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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 25, 2023
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 |
Name of Each Exchange |
||
| 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 25, 2023, Stifel Financial Corp. (“Stifel” or the “Company”) reported its financial results for the quarter ended September 30, 2023. 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, 2023 is attached as Exhibit 99.2 to this Report on Form 8-K.
On Wednesday, October 25, 2023, at 9:30 a.m. Eastern time, the Company will hold a conference call to discussion 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 |
Description |
|
| 99.1 | Press release dated October 25, 2023. | |
| 99.2 | Financial Supplement for the quarter ended September 30, 2023. | |
| 99.3 | Financial Results Presentation, dated October 25, 2023. | |
| 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) | ||||||
| Date: October 25, 2023 | By: | /s/ James M. Marischen |
||||
| Name: | James M. Marischen | |||||
| Title: | Chief Financial Officer | |||||
3
Exhibit 99.1
Stifel Reports Third Quarter 2023 Results
ST. LOUIS, MO, October 25, 2023 – Stifel Financial Corp. (NYSE: SF) today reported net revenues of $1.0 billion for the three months ended September 30, 2023, compared with $1.0 billion a year ago. Net income available to common shareholders was $58.8 million, or $0.52 per diluted common share, compared with $141.8 million, or $1.21 per diluted common share for the third quarter of 2022. Non-GAAP net income available to common shareholders was $67.4 million, or $0.60 per diluted common share for the third quarter of 2023.
Ronald J. Kruszewski, Chairman and Chief Executive Officer, said “Stifel generated a solid quarter despite challenging market conditions. Our bottom line was impacted by non-recurring legal accruals, primarily associated with an industry-wide SEC review of off-channel communications that totaled $0.58 per diluted common share, after tax. Excluding the impact of these charges, our results are consistent with those in the sequential and year-ago quarters. Although the near-term environment remains uncertain, we remain well positioned to generate stable returns and strong growth as the market improves.”
Highlights
| • | The Company reported net revenues of $1.0 billion as our business navigated an environment that remains challenging. |
| • | Non-GAAP net income available to common shareholders of $0.60 per diluted common share was negatively impacted by elevated provisions for legal and regulatory matters of $0.58 per diluted common share (after-tax). |
| • | Net interest income up $40.2 million, or 17%, over the year-ago quarter. |
| • | Recruited 36 financial advisors during the quarter, including 24 experienced employee advisors. |
| • | Non-GAAP pre-tax margin of 12% was negatively impacted by elevated provisions for legal and regulatory matters. |
| • | Annualized return on tangible common equity (ROTCE) (5) of 9%. |
| • | Tangible book value per common share (7) of $30.06, up 2% from prior year. |
| • | The Board of Directors approved an increase to the Company’s share repurchase program of an additional 10.0 million shares, bringing the authorized share repurchase amount to 14.2 million shares. |
| Financial Summary (Unaudited) | ||||||||||||||||
| (000s) | 3Q 2023 | 3Q 2022 | 9m 2023 | 9m 2022 | ||||||||||||
| GAAP Financial Highlights: |
|
|||||||||||||||
| Net revenues |
$ | 1,045,051 | $ | 1,045,139 | $ | 3,202,565 | $ | 3,269,792 | ||||||||
| Net income (1) |
$ | 58,840 | $ | 141,849 | $ | 332,091 | $ | 457,573 | ||||||||
| Diluted EPS (1) |
$ | 0.52 | $ | 1.21 | $ | 2.91 | $ | 3.89 | ||||||||
| Comp. ratio |
58.7 | % | 58.5 | % | 58.7 | % | 59.3 | % | ||||||||
| Non-comp. ratio |
30.8 | % | 21.8 | % | 25.7 | % | 20.8 | % | ||||||||
| Pre-tax margin |
10.5 | % | 19.7 | % | 15.6 | % | 19.9 | % | ||||||||
| Non-GAAP Financial Highlights: |
|
|||||||||||||||
| Net revenues |
$ | 1,045,028 | $ | 1,045,133 | $ | 3,202,539 | $ | 3,269,847 | ||||||||
| Net income (1) (2) |
$ | 67,413 | $ | 150,756 | $ | 364,937 | $ | 490,196 | ||||||||
| Diluted EPS (1) (2) |
$ | 0.60 | $ | 1.29 | $ | 3.20 | $ | 4.17 | ||||||||
| Comp. ratio (2) |
58.0 | % | 58.0 | % | 58.0 | % | 58.5 | % | ||||||||
| Non-comp. ratio (2) |
30.2 | % | 21.2 | % | 24.9 | % | 20.2 | % | ||||||||
| Pre-tax margin (3) |
11.8 | % | 20.8 | % | 17.1 | % | 21.3 | % | ||||||||
| ROCE (4) |
5.8 | % | 13.3 | % | 10.4 | % | 14.7 | % | ||||||||
| ROTCE (5) |
8.5 | % | 19.2 | % | 15.1 | % | 21.5 | % | ||||||||
| Global Wealth Management (assets and loans in millions) |
|
|||||||||||||||
| Net revenues |
$ | 768,558 | $ | 701,820 | $ | 2,283,934 | $ | 2,081,525 | ||||||||
| Pre-tax net income |
$ | 298,449 | $ | 279,935 | $ | 914,462 | $ | 750,500 | ||||||||
| Total client assets |
$ | 412,458 | $ | 364,824 | ||||||||||||
| Fee-based client assets |
$ | 150,982 | $ | 135,521 | ||||||||||||
| Bank loans (6) |
$ | 20,435 | $ | 20,911 | ||||||||||||
| Institutional Group |
|
|||||||||||||||
| Net revenues |
$ | 256,888 | $ | 339,408 | $ | 867,025 | $ | 1,182,135 | ||||||||
| Equity |
$ | 144,764 | $ | 223,147 | $ | 508,371 | $ | 715,474 | ||||||||
| Fixed Income |
$ | 112,124 | $ | 116,261 | $ | 358,654 | $ | 466,661 | ||||||||
| Pre-tax net income/ (loss) |
($ | 27,804 | ) | $ | 40,000 | ($ | 5,671 | ) | $ | 209,620 | ||||||
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 $768.6 million for the three months ended September 30, 2023 compared with $701.8 million during the third quarter of 2022.
Global Wealth Management
Pre-tax net income was $298.4 million compared with $279.9 million in the third quarter of 2022.
Highlights
| • | Recruited 36 financial advisors during the quarter, including 24 experienced employee advisors with total trailing 12 month production of $24 million. |
| • | Client assets of $412.5 billion, up 13% over the year-ago quarter. |
| • | Fee-based client assets of $151.0 billion, up 11% over the year-ago quarter. |
Net revenues increased 10% from a year ago:
| • | Transactional revenues increased 6% from the year-ago quarter reflecting an increase in client activity. |
| • | Asset management revenues increased 11% from the year-ago quarter primarily due to higher asset values. |
| • | Net interest income increased 11% over the year-ago quarter primarily driven by higher interest rates. |
Total Expenses:
| • | Compensation expense as a percent of net revenues increased to 46.8% primarily as a result of higher compensable revenues. |
| • | Provision for credit losses was primarily impacted by a deterioration in certain asset classes, partially offset by a slightly better macroeconomic forecast. |
| • | Non-compensation operating expenses as a percent of net revenues increased to 14.4% primarily as a result of an increase in the provision for credit losses over the year-ago quarter, partially offset by revenue growth. |
| Summary Results of Operations | ||||||||
| (000s) | 3Q 2023 | 3Q 2022 | ||||||
| Net revenues |
$ | 768,558 | $ | 701,820 | ||||
| Transactional revenues |
165,547 | 156,565 | ||||||
| Asset management |
333,088 | 300,540 | ||||||
| Net interest income |
269,431 | 242,194 | ||||||
| Investment banking |
3,895 | 4,498 | ||||||
| Other income |
(3,403 | ) | (1,977 | ) | ||||
| Total expenses |
$ | 470,109 | $ | 421,885 | ||||
| Compensation expense |
359,325 | 326,116 | ||||||
| Provision for credit losses |
9,992 | 6,453 | ||||||
| Non-comp. opex |
100,792 | 89,316 | ||||||
| Pre-tax net income |
$ | 298,449 | $ | 279,935 | ||||
| Compensation ratio |
46.8 | % | 46.5 | % | ||||
| Non-compensation ratio |
14.4 | % | 13.6 | % | ||||
| Pre-tax margin |
38.8 | % | 39.9 | % | ||||
Stifel Financial Corp. | Page 2
Institutional Group
Institutional Group reported net revenues of $256.9 million for the three months ended September 30, 2023 compared with $339.4 million during the third quarter of 2022. Institutional Group reported pre-tax net loss of $27.8 million for the three months ended September 30, 2023 compared with pre-tax net income of $40.0 million in the third quarter of 2022.
Highlights
Investment banking revenues decreased 34% from a year ago:
| • | Advisory revenues of $97.3 million decreased 42% from the year-ago quarter driven by lower levels of completed advisory transactions. |
| • | Equity capital raising revenues decreased 12% over the year-ago quarter driven by lower volumes. |
| • | Fixed income capital raising revenues decreased 8% over the year-ago quarter as macroeconomic conditions contributed to lower municipal bond and debt issuances. |
Fixed income transactional revenues decreased 9% from a year ago:
| • | Fixed income transactional revenues decreased from the year-ago quarter driven by declines across most products as a result of lower volumes and lower market volatility compared with elevated levels in the prior year period, partially offset by higher trading gains. |
Equity transactional revenues increased 1% from a year ago:
| • | Equity transactional revenues increased from the year-ago quarter driven by an increase in equities trading commissions, partially offset by lower trading gains. |
Total Expenses:
| • | Compensation expense as a percent of net revenues increased to 75.0% primarily as a result of lower net revenues, partially offset by lower discretionary compensation. |
| • | Non-compensation operating expenses as a percent of net revenues increased to 35.8% as a result of lower net revenues, higher travel-related expenses, occupancy costs, and professional fees, as well as continued investments in technology, partially offset by lower investment banking transaction expenses. |
| Summary Results of Operations | ||||||||
| (000s) | 3Q 2023 | 3Q 2022 | ||||||
| Net revenues |
$ | 256,888 | $ | 339,408 | ||||
| Investment banking |
142,991 | 217,361 | ||||||
| Advisory |
97,272 | 166,736 | ||||||
| Equity capital raising |
21,049 | 23,883 | ||||||
| Fixed income capital raising |
24,670 | 26,742 | ||||||
| Fixed income transactional |
67,439 | 74,384 | ||||||
| Equity transactional |
46,930 | 46,483 | ||||||
| Other |
(472 | ) | 1,180 | |||||
| Total expenses |
$ | 284,692 | $ | 299,408 | ||||
| Compensation expense |
192,638 | 211,818 | ||||||
| Non-comp. opex. |
92,054 | 87,590 | ||||||
| Pre-tax net income/(loss) |
($ | 27,804 | ) | $ | 40,000 | |||
| Compensation ratio |
75.0 | % | 62.4 | % | ||||
| Non-compensation ratio |
35.8 | % | 25.8 | % | ||||
| Pre-tax margin |
(10.8 | %) | 11.8 | % | ||||
Stifel Financial Corp. | Page 3
Other Matters
Highlights
| • | Total assets increased $265.5 million, or 1%, over the year-ago quarter. |
| • | The Company repurchased $118.8 million of its outstanding common stock during the third quarter. |
| • | Weighted average diluted shares outstanding decreased primarily as a result of the increase in share repurchases over the comparable period. |
| • | The Board of Directors declared a $0.36 quarterly dividend per share payable on September 15, 2023 to common shareholders of record on September 1, 2023. |
| • | The Board of Directors declared a quarterly dividend on the outstanding shares of the Company’s preferred stock payable on September 15, 2023 to shareholders of record on September 1, 2023. |
| 3Q 2023 | 3Q 2022 | |||||||
| Common stock repurchases |
||||||||
| Repurchases (000s) |
$ | 118,810 | $ | 0 | ||||
| Number of shares (000s) |
1,886 | 0 | ||||||
| Average price |
$ | 63.00 | NA | |||||
| Period end shares (000s) |
103,120 | 106,225 | ||||||
| Weighted average diluted shares outstanding (000s) |
113,195 | 117,218 | ||||||
| Effective tax rate |
37.7 | % | 26.5 | % | ||||
| Stifel Financial Corp. (8) |
||||||||
| Tier 1 common capital ratio |
13.9 | % | 14.1 | % | ||||
| Tier 1 risk based capital ratio |
16.9 | % | 17.0 | % | ||||
| Tier 1 leverage capital ratio |
10.8 | % | 11.1 | % | ||||
| Tier 1 capital (MM) |
$ | 3,914 | $ | 3,964 | ||||
| Risk weighted assets (MM) |
$ | 23,219 | $ | 23,300 | ||||
| Average assets (MM) |
$ | 36,356 | $ | 35,620 | ||||
| Quarter end assets (MM) |
$ | 37,878 | $ | 37,612 | ||||
| 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 2023 financial results conference call on Wednesday, October 25, 2023, 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 (866) 409-1555 and referencing conference ID 4717221. 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 and Miller Buckfire business divisions; Keefe, Bruyette & Woods, Inc.; and Stifel Independent Advisors, LLC; in Canada through Stifel Nicolaus Canada Inc.; and in the United Kingdom and Europe through Stifel Nicolaus Europe Limited. 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, 2022. 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) | 9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | 9/30/2023 | 9/30/2022 | % Change | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Commissions |
$ | 165,075 | $ | 159,054 | 3.8 | $ | 165,358 | (0.2 | ) | $ | 499,983 | $ | 541,644 | (7.7 | ) | |||||||||||||||||
| Principal transactions |
114,841 | 118,379 | (3.0 | ) | 105,700 | 8.6 | 336,063 | 403,252 | (16.7 | ) | ||||||||||||||||||||||
| Investment banking |
146,887 | 221,858 | (33.8 | ) | 166,825 | (12.0 | ) | 525,591 | 747,779 | (29.7 | ) | |||||||||||||||||||||
| Asset management |
333,127 | 300,557 | 10.8 | 320,264 | 4.0 | 968,960 | 973,457 | (0.5 | ) | |||||||||||||||||||||||
| Other income |
459 | 852 | (46.1 | ) | 894 | (48.7 | ) | (940 | ) | 7,823 | (112.0 | ) | ||||||||||||||||||||
| Operating revenues |
760,389 | 800,700 | (5.0 | ) | 759,041 | 0.2 | 2,329,657 | 2,673,955 | (12.9 | ) | ||||||||||||||||||||||
| Interest revenue |
505,198 | 304,195 | 66.1 | 482,770 | 4.6 | 1,439,532 | 682,384 | 111.0 | ||||||||||||||||||||||||
| Total revenues |
1,265,587 | 1,104,895 | 14.5 | 1,241,811 | 1.9 | 3,769,189 | 3,356,339 | 12.3 | ||||||||||||||||||||||||
| Interest expense |
220,536 | 59,756 | 269.1 | 191,090 | 15.4 | 566,624 | 86,547 | 554.7 | ||||||||||||||||||||||||
| Net revenues |
1,045,051 | 1,045,139 | (0.0 | ) | 1,050,721 | (0.5 | ) | 3,202,565 | 3,269,792 | (2.1 | ) | |||||||||||||||||||||
| Non-interest expenses: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
613,287 | 611,870 | 0.2 | 615,667 | (0.4 | ) | 1,880,144 | 1,938,270 | (3.0 | ) | ||||||||||||||||||||||
| Non-compensation operating expenses |
322,335 | 227,500 | 41.7 | 253,669 | 27.1 | 821,724 | 680,103 | 20.8 | ||||||||||||||||||||||||
| Total non-interest expenses |
935,622 | 839,370 | 11.5 | 869,336 | 7.6 | 2,701,868 | 2,618,373 | 3.2 | ||||||||||||||||||||||||
| Income before income taxes |
109,429 | 205,769 | (46.8 | ) | 181,385 | (39.7 | ) | 500,697 | 651,419 | (23.1 | ) | |||||||||||||||||||||
| Provision for income taxes |
41,268 | 54,600 | (24.4 | ) | 47,033 | (12.3 | ) | 140,645 | 165,885 | (15.2 | ) | |||||||||||||||||||||
| Net income |
68,161 | 151,169 | (54.9 | ) | 134,352 | (49.3 | ) | 360,052 | 485,534 | (25.8 | ) | |||||||||||||||||||||
| Preferred dividends |
9,321 | 9,320 | 0.0 | 9,320 | 0.0 | 27,961 | 27,961 | 0.0 | ||||||||||||||||||||||||
| Net income available to common shareholders |
$ | 58,840 | $ | 141,849 | (58.5 | ) | $ | 125,032 | (52.9 | ) | $ | 332,091 | $ | 457,573 | (27.4 | ) | ||||||||||||||||
| Earnings per common share: |
||||||||||||||||||||||||||||||||
| Basic |
$ | 0.55 | $ | 1.30 | (57.7 | ) | $ | 1.16 | (52.6 | ) | $ | 3.09 | $ | 4.20 | (26.4 | ) | ||||||||||||||||
| Diluted |
$ | 0.52 | $ | 1.21 | (57.0 | ) | $ | 1.10 | (52.7 | ) | $ | 2.91 | $ | 3.89 | (25.2 | ) | ||||||||||||||||
| Cash dividends declared per common share |
$ | 0.36 | $ | 0.30 | 20.0 | $ | 0.36 | 0.0 | $ | 1.08 | $ | 0.90 | 20.0 | |||||||||||||||||||
| Weighted average number of common shares outstanding: |
|
|||||||||||||||||||||||||||||||
| Basic |
106,068 | 108,767 | (2.5 | ) | 107,944 | (1.7 | ) | 107,580 | 109,017 | (1.3 | ) | |||||||||||||||||||||
| Diluted |
113,195 | 117,218 | (3.4 | ) | 113,864 | (0.6 | ) | 114,170 | 117,649 | (3.0 | ) | |||||||||||||||||||||
Stifel Financial Corp. | Page 6
Non-GAAP Financial Measures (9)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| (000s, except per share amounts) | 9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | ||||||||||||
| GAAP net income |
$ | 68,161 | $ | 151,169 | $ | 360,052 | $ | 485,534 | ||||||||
| Preferred dividend |
9,321 | 9,320 | 27,961 | 27,961 | ||||||||||||
| Net income available to common shareholders |
58,840 | 141,849 | 332,091 | 457,573 | ||||||||||||
| Non-GAAP adjustments: |
||||||||||||||||
| Merger-related (10) |
13,771 | 11,958 | 46,301 | 43,602 | ||||||||||||
| Provision for income taxes (11) |
(5,198 | ) | (3,051 | ) | (13,455 | ) | (10,979 | ) | ||||||||
| Total non-GAAP adjustments |
8,573 | 8,907 | 32,846 | 32,623 | ||||||||||||
| Non-GAAP net income available to common shareholders |
$ | 67,413 | $ | 150,756 | $ | 364,937 | $ | 490,196 | ||||||||
| Weighted average diluted shares outstanding |
113,195 | 117,218 | 114,170 | 117,649 | ||||||||||||
| GAAP earnings per diluted common share |
$ | 0.60 | $ | 1.29 | $ | 3.15 | $ | 4.13 | ||||||||
| Non-GAAP adjustments |
0.08 | 0.08 | 0.29 | 0.28 | ||||||||||||
| Non-GAAP earnings per diluted common share |
$ | 0.68 | $ | 1.37 | $ | 3.44 | $ | 4.41 | ||||||||
| GAAP earnings per diluted common share available to common shareholders |
$ | 0.52 | $ | 1.21 | $ | 2.91 | $ | 3.89 | ||||||||
| Non-GAAP adjustments |
0.08 | 0.08 | 0.29 | 0.28 | ||||||||||||
| Non-GAAP earnings per diluted common share available to common shareholders |
$ | 0.60 | $ | 1.29 | $ | 3.20 | $ | 4.17 | ||||||||
GAAP to Non-GAAP Reconciliation (9)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| (000s) | 9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | ||||||||||||
| GAAP compensation and benefits |
$ | 613,287 | $ | 611,870 | $ | 1,880,144 | $ | 1,938,270 | ||||||||
| As a percentage of net revenues |
58.7 | % | 58.5 | % | 58.7 | % | 59.3 | % | ||||||||
| Non-GAAP adjustments: |
||||||||||||||||
| Merger-related (10) |
(7,171 | ) | (6,059 | ) | (22,947 | ) | (24,544 | ) | ||||||||
| Non-GAAP compensation and benefits |
$ | 606,116 | $ | 605,811 | $ | 1,857,197 | $ | 1,913,726 | ||||||||
| As a percentage of non-GAAP net revenues |
58.0 | % | 58.0 | % | 58.0 | % | 58.5 | % | ||||||||
| GAAP non-compensation expenses |
$ | 322,335 | $ | 227,500 | $ | 821,724 | $ | 680,103 | ||||||||
| As a percentage of net revenues |
30.8 | % | 21.8 | % | 25.7 | % | 20.8 | % | ||||||||
| Non-GAAP adjustments: |
||||||||||||||||
| Merger-related (10) |
(6,623 | ) | (5,905 | ) | (23,380 | ) | (19,003 | ) | ||||||||
| Non-GAAP non-compensation expenses |
$ | 315,712 | $ | 221,595 | $ | 798,344 | $ | 661,100 | ||||||||
| As a percentage of non-GAAP net revenues |
30.2 | % | 21.2 | % | 24.9 | % | 20.2 | % | ||||||||
| Total merger-related expenses |
$ | 13,771 | $ | 11,958 | $ | 46,301 | $ | 43,602 | ||||||||
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 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 $67.4 million and $59.2 million as of September 30, 2023 and 2022, 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 25, 2023. |
| (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 2023 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 | |||
| Stifel Bancorp - Loan and Investment Portfolio |
12 | |||
| Loans and Lending Commitments - Allowance for Credit Losses |
13 | |||
| Consolidated Net Interest Income |
14 | |||
| Stifel Bancorp Net Interest Income |
15 | |||
| GAAP to Core Reconciliation |
16 | |||
| Footnotes |
17 | |||
| Disclaimer and Legal Notice |
18 | |||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 1 of 18 |
Consolidated Financial Highlights
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s, except per share information) |
9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | 9/30/2023 | 9/30/2022 | % Change | ||||||||||||||||||||||||
| Net revenues |
$ | 1,045,051 | $ | 1,045,139 | (0.0 | %) | $ | 1,050,721 | (0.5 | %) | $ | 3,202,565 | $ | 3,269,792 | (2.1 | %) | ||||||||||||||||
| Net income |
$ | 68,161 | $ | 151,169 | (54.9 | %) | $ | 134,352 | (49.3 | %) | $ | 360,052 | $ | 485,534 | (25.8 | %) | ||||||||||||||||
| Preferred dividends |
9,321 | 9,320 | 0.0 | % | 9,320 | 0.0 | % | 27,961 | 27,961 | 0.0 | % | |||||||||||||||||||||
|
|
|
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|
|
|||||||||||||||||
| Net income available to common shareholders |
$ | 58,840 | $ | 141,849 | (58.5 | %) | $ | 125,032 | (52.9 | %) | $ | 332,091 | $ | 457,573 | (27.4 | %) | ||||||||||||||||
| Earnings per diluted common share |
$ | 0.60 | $ | 1.29 | (53.5 | %) | $ | 1.18 | (49.2 | %) | $ | 3.15 | $ | 4.13 | (23.7 | %) | ||||||||||||||||
| Earnings per diluted common share available to common shareholders |
$ | 0.52 | $ | 1.21 | (57.0 | %) | $ | 1.10 | (52.7 | %) | $ | 2.91 | $ | 3.89 | (25.2 | %) | ||||||||||||||||
| Non-GAAP financial summary (1): |
||||||||||||||||||||||||||||||||
| Net revenues |
$ | 1,045,028 | $ | 1,045,133 | (0.0 | %) | $ | 1,050,721 | (0.5 | %) | $ | 3,202,539 | $ | 3,269,847 | (2.1 | %) | ||||||||||||||||
| Net income |
$ | 76,734 | $ | 160,076 | (52.1 | %) | $ | 145,576 | (47.3 | %) | $ | 392,898 | $ | 518,157 | (24.2 | %) | ||||||||||||||||
| Preferred dividends |
9,321 | 9,320 | 0.0 | % | 9,320 | 0.0 | % | 27,961 | 27,961 | 0.0 | % | |||||||||||||||||||||
|
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|
|
|
|
|
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|
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|
|
|
|
|||||||||||||||||
| Net income available to common shareholders |
$ | 67,413 | 150,756 | (55.3 | %) | 136,256 | (50.5 | %) | 364,937 | 490,196 | (25.6 | %) | ||||||||||||||||||||
| Earnings per diluted common share |
$ | 0.68 | $ | 1.37 | (50.4 | %) | $ | 1.28 | (46.9 | %) | $ | 3.44 | $ | 4.41 | (22.0 | %) | ||||||||||||||||
| Earnings per diluted common share available to common shareholders |
$ | 0.60 | $ | 1.29 | (53.5 | %) | $ | 1.20 | (50.0 | %) | $ | 3.20 | $ | 4.17 | (23.3 | %) | ||||||||||||||||
| Weighted average number of common shares outstanding: |
|
|||||||||||||||||||||||||||||||
| Basic |
106,068 | 108,767 | (2.5 | %) | 107,944 | (1.7 | %) | 107,580 | 109,017 | (1.3 | %) | |||||||||||||||||||||
| Diluted |
113,195 | 117,218 | (3.4 | %) | 113,864 | (0.6 | %) | 114,170 | 117,649 | (3.0 | %) | |||||||||||||||||||||
| Period end common shares outstanding |
103,120 | 106,225 | (2.9 | %) | 104,889 | (1.7 | %) | 103,120 | 106,225 | (2.9 | %) | |||||||||||||||||||||
| Cash dividends declared per common share |
$ | 0.36 | $ | 0.30 | 20.0 | % | $ | 0.36 | 0.0 | % | $ | 1.08 | $ | 0.90 | 20.0 | % | ||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 2 of 18 |
GAAP Consolidated Results of Operations
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s, except per share information) |
9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | 9/30/2023 | 9/30/2022 | % Change | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Commissions |
$ | 165,075 | $ | 159,054 | 3.8 | % | $ | 165,358 | (0.2 | %) | $ | 499,983 | $ | 541,644 | (7.7 | %) | ||||||||||||||||
| Principal transactions |
114,841 | 118,379 | (3.0 | %) | 105,700 | 8.6 | % | 336,063 | 403,252 | (16.7 | %) | |||||||||||||||||||||
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|
|
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|
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|
|
|||||||||||||||||
| Transactional revenues |
279,916 | 277,433 | 0.9 | % | 271,058 | 3.3 | % | 836,046 | 944,896 | (11.5 | %) | |||||||||||||||||||||
| Capital raising |
49,615 | 55,122 | (10.0 | %) | 78,950 | (37.2 | %) | 189,381 | 200,091 | (5.4 | %) | |||||||||||||||||||||
| Advisory |
97,272 | 166,736 | (41.7 | %) | 87,875 | 10.7 | % | 336,210 | 547,688 | (38.6 | %) | |||||||||||||||||||||
|
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|
|
|
|
|
|
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|
|
|
|
|||||||||||||||||
| Investment banking |
146,887 | 221,858 | (33.8 | %) | 166,825 | (12.0 | %) | 525,591 | 747,779 | (29.7 | %) | |||||||||||||||||||||
| Asset management |
333,127 | 300,557 | 10.8 | % | 320,264 | 4.0 | % | 968,960 | 973,457 | (0.5 | %) | |||||||||||||||||||||
| Other income |
459 | 852 | (46.1 | %) | 894 | (48.7 | %) | (940 | ) | 7,823 | (112.0 | %) | ||||||||||||||||||||
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|
|||||||||||||||||
| Operating revenues |
760,389 | 800,700 | (5.0 | %) | 759,041 | 0.2 | % | 2,329,657 | 2,673,955 | (12.9 | %) | |||||||||||||||||||||
| Interest revenue |
505,198 | 304,195 | 66.1 | % | 482,770 | 4.6 | % | 1,439,532 | 682,384 | 111.0 | % | |||||||||||||||||||||
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|
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|
|
|
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|
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|
|
|
|
|
|||||||||||||||||
| Total revenues |
1,265,587 | 1,104,895 | 14.5 | % | 1,241,811 | 1.9 | % | 3,769,189 | 3,356,339 | 12.3 | % | |||||||||||||||||||||
| Interest expense |
220,536 | 59,756 | 269.1 | % | 191,090 | 15.4 | % | 566,624 | 86,547 | 554.7 | % | |||||||||||||||||||||
|
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|
|
|
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|
|
|
|
|
|||||||||||||||||
| Net revenues |
1,045,051 | 1,045,139 | (0.0 | %) | 1,050,721 | (0.5 | %) | 3,202,565 | 3,269,792 | (2.1 | %) | |||||||||||||||||||||
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|
|||||||||||||||||
| Non-interest expenses: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
613,287 | 611,870 | 0.2 | % | 615,667 | (0.4 | %) | 1,880,144 | 1,938,270 | (3.0 | %) | |||||||||||||||||||||
| Occupancy and equipment rental |
84,396 | 77,230 | 9.3 | % | 84,604 | (0.2 | %) | 251,140 | 232,507 | 8.0 | % | |||||||||||||||||||||
| Communication and office supplies |
46,215 | 43,825 | 5.5 | % | 44,969 | 2.8 | % | 137,320 | 129,926 | 5.7 | % | |||||||||||||||||||||
| Commissions and floor brokerage |
14,413 | 13,576 | 6.2 | % | 14,112 | 2.1 | % | 42,965 | 44,569 | (3.6 | %) | |||||||||||||||||||||
| Provision for credit losses |
9,992 | 6,453 | 54.8 | % | 7,824 | 27.7 | % | 22,736 | 27,478 | (17.3 | %) | |||||||||||||||||||||
| Other operating expenses |
167,319 | 86,416 | 93.6 | % | 102,160 | 63.8 | % | 367,563 | 245,623 | 49.6 | % | |||||||||||||||||||||
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|
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|
|||||||||||||||||
| Total non-interest expenses |
935,622 | 839,370 | 11.5 | % | 869,336 | 7.6 | % | 2,701,868 | 2,618,373 | 3.2 | % | |||||||||||||||||||||
| Income before income taxes |
109,429 | 205,769 | (46.8 | %) | 181,385 | (39.7 | %) | 500,697 | 651,419 | (23.1 | %) | |||||||||||||||||||||
| Provision for income taxes |
41,268 | 54,600 | (24.4 | %) | 47,033 | (12.3 | %) | 140,645 | 165,885 | (15.2 | %) | |||||||||||||||||||||
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|
|
|||||||||||||||||
| Net income |
68,161 | 151,169 | (54.9 | %) | 134,352 | (49.3 | %) | 360,052 | 485,534 | (25.8 | %) | |||||||||||||||||||||
| Preferred dividends |
9,321 | 9,320 | 0.0 | % | 9,320 | 0.0 | % | 27,961 | 27,961 | 0.0 | % | |||||||||||||||||||||
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|
|||||||||||||||||
| Net income available to common shareholders |
$ | 58,840 | $ | 141,849 | (58.5 | %) | $ | 125,032 | (52.9 | %) | $ | 332,091 | $ | 457,573 | (27.4 | %) | ||||||||||||||||
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|||||||||||||||||
| Earnings per common share: |
||||||||||||||||||||||||||||||||
| Basic |
$ | 0.55 | $ | 1.30 | (57.7 | %) | $ | 1.16 | (52.6 | %) | $ | 3.09 | $ | 4.20 | (26.4 | %) | ||||||||||||||||
| Diluted |
$ | 0.52 | $ | 1.21 | (57.0 | %) | $ | 1.10 | (52.7 | %) | $ | 2.91 | $ | 3.89 | (25.2 | %) | ||||||||||||||||
| Weighted average number of common shares outstanding: |
|
|||||||||||||||||||||||||||||||
| Basic |
106,068 | 108,767 | (2.5 | %) | 107,944 | (1.7 | %) | 107,580 | 109,017 | (1.3 | %) | |||||||||||||||||||||
| Diluted |
113,195 | 117,218 | (3.4 | %) | 113,864 | (0.6 | %) | 114,170 | 117,649 | (3.0 | %) | |||||||||||||||||||||
| Cash dividends declared per common share |
$ | 0.36 | $ | 0.30 | 20.0 | % | $ | 0.36 | 0.0 | % | $ | 1.08 | $ | 0.90 | 20.0 | % | ||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 3 of 18 |
Non-GAAP Consolidated Results of Operations (1)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s, except per share information) |
9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | 9/30/2023 | 9/30/2022 | % Change | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Commissions |
$ | 165,075 | $ | 159,054 | 3.8 | % | $ | 165,358 | (0.2 | %) | $ | 499,983 | $ | 541,644 | (7.7 | %) | ||||||||||||||||
| Principal transactions |
114,841 | 118,379 | (3.0 | %) | 105,700 | 8.6 | % | 336,063 | 403,252 | (16.7 | %) | |||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Transactional revenues |
279,916 | 277,433 | 0.9 | % | 271,058 | 3.3 | % | 836,046 | 944,896 | (11.5 | %) | |||||||||||||||||||||
| Capital raising |
49,615 | 55,122 | (10.0 | %) | 78,950 | (37.2 | %) | 189,381 | 200,091 | (5.4 | %) | |||||||||||||||||||||
| Advisory |
97,272 | 166,736 | (41.7 | %) | 87,875 | 10.7 | % | 336,210 | 547,688 | (38.6 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Investment banking |
146,887 | 221,858 | (33.8 | %) | 166,825 | (12.0 | %) | 525,591 | 747,779 | (29.7 | %) | |||||||||||||||||||||
| Asset management |
333,127 | 300,557 | 10.8 | % | 320,264 | 4.0 | % | 968,960 | 973,457 | (0.5 | %) | |||||||||||||||||||||
| Other income |
436 | 852 | (48.8 | %) | 894 | (51.2 | %) | (963 | ) | 7,823 | (112.3 | %) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating revenues |
760,366 | 800,700 | (5.0 | %) | 759,041 | 0.2 | % | 2,329,634 | 2,673,955 | (12.9 | %) | |||||||||||||||||||||
| Interest revenue |
505,198 | 304,195 | 66.1 | % | 482,770 | 4.6 | % | 1,439,532 | 682,384 | 111.0 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total revenues |
1,265,564 | 1,104,895 | 14.5 | % | 1,241,811 | 1.9 | % | 3,769,166 | 3,356,339 | 12.3 | % | |||||||||||||||||||||
| Interest expense |
220,536 | 59,762 | 269.0 | % | 191,090 | 15.4 | % | 566,627 | 86,492 | 555.1 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net revenues |
1,045,028 | 1,045,133 | (0.0 | %) | 1,050,721 | (0.5 | %) | 3,202,539 | 3,269,847 | (2.1 | %) | |||||||||||||||||||||
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|
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|
|
|
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|
|
|
|||||||||||||||||
| Non-interest expenses: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
606,116 | 605,811 | 0.1 | % | 609,144 | (0.5 | %) | 1,857,197 | 1,913,726 | (3.0 | %) | |||||||||||||||||||||
| Occupancy and equipment rental |
84,342 | 77,142 | 9.3 | % | 84,579 | (0.3 | %) | 250,960 | 232,035 | 8.2 | % | |||||||||||||||||||||
| Communication and office supplies |
46,215 | 43,794 | 5.5 | % | 44,965 | 2.8 | % | 137,314 | 129,863 | 5.7 | % | |||||||||||||||||||||
| Commissions and floor brokerage |
14,413 | 13,576 | 6.2 | % | 14,112 | 2.1 | % | 42,965 | 44,569 | (3.6 | %) | |||||||||||||||||||||
| Provision for credit losses |
9,992 | 6,453 | 54.8 | % | 7,824 | 27.7 | % | 22,736 | 27,478 | (17.3 | %) | |||||||||||||||||||||
| Other operating expenses |
160,750 | 80,630 | 99.4 | % | 93,568 | 71.8 | % | 344,369 | 227,155 | 51.6 | % | |||||||||||||||||||||
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total non-interest expenses |
921,828 | 827,406 | 11.4 | % | 854,192 | 7.9 | % | 2,655,541 | 2,574,826 | 3.1 | % | |||||||||||||||||||||
| Income before income taxes |
123,200 | 217,727 | (43.4 | %) | 196,529 | (37.3 | %) | 546,998 | 695,021 | (21.3 | %) | |||||||||||||||||||||
| Provision for income taxes |
46,466 | 57,651 | (19.4 | %) | 50,953 | (8.8 | %) | 154,100 | 176,864 | (12.9 | %) | |||||||||||||||||||||
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income |
76,734 | 160,076 | (52.1 | %) | 145,576 | (47.3 | %) | 392,898 | 518,157 | (24.2 | %) | |||||||||||||||||||||
| Preferred dividends |
9,321 | 9,320 | 0.0 | % | 9,320 | 0.0 | % | 27,961 | 27,961 | 0.0 | % | |||||||||||||||||||||
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|
|||||||||||||||||
| Net income available to common shareholders |
$ | 67,413 | $ | 150,756 | (55.3 | %) | $ | 136,256 | (50.5 | %) | $ | 364,937 | $ | 490,196 | (25.6 | %) | ||||||||||||||||
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|
|||||||||||||||||
| Earnings per common share: |
||||||||||||||||||||||||||||||||
| Basic |
$ | 0.64 | $ | 1.39 | (54.0 | %) | $ | 1.26 | (49.2 | %) | $ | 3.39 | $ | 4.50 | (24.7 | %) | ||||||||||||||||
| Diluted |
$ | 0.60 | $ | 1.29 | (53.5 | %) | $ | 1.20 | (50.0 | %) | $ | 3.20 | $ | 4.17 | (23.3 | %) | ||||||||||||||||
| Weighted average number of common shares outstanding: |
|
|||||||||||||||||||||||||||||||
| Basic |
106,068 | 108,767 | (2.5 | %) | 107,944 | (1.7 | %) | 107,580 | 109,017 | (1.3 | %) | |||||||||||||||||||||
| Diluted |
113,195 | 117,218 | (3.4 | %) | 113,864 | (0.6 | %) | 114,170 | 117,649 | (3.0 | %) | |||||||||||||||||||||
| Cash dividends declared per common share |
$ | 0.36 | $ | 0.30 | 20.0 | % | $ | 0.36 | 0.0 | % | $ | 1.08 | $ | 0.90 | 20.0 | % | ||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 4 of 18 |
Consolidated Financial Summary
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | 9/30/2023 | 9/30/2022 | % Change | ||||||||||||||||||||||||
| Net revenues: |
||||||||||||||||||||||||||||||||
| Global Wealth Management |
$ | 768,558 | $ | 701,820 | 9.5 | % | $ | 758,190 | 1.4 | % | $ | 2,283,934 | $ | 2,081,525 | 9.7 | % | ||||||||||||||||
| Institutional Group |
256,888 | 339,408 | (24.3 | %) | 277,524 | (7.4 | %) | 867,025 | 1,182,135 | (26.7 | %) | |||||||||||||||||||||
| Other |
19,605 | 3,911 | 401.3 | % | 15,007 | 30.6 | % | 51,606 | 6,132 | 741.6 | % | |||||||||||||||||||||
|
|
|
|
|
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|
|||||||||||||||||
| Total net revenues |
$ | 1,045,051 | $ | 1,045,139 | (0.0 | %) | $ | 1,050,721 | (0.5 | %) | $ | 3,202,565 | $ | 3,269,792 | (2.1 | %) | ||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Global Wealth Management |
$ | 470,109 | $ | 421,885 | 11.4 | % | $ | 458,286 | 2.6 | % | $ | 1,369,472 | $ | 1,331,025 | 2.9 | % | ||||||||||||||||
| Institutional Group |
284,692 | 299,408 | (4.9 | %) | 289,117 | (1.5 | %) | 872,696 | 972,515 | (10.3 | %) | |||||||||||||||||||||
| Other |
180,821 | 118,077 | 53.1 | % | 121,933 | 48.3 | % | 459,700 | 314,833 | 46.0 | % | |||||||||||||||||||||
|
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|
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|
|||||||||||||||||
| Total operating expenses |
$ | 935,622 | $ | 839,370 | 11.5 | % | $ | 869,336 | 7.6 | % | $ | 2,701,868 | $ | 2,618,373 | 3.2 | % | ||||||||||||||||
| Operating contribution: |
||||||||||||||||||||||||||||||||
| Global Wealth Management |
$ | 298,449 | $ | 279,935 | 6.6 | % | $ | 299,904 | (0.5 | %) | $ | 914,462 | $ | 750,500 | 21.8 | % | ||||||||||||||||
| Institutional Group |
(27,804 | ) | 40,000 | (169.5 | %) | (11,593 | ) | (139.8 | %) | (5,671 | ) | 209,620 | (102.7 | %) | ||||||||||||||||||
| Other |
(161,216 | ) | (114,166 | ) | (41.2 | %) | (106,926 | ) | (50.8 | %) | (408,094 | ) | (308,701 | ) | (32.2 | %) | ||||||||||||||||
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|
|||||||||||||||||
| Income before income taxes |
$ | 109,429 | $ | 205,769 | (46.8 | %) | $ | 181,385 | (39.7 | %) | $ | 500,697 | $ | 651,419 | (23.1 | %) | ||||||||||||||||
| Financial ratios: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
58.7 | % | 58.5 | % | 20 | 58.6 | % | 10 | 58.7 | % | 59.3 | % | (60 | ) | ||||||||||||||||||
| Non-compensation operating expenses |
30.8 | % | 21.8 | % | 900 | 24.1 | % | 670 | 25.7 | % | 20.8 | % | 490 | |||||||||||||||||||
| Income before income taxes |
10.5 | % | 19.7 | % | (920 | ) | 17.3 | % | (680 | ) | 15.6 | % | 19.9 | % | (430 | ) | ||||||||||||||||
| Effective tax rate |
37.7 | % | 26.5 | % | 1,120 | 25.9 | % | 1,180 | 28.1 | % | 25.5 | % | 260 | |||||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 5 of 18 |
Consolidated Financial Information and Metrics
| As of and for the Three Months Ended | ||||||||||||||||||||
| (Unaudited, 000s, except per share data) | 9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | |||||||||||||||
| Financial Information: |
||||||||||||||||||||
| Total assets |
$ | 37,877,577 | $ | 37,612,063 | 0.7 | % | $ | 37,298,239 | 1.6 | % | ||||||||||
| Total shareholders’ equity |
$ | 5,242,594 | $ | 5,227,350 | 0.3 | % | $ | 5,342,987 | (1.9 | %) | ||||||||||
| Total common equity |
$ | 4,557,594 | $ | 4,542,350 | 0.3 | % | $ | 4,657,987 | (2.2 | %) | ||||||||||
| Goodwill and intangible assets |
$ | (1,526,572 | ) | $ | (1,454,532 | ) | 5.0 | % | $ | (1,509,431 | ) | 1.1 | % | |||||||
| DTL on goodwill and intangible assets |
$ | 69,187 | $ | 60,034 | 15.2 | % | $ | 65,651 | 5.4 | % | ||||||||||
|
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|||||||||||
| Tangible common equity |
$ | 3,100,209 | $ | 3,147,852 | (1.5 | %) | $ | 3,214,207 | (3.5 | %) | ||||||||||
| Preferred equity |
$ | 685,000 | $ | 685,000 | 0.0 | % | $ | 685,000 | 0.0 | % | ||||||||||
| Financial Metrics: |
||||||||||||||||||||
| Book value per common share (2) |
$ | 44.20 | $ | 42.76 | 3.4 | % | $ | 44.41 | (0.5 | %) | ||||||||||
| Tangible book value per common share (2) |
$ | 30.06 | $ | 29.63 | 1.5 | % | $ | 30.64 | (1.9 | %) | ||||||||||
| Return on common equity (3) |
5.1 | % | 12.5 | % | 10.7 | % | ||||||||||||||
| Non-GAAP return on common equity (1)(3) |
5.8 | % | 13.3 | % | 11.6 | % | ||||||||||||||
| Return on tangible common equity (4) |
7.4 | % | 18.0 | % | 15.5 | % | ||||||||||||||
| Non-GAAP return on tangible common equity (1)(4) |
8.5 | % | 19.2 | % | 16.8 | % | ||||||||||||||
| Pre-tax margin on net revenues |
10.5 | % | 19.7 | % | 17.3 | % | ||||||||||||||
| Non-GAAP pre-tax margin on net revenues (1) |
11.8 | % | 20.8 | % | 18.7 | % | ||||||||||||||
| Effective tax rate |
37.7 | % | 26.5 | % | 25.9 | % | ||||||||||||||
| Non-GAAP effective tax rate (1) |
37.7 | % | 26.5 | % | 25.9 | % | ||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 6 of 18 |
Regulatory Capital
| (Unaudited, 000s) | 9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | |||||||||||||||
| SF Regulatory Capital (5): |
||||||||||||||||||||
| Common equity tier 1 capital |
$ | 3,228,952 | $ | 3,279,013 | (1.5 | %) | $ | 3,314,189 | (2.6 | %) | ||||||||||
| Tier 1 capital |
$ | 3,913,952 | $ | 3,964,013 | (1.3 | %) | $ | 3,999,189 | (2.1 | %) | ||||||||||
| Risk-weighted assets |
$ | 23,218,858 | $ | 23,300,119 | (0.3 | %) | $ | 23,164,596 | 0.2 | % | ||||||||||
| Common equity tier 1 capital ratio |
13.9 | % | 14.1 | % | 14.3 | % | ||||||||||||||
| Tier 1 risk based capital ratio |
16.9 | % | 17.0 | % | 17.3 | % | ||||||||||||||
| Tier 1 leverage capital ratio |
10.8 | % | 11.1 | % | 11.1 | % | ||||||||||||||
| Stifel Bank & Trust Regulatory Capital (5): |
||||||||||||||||||||
| Common equity tier 1 capital |
$ | 1,489,819 | $ | 1,655,760 | (10.0 | %) | $ | 1,513,202 | (1.5 | %) | ||||||||||
| Tier 1 capital |
$ | 1,489,819 | $ | 1,655,760 | (10.0 | %) | $ | 1,513,202 | (1.5 | %) | ||||||||||
| Risk-weighted assets |
$ | 13,785,150 | $ | 15,406,324 | (10.5 | %) | $ | 13,967,683 | (1.3 | %) | ||||||||||
| Common equity tier 1 capital ratio |
10.8 | % | 10.8 | % | 10.8 | % | ||||||||||||||
| Tier 1 risk based capital ratio |
10.8 | % | 10.8 | % | 10.8 | % | ||||||||||||||
| Tier 1 leverage capital ratio |
7.7 | % | 7.3 | % | 7.5 | % | ||||||||||||||
| Stifel Bank Regulatory Capital (5): |
||||||||||||||||||||
| Common equity tier 1 capital |
$ | 690,455 | $ | 377,572 | 82.9 | % | $ | 639,967 | 7.9 | % | ||||||||||
| Tier 1 capital |
$ | 690,455 | $ | 377,572 | 82.9 | % | $ | 639,967 | 7.9 | % | ||||||||||
| Risk-weighted assets |
$ | 4,724,176 | $ | 3,591,228 | 31.5 | % | $ | 5,145,958 | (8.2 | %) | ||||||||||
| Common equity tier 1 capital ratio |
14.6 | % | 10.5 | % | 12.4 | % | ||||||||||||||
| Tier 1 risk based capital ratio |
14.6 | % | 10.5 | % | 12.4 | % | ||||||||||||||
| Tier 1 leverage capital ratio |
7.1 | % | 7.3 | % | 7.1 | % | ||||||||||||||
| Stifel Net Capital (5): |
||||||||||||||||||||
| Net capital |
$ | 395,400 | $ | 642,700 | (38.5 | %) | $ | 456,500 | (13.4 | %) | ||||||||||
| Excess net capital |
$ | 373,800 | $ | 614,300 | (39.2 | %) | $ | 433,900 | (13.9 | %) | ||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 7 of 18 |
Global Wealth Management - Summary Results of Operations
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | 9/30/2023 | 9/30/2022 | % Change | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Commissions |
$ | 112,300 | $ | 108,214 | 3.8 | % | $ | 109,836 | 2.2 | % | $ | 332,327 | $ | 360,994 | (7.9 | %) | ||||||||||||||||
| Principal transactions |
53,247 | 48,351 | 10.1 | % | 48,122 | 10.7 | % | 152,433 | 142,361 | 7.1 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Transactional revenues |
165,547 | 156,565 | 5.7 | % | 157,958 | 4.8 | % | 484,760 | 503,355 | (3.7 | %) | |||||||||||||||||||||
| Asset management |
333,088 | 300,540 | 10.8 | % | 320,238 | 4.0 | % | 968,863 | 973,396 | (0.5 | %) | |||||||||||||||||||||
| Net interest |
269,431 | 242,194 | 11.2 | % | 277,345 | (2.9 | %) | 828,708 | 594,782 | 39.3 | % | |||||||||||||||||||||
| Investment banking (6) |
3,895 | 4,498 | (13.4 | %) | 4,065 | (4.2 | %) | 12,118 | 14,701 | (17.6 | %) | |||||||||||||||||||||
| Other income |
(3,403 | ) | (1,977 | ) | (72.1 | %) | (1,416 | ) | (140.3 | %) | (10,515 | ) | (4,709 | ) | (123.3 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net revenues |
768,558 | 701,820 | 9.5 | % | 758,190 | 1.4 | % | 2,283,934 | 2,081,525 | 9.7 | % | |||||||||||||||||||||
| Non-interest expenses: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
359,325 | 326,116 | 10.2 | % | 354,086 | 1.5 | % | 1,055,834 | 1,040,477 | 1.5 | % | |||||||||||||||||||||
| Non-compensation operating expenses |
110,784 | 95,769 | 15.7 | % | 104,200 | 6.3 | % | 313,638 | 290,548 | 7.9 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total non-interest expenses |
470,109 | 421,885 | 11.4 | % | 458,286 | 2.6 | % | 1,369,472 | 1,331,025 | 2.9 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income before income taxes |
$ | 298,449 | $ | 279,935 | 6.6 | % | $ | 299,904 | (0.5 | %) | $ | 914,462 | $ | 750,500 | 21.8 | % | ||||||||||||||||
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|||||||||||||||||
| As a percentage of net revenues: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
46.8 | % | 46.5 | % | 30 | 46.7 | % | 10 | 46.2 | % | 50.0 | % | (380 | ) | ||||||||||||||||||
| Non-compensation operating expenses |
14.4 | % | 13.6 | % | 80 | 13.7 | % | 70 | 13.8 | % | 13.9 | % | (10 | ) | ||||||||||||||||||
| Income before income taxes |
38.8 | % | 39.9 | % | (110 | ) | 39.6 | % | (80 | ) | 40.0 | % | 36.1 | % | 390 | |||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 8 of 18 |
Global Wealth Management - Statistical Information
| As of and for the Three Months Ended | ||||||||||||||||||||
| (Unaudited, 000s, except financial advisors) | 9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | |||||||||||||||
| Financial advisors (including independent contractors) (7) |
2,374 | 2,337 | 1.6 | % | 2,369 | 0.2 | % | |||||||||||||
| Total client assets |
$ | 412,458,000 | $ | 364,824,000 | 13.1 | % | $ | 417,669,000 | (1.2 | %) | ||||||||||
| Fee-based client assets |
$ | 150,982,000 | $ | 135,521,000 | 11.4 | % | $ | 154,538,000 | (2.3 | %) | ||||||||||
| Transactional assets |
$ | 261,476,000 | $ | 229,303,000 | 14.0 | % | $ | 263,131,000 | (0.6 | %) | ||||||||||
| Secured client lending (8) |
$ | 3,083,000 | $ | 3,841,000 | (19.7 | %) | $ | 3,163,000 | (2.5 | %) | ||||||||||
| Asset Management Revenue (000s): |
||||||||||||||||||||
| Private Client Group (9) |
$ | 279,807 | $ | 252,487 | 10.8 | % | $ | 266,510 | 5.0 | % | ||||||||||
| Asset Management |
33,211 | 30,648 | 8.4 | % | 33,154 | 0.2 | % | |||||||||||||
| Third-party Bank Sweep Program |
7,023 | 3,851 | 82.4 | % | 7,452 | (5.8 | %) | |||||||||||||
| Other (10) |
13,086 | 13,571 | (3.6 | %) | 13,148 | (0.5 | %) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total asset management revenues |
$ | 333,127 | $ | 300,557 | 10.8 | % | $ | 320,264 | 4.0 | % | ||||||||||
| Fee-based Assets (millions): |
||||||||||||||||||||
| Private Client Group (9) |
$ | 132,712 | $ | 118,850 | 11.7 | % | $ | 135,606 | (2.1 | %) | ||||||||||
| Asset Management |
33,519 | 30,095 | 11.4 | % | 34,766 | (3.6 | %) | |||||||||||||
| Elimination (11) |
(15,249 | ) | (13,424 | ) | 13.6 | % | (15,834 | ) | (3.7 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total fee-based assets |
$ | 150,982 | $ | 135,521 | 11.4 | % | $ | 154,538 | (2.3 | %) | ||||||||||
| Third-party Bank Sweep Program |
$ | 578 | $ | 1,114 | (48.1 | %) | $ | 657 | (12.0 | %) | ||||||||||
| ROA (bps) (12): |
||||||||||||||||||||
| Private Client Group (9) |
82.5 | 81.6 | 81.1 | |||||||||||||||||
| Asset Management |
39.6 | 40.7 | 38.1 | |||||||||||||||||
| Third-party Bank Sweep Program |
429.7 | 104.3 | 362.3 | |||||||||||||||||
| Stifel Bancorp Deposits (millions): |
||||||||||||||||||||
| Sweep Deposits |
$ | 11,142 | $ | 19,992 | (44.3 | %) | $ | 12,293 | (9.4 | %) | ||||||||||
| Smart Rate Deposits |
13,605 | 4,739 | 187.1 | % | 11,858 | 14.7 | % | |||||||||||||
| Direct Wealth Management Deposits at Stifel Bancorp |
397 | 25 | nm | 319 | 24.5 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Stifel Bancorp Wealth Management Deposits |
25,144 | 24,756 | 1.6 | % | 24,470 | 2.8 | % | |||||||||||||
| Other Bank Deposits |
2,450 | 2,435 | 0.6 | % | 2,535 | (3.4 | %) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Stifel Bancorp Deposits |
$ | 27,594 | $ | 27,191 | 1.5 | % | $ | 27,005 | 2.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Short-term Treasuries (millions) (13) |
$ | 7,586 | $ | 3,019 | 151.3 | % | $ | 7,104 | 6.8 | % | ||||||||||
| Wealth Management Cash (millions): |
||||||||||||||||||||
| Stifel Bancorp Wealth Management Deposits |
$ | 25,144 | $ | 24,756 | 1.6 | % | $ | 24,470 | 2.8 | % | ||||||||||
| Third-party Bank Sweep Program |
578 | 1,114 | (48.1 | %) | 657 | (12.0 | %) | |||||||||||||
| Other Sweep Cash |
173 | 236 | (26.7 | %) | 284 | (39.1 | %) | |||||||||||||
| Money Market Mutual Funds |
8,760 | 6,240 | 40.4 | % | 8,034 | 9.0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Wealth Management Cash |
$ | 34,655 | $ | 32,346 | 7.1 | % | $ | 33,445 | 3.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 9 of 18 |
Institutional Group - Summary Results of Operations
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | 9/30/2023 | 9/30/2022 | % Change | ||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||||||||||
| Commissions |
$ | 52,775 | $ | 50,840 | 3.8 | % | $ | 55,522 | (4.9 | %) | $ | 167,656 | $ | 180,650 | (7.2 | %) | ||||||||||||||||
| Principal transactions |
61,594 | 70,027 | (12.0 | %) | 57,578 | 7.0 | % | 183,630 | 260,890 | (29.6 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Transactional revenues |
114,369 | 120,867 | (5.4 | %) | 113,100 | 1.1 | % | 351,286 | 441,540 | (20.4 | %) | |||||||||||||||||||||
| Capital raising |
45,719 | 50,625 | (9.7 | %) | 74,886 | (38.9 | %) | 177,263 | 185,391 | (4.4 | %) | |||||||||||||||||||||
| Advisory |
97,272 | 166,736 | (41.7 | %) | 87,875 | 10.7 | % | 336,210 | 547,688 | (38.6 | %) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Investment banking |
142,991 | 217,361 | (34.2 | %) | 162,761 | (12.1 | %) | 513,473 | 733,079 | (30.0 | %) | |||||||||||||||||||||
| Other income (14) |
(472 | ) | 1,180 | (140.0 | %) | 1,663 | (128.4 | %) | 2,266 | 7,516 | (69.9 | %) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net revenues |
256,888 | 339,408 | (24.3 | %) | 277,524 | (7.4 | %) | 867,025 | 1,182,135 | (26.7 | %) | |||||||||||||||||||||
| Non-interest expenses: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
192,638 | 211,818 | (9.1 | %) | 194,158 | (0.8 | %) | 592,701 | 708,876 | (16.4 | %) | |||||||||||||||||||||
| Non-compensation operating expenses |
92,054 | 87,590 | 5.1 | % | 94,959 | (3.1 | %) | 279,995 | 263,639 | 6.2 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total non-interest expenses |
284,692 | 299,408 | (4.9 | %) | 289,117 | (1.5 | %) | 872,696 | 972,515 | (10.3 | %) | |||||||||||||||||||||
|
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|
|||||||||||||||||
| Income/(loss) before income taxes |
$ | (27,804 | ) | $ | 40,000 | (169.5 | %) | $ | (11,593 | ) | (139.8 | %) | $ | (5,671 | ) | $ | 209,620 | (102.7 | %) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| As a percentage of net revenues: |
||||||||||||||||||||||||||||||||
| Compensation and benefits |
75.0 | % | 62.4 | % | 1,260 | 70.0 | % | 500 | 68.4 | % | 60.0 | % | 840 | |||||||||||||||||||
| Non-compensation operating expenses |
35.8 | % | 25.8 | % | 1,000 | 34.2 | % | 160 | 32.3 | % | 22.3 | % | 1,000 | |||||||||||||||||||
| Income before income taxes |
(10.8 | %) | 11.8 | % | (2,260 | ) | (4.2 | %) | (660 | ) | (0.7 | %) | 17.7 | % | (1,840 | ) | ||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 10 of 18 |
Stifel Bancorp - Financial Information and Credit Metrics
| (Unaudited, 000s) | 9/30/2023 | 9/30/2022 | % Change | 6/30/2023 | % Change | |||||||||||||||
| Stifel Bancorp Financial Information: |
||||||||||||||||||||
| Total assets |
$ | 29,872,977 | $ | 29,307,718 | 1.9 | % | $ | 29,260,431 | 2.1 | % | ||||||||||
| Total shareholder’s equity |
$ | 2,162,000 | $ | 1,995,933 | 8.3 | % | $ | 2,148,221 | 0.6 | % | ||||||||||
| Total loans, net (includes loans held for sale) |
$ | 20,435,170 | $ | 20,910,895 | (2.3 | %) | $ | 20,562,492 | (0.6 | %) | ||||||||||
| Residential real estate |
7,957,027 | 7,048,762 | 12.9 | % | 7,708,506 | 3.2 | % | |||||||||||||
| Commercial and industrial |
4,367,671 | 5,040,682 | (13.4 | %) | 4,471,031 | (2.3 | %) | |||||||||||||
| Fund banking |
4,114,889 | 4,353,875 | (5.5 | %) | 4,349,541 | (5.4 | %) | |||||||||||||
| Securities-based loans |
2,317,631 | 2,785,679 | (16.8 | %) | 2,399,328 | (3.4 | %) | |||||||||||||
| Commercial real estate |
670,907 | 872,010 | (23.1 | %) | 677,521 | (1.0 | %) | |||||||||||||
| Construction and land |
851,709 | 564,581 | 50.9 | % | 772,571 | 10.2 | % | |||||||||||||
| Other |
172,555 | 153,661 | 12.3 | % | 154,469 | 11.7 | % | |||||||||||||
| Loans held for sale |
142,617 | 234,927 | (39.3 | %) | 224,017 | (36.3 | %) | |||||||||||||
| Investment securities |
$ | 7,411,040 | $ | 7,650,130 | (3.1 | %) | $ | 7,532,175 | (1.6 | %) | ||||||||||
| Available-for-sale securities, at fair value |
1,512,233 | 1,660,847 | (8.9 | %) | 1,582,418 | (4.4 | %) | |||||||||||||
| Held-to-maturity securities, at amortized cost |
5,898,807 | 5,989,283 | (1.5 | %) | 5,949,757 | (0.9 | %) | |||||||||||||
| Unrealized losses on available-for-sale securities |
(250,506 | ) | (247,188 | ) | 1.3 | % | (215,038 | ) | 16.5 | % | ||||||||||
| Total deposits |
$ | 27,594,358 | $ | 27,190,619 | 1.5 | % | $ | 27,004,807 | 2.2 | % | ||||||||||
| Demand deposits (interest-bearing) |
27,335,890 | 26,783,010 | 2.1 | % | 26,744,730 | 2.2 | % | |||||||||||||
| Demand deposits (non-interest-bearing) |
258,466 | 397,573 | (35.0 | %) | 260,075 | (0.6 | %) | |||||||||||||
| Certificates of deposit |
2 | 10,036 | nm | 2 | 0.0 | % | ||||||||||||||
| Credit Metrics: |
||||||||||||||||||||
| Allowance for credit losses |
$ | 169,822 | $ | 141,998 | 19.6 | % | $ | 160,132 | 6.1 | % | ||||||||||
| Allowance as a percentage of retained loans |
0.83 | % | 0.68 | % | 0.78 | % | ||||||||||||||
| Net charge-offs as a percentage of average loans |
0.00 | % | 0.02 | % | 0.00 | % | ||||||||||||||
| Total nonperforming assets |
$ | 50,719 | $ | 11,291 | 349.2 | % | $ | 11,420 | 344.1 | % | ||||||||||
| Nonperforming assets as a percentage of total assets |
0.17 | % | 0.04 | % | 0.04 | % | ||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 11 of 18 |
Stifel Bancorp - Loan and Investment Portfolio
| (Unaudited, millions) | 9/30/2023 | % of Total Portfolio |
||||||||||||||||
| Loan Portfolio |
Commercial Portfolio by Major Sector | |||||||||||||||||
| Residential real estate |
$ | 7,957 | 30 | % | Industrials |
$ | 1,012 | 4 | % | |||||||||
| Securities-based loans |
2,318 | 9 | % | Financials |
908 | 3 | % | |||||||||||
| Home equity lines of credit and other |
172 | 1 | % | Information technology |
604 | 2 | % | |||||||||||
|
|
|
|
|
|||||||||||||||
| Total consumer |
10,447 | 39 | % | Consumer discretionary |
567 | 2 | % | |||||||||||
|
|
|
|
|
|||||||||||||||
| Commercial and industrial |
4,368 | 17 | % | Healthcare |
298 | 1 | % | |||||||||||
| Fund banking |
4,115 | 16 | % | REITs |
275 | 1 | % | |||||||||||
| Construction and land |
852 | 3 | % | Materials |
224 | 1 | % | |||||||||||
| Commercial real estate |
671 | 3 | % | Hotel, leisure, restaurants |
173 | 1 | % | |||||||||||
|
|
|
|
|
|||||||||||||||
| Total commercial |
10,006 | 38 | % | Communication services |
158 | 1 | % | |||||||||||
|
|
|
|
|
|||||||||||||||
| Total loan portfolio |
20,453 | 77 | % | Consumer staples |
110 | 0 | % | |||||||||||
|
|
|
|
|
|||||||||||||||
| Unfunded commitments |
6,012 | 23 | % | |||||||||||||||
|
|
|
|
|
|||||||||||||||
| Total |
$ | 26,465 | ||||||||||||||||
|
|
|
|||||||||||||||||
| CLO by Major Sector | ||||||||||||||||||
| High tech industries |
$ | 601 | 10 | % | ||||||||||||||
| Investment Portfolio |
Healthcare & pharmaceuticals |
598 | 10 | % | ||||||||||||||
| CLO |
$ | 5,868 | 77 | % | Services: business |
524 | 9 | % | ||||||||||
| Agency MBS |
878 | 11 | % | Banking, finance, insurance, & real estate |
509 | 9 | % | |||||||||||
| Corporate bonds |
618 | 8 | % | Construction & building |
255 | 4 | % | |||||||||||
| SBA |
132 | 2 | % | Services: consumer |
249 | 4 | % | |||||||||||
| Student loan ARS |
92 | 1 | % | Media: broadcasting & subscription |
249 | 4 | % | |||||||||||
| CMBS |
70 | 1 | % | Chemicals, plastics, & rubber |
247 | 4 | % | |||||||||||
| Other |
3 | 0 | % | Hotel, gaming, & leisure |
236 | 4 | % | |||||||||||
|
|
|
|
|
|||||||||||||||
| Total Portfolio |
$ | 7,661 | 100 | % | Telecommunications |
233 | 4 | % | ||||||||||
|
|
|
|
|
|||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 12 of 18 |
Loans and Lending Commitments - Allowance for Credit Losses
| September 30, 2023 | ||||||||||||||||
| (Unaudited, 000s) | Loans and Lending Commitments |
ACL | ACL % | Q3 Provision | ||||||||||||
| Residential real estate |
$ | 7,957,027 | $ | 14,607 | 0.2 | % | $ | 194 | ||||||||
| Commercial and industrial |
4,367,671 | 74,659 | 1.7 | % | 8,584 | |||||||||||
| Fund banking |
4,114,889 | 11,518 | 0.3 | % | (660 | ) | ||||||||||
| Securities-based loans |
2,317,631 | 3,018 | 0.1 | % | (68 | ) | ||||||||||
| Commercial real estate |
670,907 | 19,866 | 3.0 | % | 6,437 | |||||||||||
| Construction and land |
851,709 | 11,500 | 1.4 | % | (1,145 | ) | ||||||||||
| Other |
172,555 | 629 | 0.4 | % | 76 | |||||||||||
|
|
|
|
|
|
|
|||||||||||
| Loans held for investment, gross |
20,452,389 | 135,797 | 0.7 | % | 13,418 | |||||||||||
| Loans held for sale |
142,617 | |||||||||||||||
|
|
|
|||||||||||||||
| Total loans, gross |
20,595,006 | |||||||||||||||
| Lending commitments |
6,012,000 | 34,025 | 0.6 | % | (3,426 | ) | ||||||||||
|
|
|
|
|
|
|
|||||||||||
| Loans and lending commitments |
$ | 26,607,006 | $ | 169,822 | $ | 9,992 | ||||||||||
|
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|
|
|
|
|
|||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 13 of 18 |
Consolidated Net Interest Income
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2023 | September 30, 2022 | June 30, 2023 | ||||||||||||||||||||||||||||||||||
| (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 |
|||||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||||||||||||||
| Cash and federal funds sold |
$ | 2,595.1 | $ | 35.6 | 5.48 | % | $ | 1,302.9 | $ | 7.7 | 2.38 | % | $ | 2,015.4 | $ | 25.0 | 4.96 | % | ||||||||||||||||||
| Financial instruments owned |
875.6 | 4.4 | 2.01 | % | 982.7 | 3.6 | 1.45 | % | 864.7 | 4.6 | 2.14 | % | ||||||||||||||||||||||||
| Margin balances |
768.2 | 15.6 | 8.15 | % | 1,062.3 | 12.5 | 4.71 | % | 795.6 | 15.4 | 7.72 | % | ||||||||||||||||||||||||
| Investments: |
||||||||||||||||||||||||||||||||||||
| Asset-backed securities |
6,130.3 | 111.0 | 7.25 | % | 6,178.0 | 61.0 | 3.95 | % | 6,162.8 | 106.5 | 6.91 | % | ||||||||||||||||||||||||
| Mortgage-backed securities |
957.3 | 5.3 | 2.22 | % | 1,032.7 | 5.3 | 2.08 | % | 974.9 | 5.4 | 2.20 | % | ||||||||||||||||||||||||
| Corporate fixed income securities |
619.5 | 4.3 | 2.77 | % | 722.7 | 5.1 | 2.81 | % | 622.5 | 4.3 | 2.77 | % | ||||||||||||||||||||||||
| Other |
4.8 | 0.1 | 2.55 | % | 4.6 | — | 1.77 | % | 4.7 | — | 2.55 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total investments |
7,711.9 | 120.7 | 6.26 | % | 7,938.0 | 71.4 | 3.60 | % | 7,764.9 | 116.2 | 5.99 | % | ||||||||||||||||||||||||
| Loans: |
||||||||||||||||||||||||||||||||||||
| Residential real estate |
7,839.4 | 61.7 | 3.15 | % | 6,824.3 | 44.8 | 2.63 | % | 7,605.8 | 57.2 | 3.01 | % | ||||||||||||||||||||||||
| Commercial and industrial |
4,372.4 | 96.8 | 8.86 | % | 4,947.8 | 65.2 | 5.27 | % | 4,715.2 | 96.7 | 8.21 | % | ||||||||||||||||||||||||
| Fund banking |
4,155.7 | 83.0 | 7.99 | % | 4,090.2 | 47.6 | 4.66 | % | 4,403.6 | 82.9 | 7.53 | % | ||||||||||||||||||||||||
| Securities-based loans |
2,342.4 | 42.7 | 7.30 | % | 2,901.9 | 31.7 | 4.36 | % | 2,469.1 | 43.0 | 6.96 | % | ||||||||||||||||||||||||
| Commercial real estate |
668.0 | 13.4 | 8.00 | % | 733.4 | 8.6 | 4.68 | % | 688.3 | 13.1 | 7.59 | % | ||||||||||||||||||||||||
| Construction and land |
820.5 | 17.3 | 8.44 | % | 493.3 | 6.4 | 5.21 | % | 702.3 | 14.2 | 8.07 | % | ||||||||||||||||||||||||
| Loans held for sale |
202.2 | 2.6 | 5.06 | % | 231.2 | 2.1 | 3.57 | % | 178.9 | 3.0 | 6.72 | % | ||||||||||||||||||||||||
| Other |
162.2 | 3.2 | 7.86 | % | 154.0 | 2.0 | 5.06 | % | 161.6 | 2.9 | 7.65 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total loans |
20,562.8 | 320.7 | 6.24 | % | 20,376.1 | 208.4 | 4.09 | % | 20,924.8 | 313.0 | 5.98 | % | ||||||||||||||||||||||||
| Other interest-bearing assets |
730.9 | 8.2 | 4.49 | % | 889.5 | 0.6 | 0.27 | % | 718.2 | 8.6 | 4.76 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total interest-bearing assets/ interest income |
33,244.5 | 505.2 | 6.08 | % | 32,551.5 | 304.2 | 3.74 | % | 33,083.6 | 482.8 | 5.84 | % | ||||||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
| Senior notes |
1,115.2 | 12.5 | 4.49 | % | 1,114.1 | 11.2 | 4.03 | % | 1,114.9 | 12.5 | 4.49 | % | ||||||||||||||||||||||||
| Deposits |
27,247.4 | 198.2 | 2.91 | % | 25,998.2 | 43.4 | 0.67 | % | 27,223.3 | 171.4 | 2.52 | % | ||||||||||||||||||||||||
| Other interest-bearing liabilities |
1,218.9 | 9.8 | 3.23 | % | 1,958.6 | 5.2 | 1.05 | % | 1,181.3 | 7.2 | 2.45 | % | ||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total interest-bearing liabilities/ interest expense |
$ | 29,581.5 | 220.5 | 2.98 | % | $ | 29,070.9 | 59.8 | 0.82 | % | $ | 29,519.5 | 191.1 | 2.59 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Net interest income/margin |
$ | 284.7 | 3.43 | % | $ | 244.4 | 3.00 | % | $ | 291.7 | 3.53 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 14 of 18 |
Stifel Bancorp Net Interest Income
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2023 | September 30, 2022 | June 30, 2023 | ||||||||||||||||||||||||||||||||||
| (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 |
|||||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||||||||||||||
| Cash and federal funds sold |
$ | 1,536.8 | $ | 21.9 | 5.70 | % | $ | 520.5 | $ | 3.2 | 2.45 | % | $ | 1,128.4 | $ | 15.0 | 5.31 | % | ||||||||||||||||||
| Investments |
7,711.9 | 120.7 | 6.26 | % | 7,938.0 | 71.4 | 3.60 | % | 7,764.9 | 116.2 | 5.99 | % | ||||||||||||||||||||||||
| Loans |
20,562.8 | 320.7 | 6.24 | % | 20,376.1 | 208.4 | 4.09 | % | 20,924.8 | 313.0 | 5.98 | % | ||||||||||||||||||||||||
| Other interest-bearing assets |
64.9 | 0.7 | 4.08 | % | 75.8 | 0.8 | 4.37 | % | 62.9 | 0.7 | 4.13 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total interest-bearing assets/ interest income |
$ | 29,876.4 | $ | 464.0 | 6.21 | % | $ | 28,910.4 | $ | 283.8 | 3.93 | % | $ | 29,881.0 | $ | 444.9 | 5.96 | % | ||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
| Deposits |
$ | 27,247.4 | $ | 198.2 | 2.91 | % | $ | 25,998.2 | $ | 43.4 | 0.67 | % | $ | 27,223.3 | $ | 171.4 | 2.52 | % | ||||||||||||||||||
| Other interest-bearing liabilities |
0.9 | 0.2 | 80.57 | % | 543.2 | 3.3 | 2.43 | % | 0.8 | 0.1 | 50.62 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total interest-bearing liabilities/ interest expense |
$ | 27,248.3 | 198.4 | 2.91 | % | $ | 26,541.4 | 46.7 | 0.70 | % | $ | 27,224.1 | 171.5 | 2.52 | % | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Net interest income/margin |
$ | 265.6 | 3.56 | % | $ | 237.1 | 3.28 | % | $ | 273.4 | 3.66 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 15 of 18 |
GAAP to Core Reconciliation
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| (Unaudited, 000s) | 9/30/2023 | 9/30/2022 | Change | 6/30/2023 | Change | 9/30/2023 | 9/30/2022 | Change | ||||||||||||||||||||||||
| GAAP net revenues |
$ | 1,045,051 | $ | 1,045,139 | $ | 1,050,721 | $ | 3,202,565 | $ | 3,269,792 | ||||||||||||||||||||||
| Non-GAAP adjustments |
(23 | ) | (6 | ) | — | (26 | ) | 55 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Non-GAAP net revenues |
1,045,028 | 1,045,133 | 1,050,721 | 3,202,539 | 3,269,847 | |||||||||||||||||||||||||||
| GAAP compensation and benefits expense |
613,287 | 611,870 | 615,667 | 1,880,144 | 1,938,270 | |||||||||||||||||||||||||||
| Merger-related (15) |
(7,171 | ) | (6,059 | ) | (6,523 | ) | (22,947 | ) | (24,544 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
| Non-GAAP compensation and benefits expense |
606,116 | 605,811 | 609,144 | 1,857,197 | 1,913,726 | |||||||||||||||||||||||||||
| GAAP non-compensation operating expenses |
322,335 | 227,500 | 253,669 | 821,724 | 680,103 | |||||||||||||||||||||||||||
| Merger-related (15) |
(6,623 | ) | (5,905 | ) | (8,621 | ) | (23,380 | ) | (19,003 | ) | ||||||||||||||||||||||
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| Non-GAAP non-compensation operating expenses |
315,712 | 221,595 | 245,048 | 798,344 | 661,100 | |||||||||||||||||||||||||||
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| Total merger-related adjustments |
(13,771 | ) | (11,958 | ) | (15,144 | ) | (46,301 | ) | (43,602 | ) | ||||||||||||||||||||||
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| GAAP provision for income taxes |
41,268 | 54,600 | 47,033 | 140,645 | 165,885 | |||||||||||||||||||||||||||
| Merger-related and other (15) |
5,198 | 3,051 | 3,920 | 13,455 | 10,979 | |||||||||||||||||||||||||||
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| Non-GAAP provision for income taxes |
46,466 | 57,651 | 50,953 | 154,100 | 176,864 | |||||||||||||||||||||||||||
| Financial ratios: |
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| Compensation and benefits |
58.0 | % | 58.0 | % | — | 58.0 | % | — | 58.0 | % | 58.5 | % | (50 | ) | ||||||||||||||||||
| Non-compensation operating expenses |
30.2 | % | 21.2 | % | 900 | 23.3 | % | 690 | 24.9 | % | 20.2 | % | 470 | |||||||||||||||||||
| Income before income taxes |
11.8 | % | 20.8 | % | (900 | ) | 18.7 | % | (690 | ) | 17.1 | % | 21.3 | % | (420 | ) | ||||||||||||||||
| Effective tax rate |
37.7 | % | 26.5 | % | 1,120 | 25.9 | % | 1,180 | 28.2 | % | 25.4 | % | 280 | |||||||||||||||||||
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 16 of 18 |
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 $67.4 million, $59.2 million, and $64.6 million, as of September 30, 2023 and 2022, and June 30, 2023, respectively. |
| (5) | Regulatory capital amounts and ratios are estimates as of the date of the Company’s earnings release, October 25, 2023. |
| (6) | Includes capital raising and advisory revenues. |
| (7) | Includes independent contractors of 108, 102, and 109 as of September 30, 2023 and 2022, and June 30, 2023, respectively. |
| (8) | Includes client margin balances held by the Company’s broker-dealer subsidiaries and securities-based loans held at the Company’s bank subsidiaries. |
| (9) | Includes Private Client Group and Trust Business. |
| (10) | Includes fund networking fees, retirement fees, transaction/handling fees, and ACAT fees. |
| (11) | Asset management assets managed in Private Client Group or Trust accounts. |
| (12) | 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. |
| (13) | Represents client assets in Treasury Securities with maturities of 52 weeks or less. |
| (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 2023 Earnings Release | Page 17 of 18 |
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, 2022. 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 25, 2023.
| Stifel Financial Corp. Quarterly Financial Supplement | Third Quarter 2023 Earnings Release | Page 18 of 18 |
Exhibit 99.3 Third Quarter 2023 Financial Results Presentation October 25, 2023 Quarterly Earnings Report
Third Quarter Snapshot 3Q23 RESULTS millions, except per share and ratios NET REVENUE NET EARNINGS EPS 3Q23: GAAP & NON-GAAP $1,045 3Q23: GAAP $0.52 & NON-GAAP $0.60 3Q23: GAAP $59 & NON-GAAP $67 YTD: GAAP & NON-GAAP $3,203 YTD: GAAP $332 & NON-GAAP $365 YTD: GAAP $2.91 & NON-GAAP $3.20 ANNUALIZED ROTCE* BOOK VALUE PER SHARE ANNUALIZED ROCE TBV $30.06 BV $44.20 3Q23: GAAP 5.1% & NON-GAAP 5.8% 3Q23: GAAP 7.4% & NON-GAAP 8.5% YTD: GAAP 13.7% & NON-GAAP 15.1% YTD: GAAP 9.5% & NON-GAAP 10.4% * Please see our definition of ROTCE in our third quarter 2023 earnings release HIGHLIGHTS Record Increased Deposits Global Wealth Management Revenue By $600 million Continued Recruiting Repurchased Strength 1.9 million Common Shares Stable Increased Share Repurchase Net Interest Income Authorization by 10 million Shares Quarterly Earnings Report 1
Variance to Consensus Estimates Third Quarter Results Variance to Consensus Estimates Commentary on Variance to Analyst Estimates (in Millions, except diluted EPS and share data) 3Q23 3Q23 Mean % Δ ■ Commissions & Principal Transactions: Revenues Operating ANALYST Commissions + Principal transactions $280 $275 2% ■ Stronger Revenue from GWM Investment banking $147 $176 (17%) ■ Investment Banking: Asset management and service fees $333 $330 1% Net interest $285 $287 (1%) ■ Slower Closing in Advisory Net revenues $1,045 $1,073 (3%) ■ Weaker ECM & FICM Results Non-interest expenses Compensation and benefits 606 625 3%■ Net Interest Income Compensation Ratio 58.0% 58.2% 20 bps ■ Modest Cash Sorting Non-compensation expenses, including legal charges 316 241 31% ■ Non-compensation Expense: Total non-interest expenses 922 866 6% Income before income taxes 123 207 (40%) ■ Includes $67 million of Legal Settlements Provision for income taxes 46 53 (13%) ■ Higher Provision Expense Tax Rate 37.7% 25.7% 47% Net Income $77 $154 (50%) ■ Tax Rate: Diluted Operating EPS* $0.60 $1.29 (54%) ■ Negatively Impacted by Non-Deductibility of Legal After-tax EPS Impact of Legal Rerserve* ($0.58) Settlement Expense * Impact of Legal Reserves calculated as legal reserves of $67 million, an adjusted tax rate of 25%, divided by the diluted average share count. Quarterly Earnings Report 2
Wealth Management: A Key Growth Driver CONSISTENT GROWTH $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2015 2016 2017 2018 2019 2020 2021 2022 2023* Brokerage Asset Management & Service Fees Net Interest Investment Banking & Other *2023 GWM Net Revenue based on annualized results through 9/30/2023 INCREASING PERCENTAGE OF RECURRING REVENUE RECRUITING DRIVES REVENUE GROWTH $450 700 100% 650 90% 22% $400 24% 600 34% 32% 32% 80% 33% 39% 550 $350 46% 51% 70% 500 $300 450 60% 400 $250 50% 350 $200 40% 78% 300 76% 66% 66% 66% 64% 250 30% 60% $150 53% 200 47% 20% $100 150 10% 100 $50 0% 50 $- 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 Net Interest Income & Asset Management Fees Transactional & Investment Banking T-12 Cumulative Production Cumulative Gross FAs Quarterly Earnings Report 3 millions Net Revenue (millions) Financial Advisors
Third Quarter Results FINANCIAL RESULTS NET REVENUE Sequential millions 3Q23 Y/Y Change 2023 YTD VS 2022 YTD Change $1,400 Global Wealth Management $769 10% 1% $2,284 10% $1,122 $1,200 $1,107 Institutional 257 -24% -7% 867 -27% $1,045 $1,051 $1,045 Other 20 nm 31% 52 nm $1,000 Net revenue 1,045 0% -1% 3,203 -2% $800 Compensation expense 606 0% 0% 1,857 -3% $600 1 306 42% 29% 776 22% Operating expense 2 $400 10 55% 28% 23 -17% Provision for credit loss Pre-tax pre-provision income 133 -41% -35% 570 -21% $200 Pre-tax income 123 -43% -37% 547 -21% $0 3Q22 4Q22 1Q23 2Q23 3Q23 Taxes 46 -19% -9% 154 -13% Net income 77 -52% -47% 393 -24% Preferred dividends 9 0% 0% 28 0% Net income available to common 67 -55% -51% 365 -26% shareholders Diluted EPS $0.60 -54% -50% $3.20 -23% Compensation ratio 58.0% 0 bps 0 bps 58.0% -50 bps 3 29.3% 870 bps 670 bps 24.2% 480 bps Operating expense ratio Pre-tax operating margin 11.8% -900 bps -690 bps 17.1% -420 bps Book value per share $44.20 3% -1% Tangible book value per share $30.06 2% -2% 4 8.5% -1070 bps -830 bps ROTCE (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 4 millions
Global Wealth Management HIGHLIGHTS GLOBAL WEALTH MANAGEMENT REVENUE Sequential millions 3Q23 Y/Y Change 2023 YTD VS 2022 YTD Change■ Record Quarterly & First Three Quarters’ Net Revenue Transactional $166 6% 5% $485 -4% ■ Second Highest Quarterly Asset Management Asset Management 333 11% 4% 969 -1% Revenue Net Interest 269 11% -3% 829 39% ■ Added 36 Financial Advisors, Including 24 Investment Banking 4 -13% -4% 12 -18% Experienced with Total Trailing Twelve Month Other (3) nm nm (11) nm Production of $24.3 million Total Global Wealth Management Net $769 10% 1% $2,284 10% Revenue ■ 34% Increase in Recruited Advisors YTD 2023 Comp. Ratio 46.8% 30 bps 10 bps 46.2% -380 bps Non-Comp. Ratio 14.4% 80 bps 70 bps 13.8% -10 bps Provision for credit loss $10 55% 28% $23 -17% Pre-tax Margin 38.8% -110 bps -80 bps 40.0% 390 bps NET REVENUE & MARGIN Pre-tax Pre-provision Margin 40.1% -70 bps -50 bps 41.0% 370 bps $790 $769 44% $757 $758 $765 FINANCIAL ADVISOR & CLIENT ASSET METRICS $744 42% $740 Sequential millions 3Q23 Y/Y 40% Change $702 $715 42.6% 41.7% Financial Advisors 2,266 1% 0% 38% 39.6% 39.9% $690 38.8% 36% Independent Contractors 108 6% -1% $665 34% Total Financial Advisors 2,374 2% 0% $640 32% Client AUA $412,458 13% -1% $615 Fee-based Client Assets $150,982 11% -2% 30% $590 3Q22 4Q22 1Q23 2Q23 3Q23 Private Client Fee-based Client Assets $132,712 12% -2% Net Revenue Pre-tax Margin Quarterly Earnings Report 5 Margin Net Revenue (millions)
Strong Bank Fundamentals SLOWING CASH SORTING NIM STABLE DESPITE RISING DEPOSIT $3,969 $3,811 COSTS 7.00% $2,068 $1,747 6.00% $1,080 $905 $726 $599 $381 $288 5.00% 3.64% 3.57% 3.53% 4.00% 3.43% 3.00% ($1,230) 3.00% ($2,022) 2.00% ($2,494) 1.00% ($3,640) ($4,364) 0.00% 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Sweep Smart Rate Ticketed MMF Net Interest Margin Deposit Costs Asset Yields ALLOWANCE FOR CREDIT LOSSES / TOTAL LOANS WELL CAPITALIZED UNDER STRESS SCENARIO 3.50% 12.0% 11.0% 3.00% 10.0% 2.50% 9.0% 2.00% 8.0% 1.50% 7.0% 0.85% 0.80% 1.00% 0.75% 6.0% 0.74% 0.70% 5.0% 0.50% 4.0% 0.00% 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Tier 1 R atio (ex. AOCI & HTM Losses) Tier 1 Ratio Well Capitalized Residential SBL CRE Construction C&I Unfunded / Other reserves* Total Reserve Ratio Quarterly Earnings Report 6 millions
Institutional Group INSTITUTIONAL GROUP REVENUE HIGHLIGHTS Sequential millions 3Q23 Y/Y Change 2023 YTD VS 2022 YTD Change ■ Ranked #1 in Municipal Issuance YTD with 13.8% Advisory $97 -42% 11% $336 -39% Market Share Capital Raising $46 -10% -39% $177 -4% Transactional $114 -5% 1% $351 -20% ■ Increased Market Share in Equity Transactions Total Institutional Revenue* $257 -24% -7% $867 -27% ■ Improving Investment Banking Backlogs Comp. Ratio 75.0% 1260 bps 500 bps 68.4% 840 bps Non-Comp. Ratio 35.8% 1000 bps 160 bps 32.3% 1000 bps Pre-tax Margin -10.8% -2260 bps -660 bps -0.7% -1840 bps * Includes net interest, asset management, and other income EQUITIES REVENUE FIXED INCOME REVENUE $100 $150 $76 $77 $76 $113 $80 $70 $105 $101 $103 $68 $110 $92 $60 $24 $25 $28 $27 $32 $24 $21 $30 $45 $25 $70 $40 $30 $20 $74 $77 $71 $68 $67 $46 $52 $52 $46 $47 $0 -$10 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Transactional Underwriting Transactional Underwriting * 2021 revenue based on annualized results through 9/30/2021 Quarterly Earnings Report 7 millions millions
Expenses Non-GAAP EXPENSE RATIOS NON-GAAP EXPENSES & PRE-TAX INCOME 65% 35% millions 3Q23 3Q22 Y/Y Change 63% 30% 61% 25% Compensation $606 $606 0% 59% 20% Non-compensation Expense, 57% 15% $302 $209 44% 58.0% 58.0% 58.0% 58.0% Ex. IB Gross Up & Credit Loss 55% 56.5% 10% Credit Loss Provision & IB Gross Up $14 $12 13% 53% 5% 51% 0% Non-compensation $316 $222 42% 3Q22 4Q22 1Q23 2Q23 3Q23 Pre-tax Income $123 $218 -43% Non-compensation Operating Ratio IB Gross up & Loan Loss Provision Compensation Ratio ANNUAL GAAP to Non-GAAP RESULTS GAAP to Non-GAAP RECONCILIATION $900 $800 (000s) 3Q23 $700 $600 GAAP Net Income $68,161 $500 $400 Preferred Dividend $9,321 $300 $200 Net Income available to common Shareholders $58,840 $100 $0 Non-GAAP After Tax Adjustments $8,573 2019 2020 2021 2022 2023* Non-GAAP Net Income Available to Common $67,413 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 2023 earnings release. *2023 annual GAAP to non-GAAP results based on annualized results through 9/30/2023 Quarterly Earnings Report 8 millions Compensation Ratio Non-compensation Ratio
Capital Utilization FIRM-WIDE ASSETS & CAPITAL RATIOS HIGHLIGHTS $40,000 $38,598 22.0% $37,878 $37,612 ■ Repurchased 1.9 million Shares $37,298 $37,196 $38,000 20.0% $36,000 ■ Approved Additional 10 million Share 18.0% $34,000 Repurchase Authorization $32,000 17.6% 17.3% 16.0% 16.9% 17.0% 16.8% $30,000 ■ 14.2 million Shares in Total Authorization 14.0% $28,000 $26,000 12.0% ■ Total Assets Increased $600 million $24,000 10.0% 11.1% 11.1% 11.1% 10.9% 10.8% $22,000■ Bank Funding Increased at CAGR of 13% Since 2019 $20,000 8.0% 3Q22 4Q22 1Q23 2Q23 3Q23 Assets Tier 1 Leverage Tier 1 Risk Based Capital $1,600,000 BANK FUNDING: A TRACK RECORD of GROWTH DEPLOYING EXCESS CAPITAL $50,000 $1,400,000 $45,000 $1,200,000 $40,000 $1,000,000 $35,000 $30,000 $800,000 $25,000 $600,000 $20,000 $15,000 $400,000 $10,000 $200,000 $5,000 $0 $0 2018 2019 2020 2021 2022 2023E 2017 2018 2019 2020 2021 2022 2023* ($200,000) Capital Generated Bank Growth Common Stock Repurchases Dividends (Common & Preferred) Bank Deposits Available Funding *2023 based on results through 9/30/2023 *2023 Estimated Capital Generated based annualized 3Q23 Net Income plus current capital in excess of regulatory minimum. Quarterly Earnings Report 9 (000s) millions millions
Concluding Remarks Quarterly Earnings Report
Third Quarter 2023 Financial Results Presentation October 25, 2023 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, 2022. 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 12