

322,675

 

 

 

 

 

321,708

 

 

 

 

 

0.3

 

Other (17)

 

 

2,487

 

 

 

 

 

3,195

 

 

 

 

 

(22.2

)

 

 

 

 

1,382

 

 

 

80.0

 

 

 

 

 

3,869

 

 

 

 

 

3,776

 

 

 

 

 

2.5

 

Net revenues

 

 

270,602

 

 

 

 

 

252,825

 

 

 

 

 

7.0

 

 

 

 

 

261,286

 

 

 

3.6

 

 

 

 

 

531,888

 

 

 

 

 

522,903

 

 

 

 

 

1.7

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

155,779

 

 

 

 

 

149,984

 

 

 

 

 

3.9

 

 

 

 

 

159,411

 

 

 

(2.3

)

 

 

 

 

315,190

 

 

 

 

 

309,328

 

 

 

 

 

1.9

 

Non-compensation operating expenses

 

 

75,521

 

 

 

 

 

66,817

 

 

 

 

 

13.0

 

 

 

 

 

69,671

 

 

 

8.4

 

 

 

 

 

145,192

 

 

 

 

 

132,981

 

 

 

 

 

9.2

 

Total non-interest expenses

 

 

231,300

 

 

 

 

 

216,801

 

 

 

 

 

6.7

 

 

 

 

 

229,082

 

 

 

1.0

 

 

 

 

 

460,382

 

 

 

 

 

442,309

 

 

 

 

 

4.1

 

Income before income taxes

 

$

39,302

 

 

 

 

$

36,024

 

 

 

 

 

9.1

 

 

 

 

$

32,204

 

 

 

22.0

 

 

 

 

$

71,506

 

 

 

 

$

80,594

 

 

 

 

 

(11.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

57.6

 

 

 

 

 

59.3

 

 

 

 

 

 

 

 

 

 

 

61.0

 

 

 

 

 

 

 

 

 

59.3

 

 

 

 

 

59.2

 

 

 

 

 

 

 

Non-compensation operating expenses

 

 

27.9

 

 

 

 

 

26.5

 

 

 

 

 

 

 

 

 

 

 

26.7

 

 

 

 

 

 

 

 

 

27.3

 

 

 

 

 

25.4

 

 

 

 

 

 

 

Income before income taxes

 

 

14.5

 

 

 

 

 

14.2

 

 

 

 

 

 

 

 

 

 

 

12.3

 

 

 

 

 

 

 

 

 

13.4

 

 

 

 

 

15.4

 

 

 

 

 

 

 

 


 

11

 

Non-GAAP Financial Measures

The Company utilized certain non-GAAP calculations as additional measures to aid in understanding and analyzing the Company’s financial results for the three months ended June 30, 2019 and 2018, and March 31, 2019. 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’s results in the current period to those in prior 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 current financial performance. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. These non-GAAP measures primarily exclude expenses which management believes are, in some instances, non-recurring and not representative of on-going business.

A limitation of utilizing these non-GAAP measures is that the GAAP accounting effects of these charges do, in fact, reflect the underlying financial results of the Company’s business and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that GAAP measures and the same respective non-GAAP measures of the Company’s financial performance should be considered together.  

The following table provides details with respect to reconciling net income and earnings per diluted common share on a GAAP basis for the three and six months ended June 30, 2019 and 2018, and the three months ended March 31, 2019 to net income and earnings per diluted common share on a non-GAAP basis for the same period.

 

 

 

Three Months Ended

 

 

Six Months Ended

 

($ in 000s)

 

6/30/19

 

 

6/30/18

 

 

3/31/19

 

 

6/30/19

 

 

6/30/18

 

GAAP net income applicable to Stifel Financial Corp.

 

$

109,085

 

 

$

87,287

 

 

$

99,207

 

 

$

208,292

 

 

$

176,048

 

Preferred dividend

 

 

5,288

 

 

 

2,344

 

 

 

2,344

 

 

 

7,632

 

 

 

4,688

 

Net income available to common shareholders

 

 

103,797

 

 

 

84,943

 

 

 

96,863

 

 

 

200,660

 

 

 

171,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger-related and severance (18)

 

 

6,721

 

 

 

12,776

 

 

 

8,191

 

 

 

14,912

 

 

 

22,729

 

Litigation-related (19)

 

 

3,507

 

 

 

6,000

 

 

 

—

 

 

 

3,507

 

 

 

6,000

 

Provision for income taxes (20)

 

 

(2,654

)

 

 

(4,932

)

 

 

(534

)

 

 

(3,188

)

 

 

(7,499

)

Total non-GAAP adjustments

 

 

7,574

 

 

 

13,844

 

 

 

7,657

 

 

 

15,231

 

 

 

21,230

 

Non-GAAP net income available to common shareholders

 

$

111,371

 

 

$

98,787

 

 

$

104,520

 

 

$

215,891

 

 

$

192,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

 

 

79,079

 

 

 

81,299

 

 

 

79,210

 

 

 

79,160

 

 

 

81,548

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings per diluted common share

 

$

1.38

 

 

$

1.07

 

 

$

1.25

 

 

$

2.63

 

 

$

2.16

 

Non-GAAP adjustments

 

 

0.10

 

 

 

0.17

 

 

 

0.10

 

 

 

0.19

 

 

 

0.26

 

Non-GAAP earnings per diluted common share

 

$

1.48

 

 

$

1.24

 

 

$

1.35

 

 

$

2.82

 

 

$

2.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings per diluted common share available to common shareholders

 

$

1.31

 

 

$

1.04

 

 

$

1.22

 

 

$

2.53

 

 

$

2.10

 

Non-GAAP adjustments

 

 

0.10

 

 

 

0.18

 

 

 

0.10

 

 

 

0.20

 

 

 

0.26

 

Non-GAAP earnings per diluted common share available to common shareholders

 

$

1.41

 

 

$

1.22

 

 

$

1.32

 

 

$

2.73

 

 

$

2.36

 


 

12

 

Footnotes

 

(1)

Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures.”

 

(2)

Non-GAAP pre-tax margin for the three months ended June 30, 2019 of 19.8% is calculated by adding non-GAAP adjustments of $10.2 million to our GAAP income before income taxes of $148.0 million and dividing it by non-GAAP net revenues for the quarter of $800.8 million. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is discussed within and under “Non-GAAP Financial Measures.”

 

(3)

Non-GAAP pre-tax margin for the six months ended June 30, 2019 of 19.4% is calculated by adding non-GAAP adjustments of $18.4 million to our GAAP income before income taxes of $285.8 million and dividing it by non-GAAP net revenues for the quarter of $1.6 billion. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is discussed within and under “Non-GAAP Financial Measures.”

 

(4)

Excludes revenue included in the Other segment.

 

(5)

See further discussion of non-GAAP adjustments under “Non-GAAP Financial Measures.”

 

(6)

Book value per common share represents shareholders’ equity (excluding preferred stock and non-controlling interests) divided by period end common shares outstanding.

 

(7)

Computed by dividing annualized net income by average common shareholders’ equity or, in the case of non-GAAP return on common equity, computed by dividing non-GAAP net income by average common shareholders’ equity.

 

(8)

Computed by dividing annualized net income by average tangible shareholders' equity or, in the case of non-GAAP return on tangible common equity, computed by dividing non-GAAP net income by average tangible shareholders' equity. Tangible common shareholders' equity equals total common shareholders' equity less goodwill and identifiable intangible assets.

 

(9)

Capital ratios are estimates at time of the Company’s earnings release.

 

(10)

Reflects change in the definition of producing brokers as of January 1, 2019. Prior period amounts have been restated to conform with current period presentation.

 

(11)

Includes client margin balances held by our broker-dealer subsidiaries and securities-based loans held at our bank subsidiaries.

 

(12)

Includes Private Client Group and Trust Business.

 

(13)

Includes fund networking fees, retirement fees, transaction/handling fees, and ACAT fees.

 

(14)

Asset management assets included in Private Client Group or Trust accounts.

 

(15)

Return on assets (ROA) is calculated based on prior period-end balances for Private Client Group, period-end balances for Asset Management, and average quarterly balances for Individual Program Banks.

 

(16)

Includes Stifel Bank & Trust and Stifel Bank, formerly known as The Business Bank of St. Louis, which was acquired on August 31, 2018, and Stifel Trust Company, N.A.

 

(17)

Includes net interest, asset management and service fees, and other income.

 

(18)

Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards and promissory notes issued as retention, professional fees, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s on-going business.

 

(19)

Primarily related to costs associated with Company’s legal matters.

 

(20)

See details of non-GAAP adjustments under “Provision for Income Taxes.”

 

 

13