þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
_________________________
DELAWARE (State or other jurisdiction of | 43-1273600 (IRS Employer Identification No.) | |
incorporation or organization) | ||
501North Broadway | ||
St. Louis, Missouri | 63102 | |
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Large accelerated filer:þ | Accelerated filer:o | Non-accelerated filer:o | Smaller reporting company:o | |||
(Do not check if a smaller reporting company) |
The number of shares outstanding of the registrant's common stock, $0.15 par value per share, as of the close of business on November 1, 2011, was 53,720,016, which includes exchangeable shares of TWP Acquisition Company (Canada), Inc., a wholly owned subsidiary of the registrant. These shares are exchangeable at any time into an aggregate of 172,242 shares of common stock of the registrant; entitle the holder to dividend and other rights substantially economically equivalent to those of a share of common stock; and, through a voting trust, entitle the holder to a vote on matters presented to common shareholders.
PART I – FINANCIAL INFORMATION |
Item 1. Financial Statements |
Consolidated Statements of Financial Condition as of September 30, 2011 (unaudited) and December 31, 2010 |
Consolidated Statements of Operations for the three months and nine months ended September 30, 2011 and September 30, 2010 (unaudited) |
Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and September 30, 2010 (unaudited) |
Notes to Consolidated Financial Statements (unaudited) |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
Item 4. Controls and Procedures |
PART II – OTHER INFORMATION |
Item 1. Legal Proceedings |
Item 1A. Risk Factors |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
Item 6. Exhibits |
Signatures |
(in thousands) | September 30, 2011 | December 31, 2010 | ||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 214,619 | $ | 253,529 | ||||
Restricted cash | 6,880 | 6,868 | ||||||
Cash segregated for regulatory purposes | 26 | 6,023 | ||||||
Receivables: | ||||||||
Brokerage clients, net | 526,774 | 477,514 | ||||||
Brokers, dealers, and clearing organizations | 235,950 | 247,707 | ||||||
Securities purchased under agreements to resell | 121,004 | 123,617 | ||||||
Trading securities owned, at fair value (includes securities pledged of $354,997 and $272,172, respectively) | 526,444 | 444,170 | ||||||
Available-for-sale securities, at fair value | 1,312,784 | 1,012,714 | ||||||
Held-to-maturity securities, at amortized cost | 159,132 | 52,640 | ||||||
Loans held for sale | 114,452 | 86,344 | ||||||
Bank loans, net of allowance | 568,293 | 389,742 | ||||||
Bank foreclosed assets held for sale | 550 | 1,577 | ||||||
Investments | 176,550 | 178,936 | ||||||
Fixed assets, net | 84,643 | 71,498 | ||||||
Goodwill | 309,519 | 301,919 | ||||||
Intangible assets, net | 30,566 | 34,595 | ||||||
Loans and advances to financial advisors and other employees, net | 170,203 | 181,357 | ||||||
Deferred tax assets, net | 179,410 | 197,139 | ||||||
Other assets | 204,565 | 145,226 | ||||||
Total Assets | $ | 4,942,364 | $ | 4,213,115 | ||||
(in thousands, except share and per share amounts) | September 30, 2011 | December 31, 2010 | ||||||
(Unaudited) | ||||||||
Liabilities and Shareholders’ Equity | ||||||||
Short-term borrowings from banks | $ | 310,600 | $ | 109,600 | ||||
Payables: | ||||||||
Brokerage clients | 241,849 | 212,642 | ||||||
Brokers, dealers, and clearing organizations | 143,410 | 114,869 | ||||||
Drafts | 45,377 | 73,248 | ||||||
Securities sold under agreements to repurchase | 52,805 | 109,595 | ||||||
Bank deposits | 2,120,763 | 1,623,568 | ||||||
Trading securities sold, but not yet purchased, at fair value | 272,190 | 200,140 | ||||||
Accrued compensation | 159,112 | 234,512 | ||||||
Accounts payable and accrued expenses | 228,235 | 170,382 | ||||||
Debenture to Stifel Financial Capital Trust II | 35,000 | 35,000 | ||||||
Debenture to Stifel Financial Capital Trust III | 35,000 | 35,000 | ||||||
Debenture to Stifel Financial Capital Trust IV | 12,500 | 12,500 | ||||||
Other | 16,815 | 19,935 | ||||||
3,673,656 | 2,950,991 | |||||||
Liabilities subordinated to claims of general creditors | 6,957 | 8,241 | ||||||
Shareholders’ Equity: | ||||||||
Preferred stock - $1 par value; authorized 3,000,000 shares; none issued | — | — | ||||||
Exchangeable common stock - $0.15 par value; issued 172,242 and 897,618 shares, respectively | 26 | 135 | ||||||
Common stock - $0.15 par value; authorized 97,000,000 shares; issued 53,547,774 and 52,822,428 shares, respectively | 8,032 | 7,923 | ||||||
Additional paid-in-capital | 1,065,018 | 1,082,788 | ||||||
Retained earnings | 259,816 | 232,415 | ||||||
Accumulated other comprehensive income/(loss) | (7,756 | ) | 381 | |||||
1,325,136 | 1,323,642 | |||||||
Treasury stock, at cost, 2,099,972 and 2,235,473 shares, respectively | (63,020 | ) | (69,238 | ) | ||||
Unearned employee stock ownership plan shares, at cost, 85,417 and 122,024 shares, respectively | (365 | ) | (521 | ) | ||||
1,261,751 | 1,253,883 | |||||||
Total Liabilities and Shareholders’ Equity | $ | 4,942,364 | $ | 4,213,115 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Revenues: | ||||||||||||||||
Commissions | $ | 143,243 | $ | 96,986 | $ | 437,344 | $ | 305,655 | ||||||||
Principal transactions | 76,650 | 123,194 | 249,250 | 363,537 | ||||||||||||
Asset management and service fees | 58,253 | 50,876 | 172,914 | 136,117 | ||||||||||||
Investment banking | 37,673 | 51,656 | 143,509 | 127,129 | ||||||||||||
Interest | 24,161 | 17,718 | 64,246 | 47,019 | ||||||||||||
Other income | 540 | 3,656 | 11,352 | 9,358 | ||||||||||||
Total revenues | 340,520 | 344,086 | 1,078,615 | 988,815 | ||||||||||||
Interest expense | 6,306 | 3,698 | 18,931 | 8,388 | ||||||||||||
Net revenues | 334,214 | 340,388 | 1,059,684 | 980,427 | ||||||||||||
Non-interest expenses: | ||||||||||||||||
Compensation and benefits | 210,573 | 395,936 | 671,678 | 819,085 | ||||||||||||
Occupancy and equipment rental | 30,914 | 29,559 | 89,962 | 81,012 | ||||||||||||
Communications and office supplies | 18,838 | 19,877 | 56,198 | 50,220 | ||||||||||||
Commissions and floor brokerage | 7,400 | 7,972 | 20,943 | 18,988 | ||||||||||||
Other operating expenses | 27,466 | 29,600 | 127,321 | 78,168 | ||||||||||||
Total non-interest expenses | 295,191 | 482,944 | 966,102 | 1,047,473 | ||||||||||||
Income/(loss) before income tax expense/(benefit) | 39,023 | (142,556 | ) | 93,582 | (67,046 | ) | ||||||||||
Provision for income taxes/(benefit) | 16,719 | (58,220 | ) | 36,464 | (27,559 | ) | ||||||||||
Net income/(loss) | $ | 22,304 | $ | (84,336 | ) | $ | 57,118 | $ | (39,487 | ) | ||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.43 | $ | (1.65 | ) | $ | 1.09 | $ | (0.82 | ) | ||||||
Diluted (1) | $ | 0.35 | $ | (1.65 | ) | $ | 0.90 | $ | (0.82 | ) | ||||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic | 52,367 | 51,201 | 52,610 | 47,865 | ||||||||||||
Diluted | 63,152 | 61,834 | 63,174 | 55,593 | ||||||||||||
(1) In accordance with Topic 260, “Earnings Per Share,” earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding in periods a loss is incurred. | ||||||||||||||||
Nine Months Ended September 30, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Operating Activities: | ||||||||
Net income/(loss) | $ | 57,118 | $ | (39,487) | ||||
Adjustments to reconcile net income/(loss) to net cash used in operating activities: | ||||||||
Depreciation and amortization | 19,124 | 17,965 | ||||||
Amortization of loans and advances to financial advisors and other employees | 42,262 | 35,486 | ||||||
Amortization of premium on available-for-sale securities | 9,201 | 5,349 | ||||||
Provision for loan losses and allowance for loans and advances to financial advisors and other employees | 986 | (916) | ||||||
Amortization of intangible assets | 3,588 | 3,480 | ||||||
Deferred income taxes | 23,777 | (60,586) | ||||||
Stock-based compensation | 19,562 | 183,602 | ||||||
Excess tax benefits from stock-based compensation | (25,188 | ) | (14,280) | |||||
Gain on the sale of investments | (60 | ) | (1,234) | |||||
Other, net | 1,156 | (5,881) | ||||||
Decrease/(increase) in operating assets: | ||||||||
Cash segregated for regulatory purposes and restricted cash | 5,985 | — | ||||||
Receivables: | ||||||||
Brokerage clients | (49,174 | ) | (120,389) | |||||
Brokers, dealers and clearing organizations | 11,757 | 73,327 | ||||||
Securities purchased under agreements to resell | 2,613 | (11,221) | ||||||
Trading securities owned, including those pledged | (82,274 | ) | (176,664) | |||||
Loans originated as mortgages held for sale | (638,596 | ) | (761,075) | |||||
Proceeds from mortgages held for sale | 608,853 | 715,151 | ||||||
Loans and advances to financial advisors and other employees | (30,265 | ) | (29,362) | |||||
Other assets | (37,058 | ) | 32,851 | |||||
Increase/(decrease) in operating liabilities: | ||||||||
Payables: | ||||||||
Brokerage clients | 29,207 | 3,656 | ||||||
Brokers, dealers and clearing organizations | (63,977 | ) | 72,098 | |||||
Drafts | (27,871 | ) | 40,923 | |||||
Trading securities sold, but not yet purchased | 72,050 | (5,983) | ||||||
Other liabilities and accrued expenses | (82,110 | ) | (3,061) | |||||
Net cash used in operating activities | $ | (129,334 | ) | $ | (46,251) | |||
Nine Months Ended September 30, | ||||||||
(in thousands) | 2011 | 2010 | ||||||
Investing Activities: | ||||||||
Proceeds from: | ||||||||
Maturities, calls and principal paydowns on available-for sale securities | $ | 535,499 | $ | 150,931 | ||||
Maturities, calls and principal paydowns on held-to-maturity securities | 800 | — | ||||||
Sale or maturity of investments | 74,437 | 79,195 | ||||||
Sale of bank branch | — | 13,905 | ||||||
Sale of bank foreclosed assets held for sale | 808 | 2,096 | ||||||
Increase in bank loans, net | (178,275 | ) | (27,531) | |||||
Payments for: | ||||||||
Purchase of available-for-sale securities | (868,769 | ) | (395,646) | |||||
Purchase of held-to-maturity securities | (80,115 | ) | (42,931) | |||||
Purchase of investments | (71,991 | ) | (98,794) | |||||
Purchase of fixed assets | (32,561 | ) | (21,886) | |||||
Purchase of bank foreclosed assets held for sale | (225 | ) | — | |||||
Acquisitions | — | (500) | ||||||
Net cash used in investing activities | (620,392 | ) | (341,161) | |||||
Financing Activities: | ||||||||
Net proceeds from short-term borrowings from banks | 201,000 | 116,300 | ||||||
Decrease in securities sold under agreements to repurchase | (56,790 | ) | (23,588) | |||||
Increase in bank deposits, net | 497,195 | 346,393 | ||||||
Increase in securities loaned | 92,518 | 86,091 | ||||||
Excess tax benefits from stock-based compensation | 25,188 | 14,280 | ||||||
Issuance of common stock | 865 | |||||||
Repurchase of common stock | (48,505 | ) | (91,769) | |||||
Reissuance of treasury stock | 2,755 | 2,055 | ||||||
Extinguishment of senior notes | — | (23,000) | ||||||
Payment of Federal Home Loan Bank advances | — | (2,000) | ||||||
Extinguishment of subordinated debt | (1,284 | ) | (1,840) | |||||
Net cash provided by financing activities | 712,077 | 423,787 | ||||||
Effect of exchange rate changes on cash | (1,261 | ) | 8,689 | |||||
(Decrease)/increase in cash and cash equivalents | (38,910 | ) | 45,064 | |||||
Cash and cash equivalents at beginning of period | 253,529 | 161,820 | ||||||
Cash and cash equivalents at end of period | $ | 214,619 | $ | 206,884 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 18,880 | $ | 8,539 | ||||
Cash paid for income taxes, net of refunds | $ | 5,618 | $ | 51,896 | ||||
Noncash investing and financing activities: | ||||||||
Units, net of forfeitures | $ | 119,530 | $ | 137,158 | ||||
Issuance of common stock for acquisition of Thomas Weisel Partners Group, Inc. | $ | — | $ | 271,285 | ||||
Nine Months Ended September 30, 2010 | ||||
(in thousands) | (Unaudited) | |||
Total net revenues | $ | 1,071,055 | ||
Net loss | (107,174 | ) | ||
Loss per share: | ||||
Basic | $ | (2.24 | ) | |
Diluted | $ | (2.24 | ) | |
September 30, 2011 | December 31, 2010 | |||||||
Deposits paid for securities borrowed | $ | 171,033 | $ | 94,709 | ||||
Securities failed to deliver | 56,304 | 74,991 | ||||||
Receivable from clearing organizations | 8,613 | 78,007 | ||||||
$ | 235,950 | $ | 247,707 | |||||
September 30, 2011 | December 31, 2010 | |||||||
Deposits received from securities loaned | $ | 119,533 | $ | 27,907 | ||||
Securities failed to receive | 19,355 | 78,499 | ||||||
Payable to clearing organizations | 4,522 | 8,463 | ||||||
$ | 143,410 | $ | 114,869 | |||||
September 30, 2011 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents | $ | 16,152 | $ | 16,152 | $ | — | $ | — | ||||||||
Trading securities owned: | ||||||||||||||||
U.S. government agency securities | 71,333 | — | 71,333 | — | ||||||||||||
U.S. government securities | 12,202 | 12,202 | — | — | ||||||||||||
Corporate securities: | ||||||||||||||||
Fixed income securities | 264,623 | 61,151 | 202,271 | 1,201 | ||||||||||||
Equity securities | 40,886 | 40,515 | 371 | — | ||||||||||||
State and municipal securities | 137,400 | — | 137,400 | — | ||||||||||||
Total trading securities owned | 526,444 | 113,868 | 411,375 | 1,201 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||
U.S. government securities | 904 | — | 904 | — | ||||||||||||
State and municipal securities | 84,012 | — | 17,388 | 66,624 | ||||||||||||
Mortgage-backed securities: | ||||||||||||||||
Agency | 506,767 | — | 506,767 | — | ||||||||||||
Commercial | 265,925 | — | 265,925 | — | ||||||||||||
Non-agency | 18,257 | — | 18,257 | — | ||||||||||||
Corporate fixed income securities | 409,817 | 301,871 | 95,946 | 12,000 | ||||||||||||
Asset-backed securities | 27,102 | — | 27,102 | — | ||||||||||||
Total available-for-sale securities | 1,312,784 | 301,871 | 932,289 | 78,624 | ||||||||||||
Investments: | ||||||||||||||||
Corporate equity securities | 4,676 | 4,283 | 393 | — | ||||||||||||
Mutual funds | 33,811 | 33,811 | — | — | ||||||||||||
Auction rate securities: | ||||||||||||||||
Equity securities | 64,203 | — | — | 64,203 | ||||||||||||
Municipal securities | 7,044 | — | — | 7,044 | ||||||||||||
Other | 38,816 | 436 | 777 | 37,603 | ||||||||||||
Total investments | 148,550 | 38,530 | 1,170 | 108,850 | ||||||||||||
$ | 2,003,930 | $ | 470,421 | $ | 1,344,834 | $ | 188,675 | |||||||||
The Company's investment in a senior preferred interest in Miller Buckfire & Co. LLC, which is included in investments in the consolidated statements of financial condition, is carried at cost and therefore not included in the above analysis of fair value at September 30, 2011.
September 30, 2011 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Liabilities: | ||||||||||||||||
Trading securities sold, but not yet purchased: | ||||||||||||||||
U.S. government securities | $ | 109,568 | $ | 109,568 | $ | — | $ | — | ||||||||
Corporate securities: | ||||||||||||||||
Fixed income securities | 129,226 | 55,375 | 73,851 | — | ||||||||||||
Equity securities | 33,071 | 33,032 | 39 | — | ||||||||||||
State and municipal securities | 325 | — | 325 | — | ||||||||||||
Total trading securities sold, but not yet purchased | 272,190 | 197,975 | 74,215 | — | ||||||||||||
Securities sold, but not yet purchased (1) | 16,815 | 16,815 | — | — | ||||||||||||
Derivative contracts (2) | 25,672 | — | 25,672 | — | ||||||||||||
$ | 314,677 | $ | 214,790 | $ | 99,887 | $ | — | |||||||||
(1) Included in other liabilities in the consolidated statements of financial condition. | ||||||||||||||||
(2) Included in accounts payable and accrued expenses in the consolidated statements of financial condition. |
December 31, 2010 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents | $ | 15,675 | $ | 15,675 | $ | — | $ | — | ||||||||
Trading securities owned: | ||||||||||||||||
U.S. government agency securities | 86,882 | — | 86,882 | — | ||||||||||||
U.S. government securities | 9,038 | 9,038 | — | — | ||||||||||||
Corporate securities: | ||||||||||||||||
Fixed income securities | 221,145 | 47,001 | 133,901 | 40,243 | ||||||||||||
Equity securities | 46,877 | 46,395 | 482 | — | ||||||||||||
State and municipal securities | 80,228 | — | 80,228 | — | ||||||||||||
Total trading securities owned | 444,170 | 102,434 | 301,493 | 40,243 | ||||||||||||
Available-for-sale securities: | ||||||||||||||||
U.S. government agency securities | 25,030 | — | 25,030 | — | ||||||||||||
State and municipal securities | 26,343 | — | 14,907 | 11,436 | ||||||||||||
Mortgage-backed securities: | ||||||||||||||||
Agency | 697,163 | — | 697,163 | — | ||||||||||||
Commercial | 67,996 | — | 67,996 | — | ||||||||||||
Non-agency | 29,273 | — | 29,273 | — | ||||||||||||
Corporate fixed income securities | 154,901 | 34,897 | 120,004 | — | ||||||||||||
Asset-backed securities | 12,008 | — | 12,008 | — | ||||||||||||
Total available-for-sale securities | 1,012,714 | 34,897 | 966,381 | 11,436 | ||||||||||||
Investments: | ||||||||||||||||
Corporate equity securities | 3,335 | 3,335 | — | — | ||||||||||||
Mutual funds | 32,193 | 32,193 | — | — | ||||||||||||
U.S. government securities | 8,751 | 8,751 | — | — | ||||||||||||
Auction rate securities: | ||||||||||||||||
Equity securities | 76,826 | — | — | 76,826 | ||||||||||||
Municipal securities | 6,533 | — | — | 6,533 | ||||||||||||
Other | 51,298 | 10,489 | 2,307 | 38,502 | ||||||||||||
Total investments | 178,936 | 54,768 | 2,307 | 121,861 | ||||||||||||
$ | 1,651,495 | $ | 207,774 | $ | 1,270,181 | $ | 173,540 | |||||||||
Liabilities: | ||||||||||||||||
Trading securities sold, but not yet purchased: | ||||||||||||||||
U.S. government securities | $ | 131,561 | $ | 131,561 | $ | — | $ | — | ||||||||
U.S. government agency securities | 664 | — | 664 | — | ||||||||||||
Corporate securities: | ||||||||||||||||
Fixed income securities | 61,026 | 18,815 | 37,526 | 4,685 | ||||||||||||
Equity securities | 6,800 | 6,780 | 20 | — | ||||||||||||
State and municipal securities | 89 | — | 89 | — | ||||||||||||
Total trading securities sold, but not yet purchased | 200,140 | 157,156 | 38,299 | 4,685 | ||||||||||||
Securities sold, but not yet purchased (1) | 19,935 | 19,935 | — | — | ||||||||||||
Derivative contracts (2) | 9,259 | — | 9,259 | — | ||||||||||||
$ | 229,334 | $ | 177,091 | $ | 47,558 | $ | 4,685 | |||||||||
(1) Included in other liabilities in the consolidated statements of financial condition. | ||||||||||||||||
(2) Included in accounts payable and accrued expenses in the consolidated statements of financial condition. |
Three Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
Financial Assets | Financial Liabilities | |||||||||||||||||||||||||||
Available-for-sale | Investments | |||||||||||||||||||||||||||
Corporate Fixed Income Securities (1) | State and Municipal Securities | Corporate Fixed Income Securities | Auction Rate Securities – Equity | Auction Rate Securities – Municipal | Other | Corporate Fixed Income Securities (2) | ||||||||||||||||||||||
Balance at June 30, 2011 | $ | 18,342 | $ | 44,678 | $ | — | $ | 66,616 | $ | 7,117 | $ | 38,958 | $ | 2,435 | ||||||||||||||
Unrealized gains/(losses): | ||||||||||||||||||||||||||||
Included in changes in net assets (3) | 37 | — | — | 162 | 52 | (692 | ) | — | ||||||||||||||||||||
Included in OCI (4) | — | 316 | — | — | — | — | — | |||||||||||||||||||||
Realized gains/(losses) (3) | (380 | ) | 43 | (94 | ) | (16 | ) | |||||||||||||||||||||
Purchases | 66 | 21,987 | 12,000 | 1,650 | — | 170 | — | |||||||||||||||||||||
Sales | (16,500 | ) | — | — | — | — | — | (2,419 | ) | |||||||||||||||||||
Redemptions | (112 | ) | (400 | ) | — | (4,225 | ) | (125 | ) | (739 | ) | — | ||||||||||||||||
Transfers: | ||||||||||||||||||||||||||||
Into Level 3 | — | — | — | — | — | — | — | |||||||||||||||||||||
Out of Level 3 | (252 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Net change | (17,141 | ) | 21,946 | 12,000 | (2,413 | ) | (73 | ) | (1,355 | ) | (2,435 | ) | ||||||||||||||||
Balance at September 30, 2011 | $ | 1,201 | $ | 66,624 | $ | 12,000 | $ | 64,203 | $ | 7,044 | $ | 37,603 | $ | — | ||||||||||||||
Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
Financial Assets | Financial Liabilities | |||||||||||||||||||||||||||
Available-for-sale | Investments | |||||||||||||||||||||||||||
Corporate Fixed Income Securities (1) | State and Municipal Securities | Corporate Fixed Income Securities | Auction Rate Securities – Equity | Auction Rate Securities – Municipal | Other | Corporate Fixed Income Securities (2) | ||||||||||||||||||||||
Balance at December 31, 2010 | $ | 40,243 | $ | 11,436 | $ | — | $ | 76,826 | $ | 6,533 | $ | 38,502 | $ | 4,685 | ||||||||||||||
Unrealized gains/(losses): | ||||||||||||||||||||||||||||
Included in changes in net assets (3) | (283 | ) | — | — | 452 | (44 | ) | 2,872 | — | |||||||||||||||||||
Included in OCI (4) | — | 2,403 | — | — | — | — | — | |||||||||||||||||||||
Realized gains/(losses) (3) | 356 | 858 | — | — | (681 | ) | (52 | ) | ||||||||||||||||||||
Purchases | 166,549 | 48,974 | 12,000 | 3,725 | 4,105 | 994 | 6,663 | |||||||||||||||||||||
Sales | (198,572 | ) | (24,126 | ) | — | — | (2,900 | ) | (11,296 | ) | ||||||||||||||||||
Redemptions | (828 | ) | (775 | ) | — | (16,800 | ) | (650 | ) | (4,324 | ) | — | ||||||||||||||||
Transfers: | ||||||||||||||||||||||||||||
Into Level 3 | 27,854 | — | — | — | 240 | — | ||||||||||||||||||||||
Out of Level 3 | (6,264 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Net change | (39,042 | ) | 55,188 | 12,000 | (12,623 | ) | 511 | (899 | ) | (4,685 | ) | |||||||||||||||||
Balance at September 30, 2011 | $ | 1,201 | $ | 66,624 | $ | 12,000 | $ | 64,203 | $ | 7,044 | $ | 37,603 | $ | — | ||||||||||||||
(1) Included in trading securities owned in the consolidated statements of financial condition. | ||||||||||||||||||||||||||||
(2) Included in trading securities sold, but not yet purchased in the consolidated statements of financial condition. | ||||||||||||||||||||||||||||
(3) Realized and unrealized gains/(losses) related to trading securities and investments are reported in other income in the consolidated statements of operations. | ||||||||||||||||||||||||||||
(4) Unrealized gains related to available-for-sale securities are reported in accumulated other comprehensive income/(loss) in the consolidated statements of financial condition. |
September 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying value | Estimated fair value | Carrying value | Estimated fair value | |||||||||||||
Financial assets: | ||||||||||||||||
Cash and cash equivalents | $ | 214,619 | $ | 214,619 | $ | 253,529 | $ | 253,529 | ||||||||
Restricted cash | 6,880 | 6,880 | 6,868 | 6,868 | ||||||||||||
Cash segregated for regulatory purposes | 26 | 26 | 6,023 | 6,023 | ||||||||||||
Securities purchased under agreements to resell | 121,004 | 121,004 | 123,617 | 123,617 | ||||||||||||
Trading securities owned | 526,444 | 526,444 | 444,170 | 444,170 | ||||||||||||
Available-for-sale securities | 1,312,784 | 1,312,784 | 1,012,714 | 1,012,714 | ||||||||||||
Held-to-maturity securities | 159,132 | 157,085 | 52,640 | 52,984 | ||||||||||||
Loans held for sale | 114,452 | 114,452 | 86,344 | 86,344 | ||||||||||||
Bank loans | 568,293 | 571,716 | 389,742 | 376,176 | ||||||||||||
Investments | 176,550 | 176,550 | 178,936 | 178,936 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Securities sold under agreements to repurchase | $ | 52,805 | $ | 52,805 | $ | 109,595 | $ | 109,595 | ||||||||
Non-interest-bearing deposits | 21,405 | 21,398 | 8,197 | 7,980 | ||||||||||||
Interest-bearing deposits | 2,099,358 | 2,072,029 | 1,615,371 | 1,565,199 | ||||||||||||
Trading securities sold, but not yet purchased | 272,190 | 272,190 | 200,140 | 200,140 | ||||||||||||
Securities sold, but not yet purchased (1) | 16,815 | 16,815 | 19,935 | 19,935 | ||||||||||||
Derivative contracts (2) | 25,672 | 25,672 | 9,259 | 9,259 | ||||||||||||
Liabilities subordinated to the claims of general creditors | 6,957 | 6,617 | 8,241 | 7,739 | ||||||||||||
(1) Included in other liabilities in the consolidated statements of financial condition. | ||||||||||||||||
(2) Included in accounts payable and accrued expenses in the consolidated statements of financial condition. |
September 30, 2011 | December 31, 2010 | |||||||
Trading securities owned: | ||||||||
U.S. government agency securities | $ | 71,333 | $ | 86,882 | ||||
U.S. government securities | 12,202 | 9,038 | ||||||
Corporate securities: | ||||||||
Fixed income securities | 264,623 | 221,145 | ||||||
Equity securities | 40,886 | 46,877 | ||||||
State and municipal securities | 137,400 | 80,228 | ||||||
$ | 526,444 | $ | 444,170 | |||||
Trading securities sold, but not yet purchased: | ||||||||
U.S. government securities | $ | 109,568 | $ | 131,561 | ||||
U.S. government agency securities | — | 664 | ||||||
Corporate securities: | ||||||||
Fixed income securities | 129,226 | 61,026 | ||||||
Equity securities | 33,071 | 6,800 | ||||||
State and municipal securities | 325 | 89 | ||||||
$ | 272,190 | $ | 200,140 | |||||
September 30, 2011 | ||||||||||||||||
Amortized cost | Gross unrealized gains (1) | Gross unrealized losses (1) | Estimated fair value | |||||||||||||
Available-for-sale | ||||||||||||||||
U.S. government securities | $ | 905 | $ | — | $ | (1 | ) | $ | 904 | |||||||
State and municipal securities | 79,714 | 4,490 | (192 | ) | 84,012 | |||||||||||
Mortgage-backed securities: | ||||||||||||||||
Agency | 495,524 | 12,021 | (778 | ) | 506,767 | |||||||||||
Commercial | 266,643 | 1,102 | (1,820 | ) | 265,925 | |||||||||||
Non-agency | 19,125 | 117 | (985 | ) | 18,257 | |||||||||||
Corporate fixed income securities | 412,433 | 1,834 | (4,450 | ) | 409,817 | |||||||||||
Asset-backed securities | 26,677 | 553 | (128 | ) | 27,102 | |||||||||||
$ | 1,301,021 | $ | 20,117 | $ | (8,354 | ) | $ | 1,312,784 | ||||||||
Held-to-maturity (2) | ||||||||||||||||
Corporate fixed income securities | $ | 55,569 | $ | 55 | $ | (2,206 | ) | $ | 53,418 | |||||||
Asset-backed securities | 82,224 | 2,734 | (3,235 | ) | 81,723 | |||||||||||
Municipal auction rate securities | 21,339 | 955 | (350 | ) | 21,944 | |||||||||||
$ | 159,132 | $ | 3,744 | $ | (5,791 | ) | $ | 157,085 | ||||||||
December 31, 2010 | ||||||||||||||||
Amortized cost | Gross unrealized gains (1) | Gross unrealized losses (1) | Estimated fair value | |||||||||||||
Available-for-sale | ||||||||||||||||
U.S. government securities | $ | 24,972 | $ | 58 | $ | — | $ | 25,030 | ||||||||
State and municipal securities | 26,678 | 727 | (1,062 | ) | 26,343 | |||||||||||
Mortgage-backed securities: | ||||||||||||||||
Agency | 692,922 | 6,938 | (2,697 | ) | 697,163 | |||||||||||
Commercial | 66,912 | 1,212 | (128 | ) | 67,996 | |||||||||||
Non-agency | 29,319 | 744 | (790 | ) | 29,273 | |||||||||||
Corporate fixed income securities | 153,523 | 1,705 | (327 | ) | 154,901 | |||||||||||
Asset-backed securities | 11,331 | 677 | — | 12,008 | ||||||||||||
$ | 1,005,657 | $ | 12,061 | $ | (5,004 | ) | $ | 1,012,714 | ||||||||
Held-to-maturity (2) | ||||||||||||||||
Municipal auction rate securities | $ | 43,719 | $ | 3,803 | $ | (171 | ) | $ | 47,351 | |||||||
Asset-backed securities | 8,921 | 198 | (3,486 | ) | 5,633 | |||||||||||
$ | 52,640 | $ | 4,001 | $ | (3,657 | ) | $ | 52,984 | ||||||||
(1) | Unrealized gains/(losses) related to available-for-sale securities are reported in accumulated other comprehensive income/(loss). |
(2) | Held-to-maturity securities are carried in the consolidated statements of financial condition at amortized cost, and the changes in the value of these securities, other than impairment charges, are not reported on the consolidated financial statements. |
September 30, 2011 | ||||||||||||||||
Available-for-sale | Held-to-maturity | |||||||||||||||
Amortized cost | Estimated fair value | Amortized cost | Estimated fair value | |||||||||||||
Debt securities | ||||||||||||||||
Within one year | $ | 30,183 | $ | 30,579 | $ | — | $ | — | ||||||||
After one year through three years | 233,280 | 232,661 | — | — | ||||||||||||
After three years through five years | 153,110 | 150,672 | 15,118 | 14,301 | ||||||||||||
After five years through ten years | 10,529 | 11,169 | 66,203 | 64,441 | ||||||||||||
After ten years | 92,627 | 96,754 | 77,811 | 78,343 | ||||||||||||
Mortgage-backed securities | ||||||||||||||||
After three years through five years | 9,641 | 10,020 | — | — | ||||||||||||
After five years through ten years | 13,825 | 13,971 | — | — | ||||||||||||
After ten years | 757,826 | 766,958 | — | — | ||||||||||||
$ | 1,301,021 | $ | 1,312,784 | $ | 159,132 | $ | 157,085 | |||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||
Gross unrealized losses | Estimated fair value | Gross unrealized losses | Estimated fair value | Gross unrealized losses | Estimated fair value | |||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||
U.S. government securities | $ | (1 | ) | $ | 251 | $ — | $ — | $ | (1 | ) | $ | 251 | ||||||||||||
State and municipal securities | (192 | ) | 17,092 | — | — | (192 | ) | 17,092 | ||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||||||
Agency | (778 | ) | 202,452 | — | — | (778 | ) | 202,452 | ||||||||||||||||
Commercial | (1,820 | ) | 187,206 | — | — | (1,820 | ) | 187,206 | ||||||||||||||||
Non-agency | (475 | ) | 6,140 | (510 | ) | 7,352 | (985 | ) | 13,492 | |||||||||||||||
Corporate fixed income securities | (4,450 | ) | 263,046 | — | — | (4,450 | ) | 263,046 | ||||||||||||||||
Asset-backed securities | (128 | ) | 15,727 | — | — | (128 | ) | 15,727 | ||||||||||||||||
$ | (7,844 | ) | $ | 691,914 | $ | (510 | ) | $ | 7,352 | $ | (8,354 | ) | $ | 699,266 | ||||||||||
September 30, 2011 | December 31, 2010 | |||||||||||
Balance | Percent | Balance | Percent | |||||||||
Consumer (1) | $ | 364,288 | 63.7 | % | $ | 266,806 | 68.2 | % | ||||
Commercial and industrial | 125,388 | 21.9 | 41,965 | 10.7 | ||||||||
Residential real estate | 53,185 | 9.3 | 49,550 | 12.7 | ||||||||
Home equity lines of credit | 25,386 | 4.4 | 30,966 | 7.9 | ||||||||
Commercial real estate | 3,306 | 0.6 | 1,637 | 0.4 | ||||||||
Construction and land | 514 | 0.1 | 524 | 0.1 | ||||||||
572,067 | 100.0 | % | 391,448 | 100.0 | % | |||||||
Unamortized loan origination costs, net of loan fees | 66 | 392 | ||||||||||
Loans in process | (10 | ) | 233 | |||||||||
Allowance for loan losses | (3,830 | ) | (2,331 | ) | ||||||||
$ | 568,293 | $ | 389,742 | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Allowance for loan losses, beginning of period | $ | 3,251 | $ | 1,936 | $ | 2,331 | $ | 1,702 | ||||||||
Provision for loan losses | 559 | (51 | ) | 1,465 | 216 | |||||||||||
Charge-offs: | ||||||||||||||||
Residential real estate | — | (66 | ) | — | (215 | ) | ||||||||||
Other | — | — | — | (2 | ) | |||||||||||
Total charge-offs | — | (66 | ) | — | (217 | ) | ||||||||||
Recoveries | 20 | 4 | 34 | 122 | ||||||||||||
Allowance for loan losses, end of period | $ | 3,830 | $ | 1,823 | $ | 3,830 | $ | 1,823 | ||||||||
September 30, 2011 | December 31, 2010 | |||||||
Furniture and equipment | $ | 142,917 | $ | 116,650 | ||||
Building and leasehold improvements | 55,413 | 51,046 | ||||||
Total | 198,330 | 167,696 | ||||||
Less accumulated depreciation and amortization | (113,687 | ) | (96,198 | ) | ||||
$ | 84,643 | $ | 71,498 | |||||
December 31, 2010 | Net additions | Impairment losses | September 30, 2011 | |||||||||||||
Goodwill | ||||||||||||||||
Global Wealth Management | $ | 128,524 | $ | 5,410 | $ | — | $ | 133,934 | ||||||||
Institutional Group | 173,395 | 2,190 | — | 175,585 | ||||||||||||
$ | 301,919 | $ | 7,600 | $ | — | $ | 309,519 | |||||||||
December 31, 2010 | Adjustments | Amortization | September 30, 2011 | |||||||||||||
Intangible assets | ||||||||||||||||
Global Wealth Management | $ | 21,463 | $ | — | $ | (2,148 | ) | $ | 19,315 | |||||||
Institutional Group | 13,132 | (441 | ) | (1,440 | ) | 11,251 | ||||||||||
$ | 34,595 | $ | (441 | ) | $ | (3,588 | ) | $ | 30,566 | |||||||
September 30, 2011 | December 31, 2010 | |||||||||||||||
Gross carrying value | Accumulated Amortization | Gross carrying value | Accumulated Amortization | |||||||||||||
Customer relationships | $ | 37,068 | $ | 13,854 | $ | 37,068 | $ | 11,015 | ||||||||
Trade name | 7,981 | 758 | 7,981 | 364 | ||||||||||||
Non-compete agreement | 2,441 | 2,399 | 2,441 | 2,238 | ||||||||||||
Investment banking backlog | 1,789 | 1,702 | 2,230 | 1,508 | ||||||||||||
$ | 49,279 | $ | 18,713 | $ | 49,720 | $ | 15,125 | |||||||||
Fiscal year | ||||
Remainder of 2011 | $ | 1,190 | ||
2012 | 3,909 | |||
2013 | 3,482 | |||
2014 | 3,185 | |||
2015 | 2,853 | |||
Thereafter | 15,947 | |||
$ | 30,566 | |||
September 30, 2011 | December 31, 2010 | |||||||
Money market and savings accounts | $ | 2,041,669 | $ | 1,590,663 | ||||
Demand deposits (interest-bearing) | 55,125 | 22,031 | ||||||
Demand deposits (non-interest-bearing) | 21,405 | 8,197 | ||||||
Certificates of deposit | 2,564 | 2,677 | ||||||
$ | 2,120,763 | $ | 1,623,568 |
September 30, 2011 | December 31, 2010 | |||||||
Certificates of deposit, less than $100: | ||||||||
Within one year | $ | 359 | $ | 198 | ||||
One to three years | 495 | 577 | ||||||
Over three years | 181 | 190 | ||||||
$ | 1,035 | $ | 965 | |||||
Certificates of deposit, $100 and greater: | ||||||||
Within one year | $ | 747 | $ | 692 | ||||
One to three years | 782 | 1,020 | ||||||
Over three years | — | — | ||||||
$ | 1,529 | $ | 1,712 | |||||
$ | 2,564 | $ | 2,677 | |||||
September 30, 2011 | ||||||||||||||
Asset derivatives | Liability derivatives | |||||||||||||
Notional Value | Balance sheet location | Positive fair value | Balance sheet location | Negative fair value | ||||||||||
Derivatives designated as hedging instruments under Topic 815: | ||||||||||||||
Cash flow interest rate contracts | $ | 786,455 | Other assets | $ | — | Accounts payable and accrued expenses | $ | (25,672 | ) | |||||
December 31, 2010 | ||||||||||||||
Asset derivatives | Liability derivatives | |||||||||||||
Notional Value | Balance sheet location | Positive fair value | Balance sheet location | Negative fair value | ||||||||||
Derivatives designated as hedging instruments under Topic 815: | ||||||||||||||
Cash flow interest rate contracts | $ | 491,807 | Other assets | $ | — | Accounts payable and accrued expenses | $ | (9,259 | ) | |||||
Three Months Ended September 30, 2011 | ||||||||||||||
Loss recognized in OCI (effectiveness) | Location of loss reclassified from OCI into income | Loss reclassified from OCI into income | Location of loss recognized in OCI (ineffectiveness) | Loss recognized due to ineffectiveness | ||||||||||
Cash flow interest rate contracts | $ | 17,325 | Interest expense | $ | 3,510 | None | $ | — | ||||||
Three Months Ended September 30, 2010 | ||||||||||||||
Loss recognized in OCI (effectiveness) | Location of loss reclassified from OCI into income | Loss reclassified from OCI into income | Location of loss recognized in OCI (ineffectiveness) | Loss recognized due to ineffectiveness | ||||||||||
Cash flow interest rate contracts | $ | 4,495 | Interest expense | $ | 764 | None | $ | — | ||||||
Nine Months Ended September 30, 2011 | ||||||||||||||
Loss recognized in OCI (effectiveness) | Location of loss reclassified from OCI into income | Loss reclassified from OCI into income | Location of loss recognized in OCI (ineffectiveness) | Loss recognized due to ineffectiveness | ||||||||||
Cash flow interest rate contracts | $ | 26,972 | Interest expense | $ | 10,559 | None | $ | — | ||||||
Nine Months Ended September 30, 2010 | ||||||||||||||
Loss recognized in OCI (effectiveness) | Location of loss reclassified from OCI into income | Loss reclassified from OCI into income | Location of loss recognized in OCI (ineffectiveness) | Loss recognized due to ineffectiveness | ||||||||||
Cash flow interest rate contracts | $ | 15,172 | Interest expense | $ | 842 | None | $ | — | ||||||
NOTE 14 – Commitments, Guarantees, and Contingencies
We also provide guarantees to securities clearinghouses and exchanges under their standard membership agreement, which requires members to guarantee the performance of other members. Under the agreement, if another member becomes unable to satisfy its obligations to the clearinghouse, other members would be required to meet shortfalls. Our liability under these agreements is not quantifiable and may exceed the cash and securities we have posted as collateral. However, the potential requirement for us to make payments under these arrangements is considered remote. Accordingly, no liability has been recognized for these arrangements.
On November 8, 2011, the FINRA hearing panel delivered a decision that will become a final decision after 45 days and fully resolve the matter unless FINRA appeals to the National Adjudicatory Council. TWP will comply with the Order to pay a $0.2 million fine plus administrative fees and costs for failing to establish and maintain systems and procedures governing principal transactions effected by the firm.
Stifel Financial Corp. – Federal Reserve Capital Amounts | ||||||||||||||||||||||||
September 30, 2011 | ||||||||||||||||||||||||
Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Total capital to risk-weighted assets | $ | 835,120 | 25.3 | % | $ | 263,652 | 8.0 | % | $ | 329,564 | 10.0 | % | ||||||||||||
Tier 1 capital to risk-weighted assets | 831,290 | 25.2 | 131,826 | 4.0 | 197,739 | 6.0 | ||||||||||||||||||
Tier 1 capital to adjusted average total assets | 831,290 | 21.1 | 157,597 | 4.0 | 196,997 | 5.0 | ||||||||||||||||||
Stifel Bank – Federal Reserve Capital Amounts | ||||||||||||||||||||||||
September 30, 2011 | ||||||||||||||||||||||||
Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Total capital to risk-weighted assets | $ | 151,114 | 10.2 | % | $ | 119,081 | 8.0 | % | $ | 148,851 | 10.0 | % | ||||||||||||
Tier 1 capital to risk-weighted assets | 147,284 | 9.9 | 59,541 | 4.0 | 89,311 | 6.0 | ||||||||||||||||||
Tier 1 capital to adjusted average total assets | 147,284 | 7.2 | 82,274 | 4.0 | 102,842 | 5.0 | ||||||||||||||||||
Balance at December 31, 2010 | $ | 6,295 | ||
Provision charged to operating expense | 354 | |||
Cash outlays | (2,255 | ) | ||
Non-cash write-downs | (2,528 | ) | ||
Balance at September 30, 2011 | $ | 1,866 | ||
At September 30, 2011 and December 31, 2010, Stifel Bank had outstanding commitments to originate loans aggregating $253.7 million and $107.2 million, respectively. The commitments extended over varying periods of time, with all commitments at September 30, 2011 scheduled to be disbursed in the following two months.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net revenues: (1) | ||||||||||||||||
Global Wealth Management | $ | 219,498 | $ | 207,484 | $ | 683,589 | $ | 606,845 | ||||||||
Institutional Group | 113,259 | 138,043 | 373,168 | 375,937 | ||||||||||||
Other | 1,457 | (5,139 | ) | 2,927 | (2,355 | ) | ||||||||||
$ | 334,214 | $ | 340,388 | $ | 1,059,684 | $ | 980,427 | |||||||||
Income/(loss) before income taxes: | ||||||||||||||||
Global Wealth Management | $ | 55,612 | $ | 51,707 | $ | 172,510 | $ | 131,306 | ||||||||
Institutional Group | 9,152 | 27,654 | 52,496 | 85,879 | ||||||||||||
Other | (25,741 | ) | (221,917 | ) | (131,424 | ) | (284,231 | ) | ||||||||
$ | 39,023 | $ | (142,556 | ) | $ | 93,582 | $ | (67,046 | ) | |||||||
(1) | No individual client accounted for more than 10 percent of total net revenues for the three and nine months ended September 30, 2011 or 2010. |
September 30, 2011 | December 31, 2010 | |||||||
Global Wealth Management | $ | 3,658,296 | $ | 2,965,168 | ||||
Institutional Group | 1,076,051 | 883,235 | ||||||
Other | 208,017 | 364,712 | ||||||
$ | 4,942,364 | $ | 4,213,115 | |||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
United States | $ | 324,519 | $ | 329,350 | $ | 1,019,328 | $ | 955,938 | ||||||||
Canada | 3,261 | 4,870 | 16,522 | 4,870 | ||||||||||||
United Kingdom | 4,318 | 4,073 | 16,455 | 12,790 | ||||||||||||
Other European | 2,116 | 2,095 | 7,379 | 6,829 | ||||||||||||
$ | 334,214 | $ | 340,388 | $ | 1,059,684 | $ | 980,427 | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income/(loss) | $ | 22,304 | $ | (84,336 | ) | $ | 57,118 | $ | (39,487 | ) | ||||||
Other comprehensive income: | ||||||||||||||||
Unrealized gains/(losses) on available-for-sale securities, net of tax | (3,393 | ) | 517 | 3,245 | 7,472 | |||||||||||
Unrealized losses in cash flow hedging instruments, net of tax | (8,513 | ) | (2,478 | ) | (10,105 | ) | (8,875 | ) | ||||||||
Foreign currency translation adjustment, net of tax | (2,283 | ) | 8,690 | (1,277 | ) | 8,690 | ||||||||||
(14,189 | ) | 6,729 | (8,137 | ) | 7,287 | |||||||||||
Comprehensive income/(loss) | $ | 8,115 | $ | (77,607 | ) | $ | 48,981 | $ | (32,200 | ) | ||||||
NOTE 23 – Earnings Per Share
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income/(loss) | $ | 22,304 | $ | (84,336 | ) | $ | 57,118 | $ | (39,487 | ) | ||||||
Shares for basic and diluted calculations: | ||||||||||||||||
Average shares used in basic computation | 52,367 | 51,201 | 52,610 | 47,865 | ||||||||||||
Dilutive effect of stock options and units (1) | 10,785 | 10,633 | 10,564 | 7,728 | ||||||||||||
Average shares used in diluted computation | $ | 63,152 | $ | 61,834 | $ | 63,174 | $ | 55,593 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.43 | $ | (1.65 | ) | $ | 1.09 | $ | (0.82 | ) | ||||||
Diluted (1) (2) | $ | 0.35 | $ | (1.65 | ) | $ | 0.90 | $ | (0.82 | ) | ||||||
(1) | Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Diluted earnings per share include stock options and units. |
(2) | In accordance with Topic 260, “Earnings Per Share,” earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding in periods a loss is incurred. |
Share Repurchase Program
We have an ongoing authorization, as amended, from the Board to repurchase our common stock in the open market or in negotiated transactions. On November 7, 2011, the Board authorized the repurchase of an additional 3.0 million shares. The share repurchase program will manage our equity capital relative to the growth of our business and help to meet obligations under our employee benefit plans.
For the Three Months Ended September 30, | As a Percentage of Net Revenues For the Three Months Ended September 30, | |||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Commissions | $ | 143,243 | $ | 96,986 | 47.7 | 42.9 | % | 28.5 | % | |||||||||||
Principal transactions | 76,650 | 123,194 | (37.8 | ) | 22.9 | 36.2 | ||||||||||||||
Asset management and service fees | 58,253 | 50,876 | 14.5 | 17.4 | 14.9 | |||||||||||||||
Investment banking | 37,673 | 51,656 | (27.1 | ) | 11.3 | 15.2 | ||||||||||||||
Interest | 24,161 | 17,718 | 36.4 | 7.2 | 5.2 | |||||||||||||||
Other income | 540 | 3,656 | (85.2 | ) | 0.2 | 1.1 | ||||||||||||||
Total revenues | 340,520 | 344,086 | (1.0 | ) | 101.9 | 101.1 | ||||||||||||||
Interest expense | 6,306 | 3,698 | 70.5 | 1.9 | 1.1 | |||||||||||||||
Net revenues | 334,214 | 340,388 | (1.8 | ) | 100.0 | 100.0 | ||||||||||||||
Non-interest expenses: | ||||||||||||||||||||
Compensation and benefits | 210,573 | 395,936 | (46.8 | ) | 63.0 | 116.3 | ||||||||||||||
Occupancy and equipment rental | 30,914 | 29,559 | 4.6 | 9.3 | 8.7 | |||||||||||||||
Communication and office supplies | 18,838 | 19,877 | (5.2 | ) | 5.6 | 5.8 | ||||||||||||||
Commissions and floor brokerage | 7,400 | 7,972 | (7.2 | ) | 2.2 | 2.3 | ||||||||||||||
Other operating expenses | 27,466 | 29,600 | (7.2 | ) | 8.2 | 8.8 | ||||||||||||||
Total non-interest expenses | 295,191 | 482,944 | (38.9 | ) | 88.3 | 141.9 | ||||||||||||||
Income/(loss) before income taxes | 39,023 | (142,556 | ) | * | 11.7 | (41.9 | ) | |||||||||||||
Provision for income taxes/(tax benefit) | 16,719 | (58,220 | ) | * | 5.0 | (17.1 | ) | |||||||||||||
Net income/(loss) | $ | 22,304 | $ | (84,336 | ) | * | 6.7 | % | (24.8 | ) % | ||||||||||
* Percentage is not meaningful. | ||||||||||||||||||||
For the Nine Months Ended September 30, | As a Percentage of Net Revenues For the Nine Months Ended September 30, | |||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Commissions | $ | 437,344 | $ | 305,655 | 43.1 | 41.3 | % | 31.2 | % | |||||||||||
Principal transactions | 249,250 | 363,537 | (31.4 | ) | 23.5 | 37.0 | ||||||||||||||
Asset management and service fees | 172,914 | 136,117 | 27.0 | 16.3 | 13.9 | |||||||||||||||
Investment banking | 143,509 | 127,129 | 12.9 | 13.5 | 13.0 | |||||||||||||||
Interest | 64,246 | 47,019 | 36.6 | 6.1 | 4.8 | |||||||||||||||
Other income | 11,352 | 9,358 | 21.3 | 1.1 | 1.0 | |||||||||||||||
Total revenues | 1,078,615 | 988,815 | 9.1 | 101.8 | 100.9 | |||||||||||||||
Interest expense | 18,931 | 8,388 | 125.7 | 1.8 | 0.9 | |||||||||||||||
Net revenues | 1,059,684 | 980,427 | 8.1 | 100.0 | 100.0 | |||||||||||||||
Non-interest expenses: | ||||||||||||||||||||
Compensation and benefits | 671,678 | 819,085 | (18.0 | ) | 63.4 | 83.5 | ||||||||||||||
Occupancy and equipment rental | 89,962 | 81,012 | 11.0 | 8.5 | 8.3 | |||||||||||||||
Communication and office supplies | 56,198 | 50,220 | 11.9 | 5.3 | 5.1 | |||||||||||||||
Commissions and floor brokerage | 20,943 | 18,988 | 10.3 | 2.0 | 1.9 | |||||||||||||||
Other operating expenses | 127,321 | 78,168 | 62.9 | 12.0 | 8.0 | |||||||||||||||
Total non-interest expenses | 966,102 | 1,047,473 | (7.8 | ) | 91.2 | 106.8 | ||||||||||||||
Income/(loss) before income taxes | 93,582 | (67,046 | ) | * | 8.8 | (6.8 | ) | |||||||||||||
Provision for income taxes/(tax benefit) | 36,464 | (27,559 | ) | * | 3.4 | (2.8 | ) | |||||||||||||
Net income/(loss) | $ | 57,118 | $ | (39,487 | ) | * | 5.4 | % | (4.0 | ) % | ||||||||||
* Percentage is not meaningful. | ||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | % Change | |||||||||||||||||||
Net revenues: | ||||||||||||||||||||||||
Commissions | $ | 143,243 | $ | 96,986 | 47.7 | $ | 437,344 | $ | 305,655 | 43.1 | ||||||||||||||
Principal transactions | 76,650 | 123,194 | (37.8 | ) | 249,250 | 363,537 | (31.4 | ) | ||||||||||||||||
Asset management and service fees | 58,253 | 50,876 | 14.5 | 172,914 | 136,117 | 27.0 | ||||||||||||||||||
Investment banking: | ||||||||||||||||||||||||
Capital raising | 25,254 | 28,593 | (11.7 | ) | 97,301 | 84,613 | 15.0 | |||||||||||||||||
Strategic advisory fees | 12,419 | 23,063 | (46.2 | ) | 46,208 | 42,516 | 8.7 | |||||||||||||||||
37,673 | 51,656 | (27.1 | ) | 143,509 | 127,129 | 12.9 | ||||||||||||||||||
Net interest | 17,855 | 14,020 | 27.4 | 45,315 | 38,631 | 17.3 | ||||||||||||||||||
Other income | 540 | 3,656 | (85.2 | ) | 11,352 | 9,358 | 21.3 | |||||||||||||||||
Total net revenues | $ | 334,214 | $ | 340,388 | (1.8 | ) | $ | 1,059,684 | $ | 980,427 | 8.1 | |||||||||||||
Three Months Ended | ||||||||||||||||||||||||
September 30, 2011 | September 30, 2010 | |||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Interest Rate | Average Balance | Interest Income/ Expense | Average Interest Rate | |||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Margin balances (Stifel Nicolaus) | $ | 438,489 | $ | 4,569 | 4.17 | % | $ | 391,727 | $ | 4,253 | 4.34 | % | ||||||||||||
Interest-earning assets (Stifel Bank) | 2,010,120 | 15,230 | 3.03 | 1,457,598 | 9,601 | 2.63 | ||||||||||||||||||
Stock borrow (Stifel Nicolaus) | 71,401 | 4 | 0.02 | 73,936 | 6 | 0.03 | ||||||||||||||||||
Other (Stifel Nicolaus) | 4,358 | 3,858 | ||||||||||||||||||||||
Total interest revenue | $ | 24,161 | $ | 17,718 | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Short-term borrowings (Stifel Nicolaus) | $ | 212,407 | $ | 610 | 1.15 | % | $ | 91,876 | $ | 294 | 1.28 | % | ||||||||||||
Interest-bearing liabilities (Stifel Bank) | 1,878,212 | 4,182 | 0.89 | 1,351,502 | 1,378 | 0.41 | ||||||||||||||||||
Stock loan (Stifel Nicolaus) | 121,213 | 413 | 1.36 | 99,508 | 327 | 1.31 | ||||||||||||||||||
Interest-bearing liabilities (Capital Trusts) | 82,500 | 980 | 4.75 | 82,500 | 1,377 | 6.67 | ||||||||||||||||||
Other (Stifel Nicolaus) | 121 | 322 | ||||||||||||||||||||||
Total interest expense | 6,306 | 3,698 | ||||||||||||||||||||||
Net interest income | $ | 17,855 | $ | 14,020 | ||||||||||||||||||||
Nine Months Ended | ||||||||||||||||||||||||
September 30, 2011 | September 30, 2010 | |||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Interest Rate | Average Balance | Interest Income/ Expense | Average Interest Rate | |||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||
Margin balances (Stifel Nicolaus) | $ | 443,085 | $ | 13,673 | 4.11 | % | $ | 377,131 | $ | 12,136 | 4.29 | % | ||||||||||||
Interest-earning assets (Stifel Bank) | 1,829,671 | 39,852 | 2.90 | 1,223,696 | 25,859 | 2.82 | ||||||||||||||||||
Stock borrow (Stifel Nicolaus) | 93,912 | 55 | 0.08 | 75,181 | 23 | 0.04 | ||||||||||||||||||
Other (Stifel Nicolaus) | 10,666 | 9,001 | ||||||||||||||||||||||
Total interest revenue | $ | 64,246 | $ | 47,019 | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Short-term borrowings (Stifel Nicolaus) | $ | 196,034 | $ | 1,638 | 1.11 | % | $ | 108,277 | $ | 889 | 1.09 | % | ||||||||||||
Interest-bearing liabilities (Stifel Bank) | 1,705,080 | 12,658 | 0.99 | 1,128,265 | 2,112 | 0.25 | ||||||||||||||||||
Stock loan (Stifel Nicolaus) | 113,886 | 1,158 | 1.36 | 66,320 | 738 | 1.48 | ||||||||||||||||||
Interest-bearing liabilities (Capital Trusts) | 82,500 | 2,938 | 4.75 | 82,500 | 4,093 | 6.61 | ||||||||||||||||||
Other (Stifel Nicolaus) | 539 | 556 | ||||||||||||||||||||||
Total interest expense | 18,931 | 8,388 | ||||||||||||||||||||||
Net interest income | $ | 45,315 | $ | 38,631 | ||||||||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | % Change | |||||||||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||
Compensation and benefits | $ | 210,573 | $ | 395,936 | (46.8 | ) | $ | 671,678 | $ | 819,085 | (18.0 | ) | ||||||||||||
Occupancy and equipment rental | 30,914 | 29,559 | 4.6 | 89,962 | 81,012 | 11.0 | ||||||||||||||||||
Communications and office supplies | 18,838 | 19,877 | (5.2 | ) | 56,198 | 50,220 | 11.9 | |||||||||||||||||
Commissions and floor brokerage | 7,400 | 7,972 | (7.2 | ) | 20,943 | 18,988 | 10.3 | |||||||||||||||||
Other operating expenses | 27,466 | 29,600 | (7.2 | ) | 127,321 | 78,168 | 62.9 | |||||||||||||||||
Total non-interest expenses | $ | 295,191 | $ | 482,944 | (38.9 | ) | $ | 966,102 | $ | 1,047,473 | (7.8 | ) |
For the Three Months Ended September 30, | As a Percentage of Net Revenues For the Three Months Ended September 30, | |||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Commissions | $ | 92,029 | $ | 69,875 | 31.7 | 41.9 | % | 33.7 | % | |||||||||||
Principal transactions | 48,836 | 62,785 | (22.2 | ) | 22.3 | 30.2 | ||||||||||||||
Asset management and service fees | 58,007 | 50,449 | 15.0 | 26.4 | 24.3 | |||||||||||||||
Investment banking | 3,737 | 6,957 | (46.3 | ) | 1.7 | 3.4 | ||||||||||||||
Interest | 20,467 | 14,522 | 40.9 | 9.3 | 7.0 | |||||||||||||||
Other income | 1,873 | 5,401 | (65.3 | ) | 0.9 | 2.6 | ||||||||||||||
Total revenues | 224,949 | 209,989 | 7.1 | 102.5 | 101.2 | |||||||||||||||
Interest expense | 5,451 | 2,505 | 117.6 | 2.5 | 1.2 | |||||||||||||||
Net revenues | 219,498 | 207,484 | 5.8 | 100.0 | 100.0 | |||||||||||||||
Non-interest expenses: | ||||||||||||||||||||
Compensation and benefits | 128,244 | 119,100 | 7.7 | 58.4 | 57.4 | |||||||||||||||
Occupancy and equipment rental | 15,997 | 15,476 | 3.4 | 7.3 | 7.5 | |||||||||||||||
Communication and office supplies | 7,630 | 8,541 | (10.7 | ) | 3.5 | 4.1 | ||||||||||||||
Commissions and floor brokerage | 3,172 | 2,511 | 26.3 | 1.5 | 1.2 | |||||||||||||||
Other operating expenses | 8,843 | 10,149 | (12.9 | ) | 4.0 | 4.9 | ||||||||||||||
Total non-interest expenses | 163,886 | 155,777 | 5.2 | 74.7 | 75.1 | |||||||||||||||
Income before income taxes | $ | 55,612 | $ | 51,707 | 7.6 | 25.3 | % | 24.9 | % | |||||||||||
September 30, 2011 | June 30, 2011 | September 30, 2010 | |||||
Branch offices | 287 | 288 | 279 | ||||
Financial advisors | 1,801 | 1,798 | 1,755 | ||||
Independent contractors | 160 | 160 | 165 | ||||
Assets in fee-based accounts: | |||||||
Value (in thousands) | 18,541,710 | 18,278,557 | 13,408,795 | ||||
Number of accounts | 67,077 | 64,559 | 55,816 | ||||
For the Nine Months Ended September 30, | As a Percentage of Net Revenues For the Nine Months Ended September 30, | |||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Commissions | $ | 287,384 | $ | 228,983 | 25.5 | 42.0 | % | 37.7 | % | |||||||||||
Principal transactions | 156,262 | 181,331 | (13.8 | ) | 22.9 | 29.9 | ||||||||||||||
Asset management and service fees | 172,354 | 135,120 | 27.6 | 25.2 | 22.3 | |||||||||||||||
Investment banking | 16,460 | 17,753 | (7.3 | ) | 2.4 | 2.9 | ||||||||||||||
Interest | 56,062 | 40,013 | 40.1 | 8.2 | 6.6 | |||||||||||||||
Other income | 11,543 | 9,101 | 26.8 | 1.7 | 1.5 | |||||||||||||||
Total revenues | 700,065 | 612,301 | 14.3 | 102.4 | 100.9 | |||||||||||||||
Interest expense | 16,476 | 5,456 | 202.0 | 2.4 | 0.9 | |||||||||||||||
Net revenues | 683,589 | 606,845 | 12.6 | 100.0 | 100.0 | |||||||||||||||
Non-interest expenses: | ||||||||||||||||||||
Compensation and benefits | 403,782 | 367,447 | 9.9 | 59.1 | 60.6 | |||||||||||||||
Occupancy and equipment rental | 46,570 | 45,339 | 2.7 | 6.8 | 7.5 | |||||||||||||||
Communication and office supplies | 24,968 | 23,701 | 5.3 | 3.6 | 3.9 | |||||||||||||||
Commissions and floor brokerage | 8,753 | 7,634 | 14.7 | 1.3 | 1.3 | |||||||||||||||
Other operating expenses | 27,006 | 31,418 | (14.0 | ) | 4.0 | 5.1 | ||||||||||||||
Total non-interest expenses | 511,079 | 475,539 | 7.5 | 74.8 | 78.4 | |||||||||||||||
Income before income taxes | $ | 172,510 | $ | 131,306 | 31.4 | 25.2 | % | 21.6 | % | |||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
September 30, 2011 | September 30, 2010 | |||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Interest Rate | Average Balance | Interest Income/ Expense | Average Interest Rate | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Federal funds sold | $ | 138,378 | $ | 84 | 0.24 | % | $ | 196,722 | $ | 148 | 0.30 | % | ||||||||||||
U.S. government agencies | — | — | — | 97,912 | 250 | 1.02 | ||||||||||||||||||
State and political subdivisions: | ||||||||||||||||||||||||
Taxable | 86,190 | 1,596 | 7.41 | 20,474 | 245 | 4.79 | ||||||||||||||||||
Non-taxable (1) | 2,943 | 25 | 3.40 | 959 | 10 | 4.17 | ||||||||||||||||||
Mortgage-backed securities | 760,215 | 4,955 | 2.61 | 600,827 | 4,256 | 2.83 | ||||||||||||||||||
Corporate bonds | 355,600 | 3,045 | 3.43 | 64,336 | 599 | 3.72 | ||||||||||||||||||
Asset-backed securities | 84,376 | 520 | 2.47 | 11,232 | 77 | 2.74 | ||||||||||||||||||
Federal Home Loan Bank (“FHLB”) and other capital stock | 2,343 | 16 | 2.73 | 1,545 | 7 | 1.81 | ||||||||||||||||||
Loans (2) | 515,506 | 4,373 | 3.39 | 402,524 | 3,238 | 3.22 | ||||||||||||||||||
Loans held for sale | 64,569 | 616 | 3.82 | 61,067 | 771 | 5.05 | ||||||||||||||||||
Total interest-earning assets (3) | $ | 2,010,120 | $ | 15,230 | 3.03 | % | $ | 1,457,598 | $ | 9,601 | 2.63 | % | ||||||||||||
Cash and due from banks | 9,608 | 10,045 | ||||||||||||||||||||||
Other non interest-earning assets | 52,941 | 44,503 | ||||||||||||||||||||||
Total assets | $ | 2,072,669 | $ | 1,512,146 | ||||||||||||||||||||
Liabilities and stockholders’ equity: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Money market | $ | 1,832,723 | $ | 4,152 | 0.91 | % | $ | 1,323,187 | $ | 1,350 | 0.41 | % | ||||||||||||
Demand deposits | 42,320 | 14 | 0.13 | 25,064 | 9 | 0.14 | ||||||||||||||||||
Time deposits | 2,558 | 15 | 2.35 | 3,231 | 19 | 2.35 | ||||||||||||||||||
Savings | 35 | — | — | 20 | — | — | ||||||||||||||||||
FHLB advances | 576 | 1 | 0.69 | — | — | — | ||||||||||||||||||
Total interest-bearing liabilities (3) | $ | 1,878,212 | $ | 4,182 | 0.89 | % | $ | 1,351,502 | $ | 1,378 | 0.41 | % | ||||||||||||
Non interest-bearing deposits | 13,024 | 22,438 | ||||||||||||||||||||||
Other non interest-bearing liabilities | 33,307 | 19,681 | ||||||||||||||||||||||
Total liabilities | 1,924,543 | 1,393,621 | ||||||||||||||||||||||
Stockholders’ equity | 148,126 | 118,525 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,072,669 | $ | 1,512,146 | ||||||||||||||||||||
Net interest income/margin | $ | 11,048 | 2.20 | % | $ | 8,223 | 2.26 | % | ||||||||||||||||
(3) See Net Interest Income table included in “Results of Operations” for additional information on our company’s average balances and operating interest and expenses. |
Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, 2011 | September 30, 2010 | |||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Interest Rate | Average Balance | Interest Income/ Expense | Average Interest Rate | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Federal funds sold | $ | 125,931 | $ | 229 | 0.24 | % | $ | 147,836 | $ | 301 | 0.27 | % | ||||||||||||
U.S. government agencies | 12,531 | 161 | 1.71 | 48,143 | 375 | 1.04 | ||||||||||||||||||
State and political subdivisions: | ||||||||||||||||||||||||
Taxable | 75,603 | 2,908 | 5.13 | 6,947 | 247 | 4.74 | ||||||||||||||||||
Non-taxable (1) | 2,943 | 74 | 3.35 | 960 | 29 | 4.03 | ||||||||||||||||||
Mortgage-backed securities | 772,672 | 16,219 | 2.80 | 528,118 | 11,682 | 2.95 | ||||||||||||||||||
Corporate bonds | 279,135 | 5,943 | 2.84 | 48,137 | 1,563 | 4.33 | ||||||||||||||||||
Asset-backed securities | 49,987 | 979 | 2.61 | 11,373 | 235 | 2.76 | ||||||||||||||||||
FHLB and other capital stock | 2,027 | 39 | 2.57 | 1,180 | 13 | 1.47 | ||||||||||||||||||
Loans (2) | 455,626 | 11,831 | 3.46 | 357,617 | 9,099 | 3.39 | ||||||||||||||||||
Loans held for sale | 53,216 | 1,469 | 3.68 | 73,385 | 2,315 | 4.21 | ||||||||||||||||||
Total interest-earning assets (3) | $ | 1,829,671 | $ | 39,852 | 2.90 | % | $ | 1,223,696 | $ | 25,859 | 2.82 | % | ||||||||||||
Cash and due from banks | 7,392 | 7,529 | ||||||||||||||||||||||
Other non interest-earning assets | 45,916 | 37,909 | ||||||||||||||||||||||
Total assets | $ | 1,882,979 | $ | 1,269,134 | ||||||||||||||||||||
Liabilities and stockholders’ equity: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Money market | $ | 1,674,906 | $ | 12,579 | 1.00 | % | $ | 1,094,919 | $ | 1,873 | 0.23 | % | ||||||||||||
Demand deposits | 27,334 | 31 | 0.15 | 20,500 | 18 | 0.12 | ||||||||||||||||||
Time deposits | 2,615 | 47 | 2.40 | 11,953 | 200 | 2.23 | ||||||||||||||||||
Savings | 31 | — | — | 21 | — | — | ||||||||||||||||||
FHLB advances | 194 | 1 | 0.69 | 872 | 21 | 3.21 | ||||||||||||||||||
Total interest-bearing liabilities (3) | $ | 1,705,080 | $ | 12,658 | 0.99 | % | $ | 1,128,265 | $ | 2,112 | 0.25 | % | ||||||||||||
Non interest-bearing deposits | 10,231 | 17,075 | ||||||||||||||||||||||
Other non interest-bearing liabilities | 23,951 | 11,197 | ||||||||||||||||||||||
Total liabilities | 1,739,262 | 1,156,537 | ||||||||||||||||||||||
Stockholders’ equity | 143,717 | 112,597 | ||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,882,979 | $ | 1,269,134 | ||||||||||||||||||||
Net interest income/margin | $ | 27,194 | 1.98 | % | $ | 23,747 | 2.59 | % | ||||||||||||||||
(3) See Net Interest Income table included in “Results of Operations” for additional information on our company’s average balances and operating interest and expenses. |
Three Months Ended September 30, 2011 Compared to Three Months Ended September 30, 2010 | Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010 | |||||||||||||||||||||||
Increase (decrease) due to: | Increase (decrease) due to: | |||||||||||||||||||||||
Volume | Rate | Total | Volume | Rate | Total | |||||||||||||||||||
Interest income: | ||||||||||||||||||||||||
Federal funds sold | $ | (39 | ) | $ | (25 | ) | $ | (64 | ) | $ | (42 | ) | $ | (30 | ) | $ | (72 | ) | ||||||
U.S. government agencies | (125 | ) | (125 | ) | (250 | ) | (1,754 | ) | 1,540 | (214 | ) | |||||||||||||
State and political subdivisions: | ||||||||||||||||||||||||
Taxable | 1,154 | 197 | 1,351 | 2,639 | 22 | 2,661 | ||||||||||||||||||
Non-taxable | 16 | (1 | ) | 15 | 49 | (4 | ) | 45 | ||||||||||||||||
Mortgage-backed securities | 1,000 | (301 | ) | 699 | 5,099 | (562 | ) | 4,537 | ||||||||||||||||
Corporate bonds | 2,490 | (44 | ) | 2,446 | 4,719 | (339 | ) | 4,380 | ||||||||||||||||
Asset-backed securities | 450 | (7 | ) | 443 | 756 | (12 | ) | 744 | ||||||||||||||||
FHLB and other capital stock | 6 | 3 | 9 | 14 | 12 | 26 | ||||||||||||||||||
Loans | 947 | 188 | 1,135 | 2,538 | 194 | 2,732 | ||||||||||||||||||
Loans held for sale | 52 | (207 | ) | (155 | ) | (578 | ) | (268 | ) | (846 | ) | |||||||||||||
$ | 5,951 | $ | (322 | ) | $ | 5,629 | $ | 13,440 | $ | 553 | $ | 13,993 | ||||||||||||
Increase (decrease) due to: | Increase (decrease) due to: | |||||||||||||||||||||||
Volume | Rate | Total | Volume | Rate | Total | |||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Money market | $ | 672 | $ | 2,130 | $ | 2,802 | $ | 1,447 | $ | 9,259 | $ | 10,706 | ||||||||||||
Demand deposits | 6 | (1 | ) | 5 | 7 | 6 | 13 | |||||||||||||||||
Time deposits | (4 | ) | — | (4 | ) | (169 | ) | 16 | (153 | ) | ||||||||||||||
Savings | — | — | — | — | — | — | ||||||||||||||||||
FHLB advances | 1 | — | 1 | (10 | ) | (10 | ) | (20 | ) | |||||||||||||||
$ | 675 | $ | 2,129 | $ | 2,804 | $ | 1,275 | $ | 9,271 | $ | 10,546 | |||||||||||||
For the Three Months Ended September 30, | As a Percentage of Net Revenues For the Three Months Ended September 30, | |||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Commissions | $ | 51,214 | $ | 27,111 | 88.9 | 45.2 | % | 19.6 | % | |||||||||||
Principal transactions | 27,815 | 60,408 | (54.0 | ) | 24.6 | 43.7 | ||||||||||||||
Capital raising | 21,436 | 22,575 | (5.0 | ) | 18.9 | 16.4 | ||||||||||||||
Advisory | 12,500 | 23,063 | (45.8 | ) | 11.1 | 16.7 | ||||||||||||||
Investment banking | 33,936 | 45,638 | (25.6 | ) | 30.0 | 33.1 | ||||||||||||||
Interest | 1,940 | 2,422 | (19.9 | ) | 1.7 | 1.8 | ||||||||||||||
Other income | (423 | ) | 3,419 | (112.4 | ) | (0.4 | ) | 2.5 | ||||||||||||
Total revenues | 114,482 | 138,998 | (17.6 | ) | 101.1 | 100.7 | ||||||||||||||
Interest expense | 1,223 | 955 | 28.1 | 1.1 | 0.7 | |||||||||||||||
Net revenues | 113,259 | 138,043 | (18.0 | ) | 100.0 | 100.0 | ||||||||||||||
Non-interest expenses: | ||||||||||||||||||||
Compensation and benefits | 74,813 | 82,147 | (8.9 | ) | 66.0 | 59.5 | ||||||||||||||
Occupancy and equipment rental | 5,431 | 7,355 | (26.2 | ) | 4.8 | 5.3 | ||||||||||||||
Communication and office supplies | 7,678 | 6,892 | 11.4 | 6.8 | 5.0 | |||||||||||||||
Commissions and floor brokerage | 4,377 | 4,251 | 3.0 | 3.9 | 3.1 | |||||||||||||||
Other operating expenses | 11,808 | 9,744 | 21.2 | 10.4 | 7.1 | |||||||||||||||
Total non-interest expenses | 104,107 | 110,389 | (5.7 | ) | 91.9 | 80.0 | ||||||||||||||
Income before income taxes | $ | 9,152 | $ | 27,654 | (66.9 | ) | 8.1 | % | 20.0 | % | ||||||||||
For the Nine Months Ended September 30, | As a Percentage of Net Revenues For the Nine Months Ended September 30, | |||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Commissions | $ | 149,960 | $ | 76,672 | 95.6 | 40.2 | % | 20.4 | % | |||||||||||
Principal transactions | 92,988 | 182,206 | (49.0 | ) | 24.9 | 48.4 | ||||||||||||||
Capital raising | 80,654 | 67,799 | 19.0 | 21.6 | 18.0 | |||||||||||||||
Advisory | 46,395 | 42,516 | 9.1 | 12.4 | 11.3 | |||||||||||||||
Investment banking | 127,049 | 110,315 | 15.2 | 34.0 | 29.3 | |||||||||||||||
Interest | 5,695 | 5,330 | 6.8 | 1.5 | 1.4 | |||||||||||||||
Other income | 1,046 | 4,432 | (76.4 | ) | 0.4 | 1.3 | ||||||||||||||
Total revenues | 376,738 | 378,955 | (0.6 | ) | 101.0 | 100.8 | ||||||||||||||
Interest expense | 3,570 | 3,018 | 18.3 | 1.0 | 0.8 | |||||||||||||||
Net revenues | 373,168 | 375,937 | (0.7 | ) | 100.0 | 100.0 | ||||||||||||||
Non-interest expenses: | ||||||||||||||||||||
Compensation and benefits | 234,006 | 221,029 | 5.9 | 62.7 | 58.8 | |||||||||||||||
Occupancy and equipment rental | 15,875 | 15,449 | 2.8 | 4.3 | 4.1 | |||||||||||||||
Communication and office supplies | 22,203 | 16,992 | 30.7 | 5.9 | 4.5 | |||||||||||||||
Commissions and floor brokerage | 12,190 | 10,144 | 20.2 | 3.3 | 2.7 | |||||||||||||||
Other operating expenses | 36,398 | 26,444 | 37.6 | 9.7 | 7.1 | |||||||||||||||
Total non-interest expenses | 320,672 | 290,058 | 10.6 | 85.9 | 77.2 | |||||||||||||||
Income before income taxes | $ | 52,496 | $ | 85,879 | (38.9 | ) | 14.1 | % | 22.8 | % | ||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||
2011 | 2010 | % Change | 2011 | 2010 | % Change | |||||||||||||||||||
Net revenues | $ | 1,457 | $ | (5,139 | ) | 128.4 | $ | 2,927 | $ | (2,355 | ) | 224.3 | ||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||
Compensation and benefits | 7,517 | 194,689 | (96.1 | ) | 33,891 | 230,609 | (85.3 | ) | ||||||||||||||||
Other operating expenses | 19,681 | 22,089 | (10.9 | ) | 100,460 | 51,267 | 96.0 | |||||||||||||||||
Total non-interest expenses | 27,198 | 216,778 | (87.5 | ) | 134,351 | 281,876 | (52.3 | ) | ||||||||||||||||
Loss before income taxes | $ | (25,741 | ) | $ | (221,917 | ) | (88.4 | ) | $ | (131,424 | ) | $ | (284,231 | ) | (53.8 | ) | ||||||||
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Nine Months Ended September 30, 2011 | VaR calculation at | |||||||||||||||||||
High | Low | Daily Average | September 30, 2011 | December 31, 2010 | ||||||||||||||||
Daily VaR | $ | 13,264 | $ | 4,130 | $ | 8,190 | $ | 10,691 | $ | 8,043 | ||||||||||
Hypothetical change in interest rates | Projected change in net interest margin | ||
+200 | 44.1% | ||
+100 | 22.5% | ||
0 | — | ||
-100 | n/a | ||
-200 | n/a | ||
Repricing Opportunities | ||||||||||||||||
0-6 Months | 7-12 Months | 1-5 Years | 5+ Years | |||||||||||||
Interest-earning assets: | ||||||||||||||||
Loans | $ | 690,670 | $ | 11,669 | $ | 8,237 | $ | 82 | ||||||||
Securities | 443,143 | 94,547 | 609,662 | 310,726 | ||||||||||||
Interest-bearing cash | 113,440 | — | — | — | ||||||||||||
$ | 1,247,253 | $ | 106,216 | $ | 617,899 | $ | 310,808 | |||||||||
Interest-bearing liabilities: | ||||||||||||||||
Transaction accounts and savings | $ | 277,069 | $ | 321,756 | $ | 1,296,344 | $ | 227,619 | ||||||||
Certificates of deposit | 992 | 115 | 1,458 | — | ||||||||||||
278,060 | 321,871 | 1,297,802 | 227,619 | |||||||||||||
GAP | 969,192 | (215,655 | ) | (679,903 | ) | 83,189 | ||||||||||
Cumulative GAP | $ | 969,192 | $ | 753,537 | $ | 73,634 | $ | 156,823 | ||||||||
Regulatory and Legal Risk
ITEM 4. CONTROLS AND PROCEDURES |
On November 8, 2011, the FINRA hearing panel delivered a decision that will become a final decision after 45 days and fully resolve the matter unless FINRA appeals to the National Adjudicatory Council. TWP will comply with the Order to pay a $0.2 million fine plus administrative fees and costs for failing to establish and maintain systems and procedures governing principal transactions effected by the firm.
ITEM 1A. RISK FACTORS |
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publically Announced Plans | Maximum Number of Shares That May Yet be Purchased Under the Plan or Program | |||||||
July 1 – 31, 2011 | — | $ | — | — | 2,957,776 | |||||
August 1 – 31, 2011 | 1,011,296 | 27.88 | 1,011,296 | 1,946,480 | ||||||
September 1 – 30, 2011 | 613,704 | 26.76 | 613,704 | 1,332,776 | ||||||
1,625,000 | $ | 27.46 | 1,625,000 |
Exhibit No. | Description | |
11.1 | Statement Re: Computation of per Share Earnings (The calculation of per share earnings is included in Part I, Item 1 in the Notes to Consolidated Financial Statements (Earnings Per Share) and is omitted here in accordance with Section (b)(11) of Item 601 of Regulation S-K). | |
31.1 | Rule 13a-14(a) Certification of Chief Executive Officer. | |
31.2 | Rule 13a-14(a) Certification of Chief Financial Officer. | |
32.1 | Section 1350 Certification of Chief Executive Officer.* | |
32.2 | Section 1350 Certification of Chief Financial Officer.* | |
101.INS | Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Statements of Financial Condition as of September 30, 2011 and December 31, 2010; (ii) Consolidated Statements of Operations for the three and nine months ended September 30, 2011 and 2010; (iii) Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and 2010; and (v) Notes to Consolidated Financial Statements. * | |
* | The certifications attached as Exhibits 32.1 and 32.2 and the interactive data files attached as Exhibits 101 that accompany this Quarterly Report on Form 10-Q, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Stifel Financial Corp. under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing. |
SIGNATURES |
STIFEL FINANCIAL CORP. |
/s/ Ronald J. Kruszewski |
Ronald J. Kruszewski Chairman, President, and Chief Executive Officer |
/s/ James M. Zemlyak |
James M. Zemlyak Senior Vice President, and Chief Financial Officer |
Date: November 9, 2011 |