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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): October 26, 2022
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)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
||
| Common Stock, $0.15 par value per share | SF | New York Stock Exchange | ||
| Depository Shares, each representing 1/1,000th interest in a share of 6.25% Non-Cumulative Preferred Stock, Series B | SF-PB | New York Stock Exchange | ||
| Depository Shares, each representing 1/1,000th interest in a share of 6.125% Non-Cumulative Preferred Stock, Series C | SF-PC | New York Stock Exchange | ||
| Depository Shares, each representing 1/1,000th interest in a share of 4.50% Non-Cumulative Preferred Stock, Series D | SF-PD | New York Stock Exchange | ||
| 5.20% Senior Notes due 2047 | SFB | New York Stock Exchange |
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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
On October 26, 2022, Stifel Financial Corp. (“Stifel” or the “Company”) reported its financial results for the quarter ended September 30, 2022. A copy of the press release containing this information is attached as Exhibit 99.1 to this Report on Form 8-K.
In addition, a copy of the Company’s Financial Supplement for the quarter ended September 30, 2022 is attached as Exhibit 99.2 to this Report on Form 8-K.
On Wednesday, October 26, 2022, at 9:30 a.m. Eastern time, the Company will hold a conference call to discuss its financial results and other related matters. A copy of the presentation for the conference call is attached as Exhibit 99.3 to this Report on Form 8-K.
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 into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description |
|
| 99.1 | Press release dated October 26, 2022. | |
| 99.2 | Financial Supplement for the quarter ended September 30, 2022. | |
| 99.3 | Financial Results Presentation, dated October 26, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
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. (Registrant) |
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| Date: October 26, 2022 | By: | /s/ James M. Marischen |
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| Name: | James M. Marischen | |||||
| Title: | Chief Financial Officer | |||||
3
Exhibit 99.1
Stifel Reports Third Quarter 2022 Results
ST. LOUIS, MO, October 26, 2022 – Stifel Financial Corp. (NYSE: SF) today reported net revenues of $1.0 billion for the three months ended September 30, 2022, compared with $1.1 billion a year ago. Net income available to common shareholders of $141.8 million, or $1.21 per diluted common share, compared with $182.7 million, or $1.54 per diluted common share for the third quarter of 2021. Non-GAAP net income available to common shareholders of $150.8 million, or $1.29 per diluted common share for the third quarter of 2022.
Ronald J. Kruszewski, Chairman and Chief Executive Officer, said “Stifel posted strong results, led by our Global Wealth Management segment, which generated its seventh consecutive record quarter. For the first nine months of the year, we are on track to record our second-strongest annual revenue and earnings per share. Our diversified business model continues to generate strong returns as our year-to-date return on tangible common equity is more than 21% and we are well positioned to not only return excess capital to shareholders, but to fund further growth in our business.”
Highlights
| • | The Company reported solid results with net revenues of $1.0 billion primarily driven by higher net interest income. |
| • | Non-GAAP net income available to common shareholders of $1.29. |
| • | Record net interest income, up 85% over the year ago quarter. |
| • | Recruited 36 financial advisors during the quarter, including 14 experienced employee advisors and 2 experienced independent advisors. |
| • | Bank loans up $1.6 billion, or 9%, sequentially, and $7.3 billion, or 53%, from the prior year. |
| • | Non-GAAP pre-tax margin of 21% as the Company maintained its focus on expense discipline, while continuing to invest in the business. In addition, the Company gained operating leverage as a result of the composition of revenues compared to the prior year. |
| • | Annualized return on tangible common equity (ROTCE) (5) of 19%. |
| • | Tangible book value per common share (7) of $29.63, up 8% from prior year. |
| Financial Summary (Unaudited) | ||||||||||||||||
| (000s) |
3Q 2022 | 3Q 2021 | 9m 2022 | 9m 2021 | ||||||||||||
| GAAP Financial Highlights: |
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| Net revenues |
$ | 1,045,139 | $ | 1,144,938 | $ | 3,269,792 | $ | 3,432,863 | ||||||||
| Net income (1) |
$ | 141,849 | $ | 182,687 | $ | 457,573 | $ | 537,201 | ||||||||
| Diluted EPS (1) |
$ | 1.21 | $ | 1.54 | $ | 3.89 | $ | 4.54 | ||||||||
| Comp. ratio |
58.5 | % | 58.7 | % | 59.3 | % | 60.1 | % | ||||||||
| Non-comp. ratio |
21.8 | % | 18.9 | % | 20.8 | % | 18.1 | % | ||||||||
| Pre-tax margin |
19.7 | % | 22.4 | % | 19.9 | % | 21.8 | % | ||||||||
| Non-GAAP Financial Highlights: |
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| Net revenues |
$ | 1,045,133 | $ | 1,144,938 | $ | 3,269,847 | $ | 3,433,016 | ||||||||
| Net income (1) (2) |
$ | 150,756 | $ | 195,653 | $ | 490,196 | $ | 574,145 | ||||||||
| Diluted EPS (1) (2) |
$ | 1.29 | $ | 1.65 | $ | 4.17 | $ | 4.85 | ||||||||
| Comp. ratio (2) |
58.0 | % | 58.2 | % | 58.5 | % | 59.5 | % | ||||||||
| Non-comp. ratio (2) |
21.2 | % | 17.9 | % | 20.2 | % | 17.3 | % | ||||||||
| Pre-tax margin (3) |
20.8 | % | 23.9 | % | 21.3 | % | 23.2 | % | ||||||||
| ROCE (4) |
13.3 | % | 19.2 | % | 14.7 | % | 19.5 | % | ||||||||
| ROTCE (5) |
19.2 | % | 27.7 | % | 21.5 | % | 28.9 | % | ||||||||
| Global Wealth Management (assets and loans in millions) |
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| Net revenues |
$ | 701,820 | $ | 655,533 | $ | 2,081,525 | $ | 1,924,595 | ||||||||
| Pre-tax net income |
$ | 279,935 | $ | 232,119 | $ | 750,500 | $ | 682,655 | ||||||||
| Total client assets |
$ | 364,824 | $ | 406,959 | ||||||||||||
| Fee-based client assets |
$ | 135,521 | $ | 150,472 | ||||||||||||
| Bank loans (6) |
$ | 20,911 | $ | 13,659 | ||||||||||||
| Institutional Group |
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| Net revenues |
$ | 339,408 | $ | 492,284 | $ | 1,182,135 | $ | 1,519,176 | ||||||||
| Equity |
$ | 223,147 | $ | 330,014 | $ | 715,474 | $ | 1,011,094 | ||||||||
| Fixed Income |
$ | 116,261 | $ | 162,270 | $ | 466,661 | $ | 508,082 | ||||||||
| Pre-tax net income |
$ | 40,000 | $ | 125,092 | $ | 209,620 | $ | 383,774 | ||||||||
Media Contact: Neil Shapiro (212) 271-3447 | Investor Contact: Joel Jeffrey (212) 271- 3610 | www.stifel.com/investor-relations Global Wealth Management reported record net revenues of $701.8 million for the three months ended September 30, 2022 compared with $655.5 million during the third quarter of 2021.
Global Wealth Management
Pre-tax net income was $279.9 million compared with $232.1 million in the third quarter of 2021.
Highlights
| • | Recruited 36 financial advisors during the quarter, including 14 experienced employee advisors and 2 experienced independent advisors, with total trailing 12 month production of $14 million. |
| • | Client assets of $364.8 billion, down 10% from the year-ago quarter driven by lower market levels. |
| • | Bank loans of $20.9 billion, up 53% over the year-ago quarter. |
Net revenues increased 7% from a year ago:
| • | Asset management revenues decreased 4% from the year-ago quarter as a result of decline in fee-based asset values. |
| • | Transactional revenues decreased 15% over the year-ago quarter reflecting a decrease in client activity from significantly elevated levels a year ago. |
| • | Net interest income increased 86% over the year-ago quarter driven by higher interest rates and continued bank lending growth. |
Total Expenses:
| • | Compensation expense as percent of net revenues decreased to 46.5% primarily as a result of lower compensable revenues. |
| • | Provision for credit losses was primarily impacted by growth in the loan portfolio. |
| • | Non-compensation operating expenses as a percent of net revenues increased to 13.6% primarily as a result of the increase in the provision for credit losses over the prior year. |
| Summary Results of Operations | ||||||||
| (000s) | 3Q 2022 | 3Q 2021 | ||||||
| Net revenues |
$ | 701,820 | $ | 655,533 | ||||
| Asset management |
300,540 | 313,838 | ||||||
| Transactional revenues |
156,564 | 184,072 | ||||||
| Net interest income |
242,194 | 130,341 | ||||||
| Investment banking |
4,498 | 11,580 | ||||||
| Other income |
(1,976 | ) | 15,702 | |||||
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| Total expenses |
$ | 421,885 | $ | 423,414 | ||||
| Compensation expense |
326,116 | 342,792 | ||||||
| Provision for credit losses |
6,453 | (660 | ) | |||||
| Non-comp. opex |
89,316 | 81,282 | ||||||
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| Pre-tax net income |
$ | 279,935 | $ | 232,119 | ||||
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| Compensation ratio |
46.5 | % | 52.3 | % | ||||
| Non-compensation ratio |
13.6 | % | 12.3 | % | ||||
| Pre-tax margin |
39.9 | % | 35.4 | % | ||||
Stifel Financial Corp. | Page 2
Institutional Group
Institutional Group reported net revenues of $339.4 million for the three months ended September 30, 2022 compared with $492.3 million during the third quarter of 2021. Pre-tax net income was $40.0 million compared with $125.1 million in the third quarter of 2021.
Highlights
| • | Strong investment banking pipeline. |
Investment banking revenues decreased 40% from a year ago:
| • | Advisory fee revenues of $166.7 million decreased 20% from the year-ago quarter driven by lower levels of completed advisory transactions. |
| • | Equity capital raising revenues decreased significantly from a year ago on lower issuances in line with market volumes in an uncertain market environment. |
| • | Fixed income capital raising revenues decreased from a year ago as microeconomic conditions contributed to lower issuances. |
Fixed income transactional revenues decreased 2% from a year ago:
| • | Fixed income transactional revenues decreased from the year-ago quarter driven by lower net revenues in mortgages, partially offset by the Vining Sparks acquisition, which closed in November 2021. |
Equity transactional revenues decreased 4% from a year ago:
| • | Equity transactional revenues declined from the year-ago quarter driven by declines in equity markets and lower client activity compared with elevated levels in the prior year quarter. |
Total Expenses:
| • | Compensation expense as percent of net revenues increased to 62.4% primarily as a result of lower net revenues. |
| • | Non-compensation operating expenses as a percent of net revenues increased to 25.8% as a result of lower net revenues, higher travel-related expenses, and investments in technology, partially offset by lower investment banking expenses. |
| Summary Results of Operations | ||||||||
| (000s) | 3Q 2022 | 3Q 2021 | ||||||
| Net revenues |
$ | 339,408 | $ | 492,284 | ||||
| Investment banking |
217,361 | 360,699 | ||||||
| Advisory |
166,736 | 208,218 | ||||||
| Equity capital raising |
23,883 | 93,764 | ||||||
| Fixed income capital raising |
26,742 | 58,717 | ||||||
| Fixed income transactional |
74,384 | 75,838 | ||||||
| Equity transactional |
46,483 | 48,307 | ||||||
| Other |
1,180 | 7,440 | ||||||
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| Total expenses |
$ | 299,408 | $ | 367,192 | ||||
| Compensation expense |
211,818 | 283,063 | ||||||
| Non-comp. opex. |
87,590 | 84,129 | ||||||
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| Pre-tax net income |
$ | 40,000 | $ | 125,092 | ||||
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| Compensation ratio |
62.4 | % | 57.5 | % | ||||
| Non-compensation ratio |
25.8 | % | 17.1 | % | ||||
| Pre-tax margin |
11.8 | % | 25.4 | % | ||||
Stifel Financial Corp. | Page 3
Other Matters
Highlights
| • | Total assets increased $6.8 billion, or 22%, over the year-ago quarter and 3% sequentially. |
| • | The Board of Directors declared a $0.30 quarterly dividend per share payable on September 15, 2022 to common shareholders of record on September 1, 2022. |
| • | The Board of Directors declared a quarterly dividend on the outstanding shares of the Company’s preferred stock payable on September 15, 2022 to shareholders of record on September 1, 2022. |
| 3Q 2022 | 3Q 2021 | |||||||
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| Common stock repurchases |
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| Repurchases (000s) |
$ | 0 | $ | 44,793 | ||||
| Number of shares (000s) |
0 | 671 | ||||||
| Average price |
NA | $ | 66.74 | |||||
| Period end shares (000s) |
106,225 | 104,263 | ||||||
| Effective tax rate |
26.5 | % | 25.0 | % | ||||
| Stifel Financial Corp. (8) |
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| Tier 1 common capital ratio |
14.1 | % | 16.6 | % | ||||
| Tier 1 risk based capital ratio |
17.0 | % | 20.6 | % | ||||
| Tier 1 leverage capital ratio |
11.1 | % | 12.0 | % | ||||
| Tier 1 capital (MM) |
$ | 3,964 | $ | 3,502 | ||||
| Risk weighted assets (MM) |
$ | 23,300 | $ | 16,993 | ||||
| Average assets (MM) |
$ | 35,620 | $ | 29,123 | ||||
| Quarter end assets (MM) |
$ | 37,612 | $ | 30,820 | ||||
| Agency |
Rating | Outlook | ||||||
| Fitch Ratings |
BBB+ | Stable | ||||||
| S&P Global Ratings |
BBB- | Positive | ||||||
Stifel Financial Corp. | Page 4
Conference Call Information
Stifel Financial Corp. will host its third quarter 2022 financial results conference call on Wednesday, October 26, 2022, at 9:30 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) 256-1007 and referencing conference ID 8617839. A live audio webcast of the call, as well as a presentation highlighting the Company’s results, will be available through the Company’s web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.
Company Information
Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel’s broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated, including its Eaton Partners business division; Keefe, Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Stifel Independent Advisors, LLC. 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 and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer trust and related services. To learn more about Stifel, please visit the Company’s website at www.stifel.com. For global disclosures, please visit www.stifel.com/investor-relations/press-releases.
A financial summary follows. Financial, statistical and business-related information, as well as information regarding business and segment trends, is included in the financial supplement. Both the earnings release and the financial supplement are available online in the Investor Relations section at www.stifel.com/investor-relations.
The information provided herein and in the financial supplement, including information provided on the Company’s earnings conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliation of such measures to the comparable U.S. GAAP figures are included in this earnings release and the financial supplement, both of which are available online in the Investor Relations section at www.stifel.com/investor-relations.
Cautionary Note Regarding 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. For information about the risks and important factors that could affect the Company’s future results, financial condition and liquidity, see “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Forward-looking statements speak only as to the date they are made. The Company 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. | Page 5
Summary Results of Operations (Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (000s, except per share amounts) |
9/30/2022 | 9/30/2021 | % Change |
6/30/2022 | % Change |
9/30/2022 | 9/30/2021 | % Change |
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| Revenues: |
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| Commissions |
$ | 159,054 | $ | 189,239 | (16.0 | ) | $ | 186,681 | (14.8 | ) | $ | 541,644 | $ | 598,432 | (9.5 | ) | ||||||||||||||||
| Principal transactions |
118,379 | 118,977 | (0.5 | ) | 125,603 | (5.8 | ) | 403,252 | 436,580 | (7.6 | ) | |||||||||||||||||||||
| Investment banking |
221,858 | 372,279 | (40.4 | ) | 271,075 | (18.2 | ) | 747,779 | 1,088,010 | (31.3 | ) | |||||||||||||||||||||
| Asset management |
300,557 | 313,862 | (4.2 | ) | 331,264 | (9.3 | ) | 973,457 | 887,878 | 9.6 | ||||||||||||||||||||||
| Other income |
852 | 18,760 | (95.5 | ) | (1,917 | ) | (144.4 | ) | 7,823 | 57,629 | (86.4 | ) | ||||||||||||||||||||
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| Operating revenues |
800,700 | 1,013,117 | (21.0 | ) | 912,706 | (12.3 | ) | 2,673,955 | 3,068,529 | (12.9 | ) | |||||||||||||||||||||
| Interest revenue |
304,195 | 141,844 | 114.5 | 212,754 | 43.0 | 682,384 | 402,975 | 69.3 | ||||||||||||||||||||||||
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| Total revenues |
1,104,895 | 1,154,961 | (4.3 | ) | 1,125,460 | (1.8 | ) | 3,356,339 | 3,471,504 | (3.3 | ) | |||||||||||||||||||||
| Interest expense |
59,756 | 10,023 | 496.2 | 17,334 | 244.7 | 86,547 | 38,641 | 124.0 | ||||||||||||||||||||||||
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| Net revenues |
1,045,139 | 1,144,938 | (8.7 | ) | 1,108,126 | (5.7 | ) | 3,269,792 | 3,432,863 | (4.8 | ) | |||||||||||||||||||||
| Non-interest expenses: |
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| Compensation and benefits |
611,870 | 672,385 | (9.0 | ) | 652,709 | (6.3 | ) | 1,938,270 | 2,062,353 | (6.0 | ) | |||||||||||||||||||||
| Non-compensation operating expenses |
227,500 | 216,051 | 5.3 | 236,876 | (4.0 | ) | 680,103 | 622,091 | 9.3 | |||||||||||||||||||||||
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| Total non-interest expenses |
839,370 | 888,436 | (5.5 | ) | 889,585 | (5.6 | ) | 2,618,373 | 2,684,444 | (2.5 | ) | |||||||||||||||||||||
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| Income before income taxes |
205,769 | 256,502 | (19.8 | ) | 218,541 | (5.8 | ) | 651,419 | 748,419 | (13.0 | ) | |||||||||||||||||||||
| Provision for income taxes |
54,600 | 64,126 | (14.9 | ) | 57,725 | (5.4 | ) | 165,885 | 184,951 | (10.3 | ) | |||||||||||||||||||||
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| Net income |
151,169 | 192,376 | (21.4 | ) | 160,816 | (6.0 | ) | 485,534 | 563,468 | (13.8 | ) | |||||||||||||||||||||
| Preferred dividends |
9,320 | 9,689 | (3.8 | ) | 9,321 | (0.0 | ) | 27,961 | 26,267 | 6.4 | ||||||||||||||||||||||
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| Net income available to common shareholders |
$ | 141,849 | $ | 182,687 | (22.4 | ) | $ | 151,495 | (6.4 | ) | $ | 457,573 | $ | 537,201 | (14.8 | ) | ||||||||||||||||
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| Earnings per common share: |
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| Basic |
$ | 1.30 | $ | 1.70 | (23.5 | ) | $ | 1.39 | (6.5 | ) | $ | 4.20 | $ | 4.99 | (15.8 | ) | ||||||||||||||||
| Diluted |
$ | 1.21 | $ | 1.54 | (21.4 | ) | $ | 1.29 | (6.2 | ) | $ | 3.89 | $ | 4.54 | (14.3 | ) | ||||||||||||||||
| Cash dividends declared per common share |
$ | 0.30 | $ | 0.15 | 100.0 | $ | 0.30 | — | $ | 0.90 | $ | 0.45 | 100.0 | |||||||||||||||||||
| Weighted average number of common shares outstanding: |
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| Basic |
108,767 | 107,379 | 1.3 | 109,083 | (0.3 | ) | 109,017 | 107,655 | 1.3 | |||||||||||||||||||||||
| Diluted |
117,218 | 118,475 | (1.1 | ) | 117,400 | (0.2 | ) | 117,649 | 118,355 | (0.6 | ) | |||||||||||||||||||||
Stifel Financial Corp. | Page 6
Non-GAAP Financial Measures (9)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| (000s, except per share amounts) | 9/30/2022 | 9/30/2021 | 9/30/2022 | 9/30/2021 | ||||||||||||
|
|
|
|||||||||||||||
| GAAP net income |
$ | 151,169 | $ | 192,376 | $ | 485,534 | $ | 563,468 | ||||||||
| Preferred dividend |
9,320 | 9,689 | 27,961 | 26,267 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income available to common shareholders |
141,849 | 182,687 | 457,573 | 537,201 | ||||||||||||
| Non-GAAP adjustments: |
||||||||||||||||
| Merger-related (10) |
11,958 | 17,283 | 43,602 | 49,080 | ||||||||||||
| Provision for income taxes (11) |
(3,051 | ) | (4,317 | ) | (10,979 | ) | (12,136 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total non-GAAP adjustments |
8,907 | 12,966 | 32,623 | 36,944 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP net income available to common shareholders |
$ | 150,756 | $ | 195,653 | $ | 490,196 | $ | 574,145 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average diluted shares outstanding |
117,218 | 118,475 | 117,649 | 118,355 | ||||||||||||
| GAAP earnings per diluted common share |
$ | 1.29 | $ | 1.62 | $ | 4.13 | $ | 4.76 | ||||||||
| Non-GAAP adjustments |
0.08 | 0.11 | 0.28 | 0.31 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP earnings per diluted common share |
$ | 1.37 | $ | 1.73 | $ | 4.41 | $ | 5.07 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| GAAP earnings per diluted common share available to common shareholders |
$ | 1.21 | $ | 1.54 | $ | 3.89 | $ | 4.54 | ||||||||
| Non-GAAP adjustments |
0.08 | 0.11 | 0.28 | 0.31 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP earnings per diluted common share available to common shareholders |
$ | 1.29 | $ | 1.65 | $ | 4.17 | $ | 4.85 | ||||||||
|
|
||||||||||||||||
GAAP to Non-GAAP Reconciliation (9)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| (000s) | 9/30/2022 | 9/30/2021 | 9/30/2022 | 9/30/2021 | ||||||||||||
|
|
|
|||||||||||||||
| GAAP compensation and benefits |
$ | 611,870 | $ | 672,385 | $ | 1,938,270 | $ | 2,062,353 | ||||||||
| As a percentage of net revenues |
58.5 | % | 58.7 | % | 59.3 | % | 60.1 | % | ||||||||
| Non-GAAP adjustments: |
||||||||||||||||
| Merger-related (10) |
(6,059 | ) | (5,780 | ) | (24,544 | ) | (18,073 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP compensation and benefits |
$ | 605,811 | $ | 666,605 | $ | 1,913,726 | $ | 2,044,280 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| As a percentage of non-GAAP net revenues |
58.0 | % | 58.2 | % | 58.5 | % | 59.5 | % | ||||||||
| GAAP non-compensation expenses |
$ | 227,500 | $ | 216,051 | $ | 680,103 | $ | 622,091 | ||||||||
| As a percentage of net revenues |
21.8 | % | 18.9 | % | 20.8 | % | 18.1 | % | ||||||||
| Non-GAAP adjustments: |
||||||||||||||||
| Merger-related (10) |
(5,905 | ) | (11,503 | ) | (19,003 | ) | (30,854 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP non-compensation expenses |
$ | 221,595 | $ | 204,548 | $ | 661,100 | $ | 591,237 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| As a percentage of non-GAAP net revenues |
21.2 | % | 17.9 | % | 20.2 | % | 17.3 | % | ||||||||
| Total merger-related expenses |
$ | 11,958 | $ | 17,283 | $ | 43,602 | $ | 49,080 | ||||||||
|
|
||||||||||||||||
Stifel Financial Corp. | Page 7
Footnotes
| (1) | Represents available to common shareholders. |
| (2) | Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliation.” |
| (3) | Non-GAAP pre-tax margin is calculated by adding total merger-related expenses (non-GAAP adjustments) and dividing it by non-GAAP net revenues. See “Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliation.” |
| (4) | Return on average common equity (“ROCE”) is calculated by dividing annualized net income applicable to common shareholders by average common shareholders’ equity or, in the case of non-GAAP ROCE, calculated by dividing non-GAAP net income applicable to commons shareholders by average common shareholders’ equity. |
| (5) | Return on average tangible common equity (“ROTCE”) is calculated by dividing annualized net income applicable to common shareholders by average tangible shareholders’ equity or, in the case of non-GAAP ROTCE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible common equity. Tangible common equity, also on non-GAAP financial measure, equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. Average deferred taxes on goodwill and intangible assets was $59.2 million and $54.5 million as of September 30, 2022 and 2021, respectively. |
| (6) | Includes loans held for sale. |
| (7) | Tangible book value per common share represents shareholders’ equity (excluding preferred stock) divided by period end common shares outstanding. Tangible common shareholders’ equity equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. |
| (8) | Capital ratios are estimates at time of the Company’s earnings release, October 26, 2022. |
| (9) | The Company prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). The Company may disclose certain “non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a “non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by the Company are provided as additional information to analysts, investors and other stakeholders in order to provide them with greater transparency about, or an alternative method for assessing the Company’s financial condition or operating results. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever the Company refers to a non-GAAP financial measure, it will also define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure it references and such comparable U.S. GAAP financial measure. |
| (10) | Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards, debentures, and promissory notes issued as retention, additional earn-out expense, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s on-going business. |
| (11) | Primarily represents the Company’s effective tax rate for the period applied to the non-GAAP adjustments. |
Stifel Financial Corp. | Page 8
Exhibit 99.2
Third Quarter 2022 Earnings Results
| Quarterly Financial Supplement | Page | |||
| Consolidated Financial Highlights |
2 | |||
| GAAP Consolidated Results of Operations |
3 | |||
| Non-GAAP Consolidated Results of Operations |
4 | |||
| Consolidated Financial Summary |
5 | |||
| Consolidated Financial Information and Metrics |
6 | |||
| Regulatory Capital |
7 | |||
| Global Wealth Management - Summary Results of Operations |
8 | |||
| Global Wealth Management - Statistical Information |
9 | |||
| Institutional Group - Summary Results of Operations |
10 | |||
| Stifel Bancorp - Financial Information and Credit Metrics |
11 | |||
| Loans and Lending Commitments - Allowance for Credit Losses |
12 | |||
| Consolidated Net Interest Income |
13 | |||
| Stifel Bancorp Net Interest Income |
14 | |||
| GAAP to Core Reconciliation |
15 | |||
| Footnotes |
16 | |||
| Disclaimer and Legal Notice |
17 | |||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 1 of 17 |
Consolidated Financial Highlights
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s, except per share information) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | 9/30/2022 | 9/30/2021 | % Change | ||||||||||||||||||||||||
| Net revenues |
$ | 1,045,139 | $ | 1,144,938 | (8.7 | %) | $ | 1,108,126 | (5.7 | %) | $ | 3,269,792 | $ | 3,432,863 | (4.8 | %) | ||||||||||||||||
| Net income |
$ | 151,169 | $ | 192,376 | (21.4 | %) | $ | 160,816 | (6.0 | %) | $ | 485,534 | $ | 563,468 | (13.8 | %) | ||||||||||||||||
| Preferred dividends |
9,320 | 9,689 | (3.8 | %) | 9,321 | (0.0 | %) | 27,961 | 26,267 | 6.4 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income available to common shareholders |
$ | 141,849 | $ | 182,687 | (22.4 | %) | $ | 151,495 | (6.4 | %) | $ | 457,573 | $ | 537,201 | (14.8 | %) | ||||||||||||||||
| Earnings per diluted common share |
$ | 1.29 | $ | 1.62 | (20.4 | %) | $ | 1.37 | (5.8 | %) | $ | 4.13 | $ | 4.76 | (13.2 | %) | ||||||||||||||||
| Earnings per diluted common share available to common shareholders |
$ | 1.21 | $ | 1.54 | (21.4 | %) | $ | 1.29 | (6.2 | %) | $ | 3.89 | $ | 4.54 | (14.3 | %) | ||||||||||||||||
| Non-GAAP financial summary (1): |
||||||||||||||||||||||||||||||||
| Net revenues |
$ | 1,045,133 | $ | 1,144,938 | (8.7 | %) | $ | 1,108,127 | (5.7 | %) | $ | 3,269,847 | $ | 3,433,016 | (4.8 | %) | ||||||||||||||||
| Net income |
$ | 160,076 | $ | 205,342 | (22.0 | %) | $ | 173,174 | (7.6 | %) | $ | 518,157 | $ | 600,412 | (13.7 | %) | ||||||||||||||||
| Preferred dividends |
9,320 | 9,689 | (3.8 | %) | 9,321 | (0.0 | %) | 27,961 | 26,267 | 6.4 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income available to common shareholders |
$ | 150,756 | 195,653 | (22.9 | %) | 163,853 | (8.0 | %) | 490,196 | 574,145 | (14.6 | %) | ||||||||||||||||||||
| Earnings per diluted common share |
$ | 1.37 | $ | 1.73 | (20.8 | %) | $ | 1.48 | (7.4 | %) | $ | 4.41 | $ | 5.07 | (13.0 | %) | ||||||||||||||||
| Earnings per diluted common share available to common shareholders |
$ | 1.29 | $ | 1.65 | (21.8 | %) | $ | 1.40 | (7.9 | %) | $ | 4.17 | $ | 4.85 | (14.0 | %) | ||||||||||||||||
| Weighted average number of common shares outstanding: |
|
|||||||||||||||||||||||||||||||
| Basic |
108,767 | 107,379 | 1.3 | % | 109,083 | (0.3 | %) | 109,017 | 107,655 | 1.3 | % | |||||||||||||||||||||
| Diluted |
117,218 | 118,475 | (1.1 | %) | 117,400 | (0.2 | %) | 117,649 | 118,355 | (0.6 | %) | |||||||||||||||||||||
| Period end common shares outstanding |
106,225 | 104,263 | 1.9 | % | 106,166 | 0.1 | %) | 106,225 | 104,263 | 1.9 | % | |||||||||||||||||||||
| Cash dividends declared per common share |
$ | 0.30 | $ | 0.15 | 100.0 | % | $ | 0.30 | 0.0 | % | $ | 0.90 | $ | 0.45 | 100.0 | % | ||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 2 of 17 |
GAAP Consolidated Results of Operations
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s, except per share information) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | 9/30/2022 | 9/30/2021 | % Change | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Commissions |
$ | 159,054 | $ | 189,239 | (16.0 | %) | $ | 186,681 | (14.8 | %) | $ | 541,644 | $ | 598,432 | (9.5 | %) | ||||||||||||||||
| Principal transactions |
118,379 | 118,977 | (0.5 | %) | 125,603 | (5.8 | %) | 403,252 | 436,580 | (7.6 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Transactional revenues |
277,433 | 308,216 | (10.0 | %) | 312,284 | (11.2 | %) | 944,896 | 1,035,012 | (8.7 | %) | |||||||||||||||||||||
| Capital raising |
55,122 | 164,061 | (66.4 | %) | 71,519 | (22.9 | %) | 200,091 | 542,645 | (63.1 | %) | |||||||||||||||||||||
| Advisory |
166,736 | 208,218 | (19.9 | %) | 199,556 | (16.4 | %) | 547,688 | 545,365 | 0.4 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Investment banking |
221,858 | 372,279 | (40.4 | %) | 271,075 | (18.2 | %) | 747,779 | 1,088,010 | (31.3 | %) | |||||||||||||||||||||
| Asset management |
300,557 | 313,862 | (4.2 | %) | 331,264 | (9.3 | %) | 973,457 | 887,878 | 9.6 | % | |||||||||||||||||||||
| Other income |
852 | 18,760 | (95.5 | %) | (1,917 | ) | (144.4 | %) | 7,823 | 57,629 | (86.4 | %) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating revenues |
800,700 | 1,013,117 | (21.0 | %) | 912,706 | (12.3 | %) | 2,673,955 | 3,068,529 | (12.9 | %) | |||||||||||||||||||||
| Interest revenue |
304,195 | 141,844 | 114.5 | % | 212,754 | 43.0 | % | 682,384 | 402,975 | 69.3 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total revenues |
1,104,895 | 1,154,961 | (4.3 | %) | 1,125,460 | (1.8 | %) | 3,356,339 | 3,471,504 | (3.3 | %) | |||||||||||||||||||||
| Interest expense |
59,756 | 10,023 | 496.2 | % | 17,334 | 244.7 | % | 86,547 | 38,641 | 124.0 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net revenues |
1,045,139 | 1,144,938 | (8.7 | %) | 1,108,126 | (5.7 | %) | 3,269,792 | 3,432,863 | (4.8 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Non-interest expenses: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
611,870 | 672,385 | (9.0 | %) | 652,709 | (6.3 | %) | 1,938,270 | 2,062,353 | (6.0 | %) | |||||||||||||||||||||
| Occupancy and equipment rental |
77,230 | 72,160 | 7.0 | % | 78,251 | (1.3 | %) | 232,507 | 215,163 | 8.1 | % | |||||||||||||||||||||
| Communication and office supplies |
43,825 | 40,432 | 8.4 | % | 43,645 | 0.4 | % | 129,926 | 123,565 | 5.1 | % | |||||||||||||||||||||
| Commissions and floor brokerage |
13,576 | 14,744 | (7.9 | % | 15,106 | (10.1 | %) | 44,569 | 44,424 | 0.3 | % | |||||||||||||||||||||
| Provision for credit losses |
6,453 | (660 | ) | nm | 12,785 | (49.5 | %) | 27,478 | (15,564 | ) | (276.5 | %) | ||||||||||||||||||||
| Other operating expenses |
86,416 | 89,375 | (3.3 | %) | 87,089 | (0.8 | %) | 245,623 | 254,503 | (3.5 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total non-interest expenses |
839,370 | 888,436 | (5.5 | %) | 889,585 | (5.6 | %) | 2,618,373 | 2,684,444 | (2.5 | %) | |||||||||||||||||||||
| Income before income taxes |
205,769 | 256,502 | (19.8 | %) | 218,541 | (5.8 | %) | 651,419 | 748,419 | (13.0 | %) | |||||||||||||||||||||
| Provision for income taxes |
54,600 | 64,126 | (14.9 | %) | 57,725 | (5.4 | %) | 165,885 | 184,951 | (10.3 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income |
151,169 | 192,376 | (21.4 | %) | 160,816 | (6.0 | %) | 485,534 | 563,468 | (13.8 | %) | |||||||||||||||||||||
| Preferred dividends |
9,320 | 9,689 | (3.8 | %) | 9,321 | (0.0 | %) | 27,961 | 26,267 | 6.4 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income available to common shareholders |
$ | 141,849 | $ | 182,687 | (22.4 | %) | $ | 151,495 | (6.4 | %) | $ | 457,573 | $ | 537,201 | (14.8 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Earnings per common share: |
||||||||||||||||||||||||||||||||
| Basic |
$ | 1.30 | $ | 1.70 | (23.5 | %) | $ | 1.39 | (6.5 | %) | $ | 4.20 | $ | 4.99 | (15.8 | %) | ||||||||||||||||
| Diluted |
$ | 1.21 | $ | 1.54 | (21.4 | %) | $ | 1.29 | (6.2 | %) | $ | 3.89 | $ | 4.54 | (14.3 | %) | ||||||||||||||||
| Weighted average number of common shares outstanding: |
||||||||||||||||||||||||||||||||
| Basic |
108,767 | 107,379 | 1.3 | % | 109,083 | (0.3 | %) | 109,017 | 107,655 | 1.3 | % | |||||||||||||||||||||
| Diluted |
117,218 | 118,475 | (1.1 | %) | 117,400 | (0.2 | %) | 117,649 | 118,355 | (0.6 | %) | |||||||||||||||||||||
| Cash dividends declared per common share |
$ | 0.30 | $ | 0.15 | 100.0 | % | $ | 0.30 | 0.0 | % | $ | 0.90 | $ | 0.45 | 100.0 | % | ||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 3 of 17 |
Non-GAAP Consolidated Results of Operations (1)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s, except per share information) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | 9/30/2022 | 9/30/2021 | % Change | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Commissions |
$ | 159,054 | $ | 189,239 | (16.0 | %) | $ | 186,681 | (14.8 | %) | $ | 541,644 | $ | 598,432 | (9.5 | %) | ||||||||||||||||
| Principal transactions |
118,379 | 118,977 | (0.5 | %) | 125,603 | (5.8 | %) | 403,252 | 436,580 | (7.6 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Transactional revenues |
277,433 | 308,216 | (10.0 | %) | 312,284 | (11.2 | %) | 944,896 | 1,035,012 | (8.7 | %) | |||||||||||||||||||||
| Capital raising |
55,122 | 164,061 | (66.4 | %) | 71,519 | (22.9 | %) | 200,091 | 542,645 | (63.1 | %) | |||||||||||||||||||||
| Advisory |
166,736 | 208,218 | (19.9 | %) | 199,556 | (16.4 | %) | 547,688 | 545,365 | 0.4 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Investment banking |
221,858 | 372,279 | (40.4 | %) | 271,075 | (18.2 | %) | 747,779 | 1,088,010 | (31.3 | %) | |||||||||||||||||||||
| Asset management |
300,557 | 313,862 | (4.2 | %) | 331,264 | (9.3 | %) | 973,457 | 887,878 | 9.6 | % | |||||||||||||||||||||
| Other income |
852 | 18,760 | (95.5 | %) | (1,917 | ) | (144.4 | %) | 7,823 | 57,657 | (86.4 | %) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating revenues |
800,700 | 1,013,117 | (21.0 | %) | 912,706 | (12.3 | %) | 2,673,955 | 3,068,557 | (12.9 | %) | |||||||||||||||||||||
| Interest revenue |
304,195 | 141,844 | 114.5 | % | 212,754 | 43.0 | % | 682,384 | 402,975 | 69.3 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total revenues |
1,104,895 | 1,154,961 | (4.3 | %) | 1,125,460 | (1.8 | %) | 3,356,339 | 3,471,532 | (3.3 | %) | |||||||||||||||||||||
| Interest expense |
59,762 | 10,023 | 496.2 | % | 17,333 | 244.8 | % | 86,492 | 38,516 | 124.6 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net revenues |
1,045,133 | 1,144,938 | (8.7 | %) | 1,108,127 | (5.7 | %) | 3,269,847 | 3,433,016 | (4.8 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Non-interest expenses: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
605,811 | 666,605 | (9.1 | %) | 643,535 | (5.9 | %) | 1,913,726 | 2,044,280 | (6.4 | %) | |||||||||||||||||||||
| Occupancy and equipment rental |
77,142 | 72,129 | 7.0 | % | 77,884 | (1.0 | %) | 232,035 | 215,068 | 7.9 | % | |||||||||||||||||||||
| Communication and office supplies |
43,794 | 40,432 | 8.3 | % | 43,621 | 0.4 | % | 129,863 | 123,489 | 5.2 | % | |||||||||||||||||||||
| Commissions and floor brokerage |
13,576 | 14,744 | (7.9 | %) | 15,106 | (10.1 | %) | 44,569 | 44,424 | 0.3 | % | |||||||||||||||||||||
| Provision for credit losses |
6,453 | (660 | ) | nm | 12,785 | (49.5 | %) | 27,478 | (15,564 | ) | (276.5 | %) | ||||||||||||||||||||
| Other operating expenses |
80,630 | 77,903 | 3.5 | % | 79,864 | 1.0 | % | 227,155 | 223,820 | 1.5 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total non-interest expenses |
827,406 | 871,153 | (5.0 | %) | 872,795 | (5.2 | %) | 2,574,826 | 2,635,517 | (2.3 | %) | |||||||||||||||||||||
| Income before income taxes |
217,727 | 273,785 | (20.5 | %) | 235,332 | (7.5 | %) | 695,021 | 797,499 | (12.8 | %) | |||||||||||||||||||||
| Provision for income taxes |
57,651 | 68,443 | (15.8 | %) | 62,158 | (7.3 | %) | 176,864 | 197,087 | (10.3 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income |
160,076 | 205,342 | (22.0 | %) | 173,174 | (7.6 | %) | 518,157 | 600,412 | (13.7 | %) | |||||||||||||||||||||
| Preferred dividends |
9,320 | 9,689 | (3.8 | %) | 9,321 | (0.0 | %) | 27,961 | 26,267 | 6.4 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income available to common shareholders |
$ | 150,756 | $ | 195,653 | (22.9 | %) | $ | 163,853 | (8.0 | %) | $ | 490,196 | $ | 574,145 | (14.6 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Earnings per common share: |
||||||||||||||||||||||||||||||||
| Basic |
$ | 1.39 | $ | 1.82 | (23.6 | %) | $ | 1.50 | (7.3 | %) | $ | 4.50 | $ | 5.33 | (15.6 | %) | ||||||||||||||||
| Diluted |
$ | 1.29 | $ | 1.65 | (21.8 | %) | $ | 1.40 | (7.9 | %) | $ | 4.17 | $ | 4.85 | (14.0 | %) | ||||||||||||||||
| Weighted average number of common shares outstanding: |
||||||||||||||||||||||||||||||||
| Basic |
108,767 | 107,379 | 1.3 | % | 109,083 | (0.3 | %) | 109,017 | 107,655 | 1.3 | % | |||||||||||||||||||||
| Diluted |
117,218 | 118,475 | (1.1 | %) | 117,400 | (0.2 | %) | 117,649 | 118,355 | (0.6 | %) | |||||||||||||||||||||
| Cash dividends declared per common share |
$ | 0.30 | $ | 0.15 | 100.0 | % | $ | 0.30 | 0.0 | % | $ | 0.90 | $ | 0.45 | 100.0 | % | ||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 4 of 17 |
Consolidated Financial Summary
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | 9/30/2022 | 9/30/2021 | % Change | ||||||||||||||||||||||||
| Net revenues: |
||||||||||||||||||||||||||||||||
| Global Wealth Management |
$ | 701,820 | $ | 655,533 | 7.1 | % | $ | 697,980 | 0.6 | % | $ | 2,081,525 | $ | 1,924,595 | 8.2 | % | ||||||||||||||||
| Institutional Group |
339,408 | 492,284 | (31.1 | %) | 411,364 | (17.5 | %) | 1,182,135 | 1,519,176 | (22.2 | %) | |||||||||||||||||||||
| Other |
3,911 | (2,879 | ) | (235.8 | %) | (1,218 | ) | (421.1 | %) | 6,132 | (10,908 | ) | (156.2 | %) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total net revenues |
$ | 1,045,139 | $ | 1,144,938 | (8.7 | %) | $ | 1,108,126 | (5.7 | %) | $ | 3,269,792 | $ | 3,432,863 | (4.8 | %) | ||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Global Wealth Management |
$ | 421,885 | $ | 423,414 | (0.4 | %) | $ | 452,828 | (6.8 | %) | $ | 1,331,025 | $ | 1,241,940 | 7.2 | % | ||||||||||||||||
| Institutional Group |
299,408 | 367,192 | (18.5 | %) | 338,372 | (11.5 | %) | 972,515 | 1,135,402 | (14.3 | %) | |||||||||||||||||||||
| Other |
118,077 | 97,830 | 20.7 | % | 98,385 | 20.0 | % | 314,833 | 307,102 | 2.5 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total operating expenses |
$ | 839,370 | $ | 888,436 | (5.5 | %) | $ | 889,585 | (5.6 | %) | $ | 2,618,373 | $ | 2,684,444 | (2.5 | %) | ||||||||||||||||
| Operating contribution: |
||||||||||||||||||||||||||||||||
| Global Wealth Management |
$ | 279,935 | $ | 232,119 | 20.6 | % | $ | 245,152 | 14.2 | % | $ | 750,500 | $ | 682,655 | 9.9 | % | ||||||||||||||||
| Institutional Group |
40,000 | 125,092 | (68.0 | %) | 72,992 | (45.2 | %) | 209,620 | 383,774 | (45.4 | %) | |||||||||||||||||||||
| Other |
(114,166 | ) | (100,709 | ) | 13.4 | % | (99,603 | ) | 14.6 | % | (308,701 | ) | (318,010 | ) | (2.9 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income before income taxes |
$ | 205,769 | $ | 256,502 | (19.8 | %) | $ | 218,541 | (5.8 | %) | $ | 651,419 | $ | 748,419 | (13.0 | %) | ||||||||||||||||
| Financial ratios: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
58.5 | % | 58.7 | % | (20 | ) | 58.9 | % | (40 | ) | 59.3 | % | 60.1 | % | (80 | ) | ||||||||||||||||
| Non-compensation operating expenses |
21.8 | % | 18.9 | % | 290 | 21.4 | % | 40 | 20.8 | % | 18.1 | % | 270 | |||||||||||||||||||
| Income before income taxes |
19.7 | % | 22.4 | % | (270 | ) | 19.7 | % | 0 | 19.9 | % | 21.8 | % | (190 | ) | |||||||||||||||||
| Effective tax rate |
26.5 | % | 25.0 | % | 150 | 26.4 | % | 10 | 25.5 | % | 24.7 | % | 80 | |||||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 5 of 17 |
Consolidated Financial Information and Metrics
| As of and for the Three Months Ended | ||||||||||||||||||||
| (Unaudited, 000s, except per share data) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | |||||||||||||||
| Financial Information: |
||||||||||||||||||||
| Total assets |
$ | 37,612,063 | $ | 30,820,334 | 22.0 | % | $ | 36,476,441 | 3.1 | % | ||||||||||
| Total shareholders’ equity |
$ | 5,227,350 | $ | 4,791,324 | 9.1 | % | $ | 5,124,737 | 2.0 | % | ||||||||||
| Total common equity |
$ | 4,542,350 | $ | 4,106,324 | 10.6 | % | $ | 4,439,737 | 2.3 | % | ||||||||||
| Goodwill and intangible assets |
$ | (1,454,532 | ) | $ | (1,310,038 | ) | 11.0 | % | $ | (1,444,158 | ) | 0.7 | % | |||||||
| DTL on goodwill and intangible assets |
$ | 60,034 | $ | 55,430 | 8.3 | % | $ | 58,731 | 2.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible common equity |
$ | 3,147,852 | $ | 2,851,716 | 10.4 | % | $ | 3,054,310 | 3.1 | % | ||||||||||
| Preferred equity |
$ | 685,000 | $ | 685,000 | 0.0 | % | $ | 685,000 | 0.0 | % | ||||||||||
| Financial Metrics: |
||||||||||||||||||||
| Book value per common share (2) |
$ | 42.76 | $ | 39.38 | 8.6 | % | $ | 41.82 | 2.2 | % | ||||||||||
| Tangible book value per common share (2) |
$ | 29.63 | $ | 27.35 | 8.3 | % | $ | 28.77 | 3.0 | % | ||||||||||
| Return on common equity (3) |
12.5 | % | 17.9 | % | 13.7 | % | ||||||||||||||
| Non-GAAP return on common equity (1)(3) |
13.3 | % | 19.2 | % | 14.8 | % | ||||||||||||||
| Return on tangible common equity (4) |
18.0 | % | 25.9 | % | 20.0 | % | ||||||||||||||
| Non-GAAP return on tangible common equity (1)(4) |
19.2 | % | 27.7 | % | 21.6 | % | ||||||||||||||
| Pre-tax margin on net revenues |
19.7 | % | 22.4 | % | 19.7 | % | ||||||||||||||
| Non-GAAP pre-tax margin on net revenues (1) |
20.8 | % | 23.9 | % | 21.2 | % | ||||||||||||||
| Effective tax rate |
26.5 | % | 25.0 | % | 26.4 | % | ||||||||||||||
| Non-GAAP effective tax rate (1) |
26.5 | % | 25.0 | % | 26.4 | % | ||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 6 of 16 |
Regulatory Capital
| Three Months Ended | ||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | |||||||||||||||
| SF Regulatory Capital (5): |
||||||||||||||||||||
| Common equity tier 1 capital |
$ | 3,279,013 | $ | 2,816,734 | 16.4 | % | $ | 3,151,794 | 4.0 | % | ||||||||||
| Tier 1 capital |
$ | 3,964,013 | $ | 3,501,734 | 13.2 | % | $ | 3,836,794 | 3.3 | % | ||||||||||
| Risk-weighted assets |
$ | 23,300,119 | $ | 16,993,177 | 37.1 | % | $ | 21,281,241 | 9.5 | % | ||||||||||
| Common equity tier 1 capital ratio |
14.1 | % | 16.6 | % | 14.8 | % | ||||||||||||||
| Tier 1 risk based capital ratio |
17.0 | % | 20.6 | % | 18.0 | % | ||||||||||||||
| Tier 1 leverage capital ratio |
11.1 | % | 12.0 | % | 11.2 | % | ||||||||||||||
| Stifel Bank & Trust Regulatory Capital (5): |
||||||||||||||||||||
| Common equity tier 1 capital |
$ | 1,655,760 | $ | 1,145,805 | 44.5 | % | $ | 1,482,526 | 11.7 | % | ||||||||||
| Tier 1 capital |
$ | 1,655,760 | $ | 1,145,805 | 44.5 | % | $ | 1,482,526 | 11.7 | % | ||||||||||
| Risk-weighted assets |
$ | 15,406,324 | $ | 10,727,146 | 43.6 | % | $ | 13,783,486 | 11.8 | % | ||||||||||
| Common equity tier 1 capital ratio |
10.8 | % | 10.7 | % | 10.8 | % | ||||||||||||||
| Tier 1 risk based capital ratio |
10.8 | % | 10.7 | % | 10.8 | % | ||||||||||||||
| Tier 1 leverage capital ratio |
7.3 | % | 7.0 | % | 7.1 | % | ||||||||||||||
| Stifel Bank Regulatory Capital (5): |
||||||||||||||||||||
| Common equity tier 1 capital |
$ | 377,572 | $ | 309,150 | 22.1 | % | $ | 346,827 | 8.9 | % | ||||||||||
| Tier 1 capital |
$ | 377,572 | $ | 309,150 | 22.1 | % | $ | 346,827 | 8.9 | % | ||||||||||
| Risk-weighted assets |
$ | 3,591,228 | $ | 1,480,711 | 142.5 | % | $ | 2,970,926 | 20.9 | % | ||||||||||
| Common equity tier 1 capital ratio |
10.5 | % | 20.9 | % | 11.7 | % | ||||||||||||||
| Tier 1 risk based capital ratio |
10.5 | % | 20.9 | % | 11.7 | % | ||||||||||||||
| Tier 1 leverage capital ratio |
7.3 | % | 7.1 | % | 7.2 | % | ||||||||||||||
| Stifel Net Capital (5): |
||||||||||||||||||||
| Net capital |
$ | 643,000 | $ | 654,900 | (1.8 | %) | $ | 627,100 | 2.5 | % | ||||||||||
| Excess net capital |
$ | 614,000 | $ | 628,600 | (2.3 | %) | $ | 596,500 | 2.9 | % | ||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 7 of 17 |
Global Wealth Management - Summary Results of Operations
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | 9/30/2022 | 9/30/2021 | % Change | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Commissions |
$ | 108,214 | $ | 133,998 | (19.2 | %) | $ | 122,004 | (11.3 | %) | $ | 360,994 | $ | 421,156 | (14.3 | %) | ||||||||||||||||
| Principal transactions |
48,351 | 50,074 | (3.4 | %) | 48,466 | (0.2 | %) | 142,361 | 158,882 | (10.4 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Transactional revenues |
156,565 | 184,072 | (14.9 | %) | 170,470 | (8.2 | %) | 503,355 | 580,038 | (13.2 | %) | |||||||||||||||||||||
| Asset management |
300,540 | 313,838 | (4.2 | %) | 331,243 | (9.3 | %) | 973,396 | 887,794 | 9.6 | % | |||||||||||||||||||||
| Net interest |
242,194 | 130,341 | 85.8 | % | 195,828 | 23.7 | % | 594,782 | 372,802 | 59.5 | % | |||||||||||||||||||||
| Investment banking (6) |
4,498 | 11,580 | (61.2 | %) | 5,056 | (11.0 | %) | 14,701 | 37,027 | (60.3 | %) | |||||||||||||||||||||
| Other income |
(1,977 | ) | 15,702 | (112.6 | %) | (4,617 | (57.2 | %) | (4,709 | ) | 46,934 | (110.0 | %) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net revenues |
701,820 | 655,533 | 7.1 | % | 697,980 | 0.6 | % | 2,081,525 | 1,924,595 | 8.2 | % | |||||||||||||||||||||
| Non-interest expenses: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
326,116 | 342,792 | (4.9 | %) | 349,368 | (6.7 | %) | 1,040,477 | 1,020,880 | 1.9 | % | |||||||||||||||||||||
| Non-compensation operating expenses |
95,769 | 80,622 | 18.8 | % | 103,460 | (7,4 | %) | 290,548 | 221,060 | 31.4 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total non-interest expenses |
421,885 | 423,414 | (0.4 | %) | 452,828 | (6.8 | %) | 1,331,025 | 1,241,940 | 7.2 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income before income taxes |
$ | 279,935 | $ | 232,119 | 20.6 | % | $ | 245,152 | 14.2 | % | $ | 750,500 | $ | 682,655 | 9.9 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| As a percentage of net revenues: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
46.5 | % | 52.3 | % | (580 | ) | 50.1 | % | (360 | ) | 50.0 | % | 53.0 | % | (300 | ) | ||||||||||||||||
| Non-compensation operating expenses |
13.6 | % | 12.3 | % | 130 | 14.8 | % | (120 | ) | 13.9 | % | 11.5 | % | 240 | ||||||||||||||||||
| Income before income taxes |
39.9 | % | 35.4 | % | 450 | 35.1 | % | 480 | 36.1 | % | 35.5 | % | (60 | ) | ||||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 8 of 17 |
Global Wealth Management - Statistical Information
| As of and for the Three Months Ended | ||||||||||||||||||||
| (Unaudited, 000s, except financial advisors and locations) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | |||||||||||||||
| Financial advisors |
2,235 | 2,212 | 1.0 | %% | 2,230 | 0.2 | % | |||||||||||||
| Independent contractors |
102 | 90 | 13.3 | %% | 100 | 2.0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total financial advisors |
2,337 | 2,302 | 1.5 | %% | 2,330 | 0.3 | % | |||||||||||||
| Locations (7) |
395 | 391 | 1.0 | % | 397 | (0.5 | %) | |||||||||||||
| Total client assets |
$ | 364,824,000 | $ | 406,959,000 | (10.4 | %) | $ | 377,591,000 | (3.4 | %) | ||||||||||
| Fee-based client assets |
$ | 135,521,000 | $ | 150,472,000 | (9.9 | %) | $ | 141,223,000 | (4.0 | %) | ||||||||||
| Transactional assets |
$ | 229,303,000 | $ | 256,487,000 | (10.6 | %) | $ | 236,368,000 | (3.0 | %) | ||||||||||
| Client money market and insured product (8) |
$ | 26,082,000 | $ | 24,974,000 | 4.4 | % | $ | 26,759,000 | (2.5 | %) | ||||||||||
| Secured client lending (9) |
$ | 3,841,430 | $ | 3,588,799 | 7.0 | % | $ | 4,044,684 | (5.0 | %) | ||||||||||
| Asset Management Revenue ($ in 000s): |
||||||||||||||||||||
| Private Client Group (10) |
$ | 252,487 | $ | 267,300 | (5.5 | % | $ | 282,207 | (10.5 | %) | ||||||||||
| Asset Management |
30,648 | 33,145 | (7.5 | % | 32,511 | (5.7 | %) | |||||||||||||
| Third-party Bank Sweep Program |
3,851 | 791 | 386.9 | % | 3,841 | 0.3 | % | |||||||||||||
| Other (11) |
13,571 | 12,626 | 7.5 | %) | 12,705 | 6.8 | %) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total asset management revenues |
$ | 300,557 | $ | 313,862 | (4.2 | % | $ | 331,264 | (9.3 | %) | ||||||||||
| Fee-based Assets ($ in millions): |
||||||||||||||||||||
| Private Client Group (10) |
$ | 118,850 | 130,931 | (9.2 | %) | $ | 123,832 | (4.0 | %) | |||||||||||
| Asset Management |
30,095 | 33,655 | (10.6 | %) | 31,288 | (3.8 | %) | |||||||||||||
| Elimination (12) |
(13,424 | ) | (14,114 | ) | (4.9 | %) | (13,897 | ) | (3.4 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total fee-based assets |
$ | 135,521 | $ | 150,472 | (9.9 | %) | $ | 141,223 | (4.0 | %) | ||||||||||
| Third-party Bank Sweep Program |
$ | 1,114 | $ | 6,051 | (81.6 | %) | $ | 1,666 | (33.1 | %) | ||||||||||
| ROA (bps) (13): |
||||||||||||||||||||
| Private Client Group (10) |
81.6 | 82.5 | 81.7 | |||||||||||||||||
| Asset Management |
40.7 | 39.4 | 41.6 | |||||||||||||||||
| Third-party Bank Sweep Program |
104.3 | 5.0 | 41.3 | |||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 9 of 17 |
Institutional Group - Summary Results of Operations
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | 9/30/2022 | 9/30/2021 | % Change | ||||||||||||||||||||||||
| Revenues: |
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| Commissions |
$ | 50,840 | $ | 55,241 | (8.0 | % | $ | 64,677 | (21.4 | %) | $ | 180,650 | $ | 177,276 | 1.9 | % | ||||||||||||||||
| Principal transactions |
70,027 | 68,904 | 1.6 | % | 77,137 | (9.2 | %) | 260,890 | 277,699 | (6.1 | %) | |||||||||||||||||||||
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| Transactional revenues |
120,867 | 124,145 | (2.6 | %) | 141,814 | (14.8 | %) | 441,540 | 454,975 | (3.0 | %) | |||||||||||||||||||||
| Capital raising |
50,625 | 152,481 | (66.8 | %) | 66,463 | (23.8 | %) | 185,391 | 505,618 | (63.3 | %) | |||||||||||||||||||||
| Advisory |
166,736 | 208,218 | (19.9 | %) | 199,556 | (16.4 | %) | 547,688 | 545,365 | 0.4 | % | |||||||||||||||||||||
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| Investment banking |
217,361 | 360,699 | (39.7 | %) | 266,019 | (18.3 | %) | 733,079 | 1,050,983 | (30.2 | %) | |||||||||||||||||||||
| Other income (14) |
1,180 | 7,440 | (84.1 | %) | 3,531 | (66.6 | %) | 7,516 | 13,218 | (43.1 | %) | |||||||||||||||||||||
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| Net revenues |
339,408 | 492,284 | (31.1 | %) | 411,364 | (17.5 | %) | 1,182,135 | 1,519,176 | (22.2 | %) | |||||||||||||||||||||
| Non-interest expenses: |
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| Compensation and benefits |
211,818 | 283,063 | (25.2 | %) | 244,711 | (13.4 | %) | 708,876 | 884,156 | (19.8 | %) | |||||||||||||||||||||
| Non-compensation operating expenses |
87,590 | 84,129 | 4.1 | % | 93,661 | (6.5 | %) | 263,639 | 251,246 | 4.9 | % | |||||||||||||||||||||
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| Total non-interest expenses |
299,408 | 367,192 | (18.5 | %) | 338,372 | (11.5 | %) | 972,515 | 1,135,402 | (14.3 | %) | |||||||||||||||||||||
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| Income before income taxes |
$ | 40,000 | $ | 125,092 | (68.0 | %) | $ | 72,992 | (45.2 | %) | $ | 209,620 | $ | 383,774 | (45.4 | %) | ||||||||||||||||
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| As a percentage of net revenues: |
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| Compensation and benefits |
62.4 | % | 57.5 | % | 490 | 59.5 | % | 290 | 60.0 | % | 58.2 | % | 180 | |||||||||||||||||||
| Non-compensation operating expenses |
25.8 | % | 17.1 | % | 870 | 22.8 | % | 300 | 22.3 | % | 16.5 | % | 580 | |||||||||||||||||||
| Income before income taxes |
11.8 | % | 25.4 | % | (1360 | ) | 17.7 | % | (590 | ) | 17.7 | % | 25.3 | % | (760 | ) | ||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 10 of 17 |
Stifel Bancorp - Financial Information and Credit Metrics
| (Unaudited, 000s) | 9/30/2022 | 9/30/2021 | % Change | 6/30/2022 | % Change | |||||||||||||||
| Stifel Bancorp Financial Information: |
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| Total assets |
$ | 29,307,718 | $ | 22,164,598 | 32.2 | % | $ | 27,957,299 | 4.8 | % | ||||||||||
| Total shareholder’s equity |
$ | 1,995,933 | $ | 1,607,936 | 24.1 | % | $ | 1,840,273 | 8.5 | % | ||||||||||
| Total loans, net (includes loans held for sale) |
$ | 20,910,895 | $ | 13,658,697 | 53.1 | % | $ | 19,271,862 | 8.5 | % | ||||||||||
| Commercial and industrial |
9,394,557 | 5,033,313 | 86.6 | % | 8,347,410 | 12.4 | % | |||||||||||||
| Residential real estate |
7,048,762 | 4,952,372 | 42.3 | % | 6,607,825 | 6.7 | % | |||||||||||||
| Securities-based loans |
2,785,679 | 2,581,705 | 7.9 | % | 2,993,552 | (6.9 | % | |||||||||||||
| Commercial real estate |
872,010 | 369,502 | 136.0 | % | 629,459 | 38.5 | % | |||||||||||||
| Other |
718,242 | 694,395 | 3.4 | %) | 580,374 | 23.8 | %) | |||||||||||||
| Loans held for sale |
234,927 | 156,110 | 50.5 | %) | 288,676 | (18.6 | %) | |||||||||||||
| Investment securities |
$ | 7,650,130 | $ | 7,587,896 | 0.8 | % | $ | 7,761,115 | (1.4 | %) | ||||||||||
| Available-for-sale securities, at fair value |
1,660,847 | 2,242,465 | (25.9 | %) | 1,879,904 | (11.7 | %) | |||||||||||||
| Held-to-maturity securities, at amortized cost |
5,989,283 | 5,345,431 | 12.0 | % | 5,881,211 | 1.8 | % | |||||||||||||
| Total deposits |
$ | 27,190,619 | $ | 20,398,874 | 33.3 | % | $ | 26,009,300 | 4.5 | % | ||||||||||
| Demand deposits (interest-bearing) |
26,783,010 | 19,729,032 | 35.8 | % | 25,670,438 | 4.3 | % | |||||||||||||
| Demand deposits (non-interest-bearing) |
397,573 | 635,059 | (37.4 | %) | 319,682 | 24.4 | %) | |||||||||||||
| Certificates of deposit |
10,036 | 34,783 | (71.1 | %) | 19,180 | (47.7 | %) | |||||||||||||
| Credit Metrics: |
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| Allowance for credit losses |
$ | 141,998 | $ | 114,531 | 24.0 | % | $ | 139,553 | 1.8 | % | ||||||||||
| Allowance as a percentage of retained loans |
0.68 | % | 0.84 | % | 0.73 | % | ||||||||||||||
| Net charge-offs as a percentage of average loans |
0.02 | % | 0.00 | % | 0.00 | % | ||||||||||||||
| Total nonperforming assets |
$ | 11,291 | $ | 8,449 | 33.6 | % | $ | 29,430 | (61.6 | %) | ||||||||||
| Nonperforming assets as a percentage of total assets |
0.04 | % | 0.04 | % | 0.11 | % | ||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 11 of 17 |
Loans and Lending Commitments - Allowance for Credit Losses
| September 30, 2022 | ||||||||||||||||
| (Unaudited, 000s) | Loans and Lending Commitments |
ACL | ACL% | Q3 Provision | ||||||||||||
| Commercial and industrial |
$ | 9,394,557 | $ | 64,246 | 0.7 | % | $ | 902 | ||||||||
| Residential real estate |
7,048,762 | 17,465 | 0.2 | % | (5,151 | ) | ||||||||||
| Securities-based loans |
2,785,679 | 3,318 | 0.1 | % | (657 | ) | ||||||||||
| Commercial real estate |
872,010 | 11,962 | 1.4 | % | 5,480 | |||||||||||
| Other |
718,242 | 8,033 | 1.1 | % | 975 | |||||||||||
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| Loans held for investment, gross |
20,819,250 | 105,024 | 0.5 | % | 1,549 | |||||||||||
| Loans held for sale |
234,927 | |||||||||||||||
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| Total loans, gross |
21,054,177 | |||||||||||||||
| Lending commitments |
5,948,000 | 36,974 | 0.6 | % | 4,904 | |||||||||||
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| Loans and lending commitments |
$ | 27,002,177 | $ | 141,998 | $ | 6,453 | ||||||||||
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| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 12 of 17 |
Consolidated Net Interest Income
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | June 30, 2022 | ||||||||||||||||||||||||||||||||||
| (Unaudited, millions) | Average balance |
Interest income/expense |
Average interest rate |
Average balance |
Interest income/expense |
Average interest rate |
Average balance |
Interest income/expense |
Average interest rate |
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| Interest-earning assets: |
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| Cash and federal funds sold |
$ | 1,302.9 | $ | 7.7 | 2.38 | % | $ | 1,537.9 | $ | 1.0 | 0.27 | % | $ | 1,106.4 | $ | 2.9 | 1.05 | % | ||||||||||||||||||
| Financial instruments owned |
982.7 | 3.6 | 1.45 | % | 1,001.2 | 3.6 | 1.43 | % | 1,171.1 | 4.1 | 1.39 | % | ||||||||||||||||||||||||
| Margin balances |
1,062.3 | 12.5 | 4.71 | % | 1,081.0 | 6.6 | 2.45 | % | 1,105.7 | 8.7 | 3.16 | % | ||||||||||||||||||||||||
| Investments: |
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| Asset-backed securities |
6,178.0 | 61.0 | 3.95 | % | 5,393.1 | 25.2 | 1.87 | % | 5,728.1 | 36.3 | 2.53 | % | ||||||||||||||||||||||||
| Mortgage-backed securities |
1,032.7 | 5.3 | 2.08 | % | 1,068.4 | 3.7 | 1.40 | % | 991.3 | 4.7 | 1.89 | % | ||||||||||||||||||||||||
| Corporate fixed income securities |
722.7 | 5.1 | 2.81 | % | 775.7 | 5.3 | 2.72 | % | 756.2 | 5.0 | 2.68 | % | ||||||||||||||||||||||||
| Other |
4.6 | — | 1.77 | % | 4.9 | — | 1.95 | % | 4.8 | — | 1.72 | % | ||||||||||||||||||||||||
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| Total investments |
7,938.0 | 71.4 | 3.60 | % | 7,242.1 | 34.2 | 1.89 | % | 7,480.4 | 46.0 | 2.46 | % | ||||||||||||||||||||||||
| Loans: |
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| Commercial and industrial |
9,038.0 | 112.7 | 4.99 | % | 4,915.9 | 40.9 | 3.33 | % | 8,175.3 | 77.9 | 3.81 | % | ||||||||||||||||||||||||
| Residential real estate |
6,824.3 | 44.8 | 2.63 | % | 4,743.3 | 30.7 | 2.59 | % | 6,301.8 | 39.5 | 2.51 | % | ||||||||||||||||||||||||
| Securities-based loans |
2,901.9 | 31.7 | 4.36 | % | 2,425.0 | 11.7 | 1.94 | % | 2,972.2 | 20.7 | 2.79 | % | ||||||||||||||||||||||||
| Commercial real estate |
733.4 | 8.7 | 4.76 | % | 365.3 | 3.4 | 3.77 | % | 592.3 | 5.0 | 3.35 | % | ||||||||||||||||||||||||
| Loans held for sale |
231.2 | 2.1 | 3.57 | % | 364.1 | 2.8 | 3.02 | % | 293.3 | 1.9 | 2.55 | % | ||||||||||||||||||||||||
| Other |
647.3 | 8.4 | 5.17 | % | 677.4 | 5.6 | 3.30 | % | 562.7 | 5.4 | 3.85 | % | ||||||||||||||||||||||||
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| Total loans |
20,376.1 | 208.4 | 4.09 | % | 13,491.0 | 95.1 | 2.82 | % | 18,897.6 | 150.4 | 3.18 | % | ||||||||||||||||||||||||
| Other interest-bearing assets |
889.5 | 0.6 | 0.27 | % | 702.5 | 1.3 | 0.74 | % | 1,149.5 | 0.7 | 0.24 | %) | ||||||||||||||||||||||||
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| Total interest-bearing assets/ interest income |
32,551.5 | 304.2 | 3.74 | % | 25,055.7 | 141.8 | 2.26 | % | 30,910.7 | 212.8 | 2.75 | % | ||||||||||||||||||||||||
| Interest-bearing liabilities: |
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| Senior notes |
1,114.1 | 11.2 | 4.03 | % | 1,113.0 | 11.9 | 4.26 | % | 1,113.8 | 11.3 | 4.05 | % | ||||||||||||||||||||||||
| Deposits |
25,998.2 | 43.4 | 0.67 | % | 19,545.5 | 1.1 | 0.02 | % | 24,231.9 | 3.6 | 0.06 | % | ||||||||||||||||||||||||
| Federal Home Loan advances |
542.2 | 3.3 | 2.41 | % | 5.7 | — | 0.28 | % | 368.5 | 0.8 | 0.86 | % | ||||||||||||||||||||||||
| Other interest-bearing liabilities |
1,416.4 | 1.9 | 0.54 | % | 1,346.0 | (3.0 | ) | (0.87 | %) | 1,664.3 | 1.6 | 0.40 | %) | |||||||||||||||||||||||
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| Total interest-bearing liabilities/ interest expense |
$ | 29,070.9 | 59.8 | 0.82 | % | $ | 22,010.2 | 10.0 | 0.18 | % | $ | 27,378.5 | 17.3 | 0.25 | % | |||||||||||||||||||||
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| Net interest income/margin |
$ | 244.4 | 3.00 | % | $ | 131.8 | 2.10 | % | $ | 195.5 | 2.53 | % | ||||||||||||||||||||||||
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| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 13 of 17 |
Stifel Bancorp Net Interest Income
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2022 | September 30, 2021 | June 30, 2022 | ||||||||||||||||||||||||||||||||||
| (Unaudited, millions) | Average balance |
Interest income/expense |
Average interest rate |
Average balance |
Interest income/expense |
Average interest rate |
Average balance |
Interest income /expense |
Average interest rate |
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| Interest-earning assets: |
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| Cash and federal funds sold |
$ | 520.5 | $ | 3.2 | 2.45 | % | $ | 730.0 | $ | 0.3 | 0.19 | % | $ | 453.1 | $ | 1.0 | 0.87 | % | ||||||||||||||||||
| Investments |
7,938.0 | 71.4 | 3.60 | % | 7,242.1 | 34.2 | 1.89 | % | 7,480.4 | 46.0 | 2.46 | % | ||||||||||||||||||||||||
| Loans |
20,376.1 | 208.4 | 4.09 | % | 13,491.0 | 95.1 | 2.82 | % | 18,897.6 | 150.4 | 3.18 | % | ||||||||||||||||||||||||
| Other interest-bearing assets |
75.8 | 0.8 | 4.37 | % | 43.5 | 0.4 | 3.10 | % | 68.1 | 0.8 | 4.67 | % | ||||||||||||||||||||||||
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| Total interest-bearing assets/interest income |
$ | 28,910.4 | $ | 283.8 | 3.93 | % | $ | 21,506.6 | $ | 130.0 | 2.42 | % | $ | 26,899.2 | $ | 198.2 | 2.95 | % | ||||||||||||||||||
| Interest-bearing liabilities: |
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| Deposits |
$ | 25,998.2 | $ | 43.4 | 0.67 | % | $ | 19,545.5 | $ | 1.1 | 0.02 | % | $ | 24,231.9 | $ | 3.6 | 0.06 | % | ||||||||||||||||||
| Federal Home Loan advances |
542.2 | 3.3 | 2.41 | % | 5.7 | — | 0.28 | % | 368.5 | 0.8 | 0.86 | % | ||||||||||||||||||||||||
| Other interest-bearing liabilities |
1.0 | — | 14.26 | % | 1.3 | — | 6.87 | % | 1.0 | — | 15.57 | % | ||||||||||||||||||||||||
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| Total interest-bearing liabilities/ interest expense |
$ | 26,541.4 | $ | 46.7 | 0.70 | % | $ | 19,552.5 | $ | 1.1 | 0.02 | % | $ | 24,601.4 | $ | 4.4 | 0.07 | % | ||||||||||||||||||
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| Net interest income/margin |
$ | 237.1 | 3.28 | % | $ | 128.9 | 2.40 | % | $ | 193.8 | 2.88 | % | ||||||||||||||||||||||||
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| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 14 of 17 |
GAAP to Core Reconciliation
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2022 | 9/30/2021 | Change | 6/30/2022 | Change | 9/30/2022 | 9/30/2021 | Change | ||||||||||||||||||||||||
| GAAP net revenues |
$ | 1,045,139 | $ | 1,144,938 | $ | 1,108,126 | $ | 3,269,792 | $ | 3,432,863 | ||||||||||||||||||||||
| Non-GAAP adjustments |
(6 | ) | — | 1 | 55 | 153 | ||||||||||||||||||||||||||
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| Non-GAAP net revenues |
1,045,133 | 1,144,938 | 1,108,127 | 3,269,847 | 3,433,016 | |||||||||||||||||||||||||||
| GAAP compensation and benefits expense |
611,870 | 672,385 | 652,709 | 1,938,270 | 2,062,353 | |||||||||||||||||||||||||||
| Merger-related (15) |
(6,059 | ) | (5,780 | ) | (9,174 | ) | (24,544 | ) | (18,073 | ) | ||||||||||||||||||||||
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| Non-GAAP compensation and benefits expense |
605,811 | 666,605 | 643,535 | 1,913,726 | 2,044,280 | |||||||||||||||||||||||||||
| GAAP non-compensation operating expenses |
227,500 | 216,051 | 236,876 | 680,103 | 622,091 | |||||||||||||||||||||||||||
| Merger-related (15) |
(5,905 | ) | (11,503 | ) | (7,616 | ) | (19,003 | ) | (30,854 | ) | ||||||||||||||||||||||
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| Non-GAAP non-compensation operating expenses |
221,595 | 204,548 | 229,260 | 661,100 | 591,237 | |||||||||||||||||||||||||||
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| Total merger-related adjustments |
(11,958 | ) | (17,283 | ) | (16,791 | ) | (43,602 | )) | (49,080 | ) | ||||||||||||||||||||||
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| GAAP provision for income taxes |
54,600 | 64,126 | 57,725 | 165,885 | 184,951 | |||||||||||||||||||||||||||
| Merger-related and other (15) |
3,051 | 4,317 | 4,433 | 10,979 | 12,136 | |||||||||||||||||||||||||||
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| Non-GAAP provision for income taxes |
57,651 | 68,443 | 62,158 | 176,864 | 197,087 | |||||||||||||||||||||||||||
| Financial ratios: |
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| Compensation and benefits |
58.0 | % | 58.2 | % | (20 | ) | 58.1 | % | (10 | ) | 58.5 | % | 59.5 | % | (100 | ) | ||||||||||||||||
| Non-compensation operating expenses |
21.2 | % | 17.9 | % | 330 | 20.7 | % | 50 | 20.2 | % | 17.3 | % | 290 | |||||||||||||||||||
| Income before income taxes |
20.8 | % | 23.9 | % | (310 | ) | 21.2 | % | (40 | ) | 21.3 | % | 23.2 | % | (190 | ) | ||||||||||||||||
| Effective tax rate |
26.5 | % | 25.0 | % | 150 | 26.4 | % | 10 | 25.4 | % | 24.7 | % | 70 | |||||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 15 of 17 |
Footnotes
| (1) | Please refer to the GAAP to Core Reconciliation for a reconciliation of the Company’s GAAP results to these non-GAAP measures. |
| (2) | Book value per common share represents shareholders’ equity (excluding preferred stock) divided by period end common shares outstanding. Tangible book value per share represents tangible common shareholders’ equity (defined below) divided by period end common shares outstanding. |
| (3) | Return on average common equity (“ROCE”) is calculated by dividing annualized net income applicable to common shareholders by average common shareholders’ equity or, in the case of non-GAAP ROCE, calculated by dividing non-GAAP net income applicable to commons shareholders by average common shareholders’ equity. |
| (4) | Return on average tangible common equity (“ROTCE”) is calculated by dividing annualized net income applicable to common shareholders by average tangible common equity or, in the case of non-GAAP ROTCE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible common equity. Tangible common equity, also a non-GAAP financial measure, equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. Average deferred taxes on goodwill and intangible assets was $59.2 million, $54.5 million, and $57.4 million, as of September 30, 2022 and 2021, and June 30, 2022, respectively. |
| (5) | Regulatory capital amounts and ratios are estimates as of the date of the Company’s earnings release, October 26, 2022. |
| (6) | Includes capital raising and advisory fee revenues. |
| (7) | Represents Global Wealth Management locations. Historical periods have been restated to conform to the current period presentation. |
| (8) | Includes Stifel Smart Rate Program balances. Historical periods have been restated to conform to the current presentation. |
| (9) | Includes client margin balances held by the Company’s broker-dealer subsidiaries and securities-based loans held at the Company’s bank subsidiaries. |
| (10) | Includes Private Client Group and Trust Business. |
| (11) | Includes fund networking fees, retirement fees, transaction/handling fees, and ACAT fees. |
| (12) | Asset management assets managed in Private Client Group or Trust accounts. |
| (13) | Return on assets (ROA) is calculated based on prior period-end balances for Private Client Group, period-end balances for Asset Management, and average quarterly balances for Individual Program Banks. |
| (14) | Includes net interest, asset management, and other income. |
| (15) | Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards, debentures, and promissory notes issued as retention, additional earn-out expense, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s on-going business. |
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 16 of 16 |
Disclaimer and Legal Notice
Forward-Looking Statements
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.
All statements not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. For information about the risks and important factors that could affect the Company’s future results, financial condition and liquidity, see “Risk Factors” in Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Forward-looking statements speak only as to the date they are made. The Company 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.
Use of Non-GAAP Financial Measures
The Company prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). The Company may disclose certain “non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a “non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by the Company are provided as additional information to analysts, investors and other stakeholders in order to provide them with greater transparency about, or an alternative method for assessing the Company’s financial condition or operating results. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever the Company refers to a non-GAAP financial measure, it will also define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure it references and such comparable U.S. GAAP financial measure.
Legal Notice
This Financial Supplement contains financial, statistical, and business-related information, as well as business and segment trends. The information should be read in conjunction with the Company’s third quarter earnings release issued October 26, 2022.
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2022 Earnings Release | Page 17 of 17 |
Exhibit 99.3 Third Quarter 2022 Financial Results Presentation October 26, 2022 Quarterly Earnings Report
Third Quarter & YTD Snapshot 3Q22 & YTD Results HIGHLIGHTS millions, except share and ratios Second Highest Third Quarter & First Nine Months GAAP Non- GAAP Net Revenue 3Q22 YTD 3Q22 YTD Net Revenue $1,045 $3,270 $1,045 $3,270 Record Quarterly & Nine Month Global Wealth Management Revenue Net Earnings $142 $458 $151 $490 EPS $1.21 $3.89 $1.29 $4.17 Second Highest First Nine Months Institutional Group Revenue Annualized ROE 12.5% 13.7% 13.3% 14.7% Annualized ROTCE 18.0% 20.0% 19.2% 21.5% Record Loan Balances Pre-tax Margin 19.7% 19.9% 20.8% 21.3% Book Value per $42.76 Record Quarterly Share Net Interest Income Tangible Book Value $29.63 per Share Announced Formation of * Please see our definition of ROTCE in our third quarter earnings release SF Credit Partners Quarterly Earnings Report 1
Third Quarter Results FINANCIAL RESULTS NET REVENUE Sequential millions 3Q22 Y/Y Change YTD VS 2021 Change $1,400 $1,304 Global Wealth Management $702 7% 1% $2,082 8% $1,145 $1,117 $1,200 $1,108 Institutional 339 -31% -17% 1,183 -22% $1,045 Other 4 n/m n/m 6 n/m $1,000 Net revenue 1,045 -9% -6% 3,270 -5% $800 Compensation expense 606 -9% -6% 1,914 -6% 1145 $600 1 215 5% -1% 634 4% Operating expense 376 2 $400 Provision for credit loss 6 n/m -50% 27 n/m Pre-tax pre-provision income 224 -17% -10% 723 -8% $200 Pre-tax income 218 -21% -8% 695 -13% $0 3Q21 4Q21 1Q22 2Q22 3Q22 Taxes 58 -16% -7% 177 -10% Net income 160 -22% -8% 518 -14% 3.47377 Preferred dividends 9 -4% 0% 28 6% Net income available to common 151 -23% -8% 490 -15% shareholders Diluted EPS $1.29 -22% -8% $4.17 -14% Compensation ratio 58.0% -20 bps -10 bps 58.5% -100 bps -1.4 3 Operating expense ratio 20.6% 270 bps 100 bps 19.4% 260 bps 17.9% Pre-tax operating margin 20.8% -310 bps -40 bps 21.3% -190 bps Book value per share $42.76 9% 2% 40.98 Tangible book value per share $29.63 8% 3% 27.91 4 ROTCE 19.2% -850 bps -240 bps 37 (1) Operating Expense = Non-Compensation Expense – Provision for Credit Loss (2) Provision for Credit Loss at bank subsidiary (3) Operating Expense Ratio excludes Provision for Credit Loss (4) Please see our definition of ROTCE in our third quarter earnings release Quarterly Earnings Report 2 millions
Global Wealth Management HIGHLIGHTS GLOBAL WEALTH MANAGEMENT REVENUE Sequential millions 3Q22 Y/Y Change YTD VS 2021 ■ Record Quarterly Revenue of $701 million, up 7% Y/Y Change Transactional $157 -15% -8% $503 -13% ■ Record Net Interest Income of $242 million, up 86% Y/Y Asset Management 301 -4% -9% 973 10% ■ Added 36 Financial Advisors, Including 16 Experienced Advisors with Total Trailing Twelve Month Production of $14 million. Net Interest 242 86% 24% 595 60% ■ 32 Employee Advisors, Including 14 Experienced Advisors Investment Banking 4 -61% -11% 15 -60% with Trailing Twelve Month Production of $12 million Other (2) nm nm (5) nm ■ 4 Independent Advisors, Including 2 Experienced Advisors Total Global Wealth Management Net $702 7% 1% $2,082 8% Revenue with Trailing Twelve Month Production of $2 million Comp. Ratio 46.5% -580 bps -360 bps 50.0% -300 bps Non-Comp. Ratio 13.6% 130 bps -120 bps 13.9% 240 bps Provision for credit loss $6 nm -50% $27 nm Pre-tax Margin 39.9% 450 bps 480 bps 36.1% 60 bps NET REVENUE & MARGIN Pre-tax Pre-provision Margin 40.8% 550 bps 380 bps 37.3% 260 bps $702 45% $698 $710 $682 $690 FINANCIAL ADVISOR & CLIENT ASSET METRICS $674 40% $670 $656 Sequential millions 3Q22 Y/Y 39.9% Change $650 35% Financial Advisors 2,235 1% 0% 35.4% $630 35.1% Independent Contractors 102 13% 2% 30% $610 34.5% 33.1% Total Financial Advisors 2,337 2% 0% $590 25% Client AUA $364,824 -10% -3% $570 Fee-based Client Assets $135,521 -10% -4% 20% $550 3Q21 4Q21 1Q22 2Q22 3Q22 Private Client Fee-based Client Assets $118,850 -9% -4% Net Revenue Pre-tax Margin Quarterly Earnings Report 3 Margin Net Revenue (millions)
Wealth Management Metrics INCREASING PERCENTAGE OF RECURRING REVENUE RECRUITING DRIVES REVENUE GROWTH 100% $400 500 90% 450 25% $350 34% 32% 32% 80% 33% 39% 400 46% $300 51% 70% 350 $250 60% 300 50% $200 250 40% 200 75% $150 66% 66% 66% 64% 30% 60% 150 53% $100 47% 20% 100 $50 10% 50 0% $- 0 2015 2016 2017 2018 2019 2020 2021 YTD 2022 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q222Q223Q22 Net Interest Income & Asset Management Fees Transactional & Investment Banking T-12 Cumulative Production Cumulative Gross FAs SUBSTANTIAL LOAN GROWTH TECHNOLOGY TO SUPPORT ADVICE-BASED MODEL $20,911 $22,000 ■ Stifel Wealth Tracker – online and mobile app: free/ secure / smart $20,000 aggregation / budgeting tools / advice when you want it / $16,836 $18,000 understand the markets / understand your complete financial $16,000 picture $14,000 $11,558 $12,000 ■ Performance reporting tools – enhanced platform-wide capabilities $10,014 with key vendor partners collaborating $10,000 $8,723 $7,174 $8,000 $5,820 ■ Cash management and digital banking capabilities in WM platform, $6,000 including client mobile app $3,333 $4,000 $2,000 ■ Video meetings, centralized technology support $0 2015 2016 2017 2018 2019 2020 2021 3Q22 Quarterly Earnings Report 4 millions millions Financial Advisors
Institutional Group INSTITUTIONAL GROUP REVENUE HIGHLIGHTS Sequential millions 3Q22 Y/Y Change YTD VS 2021 Change ■ Second Highest First Nine Months Institutional Advisory $167 -20% -16% $548 0% Revenue Capital Raising $51 -67% -24% $185 -63% ■ Record First Nine Months Advisory Revenue Transactional $121 -3% -15% $442 -3% Total Institutional Revenue* $339 -31% -18% $1,182 -22% ■ Continued Growth in Number of High Fee Advisory Comp. Ratio 62.4% 490 bps 290 bps 60.0% 180 bps Assignments Non-Comp. Ratio 25.8% 870 bps 300 bps 22.3% 580 bps ■ Record Electronic Trading Platform Activity Levels Pre-tax Margin 11.8% -1360 bps -590 bps 17.7% -760 bps * Includes net interest, asset management, and other income BUILDING CAPACITY $2,500 $2,000 $1,500 $1,000 $500 $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Transactional Advisory Capital Raising *2022 revenue based on annualized results through 9/30/2022 * 2021 revenue based on annualized results through 9/30/2021 Quarterly Earnings Report 5 millions
Institutional Equities & Fixed Income INSTITUTIONAL EQUITIES REVENUE INSTITUTIONAL FIXED INCOME REVENUE Sequential Sequential millions 3Q22 Y/Y Change YTD VS 2021 millions 3Q22 Y/Y Change YTD VS 2021 Change Change Transactional $46 -4% 1% $149 -21% Transactional $74 -2% -23% $292 10% Capital Raising $24 -75% -8% $79 -77% Capital Raising $27 -55% -34% $106 -35% Total Equities $70 -50% -83% $228 -57% Total Fixed Income $101 -25% -26% $398 -7% HIGHLIGHTS HIGHLIGHTS ■ Third Highest First Nine Months Revenue ■ Record Number of Active Daily Users on Electronic Trading Platform ■ Second Highest First Nine Months Transactional Revenue ■ Record Number of New Clients on Electronic Trading Platform ■ Lead Managed 223 Negotiated Municipal Offerings ■ Increased Market Share in Equity Capital Raising REVENUE REVENUE $180 $200 $157 $161 $180 $160 $160 $142 $160 $140 $135 $136 $140 $39 $120 $120 $101 $100 $86 $65 $40 $100 $72 $59 $27 $80 $70 $91 $80 $29 $94 $60 $26 $24 $60 $40 $40 $20 $20 $76 $95 $122 $96 $74 $48 $66 $57 $46 $46 $0 $0 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 Transactional Underwriting Transactional Underwriting Quarterly Earnings Report 6 millions millions
Net Interest Income CONDENSED NET INTEREST INCOME NET INTEREST COMMENTARY 3Q22 Y/Y Change Sequential Change ■ 3Q22 Net Interest Income Increased 86% Y/Y. Average Average Average Average Average Average Balance Interest Balance Interest Balance Interest ■ Average Interest Earning Assets Increased $5.5 billion in the First Nine Interest-earning Cash & Fed Funds Sold $1,303 2.38% -15% 211bps 5% 133 bps Months of 2022. Investment Portfolio $7,938 3.60% 10% 171 bps 4% 114 bps ■ Quarter End Deposits up 33% year-on-year Loans $20,376 4.09% 51% 127 bps 8% 91 bps ■ Updated NII Forecast for 2022: $885 million - $895 million: Total Interest-earning Assets $32,551 3.74% 30% 148 bps 5% 99 bps ■ $4 billion - $6 billion of loan growth Deposits $25,998 0.67% 33% 65 bps 6% 61 bps Other Interest-bearing Liabilities $3,073 0.52% 25% 27 bps -2% -123 bps ■ 75 bps increase in Fed Funds in July & September Total Interest-bearing Liabilities $29,071 0.82% 32% 64 bps 6% 57 bps ■ 425 bps increase in Fed Funds by year end Net Interest Margin 3.00% 90 bps 47 bps ■ 40% - 50% deposit beta NET INTEREST MARGIN LOAN & NII GROWTH 3.28% 3.50% $25,000 $900 3.00% 2.88% $800 3.00% $20,000 2.53% $700 2.44% 2.40% 2.36% 2.50% $600 2.13% 2.10% 2.04% $15,000 $500 2.00% $400 $10,000 1.50% $300 $200 $5,000 1.00% $100 $0 $0 0.50% 2015 2016 2017 2018 2019 2020 2021 3Q22 0.00% Loans NII 3Q21 4Q21 1Q22 2Q22 3Q22 NIM Bank NIM *2022 Represents $6 billion of loan growth & NII guidance Quarterly Earnings Report 7 Loans, net (millions) NII (millions)
Stifel Bancorp Inc. Loan & Investment Portfolio LOAN PORTFOLIO COMMERCIAL PORTFOLIO BY MAJOR SECTOR % of Total millions 3Q22 Portfolio Residential Real Estate $7,049 26% Fund (PE/VC Capital Call Lines) $4,329 16% Securities Based Lending 2,786 10% Industrials 1,134 4% Home Equity lines of Credit & Other $154 1% Financials 887 3% Consumer Discretionary 757 3% Total Consumer $9,989 37% Commercial Real Estate $872 3% Information Technology 566 2% Commercial 9,395 35% Materials 392 1% Healthcare 386 1% Construction and Land $565 2% REITs 268 1% Total Commercial $10,831 40% Total Loan Portfolio $20,819 78% Communication Services 240 1% Hotel, Leisure, Restaurants 168 1% Unfunded Commitments $5,948 22% Total $26,767 * Total excludes $235 million of loans classified as held for sale CLO BY MAJOR SECTOR INVESTMENT PORTFOLIO % of Total Healthcare & Pharmaceuticals $631 11% Portfolio Book Value (millions) 3Q22 High Tech Industries 593 10% CLO $5,932 75% Services: Business 541 9% Agency MBS 948 12% Banking, Finance, Insurance & Real Estate 488 8% Corporate Bonds 654 8% Telecommunications 247 4% SBA 167 2% Construction & Building 247 4% Student Loan ARS 123 2% Media: Broadcasting & Subscription 243 4% CMBS 71 1% Services: Consumer 234 4% Others 6 0% Hotel, Gaming & Leisure 232 4% Total Portfolio $7,901 100% Chemicals, Plastics & Rubber 232 4% Quarterly Earnings Report 8
CECL & Credit Metrics Economic Economic Economic Economic Factors & Factors & Factors & Factors & Portfolio Portfolio Portfolio Portfolio ASSUMPTIONS Changes, net of Changes, net of Changes, net of Changes, net of charge offs charge offs charge offs charge offs • Moody’s Forecast • 40% Baseline • 30% Downside $2.5 • 30% Upside $11.7 • Forecast Update for Most Recent Scenarios • Includes Slowing Growth $8.2 $145.9 • Incorporated a Management Overlay to Increase the $143.5 Severity of the Forecasted Economic Variables $4.0 $131.9 $123.6 $119.6 ACL - 9.30.2022 ACL - 12.31.2021 ACL - 3.31.2022 ACL - 6.30.2022 ACL - 9.30.2022 ALLOWANCE FOR CREDIT LOSSES / TOTAL LOANS CREDIT BALANCES & NET CHARGE-OFFS 3.00% 3.00% 30,000,000 1.50% 1.30% 2.50% 2.50% 25,000,000 1.10% 2.00% 2.00% 20,000,000 0.90% 15,000,000 0.70% 1.50% 1.50% 0.50% 10,000,000 1.00% 1.00% 0.30% 5,000,000 0.10% 0.50% 0.50% 0 -0.10% 2019 2020 2021 1Q22 2Q22 3Q22 0.00% 0.00% 3Q21 4Q21 1Q22 2Q22 3Q22 CLOs Retained Loans NCO (Recovery) as % Credit Balances Residential SBL CRE Construction C&I Unfunded / Other reserves* Total Reserve Ratio 9 Quarterly Earnings Report Total Credit Balances (000s) NCO/ Recoveries as % of Credit Balances)
Capital & Liquidity HIGHLIGHTS FIRM-WIDE ASSETS & CAPITAL RATIOS $40,000 ■ Balance Sheet Growth of $1.1 billion in 3Q22 $37,612 $38,000 $36,476 30.0% $35,088 $36,000 ■ Capital Ratios Remained Strong $34,050 $34,000 25.0% $30,820 $32,000 ■ Total Bank Funding Increased by more than $900 $30,000 million 20.0% $28,000 20.6% $26,000 18.7% 18.0% ■ 21% Payout Ratio on Common Dividend 18.6% 15.0% $24,000 17.0% 12.0% 11.7% 11.2% 11.3% 11.1% $22,000 $20,000 10.0% 3Q21 4Q21 1Q22 2Q22 3Q22 Assets Tier 1 Leverage Tier 1 Risk Based Capital DIVIDEND GROWTH & PAYOUT RATIO BANK FUNDING: A TRACK RECORD of GROWTH $1.40 30.00% $45,000 10% CAGR Since 2016 $40,000 $1.20 25.00% $35,000 $1.00 $30,000 20.00% $0.80 $25,000 15.00% $20,000 $0.60 $15,000 10.00% $0.40 $10,000 $5,000 5.00% $0.20 $0 $- 0.00% 2016 2017 2018 2019 2020 2021 3Q22 2017 2018 2019 2020 2021 2022 Bank Deposits Available Funding Dividends Per Share Payout Ratio *Payout Ratio calculated as total common stock dividends divided by GAAP net income ** 2022 dividends per share based on annualized common dividends through 9/30/2022 Quarterly Earnings Report 10 millions millions Annual Dividends Per Share Payout Ratio
Expenses Non-GAAP EXPENSE RATIOS NON-GAAP EXPENSES & PRE-TAX INCOME 65% 25% millions 3Q22 3Q21 Y/Y Change 63% 20% 61% Compensation $606 $667 -9% 15% 59% Non-compensation Expense, $209 $193 8% 59.5% 10% Ex. IB Gross Up & Credit Loss Provision 57% 58.1% 57.5% 58.0% 58.2% 5% Credit Loss Provision & IB Gross Up $12 $11 10% 55% 53% 0% Non-compensation $222 $205 8% 3Q21 4Q21 1Q22 2Q22 3Q22 Pre-tax Income $218 $274 -21% Non-compensation Operating Ratio IB Gross up & Loan Loss Provision Compensation Ratio GAAP to Non-GAAP Reconciliation for 1Q2020 ANNUAL GAAP to Non-GAAP RESULTS GAAP to Non-GAAP RECONCILIATION $900 $800 (000s) 3Q22 $700 $600 GAAP Net Income $151,169 $500 $400 Preferred Dividend $9,320 $300 $200 Net Income available to common Shareholders $141,849 $100 $0 Non-GAAP After Tax Adjustments $8,907 2018 2019 2020 2021 2022 Non-GAAP Net Income Available to Common $150,756 Shareholders GAAP Net Income Available to Common Shareholders Non-GAAP After Tax Adjustments * For reconciliation of GAAP to non-GAAP expenses, refer to our third quarter 2022 earnings release. *2022 revenue based on annualized results through 9/30/2022 Quarterly Earnings Report 11 millions Compensation Ratio Non-compensation Ratio
2022 Updated Guidance Actual 2Q22 Revision Updated Guidance (millions) 2021 2022 2022 Net Revenue $4,737 $4,500 - $5,200 Approx. $4,500 Net Interest Income $503 $800 - $900 $885 - $895 Compensation Ratio 59.0% 56% - 58% Approx. 58% 1 Operating Non-Compensation Ratio 16.1% 16% - 18% 18% - 19% (1) Operating Non-Compensation Ratio excludes loan loss provision & investment banking gross up Prior Guidance Assumptions Revised Guidance Assumptions ■ Annual Net Revenue Range of -5% to +5% from 2021 ■ Total Net Revenue Down Approximately 5% ■ Net Interest Income $825 million - $925 million ■ Net Interest Income Range of $885 million - $895 million ■ Year-end Bank Net Interest Margin of 3.25% - 3.50% ■ Year-end Bank Net Interest Margin of 3.75% - 3.85% ■ Bank Interest-Earning Asset Growth of $4 billion to $6 billion ■ Average Interest Earning Assets Increased by $6 billion ■ Increased Transactional Revenue in the Second Half of 2021 ■ Institutional Revenue Negatively Impacted by Slower Transactional Revenue and Continued Weakness in Capital Markets. ■ Asset Management Revenue Negatively Impacted by 20% Decline in S&P 500 ■ Comp. Ratio of Approximately 58% ■ Comp. Ratio of 56% - 58% ■ Operating Non-Comp. Ratio of 18%-19% ■ Operating Non-Comp. Ratio of 16%-18% Quarterly Earnings Report 12
Concluding Remarks Quarterly Earnings Report
Third Quarter 2022 Financial Results Presentation October 26, 2022 Quarterly Earnings Report
Disclaimer Forward-Looking Statements 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. All statements not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. For information about the risks and important factors that could affect the Company’s future results, financial condition and liquidity, see “Risk Factors” in Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Forward-looking statements speak only as to the date they are made. The Company 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. Use of Non-GAAP Financial Measures The Company prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). The Company may disclose certain “non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a “non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by the Company are provided as additional information to analysts, investors and other stakeholders in order to provide them with greater transparency about, or an alternative method for assessing the Company’s financial condition or operating results. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever the Company refers to a non-GAAP financial measure, it will also define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure it references and such comparable U.S. GAAP financial measure. Quarterly Earnings Report 15