STIFEL FINANCIAL CORP.
Form 8-K Dated August 8, 2006
Exhibit 99.1: Press Release
[Stifel Financial Corp. logo] Stifel Financial News
One Financial Plaza
501 North Broadway
St. Louis, MO 63102
(314) 342-2000 |
For further information contact:
James M. Zemlyak, Chief Financial Officer
(314) 342-2228 zemlyakj@stifel.com
For Immediate Release
Stifel Financial Corp. Reports Second Quarter Results
Quarterly Revenues of $107 Million, up 65%
Core diluted EPS $0.50
GAAP diluted EPS $0.16
St. Louis, Missouri - August 8, 2006- Stifel Financial Corp. (NYSE: "SF") today reported unaudited quarterly net income of $2.3 million, or $0.16 per diluted share, on net revenues of $102.7 million for the quarter ended June 30, 2006. For the comparable quarter of 2005, net income was $5.6 million, or $0.46 per diluted share, on net revenues of $64.0 million. For the six months ended June 30, 2006, we posted net income of $2.8 million, or $0.20 per diluted share, on record six month net revenues of $212.2 million, compared with $10.0 million, or $0.81 per diluted share, on net revenues of $124.2 million, for the same period one year earlier.
At June 30, 2006, our equity was $205.4 million, resulting in book value per share of $17.57.
The Company achieved record net revenues as a result of the benefits attributable to the previously disclosed Legg Mason Capital Markets ("LM Capital Markets") acquisition which closed on December 1, 2005 (see Equity Capital Markets and Fixed Income Capital Markets-Business Segment Results).
Core Earnings
After adjusting for acquisition related charges, principally compensation expense recorded for stock based awards offered to key associates of LM Capital Markets and accounted for under Statement of Accounting Standards No. 123 (Revised 2004) "Share Based Payments" ("SFAS No. 123R") non-GAAP net income and non-GAAP earnings per diluted share, our Core earnings, for the quarter ended June 30, 2006 were $7.0 million and $0.50, respectively. We believe Core Earnings provides investors, rating agencies, and financial analysts with a more meaningful measure of the Company's operating performance. Core Earnings for the quarter excludes acquisition charges of approximately $8.3 million or $0.34 per diluted share. Included in these acquisition related charges are: 1) compensation charges of $7.8 million for amortization of units awarded to LM Capital Markets associates, severance, and contractually based compensation above standard per formance based compensation; and 2) other non-compensation acquisition charges of $507,000.
Core Earnings, for the six months ended June 30, 2006, were $18.1 million or $1.31 per diluted share.
Page 1
Second Quarter of 2006 Business Highlights
- We continued our expansion of the Private Client Group ("PCG") opening 6 branch offices during the quarter for a total of 97.
- Our number of investment executives we employ has increased by 51 to 485 from June 30, 2005.
- Our net revenues grew to $102.7 million, a 60% increase over the prior year second quarter of $64.0 million but a 6% reduction from the preceding first quarter.
- Commission and principal transaction revenues increased 101% to $68.8 million from $34.3 million from the same period one year earlier but decreased 1% from the 2006 first quarter.
- Asset management and service fees increased 40% to $14.2 million from $10.1 million from the prior year second quarter and increased 5% from the preceding first quarter of 2006.
Chairman and Chief Executive Officer, Ronald J. Kruszewski, commented, "We are pleased with our results during the quarter in light of the difficult market conditions. Most important, our integration of the LM Capital Markets business is exceeding our expectations."
Second Quarter Discussion
As a result of our LM Capital Markets acquisition we added 429 staff and 22 offices on December 1, 2005. Unless noted otherwise, our increase in revenues and non-interest expenses for the quarter and year-to-date for the total company and segment can be attributed principally to the acquisition and increased number of Private Client Group ("PCG") offices and increased number of PCG investment executives.
Commission and Principal Transactions
Commission and principal transaction revenues increased 101% to $68.8 million from $34.3 million in the same period last year with increases of 21%, 1,119% and 377% in PCG, Equity Capital Markets ("ECM"), and Fixed Income Capital Markets ("FICM"), respectively.
Investment Banking Revenues
Investment banking revenues increased slightly to $15.8 million from $15.7 million in the same period last year. We had a significant increase in our corporate advisory fees of $6.9 million over the prior year quarter but our underwriting revenues declined $6.8 million for both corporate and municipal finance due to decreased banking calendars.
Asset Management and Service Fees
Asset management and service fees increased 40% to $14.2 million from $10.1 million in the second quarter of last year due to a 43% increase in the number of our managed accounts and a 108% increase in the value of assets under management in those accounts.
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Net Interest Revenue
Net interest revenue increased 28% to $4.0 million from $3.1 million in the same period last year due principally to increased interest charged on customer margin accounts and increased interest earned on fixed income inventory held for sale to customers offset by increased costs to carry higher levels of firm inventory, increased rates charged for bank borrowings and stock loans to finance customer borrowings, and increased interest expense on debenture issued in the third quarter of calendar 2005. Weighted average effective external rates increased 104% over the prior year to 5.11% resulting from the Federal Reserve Board's increase in the Fed funds rate.
Non-Interest Expenses
Total non-interest expenses in the 2006 second quarter were $98.7 million, up 81% from $54.7 million in the same period of 2005, but decreased 9% from the first quarter of 2006.
Employee Compensation and Benefits
Employee compensation and benefits increased 79% to $74.4 million from $41.6 million in the prior year second quarter. As a percentage of net revenues, compensation and benefits totaled 72.5% in the second quarter of 2006, and 65.0% in the 2005 comparable quarter. A portion of compensation and benefits includes transition pay of $3.6 million in the second quarter of 2006 and $2.4 million in the 2005 comparable quarter, in connection with the Company's continuing expansion efforts. In addition, compensation and benefits includes $7.8 million and $17.5 million for the quarter ended June 30, 2006 and March 31, 2006 respectively, primarily stock based compensation, in acquisition related charges for payments in connection with the LM Capital Markets acquisition. Excluding the acquisition related charges, compensation and benefits as a percentage of net revenues totaled 64.8% in the second quarter of 2006 and 65.0% in the 2005 comparable quarter. The Company excludes acquisition related expenses in its analysis of compensation and benefits, a non-GAAP measure, because it believes exclusion of acquisition related compensation is a more useful tool in measuring compensation as a percentage of net revenues.
Operating Expenses
Excluding compensation and benefits and non-compensation acquisition related charges, non-interest expenses increased 82% from the prior year second quarter.
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Business Segment Results for the Three Months Ended June 30, 2006:
- PCG net revenues for the second quarter of 2006 were $54.9 million, an increase of 13% from the second quarter of 2005 principally due to increased commissions and principal transactions and increased asset management and service fees offset by decreased investment banking sales credits due to decreased underwritings for lead or co-managed offerings. Asset management and service fees increased due to a 43 % increase in the number of our managed accounts and a 108% increase in the value of assets under management in those accounts. PCG net revenues decreased 2% from the first quarter of 2006. PCG recorded an operating contribution of $11.7 million, a 2% increase from the second quarter of 2005, and a 6% decrease from the first quarter of this year.
- ECM recorded record net revenues of $35.3 million, an increase of 277% from the same quarter last year,principally due to increased commissions and principal transactions and increased investment banking revenues. Investment banking fees increased principally due to a $6.9 million increase in advisory fees offset by a decrease of $1.4 million in underwriting fees for lead or co-managed offerings. ECM net revenues increased 4% from the first quarter of 2006. ECM operating contribution totaled $7.9 million, a 139% increase from the second quarter of 2005 and a 6% increase from the first quarter of 2006.
- FICM posted net revenues of $10.6 million, an increase of 142% from the prior year second quarter, principally due to increased commissions and principal transactions offset by decreased investment banking revenues resulting from decreased municipal refinancings due to increased interest rates. FICM net revenue decreased 7% from the previous quarter. During the 2006 second quarter, FICM recorded an operating contribution of $1.0 million, a decrease of 1% from the prior year second quarter, and a decrease of 40% from the previous quarter.
- Other Segment, which includes acquisition charges, related to the LM Capital Markets acquisition, posted net revenues of $1.8 million, an increase of 1% from the prior year second quarter and a decrease of 78% from the first quarter of 2006. During the second quarter, the Other Segment recorded an operating loss of $16.7 million which included acquisition related charges, primarily stock based compensation, of $8.3 million previously discussed, compared to the prior year quarter operating loss of $6.5 million.
Stock Based Compensation
In connection with the LM Capital Markets acquisition, on January 2, 2006, the Company granted 1,807,610 restricted stock units to key associates of the LM Capital Markets. The units were granted with a fair value of $37.59 per unit. The majority of the units vest ratably over a three-year period and accordingly the Company incurred a non-cash compensation charge of $5.7 million and $11.3 million, net of estimated forfeitures, for the three and six months ended June 30, 2006 respectively.
On January 23, 2006, the Company completed its private placement of 1,052,220 shares of its common stock at $25.00 per share. The shares were purchased by key associates of the LM Capital Markets. The Company is required to charge to compensation the difference of $25.00 per share and the fair value, as determined in accordance with SFAS No. 123R, of $34.27 per share. As a result, the Company incurred a non-cash compensation charge of $9.8 million in the quarter ended March 31, 2006.
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Conference Call Information
Stifel Financial Corp. will hold a conference call August 9, 2006, at 10:00 a.m. EDT. This call will be Web cast and slides can be accessed on the Investor Relations portion of the Stifel Financial Corp. website at www.stifel.com, as well as on all sites within Thomson/CCBN's Investor Distribution Network. To participate on the call, please dial 888-676-3684 and request the Stifel Financial Corp. earnings call.
Company Information
Stifel Financial Corp. operates 118 offices in 26 states and the District of Columbia through its principal subsidiary, Stifel Nicolaus, and 3 European offices through Stifel Nicolaus Ltd. Stifel Nicolaus provides securities brokerage, investment banking, trading, investment advisory, and related financial services, primarily, to individual investors, professional money managers, businesses, and municipalities. To learn more about Stifel, please visit the Company's web site at www.stifel.com.
Forward-Looking Statements
Statements in this news release contain forward-looking statements within the meaning of federal securities laws. Actual results are subject to risks and uncertainties, including both those specific to the Company and those specific to the industry, which could cause results to differ materially from those contemplated. The risks and uncertainties include, but are not limited to, general economic conditions, actions of competitors, regulatory actions, changes in legislation, and technology changes. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this news release. The Company does not undertake any obligation to publicly update any forward-looking statements.
# # # # # #
(Tables attached)
Page 5
Stifel Financial Corp. |
Summary of Results of Operations (Unaudited) |
($ In Thousands, Except Per Share Amounts) |
| | | | | | | | | | | |
| Three Months Ended | | Percent Change From | |
| 6/30/2006 | % of Net Revenues | 3/31/2006 | % of Net Revenues | 6/30/2005 | % of Net Revenues | 3/31/2006 | | 6/30/2005 | |
Revenues | | | | | | | | | | | |
Commissions | $ 48,064 | 46.8% | $ 48,176 | 44.0% | $ 23,557 | 36.8% | | 0% | | 104% | |
Principal transactions | 20,754 | 20.2% | 21,626 | 19.7% | 10,761 | 16.8% | | -4% | | 93% | |
Investment banking | 15,757 | 15.3% | 15,748 | 14.4% | 15,656 | 24.5% | | 0% | | 1% | |
Asset management and service fees | 14,239 | 14.0% | 13,498 | 12.3% | 10,146 | 15.9% | | 5% | | 40% | |
Other | (98) | -0.1% | 7,358 | 6.7% | 773 | 1.2% | | n/a | | n/a | |
| Total operating revenues | 98,716 | 96.2% | 106,406 | 97.1% | 60,893 | 95.2% | | -7% | | 62% | |
Interest revenue | 8,635 | 8.4% | 7,191 | 6.6% | 4,318 | 6.7% | | 20% | | 100% | |
| Total revenues | 107,351 | 104.6% | 113,597 | 103.7% | 65,211 | 101.9% | | -5% | | 65% | |
Less: Interest expense | 4,684 | 4.6% | 4,063 | 3.7% | 1,240 | 1.9% | | 15% | | 278% | |
| Net revenues | 102,667 | 100.0% | 109,534 | 100.0% | 63,971 | 100.0% | | -6% | | 60% | |
Non-Interest Expenses | | | | | | | | | | | |
Employee compensation and benefits | 74,385 | 72.5% | 86,694 | 79.1% | 41,593 | 65.0% | | -14% | | 79% | |
Occupancy and equipment rental | 7,267 | 7.1% | 7,495 | 6.8% | 5,117 | 8.0% | | -3% | | 42% | |
Communication and office supplies | 6,483 | 6.3% | 6,413 | 5.9% | 2,891 | 4.5% | | 1% | | 124% | |
Commissions and floor brokerage | 1,838 | 1.8% | 1,267 | 1.2% | 994 | 1.6% | | 45% | | 85% | |
Other operating expenses | 8,721 | 8.5% | 6,882 | 6.3% | 4,071 | 6.4% | | 27% | | 114% | |
| Total non-interest expenses | 98,694 | 96.2% | 108,751 | 99.3% | 54,666 | 85.5% | | -9% | | 81% | |
| Income before income taxes | 3,973 | 3.8% | 783 | 0.7% | 9,305 | 14.5% | | 407% | | -57% | |
Provision for income taxes | 1,675 | 1.6% | 307 | 0.3% | 3,685 | 5.8% | | 446% | | -55% | |
| Net income | $ 2,298 | 2.2% | $ 476 | 0.4% | $ 5,620 | 8.8% | | 383% | | -59% | |
Per Share Information |
| Three Months Ended | |
| 6/30/2006 | | 3/31/2006 | | 6/30/2005 | | | 3/31/2006 | | 6/30/2005 | |
Earnings Per Share: | | | | | | | | | | | |
| Basic | $ 0.20 | | $ 0.04 | | $ 0.58 | | | 400% | | -66% | |
| Diluted | $ 0.16 | | $ 0.04 | | $ 0.46 | | | 300% | | -65% | |
Number of Shares for Earnings Per Share Computations: | | | | | | | | | | | |
| Basic shares | 11,729 | | 11,254 | | 9,720 | | | 4% | | 21% | |
| Diluted shares | 14,111 | | 13,422 | | 12,350 | | | 5% | | 14% | |
Note: Certain prior period amounts have been reclassified to conform to the current period presentation. | | | | | | | | | |
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Stifel Financial Corp. |
Summary of Results of Operations (Unaudited) |
($ In Thousands, Except Per Share Amounts) |
| | | | | | | |
| Six Months Ended | | Change |
| 6/30/2006 | % of Net Revenues | 6/30/2005 | % of Net Revenues | | Amount | Percent |
Revenues | | | | | | | |
Commissions | $ 96,240 | 45.4% | $ 47,892 | 38.6% | | $ 48,348 | 101% |
Principal transactions | 42,380 | 20.0% | 21,742 | 17.5% | | 20,638 | 95% |
Investment banking | 31,505 | 14.8% | 29,397 | 23.7% | | 2,108 | 7% |
Asset management and service fees | 27,737 | 13.1% | 19,597 | 15.8% | | 8,140 | 42% |
Other | 7,260 | 3.4% | 118 | 0.1% | | 7,142 | 6053% |
| Total operating revenues | 205,122 | 96.7% | 118,746 | 95.7% | | 86,376 | 73% |
Interest revenue | 15,826 | 7.4% | 7,758 | 6.2% | | 8,068 | 104% |
| Total revenues | 220,948 | 104.1% | 126,504 | 101.9% | | 94,444 | 75% |
Less: Interest expense | 8,747 | 4.1% | 2,345 | 1.9% | | 6,402 | 273% |
| Net revenues | 212,201 | 100.0% | 124,159 | 100.0% | | 88,042 | 71% |
Non-Interest Expenses | | | | | | | |
Employee compensation and benefits | 161,079 | 75.9% | 82,282 | 66.3% | | 78,797 | 96% |
Occupancy and equipment rental | 14,762 | 7.0% | 10,622 | 8.5% | | 4,140 | 39% |
Communication and office supplies | 12,896 | 6.1% | 5,452 | 4.4% | | 7,444 | 137% |
Commissions and floor brokerage | 3,105 | 1.5% | 1,838 | 1.5% | | 1,267 | 69% |
Other operating expenses | 15,603 | 7.3% | 7,396 | 6.0% | | 8,207 | 111% |
| Total non-interest expenses | 207,445 | 97.8% | 107,590 | 86.7% | | 99,855 | 93% |
| Income before income taxes | 4,756 | 2.2% | 16,569 | 13.3% | | (11,813) | -71% |
Provision for income taxes | 1,982 | 0.9% | 6,591 | 5.3% | | (4,609) | -70% |
| Net income | $ 2,774 | 1.3% | $ 9,978 | 8.0% | | $ (7,204) | -72% |
Per Share Information |
| Six Months Ended | | | Change | |
| 6/30/2006 | | 6/30/2005 | | | Amount | Percent |
Earnings Per Share: | | | | | | | |
| Basic | $ 0.24 | | $ 1.02 | | | $ (0.78) | -76% |
| Diluted | $ 0.20 | | $ 0.81 | | | $ (0.61) | -75% |
Number of Shares for Earnings Per Share Computations: | | | | | |
| Basic shares | 11,485 | | 9,775 | | | 1,710 | 17% |
| Diluted shares | 13,815 | | 12,353 | | | 1,462 | 12% |
| | | | | | | |
Note: Certain prior period amounts have been reclassified to conform to the current period presentation. | |
Page 7
Stifel Financial Corp. |
Summary of Core Earnings (Unaudited)(1) |
($ In Thousands, Except Per Share Amounts) |
| | | | | | | | | | |
| Three Months Ended | | | Percent Change From |
| 6/30/2006 | % of Net Revenues | 3/31/2006 | % of Net Revenues | 6/30/2005 | % of Net Revenues | | 3/31/2006 | | 6/30/2005 |
Revenues | | | | | | | | | | |
| Net revenues | $ 102,819 | 100.0% | $ 109,534 | 100.0% | $ 63,971 | 100.0% | | -6% | | 61% |
Non-Interest Expenses | | | | | | | | | | |
Employee compensation and benefits | 66,566 | 64.7% | 69,246 | 63.2% | 41,593 | 65.0% | | -4% | | 60% |
Occupancy and equipment rental | 7,082 | 6.9% | 7,368 | 6.7% | 5,117 | 8.0% | | -4% | | 38% |
Communication and office supplies | 6,343 | 6.2% | 6,287 | 5.7% | 2,891 | 4.5% | | 1% | | 119% |
Commissions and floor brokerage | 1,838 | 1.8% | 1,267 | 1.2% | 994 | 1.6% | | 45% | | 85% |
Other operating expenses | 8,539 | 8.3% | 6,788 | 6.2% | 4,071 | 6.4% | | 26% | | 110% |
| Total non-interest expenses | 90,368 | 87.9% | 90,956 | 83.0% | 54,666 | 85.5% | | -1% | | 65% |
Income before income taxes | 12,451 | 12.1% | 18,578 | 17.0% | 9,305 | 14.5% | | -33% | | 34% |
Provision for income taxes | 5,453 | 5.3% | 7,474 | 6.8% | 3,685 | 5.7% | | -27% | | 48% |
| Core Earnings | $ 6,998 | 6.8% | $ 11,104 | 10.2% | $ 5,620 | 8.8% | | -37% | | 25% |
Per Share Information |
| Three Months Ended | | | Percent Change From |
| 6/30/2006 | | 3/31/2006 | | 6/30/2005 | | | 3/31/2006 | | 6/30/2005 |
Earnings Per Share: | | | | | | | | | | |
| Basic | $ 0.60 | | $ 0.99 | | $ 0.58 | | | -39% | | 3% |
| Diluted | $ 0.50 | | $ 0.83 | | $ 0.46 | | | -40% | | 9% |
| | | | | | | | | | |
Number of Shares for Earnings Per Share Computations: | | | | | | | | |
| Basic shares | 11,729 | | 11,254 | | 9,720 | | | 4% | | 21% |
| Diluted shares | 14,111 | | 13,422 | | 12,350 | | | 5% | | 14% |
| | | | | | | | | | |
Note: Certain prior period amounts have been reclassified to conform to the current period presentation. | | | | | |
(1) See "Reconciliation of Core Earnings" table
Page 8
Stifel Financial Corp. |
Summary of Core Earnings (Unaudited)(1) |
($ In Thousands, Except Per Share Amounts) |
| | | | | | |
| Six Months Ended | | Percent Change From |
| 6/30/2006 | % of Net Revenues | 6/30/2005 | % of Net Revenues | | 6/30/2005 |
Revenues | | | | | | |
Net revenues | $ 212,353 | 100.0% | $ 124,159 | 100.0% | | 71% |
Non-Interest Expenses | | | | | | |
Employee compensation and benefits | 135,812 | 64.0% | 82,282 | 66.3% | | 65% |
Occupancy and equipment rental | 14,450 | 6.8% | 10,622 | 8.6% | | 36% |
Communication and office supplies | 12,630 | 5.9% | 5,452 | 4.4% | | 132% |
Commissions and floor brokerage | 3,105 | 1.5% | 1,838 | 1.4% | | 69% |
Other operating expenses | 15,327 | 7.2% | 7,396 | 6.0% | | 107% |
| Total non-interest expenses | 181,324 | 85.4% | 107,590 | 86.7% | | 69% |
Income before income taxes | 31,029 | 14.6% | 16,569 | 13.3% | | 87% |
Provision for income taxes | 12,927 | 6.1% | 6,591 | 5.3% | | 96% |
| Core Earnings | $ 18,102 | 8.5% | $ 9,978 | 8.0% | | 81% |
| Six Months Ended | | Percent Change From |
| 6/30/2006 | | 6/30/2005 | | | 6/30/2005 |
Earnings Per Share: | | | | | | |
| Basic | $ 1.58 | | $ 1.02 | | | 55% |
| Diluted | $ 1.31 | | $ 0.81 | | | 62% |
Number of Shares for Earnings Per Share Computations: | | | | |
| Basic shares | 11,485 | | 9,775 | | | 17% |
| Diluted shares | 13,815 | | 12,353 | | | 12% |
| | | | | | |
Note: Certain prior period amounts have been reclassified to conform to the current period presentation. |
(1) See "Reconciliation of Core Earnings" table
Page 9
Stifel Financial Corp. |
Reconciliation of Core Earnings(1) |
Three Months Ended 6/30/06 |
($ In Thousands, Except Per Share Amounts) |
| GAAP | Acquisition Related | Core Business |
| $ | $ | $ | % Net Rev |
Revenues | | | | |
Net Revenues | $102,667 | ($152) | $102,819 | 100% |
Non-Interest Expenses | | | | |
Compensation and benefits | 74,385 | 7,819 | 66,566 | 65% |
Operating Expenses | 24,309 | 507 | 23,802 | 23% |
| Total non-interest expenses | 98,694 | 8,326 | 90,368 | 88% |
| Income/(loss) before income taxes | 3,973 | (8,478) | 12,451 | 12% |
Provision (benefit) for income taxes | 1,675 | (3,778) | 5,453 | 5% |
| Net Income/(Loss) | $2,298 | ($4,700) | $6,998 | 7% |
Earnings per Share: | | | | |
| Basic | $0.20 | ($0.40) | $0.60 | |
| Diluted | $0.16 | ($0.34) | $0.50 | |
Six Months Ended 6/30/06 |
($ In Thousands, Except Per Share Amounts) |
| GAAP | Acquisition Related | Core Business |
| $ | $ | $ | % Net Rev |
Revenues | | | | |
Net Revenues | $212,201 | ($152) | $212,353 | 100% |
Non-Interest Expenses | | | | |
Compensation and benefits | 161,079 | 25,267 | 135,812 | 64% |
Operating Expenses | 46,366 | 854 | 45,512 | 21% |
| Total non-interest expenses | 207,445 | 26,121 | 181,324 | 85% |
| Income/(loss) before income taxes | 4,756 | (26,273) | 31,029 | 15% |
Provision (benefit) for income taxes | 1,982 | (10,945) | 12,927 | 6% |
| Net Income/(Loss) | $2,774 | ($15,328) | $18,102 | 9% |
Earnings per Share: | | | | |
| Basic | $0.24 | ($1.34) | $1.58 | |
| Diluted | $0.20 | ($1.11) | $1.31 | |
- Core Earnings excludes acquisition related charges incurred in the three and six months ended June 30, 2006. A reconciliation of Core Earnings to Net Income, the most directly comparable measure under GAAP, is included in the tables above. The Company believes that Core Earnings is a useful measure of financial performance because of its focus on the Company's results from operations. The Company also believes that this measure is an alternative financial measure of performance used by investors, rating agencies, and financial analysts to estimate the value of a company and evaluate its ability to meet debt service requirements.
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Stifel Financial Corp. |
Summary of Segment Data & Statistical Information (Unaudited) |
($ In Thousands, Except Per Share Amounts) |
| | | | | | | | | | | | | |
Segment Data | |
| | | | | | | | | | | | | |
| Three Months Ended | | Percent Change From | | | Six Months Ended | | Change |
Net Revenues | 6/30/2006 | 3/31/2006 | 6/30/2005 | | 3/31/2006 | | 6/30/2005 | | | 6/30/2006 | 6/30/2005 | | Percent |
Private client | $ 54,942 | $ 56,058 | $ 48,452 | | -2% | | 13% | | | $ 111,000 | $ 95,796 | | 16% |
Equity capital markets | 35,311 | 33,798 | 9,354 | | 4% | | 277% | | | 69,109 | 17,968 | | 285% |
Fixed income capital markets | 10,636 | 11,469 | 4,404 | | -7% | | 142% | | | 22,105 | 8,314 | | 166% |
Other | 1,778 | 8,209 | 1,761 | | -78% | | 1% | | | 9,987 | 2,081 | | 380% |
| Total net revenues | $ 102,667 | $ 109,534 | $ 63,971 | | -6% | | 60% | | | $ 212,201 | $ 124,159 | | 71% |
| | | | | | | | | | | | | |
Operating Contribution | | | | | | | | | | | | | |
Private client | $ 11,690 | $ 12,435 | $ 11,413 | | -6% | | 2% | | | $ 24,125 | $ 22,471 | | 7% |
Equity capital markets | 7,932 | 7,502 | 3,322 | | 6% | | 139% | | | 15,434 | 6,052 | | 155% |
Fixed income capital markets | 1,028 | 1,720 | 1,043 | | -40% | | -1% | | | 2,748 | 1,714 | | 60% |
Other / unallocated overhead | (16,677) | (20,874) | (6,473) | | n/a | | n/a | | | (37,551) | (13,668) | | n/a |
| Income before income taxes | $ 3,973 | $ 783 | $ 9,305 | | 407% | | -57% | | | $ 4,756 | $ 16,569 | | -71% |
| | | | | | | | | | | | | |
Statistical Information | |
| | | | | | | | | | | | | |
Stockholders' Equity | $ 205,440 | $ 196,275 | $ 138,536 | | 5% | | 48% | | | | | | |
Book Value Per Share | $ 17.57 | $ 16.77 | $ 14.25 | | 5% | | 23% | | | | | | |
Total Assets | $ 1,060,953 | $ 891,043 | $ 439,497 | | 19% | | 141% | | | | | | |
Investment Executives | 485 | 473 | 434 | | 3% | | 12% | | | | | | |
Full-Time Employees | 1,662 | 1,626 | 1,189 | | 2% | | 40% | | | | | | |
Locations | 121 | 114 | 90 | | 6% | | 34% | | | | | | |
Total Client Assets | $ 29,462,000 | $ 28,732,000 | $ 23,466,000 | | 3% | | 26% | | | | | | |
Note: Certain prior period amounts have been reclassified to conform to the current period presentation.
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Stifel Financial Corp. |
Statement of Operations |
Quarter ended 6/30/2006 |
($ In Thousands, Except Per Share Amounts) |
Private Client Group Segment |
| Three Months Ended | Amount Change From | Six Months Ended | |
Revenues | 6/30/2006 | 3/31/2006 | 6/30/2005 | 3/31/2006 | 6/30/2005 | 6/30/2006 | 6/30/2005 | Change |
Commissions & principal transactions | 36,897 | 38,616 | 30,513 | -4% | 21% | 75,513 | 62,607 | 21% |
Investment banking | 2,154 | 1,871 | 5,746 | 15% | -63% | 4,025 | 10,069 | -60% |
Asset management and service fees | 14,205 | 13,492 | 10,142 | 5% | 40% | 27,697 | 19,586 | 41% |
Other | (58) | 366 | 110 | n/a | n/a | 308 | 60 | 413% |
| Operating Revenues | 53,198 | 54,345 | 46,511 | -2% | 14% | 107,543 | 92,322 | 16% |
Interest Income | 5,142 | 4,669 | 3,587 | 10% | 43% | 9,811 | 6,520 | 50% |
| Total Revenues | 58,340 | 59,014 | 50,098 | -1% | 16% | 117,354 | 98,842 | 19% |
Interest Expense | 3,398 | 2,956 | 1,646 | 15% | 106% | 6,354 | 3,046 | 109% |
| Net Revenues | 54,942 | 56,058 | 48,452 | -2% | 13% | 111,000 | 95,796 | 16% |
Non-Interest Expenses | | | | | | | | |
Employee compensation and benefits | 34,880 | 35,041 | 29,184 | 0% | 20% | 69,921 | 58,400 | 20% |
Operating expenses | 8,372 | 8,582 | 7,855 | -2% | 7% | 16,954 | 14,925 | 14% |
| Total non-interest expenses | 43,252 | 43,623 | 37,039 | -1% | 17% | 86,875 | 73,325 | 18% |
| Income before income taxes | 11,690 | 12,435 | 11,413 | -6% | 2% | 24,125 | 22,471 | 7% |
Ratios to Net Revenues | | | | | | | | |
Compensation & Benefits | 63.5% | 62.5% | 60.2% | | | 63.0% | 61.0% | |
Operating expenses | 15.2% | 15.3% | 16.2% | | | 15.3% | 15.6% | |
Income before income taxes | 21.3% | 22.2% | 23.6% | | | 21.7% | 23.5% | |
Equity Capital Markets Segment |
| Three Months Ended | Amount Change From | Six Months Ended | |
Revenues | 6/30/2006 | 3/31/2006 | 6/30/2005 | 3/31/2006 | 6/30/2005 | 6/30/2006 | 6/30/2005 | Change |
Commissions & principal transactions | 22,633 | 21,722 | 1,857 | 4% | 1119% | 44,355 | 3,486 | 1172% |
Investment banking | 12,177 | 11,900 | 7,426 | 2% | 64% | 24,077 | 14,495 | 66% |
Asset management and service fees | 33 | 5 | 3 | 560% | 1000% | 38 | 8 | 375% |
Other | 383 | 102 | 40 | 275% | 858% | 485 | 106 | 358% |
| Operating Revenues | 35,226 | 33,729 | 9,326 | 4% | 278% | 68,955 | 18,095 | 281% |
Interest Income | 160 | 124 | 116 | 29% | 38% | 284 | 116 | 145% |
| Total Revenues | 35,386 | 33,853 | 9,442 | 5% | 275% | 69,239 | 18,211 | 280% |
Interest Expense | 75 | 55 | 88 | 36% | -15% | 130 | 243 | -47% |
| Net Revenues | 35,311 | 33,798 | 9,354 | 4% | 277% | 69,109 | 17,968 | 285% |
Non-Interest Expenses | | - | | | |
Employee compensation and benefits | 19,267 | 19,697 | 4,483 | -2% | 330% | 38,964 | 9,003 | 333% |
Operating expenses | 8,112 | 6,599 | 1,549 | 23% | 424% | 14,711 | 2,913 | 405% |
| Total non-interest expenses | 27,379 | 26,296 | 6,032 | 4% | 354% | 53,675 | 11,916 | 350% |
| Income before income taxes | 7,932 | 7,502 | 3,322 | 6% | 139% | 15,434 | 6,052 | 155% |
Ratios to Net Revenues | | | | | | | | |
Compensation & Benefits | 54.6% | 58.3% | 47.9% | | | 56.4% | 50.1% | |
Operating expenses | 23.0% | 19.5% | 16.6% | | | 21.3% | 16.2% | |
Income before income taxes | 22.5% | 22.2% | 35.5% | | | 22.3% | 33.7% | |
Fixed Income Capital Market Segment |
| Three Months Ended | Amount Change From | Six Months Ended |
Revenues | 6/30/2006 | 3/31/2006 | 6/30/2005 | 3/31/2006 | 6/30/2005 | 6/30/2006 | 6/30/2005 | Change |
Commissions & principal transactions | 9,288 | 9,464 | 1,948 | -2% | 377% | 18,752 | 3,526 | 432% |
Investment banking | 1,426 | 1,977 | 2,484 | -28% | -43% | 3,403 | 4,833 | -30% |
Asset management and service fees | 1 | 1 | 1 | 0% | 0% | 2 | 3 | -33% |
Other | - | - | 3 | n/a | -100% | - | 6 | -100% |
| Operating Revenues | 10,715 | 11,442 | 4,436 | -6% | 142% | 22,157 | 8,368 | 165% |
Interest Income | 4,729 | 2,321 | 54 | 104% | 8657% | 7,050 | 89 | 7821% |
| Total Revenues | 15,444 | 13,763 | 4,490 | 12% | 244% | 29,207 | 8,457 | 245% |
Interest Expense | 4,808 | 2,294 | 86 | 110% | 5491% | 7,102 | 143 | 4866% |
| Net Revenues | 10,636 | 11,469 | 4,404 | -7% | 142% | 22,105 | 8,314 | 166% |
Non-Interest Expenses | | - | | | | | | |
Employee compensation and benefits | 7,006 | 7,199 | 2,469 | -3% | 184% | 14,205 | 4,872 | 192% |
Operating expenses | 2,602 | 2,550 | 892 | 2% | 192% | 5,152 | 1,728 | 198% |
| Total non-interest expenses | 9,608 | 9,749 | 3,361 | -1% | 186% | 19,357 | 6,600 | 193% |
| Income before income taxes | 1,028 | 1,720 | 1,043 | -40% | -1% | 2,748 | 1,714 | 60% |
Ratios to Net Revenues | | | | | | | | |
Compensation & Benefits | 65.9% | 62.8% | 56.1% | | | 64.3% | 58.6% | |
Operating expenses | 24.5% | 22.2% | 20.3% | | | 23.3% | 20.8% | |
Income before income taxes | 9.7% | 15.0% | 23.7% | | | 12.4% | 20.6% | |
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