Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
As previously disclosed, on July 1, 2016, Stifel Financial Corp. (the “Company”) completed the sale of Sterne Agee, LLC’s legacy independent brokerage and clearing businesses to INTL FCStone Inc. pursuant to two separate stock purchase agreements dated June 24, 2016. Pursuant to the two stock purchase agreements, the Company sold Sterne Agee Financial Services, Inc.; Sterne Agee Clearing, Inc.; Sterne Agee & Leach, Inc.; Sterne Agee Asset Management; and Sterne Agee Investment Advisor Services (the “Sterne Businesses”) for cash consideration of approximately $50.0 million.
The unaudited pro forma consolidated statements of operations for the year ended December 31, 2016 has been prepared to give effect to the sale of the Sterne Businesses as if it occurred on December 31, 2015.
The unaudited pro forma statement of operations was prepared utilizing our historical financial data derived from the audited consolidated financial statements for the year ended December 31, 2016 included in our Current Report on Form8-K filed with the SEC on August 11, 2017. Consistent with the requirements of Article 11 of RegulationS-X, the pro forma consolidated statement of operations have been presented on a continuing operations basis. The pro forma adjustments are described in the notes to the unaudited pro forma information and are based upon available information and assumptions that we believe are reasonable.
The unaudited pro forma consolidated statement of operations included herein is for informational purposes only and is not necessarily indicative of what our financial performance would have been had the sale of the Sterne Businesses been completed on the dates assumed nor is such unaudited pro forma consolidated statement of operations necessarily indicative of the results to be expected in any future period. Actual results may differ significantly from those reflected here in the unaudited pro forma consolidated statement of operations for various reasons, including but not limited to, the differences between the assumptions used to prepare the unaudited pro forma consolidated statement of operations and actual results.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
| | | | | | | | | | | | |
| | | Year ended December 31, 2016 | |
| (in thousands, except per share amounts) | | As Reported | | | Pro Forma
Adjustments(2) | | | Pro Forma | |
Revenues: | | | | | | | | | | | | |
Commissions | | $ | 729,989 | | | $ | (27,838 | ) | | $ | 702,151 | |
Principal transactions | | | 475,428 | | | | (2,109 | ) | | | 473,319 | |
Investment banking | | | 513,034 | | | | 16 | | | | 513,050 | |
Asset management and service fees | | | 582,789 | | | | (12,086 | ) | | | 570,703 | |
Interest | | | 294,332 | | | | (2,474 | ) | | | 291,858 | |
Other income | | | 46,798 | | | | (5,268 | ) | | | 41,530 | |
| | | | | | | | | | | | |
Total revenues | | | 2,642,370 | | | | (49,759 | ) | | | 2,592,611 | |
Interest expense | | | 66,874 | | | | (172 | ) | | | 66,702 | |
| | | | | | | | | | | | |
Net revenues | | | 2,575,496 | | | | (49,587 | ) | | | 2,525,909 | |
| | | | | | | | | | | | |
Non-interest expenses: | | | | | | | | | | | | |
Compensation and benefits | | | 1,726,016 | | | | (41,613 | ) | | | 1,684,403 | |
Occupancy and equipment rental | | | 231,324 | | | | (6,674 | ) | | | 224,650 | |
Communications and office supplies | | | 139,644 | | | | (3,542 | ) | | | 136,102 | |
Commissions and floor brokerage | | | 44,315 | | | | (1,192 | ) | | | 43,123 | |
Other operating expenses | | | 291,615 | | | | (9,827 | ) | | | 281,788 | |
| | | | | | | | | | | | |
Totalnon-interest expenses | | | 2,432,914 | | | | (62,848 | ) | | | 2,370,066 | |
Income from operations before income tax expense | | | 142,582 | | | | 13,261 | | | | 155,843 | |
Provision for income taxes | | | 61,062 | | | | 5,158 | | | | 66,220 | |
| | | | | | | | | | | | |
Net income | | | 81,520 | | | | 8,103 | | | | 89,623 | |
Preferred dividends | | | 3,906 | | | | — | | | | 3,906 | |
| | | | | | | | | | | | |
Net income available to common shareholders | | $ | 77,614 | | | $ | 8,103 | | | $ | 85,717 | |
| | | | | | | | | | | | |
Earnings per common share: | | | | | | | | | | | | |
Basic | | $ | 1.16 | | | | | | | $ | 1.28 | |
Diluted | | $ | 1.00 | | | | | | | $ | 1.11 | |
| | | |
Weighted average number of common shares outstanding: | | | | | | | | | | | | |
Basic | | | 66,871 | | | | | | | | 66,871 | |
Diluted | | | 77,563 | | | | | | | | 77,563 | |
See accompanying Notes to Unaudited Pro Forma Consolidated Statement of Operations.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONSS
Note 1 – Description of Disposition of Assets
As previously disclosed, on July 1, 2016, Stifel Financial Corp. (the “Company”) completed the sale of Sterne Agee, LLC’s legacy independent brokerage and clearing businesses to INTL FCStone Inc. pursuant to two separate stock purchase agreements dated June 24, 2016. Pursuant to the two stock purchase agreements, the Company sold Sterne Agee Financial Services, Inc.; Sterne Agee Clearing, Inc.; Sterne Agee & Leach, Inc.; Sterne Agee Asset Management; and Sterne Agee Investment Advisor Services (the “Sterne Businesses”).
Note 2 – Pro Forma Adjustments
Represents adjustments to eliminate the direct operating results of the Sterne Businesses as if the disposition occurred on December 31, 2015. The pro forma adjustments include amounts that are directly related to the Sterne Businesses. Adjustments to the income tax provision were based on statutory rates in effect during the periods.
