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 April 30, 2012, 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 22,830 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 | 2 |
Item 1. Financial Statements | 2 |
Consolidated Statements of Financial Condition as of March 31, 2012 (unaudited) and December 31, 2011 | 2 |
Consolidated Statements of Operations for the three months ended March 31, 2012 and March 31, 2011 (unaudited) | 4 |
Consolidated Statements of Comprehensive Income for the three months ended March 31, 2012 and March 31, 2011 (unaudited) | 5 |
Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and March 31, 2011 (unaudited) | 6 |
Notes to Consolidated Financial Statements (unaudited) | 8 |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 43 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 65 |
Item 4. Controls and Procedures | 69 |
PART II - OTHER INFORMATION | 70 |
Item 1. Legal Proceedings | 70 |
Item 1A. Risk Factors | 72 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 72 |
Item 6. Exhibits | 73 |
Signatures | 74 |
(in thousands) | March 31, 2012 | December 31, 2011 | ||||
(Unaudited) | ||||||
Assets | ||||||
Cash and cash equivalents | $ | 226,458 | $ | 167,671 | ||
Restricted cash | 6,584 | 6,883 | ||||
Cash segregated for regulatory purposes | 26 | 26 | ||||
Receivables: | ||||||
Brokerage clients, net | 569,276 | 560,018 | ||||
Brokers, dealers, and clearing organizations | 237,258 | 252,636 | ||||
Securities purchased under agreements to resell | 103,958 | 75,455 | ||||
Trading securities owned, at fair value (includes securities pledged of $425,845 and $392,395, respectively) | 575,724 | 474,951 | ||||
Available-for-sale securities, at fair value | 1,347,535 | 1,214,141 | ||||
Held-to-maturity securities, at amortized cost | 327,447 | 190,484 | ||||
Loans held for sale | 141,136 | 131,754 | ||||
Bank loans, net of allowance | 657,193 | 632,140 | ||||
Other real estate owned | 717 | 708 | ||||
Investments | 244,106 | 239,208 | ||||
Fixed assets, net | 101,401 | 104,740 | ||||
Goodwill | 358,988 | 358,988 | ||||
Intangible assets, net | 32,534 | 33,863 | ||||
Loans and advances to financial advisors and other employees, net | 183,652 | 172,717 | ||||
Deferred tax assets, net | 141,798 | 177,803 | ||||
Other assets | 209,903 | 157,714 | ||||
Total Assets | $ | 5,465,694 | $ | 4,951,900 | ||
(in thousands, except share and per share amounts) | March 31, 2012 | December 31, 2011 | ||||
(Unaudited) | ||||||
Liabilities and Shareholders' Equity | ||||||
Short-term borrowings from banks | $ | 187,400 | $ | 199,400 | ||
Payables: | ||||||
Brokerage clients | 291,317 | 245,886 | ||||
Brokers, dealers, and clearing organizations | 169,437 | 139,911 | ||||
Drafts | 56,627 | 75,901 | ||||
Securities sold under agreements to repurchase | 142,119 | 80,176 | ||||
Bank deposits | 2,357,912 | 2,071,738 | ||||
Trading securities sold, but not yet purchased, at fair value | 267,807 | 266,833 | ||||
Securities sold, but not yet purchased, at fair value | 21,823 | 19,223 | ||||
Accrued compensation | 124,962 | 204,076 | ||||
Accounts payable and accrued expenses | 240,530 | 257,194 | ||||
Senior notes | 175,000 | - | ||||
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 | ||||
4,117,434 | 3,642,838 | |||||
Liabilities subordinated to claims of general creditors | 5,318 | 6,957 | ||||
Shareholders' Equity: | ||||||
Preferred stock - $1 par value; authorized 3,000,000 shares; none issued | - | - | ||||
Exchangeable common stock - $0.15 par value; issued 34,593 and 172,242 shares, respectively | 5 | 26 | ||||
Common stock - $0.15 par value; authorized 97,000,000 shares; issued 53,685,423 and 53,547,774 shares, respectively | 8,053 | 8,032 | ||||
Additional paid-in-capital | 1,051,863 | 1,078,743 | ||||
Retained earnings | 286,854 | 277,195 | ||||
Accumulated other comprehensive loss | (189 | ) | (7,938 | ) | ||
1,346,586 | 1,356,058 | |||||
Treasury stock, at cost, 92,359 and 1,769,096 shares, respectively | (3,383 | ) | (53,640 | ) | ||
Unearned employee stock ownership plan shares, at cost, 61,013 and 73,215 shares, respectively | (261 | ) | (313 | ) | ||
1,342,942 | 1,302,105 | |||||
Total Liabilities and Shareholders' Equity | $ | 5,465,694 | $ | 4,951,900 | ||
Three Months Ended March 31, | ||||||
(in thousands, except per share amounts) | 2012 | 2011 | ||||
Revenues: | ||||||
Commissions | $ | 123,303 | $ | 155,786 | ||
Principal transactions | 116,233 | 92,859 | ||||
Investment banking | 70,438 | 41,418 | ||||
Asset management and service fees | 60,818 | 57,680 | ||||
Interest | 25,257 | 18,856 | ||||
Other income | 13,294 | 6,256 | ||||
Total revenues | 409,343 | 372,855 | ||||
Interest expense | 9,010 | 6,242 | ||||
Net revenues | 400,333 | 366,613 | ||||
Non-interest expenses: | ||||||
Compensation and benefits | 254,704 | 231,166 | ||||
Occupancy and equipment rental | 30,791 | 29,325 | ||||
Communications and office supplies | 20,373 | 18,845 | ||||
Commissions and floor brokerage | 7,612 | 6,649 | ||||
Other operating expenses | 27,599 | 29,944 | ||||
Total non-interest expenses | 341,079 | 315,929 | ||||
Income before income tax expense | 59,254 | 50,684 | ||||
Provision for income taxes | 24,481 | 19,286 | ||||
Net income | $ | 34,773 | $ | 31,398 | ||
Earnings per common share: | ||||||
Basic | $ | 0.65 | $ | 0.60 | ||
Diluted | $ | 0.55 | $ | 0.50 | ||
Weighted average number of common shares outstanding: | ||||||
Basic | 53,243 | 52,534 | ||||
Diluted | 62,669 | 63,179 | ||||
Three Months Ended March 31, | ||||||
(in thousands) | 2012 | 2011 | ||||
Net income | $ | 34,773 | $ | 31,398 | ||
Other comprehensive income: | ||||||
Unrealized gains on available-for-sale securities, net of tax | 4,850 | 1,193 | ||||
Unrealized gains on cash flow hedging instruments, net of tax | 2,364 | 2,806 | ||||
Foreign currency translation adjustment, net of tax | 535 | 534 | ||||
7,749 | 4,533 | |||||
Comprehensive income | $ | 42,522 | $ | 35,931 | ||
Three Months Ended March 31, | |||||||
(in thousands) | 2012 | 2011 | |||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 34,773 | $ | 31,398 | |||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||
Depreciation and amortization | 7,189 | 5,606 | |||||
Amortization of loans and advances to financial advisors and other employees | 13,931 | 14,268 | |||||
Amortization of premium on available-for-sale securities | 2,886 | 3,602 | |||||
Provision for loan losses and allowance for loans and advances to financial advisors and other employees | 955 | (259 | ) | ||||
Amortization of intangible assets | 1,329 | 1,064 | |||||
Deferred income taxes | 31,514 | 23,351 | |||||
Excess tax benefits from stock-based compensation | (12,438 | ) | (22,463 | ) | |||
Stock-based compensation | 6,963 | 6,780 | |||||
Gains on investments | (7,952 | ) | (3,317 | ) | |||
Other, net | (308 | ) | 633 | ||||
Decrease/(increase) in operating assets: | |||||||
Cash segregated for regulatory purposes and restricted cash | 299 | 996 | |||||
Receivables: | |||||||
Brokerage clients | (9,270 | ) | (6,756 | ) | |||
Brokers, dealers, and clearing organizations | 15,378 | (77,388 | ) | ||||
Securities purchased under agreements to resell | (28,503 | ) | (90,616 | ) | |||
Loans originated as held for sale | (356,192 | ) | (179,834 | ) | |||
Proceeds from mortgages held for sale | 346,809 | 234,725 | |||||
Trading securities owned, including those pledged | (100,773 | ) | (117,240 | ) | |||
Loans and advances to financial advisors and other employees | (25,203 | ) | (14,029 | ) | |||
Other assets | (35,119 | ) | (11,265 | ) | |||
Increase/(decrease) in operating liabilities: | |||||||
Payables: | |||||||
Brokerage clients | 45,431 | (6,636 | ) | ||||
Brokers, dealers, and clearing organizations | 13,590 | (42,560 | ) | ||||
Drafts | (19,274 | ) | (17,962 | ) | |||
Trading securities sold, but not yet purchased | 3,574 | 167,269 | |||||
Other liabilities and accrued expenses | (119,349 | ) | (151,611 | ) | |||
Net cash used in operating activities | $ | (189,760 | ) | $ | (252,244 | ) | |
Three Months Ended March 31, | |||||||
(in thousands) | 2012 | 2011 | |||||
Cash Flows from Investing Activities: | |||||||
Proceeds from: | |||||||
Maturities, calls, sales, and principal paydowns on available-for-sale securities | $ | 63,783 | $ | 71,512 | |||
Calls of held-to-maturity securities | - | 500 | |||||
Sale or maturity of investments | 15,534 | 16,609 | |||||
Sale of other real estate owned | 75 | 228 | |||||
Increase in bank loans, net | (25,534 | ) | (7,604 | ) | |||
Payments for: | |||||||
Purchase of available-for-sale securities | (192,536 | ) | (251,409 | ) | |||
Purchase of held-to-maturity securities | (136,854 | ) | (11,264 | ) | |||
Purchase of investments | (12,480 | ) | (12,369 | ) | |||
Purchase of fixed assets | (3,902 | ) | (18,118 | ) | |||
Net cash used in investing activities | (291,914 | ) | (211,915 | ) | |||
Cash Flows from Financing Activities: | |||||||
(Payments of)/proceeds from short-term borrowings from banks | (12,000 | ) | 190,100 | ||||
Proceeds from issuance of senior notes, net | 170,291 | - | |||||
Increase in securities sold under agreements to repurchase | 61,943 | 33,911 | |||||
Increase in bank deposits, net | 286,174 | 2,322 | |||||
Increase in securities loaned | 15,936 | 85,361 | |||||
Excess tax benefits from stock-based compensation | 12,438 | 22,463 | |||||
Reissuance of treasury stock | 6,783 | 2,093 | |||||
Extinguishment of subordinated debt | (1,639 | ) | (1,284 | ) | |||
Net cash provided by financing activities | 539,926 | 334,966 | |||||
Effect of exchange rate changes on cash | 535 | 534 | |||||
Increase/(decrease) in cash and cash equivalents | 58,787 | (128,659 | ) | ||||
Cash and cash equivalents at beginning of period | 167,671 | 253,529 | |||||
Cash and cash equivalents at end of period | $ | 226,458 | $ | 124,870 | |||
Supplemental disclosure of cash flow information: | |||||||
(Refunds, net of taxes paid)/Cash paid for income taxes, net of refunds | $ | (885 | ) | $ | 4,323 | ||
Cash paid for interest | 6,712 | 5,982 | |||||
Noncash investing and financing activities: | |||||||
Units, net of forfeitures | 68,159 | 84,193 | |||||
March 31, 2012 | December 31, 2011 | |||||
Deposits paid for securities borrowed | $ | 200,734 | $ | 193,509 | ||
Securities failed to deliver | 22,336 | 15,485 | ||||
Receivable from clearing organizations | 14,188 | 43,642 | ||||
$ | 237,258 | $ | 252,636 | |||
March 31, 2012 | December 31, 2011 | |||||
Deposits received from securities loaned | $ | 141,101 | $ | 124,711 | ||
Securities failed to receive | 24,791 | 11,216 | ||||
Payable to clearing organizations | 3,545 | 3,984 | ||||
$ | 169,437 | $ | 139,911 | |||
March 31, 2012 | ||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash equivalents | $ | 48,751 | $ | 48,751 | $ | - | $ | - | ||||
Trading securities owned: | ||||||||||||
U.S. government agency securities | 91,271 | - | 91,271 | - | ||||||||
U.S. government securities | 15,030 | 15,030 | - | - | ||||||||
Corporate securities: | ||||||||||||
Fixed income securities | 240,244 | 67,774 | 165,773 | 6,697 | ||||||||
Equity securities | 31,810 | 28,584 | 3,226 | - | ||||||||
State and municipal securities | 197,369 | - | 197,369 | - | ||||||||
Total trading securities owned | 575,724 | 111,388 | 457,639 | 6,697 | ||||||||
Available-for-sale securities: | ||||||||||||
U.S. government agency securities | 1,116 | - | 1,116 | - | ||||||||
State and municipal securities | 83,466 | - | 18,607 | 64,859 | ||||||||
Mortgage-backed securities: | ||||||||||||
Agency | 465,882 | - | 465,882 | - | ||||||||
Commercial | 286,868 | - | 286,868 | - | ||||||||
Non-agency | 16,689 | - | 16,689 | - | ||||||||
Corporate fixed income securities | 468,097 | 310,850 | 145,247 | 12,000 | ||||||||
Asset-backed securities | 25,417 | - | 25,417 | - | ||||||||
Total available-for-sale securities | 1,347,535 | 310,850 | 959,826 | 76,859 | ||||||||
Investments: | ||||||||||||
Corporate equity securities | 27,504 | 27,311 | 193 | - | ||||||||
Mutual funds | 36,855 | 36,855 | - | - | ||||||||
U.S. government securities | 7,000 | 7,000 | - | - | ||||||||
Auction rate securities: | ||||||||||||
Equity securities | 92,077 | - | - | 92,077 | ||||||||
Municipal securities | 13,404 | - | - | 13,404 | ||||||||
Other | 39,266 | 942 | 342 | 37,982 | ||||||||
Total investments | 216,106 | 72,108 | 535 | 143,463 | ||||||||
$ | 2,188,116 | $ | 543,097 | $ | 1,418,000 | $ | 227,019 | |||||
Liabilities: | ||||||||||||
Trading securities sold, but not yet purchased: | ||||||||||||
U.S. government securities | $ | 98,283 | $ | 98,283 | $ | - | $ | - | ||||
U.S. government agency securities | 6,161 | - | 6,161 | - | ||||||||
Corporate securities: | ||||||||||||
Fixed income securities | 145,002 | 46,729 | 98,273 | - | ||||||||
Equity securities | 17,972 | 17,972 | - | - | ||||||||
State and municipal securities | 389 | - | 389 | - | ||||||||
Total trading securities sold, but not yet purchased | 267,807 | 162,984 | 104,823 | - | ||||||||
Securities sold, but not yet purchased | 21,823 | 21,823 | - | - | ||||||||
Derivative contracts (1) | 21,040 | - | 21,040 | - | ||||||||
$ | 310,670 | $ | 184,807 | $ | 125,863 | $ | - | |||||
(1) Included in accounts payable and accrued expenses in the consolidated statements of financial condition. |
December 31, 2011 | ||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash equivalents | $ | 14,156 | $ | 14,156 | $ | - | $ | - | ||||
Trading securities owned: | ||||||||||||
U.S. government agency securities | 66,424 | - | 66,424 | - | ||||||||
U.S. government securities | 32,845 | 32,845 | - | - | ||||||||
Corporate securities: | ||||||||||||
Fixed income securities | 244,535 | 31,398 | 209,395 | 3,742 | ||||||||
Equity securities | 19,859 | 19,506 | 353 | - | ||||||||
State and municipal securities | 111,288 | - | 111,288 | - | ||||||||
Total trading securities owned | 474,951 | 83,749 | 387,460 | 3,742 | ||||||||
Available-for-sale securities: | ||||||||||||
U.S. government agency securities | 1,103 | - | 1,103 | - | ||||||||
State and municipal securities | 86,932 | - | 20,036 | 66,896 | ||||||||
Mortgage-backed securities: | ||||||||||||
Agency | 404,662 | - | 404,662 | - | ||||||||
Commercial | 271,510 | - | 271,510 | - | ||||||||
Non-agency | 17,460 | - | 17,460 | - | ||||||||
Corporate fixed income securities | 405,985 | 153,855 | 240,130 | 12,000 | ||||||||
Asset-backed securities | 26,489 | - | 26,489 | - | ||||||||
Total available-for-sale securities | 1,214,141 | 153,855 | 981,390 | 78,896 | ||||||||
Investments: | ||||||||||||
Corporate equity securities | 23,921 | 23,921 | - | - | ||||||||
Mutual funds | 33,958 | 33,958 | - | - | ||||||||
Auction rate securities: | ||||||||||||
Equity securities | 103,176 | - | - | 103,176 | ||||||||
Municipal securities | 11,729 | - | - | 11,729 | ||||||||
Other | 38,424 | 1,055 | 336 | 37,033 | ||||||||
Total investments | 211,208 | 58,934 | 336 | 151,938 | ||||||||
$ | 1,914,456 | $ | 310,694 | $ | 1,369,186 | $ | 234,576 | |||||
Liabilities: | ||||||||||||
Trading securities sold, but not yet purchased: | ||||||||||||
U.S. government securities | $ | 109,776 | $ | 109,776 | $ | - | $ | - | ||||
U.S. government agency securities | 954 | - | 954 | - | ||||||||
Corporate securities: | ||||||||||||
Fixed income securities | 149,460 | 74,719 | 74,741 | - | ||||||||
Equity securities | 6,060 | 6,019 | 41 | - | ||||||||
State and municipal securities | 583 | - | 583 | - | ||||||||
Total trading securities sold, but not yet purchased | 266,833 | 190,514 | 76,319 | - | ||||||||
Securities sold, but not yet purchased | 19,223 | 19,223 | - | - | ||||||||
Derivative contracts (1) | 24,877 | - | 24,877 | - | ||||||||
$ | 310,933 | $ | 209,737 | $ | 101,196 | $ | - | |||||
(1) Included in accounts payable and accrued expenses in the consolidated statements of financial condition. |
Available-for-sale securities | Investments | ||||||||||||||||||||||
Corporate Fixed Income Securities (1) | State and Municipal Securities (2) | Corporate Fixed Income Securities | Auction Rate Securities - Equity | Auction Rate Securities - Municipal | Other | ||||||||||||||||||
Balance at December 31, 2011 | $ | 3,742 | $ | 66,896 | $ | 12,000 | $ | 103,176 | $ | 11,729 | $ | 37,033 | |||||||||||
Unrealized gains/(losses): | |||||||||||||||||||||||
Included in changes in net assets (3) | 47 | - | - | 451 | (65 | ) | 704 | ||||||||||||||||
Included in OCI (4) | - | (155 | ) | - | - | - | - | ||||||||||||||||
Realized gains (3) | 18 | 118 | - | - | - | 590 | |||||||||||||||||
Purchases | 5,246 | - | - | 2,800 | 2,040 | 390 | |||||||||||||||||
Sales | (2,557 | ) | - | - | - | - | (735 | ) | |||||||||||||||
Redemptions | - | (2,000 | ) | - | (14,350 | ) | (300 | ) | - | ||||||||||||||
Transfers: | |||||||||||||||||||||||
Into Level 3 | 227 | - | - | - | - | - | |||||||||||||||||
Out of Level 3 | (26 | ) | - | - | - | - | - | ||||||||||||||||
Net change | 2,955 | (2,037 | ) | - | (11,099 | ) | 1,675 | 949 | |||||||||||||||
Balance at March 31, 2012 | $ | 6,697 | $ | 64,859 | $ | 12,000 | $ | 92,077 | $ | 13,404 | $ | 37,982 | |||||||||||
(1) Included in trading securities owned in the consolidated statements of financial condition. | |||||||||||||||||||||||
(2) Consists of auction rate securities. | |||||||||||||||||||||||
(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 loss in the consolidated statements of financial condition. | |||||||||||||||||||||||
Discounted cash flow model - unobservable inputs | ||||||||||
Discount rate | Workout period | |||||||||
Estimated fair value | Range | Weighted average | Range | Weighted average | ||||||
Available-for-sale securities: | ||||||||||
State and municipal securities | $ | 64,859 | 2.4% - 9.2% | 5.0% | 3 - 4 years | 3.5 years | ||||
Investments: | ||||||||||
Auction rate securities: | ||||||||||
Equity securities | 92,077 | 0.0% - 7.5% | 4.7% | 1 - 4 years | 2.6 years | |||||
Municipal securities | 13,404 | 1.5% - 8.7% | 4.2% | 1 - 3 years | 1.9 years | |||||
March 31, 2012 | December 31, 2011 | |||||||||||
Carrying value | Estimated fair value | Carrying value | Estimated fair value | |||||||||
Financial assets: | ||||||||||||
Cash and cash equivalents | $ | 226,458 | $ | 226,458 | $ | 167,671 | $ | 167,671 | ||||
Restricted cash | 6,584 | 6,584 | 6,883 | 6,883 | ||||||||
Cash segregated for regulatory purposes | 26 | 26 | 26 | 26 | ||||||||
Securities purchased under agreements to resell | 103,958 | 103,958 | 75,455 | 75,455 | ||||||||
Trading securities owned | 575,724 | 575,724 | 474,951 | 474,951 | ||||||||
Available-for-sale securities | 1,347,535 | 1,347,535 | 1,214,141 | 1,214,141 | ||||||||
Held-to-maturity securities | 327,447 | 329,833 | 190,484 | 189,071 | ||||||||
Loans held for sale | 141,136 | 141,136 | 131,754 | 131,754 | ||||||||
Bank loans | 657,193 | 665,773 | 632,140 | 639,341 | ||||||||
Investments | 244,106 | 244,106 | 239,208 | 239,208 | ||||||||
Financial liabilities: | ||||||||||||
Securities sold under agreements to repurchase | $ | 142,119 | $ | 142,119 | $ | 80,176 | $ | 80,176 | ||||
Bank deposits | 2,357,912 | 2,326,411 | 2,071,738 | 2,067,324 | ||||||||
Trading securities sold, but not yet purchased | 267,807 | 267,807 | 266,833 | 266,833 | ||||||||
Securities sold, but not yet purchased | 21,823 | 21,823 | 19,223 | 19,223 | ||||||||
Derivative contracts (1) | 21,040 | 21,040 | 24,877 | 24,877 | ||||||||
Senior notes | 175,000 | 189,108 | - | - | ||||||||
Debentures to Stifel Financial Capital Trusts | 82,500 | 69,206 | 82,500 | 67,594 | ||||||||
Liabilities subordinated to the claims of general creditors | 5,318 | 5,079 | 6,957 | 6,671 | ||||||||
(1) Included in accounts payable and accrued expenses in the consolidated statements of financial condition. |
March 31, 2012 (1) | ||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||
Financial assets: | ||||||||||||
Cash and cash equivalents | $ | 177,707 | $ | 177,707 | $ | - | $ | - | ||||
Restricted cash | 6,584 | 6,584 | - | - | ||||||||
Cash segregated for regulatory purposes | 26 | 26 | - | - | ||||||||
Securities purchased under agreements to resell | 103,958 | 103,958 | - | - | ||||||||
Held-to-maturity securities | 329,833 | 14,707 | 39,537 | 275,589 | ||||||||
Loans held for sale | 141,136 | - | 141,136 | - | ||||||||
Bank loans | 665,773 | - | 665,773 | - | ||||||||
Investments | 28,000 | - | - | 28,000 | ||||||||
Financial liabilities: | ||||||||||||
Securities sold under agreements to repurchase | $ | 142,119 | 35,809 | 106,310 | - | |||||||
Bank deposits | 2,326,411 | - | 2,326,411 | - | ||||||||
Senior notes | 189,108 | 189,108 | - | - | ||||||||
Debentures to Stifel Financial Capital Trusts | 69,206 | - | - | 69,206 | ||||||||
Liabilities subordinated to claims of general creditors | 5,079 | - | - | 5,079 | ||||||||
(1) We adopted the provisions of Update No. 2011-04 in the first quarter of 2012 on a prospective basis. Accordingly, disclosures for prior periods are not presented. | ||||||||||||
March 31, 2012 | December 31, 2011 | |||||
Trading securities owned: | ||||||
U.S. government agency securities | $ | 91,271 | $ | 66,424 | ||
U.S. government securities | 15,030 | 32,845 | ||||
Corporate securities: | ||||||
Fixed income securities | 240,244 | 244,535 | ||||
Equity securities | 31,810 | 19,859 | ||||
State and municipal securities | 197,369 | 111,288 | ||||
$ | 575,724 | $ | 474,951 | |||
Trading securities sold, but not yet purchased: | ||||||
U.S. government securities | $ | 98,283 | $ | 109,776 | ||
U.S. government agency securities | 6,161 | 954 | ||||
Corporate securities: | ||||||
Fixed income securities | 145,002 | 149,460 | ||||
Equity securities | 17,972 | �� | 6,060 | |||
State and municipal securities | 389 | 583 | ||||
$ | 267,807 | $ | 266,833 | |||
March 31, 2012 | |||||||||||||
Amortized cost | Gross unrealized gains (1) | Gross unrealized losses (1) | Estimated fair value | ||||||||||
Available-for-sale securities | |||||||||||||
U.S. government securities | $ | 1,115 | $ | 2 | $ | (1 | ) | $ | 1,116 | ||||
State and municipal securities | 79,351 | 4,540 | (425 | ) | 83,466 | ||||||||
Mortgage-backed securities: | |||||||||||||
Agency | 457,608 | 8,687 | (413 | ) | 465,882 | ||||||||
Commercial | 283,746 | 3,664 | (542 | ) | 286,868 | ||||||||
Non-agency | 16,458 | 231 | - | 16,689 | |||||||||
Corporate fixed income securities | 466,221 | 4,647 | (2,771 | ) | 468,097 | ||||||||
Asset-backed securities | 25,252 | 498 | (333 | ) | 25,417 | ||||||||
$ | 1,329,751 | $ | 22,269 | $ | (4,485 | ) | $ | 1,347,535 | |||||
Held-to-maturity securities (2) | |||||||||||||
Asset-backed securities | $ | 251,832 | $ | 6,221 | $ | (2,681 | ) | $ | 255,372 | ||||
Corporate fixed income securities | 55,519 | 56 | (1,331 | ) | 54,244 | ||||||||
Municipal auction rate securities | 20,096 | 846 | (725 | ) | 20,217 | ||||||||
$ | 327,447 | $ | 7,123 | $ | (4,737 | ) | $ | 329,833 | |||||
December 31, 2011 | |||||||||||||
Amortized cost | Gross unrealized gains (1) | Gross unrealized losses (1) | Estimated fair value | ||||||||||
Available-for-sale securities | |||||||||||||
U.S. government securities | $ | 1,105 | $ | - | $ | (2 | ) | $ | 1,103 | ||||
State and municipal securities | 82,256 | 4,979 | (303 | ) | 86,932 | ||||||||
Mortgage-backed securities: | |||||||||||||
Agency | 396,952 | 8,469 | (759 | ) | 404,662 | ||||||||
Commercial | 270,677 | 1,811 | (978 | ) | 271,510 | ||||||||
Non-agency | 17,701 | 135 | (376 | ) | 17,460 | ||||||||
Corporate fixed income securities | 409,503 | 2,108 | (5,626 | ) | 405,985 | ||||||||
Asset-backed securities | 26,011 | 548 | (70 | ) | 26,489 | ||||||||
$ | 1,204,205 | $ | 18,050 | $ | (8,114 | ) | $ | 1,214,141 | |||||
Held-to-maturity securities (2) | |||||||||||||
Asset-backed securities | $ | 122,148 | $ | 2,953 | $ | (3,138 | ) | $ | 121,963 | ||||
Corporate fixed income securities | 55,544 | 56 | (2,016 | ) | 53,584 | ||||||||
Municipal auction rate securities | 12,792 | 733 | (1 | ) | 13,524 | ||||||||
$ | 190,484 | $ | 3,742 | $ | (5,155 | ) | $ | 189,071 | |||||
(1) Unrealized gains/(losses) related to available-for-sale securities are reported in accumulated other comprehensive 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. | |||||||||||||
March 31, 2012 | ||||||||||||
Available-for-sale securities | Held-to-maturity securities | |||||||||||
Amortized cost | Estimated fair value | Amortized cost | Estimated fair value | |||||||||
Debt securities | ||||||||||||
Within one year | $ | 36,257 | $ | 36,424 | $ | - | $ | - | ||||
After one year through three years | 318,885 | 322,515 | - | - | ||||||||
After three years through five years | 118,776 | 116,776 | 21,265 | 20,909 | ||||||||
After five years through ten years | 5,583 | 6,207 | 143,413 | 142,717 | ||||||||
After ten years | 92,438 | 96,174 | 162,769 | 166,207 | ||||||||
Mortgage-backed securities | ||||||||||||
After one year through three years | 9,528 | 10,003 | - | - | ||||||||
After five years through ten years | 17,408 | 17,815 | - | - | ||||||||
After ten years | 730,876 | 741,621 | - | - | ||||||||
$ | 1,329,751 | $ | 1,347,535 | $ | 327,447 | $ | 329,833 | |||||
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 securities | |||||||||||||||||||||
U.S. government securities | $ | (1 | ) | $ | 109 | $ | - | $ | - | $ | (1 | ) | $ | 109 | |||||||
State and municipal securities | (425 | ) | 26,129 | - | - | (425 | ) | 26,129 | |||||||||||||
Mortgage-backed securities: | |||||||||||||||||||||
Agency | (413 | ) | 163,201 | - | - | (413 | ) | 163,201 | |||||||||||||
Commercial | (542 | ) | 46,227 | - | - | (542 | ) | 46,227 | |||||||||||||
Corporate fixed income securities | (1,301 | ) | 57,026 | (1,470 | ) | 28,512 | (2,771 | ) | 85,538 | ||||||||||||
Asset-backed securities | (333 | ) | 15,196 | - | - | (333 | ) | 15,196 | |||||||||||||
$ | (3,015 | ) | $ | 307,888 | $ | (1,470 | ) | $ | 28,512 | $ | (4,485 | ) | $ | 336,400 | |||||||
March 31, 2012 | December 31, 2011 | ||||||||||
Balance | Percent | Balance | Percent | ||||||||
Consumer (1) | $ | 385,231 | 58.1 | % | $ | 371,399 | 58.2 | % | |||
Commercial and industrial | 203,559 | 30.7 | 186,996 | 29.3 | |||||||
Residential real estate | 47,200 | 7.1 | 51,755 | 8.1 | |||||||
Home equity lines of credit | 24,100 | 3.6 | 24,086 | 3.8 | |||||||
Commercial real estate | 2,996 | 0.4 | 3,107 | 0.5 | |||||||
Construction and land | 514 | 0.1 | 514 | 0.1 | |||||||
663,600 | 100.0 | % | 637,857 | 100.0 | % | ||||||
Unamortized loan fees, net of origination costs | (537 | ) | (421 | ) | |||||||
Loans in process | (89 | ) | 4 | ||||||||
Allowance for loan losses | (5,781 | ) | (5,300 | ) | |||||||
$ | 657,193 | $ | 632,140 | ||||||||
(1) Includes securities-based loans of $384.9 million and $371.1 million at March 31, 2012 and December 31, 2011, respectively. |
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Allowance for loan losses, beginning of period | $ | 5,300 | $ | 2,331 | |||
Provision for loan losses | 543 | 185 | |||||
Charge-offs: | |||||||
Residential real estate | (109 | ) | - | ||||
Recoveries | 47 | 5 | |||||
Allowance for loan losses, end of period | $ | 5,781 | $ | 2,521 | |||
March 31, 2012 | December 31, 2011 | |||||||||||
Balance | Percent(1) | Balance | Percent(1) | |||||||||
Commercial and industrial | $ | 2,908 | 30.7 | % | $ | 2,595 | 29.3 | % | ||||
Residential real estate | 667 | 7.1 | 679 | 8.1 | ||||||||
Commercial real estate | 565 | 0.4 | 633 | 0.5 | ||||||||
Consumer | 785 | 58.1 | 510 | 58.2 | ||||||||
Unallocated | 856 | 3.7 | 883 | 3.9 | ||||||||
$ | 5,781 | 100.0 | % | $ | 5,300 | 100.0 | % | |||||
(1) Loan category as a percentage of total loan portfolio. |
March 31, 2012 | December 31, 2011 | ||||||
Furniture and equipment | $ | 149,905 | $ | 147,210 | |||
Building and leasehold improvements | 77,100 | 77,192 | |||||
Total | 227,005 | 224,402 | |||||
Less accumulated depreciation and amortization | (125,604 | ) | (119,662 | ) | |||
$ | 101,401 | $ | 104,740 | ||||
December 31, 2011 | Net additions | Impairment losses | March 31, 2012 | ||||||||||
Goodwill | |||||||||||||
Global Wealth Management | $ | 143,828 | $ | - | $ | - | $ | 143,828 | |||||
Institutional Group | 215,160 | - | - | 215,160 | |||||||||
$ | 358,988 | $ | - | $ | - | $ | 358,988 | ||||||
December 31, 2011 | Net additions | Amortization | March 31, 2012 | ||||||||||
Intangible assets | |||||||||||||
Global Wealth Management | $ | 18,819 | $ | - | $ | (625 | ) | $ | 18,194 | ||||
Institutional Group | 15,044 | - | (704 | ) | 14,340 | ||||||||
$ | 33,863 | $ | - | $ | (1,329 | ) | $ | 32,534 | |||||
March 31, 2012 | December 31, 2011 | |||||||||||
Gross carrying value | Accumulated amortization | Gross carrying value | Accumulated amortization | |||||||||
Customer relationships | $ | 40,166 | $ | 15,843 | $ | 40,166 | $ | 14,827 | ||||
Trade name | 9,442 | 1,264 | 9,442 | 1,011 | ||||||||
Investment banking backlog | 2,250 | 2,217 | 2,250 | 2,157 | ||||||||
$ | 51,858 | $ | 19,324 | $ | 51,858 | $ | 17,995 | |||||
Fiscal year | |||
Remainder of 2012 | $ | 3,597 | |
2013 | 4,309 | ||
2014 | 3,856 | ||
2015 | 3,129 | ||
2016 | 2,829 | ||
Thereafter | 14,814 | ||
$ | 32,534 | ||
March 31, 2012 | December 31, 2011 | |||||
Money market and savings accounts | $ | 2,316,088 | $ | 2,024,568 | ||
Demand deposits (interest-bearing) | 25,292 | 29,509 | ||||
Demand deposits (non-interest-bearing) | 14,942 | 15,691 | ||||
Certificates of deposit | 1,590 | 1,970 | ||||
$ | 2,357,912 | $ | 2,071,738 | |||
March 31, 2012 | December 31, 2011 | |||||
Certificates of deposit, less than $100: | ||||||
Within one year | $ | 546 | $ | 794 | ||
One to three years | 241 | 240 | ||||
$ | 787 | $ | 1,034 | |||
Certificates of deposit, $100 and greater: | ||||||
Within one year | $ | 521 | $ | 656 | ||
One to three years | 282 | 280 | ||||
803 | 936 | |||||
$ | 1,590 | $ | 1,970 | |||
March 31, 2012 | |||||||||||||
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 | $ | 734,567 | Other assets | $ | - | Accounts payable and accrued expenses | $ | (21,040 | ) | ||||
December 31, 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 | $ | 761,907 | Other assets | $ | - | Accounts payable and accrued expenses | $ | (24,877 | ) | ||||
Three Months Ended March 31, 2012 | |||||||||||||
(Gain)/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 | $ | (625 | ) | Interest expense | $ | 3,211 | None | $ | - | ||||
Three Months Ended March 31, 2011 | |||||||||||||
(Gain)/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 | $ | (1,135 | ) | Interest expense | $ | 3,405 | None | $ | - | ||||
Stifel Financial Corp. - Federal Reserve Capital Amounts | ||||||||||||||||||
March 31, 2012 | ||||||||||||||||||
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 | $ | 939,967 | 25.2 | % | $ | 297,914 | 8.0 | % | $ | 372,392 | 10.0 | % | ||||||
Tier 1 capital to risk-weighted assets | 934,186 | 25.1 | 148,957 | 4.0 | 223,435 | 6.0 | ||||||||||||
Tier 1 capital to adjusted average total assets | 934,186 | 22.3 | 167,334 | 4.0 | 209,167 | 5.0 | ||||||||||||
Stifel Bank - Federal Reserve Capital Amounts | ||||||||||||||||||
March 31, 2012 | ||||||||||||||||||
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 | $ | 189,782 | 10.8 | % | $ | 140,448 | 8.0 | % | $ | 175,560 | 10.0 | % | ||||||
Tier 1 capital to risk-weighted assets | 184,001 | 10.5 | 70,224 | 4.0 | 105,336 | 6.0 | ||||||||||||
Tier 1 capital to adjusted average total assets | 184,001 | 7.5 | 98,806 | 4.0 | 123,507 | 5.0 | ||||||||||||
Three Months Ended March 31, | |||||||
2012 | 2011 | ||||||
Net revenues: (1) | |||||||
Global Wealth Management | $ | 248,348 | $ | 238,446 | |||
Institutional Group | 148,504 | 126,994 | |||||
Other | 3,481 | 1,173 | |||||
$ | 400,333 | $ | 366,613 | ||||
Income before income taxes: | |||||||
Global Wealth Management | $ | 69,178 | $ | 61,472 | |||
Institutional Group | 23,704 | 21,393 | |||||
Other | (33,628 | ) | (32,181 | ) | |||
$ | 59,254 | $ | 50,684 | ||||
(1) | No individual client accounted for more than 10 percent of total net revenues for the three months ended March 31, 2012 or 2011. |
March 31, 2012 | December 31, 2011 | |||||
Global Wealth Management | $ | 3,980,145 | $ | 3,637,069 | ||
Institutional Group | 1,182,290 | 1,028,948 | ||||
Other | 303,259 | 285,883 | ||||
$ | 5,465,694 | $ | 4,951,900 | |||
Three Months Ended March 31, | ||||||
2012 | 2011 | |||||
Net revenues: | ||||||
United States | $ | 391,838 | $ | 351,009 | ||
United Kingdom | 3,890 | 6,049 | ||||
Other European | 2,353 | 3,107 | ||||
Canada | 2,252 | 6,448 | ||||
$ | 400,333 | $ | 366,613 | |||
Three Months Ended March 31, | ||||||
2012 | 2011 | |||||
Net income | $ | 34,773 | $ | 31,398 | ||
Shares for basic and diluted calculations: | ||||||
Average shares used in basic computation | 53,243 | 52,534 | ||||
Dilutive effect of stock options and units (1) | 9,426 | 10,645 | ||||
Average shares used in diluted computation | 62,669 | 63,179 | ||||
Net income per share: | ||||||
Basic | $ | 0.65 | $ | 0.60 | ||
Diluted (1) | $ | 0.55 | $ | 0.50 | ||
(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. |
For the Three Months Ended March 31, | As a Percentage of Net Revenues For the Three Months Ended March 31, | ||||||||||||||
2012 | 2011 | % Change | 2012 | 2011 | |||||||||||
Revenues: | |||||||||||||||
Commissions | $ | 123,303 | $ | 155,786 | (20.9 | ) | 30.8 | % | 42.5 | % | |||||
Principal transactions | 116,233 | 92,859 | 25.2 | 29.1 | 25.3 | ||||||||||
Investment banking | 70,438 | 41,418 | 70.1 | 17.6 | 11.3 | ||||||||||
Asset management and service fees | 60,818 | 57,680 | 5.4 | 15.2 | 15.7 | ||||||||||
Interest | 25,257 | 18,856 | 33.9 | 6.3 | 5.1 | ||||||||||
Other income | 13,294 | 6,256 | 112.3 | 3.3 | 1.8 | ||||||||||
Total revenues | 409,343 | 372,855 | 9.8 | 102.3 | 101.7 | ||||||||||
Interest expense | 9,010 | 6,242 | 44.3 | 2.3 | 1.7 | ||||||||||
Net revenues | 400,333 | 366,613 | 9.2 | 100.0 | 100.0 | ||||||||||
Non-interest expenses: | |||||||||||||||
Compensation and benefits | 254,704 | 231,166 | 10.2 | 63.6 | 63.1 | ||||||||||
Occupancy and equipment rental | 30,791 | 29,325 | 5.0 | 7.7 | 8.0 | ||||||||||
Communication and office supplies | 20,373 | 18,845 | 8.1 | 5.1 | 5.1 | ||||||||||
Commissions and floor brokerage | 7,612 | 6,649 | 14.5 | 1.9 | 1.8 | ||||||||||
Other operating expenses | 27,599 | 29,944 | (7.8 | ) | 6.9 | 8.2 | |||||||||
Total non-interest expenses | 341,079 | 315,929 | 8.0 | 85.2 | 86.2 | ||||||||||
Income before income taxes | 59,254 | 50,684 | 16.9 | 14.8 | 13.8 | ||||||||||
Provision for income taxes | 24,481 | 19,286 | 26.9 | 6.1 | 5.2 | ||||||||||
Net income | $ | 34,773 | $ | 31,398 | 10.7 | 8.7 | % | 8.6 | % | ||||||
Three Months Ended March 31, | |||||||||
2012 | 2011 | % Change | |||||||
Net revenues: | |||||||||
Commissions | $ | 123,303 | $ | 155,786 | (20.9 | ) | |||
Principal transactions | 116,233 | 92,859 | 25.2 | ||||||
Investment banking: | |||||||||
Capital raising | 54,833 | 32,358 | 69.5 | ||||||
Strategic advisory fees | 15,605 | 9,060 | 72.2 | ||||||
70,438 | 41,418 | 70.1 | |||||||
Asset management and service fees | 60,818 | 57,680 | 5.4 | ||||||
Net interest | 16,247 | 12,614 | 28.8 | ||||||
Other income | 13,294 | 6,256 | 112.3 | ||||||
Total net revenues | $ | 400,333 | $ | 366,613 | 9.2 | ||||
Three Months Ended | |||||||||||||||||||
March 31, 2012 | March 31, 2011 | ||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Interest Rate | Average Balance | Interest Income/ Expense | Average Interest Rate | ||||||||||||||
Interest-earning assets: | |||||||||||||||||||
Margin balances (Stifel Nicolaus) | $ | 504,287 | $ | 4,885 | 3.87 | % | $ | 444,443 | $ | 4,587 | 4.13 | % | |||||||
Interest-earning assets (Stifel Bank) | 2,385,689 | 17,476 | 2.93 | 1,734,407 | 11,203 | 2.58 | |||||||||||||
Stock borrow (Stifel Nicolaus) | 67,669 | 26 | 0.16 | 96,861 | 5 | 0.02 | |||||||||||||
Other (Stifel Nicolaus) | 2,870 | 3,061 | |||||||||||||||||
Total interest revenue | $ | 25,257 | $ | 18,856 | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Short-term borrowings (Stifel Nicolaus) | $ | 185,342 | $ | 522 | 1.13 | % | $ | 168,502 | $ | 589 | 1.40 | % | |||||||
Interest-bearing liabilities (Stifel Bank) | 2,213,848 | 4,064 | 0.73 | 1,615,049 | 4,238 | 1.05 | |||||||||||||
Stock loan (Stifel Nicolaus) | 155,986 | 817 | 2.09 | 98,394 | 330 | 1.34 | |||||||||||||
Senior notes (Stifel Financial) | 175,000 | 2,293 | 6.94 | - | - | - | |||||||||||||
Interest-bearing liabilities (Capital Trusts) | 82,500 | 1,005 | 4.87 | 82,500 | 977 | 4.73 | |||||||||||||
Other (Stifel Nicolaus) | 309 | 108 | |||||||||||||||||
Total interest expense | 9,010 | 6,242 | |||||||||||||||||
Net interest income | $ | 16,247 | $ | 12,614 | |||||||||||||||
For the Three Months Ended March 31, | |||||||||
2012 | 2011 | % Change | |||||||
Non-interest expenses: | |||||||||
Compensation and benefits | $ | 254,704 | $ | 231,166 | 10.2 | ||||
Occupancy and equipment rental | 30,791 | 29,325 | 5.0 | ||||||
Communications and office supplies | 20,373 | 18,845 | 8.1 | ||||||
Commissions and floor brokerage | 7,612 | 6,649 | 14.5 | ||||||
Other operating expenses | 27,599 | 29,944 | (7.8 | ) | |||||
Total non-interest expenses | $ | 341,079 | $ | 315,929 | 8.0 | ||||
For the Three Months Ended March 31, | As a Percentage of Net Revenues For the Three Months Ended March 31, | ||||||||||||||
2012 | 2011 | % Change | 2012 | 2011 | |||||||||||
Revenues: | |||||||||||||||
Commissions | $ | 91,023 | $ | 101,762 | (10.6 | ) | 36.7 | % | 42.7 | % | |||||
Principal transactions | 59,045 | 56,163 | 5.1 | 23.7 | 23.6 | ||||||||||
Asset management and service fees | 60,586 | 57,530 | 5.3 | 24.4 | 24.1 | ||||||||||
Investment banking | 12,470 | 6,312 | 97.6 | 5.0 | 2.6 | ||||||||||
Interest | 23,099 | 16,703 | 38.3 | 9.3 | 7.0 | ||||||||||
Other income | 7,577 | 5,510 | 37.5 | 3.1 | 2.3 | ||||||||||
Total revenues | 253,800 | 243,980 | 4.0 | 102.2 | 102.3 | ||||||||||
Interest expense | 5,452 | 5,534 | (1.5 | ) | 2.2 | 2.3 | |||||||||
Net revenues | 248,348 | 238,446 | 4.2 | 100.0 | 100.0 | ||||||||||
Non-interest expenses: | |||||||||||||||
Compensation and benefits | 143,757 | 142,586 | 0.8 | 57.9 | 59.8 | ||||||||||
Occupancy and equipment rental | 15,786 | 15,198 | 3.9 | 6.3 | 6.4 | ||||||||||
Communication and office supplies | 8,869 | 8,139 | 9.0 | 3.6 | 3.4 | ||||||||||
Commissions and floor brokerage | 3,420 | 2,793 | 22.4 | 1.4 | 1.2 | ||||||||||
Other operating expenses | 7,338 | 8,258 | (11.1 | ) | 2.9 | 3.4 | |||||||||
Total non-interest expenses | 179,170 | 176,974 | 1.2 | 72.1 | 74.2 | ||||||||||
Income before income taxes | $ | 69,178 | $ | 61,472 | 12.5 | 27.9 | % | 25.8 | % | ||||||
March 31, 2012 | March 31, 2011 | |||||
Branch offices | 297 | 285 | ||||
Financial advisors | 1,858 | 1,787 | ||||
Independent contractors | 155 | 160 | ||||
Assets in fee-based accounts: | ||||||
Value (in thousands) (1) | $ | 18,552,774 | $ | 16,717,112 | ||
Number of accounts | 71,065 | 61,529 |
Three Months Ended | Three Months Ended | ||||||||||||||||||
March 31, 2012 | March 31, 2011 | ||||||||||||||||||
Average Balance | Interest Income/ Expense | Average Interest Rate | Average Balance | Interest Income/ Expense | Average Interest Rate | ||||||||||||||
Assets: | |||||||||||||||||||
Federal funds sold | $ | 154,496 | $ | 90 | 0.70 | % | $ | 160,570 | $ | 104 | 0.26 | % | |||||||
U.S. government agencies | - | - | - | 24,973 | 90 | 1.44 | |||||||||||||
State and political subdivisions: | |||||||||||||||||||
Taxable | 90,905 | 1,138 | 5.01 | 77,437 | 625 | 3.23 | |||||||||||||
Non-taxable (1) | 2,689 | 22 | 3.22 | 2,944 | 25 | 3.40 | |||||||||||||
Mortgage-backed securities | 690,778 | 5,581 | 3.23 | 798,949 | 5,046 | 2.53 | |||||||||||||
Corporate bonds | 477,929 | 2,938 | 2.46 | 185,887 | 1,189 | 2.56 | |||||||||||||
Asset-backed securities | 196,656 | 1,013 | 2.06 | 22,538 | 193 | 3.43 | |||||||||||||
Federal Home Loan Bank ("FHLB") and other capital stock | 2,277 | 26 | 4.75 | 1,545 | 10 | 2.59 | |||||||||||||
Loans (2) | 646,058 | 5,630 | 3.49 | 405,253 | 3,451 | 3.41 | |||||||||||||
Loans held for sale | 123,901 | 1,038 | 3.35 | 54,311 | 470 | 3.46 | |||||||||||||
Total interest-earning assets (3) | $ | 2,385,689 | $ | 17,476 | 2.93 | % | $ | 1,734,407 | $ | 11,203 | 2.58 | % | |||||||
Cash and due from banks | 8,181 | 6,811 | |||||||||||||||||
Other non interest-earning assets | 68,368 | 38,941 | |||||||||||||||||
Total assets | $ | 2,462,238 | $ | 1,780,159 | |||||||||||||||
Liabilities and stockholders' equity: | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Money market | $ | 2,174,164 | $ | 4,037 | 0.74 | % | $ | 1,591,577 | $ | 4,211 | 1.06 | % | |||||||
Demand deposits | 37,750 | 14 | 0.15 | 20,750 | 11 | 0.21 | |||||||||||||
Time deposits | 1,893 | 13 | 2.65 | 2,697 | 16 | 2.37 | |||||||||||||
Savings | 41 | - | - | 25 | - | - | |||||||||||||
Total interest-bearing liabilities (3) | $ | 2,213,848 | $ | 4,064 | 0.73 | % | $ | 1,615,049 | $ | 4,238 | 1.05 | % | |||||||
Non interest-bearing deposits | 23,105 | 9,337 | |||||||||||||||||
Other non interest-bearing liabilities | 42,369 | 17,344 | |||||||||||||||||
Total liabilities | 2,279,322 | 1,641,730 | |||||||||||||||||
Stockholders' equity | 182,916 | 138,429 | |||||||||||||||||
Total liabilities and stockholders' equity | $ | 2,462,238 | $ | 1,780,159 | |||||||||||||||
Net interest margin | $ | 13,412 | 2.25 | % | $ | 6,965 | 1.61 | % | |||||||||||
(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 March 31, 2012 Compared to Three Months Ended March 31, 2011 | |||||||||
Increase (decrease) due to: | |||||||||
Volume | Rate | Total | |||||||
Interest income: | |||||||||
Federal funds sold | $ | (443 | ) | $ | 429 | $ | (14 | ) | |
U.S. government agencies | (45 | ) | (45 | ) | (90 | ) | |||
State and political subdivisions: | |||||||||
Taxable | 123 | 390 | 513 | ||||||
Non-taxable | (2 | ) | (1 | ) | (3 | ) | |||
Mortgage-backed securities | (3,503 | ) | 4,038 | 535 | |||||
Corporate bonds | 1,794 | (45 | ) | 1,749 | |||||
Asset-backed securities | 864 | (44 | ) | 820 | |||||
FHLB and other capital stock | 137 | (121 | ) | 16 | |||||
Loans | 1,627 | 552 | 2,179 | ||||||
Loans held for sale | 671 | (103 | ) | 568 | |||||
$ | 1,223 | $ | 5,050 | $ | 6,273 | ||||
Increase (decrease) due to: | |||||||||
Volume | Rate | Total | |||||||
Interest expense: | |||||||||
Deposits: | |||||||||
Money market | $ | 6,104 | $ | (6,278 | ) | $ | (174 | ) | |
Demand deposits | 31 | (28 | ) | 3 | |||||
Time deposits | (17 | ) | 14 | (3 | ) | ||||
Savings | - | - | - | ||||||
$ | 6,118 | $ | (6,292 | ) | $ | (174 | ) | ||
For the Three Months Ended March 31, | As a Percentage of Net Revenues For the Three Months Ended March 31, | ||||||||||||||
2012 | 2011 | % Change | 2012 | 2011 | |||||||||||
Revenues: | |||||||||||||||
Commissions | $ | 32,280 | $ | 54,025 | (40.2 | ) | 21.7 | % | 42.5 | ||||||
Principal transactions | 57,188 | 36,696 | 55.8 | 38.5 | 28.9 | ||||||||||
Capital raising | 42,363 | 26,046 | 62.6 | 28.5 | 20.5 | ||||||||||
Advisory | 15,605 | 9,060 | 72.2 | 10.5 | 7.1 | ||||||||||
Investment banking | 57,968 | 35,106 | 65.1 | 39.0 | 27.6 | ||||||||||
Interest | 1,845 | 1,793 | 2.9 | 1.2 | 1.4 | ||||||||||
Other income | 398 | 462 | (13.9 | ) | 0.4 | 0.5 | |||||||||
Total revenues | 149,679 | 128,082 | 16.9 | 100.8 | 100.9 | ||||||||||
Interest expense | 1,175 | 1,088 | 8.0 | 0.8 | 0.9 | ||||||||||
Net revenues | 148,504 | 126,994 | 16.9 | 100.0 | 100.0 | ||||||||||
Non-interest expenses: | |||||||||||||||
Compensation and benefits | 94,024 | 77,187 | 21.8 | 63.3 | 60.8 | ||||||||||
Occupancy and equipment rental | 6,729 | 4,924 | 36.7 | 4.5 | 3.9 | ||||||||||
Communication and office supplies | 8,261 | 7,302 | 13.1 | 5.6 | 5.8 | ||||||||||
Commissions and floor brokerage | 4,191 | 3,857 | 8.7 | 2.8 | 3.0 | ||||||||||
Other operating expenses | 11,595 | 12,331 | (6.0 | ) | 7.8 | 9.7 | |||||||||
Total non-interest expenses | 124,800 | 105,601 | 18.2 | 84.0 | 83.2 | ||||||||||
Income before income taxes | $ | 23,704 | $ | 21,393 | 10.8 | 16.0 | % | 16.8 | % | ||||||
For the Three Months Ended March 31, | |||||||||
2012 | 2011 | % Change | |||||||
Net revenues | $ | 3,481 | $ | 1,173 | 196.8 | ||||
Non-interest expenses: | |||||||||
Compensation and benefits | 16,923 | 11,393 | 48.5 | ||||||
Other operating expenses | 20,186 | 21,961 | (8.1 | ) | |||||
Total non-interest expenses | 37,109 | 33,354 | 11.3 | ||||||
Loss before income taxes | $ | (33,628 | ) | $ | (32,181 | ) | 4.5 | ||
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Three Months Ended March 31, 2012 | VAR Calculation at | ||||||||||||||
High | Low | Daily Average | March 31, 2012 | December 31, 2011 (1) | |||||||||||
Daily VaR | $ | 6,235 | $ | 1,770 | $ | 3,635 | $ | 2,849 | $ | 1,969 | |||||
Hypothetical change in interest rates | Projected change in net interest margin | ||
+200 | 30.4 | % | |
+100 | 14.8 | % | |
0 | 0.00% | ||
-100 | n/a | ||
-200 | n/a | ||
Repricing Opportunities | ||||||||||||
0-6 Months | 7-12 Months | 1-5 Years | 5+ Years | |||||||||
Interest-earning assets: | ||||||||||||
Loans | $ | 807,845 | $ | 9,589 | $ | 10,951 | $ | 85 | ||||
Securities | 570,742 | 84,618 | 672,996 | 329,337 | ||||||||
Interest-bearing cash | 69,441 | - | - | - | ||||||||
$ | 1,448,028 | $ | 94,207 | $ | 683,947 | $ | 329,422 | |||||
Interest-bearing liabilities: | ||||||||||||
Transaction accounts and savings | $ | 419,495 | $ | 367,521 | $ | 1,335,765 | $ | 243,598 | ||||
Certificates of deposit | 115 | 952 | 523 | - | ||||||||
Borrowings | - | - | 16,983 | - | ||||||||
$ | 419,610 | $ | 368,473 | $ | 1,353,271 | $ | 243,598 | |||||
GAP | 1,028,418 | (274,266 | ) | (669,324 | ) | 85,824 | ||||||
Cumulative GAP | $ | 1,028,418 | $ | 754,152 | $ | 84,828 | $ | 170,652 | ||||
ITEM 4. CONTROLS AND PROCEDURES |
ITEM 1A. RISK FACTORS |
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
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 March 31, 2012 and December 31, 2011; (ii) Consolidated Statements of Operations for the three months ended March 31, 2012 and 2011; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2012 and 2011; (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011; and (vi) 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 of the Board, President, and Chief Executive Officer |
/s/ James M. Zemlyak |
James M. Zemlyak Senior Vice President and Chief Financial Officer |
Date: May 10, 2012 |