SOURCE: Stifel Financial Corp.

Stifel Financial Corp.

November 09, 2010 07:00 ET

Stifel Financial Corp. Reports Third Quarter 2010 Results

ST. LOUIS, MO--(Marketwire - November 9, 2010) - Stifel Financial Corp. (NYSE: SF)

  • Record net revenues of $340.4 million.
  • Non-GAAP net income of $29.6 million, or $0.72 per diluted share.
  • GAAP net loss of $84.3 million.
  • As of September 30, 2010, stockholders' equity was $1.2 billion, resulting in book value per share of $33.97.

Stifel Financial Corp. (NYSE: SF) today announced record net revenues of $340.4 million for the three months ended September 30, 2010. The Company reported non-GAAP net income of $29.6 million, or $0.72 per diluted share. On a GAAP basis, the Company reported an unaudited net loss of $84.3 million, or $2.47 per basic share(1) ($2.05 per diluted share, which is a non-GAAP measure) for the three months ended September 30, 2010, compared to net income of $22.1 million, or $0.67 per diluted share, on net revenues of $289.7 million for the third quarter of 2009. A reconciliation of the company's GAAP results to these non-GAAP measures is discussed below under "Non-GAAP Financial Measures."

Two items significantly impacted GAAP results for the third quarter of 2010:

  • A non-cash charge of $107.2 million after tax ($181.1 million pre-tax), or $3.14 per basic share ($2.60 per diluted share outstanding, which is a non-GAAP measure), related to the acceleration of deferred compensation as a result of the previously announced modification of the company's deferred compensation plan.
  • Merger-related expenses of $6.8 million after tax ($11.5 million pre-tax), or $0.20 per basic share ($0.17 per diluted share outstanding, which is a non-GAAP measure), related to the previously announced merger with Thomas Weisel Partners Group, Inc. ("TWPG").

For the nine months ending September 30, 2010, the company reported record net revenues of $980.4 million. The company reported non-GAAP net income of $77.4 million, or $2.09 per diluted share, compared to net income of $51.1 million, or $1.62 per diluted share, on net revenues of $771.2 million for the comparable period in 2009. The company reported a GAAP net loss of $39.5 million, or $1.24 per basic share(1) ($1.07 per diluted share, which is a non-GAAP measure) for the nine months ended September 30, 2010, which includes expenses associated with the previously announced modification of the company's deferred compensation plan and merger-related expenses of $116.9 million after tax. A reconciliation of the company's GAAP results to these non-GAAP measures is discussed below under "Non-GAAP Financial Measures."

Ronald J. Kruszewski, Chairman, President and Chief Executive Officer, commented, "Our record net revenues and operating results demonstrate the diversity of our platform and our ability to navigate through changing economic conditions. We have made significant investments in our associates and infrastructure, the latest being the completion of the merger with Thomas Weisel Partners. As we build out our investment bank, we believe we are well positioned to take advantage of future opportunities."


---------------------------------------------------------------------------
                  Summary Results of Operations (Unaudited)
---------------------------------------------------------------------------
                                            Three Months Ended
                               --------------------------------------------
                                9/30/10   9/30/09  Change   6/30/10  Change
                               --------  --------  ------  --------  ------
Results of operations data
 (000s):
  Net revenues                 $340,388  $289,683   17.5%  $328,009    3.8%
  Net income/(loss)            $(84,336) $ 22,138      *%  $ 21,109      *%
  Non-GAAP net income(2)       $ 29,639  $ 22,138   33.9%  $ 24,061   23.2%
Earnings per share:(1)
  Basic                        $  (2.47) $   0.77      *%  $   0.68      *%
  Diluted                      $  (2.47) $   0.67      *%  $   0.60      *%
  Non-GAAP diluted(2)          $   0.72  $   0.67    7.5%  $   0.69    4.4%

                               --------------------------------------------
                                             Nine Months Ended
                               --------------------------------------------
                                9/30/10             9/30/09          Change
                               --------            --------          ------
Results of operations data
 (000s):
  Net revenues                 $980,427            $771,169           27.1%
  Net income/(loss)            $(39,487)           $ 51,130              *%
  Non-GAAP net income(2)       $ 77,442            $ 51,130           51.5%
Earnings per share:(1)
  Basic                        $  (1.24)           $   1.85              *%
  Diluted                      $  (1.24)           $   1.62              *%
  Non-GAAP diluted(2)          $   2.09            $   1.62           29.1%

* Percentage is not meaningful.
------------------------

(1) GAAP earnings per share for the three and nine months ended
    September 30, 2010 is calculated using the basic weighted average
    number of common shares outstanding, not fully dilutive shares, as they
    are anti-dilutive in periods a loss is incurred. Net loss for the three
    and nine months ended September 30, 2010, using fully dilutive shares
    of 41.2 million and 37.1 million, was $2.05 and $1.07, respectively.

(2) A reconciliation of the company's GAAP results to these non-GAAP
    measures is discussed below under "Non-GAAP Financial Measures."


Consolidated Non-Interest Expenses

For the quarter ended September 30, 2010, compensation and benefits expenses were $395.9 million, which included $183.2 million related to the modification of the company's deferred compensation plan and merger-related expenses, an increase of 105% compared to the third quarter of 2009, and an increase of 83% compared to the second quarter of 2010. Excluding these expenses, compensation and benefits expenses were $212.7 million for the third quarter of 2010, an increase of 10% compared to the third quarter of 2009, and a 2% decrease compared to the second quarter of 2010.

Excluding these expenses, compensation and benefits, as a percentage of net revenues, was 62% compared to 67% in the third quarter of 2009 and 66% in the second quarter of 2010.

For the quarter ended September 30, 2010, non-compensation operating expenses of $87.0 million, which included $8.5 million of merger-related expenses, a 32% increase compared to the third quarter of 2009 and a 16% increase compared to the second quarter of 2010. Excluding merger-related expenses, non-compensation operating expenses were $78.5 million for the third quarter of 2010, a 20% increase compared to the third quarter of 2009, and a 5% increase compared to the second quarter of 2010. The increase in non-compensation operating expenses is primarily due to the recently completed merger with Thomas Weisel Partners Group, Inc. ("TWPG") and the acquisition of certain UBS branches completed in October 2009.

Business Segment Results

Global Wealth Management

For the quarter ended September 30, 2010, the Global Wealth Management ("GWM") segment generated pre-tax operating income of $51.7 million, compared to $29.1 million in the third quarter of 2009, and $40.4 million in the second quarter of 2010. Net revenues for the quarter were $207.5 million, compared to $158.7 million in the third quarter of 2009 and $199.9 million in the second 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 56 UBS branches completed in October 2009.

  • The Private Client Group reported net revenues of $197.3 million, a 28% increase compared to the third quarter of 2009 and a 3% increase compared to the second quarter of 2010.
  • Stifel Bank reported net revenues of $10.2 million, a 107% increase compared to the third quarter of 2009 and a 13% increase compared to the second quarter of 2010.

Compensation and benefits expenses for the quarter were $119.1 million, an increase of 23% compared to the third quarter in 2009, resulting from increased revenue production. Compensation and benefits expenses decreased 4% compared to the second quarter of 2010. For the third quarter of 2010, compensation and benefits expense as a percentage of net revenues was 57% compared to 61% in the third quarter of 2009 and 62% in the second quarter of 2010.

Non-compensation operating expenses for the quarter were $36.7 million, a 12% increase compared to the third quarter of 2009, and a 2% increase compared to the second quarter of 2010, primarily due to the acquisition of certain UBS branches completed in October 2009.

Institutional Group

For the quarter ended September 30, 2010, the Institutional Group segment generated pre-tax operating income of $27.7 million, compared to $33.4 million in the third quarter of 2009, and $30.8 million in the second quarter of 2010. Net revenues for the quarter were $138.0 million, compared to $130.2 million in the third quarter of 2009 and $124.6 million in the second 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 of TWPG. 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 third quarter of 2010.

Institutional brokerage revenues were $87.5 million, an 11% decrease compared to the third quarter of 2009, and a 1% decrease compared to the second quarter of 2010.

  • Equity institutional brokerage revenues were $43.7 million, a 10% increase compared to the third quarter of 2009, and a 1% decrease compared to the second quarter of 2010. Fixed income institutional brokerage revenues were $43.8 million, a 25% decrease compared to the third quarter of 2009, and a 1% decrease compared to the second quarter of 2010.

Investment banking revenues were $45.6 million, a 48% increase compared to the third quarter of 2009, and a 28% increase compared to the second quarter of 2010.

  • Equity capital raising revenues were $18.1 million, a 37% increase compared to the third quarter of 2009, and a 13% decrease compared to the second quarter of 2010. Fixed income capital raising revenues were $4.5 million, an 8% decrease compared to the third quarter of 2009, and a 2% increase compared to the second quarter of 2010.
  • Equity advisory fee revenues were $20.3 million, a 78% increase compared to the third quarter of 2009, and a 120% increase compared to the second quarter of 2010. Fixed income advisory fee revenues were $2.8 million, a 106% increase compared to the third quarter of 2009, and a 110% increase compared to the second quarter of 2010.

Compensation and benefits expenses for the quarter were $82.1 million, a 6% increase compared to the third quarter of 2009 and a 13% increase compared to the second quarter of 2010. For the third quarter of 2010, compensation and benefits expense as a percentage of net revenues was 60% compared to 60% in the third quarter of 2009 and 58% in the second 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 $28.2 million, a 47% increase compared to the third quarter of 2009, and a 33% increase compared to the second quarter of 2010. 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.

Statement of Financial Condition (Unaudited)

Total assets increased 43% to $4.1 billion as of September 30, 2010 from $2.9 billion as of September 30, 2009. The increase is primarily attributable to growth of the company's bank subsidiary, which has grown its balance sheet to $1.5 billion as of September 30, 2010 from $1.0 billion as of September 30, 2009, with high-quality, low-risk investments. As of September 30, 2010, Stifel Bank's investment portfolio of $830.1 million, which contains over 75% of agency mortgage back securities, is up 176.1% from September 30, 2009. The increase 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 $95.6 million, which is based on preliminary estimates and is subject to change upon the final valuation. 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 September 30, 2010 increased $325.8 million, or 39%, to $1.2 billion from $833.6 million as of September 30, 2009. The increase is primarily attributable to the cumulative impact of the previously announced modification of the deferred compensation plan of $73.9 million after-tax and the issuance of stock upon the completion of the merger with TWPG, offset by net losses and the repurchase of $67.3 million or 1.5 million shares, of the company's common stock pursuant to existing Board repurchase authorizations during the third quarter of 2010.

As of September 30, 2010, the company reported total securities owned and investments at fair value of $1.7 billion, which included securities categorized as level 3 of $137.1 million. The company's level 3 assets include auction rate securities, for which the auctions have failed, with a fair value of $85.5 million as of September 30, 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 nine months ended September 30, 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 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 nine months ended September 30, 2010 to the aforementioned expenses on a non-GAAP basis for the same period.


---------------------------------------------------------------------------
           Reconciliation of GAAP to Non-GAAP Earnings (Unaudited)
                  (in thousands, except per share amounts)
---------------------------------------------------------------------------

                                               Three Months Ended
                                               September 30, 2010
                                      ------------------------------------
                                                     Merger-
                                         GAAP        related     Non-GAAP
                                      ----------   ----------   ----------
Net revenues                          $  340,388   $      939   $  341,327

Non-interest expenses:
  Compensation and benefits              395,936     (183,176)     212,760
  Non-compensation operating expenses     87,008       (8,495)      78,513
                                      ----------   ----------   ----------
    Total non-interest expenses          482,944     (191,671)     291,273
                                      ----------   ----------   ----------
Income/(loss) before income
 taxes/(benefit)                        (142,556)     192,610       50,054
  Provision for income
   taxes/(benefit)                       (58,220)      78,635       20,415
                                      ----------   ----------   ----------
Net income/(loss)                     $  (84,336)  $  113,975   $   29,639
                                      ==========   ==========   ==========

Earnings per share:(3)
  Basic                               $    (2.47)  $     3.34   $     0.87
  Diluted                             $    (2.47)  $     2.77   $     0.72

As a percentage of net revenues:
  Compensation and benefits                116.3%                     62.3%
  Non-compensation operating expenses       25.6%                     23.0%
  Income/(loss) before income
   taxes/(benefit)                         (41.9)%                    14.7%


                                      ------------------------------------
                                                Nine Months Ended
                                               September 30, 2010
                                      ------------------------------------
                                                     Merger-
                                         GAAP        related     Non-GAAP
                                      ----------   ----------   ----------
Net revenues                          $  980,427   $      939   $  981,366

Non-interest expenses:
  Compensation and benefits              819,085     (186,295)     632,790
  Non-compensation operating expenses    228,388      (10,404)     217,984
                                      ----------   ----------   ----------
    Total non-interest expenses        1,047,473     (196,699)     850,774
                                      ----------   ----------   ----------
Income/(loss) before income
 taxes/(benefit)                         (67,046)     197,638      130,592
  Provision for income
   taxes/(benefit)                       (27,559)      80,709       53,150
                                      ----------   ----------   ----------
Net income/(loss)                     $  (39,487)  $  116,929   $   77,442
                                      ==========   ==========   ==========

Earnings per share:(3)
  Basic                               $    (1.24)  $     3.67   $     2.43
  Diluted                             $    (1.24)  $     3.16   $     2.09

As a percentage of net revenues:
  Compensation and benefits                 83.5%                     64.5%
  Non-compensation operating expenses       23.3%                     22.2%
  Income/(loss) before income
   taxes/(benefit)                          (6.8)%                    13.3%

------------------------

(3) GAAP earnings per share for the three and nine months ended
    September 30, 2010 is calculated using the basic weighted average
    number of common shares outstanding of 34.1 million and 31.9 million,
    respectively, not fully dilutive shares, as they are anti-dilutive in
    periods a loss is incurred. Net loss for the three and nine months
    ended September 30 2010, using fully dilutive shares of 41.2 million
    and 37.1 million, was $2.05 and $1.07, respectively.


Conference Call Information

Stifel Financial Corp. will host its third quarter 2010 financial results conference call on Tuesday, November 9, 2010, 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 #22760334. 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 one hour following the completion of the call.

Company Information

Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, that conducts its banking, securities and financial services business through several wholly-owned subsidiaries. Stifel clients are primarily served in the U.S. through 314 offices in 44 states, and the District of Columbia through Stifel, Nicolaus & Company, Incorporated and Thomas Weisel Partners LLC, and in Canada through Stifel Nicolaus Canada Inc. Clients in the United Kingdom and Europe are served through offices of Stifel Nicolaus Limited and Thomas Weisel Partners International Limited. Each of the broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, commercial and retail banking and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank & Trust offers a full range of consumer and commercial lending solutions. To learn more about Stifel, please visit the company's web site at www.stifel.com.

Forward-Looking Statements

This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this press release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to successfully integrate acquired companies or the branch offices and financial advisors; a material adverse change in the financial condition; the risk of borrower, depositor and other customer attrition; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies' operations, pricing, and services; and other risk factors referred to from time to time in filings made by Stifel 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.



                         Stifel Financial Corp.
                Summary Results of Operations (Unaudited)
                (in thousands, except per share amounts)
-------------------------------------------------------------------------
                                         Three Months Ended
                         ------------------------------------------------
                          9/30/10    9/30/09   Change    6/30/10   Change
                         ---------  ---------  ------   ---------  ------
Revenues:
  Principal transactions $ 123,194  $ 123,238     0.0%  $ 122,923     0.2%
  Commissions               96,986     90,905     6.7     103,634    (6.4)
  Asset management and
   service fees             50,876     27,012    88.4      44,138    15.3
  Investment banking        51,656     35,056    47.4      41,252    25.2
  Other income               3,656      5,072   (27.9)      3,757    (2.7)
                         ---------  ---------  ------   ---------  ------
    Operating revenues     326,368    281,283    16.0     315,704     3.4
  Interest revenue          17,718     11,306    56.7      14,654    20.9
                         ---------  ---------  ------   ---------  ------
    Total revenues         344,086    292,589    17.6     330,358     4.2
  Interest expense           3,698      2,906    27.2       2,349    57.4
                         ---------  ---------  ------   ---------  ------
    Net revenues           340,388    289,683    17.5     328,009     3.8
                         ---------  ---------  ------   ---------  ------
Non-interest expenses:
  Compensation and
   benefits                395,936    193,131   105.0     216,907    82.5
  Occupancy and
   equipment rental         29,559     24,730    19.5      26,595    11.1
  Communications and
   office supplies          19,877     14,429    37.8      15,925    24.8
  Commission and floor
   brokerage                 7,972      6,486    22.9       5,272    51.2
  Other operating
   expenses                 29,600     20,071    47.4      27,365     8.2
                         ---------  ---------  ------   ---------  ------
    Total non-interest
     expenses              482,944    258,847    86.6     292,064    65.4
                         ---------  ---------  ------   ---------  ------
Income/(loss) before
 income taxes             (142,556)    30,836       *      35,945       *
  Provision for income
   taxes/(benefit)         (58,220)     8,698       *      14,836       *
                         ---------  ---------  ------   ---------  ------
Net income/(loss)        $ (84,336) $  22,138       *%  $  21,109       *%
                         =========  =========  ======   =========  ======

Earnings per share:
  Basic                  $   (2.47) $    0.77       *%  $    0.68       *%
  Diluted(4)             $   (2.47) $    0.67       *%  $    0.60       *%

Weighted average number
 of common shares
 outstanding:
  Basic                     34,134     28,708    18.9%     30,838    10.7%
  Diluted                   41,223     32,817    25.7%     34,901    18.2%


                         ------------------------------------------------
                                         Nine Months Ended
                         ------------------------------------------------
                          9/30/10               9/30/09            Change
                         ---------             ---------           ------
Revenues:
  Principal transactions $ 363,537             $ 341,777              6.4%
  Commissions              305,655               246,236             24.1
  Asset management and
   service fees            136,117                78,266             73.9
  Investment banking       127,129                75,262             68.9
  Other income               9,358                 6,148             52.2
                         ---------             ---------           ------
    Operating revenues     941,796               747,689             26.0
  Interest revenue          47,019                31,782             47.9
                         ---------             ---------           ------
    Total revenues         988,815               779,471             26.9
  Interest expense           8,388                 8,302              1.0
                         ---------             ---------           ------
    Net revenues           980,427               771,169             27.1
                         ---------             ---------           ------
Non-interest expenses:
  Compensation and
   benefits                819,085               516,852             58.5
  Occupancy and
   equipment rental         81,012                63,311             28.0
  Communications and
   office supplies          50,220                39,403             27.5
  Commission and floor
   brokerage                18,988                17,167             10.6
  Other operating
   expenses                 78,168                55,336             41.3
                         ---------             ---------           ------
    Total non-interest
     expenses            1,047,473               692,069             51.4
                         ---------             ---------           ------
Income/(loss) before
 income taxes              (67,046)               79,100                *
  Provision for income
   taxes/(benefit)         (27,559)               27,970                *
                         ---------             ---------           ------
Net income/(loss)        $ (39,487)            $  51,130                *%
                         =========             =========           ======

Earnings per share:
  Basic                  $   (1.24)            $    1.85                *%
  Diluted(4)             $   (1.24)            $    1.62                *%

Weighted average number
 of common shares
 outstanding:                                                          
  Basic                     31,910                27,652             15.4%
  Diluted                   37,062                31,468             17.8%

------------------------
* Percentage is not meaningful.

(4) 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)
--------------------------------------------------------------------------
                      9/30/10      9/30/09    Change     6/30/10    Change
                   ------------  -----------  ------   -----------  ------
Statistical
 Information:
   Book value per
    share          $      33.97  $     27.63    22.9%  $     30.02    13.2%
   Financial
    advisors(5)           1,920        1,823     5.3%        1,916     0.2%
   Full-time
    associates            4,868        4,289    13.5%        4,587     6.1%
   Locations                311          281    10.7%          301     3.3%
   Total client
    assets         $100,289,000  $83,501,000    20.1%  $92,423,000     8.5%

(5) Includes 165, 183 and 167 independent contractors at September 30, 2010
    and 2009 and June 30, 2010, respectively.





 Global Wealth Management Results and Statistical Information (Unaudited)
                              (in thousands)
-------------------------------------------------------------------------
                                         Three Months Ended
                         ------------------------------------------------
                          9/30/10    9/30/09   Change    6/30/10   Change
                         ---------  ---------  ------   ---------  ------

Revenues:
  Commissions            $  69,875  $  63,161    10.6%  $  79,521   (12.1)%
  Principal transactions    62,785     53,052    18.3      58,675     7.0
  Asset management and
   service fees             50,449     26,920    87.4      43,777    15.2
  Net interest              12,017      7,186    67.2      11,506     4.4
  Investment banking         6,957      4,263    63.2       5,494    26.6
  Other income               5,401      4,077    32.5         967       *
                         ---------  ---------  ------   ---------  ------
    Net revenues           207,484    158,659    30.8     199,940     3.8
                         ---------  ---------  ------   ---------  ------
Non-interest expenses:
  Compensation and
   benefits                119,100     96,711    23.2     123,609    (3.6)
  Non-compensation
   operating expenses       36,677     32,894    11.5      35,890     2.2
                         ---------  ---------  ------   ---------  ------
    Total non-interest
     expenses              155,777    129,605    20.2     159,499    (2.3)
                         ---------  ---------  ------   ---------  ------
  Income before income
   taxes                 $  51,707  $  29,054    78.0%  $  40,441    27.9%
                         =========  =========  ======   =========  ======

As a percentage of net
 revenues:
  Compensation and
   benefits                   57.4%      61.0%               61.8%
  Non-compensation
   operating expenses         17.7%      20.7%               18.0%
  Income before income
   taxes                      24.9%      18.3%               20.2%


                         ------------------------------------------------
                                         Nine Months Ended
                         ------------------------------------------------
                          9/30/10               9/30/09            Change
                         ---------             ---------           ------
Revenues:
  Commissions            $ 228,983             $ 158,468             44.5%
  Principal transactions   181,331               140,248             29.3
  Asset management and
   service fees            135,120                77,981             73.3
  Net interest              34,557                18,124             90.7
  Investment banking        17,753                 9,176             93.5
  Other income               9,101                 5,914             53.9
                         ---------             ---------           ------
    Net revenues           606,845               409,911             48.0
                         ---------             ---------           ------
Non-interest expenses:
  Compensation and
   benefits                367,447               253,169             45.1
  Non-compensation
   operating expenses      108,092                86,369             25.2
                         ---------             ---------           ------
    Total non-interest
     expenses              475,539               339,538             40.1
                         ---------             ---------           ------
  Income before income
   taxes                 $ 131,306             $  70,373             86.6%
                         =========             =========           ======

As a percentage of net
 revenues:
  Compensation and
   benefits                   60.6%                 61.8%
  Non-compensation
   operating expenses         17.8%                 21.0%
  Income before income
   taxes                      21.6%                 17.2%

------------------------
* Percentage is not meaningful.





                            Stifel Bank & Trust
                              (in thousands)
-------------------------------------------------------------------------
                     9/30/10      9/30/09    Change     6/30/10    Change
                   -----------  -----------  ------   -----------  ------

Other information:
  Assets           $ 1,516,484  $   965,569    57.1%  $ 1,392,828     8.9%
  Investment
   securities      $   830,127  $   300,623   176.2%  $   740,121    12.2%
                   -----------  -----------  ------   -----------  ------
  Retained loans,
   net             $   364,732  $   325,443    12.1%  $   366,391    (0.5)%
                   -----------  -----------  ------   -----------  ------
  Loans held for
   sale, net       $   106,788  $    30,947   245.1%  $    60,154    77.5%
  Deposits         $ 1,375,984  $   875,028    57.3%  $ 1,255,292     9.6%

  Allowance as a
   percentage of
   loans(6)               0.50%        0.76%                 0.53%
  Non-performing
   assets as a
   percentage of
   total assets           0.16%        0.50%                 0.16%

------------------------
(6) Excluding acquired loans of $174.8 million, $140.0 million and
    $174.8 million, the allowance as a percentage of gross loans totaled
    0.95%, 1.33% and 1.00% as of September 30, 2010 and 2009 and
    June 30, 2010, respectively.





  Institutional Group Results and Statistical Information (Unaudited)
                              (in thousands)
------------------------------------------------------------------------
                                         Three Months Ended
                          ----------------------------------------------
                          9/30/10    9/30/09  Change     6/30/10  Change
                          --------  --------  ------    --------  ------

Revenues:
  Principal transactions  $ 60,408  $ 70,186   (13.9)%  $ 64,249    (6.0)%
  Commissions               27,111    27,743    (2.3)     24,113    12.4

    Capital raising         22,575    18,070    24.9      25,220   (10.5)
    Advisory fees           23,063    12,724    81.3      10,539   118.8
                          --------  --------  ------    --------  ------
  Investment banking        45,638    30,794    48.2      35,759    27.6
  Other income(7)            4,886     1,456   235.6         481       *
                          --------  --------  ------    --------  ------
    Net revenues           138,043   130,179     6.0     124,602    10.8
                          --------  --------  ------    --------  ------
Non-interest expenses:
  Compensation and
   benefits                 82,147    77,483     6.0      72,578    13.2
  Non-compensation
   operating expenses       28,242    19,263    46.6      21,255    32.9
                          --------  --------  ------    --------  ------
    Total non-interest
     expenses              110,389    96,746    14.1      93,833    17.6
                          --------  --------  ------    --------  ------
  Income before income
   taxes                  $ 27,654  $ 33,433   (17.3)%  $ 30,769   (10.1)%
                          ========  ========  ======    ========  ======

As a percentage of
 net revenues:
  Compensation and
   benefits                   59.5%     59.5%               58.2%
  Non-compensation
   operating expenses         20.5%     14.8%               17.1%
  Income before income
   taxes                      20.0%     25.7%               24.7%


                          ----------------------------------------------
                                         Nine Months Ended
                          ----------------------------------------------
                          9/30/10              9/30/09            Change
                          --------             --------           ------
Revenues:
  Principal transactions  $182,206             $201,529             (9.6)%
  Commissions               76,672               87,767            (12.6)

    Capital raising         67,799               32,890            106.1
    Advisory fees           42,516               33,197             28.1
                          --------             --------           ------
  Investment banking       110,315               66,087             66.9
  Other income(7)            6,744                5,404             24.8
                          --------             --------           ------
    Net revenues           375,937              360,787              4.2
                          --------             --------           ------
Non-interest expenses:
  Compensation and
   benefits                221,029              214,251              3.2
  Non-compensation
   operating expenses       69,029               55,219             25.0
                          --------             --------           ------
    Total non-interest
     expenses              290,058              269,470              7.6
                          --------             --------           ------
  Income before income
   taxes                  $ 85,879             $ 91,317             (6.0)%
                          ========             ========           ======

As a percentage of
 net revenues:
  Compensation and
   benefits                   58.8%                59.4%
  Non-compensation
   operating expenses         18.4%                15.3%
  Income before income
   taxes                      22.8%                25.3%

------------------------
(7) Includes net interest and other income.

* Percentage is not meaningful.





Institutional Group Institutional Brokerage & Investment Banking Revenues
                               (Unaudited)
                              (in thousands)
-------------------------------------------------------------------------
                                          Three Months Ended
                             --------------------------------------------
                             9/30/10   9/30/09   Change  6/30/10   Change
                             --------  --------  ------  --------  ------

Institutional brokerage:
  Equity                     $ 43,711  $ 39,733    10.0% $ 44,099    (0.9)%
  Fixed Income                 43,808    58,196   (24.7)   44,263    (1.0)
                             --------  --------  ------  --------  ------
Institutional brokerage        87,519    97,929   (10.6)   88,362    (1.0)
                             --------  --------  ------  --------  ------

Investment banking:
  Capital raising:
    Equity                     18,060    13,181    37.0    20,810   (13.2)
    Fixed Income                4,515     4,889    (7.6)    4,410     2.3
                             --------  --------  ------  --------  ------
      Capital raising          22,575    18,070    24.9    25,220   (10.5)
  Advisory fees:
    Equity                     20,281    11,371    78.4     9,215   120.1
    Fixed Income                2,782     1,353   105.6     1,324   110.2
                             --------  --------  ------  --------  ------
      Advisory fees            23,063    12,724    81.3    10,539   118.8
                             --------  --------  ------  --------  ------
Investment banking           $ 45,638  $ 30,794    48.2% $ 35,759    27.6%
                             --------  --------  ------  --------  ------


                             --------------------------------------------
                                          Nine Months Ended
                             --------------------------------------------
                             9/30/10            9/30/09            Change
                             --------           --------           ------
Institutional brokerage:
  Equity                     $126,462           $114,598             10.4%
  Fixed Income                132,416            174,698            (24.2)
                             --------           --------           ------
Institutional brokerage       258,878            289,296            (10.5)
                             --------           --------           ------

Investment banking:
  Capital raising:
    Equity                     52,957             21,423            147.2
    Fixed Income               14,842             11,467             29.4
                             --------           --------           ------
      Capital raising          67,799             32,890            106.1
  Advisory fees:
    Equity                     37,981             30,682             23.8
    Fixed Income                4,535              2,515             80.4
                             --------           --------           ------
      Advisory fees            42,516             33,197             28.1
                             --------           --------           ------
Investment banking           $110,315           $ 66,087             66.9%
                             --------           --------           ------

Contact Information

  • Investor Relations Contact
    Sarah Anderson
    (415) 364-2500
    Email Contact