Stifel Financial Corp. Reports Third Quarter 2012 Financial

Stifel Financial Corp. Reports Third Quarter 2012 Financial Results 
Record Net Revenues for the Three Months Ended September 30, 2012 
Record Net Revenues and Net Income for the Nine Months Ended
September 30, 2012 
ST. LOUIS, MO -- (Marketwire) -- 11/05/12 --  
Highlights for the three months ended September 30, 2012: 


 
--  Record net revenues of $420.1 million.
--  Net income of $37.7 million, or $0.60 per diluted share.
--  Stockholders' equity was $1.43 billion and book value per share was
    $26.62.

  
Highlights for the nine months ended September 30, 2012: 


 
--  Record net revenues of $1.2 billion increased 13% from the comparable
    period in 2011.
--  Record net income of $98.6 million, or $1.57 per diluted share.

  
Stifel Financial Corp. (NYSE: SF) today reported unaudited net income
of $37.7 million, or $0.60 per diluted share, on record net revenues
of $420.1 million for the three months ended September 30, 2012,
compared with net income of $22.3 million, or $0.35 per diluted
share, on net revenues of $334.2 million for the third quarter of
2011.  
For the nine months ended September 30, 2012, the Company reported
record net income of $98.6 million, or $1.57 per diluted share, on
net revenues of $1.2 billion, compared with net income of $57.1
million, or $0.90 per diluted share(1), on net revenues of $1.1
billion during the comparable period in 2011. Included in net
revenues for the three and nine months ended September 30, 2012 is
$25.6 million in realized and unrealized gains recognized on the
Company's investment in Knight Capital Group, Inc. The after-tax
impact of these gains was $0.09 per diluted share. 
"I am pleased with our third quarter results, which included record
net revenues, as well as with our record net revenues and net income
for the first nine months of 2012. Our results highlight the
soundness of our balanced business model, particularly against a
challenging economic backdrop. In the quarter, both the Global Wealth
Management and Institutional Group segments performed well,"
commented Ronald J. Kruszewski, Chairman, President and CEO of Stifel
Financial. "We continue to invest in businesses that expand our
client services, and which we believe will return shareholder value.
Opportunities drive
 our growth. Today's announcement of our merger
with KBW furthers our goal of creating the premier middle-market
investment bank with a specialized focus on the financial services
industry." 


 
                                                          
                                                          
                 Summary Results of Operations (Unaudited)
                 -----------------------------------------
                                            Three Months Ended              
                               -------------------------------------------- 
                                                      %                 %   
(in 000s)                       9/30/12   9/30/11  Change   6/30/12  Change 
                               --------- --------- ------  --------- ------ 
  Net revenues                 $ 420,080 $ 334,214   25.7  $ 374,407   12.2 
  Net income                   $  37,710 $  22,304   69.1  $  26,136   44.3 
Earnings per share:                                                         
  Basic                        $    0.70 $    0.43   62.8  $    0.49   42.9 
  Diluted                      $    0.60 $    0.35   71.4  $    0.42   42.9 
                                                                            
Weighted average number of common shares outstanding:                       
  Basic                           53,601    52,367    2.4     53,569    0.1 
  Diluted                         63,054    63,152   (0.2)    62,678    0.6 
                                                                            
                                                                            
                                                                            
 
                                            Nine Months Ended       
                                     ------------------------------ 
                                                                %   
       (in 000s)                       9/30/12     9/30/11   Change 
                                     ----------- ----------- ------ 
         Net revenues                $ 1,194,820 $ 1,059,684   12.8 
         Net income                  $    98,619 $    57,118   72.7 
       Earnings per share:                                          
         Basic                       $      1.84 $      1.09   68.8 
         Diluted                     $      1.57 $      0.90   74.4 
                                                                    
       Weighted average number of                                   
        common shares outstanding:                                  
         Basic                            53,471      52,610    1.6 
         Diluted                          62,817      63,174   (0.6)

 
Business Segment Results 


 
                                                       
                                                       
                    Summary Segment Results (Unaudited)
                    -----------------------------------
                                         Three Months Ended                 
                         -------------------------------------------------  
                                                                       %    
(in 000s)                 9/30/12    9/30/11   % Change   6/30/12   Change  
                         ---------  ---------  --------  ---------  ------  
Net revenues:                                                               
  Global Wealth                                                             
   Management            $ 251,728  $ 219,498      14.7  $ 240,029     4.9  
  Institutional Group                                                       
   (2)                     169,679    113,259      49.8    135,297    25.4  
  Other                     (1,327)     1,457    (191.1)      (919)  (44.4) 
                         ---------  ---------  --------  ---------  ------  
                         $ 420,080  $ 334,214      25.7  $ 374,407    12.2  
                         ---------  ---------  --------  ---------  ------  
Pre-tax operating                                                           
 income:                                                                    
  Global Wealth                                                             
   Management            $  68,370  $  55,612      22.9  $  61,353    11.4  
  Institutional Group                                                       
   (2)                      33,427      9,152     265.2     17,546    90.5  
  Other (3)                (40,120)   (25,741)     55.9    (35,025)   14.5  
                         ---------  ---------  --------  ---------  ------  
                         $  61,677  $  39,023      58.1  $  43,874    40.6  
                         ---------  ---------  --------  ---------  ------  
                                                                            
                                                                            
 
                                       
  Nine Months Ended        
                                 -------------------------------- 
                                                              %   
         (in 000s)                 9/30/12      9/30/11    Change 
                                 -----------  -----------  ------ 
         Net revenues:                                            
           Global Wealth                                          
            Management           $   740,105  $   683,589     8.3 
           Institutional Group                                    
            (2)                      453,480      373,168    21.5 
           Other                       1,235        2,927   (57.8)
                                 -----------  -----------  ------ 
                                 $ 1,194,820  $ 1,059,684    12.8 
                                 -----------  -----------  ------ 
         Pre-tax operating                                        
          income:                                                 
           Global Wealth                                          
            Management           $   198,901  $   172,510    15.3 
           Institutional Group                                    
            (2)                       74,677       52,496    42.3 
           Other (3)                (108,773)    (131,424)  (17.2)
                                 -----------  -----------  ------ 
                                 $   164,805  $    93,582    76.1 
                                 -----------  -----------  ------ 

 
Global Wealth Management 
For the quarter ended September 30, 2012, the Global Wealth
Management ("GWM") segment generated pre-tax operating income of
$68.4 million, compared with $55.6 million in the third quarter of
2011 and $61.4 million in the second quarter of 2012. Net revenues
for the quarter were $251.7 million, compared with $219.5 million in
the third quarter of 2011, and $240.0 million in the second quarter
of 2012. The increase in net revenues over the comparable period in
2011 is primarily attributable to: (1) higher principal transactions
revenues, offset by a decrease in commissions revenue; (2) higher
sales credits from investment banking underwritings; (3) growth in
asset management and service fees as a result of an increase in
assets under management and positive gains in market performance; and
(4) increased net interest revenues as a result of the growth of net
interest-earning assets at Stifel Bank. The increase in net revenues
from the second quarter of 2012 was primarily attributable to: (1)
higher sales credits from investment banking underwritings; (2) an
increase in principal transactions revenues; and (3) increased net
interest revenues as a result of the growth of net interest-earning
assets at Stifel Bank. 


 
--  The Private Client Group reported net revenues of $229.4 million, a
    14% increase compared with the third quarter of 2011 and a 4% increase
    compared with the second quarter of 2012.
--  Stifel Bank reported net revenues of $22.3 million, a 27% increase
    compared with the third quarter of 2011 and a 17% increase compared
    with the second quarter of 2012.

  
Institutional Group 
For the quarter ended September 30, 2012, the Institutional Group
segment generated pre-tax operating income of $33.4 million, compared
with $9.2 million in the third quarter of 2011 and $17.5 million in
the second quarter of 2012. Net revenues for the quarter were $169.7
million, compared with $113.3 million in the third quarter of 2011
and $135.3 million in the second quarter of 2012. The increase in net
revenues from the comparable period in 2011 was driven by: (1) an
increase in advisory fees; (2) an increase in fixed income capital
raising revenues; (3) higher fixed income institutional brokerage
revenues; and (4) the realized and unrealized gains recognized on the
Company's investment in Knight Capital Group, Inc. Offsetting these
increases was a decrease in equity institutional brokerage revenues.
The increase in net revenues from the second quarter of 2012 was
primarily attributable to: (1) an increase in fixed income
institutional brokerage revenues; and (2) the realized and unrealized
gains recognized on the Company's investment in Knight Capital Group,
Inc. 
Institutional brokerage revenues were $82.8 million, a 5% increase
compared with the third quarter of 2011 and a 10% increase compared
with the second quarter of 2012.  


 
--  Equity brokerage revenues were $38.0 million, a 20% decrease compared
    with the third quarter of 2011 and a 1% decrease compared with the
    second quarter of 2012.
--  Fixed income brokerage revenues were $44.8 million, a 41% increase
    compared with the third quarter of 2011 and a 23% increase compared
    with the second quarter of 2012.

  
Investment banking revenues were $59.6 million, a 76% increase compared
with the third quarter of 2011 and a 1% increase compared with the
second quarter of 2012.  


 
--  Equity capital raising revenues were $17.5 million, a 7% increase
    compared with the third quarter of 2011 and a 1% decrease compared
    with the second quarter of 2012.
--  Fixed income capital raising revenues were $14.9 million, a 194%
    increase compared with the third quarter of 2011 and a 2% increase
    compared with the second quarter of 2012.
--  Advisory fee revenues were $27.2 million, a 118% increase compared
    with the third quarter of 2011 and a 2% increase compared with the
    second quarter of 2012.

  
Consolidated Compensation and Benefits Expenses 
For the quarter ended September 30, 2012, compensation and benefits
expenses were $267.7 million, compared with $210.6 million in the
third quarter of 2011 and $239.4 million in the second quarter of
2012.  
Compensation and benefits as a percentage of net revenues was 64% in
the third quarter of 2012, compared with 63% in the third quarter of
2011 and 64% in the second quarter of 2012. Transition pay, which
primarily consists of amortization of upfront notes, signing bonuses
and retention awards, as a percentage of net revenues was 5% in the
third quarter of 2012, consistent with the third quarter of 2011 and
the second quarter of 2012.  
Consolidated Non-Compensation Operating Expenses 
For the quarter ended September 30, 2012, non-compensation operating
expenses were $90.8 million, compared to $84.6 million in the third
quarter of 2011 and $91.2 million in the second quarter of 2012. 
Non-compensation operating expenses as a percentage of net revenues
for the quarter ended September 30, 2012 was 22% compared with 25% in
the third quarter of 2011 and 24% in the second quarter of 2012. The
lower ratio in the third quarter of 2012 was driven by the impact of
higher revenues. 
Provision for Income Taxes 
The effective income tax rate for the quarter ended September 30,
2012 was 39% compared with 43% in the third quarter of 2011 and 40%
in the second quarter of 2012.  
Statement of Financial Condition (Unaudited) 
Total assets increased 24% to $6.1 billion as of September 30, 2012
from $4.9 billion as of September 30, 2011. The increase is primarily
attributable to growth of Stifel Bank, the Company's 
bank subsidiary,
which as of September 30, 2012 has grown its assets to $3.2 billion
from $2.3 billion as of September 30, 2011. As of September 30, 2012,
Stifel Bank's investment portfolio of $2.1 billion has increased 45%
from September 30, 2011, with more than 99% of the investment
portfolio comprised of investment grade securities, of which more
than 71% were Government-Sponsored Enterprise guaranteed MBS or
AAA-rated investments. The Company's broker-dealer subsidiary's gross
assets and liabilities, including trading inventory, stock
loan/borrow, receivables and payables from/to brokers, dealers and
clearing organizations and clients, fluctuate with business levels
and overall market conditions.  
Total stockholders' equity as of September 30, 2012 increased $165.4
million, or 13%, to $1.427 billion from $1.262 billion as of
September 30, 2011. Book value per share was $26.62 as of September
30, 2012. The Company repurchased $9.1 million, or 0.3 million
shares, of its common stock pursuant to existing Board repurchase
authorizations during the nine months ended September 30, 2012.  
As of September 30, 2012, the Company reported total securities owned
and investments at fair value of $2.4 billion, which included
securities categorized as Level 3 of $214.5 million. The Company's
Level 3 assets include auction rate securities with a fair value of
$162.8 million, and private equity and other fixed income securities
with a fair value $51.7 million as of September 30, 2012. 
Conference Call Information 
Stifel Financial Corp. will host its third quarter 2012 financial
results conference call on Monday, November 5, 2012, at 8:30 a.m.
Eastern time. The conference call may include forward-looking
statements. 
All interested parties are invited to listen to the Company's
Chairman, President, and CEO, Ronald J. Kruszewski, by dialing (800)
651-2240 and referencing conference ID #64728788. A live audio
webcast of the call, as well as a presentation highlighting the
Company's results, will be available through the Company's web site,
www.stifel.com. For those who cannot listen to the live broadcast, a
replay of the broadcast will be available through the
above-referenced web site beginning approximately one hour following
the completion of the call. 
Company Information 
Stifel Financial Corp. (NYSE: SF) is a financial services holding
company headquartered in St. Louis, Missouri that conducts its
banking, securities, and financial services business through several
wholly owned subsidiaries. Stifel clients are served through Stifel,
Nicolaus & Company, Incorporated in the U.S., through Stifel Nicolaus
Canada Inc. in Canada, and through Stifel Nicolaus Europe Limited in
the United Kingdom and Europe. The Company's broker-dealer affiliates
provide securities brokerage, investment banking, trading, investment
advisory, and related financial services to individual investors,
professional money managers, businesses, and municipalities. Stifel
Bank & Trust offers a full range of consumer and commercial lending
solutions. Stifel Trust Company, N.A. offers trust and related
services. To learn more about Stifel Financial, please visit the
Company's web site at www.stifel.com.  
Forward-Looking Statements 
This earnings release contains certain statements that may be deemed
to be "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements in this earnings release not
dealing with historical results are forward-looking and are based on
various assumptions. The forward-looking statements in this earnings
release are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed in or
implied by the statements. Factors that may cause actual results to
differ materially from those contemplated by such forward-looking
statements include, among other things, the following possibilities:
the ability to successfully integrate acquired companies or the
branch offices and financial advisors; a material adverse change in
financial condition; the risk of borrower, depositor, and other
customer attrition; a change in general business and economic
conditions; changes in the interest rate environment, deposit flows,
loan demand, real estate values, and competition; changes in
accounting principles, policies, or guidelines; changes in
legislation and regulation; other economic, competitive,
governmental, regulatory, geopolitical, and technological factors
affecting the companies' operations, pricing, and services; and other
risk factors referred to from time to time in filings made by Stifel
Financial Corp. with the Securities and Exchange Commission.
Forward-looking statements speak only as to the date they are made.
Stifel Financial Corp. disclaims any intent or obligation to update
forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements are made.  


 
                                                           
                                                           
                 Summary Results of Operations (Unaudited) 
                 ------------------------------------------
                                           Three Months Ended               
                              --------------------------------------------  
(in thousands, except per                            %                 %    
 share amounts)                9/30/12   9/30/11  Change   6/30/12  Change  
                              --------- --------- ------  --------- ------  
Revenues:                                                                   
  Commissions                 $ 127,966 $ 143,243  (10.7) $ 127,427    0.4  
  Principal transactions        102,979    76,650   34.4     91,564   12.5  
  Investment banking             72,938    37,673   93.6     67,363    8.3  
  Asset management and                                                      
   service fees                  62,881    58,253    7.9     65,311   (3.7) 
  Other income                   31,922       540      *      5,418  489.2  
                              --------- --------- ------  --------- ------  
    Operating revenues          398,686   316,359   26.0    357,083   11.7  
  Interest revenue               27,306    24,161   13.0     27,181    0.5  
                              --------- --------- ------  --------- ------  
    Total revenues              425,992   340,520   25.1    384,264   10.9  
  Interest expense                5,912     6,306   (6.2)     9,857  (40.0) 
                              --------- --------- ------  --------- ------  
    Net revenues                420,080   334,214   25.7    374,407   12.2  
                              --------- --------- ------  --------- ------  
                                                                            
Non-interest expenses:                                                      
  Compensation and benefits     267,652   210,573   27.1    239,374   11.8  
  Occupancy and equipment                                                   
   rental                        33,061    30,914    6.9     32,320    2.3  
  Communications and office                                                 
   supplies                      19,976    18,838    6.0     20,797   (3.9) 
  Commission and floor                                                      
   brokerage                      8,031     7,400    8.5      7,747    3.7  
  Other operating expenses       29,683    27,466    8.1     30,295   (2.0) 
                              --------- --------- ------  --------- ------  
    Total non-interest                                                      
     expenses                   358,403   295,191   21.4    330,533    8.4  
                                                                            
Income before income taxes       61,677    39,023   58.1     43,874   40.6  
  Provision for incom
e taxes     23,967    16,719   43.4     17,738   35.1  
                              --------- --------- ------  --------- ------  
Net income                    $  37,710 $  22,304   69.1  $  26,136   44.3  
                              --------- --------- ------  --------- ------  
                                                                            
Earnings per share:                                                         
  Basic                       $    0.70 $    0.43   62.8  $    0.49   42.9  
  Diluted                     $    0.60 $    0.35   71.4  $    0.42   42.9  
                                                                            
Weighted average number of common shares                                    
 outstanding:                                                               
  Basic                          53,601    52,367    2.4     53,569    0.1  
  Diluted                        63,054    63,152   (0.2)    62,678    0.6  
                                                                            
-------------------------------                                             
* Percentage not meaningful.                                                
                                                                            
                                                                            
 
                                            Nine Months Ended       
                                     ------------------------------ 
        (in thousands, except per                               %   
         share amounts)                9/30/12     9/30/11   Change 
                                     ----------- ----------- ------ 
        Revenues:                                                   
          Commissions                $   378,696 $   437,344  (13.4)
          Principal transactions         310,776     249,250   24.7 
          Investment banking             210,739     143,509   46.8 
          Asset management and                                      
           service fees                  189,010     172,914    9.3 
          Other income                    50,634      11,352  346.0 
                                     ----------- ----------- ------ 
            Operating revenues         1,139,855   1,014,369   12.4 
          Interest revenue                79,744      64,246   24.1 
                                     ----------- ----------- ------ 
            Total revenues             1,219,599   1,078,615   13.1 
          Interest expense                24,779      18,931   30.9 
                                     ----------- ----------- ------ 
            Net revenues               1,194,820   1,059,684   12.8 
                                     ----------- ----------- ------ 
                                                                    
        Non-interest expenses:                                      
          Compensation and benefits      761,730     671,678   13.4 
          Occupancy and equipment                                   
           rental                         96,172      89,962    6.9 
          Communications and office                                 
           supplies                       61,146      56,198    8.8 
          Commission and floor                                      
           brokerage                      23,390      20,943   11.7 
          Other operating expenses        87,577     127,321  (31.2)
                                     ----------- ----------- ------ 
            Total non-interest                                      
             expenses                  1,030,015     966,102    6.6 
                                                                    
        Income before income taxes       164,805      93,582   76.1 
          Provision for income taxes      66,186      36,464   81.5 
                                     ----------- ----------- ------ 
        Net income                   $    98,619 $    57,118   72.7 
                                     ----------- ----------- ------ 
                                                                    
        Earnings per share:                                         
          Basic                      $      1.84 $      1.09   68.8 
          Diluted                    $      1.57 $      0.90   74.4 
                                                                    
        Weighted average number of                                  
         common shares outstanding:                                 
          Basic                           53,471      52,610    1.6 
          Diluted                         62,817      63,174   (0.6)
                                                                    
        -----------------------------                               
        * Percentage not meaningful.                                
                                                                    
                                                                    
                                                                            
                                                                            
       (in thousands, except per share, employee and location amounts)      
                                                    %                    %  
                        9/30/12       9/30/11    Change    6/30/12    Change
                     ------------- ------------- ------ ------------- ------
Statistical                                                                 
 Information:                                                               
  Book value per                                                            
   share             $       26.62 $       24.48    8.7 $       25.63    3.9
  Financial advisors                                                        
   (4)                       2,042         1,961    4.1         2,028    0.7
  Full-time                                                                 
   associates                5,266         4,942    6.6         5,196    1.3
  Locations                    338           313    8.0           332    1.8
  Total client                                                              
   assets (5)        $ 136,015,000 $ 110,797,000   22.8 $ 131,026,000    3.8
                                                                            
                                                                            
                                                                        
                                                                        
    Global Wealth Management Summary Results of Operations (Unaudited)  
                                           Three Months Ended               
                              --------------------------------------------  
                                                     %                 %    
(in 000s)                      9/30/12   9/30/11  Change   6/30/12  Change  
                              --------- --------- ------  --------- ------  
Revenues:                                                                   
  Commissions                 $  89,393 $  92,029   (2.9) $  88,423    1.1  
  Principal transactions         58,801    48,836   20.4     55,628    5.7  
  Asset management and                                                      
   service fees                  62,871    58,007    8.4     65,169   (3.5) 
  Net interest                   22,283    15,016   48.4     18,233   22.2  
  Investment banking             13,347     3,737  257.2      8,531   56.5  
  Other income                    5,033     1,873  168.7      4,045   24.4  
                              --------- --------- ------  --------- ------  
    Net revenues                251,728   219,498   14.7    240,029    4.9  
                              --------- --------- ------  --------- ------  
Non-interest expenses:                                                     
 
  Compensation and benefits     146,882   128,244   14.5    140,984    4.2  
  Non-compensation operating                                                
   expenses                      36,476    35,642    2.3     37,692   (3.2) 
                              --------- --------- ------  --------- ------  
    Total non-interest                                                      
     expenses                   183,358   163,886   11.9    178,676    2.6  
                              --------- --------- ------  --------- ------  
Income before income taxes    $  65,921 $  55,612   22.9  $  61,353   11.4  
                              --------- --------- ------  --------- ------  
                                                                            
As a percentage of net                                                      
 revenues:                                                                  
  Compensation and benefits        58.3      58.4              58.7         
  Non-compensation operating                                                
   expenses                        14.5      16.3              15.7         
  Income before income taxes       27.2      25.3              25.6         
                                                                            
                                                                            
 
                                           Nine Months Ended       
                                     ----------------------------- 
                                                              %    
        (in 000s)                      9/30/12    9/30/11   Change 
                                     ---------- ---------- ------- 
        Revenues:                                                  
          Commissions                $  268,839 $  287,384    (6.5)
          Principal transactions        173,474    156,262    11.0 
          Asset management and                                     
           service fees                 188,626    172,354     9.4 
          Net interest                   58,163     39,586    46.9 
          Investment banking             34,348     16,460   108.7 
          Other income                   16,655     11,543    44.3 
                                     ---------- ---------- ------- 
            Net revenues                740,105    683,589     8.3 
                                     ---------- ---------- ------- 
        Non-interest expenses:                                     
          Compensation and benefits     431,623    403,782     6.9 
          Non-compensation operating                               
           expenses                     109,581    107,297     2.1 
                                     ---------- ---------- ------- 
            Total non-interest                                     
             expenses                   541,204    511,079     5.9 
                                     ---------- ---------- ------- 
        Income before income taxes   $  198,901 $  172,510    15.3 
                                     ---------- ---------- ------- 
                                                                   
        As a percentage of net                                     
         revenues:                                                 
          Compensation and benefits        58.3       59.1         
          Non-compensation operating                               
           expenses                        14.8       15.7         
          Income before income taxes       26.9       25.2         
                                                                   
                                                                   
                                                                            
                                                                            
                       Stifel Bank & Trust (Unaudited)                      
                         Key Statistical Information                        
----------------------------------------------------------------------------
(in 000s, except                                     %                   %  
 percentages)             9/30/12      9/30/11    Change   6/30/12    Change
                        -----------  -----------  ------ -----------  ------
Other information:                                                          
  Assets                $ 3,228,021  $ 2,311,371    39.7 $ 3,058,971     5.5
  Investment securities   2,133,494    1,470,812    45.1   1,849,622    15.3
  Retained loans, net       746,120      567,341    31.5     709,079     5.2
  Loans held for sale       209,358      114,452    82.9     117,166    78.7
  Deposits                2,923,671    2,120,763    37.9   2,776,684     5.3
                                                                            
  Allowance as a                                                            
   percentage of loans         0.85%        0.67%               0.88%       
  Non-performing assets                                                     
   as a percentage of                                                       
   total assets                0.07%        0.08%               0.08%       
                                                                            
                                                                            
                                                                            
                                                                            
       Institutional Group Summary Results of Operations (Unaudited)        
                                           Three Months Ended               
                              --------------------------------------------  
                                                     %                 %    
(in 000s)                      9/30/12   9/30/11  Change   6/30/12  Change  
                              --------- --------- ------  --------- ------  
Revenues:                                                                   
  Commissions                 $  38,574 $  51,214  (24.7) $  39,004   (1.1) 
  Principal transactions         44,178    27,815   58.8     35,936   22.9  
                                                                            
  Capital raising                32,386    21,436   51.1     32,202    0.6  
  Advisory fees                  27,205    12,500  117.6     26,630    2.2  
                              --------- --------- ------  --------- ------  
  Investment banking             59,591    33,936   75.6     58,832    1.3  
  Other (6)                      27,336       294      *      1,525      *  
                              --------- --------- ------  --------- ------  
    Net revenues                169,679   113,259   49.8    135,297   25.4  
                              --------- --------- ------  --------- ------  
Non-interest expenses:                                                      
  Compensation and benefits     104,913    74,813   40.2     84,754   23.8  
  Non-compensation operating                                                
   expenses                      31,339    29,294    7.0     32,997   (5.0) 
                              --------- --------- ------  --------- ------  
    Total non-interest                                                      
     expenses                   136,252   104,107   30.9    117,751   15.7  
                              --------- --------- ------  --------- ------  
Income before income taxes    $  33,427 $   9,152  265.2  $  17,546   90.5  
                              --------- --------- ------  --------- ------  
                                                                            
As a percentage of net                                                      
 revenues:                                                                  
  Compensation and benefits        61.8      66.0              62.6         
  Non-compensation operating                                                
   expenses                        18.5      25.9              24.4         
  Income before income taxes       19.7       8.1              13.0         
                                                                            
-------------------------------                                             
* Percentage not meaningful.                                                
                                                                            
                                                                            
 
                                            Nine Months Ended     
                                       -------------------------- 
                                                              %   
          (in 000s)                     9/30/12   9/30/11  Change 
                                       --------- --------- ------ 
          Revenues:                                               
            Commissions                $ 109,858 $ 149,960  (26.7)
            Principal transactions       137,302    92,988   47.7 
                                                                  
            Capital raising              106,951    80,654   32.6 
            Advisory fees                 69,440    46,395   49.7 
                                       --------- --------- ------ 
            Investment banking           176,391   127,049   38.8 
            Other (6)                     29,929     3,171      * 
                                       --------- --------- ------ 
              Net revenues               453,480   373,168   21.5 
                                       --------- --------- ------ 
          Non-interest expenses:                                  
            Compensation and benefits    283,691   234,006   21.2 
            Non-compensation operating                            
             expenses                     95,112    86,666    9.7 
                                       --------- --------- ------ 
              Total non-interest                                  
               expenses                  378,803   320,672   18.1 
                                       --------- --------- ------ 
          Income before income taxes   $  74,677 $  52,496   42.3 
                                       --------- --------- ------ 
                                                                  
          As a percentage of net                                  
           revenues:                                              
            Compensation and benefits       62.6      62.7        
            Non-compensation operating                            
             expenses                       20.9      23.2        
            Income before income taxes      16.5      14.1        
                                                                  
          -----------------------------                           
          * Percentage not meaningful.                            
                                                                  
                                                                  
                                                                         
                                                                         
  Institutional Group Brokerage & Investment Banking Revenues (Unaudited)
                                           Three Months Ended               
                              --------------------------------------------  
                                                     %                 %    
(in 000s)                      9/30/12   9/30/11  Change   6/30/12  Change  
                              --------- --------- ------  --------- ------  
Institutional brokerage:                                                    
  Equity                      $  37,956 $  47,185  (19.6) $  38,466   (1.3) 
  Fixed income                   44,796    31,844   40.7     36,474   22.8  
                              --------- --------- ------  --------- ------  
Institutional brokerage          82,752    79,029    4.7     74,940   10.4  
                                                                            
Investment banking:                                                         
  Capital raising:                                                          
    Equity                       17,527    16,382    7.0     17,651   (0.7) 
    Fixed income                 14,859     5,054  194.0     14,551    2.1  
                              --------- --------- ------  --------- ------  
      Capital raising            32,386    21,436   51.1     32,202    0.6  
  Advisory fees                  27,205    12,500  117.6     26,630    2.2  
                              --------- --------- ------  --------- ------  
Investment banking            $  59,591 $  33,936   75.6  $  58,832    1.3  
                              --------- --------- ------  --------- ------  
                                                                            
                                                                            
 
                                            Nine Months Ended     
                                       -------------------------- 
                                                              %   
          (in 000s)                     9/30/12   9/30/11  Change 
                                       --------- --------- ------ 
          Institutional brokerage:                                
            Equity                     $ 120,594 $ 141,278  (14.6)
            Fixed income                 126,566   101,670   24.5 
                                       --------- --------- ------ 
          Institutional brokerage        247,160   242,948    1.7 
                                                                  
          Investment banking:                                     
            Capital raising:                                      
              Equity                      66,728    67,386   (1.0)
              Fixed income                40,223    13,268  203.2 
                                       --------- --------- ------ 
                Capital raising          106,951    80,654   32.6 
            Advisory fees                 69,440    46,395   49.7 
                                       --------- --------- ------ 
          Investment banking           $ 176,391 $ 127,049   38.8 
                                       --------- --------- ------ 

 
(1) Included in the results for the nine months ended September 30,
2011 were the estimated costs of settlement and litigation-related
expenses of $29.4 million after tax, or $0.47 per diluted share,
respectively, associated with the civil lawsuit and related
regulatory investigation in connection with the previously disclosed
matter involving five Southeastern Wisconsin school districts and
certain merger-related expenses. 
(2) Results for the three and nine months ended September 30, 2012
include $25.6 million in realized and unrealized gains recognized on
the Company's investment in Knight Capital Group, Inc. 
(3) Results for the nine months ended September 30, 2011 include
litigation-related charges and merger-related expenses of $47.5
million pre-tax. 
(4) Includes 154, 160 and 156 independent contractors at September
30, 2012 and 2011 and June 30, 2012, respectively. 
(5) Includes money market and FDIC-insured balances. Prior period
amounts have been adjusted to conform to the current period
presentation. 
(6) Includes net interest and other income. Other income for the
three and nine months ended September 30, 2012 include $25.6 million
in realized and unrealized gains recognized on the Company's
investment in Knight Capital Group, Inc. 
Investor Relations Contact 
Sarah Anderson
(415) 364-2500
investorrelations@stifel.com 
 
 
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