-- Record GAAP net revenues of $401.6 million.
-- Record non-GAAP net income of $47.3 million(1), or $1.11 per diluted
share, on net revenues of $402.8 million.
-- Record GAAP net income of $41.4 million, or $0.97 per diluted share.
Full-Year 2010 results:
-- Record GAAP net revenues of $1.4 billion; 15th consecutive year of
record net revenues.
-- Record non-GAAP net income of $124.8 million(1), or $3.24 per diluted
share.
-- GAAP net income of $1.9 million, or $0.05 per diluted share.
-- As of December 31, 2010, stockholders' equity was $1.3 billion;
book value per share was $36.76.
Stifel Financial Corp. (
-- A non-cash charge of $106.4 million after-tax ($179.5 million
pre-tax), or $2.77 per diluted share, related to the acceleration
of deferred compensation in the third quarter of 2010 as a result
of a modification of the company's deferred compensation plan.
-- Merger-related expenses of $16.5 million after-tax ($27.7 million
pre-tax), or $0.43 per diluted share, related to the previously
announced merger with TWPG.
"We are very pleased to report our 15th consecutive year of record net
revenues and equally pleased with the success of our merger with Thomas
Weisel Partners (TWPG). Our record quarterly revenues and record quarterly
investment banking revenues demonstrate the power of the franchise and
underscore the success of the merger with TWPG. There are clear signs of
the retail investor re-engaging, as well as increased activity in the
capital markets, both of which contributed to our results. Looking forward,
we are well positioned to continue to gain market share, which is
accomplished through the addition of talented, entrepreneurial people who
share our vision to build the premier middle-market investment banking
firm," commented Ronald J. Kruszewski, Chairman, President and Chief
Executive Officer of Stifel Financial.
Summary Results of Operations (Unaudited)
Three Months Ended
----------------------------------------------------------
(in 000s) 12/31/10 12/31/09 Change 9/30/10 Change
----------- ----------- ---------- ---------- ----------
Net revenues $ 401,599 $ 319,467 25.7% $ 340,388 18.0%
Non-GAAP net
revenues (1) $ 402,787 $ 319,467 26.1% $ 341,327 18.0%
Net income/
(loss) $ 41,394 $ 24,668 67.8% $ (84,336) 149.1%
Non-GAAP net
income (1)
(2) $ 47,318 $ 24,668 91.8% $ 29,639 59.6%
Earnings per
share:
Basic $ 1.21 $ 0.82 47.6% $ (2.47) 149.0%
Diluted $ 0.97 $ 0.71 36.6% $ (2.47) 139.3%
Non-GAAP
diluted
(1) (2) $ 1.11 $ 0.71 56.3% $ 0.72 54.2%
Year Ended
---------------------------------
(in 000s) 12/31/10 12/31/09 Change
----------- ----------- ---------
Net revenues $ 1,382,026 $ 1,090,636 26.7%
Non-GAAP net
revenues (1) $ 1,384,152 $ 1,090,636 26.9%
Net income/
(loss) $ 1,907 $ 75,798 (97.5)%
Non-GAAP net
income (1)
(2) $ 124,760 $ 75,798 64.6%
Earnings per
share:
Basic $ 0.06 $ 2.68 (97.8)%
Diluted $ 0.05 $ 2.35 (97.9)%
Non-GAAP
diluted
(1) (2) $ 3.24 $ 2.35 37.9%
(1) A reconciliation of the company's GAAP results to these non-GAAP
measures is discussed below under "Non-GAAP Financial Measures."
(2) GAAP earnings per share for the three months ended September 30,
2010 is calculated using the basic weighted average number of common
shares outstanding, not fully diluted shares, as they are
anti-dilutive in periods a loss is incurred. Non-GAAP net loss for
the three months ended September 30, 2010, using fully dilutive shares
of 41.2 million was $2.05.
Fourth Quarter
Consolidated Net Revenues
For the quarter ended December 31, 2010, net revenues were a record $401.6
million, a 26% increase compared to the fourth quarter of 2009, and an 18%
increase compared to the third quarter of 2010.
Our revenue growth was primarily derived from improved equity market
conditions, which has contributed to an increase in capital raising and
strategic advisory fee revenues, as well as underwriting fees. The increase
in financial advisors, client assets and productivity and the improving
equity capital markets have contributed to the increase in our commissions
and asset management fee revenues. Principal transactions revenues were
down compared to the year-ago period and to the third quarter of 2010 due
to challenging market conditions for fixed income during the fourth
quarter.
Consolidated Compensation and Benefits Expenses
For the quarter ended December 31, 2010, compensation and benefits expenses
were $237.1 million, an 18% increase compared to the fourth quarter of
2009, and a 40% decrease compared to the third quarter of 2010. The
increase in compensation and benefits expenses from the comparable period
in 2009 is primarily due to the merger with TWPG, the purchase of certain
UBS branches completed in October 2009, and increased revenue production
and profitability. The decrease in compensation and benefits expenses from
the third quarter of 2010 is primarily due to the non-cash charge related
to the acceleration of deferred compensation taken during the third
quarter.
Excluding the non-cash charge in the third quarter of 2010, compensation
and benefits as a percentage of net revenues was 59% compared to 63% in the
fourth quarter of 2009 and 62% in the third quarter of 2010.
Consolidated Non-Compensation Operating Expenses
For the quarter ended December 31, 2010, non-compensation operating
expenses of $97.7 million, which included $8.6 million of merger-related
expenses, increased 27% compared to the fourth quarter of 2009 and
increased 12.2% from the third quarter of 2010. Excluding merger-related
expenses in the third and fourth quarters of 2010, non-compensation
operating expenses were $89.0 million for the fourth quarter of 2010, a 16%
increase compared to the fourth quarter of 2009 and a 13% increase compared
to the third quarter of 2010. The increase in non-compensation operating
expenses is primarily due to an increase in occupancy and other operating
expenses related to the merger with TWPG, the purchase of certain UBS
branches completed in October 2009, and increased revenue production.
Excluding the merger-related expenses in the third and fourth quarters of
2010, non-compensation operating expenses as a percentage of net revenues
was 22% compared to 24% in the fourth quarter of 2009 and 23% in the third
quarter of 2010.
Business Segment Results
Global Wealth Management
For the quarter ended December 31, 2010, the Global Wealth Management
("GWM") segment generated pre-tax operating income of $62.7 million,
compared to $34.3 million in the fourth quarter of 2009 and $51.7 million
in the third quarter of 2010. Net revenues for the quarter were $236.4
million, compared to $186.1 million in the fourth quarter of 2009, and
$207.5 million in the third quarter of 2010. GWM experienced revenue growth
across all revenue line items, which is primarily attributable to an
increase in the number of financial advisors and client assets resulting
from the purchase of certain UBS branches completed in October 2009.
-- The Private Client Group reported net revenues of $226.6 million,
a 27% increase compared to the fourth quarter of 2009 and a 15%
increase compared to the third quarter of 2010.
-- Stifel Bank reported net revenues of $9.8 million, a 27% increase
compared to the fourth quarter of 2009 and a 4% decrease compared
to the third quarter of 2010.
Compensation and benefits expenses for the quarter were $136.0 million, an
increase of 16% compared to the fourth quarter of 2009 and an increase of
14% compared to the third quarter of 2010. The increases are the direct
result of increased revenue production. For the fourth quarter of 2010,
compensation and benefits as a percentage of net revenues was 58% compared
to 63% in the fourth quarter of 2009 and 57% in the third quarter of 2010.
Non-compensation operating expenses for the quarter were $37.7 million, a
9% increase compared to the fourth quarter of 2009 and a 3% increase
compared to the third quarter of 2010, primarily due to the acquisition of
certain UBS branches completed in October 2009. For the fourth quarter of
2010, non-compensation operating expenses as a percentage of net revenues
was 16% compared to 19% in the fourth quarter of 2009 and 18% in the third
quarter of 2010.
Institutional Group
For the quarter ended December 31, 2010, the Institutional Group segment
generated pre-tax operating income of $43.7 million, compared to $37.8
million in the fourth quarter of 2009, and $27.7 million in the third
quarter of 2010. Net revenues for the quarter were $165.9 million, compared
to $133.3 million in the fourth quarter of 2009 and $138.0 million in the
third quarter of 2010. The growth in revenue over the comparable periods
was driven by an increase in advisory services activity, which was
primarily related to the merger with TWPG, in addition to strong equity and
debt originations. The increase in activity was offset by a decline in
fixed income institutional brokerage revenues, which was negatively
impacted by the challenging market conditions present during the fourth
quarter of 2010.
Institutional brokerage revenues were $82.6 million, a 4% decrease compared
to the fourth quarter of 2009 and a 6% decrease compared to the third
quarter of 2010.
-- Equity institutional brokerage revenues were $46.5 million, a 20%
increase compared to the fourth quarter of 2009 and a 6% increase
compared to the third quarter of 2010.
-- Fixed income institutional brokerage revenues were $36.1 million,
a 24% decrease compared to the fourth quarter of 2009 and an 18%
decrease compared to the third quarter of 2010.
Investment banking revenues were $81.6 million, an 82% increase compared to
the fourth quarter of 2009 and a 79% increase compared to the third quarter
of 2010.
-- Equity capital raising revenues were $34.5 million, a 48% increase
compared to the fourth quarter of 2009 and a 91% increase compared
to the third quarter of 2010.
-- Fixed income capital raising revenues were $6.2 million, a 12%
increase compared to the fourth quarter of 2009 and a 38% increase
compared to the third quarter of 2010.
-- Equity advisory fee revenues were $38.1 million, a 148% increase
compared to the fourth quarter of 2009, and an 88% increase compared
to the third quarter of 2010.
-- Fixed income advisory fee revenues were $2.8 million, a 300% increase
compared to the fourth quarter of 2009 and unchanged from the third
quarter of 2010.
Compensation and benefits expenses for the quarter were $94.3 million, a
28% increase compared to the fourth quarter of 2009 and a 15% increase
compared to the third quarter of 2010. For the fourth quarter of 2010,
compensation and benefits as a percentage of net revenues was 57% compared
to 55% in the fourth quarter of 2009 and 60% in the third quarter of 2010.
The increase in compensation and benefits expenses over the comparable
periods is primarily related to associates who joined in connection with
the TWPG merger.
Non-compensation operating expenses for the quarter were $28.0 million, a
28% increase compared to the fourth quarter in 2009 and a 1% decrease
compared to the third quarter of 2010. The increase in other
non-compensation expenses over the comparable period in 2009 is primarily
attributable to increased activity in all expense categories related to the
merger with TWPG. For the fourth quarter of 2010, non-compensation
operating expenses as a percentage of net revenues was 17% compared to 16%
in the fourth quarter of 2009 and 21% in the third quarter of 2010.
Full Year 2010
Consolidated Net Revenues
For the year ended December 31, 2010, net revenues were a record $1.4
billion, a 27% increase compared to $1.1 billion during the comparable
period in 2009, which represents our fifteenth consecutive annual increase
in net revenues.
Our revenue growth was primarily derived from improved equity market
conditions and the recently completed merger with TWPG and the acquisition
of certain UBS branches at the end of 2009. The increase in financial
advisors, client assets and productivity and the improving equity capital
markets have contributed to the increase in our commissions and asset
management fee revenues. The improved market conditions and our merger
with TWPG has contributed to the improvement in our investment banking
revenues over the comparable period in 2009, as there has been an increase
in capital raising and strategic advisory fee revenues, as well as
underwriting fees. Principal transactions revenues were flat compared to
the year-ago period mainly driven by improved equity markets, offset by the
changing fixed income environment.
Consolidated Compensation and Benefits Expenses
For the year ended December 31, 2010, compensation and benefits expenses
were $1.1 billion, which included $186.1 million related to the
modification of the company's deferred compensation plan and merger-related
expenses, a 47% increase compared to $718.1 million in 2009. Excluding the
charges for the modification of the company's deferred compensation plan in
the third quarter and merger-related expenses in the third and fourth
quarters of 2010, compensation and benefits expenses for 2010 increased 21%
compared to 2009. Excluding these expenses, compensation and benefits as a
percentage of net revenues was 63% compared to 66% in 2009.
Consolidated Non-Compensation Operating Expenses
For the year ended December 31, 2010, non-compensation operating expenses
of $326.1 million, which included $19.0 million of merger-related expenses,
increased 29% compared to $252.1 million in 2009. Excluding merger-related
expenses in the third and fourth quarters of 2010, non-compensation
operating expenses increased 22% compared to 2009. The increase in
non-compensation operating expenses is primarily due to the recently
completed merger with TWPG and the acquisition of certain UBS branches
completed in October 2009. Excluding the merger-related expenses,
non-compensation operating expenses as a percentage of net revenues was 22%
compared to 23% in 2009.
Business Segment Results
Global Wealth Management
For the year ended December 31, 2010, the GWM segment generated pre-tax
operating income of $194.0 million, an 85% increase compared to $104.7
million in 2009. Net revenues for the year ended December 31, 2010 were
$843.3 million, a 42% increase compared to $596.0 million in the comparable
period of 2009. GWM experienced revenue growth across all revenue line
items, which is primarily attributable to an increase in the number of
financial advisors and client assets resulting from the purchase of certain
UBS branches completed in October 2009.
-- The Private Client Group reported net revenues of $804.7 million, a
40% increase compared to $575.6 million in 2009.
-- Stifel Bank reported net revenues of $38.6 million, a 90% increase
compared to $20.4 million in 2009.
Compensation and benefits expenses for the year ended December 31, 2010
were $503.5 million; an increase of 36% compared to 2009, and the direct
result of increased revenue production. For the year, compensation and
benefits as a percentage of net revenues was 60% compared to 62% in 2009.
Non-compensation operating expenses for the year ended December 31, 2010
were $145.8 million, a 20% increase compared to 2009, primarily due to the
acquisition of certain UBS branches completed in October 2009. For the
year, non-compensation operating expenses as a percentage of net revenues
was 17% compared to 20% in 2009.
Institutional Group
For the year ended December 31, 2010, the Institutional Group segment
generated pre-tax operating income of $129.5 million, compared to $129.1
million in 2009. Net revenues for the year were $541.8 million, a 10%
increase compared to $494.1 million in 2009. The growth in revenue over the
comparable period was driven by an increase in advisory services activity,
which was primarily related to the merger of TWPG, in addition to strong
equity and debt originations. The increase in activity was offset by a
decline in fixed income institutional brokerage revenues, which was
negatively impacted by the challenging market conditions present throughout
2010.
Institutional brokerage revenues were $341.5 million, a 9% decrease
compared to $375.3 million in 2009.
-- Equity institutional brokerage revenues were $173.0 million, a 13%
increase compared to $153.3 million in 2009.
-- Fixed income institutional brokerage revenues were $168.5 million, a
24% decrease compared to $222.0 million in 2009.
Investment banking revenues were $191.9 million, a 73% increase compared to
$110.9 million in 2009.
-- Equity capital raising revenues were $87.4 million, a 96% increase
compared to $44.6 million in 2009.
-- Fixed income capital raising revenues were $21.1 million, a 24%
increase compared to $17.1 million in 2009.
-- Equity advisory fee revenues were $76.1 million, a 65% increase
compared to $46.0 million in 2009.
-- Fixed income advisory fee revenues were $7.3 million, a 128% increase
compared to $3.2 million in 2009.
Compensation and benefits expenses for the year were $315.3 million, a 10%
increase compared to $287.8 million in 2009. For the year, compensation and
benefits as a percentage of net revenues was 58%, which was consistent with
2009. The increase in compensation and benefits expenses over the
comparable periods is primarily related to associates who joined in
connection with the TWPG merger and increased revenue production.
Non-compensation operating expenses for the year were $97.0 million, a 26%
increase compared to $77.1 million in 2009. The increase in other
non-compensation expenses over the comparable periods is primarily
attributable to increased activity in all expense categories related to the
merger with TWPG. For the year, non-compensation operating expenses as a
percentage of net revenues was 18% compared to 16% in 2009.
Statement of Financial Condition (Unaudited)
Total assets increased 33% to $4.2 billion as of December 31, 2010 from
$3.2 billion as of December 31, 2009. The increase is primarily
attributable to growth of the company's bank subsidiary, which has grown
its balance sheet to $1.8 billion as of December 31, 2010 from $1.2 billion
as of December 31, 2009. As of December 31, 2010, Stifel Bank's investment
portfolio of $1.0 billion has increased 75% from December 31, 2009. Over
75% of the investment portfolio is comprised of agency mortgage-backed
securities. The increase in total assets is also attributable to the
recently completed merger with TWPG. In addition to the net assets acquired
in the merger with TWPG, the company recognized goodwill and intangible
assets of $148.6 million. 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, 2010 increased $385.4
million, or 44%, to $1.3 billion from $873.4 million as of December 31,
2009. The increase is primarily attributable to the issuance of stock upon
the completion of the merger with TWPG and the cumulative impact of the
previously announced modification of the deferred compensation plan of
$73.9 million after-tax, offset by the repurchase of $91.8 million, or 2.0
million shares, of the company's common stock pursuant to existing Board
repurchase authorizations during the year ended December 31, 2010. Book
value per share was $36.76 at December 31, 2010.
As of December 31, 2010, the company reported total securities owned and
investments at fair value of $1.7 billion, which included securities
categorized as Level 3 of $173.5 million. The company's Level 3 assets
include auction rate securities, for which the auctions have failed, with a
fair value of $94.8 million as of December 31, 2010.
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 three and twelve months
ended December 31, 2010. 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 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 current financial performance. These non-GAAP amounts exclude
compensation expense for the acceleration of deferred compensation as a
result of the modification of the company's deferred compensation plan and
certain compensation and non-compensation operating expenses associated
with the merger of TWPG.
A limitation of utilizing these non-GAAP measures of net revenues,
compensation and benefits, non-compensation operating expenses, income
before income taxes, provision for income taxes, net income, compensation
and non-compensation operating expenses ratios, pre-tax margin and diluted
earnings per share is that the GAAP accounting effects of these
merger-related 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 of 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 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
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 on a GAAP basis for the three and twelve
months ended December 31, 2010 to the aforementioned expenses on a non-GAAP
basis for the same periods.
Reconciliation of GAAP to Non-GAAP Earnings (Unaudited)
(in thousands, except per share amounts)
Three Months Ended December
31, 2010 Year Ended December 31, 2010
--------------------------- --------------------------------
Merger- Merger-
GAAP related Non-GAAP GAAP related Non-GAAP
-------- ------- -------- ---------- -------- ----------
Net revenues $401,599 $ 1,188 $402,787 $1,382,026 $ 2,126 $1,384,152
Non-interest
expenses:
Compensation
and
benefits 237,117 242 237,359 1,056,202 (186,053) 870,149
Non-
compensation
operating
expenses 97,665 (8,616) 89,049 326,053 (19,021) 307,032
-------- ------- -------- ---------- -------- ----------
Total non-
interest
expenses 334,782 (8,374) 326,408 1,382,255 (205,074) 1,177,181
-------- ------- -------- ---------- -------- ----------
Income/(loss)
before income
taxes/
(benefit) 66,817 9,562 76,379 (229) 207,200 206,971
Provision
for
income
taxes/
(benefit) 25,423 3,638 29,061 (2,136) 84,347 82,211
-------- ------- -------- ---------- -------- ----------
Net income/
(loss) $ 41,394 $ 5,924 $ 47,318 $ 1,907 122,853 $ 124,760
======== ======= ======== ========== ======== ==========
Earnings per
share
Basic $ 1.21 $ $ 1.38 $ 0.06 $ $ 3.84
Diluted $ 0.97 $ $ 1.11 $ 0.05 $ $ 3.24
As a
percentage
of net
revenues:
Compensation
and benefits 59.0% 58.9% 76.4% 62.9%
Non-
compensation
operating
expenses 24.4% 22.1% 23.6% 22.1%
Income/
(loss) before
income taxes/
(benefit) 16.6% 19.0% 0.0% 15.0%
Conference Call Information
Stifel Financial Corp. will host its fourth quarter and fiscal year 2010
financial results conference call on Tuesday, February 15, 2011, at 8:30
a.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 (888) 676-3684 and
referencing conference ID #42304629. 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. (
Stifel Financial Corp.
Summary Results of Operations (Unaudited)
(in thousands, except per share amounts)
Three Months Ended
------------------------------------------------------
12/31/10 12/31/09 Change 9/30/10 Change
---------- ---------- -------- --------- --------
Revenues:
Principal
transactions $ 89,996 $ 116,410 (22.7)% $ 123,194 (26.9)%
Commissions 139,605 99,285 40.6 96,986 43.9
Investment
banking 90,975 50,545 80.0 51,656 76.1
Asset management
and service fees 57,042 39,091 45.9 50,876 12.1
Other income 10,497 2,990 251.1 3,656 187.1
---------- ---------- -------- --------- --------
Operating
revenues 388,115 308,321 25.9 326,368 18.9
Interest revenue 18,307 15,078 21.4 17,718 3.3
---------- ---------- -------- --------- --------
Total revenues 406,422 323,399 25.7 344,086 18.1
Interest expense 4,823 3,932 22.7 3,698 30.4
---------- ---------- -------- --------- --------
Net revenues 401,599 319,467 25.7 340,388 18.0
---------- ---------- -------- --------- --------
Non-interest
expenses:
Compensation and
benefits 237,117 201,263 17.8 395,936 (40.1)
Occupancy and
equipment rental 34,730 26,430 31.4 29,559 17.5
Communications
and office
supplies 19,709 15,342 28.5 19,877 (0.8)
Commission and
floor brokerage 7,313 6,249 17.0 7,972 (8.3)
Other operating
expenses 35,913 28,869 24.4 29,600 21.3
---------- ---------- -------- --------- --------
Total
non-interest
expenses 334,782 278,153 20.4 482,944 (30.7)
Income/(loss) before
income taxes 66,817 41,314 61.7 (142,556) 146.9
Provision for
income
taxes/(benefit) 25,423 16,646 52.7 (58,220) 143.7
---------- ---------- -------- --------- --------
Net income/(loss) $ 41,394 $ 24,668 67.8 % $ (84,336) 149.1%
========== ========== ======== ========= ========
Earnings per share:
Basic $ 1.21 $ 0.82 47.6 % $ (2.47) 149.0%
Diluted (3) $ 0.97 $ 0.71 36.6 % $ (2.47) 139.3%
Weighted average
number of common
shares outstanding:
Basic 34,179 30,209 13.1 % 34,134 0.1%
Diluted 42,467 34,706 22.4 % 41,223 3.0%
Year Ended
------------------------------
12/31/10 12/31/09 Change
--------- ---------- --------
Revenues:
Principal
transactions $ 453,533 $ 458,188 (1.0)%
Commissions 445,260 345,520 28.9
Investment
banking 218,104 125,807 73.4
Asset management
and service fees 193,159 117,357 64.6
Other income 19,855 9,138 117.3
--------- ---------- --------
Operating
revenues 1,329,911 1,056,010 25.9
Interest revenue 65,326 46,860 39.4
--------- ---------- --------
Total revenues 1,395,237 1,102,870 26.5
Interest expense 13,211 12,234 8.0
--------- ---------- --------
Net revenues 1,382,026 1,090,636 26.7
--------- ---------- --------
Non-interest
expenses:
Compensation and
benefits 1,056,202 718,115 47.1
Occupancy and
equipment rental 115,742 89,741 29.0
Communications
and office
supplies 69,929 54,745 27.7
Commission and
floor brokerage 26,301 23,416 12.3
Other operating
expenses 114,081 84,205 35.5
--------- ---------- --------
Total
non-interest
expenses 1,382,255 970,222 42.5
Income/(loss) before
income taxes (229) 120,414 (100.0)
Provision for
income
taxes/(benefit) (2,136) 44,616 (104.8)
--------- ---------- --------
Net income/(loss) $ 1,907 $ 75,798 (97.5)%
========= ========== ========
Earnings per share:
Basic $ 0.06 $ 2.68 (97.8)%
Diluted (3) $ 0.05 $ 2.35 (97.9)%
Weighted average
number of common
shares outstanding:
Basic 32,482 28,297 14.8%
Diluted 38,448 32,294 19.1%
(3) Earnings per diluted common share are calculated using the basic
weighted average number of common shares outstanding in periods a loss
is incurred.
Stifel Financial Corp.
(in thousands, except per share, employee and location amounts)
12/31/10 12/31/09 Change 9/30/10 Change
------------- ------------ ------ ------------- ------
Statistical
Information:
Book value per
share $ 36.76 $ 28.86 27.4% $ 35.52 3.5%
Financial
advisors (4) 1,935 1,885 2.7% 1,920 0.8%
Full-time
associates 4,906 4,434 10.6% 4,868 0.8%
Locations 312 294 6.1% 311 0.3%
Total client
assets $ 110,593,000 $ 91,342,000 21.1% $ 100,289,000 10.3%
(4) Includes 160, 166 and 165 independent contractors at December 31, 2010
and 2009 and September 30, 2010, respectively.
Global Wealth Management Results and Statistical Information (Unaudited)
(in thousands)
Three Months Ended
-----------------------------------------------------
12/31/10 12/31/09 Change 9/30/10 Change
--------- --------- --------- --------- ---------
Revenues:
Commissions $ 92,558 $ 75,584 22.5% $ 69,875 32.5%
Principal
transactions 58,520 54,136 8.1 62,785 (6.8)
Asset management
and service fees 56,953 38,836 46.7 50,449 12.9
Net interest 10,277 9,065 13.4 12,017 (14.5)
Investment
banking 5,015 5,730 (12.5) 6,957 (27.9)
Other income 13,101 2,712 383.1 5,401 142.6
--------- --------- --------- --------- ---------
Net revenues 236,424 186,063 27.1 207,484 13.9
--------- --------- --------- --------- ---------
Non-interest
expenses:
Compensation and
benefits 136,009 116,988 16.3 119,100 14.2
Non-compensation
operating
expenses 37,698 34,749 8.5 36,677 2.8
--------- --------- --------- --------- ---------
Total
non-interest
expenses 173,707 151,737 14.5 155,777 11.5
--------- --------- --------- --------- ---------
Income before
income taxes $ 62,717 $ 34,326 82.7% $ 51,707 21.3%
========= ========= ========= ========= =========
As a percentage of
net revenues:
Compensation and
benefits 57.5% 62.9% 57.4%
Non-compensation
operating
expenses 16.0% 18.7% 17.7%
Income before
income taxes 26.5% 18.4% 24.9%
Year Ended
-------------------------------
12/31/10 12/31/09 Change
--------- --------- ---------
Revenues:
Commissions $ 321,541 $ 234,052 37.4%
Principal
transactions 239,851 194,384 23.4
Asset management
and service fees 192,073 116,818 64.4
Net interest 44,834 27,188 64.9
Investment
banking 22,768 14,906 52.7
Other income 22,202 8,626 157.4
--------- --------- ---------
Net revenues 843,269 595,974 41.5
--------- --------- ---------
Non-interest
expenses:
Compensation and
benefits 503,456 370,157 36.0
Non-compensation
operating
expenses 145,790 121,118 20.4
--------- --------- ---------
Total
non-interest
expenses 649,246 491,275 32.2
--------- --------- ---------
Income before
income taxes $ 194,023 $ 104,699 85.3%
========= ========= =========
As a percentage of
net revenues:
Compensation and
benefits 59.7% 62.1%
Non-compensation
operating
expenses 17.3% 20.3%
Income before
income taxes 23.0% 17.6%
Stifel Bank & Trust
(in thousands)
12/31/10 12/31/09 Change 9/30/10 Change
----------- ----------- ------ ----------- ------
Other information:
Assets $ 1,773,720 $ 1,159,753 52.9% $ 1,516,484 17.0%
Investment
securities $ 1,012,714 $ 578,488 75.1% $ 830,127 22.0%
Retained loans,
net $ 388,265 $ 333,547 16.4% $ 364,732 6.5%
Loans held for
sale, net (5) $ 86,344 $ 91,117 (5.2)% $ 106,788 (19.1)%
Deposits (6) $ 1,623,568 $ 1,047,211 55.0 % $ 1,375,984 18.0 %
Allowance as a
percentage of
loans (7) 0.60% 0.51% 0.50%
Non-performing
assets as a
percentage of
total assets 0.18% 0.44% 0.16%
(5) Balance at December 31, 2009 includes loans of $33.1 million held for
sale as part of the branch sale.
(6) Balance at December 31, 2009 includes deposits of $20.8 million held
for sale as part of the branch sale.
(7) Excluding acquired loans of $155.7 million, $171.0 million and $174.8
million, the allowance as a percentage of gross loans totaled 0.99%,
1.04% and 0.95% as of December 31, 2010 and 2009 and September 30,
2010, respectively.
Institutional Group Results and Statistical Information (Unaudited)
(in thousands)
Three Months Ended
-----------------------------------------------------
12/31/10 12/31/09 Change 9/30/10 Change
--------- --------- -------- --------- --------
Revenues:
Principal
transactions $ 35,564 $ 62,275 (42.9)% $ 60,408 (41.1)%
Commissions 47,047 23,701 98.5 27,111 73.5
Capital raising 40,674 28,768 41.4 22,575 80.2
Advisory fees 40,909 16,047 154.9 23,063 77.4
--------- --------- -------- --------- --------
Investment
banking 81,583 44,815 82.0 45,638 78.8
Other income (8) 1,708 2,514 (32.1) 4,886 (65.0)
--------- --------- -------- --------- --------
Net revenues 165,902 133,305 24.5 138,043 20.2
--------- --------- -------- --------- --------
Non-interest
expenses:
Compensation and
benefits 94,300 73,584 28.2 82,147 14.8
Non-compensation
operating
expenses 27,946 21,905 27.6 28,242 (1.0)
--------- --------- -------- --------- --------
Total
non-interest
expenses 122,246 95,489 28.0 110,389 10.7
--------- --------- -------- --------- --------
Income before
income taxes $ 43,656 $ 37,816 15.4% $ 27,654 57.9%
========= ========= ======== ========= ========
As a percentage of
net revenues:
Compensation and
benefits 56.8% 55.2% 59.5%
Non-compensation
operating
expenses 16.9% 16.4% 20.5%
Income before
income taxes 26.3% 28.4% 20.0%
Year Ended
-------------------------------
12/31/10 12/31/09 Change
--------- --------- --------
Revenues:
Principal
transactions $ 217,770 $ 263,804 (17.5)%
Commissions 123,719 111,469 11.0
Capital raising 108,473 61,657 75.9
Advisory fees 83,425 49,244 69.4
--------- --------- --------
Investment
banking 191,898 110,901 73.0
Other income (8) 8,452 7,918 6.7
--------- --------- --------
Net revenues 541,839 494,092 9.8
--------- --------- --------
Non-interest
expenses:
Compensation and
benefits 315,329 287,835 9.6
Non-compensation
operating
expenses 96,975 77,124 25.7
--------- --------- --------
Total
non-interest
expenses 412,304 364,959 13.0
--------- --------- --------
Income before
income taxes $ 129,535 $ 129,133 0.3%
========= ========= ========
As a percentage of
net revenues:
Compensation and
benefits 58.2% 58.3%
Non-compensation
operating
expenses 17.9% 15.6%
Income before
income taxes 23.9% 26.1%
(8) Includes net interest and other income.
Institutional Group Institutional Brokerage & Investment Banking Revenues
(Unaudited)
(in thousands)
Three Months Ended
------------------------------------------------
12/31/10 12/31/09 Change 9/30/10 Change
--------- --------- -------- --------- --------
Institutional brokerage:
Equity $ 46,521 $ 38,669 20.3% $ 43,711 6.4%
Fixed Income 36,090 47,307 (23.7) 43,808 (17.6)
--------- --------- -------- --------- --------
Institutional brokerage 82,611 85,976 (3.9) 87,519 (5.6)
--------- --------- -------- --------- --------
Investment banking:
Capital raising:
Equity 34,458 23,213 48.4 18,060 90.8
Fixed Income 6,216 5,555 11.9 4,515 37.7
--------- --------- -------- --------- --------
Capital raising 40,674 28,768 41.4 22,575 80.2
Advisory fees:
Equity 38,119 15,349 148.3 20,281 88.0
Fixed Income 2,790 698 299.7 2,782 0.3
--------- --------- -------- --------- --------
Advisory fees 40,909 16,047 154.9 23,063 77.4
--------- --------- -------- --------- --------
Investment banking $ 81,583 $ 44,815 82.0% $ 45,638 78.8%
--------- --------- -------- --------- --------
Year Ended
----------------------------
12/31/10 12/31/09 Change
--------- --------- --------
Institutional brokerage:
Equity $ 172,983 $ 153,267 12.9%
Fixed Income 168,506 222,006 (24.1)
--------- --------- --------
Institutional brokerage 341,489 375,273 (9.0)
--------- --------- --------
Investment banking:
Capital raising:
Equity 87,415 44,636 95.8
Fixed Income 21,058 17,021 23.7
--------- --------- --------
Capital raising 108,473 61,657 75.9
Advisory fees:
Equity 76,100 46,031 65.3
Fixed Income 7,325 3,213 128.0
--------- --------- --------
Advisory fees 83,425 49,244 69.4
--------- --------- --------
Investment banking $ 191,898 $ 110,901 73.0%
--------- --------- --------
Contact Information: Investor Relations Contact Sarah Anderson (415) 364-2500