Stifel Reports Second Quarter 2014 Financial Results

ST. LOUIS, MO--(Marketwired - Aug 6, 2014) - Stifel Financial Corp. (NYSE: SF)

Highlights for the three months ended June 30, 2014:

• Net revenues of $560.1 million, increased 14% compared with the year-ago quarter.
• Non-GAAP net income from continuing operations of $51.3 million, or $0.68 per diluted common share.
• Net income from continuing operations of $45.6 million, or $0.60 per diluted common share.
  
  

Highlights for the six months ended June 30, 2014:

• Record net revenues of $1.1 billion, increased 19% compared with the year-ago period.
• Non-GAAP net income from continuing operations of $103.3 million, or $1.37 per diluted share.
• Net income from continuing operations of $93.6 million, or $1.24 per diluted share.
  
  

Stifel Financial Corp. (NYSE: SF) today reported net income from continuing operations of $45.6 million, or $0.60 per diluted common share on net revenues of $560.1 million for the three months ended June 30, 2014, compared with net income from continuing operations of $30.9 million, or $0.42 per diluted common share, on net revenues of $493.7 million for the second quarter of 2013.

For the three months ended June 30, 2014, the Company reported non-GAAP net income from continuing operations of $51.3 million, or $0.68 per diluted common share. These non-GAAP results exclude merger-related expenses associated with the Company's recent acquisitions for a total of $5.7 million (after-tax).

For the six months ended June 30, 2014, the Company reported net income from continuing operations of $93.6 million, or $1.24 per diluted common share on record net revenues of $1.1 billion, compared with net income from continuing operations of $45.9 million, or $0.64 per diluted share, on net revenues of $932.3 million for the comparable period in 2013. For the six months ended June 30, 2014, the Company reported non-GAAP net income from continuing operations of $103.3 million, or $1.37 per diluted share. A reconciliation of the Company's GAAP results to these non-GAAP measures is discussed below under "Non-GAAP Financial Measures."

			Three Months Ended																	Six Months Ended
(in 000s)			6/30/14				6/30/13				% Change		3/31/14				% Change			6/30/14				6/30/13				% Change
	Net revenues		$	560,147			$	493,678			13.5		$	546,746			2.5			$	1,106,893			$	932,282			18.7
	Net income from continuing operations		$	45,577			$	30,916			47.4		$	47,973			(5.0	)		$	93,550			$	45,852			104.0
	Net income		$	43,601			$	29,435			48.1		$	47,382			(8.0	)		$	90,983			$	44,054			106.5
	Non-GAAP net income from continuing operations(1)		$	51,266			$	45,133			13.6		$	52,028			(1.5	)		$	103,294			$	85,191			21.3
Earnings per basic common share:
	Income from continuing operations		$	0.69			$	0.48			43.8		$	0.73			(5.5	)		$	1.42			$	0.74			91.9
	Loss from discontinued operations			(0.03	)			(0.02	)		50.0			(0.01	)		200.0				(0.04	)			(0.03	)		33.3
	Earnings per basic common share		$	0.66			$	0.46			43.5		$	0.72			(8.3	)		$	1.38			$	0.71			94.4
Earnings per diluted common share:
	Income from continuing operations		$	0.60			$	0.42			42.9		$	0.63			(4.8	)		$	1.24			$	0.64			93.8
	Loss from discontinued operations			(0.02	)			(0.02	)		--			--			nm				(0.04	)			(0.02	)		100.0
	Earnings per diluted common share		$	0.58			$	0.40			45.0		$	0.63			(7.9	)		$	1.20			$	0.62			93.5
	Non-GAAP net income from continuing operations1		$	0.68			$	0.61			11.5		$	0.69			(1.4	)		$	1.37			$	1.19			15.1
Weighted average number of common shares outstanding:
	Basic			66,302				64,505			2.8			66,037			0.4				66,167				62,292			6.1
	Diluted			75,641				74,090			2.1			75,691			(0.1	)			75,665				71,627			5.6

Chairman's Comments

"We are pleased with the performance of our private client and investment banking groups, which contributed nicely to our results in a challenging market environment. Our global wealth management segment posted record net revenues and record pre-tax operating contributions in the quarter. Investment banking benefitted from strong equity capital raising and advisory activity. Our institutional brokerage results are reflective of lower industry volumes," stated Ronald J. Kruszewski, Chairman and CEO of Stifel.

"During the second quarter, we announced two acquisitions. Oriel Securities, a London-based stockbroking and investment banking firm, will build out our institutional businesses already underway in London. And, in June, we announced the acquisition of Legg Mason Investment Counsel, which will be complementary to our high net worth private client group."

Brokerage Revenues

Brokerage revenues, defined as commissions and principal transactions revenues, were $278.4 million, a 5% increase compared with the second quarter of 2013 and a 3% decrease compared with the first quarter of 2014.

• Global wealth management brokerage revenues were $161.8 million, a 1% increase compared with the second quarter of 2013 and flat compared with the first quarter of 2014.
• Institutional equity brokerage revenues were $62.1 million, a 3% decrease compared with the second quarter of 2013 and a 6% decrease compared with the first quarter of 2014.
• Institutional fixed income brokerage revenues were $54.5 million, a 33% increase compared with the second quarter of 2013 and a 7% decrease compared with the first quarter of 2014.
  
  

Investment Banking Revenues

Investment banking revenues were $141.5 million, a 19% increase compared with the second quarter of 2013 and a 7% increase compared with the first quarter of 2014.

• Equity capital raising revenues were $65.8 million, a 23% increase compared with the second quarter of 2013 and an 8% increase compared with the first quarter of 2014.
• Fixed income capital raising revenues were $15.4 million, a 13% decrease compared with the second quarter of 2013 and an 18% increase compared with the first quarter of 2014.
• Advisory fee revenues were $60.4 million, a 25% increase compared with the second quarter of 2013 and a 3% increase compared with the first quarter of 2014.
  
  

Asset Management and Service Fee Revenues

Asset management and service fee revenues were $94.2 million, a 24% increase compared with the second quarter of 2013 and a 6% increase compared with the first quarter of 2014. The increase is due to the higher value of fee-based accounts, as a result of market appreciation and new client assets.

Compensation and Benefits Expenses

For the quarter ended June 30, 2014, compensation and benefits expenses were $355.3 million, which included $1.5 million of merger-related expenses, compared with $317.2 million in the second quarter of 2013, and $346.8 million in the first quarter of 2014. Compensation and benefits expense included merger-related expenses of $6.0 million in the second quarter of 2013 and $2.3 million in the first quarter of 2014.

Excluding merger-related expenses, compensation and benefits as a percentage of net revenues was 63.0% in the second quarter of 2014, compared with 62.8% in the second quarter of 2013 and 62.8% in the first quarter of 2014. Transition pay, which primarily consists of amortization of retention awards, signing bonuses, and upfront notes, as a percentage of net revenues was 4.5% in the second quarter of 2014, compared with 4.2% in the second quarter of 2013 and 4.3% in the first quarter of 2014. 

Non-Compensation Operating Expenses

For the quarter ended June 30, 2014, non-compensation operating expenses were $127.4 million, which included merger-related expenses of $4.5 million, compared with $123.9 million in the second quarter of 2013, and $121.8 million in the first quarter of 2014. Non-compensation operating expenses included merger-related expenses of $14.9 million in the second quarter of 2013 and $2.5 million in the first quarter of 2014.

Excluding merger-related expenses, non-compensation operating expenses as a percentage of net revenues for the quarter ended June 30, 2014 was 21.9%, compared with 22.0% in the second quarter of 2013 and 21.8% in the first quarter of 2014.

Provision for Income Taxes

The effective income tax rate for the quarter ended June 30, 2014 was 41.2% compared with 41.2% in the second quarter of 2013, and 38.6% in the first quarter of 2014.

Assets and Capital 

Assets

• Assets increased 13% to $9.6 billion as of June 30, 2014 from $8.5 billion as of June 30, 2013. The increase is primarily attributable to growth of Stifel Bank, the Company's bank subsidiary, which as of June 30, 2014 has grown its assets to $5.1 billion from $4.3 billion as of June 30, 2013.
• At June 30, 2014, the Company's Level 3 assets of $196.2 million, or 2.0% of total assets, consisted of $112.5 million of auction rate securities and $83.7 million of partnership interests, private company investments, private equity, and fixed income securities. The Company's Level 3 assets as a percentage of total assets measured at fair value was 6.6% at June 30, 2014.
• Non-performing assets as a percentage of total assets as of June 30, 2014 was 0.10%.
  
  

Capital 

• The Company's Tier 1 leverage capital ratio was 15.4% at June 30, 2014 and Tier 1 risk-based capital ratio was 25.5% at June 30, 2014.
• At June 30, 2014, book value per common share was $33.18 based on 65.5 million common shares outstanding.
• Stockholders' equity as of June 30, 2014 increased $275.2 million, or 13%, to $2.2 billion from $1.9 billion as of June 30, 2013.
  
  

Conference Call Information 

Stifel Financial Corp. will host its second quarter 2014 financial results conference call on Wednesday, August 6, 2014, at 8:30 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 (888) 676-3684 and referencing conference ID #80900810. A live audio webcast of the call, as well as a presentation highlighting the Company's results, will be available through the Company's web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.

Company Information 

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

Forward-Looking Statements 

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

Summary Results of Operations (Unaudited)

				Three Months Ended																		Six Months Ended
(in thousands, except per share amounts)				6/30/14				6/30/13				% Change			3/31/14				% Change			6/30/14				6/30/13				% Change
Revenues:
	Commissions			$	152,712			$	154,795			(1.3	)		$	159,416			(4.2	)		$	312,128			$	300,662			3.8
	Principal transactions				125,676				111,306			12.9				126,461			(0.6	)			252,137				218,570			15.4
	Investment banking				141,515				119,443			18.5				132,304			7.0				273,819				196,348			39.5
	Asset management and service fees				94,231				76,088			23.8				89,170			5.7				183,401				145,000			26.5
	Other income				8,742				11,787			(25.8	)			5,200			68.1				13,942				32,206			(56.7	)
		Operating revenues			522,876				473,419			10.4				512,551			2.0				1,035,427				892,786			16.0
	Interest revenue				46,113				32,893			40.2				42,826			7.7				88,939				62,699			41.9
		Total revenues			568,989				506,312			12.4				555,377			2.5				1,124,366				955,485			17.7
	Interest expense				8,842				12,634			(30.0	)			8,631			2.4				17,473				23,203			(24.7	)
		Net revenues			560,147				493,678			13.5				546,746			2.5				1,106,893				932,282			18.7
Non-interest expenses:
	Compensation and benefits				355,267				317,247			12.0				346,771			2.4				702,038				632,159			11.1
	Occupancy and equipment rental				42,967				41,282			4.1				40,532			6.0				83,499				74,801			11.6
	Communications and office supplies				25,869				25,456			1.6				24,818			4.2				50,687				47,913			5.8
	Commission and floor brokerage				9,248				9,790			(5.5	)			9,028			2.4				18,276				18,627			(1.9	)
	Other operating expenses				49,273				47,328			4.1				47,469			3.8				96,742				82,549			17.2
		Total non-interest expenses			482,624				441,103			9.4				468,618			3.0				951,242				856,049			11.1
Income from continuing operations before income taxes					77,523				52,575			47.5				78,128			(0.8	)			155,651				76,233			104.2
	Provision for income taxes				31,946				21,659			47.5				30,155			5.9				62,101				30,381			104.4
Net income from continuing operations					45,577				30,916			47.4				47,973			(5.0	)			93,550				45,852			104.0
Discontinued operations:
	Loss from discontinued operations, net of tax				(1,976	)			(1,481	)		33.4				(591	)		234.2				(2,567	)			(1,798	)		42.7
Net income				$	43,601			$	29,435			48.1			$	47,382			(8.0	)		$	90,983			$	44,054			106.5
Earnings per basic common share:
	Income from continuing operations			$	0.69			$	0.48			43.8			$	0.73			(5.5	)		$	1.42			$	0.74			91.9
	Loss from discontinued operations				(0.03	)			(0.02	)		50.0				(0.01	)		200.0				(0.04	)			(0.03	)		33.3
	Earnings per basic common share			$	0.66			$	0.46			43.5			$	0.72			(8.3	)		$	1.38			$	0.71			94.4
Earnings per diluted common share:
	Income from continuing operations			$	0.60			$	0.42			42.9			$	0.63			(4.8	)		$	1.24			$	0.64			93.8
	Loss from discontinued operations				(0.02	)			(0.02	)		--				--			*				(0.04	)			(0.02	)		100.0
	Earnings per diluted common share			$	0.58			$	0.40			45.0			$	0.63			(7.9	)		$	1.20			$	0.62			93.5
Weighted average number of common shares outstanding:
	Basic				66,302				64,505			2.8				66,037			0.4				66,167				62,292			6.1
	Diluted				75,641				74,090			2.1				75,691			(0.1	)			75,665				71,627			5.6
* Percentage not meaningful.

Statistical Information

(in thousands, except per share, employee and location amounts)
			6/30/14			6/30/13			% Change		3/31/14			% Change
Statistical Information:
	Book value per share		$	33.18		$	30.05		10.4		$	32.09		3.4
	Financial advisors (2)			2,085			2,069		0.8			2,081		0.2
	Full-time associates			5,881			5,759		2.1			5,831		0.9
	Locations			361			357		1.1			359		0.6
	Total client assets		$	173,383,000		$	150,628,000		15.1		$	168,899,000		2.7

Business Segment Results

Summary Segment Results (Unaudited)

				Three Months Ended																		Six Months Ended
(in 000s)				6/30/14				6/30/13				% Change			3/31/14				% Change			6/30/14				6/30/13				% Change
Net revenues:
	Global Wealth Management			$	307,247			$	282,717			8.7			$	297,183			3.4			$	604,430			$	549,674			10.0
	Institutional Group				255,712				215,444			18.7				249,977			2.3				505,689				388,744			30.1
	Other				(2,812	)			(4,483	)		37.3				(414	)		(578.9	)			(3,226	)			(6,136	)		47.4
				$	560,147			$	493,678			13.5			$	546,746			2.5			$	1,106,893			$	932,282			18.7
Operating contribution: (1)
	Global Wealth Management			$	89,098			$	78,924			12.9			$	79,676			11.8			$	168,774			$	148,423			13.7
	Institutional Group				42,690				31,083			37.3				45,622			(6.4	)			88,312				59,313			48.9
	Other				(46,858	)			(34,785	)		(34.7	)			(40,726	)		(15.1	)			(87,584	)			(68,523	)		(27.8	)
				$	84,930			$	75,222			12.9			$	84,572			0.4			$	169,502			$	139,213			21.8
As a percentage of net revenues:
	Compensation and benefits
		Global Wealth Management			55.9				57.7							58.6							57.2				58.4
		Institutional Group			61.6				61.5							61.6							61.6				61.5
	Non-comp. operating expenses
		Global Wealth Management			15.1				14.4							14.6							14.9				14.6
		Institutional Group			21.7				24.1							20.1							20.9				23.2
	Income before income taxes
		Global Wealth Management			29.0				27.9							26.8							27.9				27.0
		Institutional Group			16.7				14.4							18.3							17.5				15.3
					15.1				15.2							15.4							15.3				14.9

Global Wealth Management Summary Results of Operations (Unaudited)

				Three Months Ended															Six Months Ended
(in 000s)				6/30/14			6/30/13			% Change			3/31/14			% Change			6/30/14			6/30/13			% Change
Revenues:
	Commissions			$	107,438		$	104,576		2.7			$	107,739		(0.3	)		$	215,177		$	206,662		4.1
	Principal transactions				54,342			56,313		(3.5	)			53,766		1.1				108,108			112,620		(4.0	)
	Asset management and service fees				94,187			75,976		24.0				89,130		5.7				183,317			144,910		26.5
	Net interest				35,839			24,505		46.2				35,262		1.6				71,101			45,991		54.6
	Investment banking				9,892			15,334		(35.5	)			9,926		(0.3	)			19,818			26,437		(25.0	)
	Other income				5,549			6,013		(7.7	)			1,360		307.9				6,909			13,054		(47.1	)
		Net revenues			307,247			282,717		8.7				297,183		3.4				604,430			549,674		10.0
Non-interest expenses:
	Compensation and benefits				171,724			163,156		5.3				174,168		(1.4	)			345,892			320,752		7.8
	Non-compensation operating expenses				46,425			40,637		14.2				43,339		7.1				89,764			80,499		11.5
		Total non-interest expenses			218,149			203,793		7.0				217,507		0.3				435,656			401,251		8.6
Income before income taxes				$	89,098		$	78,924		12.9			$	79,676		11.8			$	168,774		$	148,423		13.7
As a percentage of net revenues:
	Compensation and benefits				55.9			57.7						58.6						57.2			58.4
	Non-compensation operating expenses				15.1			14.4						14.6						14.9			14.6
	Income before income taxes				29.0			27.9						26.8						27.9			27.0

Stifel Bank & Trust (Unaudited)
Key Statistical Information
(in 000s, except percentages)			6/30/14				6/30/13				% Change			3/31/14				% Change
Other information:
	Assets		$	5,050,036			$	4,306,447			17.3			$	4,994,215			1.1
	Investment securities			2,915,235				2,956,073			(1.4	)			3,083,902			(5.5	)
	Retained loans, net			1,773,853				984,765			80.1				1,514,465			17.1
	Loans held for sale			119,477				152,246			(21.5	)			102,367			16.7
	Deposits			4,653,656				4,007,050			16.1				4,605,260			1.1
	Allowance as a percentage of loans			0.97	%			1.10	%						0.94	%
	Non-performing assets as a percentage of total assets			0.10	%			0.03	%						0.03	%

Institutional Group Summary Results of Operations (Unaudited)

				Three Months Ended															Six Months Ended
(in 000s)				6/30/14			6/30/13			% Change			3/31/14			% Change			6/30/14			6/30/13			% Change
Revenues:
	Commissions			$	45,274		$	50,219		(9.8	)		$	51,677		(12.4	)		$	96,951		$	94,000		3.1
	Principal transactions				71,333			54,993		29.7				72,695		(1.9	)			144,028			105,950		35.9
	Capital raising				71,268			55,969		27.3				63,878		11.6				134,873			94,715		42.4
	Advisory fees				60,356			48,140		25.4				58,500		3.2				119,129			75,196		58.4
	Investment banking				131,624			104,109		26.4				122,378		7.6				254,002			169,911		49.5
	Other (3)				7,481			6,123		22.2				3,227		131.8				10,708			18,883		(43.3	)
		Net revenues			255,712			215,444		18.7				249,977		2.3				505,689			388,744		30.1
Non-interest expenses:
	Compensation and benefits				157,499			132,397		19.0				154,016		2.3				311,515			239,218		30.2
	Non-compensation operating expenses				55,523			51,964		6.8				50,339		10.3				105,862			90,213		17.3
		Total non-interest expenses			213,022			184,361		15.5				204,355		4.2				417,377			329,431		26.7
Income before income taxes				$	42,690		$	31,083		37.3			$	45,622		(6.4	)		$	88,312		$	59,313		48.9
As a percentage of net revenues:
	Compensation and benefits				61.6			61.5						61.6						61.6			61.5
	Non-compensation operating expenses				21.7			24.1						20.1						20.9			23.2
	Income before income taxes				16.7			14.4						18.3						17.5			15.3

Institutional Group Brokerage & Investment Banking Revenues (Unaudited)

				Three Months Ended															Six Months Ended
(in 000s)				6/30/14			6/30/13			% Change			3/31/14			% Change			6/30/14			6/30/13			% Change
Institutional brokerage:
	Equity			$	62,087		$	64,273		(3.4	)		$	65,768		(5.6	)		$	127,855		$	113,511		12.6
	Fixed income				54,520			40,939		33.2				58,604		(7.0	)			113,124			86,439		30.9
Institutional brokerage					116,607			105,212		10.8				124,372		(6.2	)			240,979			199,950		20.5
Investment banking:
	Capital raising:
	Equity				51,903			41,891		23.9				44,476		16.7				96,291			64,822		48.5
	Fixed income				19,365			14,078		37.6				19,402		(0.2	)			38,582			29,893		29.1
		Capital raising			71,268			55,969		27.3				63,878		11.6				134,873			94,715		42.4
	Advisory fees:				60,356			48,140		25.4				58,500		3.2				119,129			75,196		58.4
Investment banking				$	131,624		$	104,109		26.4			$	122,378		7.6			$	254,002		$	169,911		49.5

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 additional measures to aid in understanding and analyzing the Company's financial results for the three and six months ended June 30, 2014. 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. These non-GAAP amounts exclude certain compensation and non-compensation operating expenses associated with the recent acquisitions.

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 six months ended June 30, 2014 to the aforementioned expenses on a non-GAAP basis for the same period.

				Three Months Ended June 30, 2014										Six Months Ended June 30, 2014
(in 000s, except per share amounts)				Non-GAAP			Non-Core				GAAP			Non-GAAP			Non-Core				GAAP
Net revenues				$	561,495		$	(1,348	)		$	560,147		$	1,109,930		$	(3,037	)		$	1,106,893
Non-interest expenses:
	Compensation and benefits				353,754			1,513				355,267			698,241			3,797				702,038
	Non-compensation operating expenses				122,811			4,546				127,357			242,187			7,017				249,204
		Total non-interest expenses			476,565			6,059				482,624			940,428			10,814				951,242
	Income from continuing operations before income taxes				84,930			(7,407	)			77,523			169,502			(13,851	)			155,651
	Provision for income taxes				33,664			(1,718	)			31,946			66,208			(4,107	)			62,101
Net income from continuing operations				$	51,266		$	(5,689	)		$	45,577		$	103,294		$	(9,744	)		$	93,550
Earnings per share::
	Basic			$	0.77		$	(0.08	)		$	0.69		$	1.56		$	(0.14	)		$	1.42
	Diluted			$	0.68		$	(0.08	)		$	0.60		$	1.37		$	(0.13	)		$	1.24
As a percentage of net revenues:
	Compensation and benefits				63.0							63.4			62.9							63.4
	Non-compensation operating expenses				21.9							22.8			21.8							22.5
	Income before income taxes				15.1							13.8			15.3							14.1

¹ A reconciliation of the Company's GAAP results to these non-GAAP measures is discussed under "Non-GAAP Financial Measures."
² Includes 140, 145 and 141 independent contractors at June 30, 2014, June 30, 2013, and March 31, 2014, respectively.
³ Includes net interest and other income.