UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant To Section 13 OR 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2014

 

 

STIFEL FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

 

 

 

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

(Commission

File Number)

  

(IRS Employer

Identification No.)

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

(Address of principal executive offices and zip code)

(314) 342-2000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.02 Results of Operations and Financial Condition.

On August 6, 2014, Stifel Financial Corp. (“Stifel”) reported its financial results for the three months ended June 30, 2014. A copy of the related press release is attached hereto as Exhibit 99.1.

Stifel will hold a conference call on Wednesday, August 6, 2014, at 8:30 a.m. Eastern time. A live audio webcast of the call, as well as a presentation highlighting the company’s results, will be available through Stifel’s web site, www.stifel.com, as well as on all sites within Thomson/CCBN’s Investor Distribution Network. All interested parties are invited to participate by dialing (888) 676-3684 and referencing conference ID #80900810. The conference call slide show is attached hereto as Exhibit 99.2.

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

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
Number

   

Description of Exhibit

99.1    Press release dated August 6, 2014.
99.2    Investor presentation.

 

2

SIGNATURE

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

 

      STIFEL FINANCIAL CORP.
Date: August 6, 2014     By:  

/s/ James M. Zemlyak

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

 

3

EXHIBIT INDEX

 

Exhibit
Number

   

Description of Exhibit

99.1    Press release dated August 6, 2014.
99.2    Investor presentation.

 

4

EX-99.1

Exhibit 99.1

 

LOGO

STIFEL REPORTS SECOND QUARTER 2014 FINANCIAL RESULTS

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.

ST. LOUIS, August 6, 2014 – 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 operations1

    $ 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   

 

1  A reconciliation of the Company’s GAAP results to these non-GAAP measures is discussed under “Non-GAAP Financial Measures.”

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.

 

2

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.

 

3

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.

 

4

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.

 

5

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.

 

6

    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.

 

7

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: 3

                 

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     
  

 

 

    

 

 

      

 

 

      

 

 

    

 

 

    

 

2  Includes 140, 145 and 141 independent contractors at June 30, 2014, June 30, 2013, and March 31, 2014, respectively.
3  A reconciliation of the Company’s GAAP results to these non-GAAP measures is discussed under “Non-GAAP Financial Measures.”

 

8

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 %   

 

9

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 4

      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   
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

 

 

4  Includes net interest and other income.

 

10

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   

Investor Relations

Sarah Anderson

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

 

11

EX-99.2
2
nd
Quarter 2014
Financial Results Presentation
August 6, 2014
Exhibit 99.2

1
Disclaimer
Forward-Looking Statements
Use of Non-GAAP Financial Measures
The Company utilized non-GAAP calculations of presented net revenues, compensation and benefits, non-compensation operating
expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expense
ratios, pre-tax margin and diluted earnings per share as an additional measure to aid in understanding and analyzing the Company’s
financial results for the 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 periods and future periods.
Reference to these non-GAAP measures should not be considered as a substitute for results that are presented in a manner consistent
with GAAP. These non-GAAP measures are provided to enhance investors' overall understanding of the Company’s financial performance.
This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that
involve significant risks, assumptions, and uncertainties, including statements relating to the market opportunity and future business
prospects of Stifel Financial Corp., as well as Stifel, Nicolaus & Company, Incorporated and its subsidiaries (collectively, “SF” or the
“Company”).  These statements can be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,”
“estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” and similar expressions.  In particular, these statements may refer to our
goals, intentions, and expectations, our business plans and growth strategies, our ability to integrate and manage our acquired businesses,
estimates of our risks and future costs and benefits, and forecasted demographic and economic trends relating to our industry.
You should not place undue reliance on any forward-looking statements, which speak only as of the date they were made.  We will not
update these forward-looking statements, even though our situation may change in the future, unless we are obligated to do so under federal
securities laws.  
Actual results may differ materially and reported results should not be considered as an indication of future performance.  Factors that could
cause actual results to differ are included in the Company’s annual and quarterly reports and from time to time in other reports filed by the
Company with the Securities and Exchange Commission and include, among other things, changes in general economic and business
conditions, actions of competitors, regulatory and legal actions, changes in legislation, and technology changes.

2
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.
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.”

Market Overview
3
Date
S&P 500
10yr
Risk Premium
6/30/2014
5.51%
less
2.53%
=
2.98%
12/31/2013
5.54%
less
3.04%
=
2.50%
6/28/2013
6.48%
less
2.52%
=
3.96%
Equity Risk Premium
Rates
Flows
Period
S&P 500
Dow
U.S. 10yr
Yield
VIX
Equity
ADV
Corporate
Bond ADV
Equity
Mutual
Fund ($)
U.S. ECM
($)
U.S. DCM
($)
Municipal
Bond DCM
($)
U.S.
Announced
M&A ($)
U.S.
Completed
M&A ($)
2014 Q2
1,960
16,827
2.53%
11.6
6,053
21,086
11.0
83,276
511,307
88,100
437,829
202,682
2014 Q1
1,872
16,458
2.72%
13.9
6,944
21,854
56.2
58,733
546,728
63,600
300,917
345,386
2Q
5%
2%
-19 bps
-17%
-13%
-4%
-81%
42%
-6%
39%
45%
-41%
6M 2014
1,960
16,827
2.53%
11.6
6,453
42,940
67.2
142,009
1,058,036
151,700
738,746
548,069
6M 2013
1,606
14,910
2.49%
16.9
6,441
41,021
70.4
136,510
1,194,511
176,800
517,109
469,376
YTD
6%
2%
-51 bps
-16%
6M/6M
0%
5%
-5%
4%
-11%
-14%
43%
17%
Underwriting Volumes and M&A
Volatility / Volumes
Market Valuations
(1)
Volumes are in million $, except trading volumes which are in million shares.
Source: Dealogic, SIFMA, ICI, KBW Research.

Financial
Results

Stifel Financial Corp. Results
Three months ended June 30, 2014
5
(1)
Non-core adjustments consist of merger-related revenues and expenses associated with our recent acquisitions and discontinued
operations of SN Canada.
(2)
Results for the three months ended June 30, 2013 and March 31, 2014 are Core (non-GAAP).
_________________________________________________________
(1)
(2)
(2)
($ in thousands, except per share amounts)
Non-GAAP
Non-Core
GAAP
6/30/13
% Change
3/31/14
% Change
Total revenues
570,543
$      
(1,554)
$         
568,989
$      
508,022
$      
12.3%
557,288
$   
2.4%
Interest expense
9,048
(206)
8,842
12,608
(28.2%)
8,853
2.2%
Net revenues
561,495
(1,348)
560,147
495,414
13.3%
548,435
2.4%
Compensation and benefits
353,754
1,513
355,267
311,228
13.7%
344,487
2.7%
Non-comp operating expenses
122,811
4,546
127,357
108,964
12.7%
119,376
2.9%
Total non-interest expenses
476,565
6,059
482,624
420,192
13.4%
463,863
2.7%
Income from continuing operations before income taxes
84,930
(7,407)
77,523
75,222
12.9%
84,572
0.4%
Provision for income taxes
33,664
(1,718)
31,946
30,089
11.9%
32,544
3.4%
Net income from continuing operations
51,266
$        
(5,689)
$         
45,577
$        
45,133
$        
13.6%
52,028
$     
(1.5%)
Discontinued operations:
Loss from discontinued operations, net of tax
-
(1,976)
(1,976)
-
-
Net income
51,266
$        
(7,665)
$         
43,601
$        
45,133
$        
13.6%
52,028
$     
(1.5%)
Earnings per diluted common share:
Income from continuing operations
0.68
$             
(0.08)
$           
0.60
$             
0.69
$             
(1.4%)
0.69
$          
(1.4%)
Loss from discontinued operations
-
(0.02)
(0.02)
-
-
Earnings per diluted common share
0.68
$             
(0.10)
$           
0.58
$             
0.69
$             
(1.4%)
0.69
$          
(1.4%)
Weighted average number of shares outstanding:
Diluted
75,641
74,090
2.1%
75,691
(0.1%)
Ratios to net revenues:
Compensation and benefits
63.0%
63.4%
62.8%
62.8%
Non-comp operating expenses
21.9%
22.8%
22.0%
21.8%
Income from continuing operations before income taxes
15.1%
13.8%
15.2%
15.4%
Three Months Ended June 30, 2014
Three Months Ended

Stifel Financial Corp. Results
Six months ended June 30, 2014
6
(1)
Non-core adjustments consist of merger-related revenues and expenses associated with our recent acquisitions and discontinued
operations of SN Canada.
(2)
Results for the six months ended June 30, 2013 are Core (non-GAAP). 
_________________________________________________________
(1)
(2)
($ in thousands, except per share amounts)
Non-GAAP
Non-Core
GAAP
6/30/13
% Change
Total revenues
1,127,831
$   
(3,465)
$          
1,124,366
$   
957,202
$       
17.8%
Interest expense
17,901
           
(428)
                 
17,473
           
23,176
           
(22.8%)
Net revenues
1,109,930
     
(3,037)
            
1,106,893
     
934,026
         
18.8%
Compensation and benefits
698,241
         
3,797
              
702,038
         
592,355
         
17.9%
Non-comp operating expenses
242,187
         
7,017
              
249,204
         
202,458
         
19.6%
Total non-interest expenses
940,428
         
10,814
           
951,242
         
794,813
         
18.3%
Income from continuing operations before income taxes
169,502
         
(13,851)
          
155,651
         
139,213
         
21.8%
Provision for income taxes
66,208
           
(4,107)
            
62,101
           
54,022
           
22.6%
Net income from continuing operations
103,294
$       
(9,744)
$          
93,550
$         
85,191
$         
21.2%
Discontinued operations:
Loss from discontinued operations, net
-
                   
(2,567)
            
(2,567)
            
Net income
103,294
$       
(12,311)
$       
90,983
$         
85,191
$         
21.2%
Earnings per diluted common share:
Income from continuing operations
1.37
$              
(0.13)
$            
1.24
$              
1.19
$              
15.1%
Loss from discontinued operations, net
-
                   
(0.04)
              
(0.04)
              
Earnings per diluted common share
1.37
$              
(0.17)
$            
1.20
$              
1.19
$              
15.1%
Weighted average number of shares outstanding:
Diluted
75,665
71,627
5.6%
Ratios to net revenues
:
Compensation and benefits
62.9%
63.4%
63.4%
Non-comp operating expenses
21.8%
22.5%
21.7%
Income from continuing operations before income taxes
15.3%
14.1%
14.9%
Six Months Ended June 30, 2014
Six Months Ended

Source of Revenues
7
($ in thousands)
6/30/14
6/30/13
%
Change
3/31/14
%
Change
6/30/14
6/30/13
%
Change
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%
Brokerage revenues
278,388
266,101
4.6%
285,877
(2.6%)
564,265
519,232
8.7%
Capital raising
81,159
71,303
13.8%
73,804
10.0%
154,690
121,152
27.7%
Advisory
60,356
48,140
25.4%
58,500
3.2%
119,129
75,196
58.4%
Investment banking
141,515
119,443
18.5%
132,304
7.0%
273,819
196,348
39.5%
Asset mgt and service fees
94,231
76,088
23.8%
89,170
5.7%
183,401
145,000
26.5%
Other
8,742
11,787
(25.8%)
5,200
68.1%
13,942
32,206
(56.7%)
Total 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%
Three Months Ended
Six Months Ended

Brokerage & Investment Banking Revenues
8
($ in thousands)
6/30/14
6/30/13
% Change
3/31/14
% Change
6/30/14
6/30/13
% Change
Global Wealth Management
161,780
$ 
160,889
$ 
0.6%
161,505
$ 
0.2%
323,285
$ 
319,262
$ 
1.3%
Institutional Group
Equity brokerage
62,087
64,273
(3.4%)
65,768
(5.6%)
127,855
113,511
12.6%
Fixed income brokerage
54,520
40,939
33.2%
58,604
(7.0%)
113,124
86,439
30.9%
Total Institutional Group
116,607
105,212
10.8%
124,372
(6.2%)
240,979
199,950
20.5%
Total brokerage revenues
278,387
266,101
4.6%
285,877
(2.6%)
564,264
519,212
8.7%
Investment Banking:
Capital raising
Equity
65,750
53,577
22.7%
60,696
8.3%
126,174
85,172
48.1%
Fixed income
15,409
17,726
(13.1%)
13,108
17.6%
28,516
35,980
(20.7%)
Total capital raising
81,159
71,303
13.8%
73,804
10.0%
154,690
121,152
27.7%
Advisory fees
60,356
48,140
25.4%
58,500
3.2%
119,129
75,196
58.4%
Total Investment banking
141,515
119,443
18.5%
132,304
7.0%
273,819
196,348
39.5%
Three Months Ended
Six Months Ended

Core Non-Interest Expenses
Three months ended June 30, 2014
9
_________________________________________________________
(1)
Excludes non-core  adjustments consisting of merger-related revenues and expenses associated with our recent acquisitions and discontinued operations of SN Canada.
(2)
Transition pay includes amortization of retention awards, signing bonuses, and upfront notes.
($ in thousands)
6/30/14
(1)
6/30/13
% Change
3/31/14
% Change
6/30/14
(1)
6/30/13
3/31/14
Net revenues
561,495
$    
495,414
$    
13.3%
548,435
$    
2.4%
100.0%
100.0%
100.0%
Compensation and benefits
328,380
290,511
13.0%
321,035
2.3%
58.5%
58.6%
58.5%
Transitional pay
(2)
25,374
20,717
22.5%
23,452
8.2%
4.5%
4.2%
4.3%
Total compensation and benefits
353,754
311,228
13.7%
344,487
2.7%
63.0%
62.8%
62.8%
Occupancy and equipment rental
40,493
37,768
7.2%
39,570
2.3%
7.2%
7.6%
7.2%
Communication and office supplies
25,691
24,124
6.5%
24,801
3.6%
4.6%
4.9%
4.5%
Commissions and floor brokerage
9,248
9,374
(1.3%)
9,028
2.4%
1.6%
1.9%
1.6%
Other operating expenses
47,379
37,698
25.7%
45,977
3.0%
8.4%
7.6%
8.5%
Total non-comp operating expenses
122,811
108,964
12.7%
119,376
2.9%
21.9%
22.0%
21.8%
Total non-interest expense
476,565
420,192
13.4%
463,863
2.7%
84.9%
84.8%
84.6%
Income from continuing operations before income taxes
84,930
75,222
12.9%
84,572
0.4%
15.1%
15.2%
15.4%
Provision for income taxes
33,664
30,089
11.9%
32,544
3.4%
6.0%
6.1%
5.9%
Non-GAAP net income from continuing operations
51,266
$      
45,133
$      
13.6%
52,028
$      
(1.5%)
9.1%
9.1%
9.5%
Non-core expenses (after-tax)
(5,689)
(14,217)
(4,055)
GAAP net income from continuing operations
45,577
$      
30,916
$      
47,973
$      
Three Months Ended
% of Net revenues

Core Non-Interest Expenses
Six months ended June 30, 2014
10
_________________________________________________________
(1)
Excludes non-core  adjustments consisting of merger-related revenues and expenses associated with our recent acquisitions and discontinued operations of SN
Canada.
(2)
Transition pay includes amortization of retention awards, signing bonuses, and upfront notes.
($ in thousands)
6/30/14
(1)
6/30/13
% Change
6/30/14
(1)
6/30/13
Net revenues
1,109,930
$ 
934,026
$    
18.8%
100.0%
100.0%
Compensation and benefits
649,415
550,812
17.9%
58.5%
59.1%
Transitional pay
(2)
48,826
41,543
17.5%
4.4%
4.4%
Total compensation and benefits
698,241
592,355
17.9%
62.9%
63.4%
Occupancy and equipment rental
80,063
68,741
16.5%
7.2%
7.4%
Communication and office supplies
50,492
45,459
11.1%
4.5%
4.9%
Commissions and floor brokerage
18,276
17,823
2.5%
1.6%
1.9%
Other operating expenses
93,356
70,435
32.5%
8.4%
7.6%
Total non-comp operating expenses
242,187
202,458
19.6%
21.8%
21.7%
Total non-interest expense
940,428
794,813
18.3%
84.7%
85.1%
Income from continuing operations before income taxes
169,502
139,213
21.8%
15.3%
14.9%
Provision for income taxes
66,208
54,022
22.6%
6.0%
5.8%
Non-GAAP net income from continuing operations
103,294
$    
85,191
$      
21.2%
9.3%
9.1%
Non-core expenses (after-tax)
(9,744)
(39,339)
GAAP net income from continuing operations
93,550
$      
45,852
$      
Six Months Ended
% of Net revenues

11
Three Months Ended
($ in thousands)
3/31/14
6/30/14
9/30/14
12/31/14
Acquisitions
Acacia Federal Savings Bank
1,723
$      
2,762
$      
De La Rosa & Co., Inc.
130
            
765
            
Keefe, Bruyette & Woods, Inc.
1,008
         
1,657
         
Knight Fixed Income
2,407
         
94
              
Miller Buckfire & Co., LLC
1,172
         
1,233
         
Ziegler Capital Management
4
                 
11
              
6,444
         
6,522
         
4,000
         
2,500
         
Oriel Securities Holding Limited
-
             
557
            
Legg Mason Invesment Counsel
-
             
328
            
Total Deal Costs (Pre-tax)
6,444
$      
7,407
$      
4,000
$      
2,500
$      
Discontinued Operations, net
(591)
$        
(1,976)
$     
(200)
$        
-
$           
Actual
Estimate
Undetermined
Undetermined
Non-Core Deal Costs

Segment Comparison -
Core
12
(1)
Excludes the other segment.
_________________________________________________________
($ in thousands)
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
(1,464)
(2,747)
46.7%
1,275
(214.8%)
(189)
(4,392)
95.7%
561,495
$ 
495,414
$ 
13.3%
548,435
$ 
2.4%
1,109,930
$
934,026
$  
18.8%
Operating contribution:
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%
Operating contribution
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
As a percentage of net revenues:
(1)
Three Months Ended
Six Months Ended

Non Comp Operating Expenses by Segment -
Core
13
($ in thousands)
6/30/14
6/30/13
%
Change
3/31/14
%
Change
6/30/14
6/30/13
%
Change
Non-comp operating expenses:
Global Wealth Management
46,425
$    
40,637
$    
14.2%
43,339
$    
7.1%
89,764
$     
80,499
$     
11.5%
Institutional Group
55,523
      
51,964
      
6.8%
50,399
      
10.2%
105,862
     
90,213
       
17.3%
Other
20,863
      
16,363
      
27.5%
25,638
      
(18.6%)
46,561
       
31,746
       
46.7%
122,811
$  
108,964
$  
12.7%
119,376
$  
2.9%
242,187
$   
202,458
$   
19.6%
Three Months Ended
Six Months Ended
(1)
Excludes the other segment.
_________________________________________________________

Global Wealth Management
($ in thousands)
6/30/14
6/30/13
% Change
3/31/14
% Change
6/30/14
6/30/13
% Change
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 & 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%
Compensation and benefits
171,724
     
163,156
     
5.3%
174,168
     
(1.4%)
345,892
     
320,752
     
7.8%
Non-comp 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%
Ratios to net revenues
:
Compensation and benefits
55.9%
57.7%
58.6%
57.2%
58.4%
Non-comp 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%
Three Months Ended
Six Months Ended
14

Stifel Bank & Trust
(an operating unit of GWM)
15
Note:  Actual amounts presented above are as of period-end and yields are based off of quarter-to-date averages.
(1)
Investment securities includes available-for-sale and held-to-maturity securities.
(2)
Includes loans held for sale.
_________________________________________________________
Actual ($)
Yield (%)
Actual ($)
Yield (%)
Actual ($)
Yield (%)
Q214 v Q213
Q214 v Q114
Assets
Federal funds sold
132,152
0.37
110,514
0.24
181,438
0.55
19.6
(27.2)
Investment securities
(1)
2,915,235
2.47
2,956,073
2.14
3,083,902
2.54
(1.4)
(5.5)
Bank loans
(2)
1,893,330
3.38
1,137,011
3.35
1,616,832
3.49
66.5
17.1
Total interest earning assets
4,940,717
2.73
4,203,598
2.42
4,882,172
2.67
17.5
1.2
Other assets (non-interest earning)
109,319
102,849
112,043
6.3
(2.4)
Total assets
5,050,036
4,306,447
4,994,215
17.3
1.1
Liabilities
Deposits
4,653,656
0.14
4,007,050
0.31
4,605,260
0.15
16.1
1.1
Other liabilities (non-interest bearing)
26,182
14,410
37,265
81.7
(29.7)
Total liabilites
4,679,838
4,021,460
4,642,525
16.4
0.8
Net interest margin
2.59
2.13
2.53
Allowance for loan losses
17,104
$        
10,919
$             
14,131
$            
56.6
21.0
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
%
% Change
As of 6/30/14
As of 6/30/13
As of 3/31/14

Institutional Group
16
($ in thousands)
6/30/14
6/30/13
% Change
3/31/14
% Change
6/30/14
6/30/13
% Change
Net revenues
255,712
$  
215,444
$  
18.7%
249,977
$  
2.3%
505,689
$  
388,744
$  
30.1%
Compensation and benefits
157,499
132,397
19.0%
154,016
2.3%
311,515
239,218
30.2%
Non-comp 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%
Ratios to net revenues :
Compensation and benefits
61.6%
61.5%
61.6%
61.6%
61.5%
Non-comp 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%
Three Months Ended
Six Months Ended

Financial
Condition

Capital Structure
As of June 30, 2014
(in thousands, except ratios)
18
_________________________________________________________
(1)
(2)
($ in thousands)
Total Assets
9,575,012
$ 
Stockholders' Equity
2,173,191
$ 
6.70% senior notes, due 2022
175,000
$    
5.375% senior notes, due 2022
150,000
Debentures to Stifel Financial Capital Trusts II, III, & IV
82,500
Total Capitalization
2,580,691
$ 
4.250% senior notes, due 2024
300,000
Total Capitalization (pro forma)
2,880,691
$ 
Ratios:
Debt to Equity
(1)
18.8%
Pro Forma Debt to Equity
(2)
32.6%
Tier 1 Leverage Ratio
15.4%
Tier 1 Risk Based Capital Ratio
25.5%
Debt to equity ratio includes the debentures to Stifel Financial Capital Trusts ($82.5m) and Senior Notes ($325.0m) divided by 
stockholders’ equity.
Pro forma debt to equity ratio includes the $300.0 million, 4.250% senior notes issued in July 2014.

19
Other Financial Data
(1)
_________________________________________________________
As of
6/30/14
6/30/13
% Change
3/31/14
% Change
Total assets (000s):
Stifel Nicolaus & Stifel Financial
4,524,976
$         
4,186,744
$      
8.1%
4,393,599
$      
3.0%
Stifel Bank
5,050,036
4,306,447
17.3%
4,994,215
1.1%
Total assets
9,575,012
$         
8,493,191
$      
12.7%
9,387,814
$      
2.0%
Total shareholders' equity (000s):
Stifel Nicolaus & Stifel Financial
1,802,993
$         
1,613,003
$      
11.8%
1,748,450
$      
3.1%
Stifel Bank
370,198
284,987
29.9%
351,690
5.3%
Total shareholders' equity
2,173,191
$         
1,897,990
$      
14.5%
2,100,140
$      
3.5%
Leverage ratio:
Stifel Nicolaus & Stifel Financial
2.0
2.0
1.4%
2.0
0.4%
Stifel Bank
13.6
15.1
(9.7%)
14.2
(3.9%)
Total leverage ratio
3.7
3.6
3.0%
3.7
(0.9%)
Book value per share
33.18
$                  
30.05
$              
10.4%
32.09
$              
3.4%
Financial advisors
(1)
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 (000s)
173,383,000
$    
150,628,000
$ 
15.1%
168,899,000
$ 
2.7%
As of
Includes 140, 145 and 141 independent contractors as of June 30, 2014, June 30, 2013, and March 31, 2014.

Acquisition Updates
Investment Counsel
20
Closed April 3, 2014
Fully integrated into Stifel’s Public Finance business
Ranked #1 senior manager in the first six months of
2014 in California in terms of dollar volume and the
number of issues underwritten
Closed July 31, 2014
Business as usual through the balance of 2014
Integration and conversion efforts scheduled for
Q1 2015
Expected to close in the fourth quarter 2014
Working through customary regulatory, mutual fund 
conversion, and account change processes

21
Acquisition Updates
Closed November 30, 2013
Strong asset and earnings growth since the acquisition
New asset management strategies and coordinated marketing
with Stifel’s existing asset management platform 
Closed February 15, 2013
2Q 2014 was KBW’s best quarter since 1Q 2011
Improving market share –
Advised 7 of top 10 bank mergers
in 1H14.
Client facing and major systems integration completed
Closed October 31, 2013
Single branch location closed; Cost saving targets fully achieved
>5% yield on 1-4 family loan portfolio, short duration (avg ~1 year
to re-price)
Annualized run rate on pace to exceed target of $10mm/year
Closed July 1, 2013
Revenue expectations achieved

Q&A