- 22nd consecutive year of record net revenues.
- Annual net revenues of $2.9 billion, increased 13.6% compared with 2016.
- Record quarterly net revenues of $804.1 million, increased 21.6% compared with the year-ago quarter.
- Quarterly net loss attributable to common shareholders of $4.3 million, or $0.06 per diluted common share.
- Record non-GAAP net income available to common shareholders of $120.6 million, or $1.47 per diluted common share.
- Announced an increase in quarterly dividend by 20% to $0.12 per common share starting in first quarter of 2018.
ST. LOUIS, Jan. 30, 2018 (GLOBE NEWSWIRE) -- Stifel Financial Corp. (NYSE:SF) today reported net loss attributable to common shareholders of $4.3 million, or $0.06 per diluted common share on record net revenues of $804.1 million for the three months ended December 31, 2017, compared with net income available to common shareholders of $24.5 million, or $0.31 per diluted common share, on net revenues of $661.4 million for the fourth quarter of 2016.
For the three months ended December 31, 2017, the Company reported record non-GAAP net income available to common shareholders of $120.6 million, or $1.47 per diluted common share. The Company’s reported GAAP net income for the three months ended December 31, 2017 was primarily impacted by 1) actions taken by the Company in response to the Tax Cuts and Jobs Act (“Tax Legislation”) that was enacted in the fourth quarter of 2017 to maximize tax savings; 2) litigation-related expenses associated with previously disclosed legal matters; 3) expected merger-related charges; 4) the revaluation of the Company’s deferred tax assets as a result of the enacted Tax Legislation; and 5) the favorable impact of the adoption of new accounting guidance during 2017 associated with stock-based compensation. Details discussed below and in the “Non-GAAP Financial Matters” section.
Chairman’s Comments
“We are pleased to announce that 2017 was our 22nd consecutive year of record net revenue of $2.9 billion that increased 14% from 2016. Both of our operating segments generated record results, as the investments we’ve made in our business generated stronger results and an improving economy provided a better operating environment than we experienced in the past few years. Wealth management benefitted from the further expansion of our bank balance sheet and growth in our fee-based assets. Our institutional group’s record results were driven by record investment banking activity in both advisory and underwriting that more than offset an industry-wide slowdown in trading activity. The result of our record revenue coupled with solid expense management was record non-GAAP net income as well as return on common equity of nearly 18% in the fourth quarter. We believe that this level of operating leverage is indicative of our capabilities as Stifel is well positioned to capitalize on the current market tailwinds of the lower corporate U.S. tax rates and improved global economic growth,” stated Ronald J. Kruszewski, Chairman & CEO of Stifel.
Fourth Quarter Review
Quarterly Highlights
- Record net revenues of $804.1 million, increased 21.6% compared with the year-ago quarter.
- Record net revenues and pre-tax operating income in Global Wealth Management.
- Record net revenues and pre-tax operating income in Institutional Group.
- Net loss attributable to common shareholders of $4.3 million, or $0.06 per diluted common share.
- Record non-GAAP net income available to common shareholders of $120.6 million, or $1.47 per diluted common share.
- Record client assets of $272.6 billion, increased 15.0% compared with the year-ago quarter and 3.0% sequentially.
- Payment of regularly quarterly dividend of $0.10 per common share.
- Bank net interest margin of 2.85% increased 5 basis points sequentially.
| Financial Highlights (Unaudited) | Three Months Ended | ||||||||||||||||||||||||||||||||
| (in 000s, except per share data) | GAAP (1) 12/31/17 | GAAP 12/31/16 | % Change | GAAP 9/30/17 | % Change | Non-GAAP (2) 12/31/17 | Non-GAAP (2) 12/31/16 | % Change | |||||||||||||||||||||||||
| Net revenues | $ | 804,085 | $ | 661,391 | 21.6 | $ | 721,169 | 11.5 | $ | 804,085 | $ | 661,392 | 21.6 | ||||||||||||||||||||
| Net income/(loss) | $ | (1,988 | ) | $ | 26,880 | (107.4 | ) | $ | 66,536 | (103.0 | ) | $ | 122,969 | $ | 56,528 | 117.5 | |||||||||||||||||
| Preferred dividend | 2,344 | 2,343 | n/m | 2,343 | n/m | 2,344 | 2,343 | n/m | |||||||||||||||||||||||||
| Net income/(loss) available to common shareholders | $ | (4,332 | ) | $ | 24,537 | (117.7 | ) | $ | 64,193 | (106.7 | ) | $ | 120,625 | $ | 54,185 | 122.6 | |||||||||||||||||
| Earnings per diluted common share | $ | (0.03 | ) | $ | 0.34 | (108.8 | ) | $ | 0.82 | (103.7 | ) | $ | 1.49 | $ | 0.71 | 109.9 | |||||||||||||||||
| Earnings per diluted common share available to common shareholders | $ | (0.06 | ) | $ | 0.31 | (119.4 | ) | $ | 0.79 | (107.6 | ) | $ | 1.47 | $ | 0.68 | 116.2 | |||||||||||||||||
| Compensation ratio | 77.1 | % | 63.6 | % | 62.2 | % | 60.0 | % | 62.3 | % | |||||||||||||||||||||||
| Non-compensation ratio | 23.0 | % | 28.1 | % | 22.8 | % | 19.9 | % | 24.2 | % | |||||||||||||||||||||||
| Pre-tax operating margin (6) | (0.1 | %) | 8.3 | % | 15.0 | % | 20.1 | % | 13.5 | % | |||||||||||||||||||||||
Brokerage Revenues
Brokerage revenues, defined as commissions and principal transactions, were $266.0 million, an 8.2% decrease compared with the fourth quarter of 2016 and a 6.6% increase compared with the third quarter of 2017.
| Three Months Ended | ||||||||||||||||||||
| (in 000s) | 12/31/17 | 12/31/16 | % Change | 9/30/17 | % Change | |||||||||||||||
| Global Wealth Management brokerage revenues | $ | 163,421 | $ | 160,017 | 2.1 | $ | 158,334 | 3.2 | ||||||||||||
| Institutional brokerage: | ||||||||||||||||||||
| Equity capital markets | 49,628 | 64,007 | (22.5 | ) | 45,209 | 9.8 | ||||||||||||||
| Fixed income capital markets | 52,961 | 65,712 | (19.4 | ) | 46,079 | 14.9 | ||||||||||||||
| Total institutional brokerage | 102,589 | 129,719 | (20.9 | ) | 91,288 | 12.4 | ||||||||||||||
| Total brokerage revenues (3) | $ | 266,010 | $ | 289,736 | (8.2 | ) | $ | 249,622 | 6.6 | |||||||||||
- Global wealth management brokerage revenues were $163.4 million, a 2.1% increase compared with the fourth quarter of 2016 and a 3.2% increase compared with the third quarter of 2017.
- Institutional equity brokerage revenues were $49.6 million, a 22.5% decrease compared with the fourth quarter of 2016 and a 9.8% increase compared with the third quarter of 2017.
- Institutional fixed income brokerage revenues were $53.0 million, a 19.4% decrease compared with the fourth quarter of 2016 and a 14.9% increase compared with the third quarter of 2017.
Investment Banking Revenues
Investment banking revenues were a record $232.7 million, a 73.1% increase compared with the fourth quarter of 2016 and a 27.9% increase compared with the third quarter of 2017.
| Three Months Ended | ||||||||||||||||||||
| (in 000s) | 12/31/17 | 12/31/16 | % Change | 9/30/17 | % Change | |||||||||||||||
| Capital raising: | ||||||||||||||||||||
| Global Wealth Management | $ | 8,899 | $ | 12,064 | (26.2 | ) | $ | 9,072 | (1.9 | ) | ||||||||||
| Equity capital markets | 57,800 | 36,714 | 57.4 | 43,277 | 33.6 | |||||||||||||||
| Fixed income capital markets | 42,820 | 30,235 | 41.6 | 27,573 | 55.3 | |||||||||||||||
| Institutional Group | 100,620 | 66,949 | 50.3 | 70,850 | 42.0 | |||||||||||||||
| Total capital raising (3) | 109,519 | 79,013 | 38.6 | 79,922 | 37.0 | |||||||||||||||
| Advisory fees (3) | 123,227 | 55,439 | 122.3 | 101,982 | 20.8 | |||||||||||||||
| Total investment banking | $ | 232,746 | $ | 134,452 | 73.1 | $ | 181,904 | 27.9 | ||||||||||||
- Global wealth management capital raising revenues were $8.9 million, a 26.2% decrease compared with the fourth quarter of 2016 and a 1.9% decrease compared with the third quarter of 2017.
- Institutional equity capital raising revenues were $57.8 million, a 57.4% increase compared with the fourth quarter of 2016 and a 33.6% increase compared with the third quarter of 2017.
- Institutional fixed income capital raising revenues were $42.8 million, a 41.6% increase compared with the fourth quarter of 2016 and a 55.3% increase compared with the third quarter of 2017.
- Advisory fee revenues were $123.2 million, a 122.3% increase compared with the fourth quarter of 2016 and a 20.8% increase compared with the third quarter of 2017.
Asset Management and Service Fee Revenues
Asset management and service fee revenues were a record $186.6 million, a 24.8% increase compared with the fourth quarter of 2016 and a 3.7% increase compared with the third quarter of 2017.
Net Interest Income
Record net interest income of $106.8 million, a 42.9% increase compared with the fourth quarter of 2016 and a 6.5% increase compared with the third quarter of 2017.
- Interest income was $126.6 million, a 39.4% increase compared with the fourth quarter of 2016 and a 7.4% increase compared with the third quarter of 2017.
- Interest expense was $19.9 million, a 23.2% increase compared with the fourth quarter of 2016 and a 12.7% increase compared with the third quarter of 2017.
Annual Review
Annual Highlights
- Record net revenues of $2.9 billion, increased 13.6% compared with 2016.
- Record net revenues and pre-tax operating income in Global Wealth Management.
- Record net revenues and pre-tax operating income in Institutional Group.
- Net income available to common shareholders of $173.5 million, or $2.14 per diluted common share.
- Record non-GAAP net income available to common shareholders of $323.4 million, or $3.99 per diluted common share.
For the year ended December 31, 2017, the Company reported net income available to common shareholders of $173.5 million, or $2.14 per diluted common share on record net revenues of $2.9 billion, compared with net income available to common shareholders of $77.6 million, or $1.00 per diluted share, on net revenues of $2.6 billion for the comparable period in 2016.
For the year ended December 31, 2017, the Company reported record non-GAAP net income available to common shareholders of $323.4 million, or $3.99 per diluted common share. The Company’s reported GAAP net income for the year ended December 31, 2017 was primarily impacted by 1) actions taken by the Company in response to the Tax Cuts and Jobs Act (“Tax Legislation”) that was enacted in the fourth quarter of 2017 to maximize tax savings; 2) anticipated merger-related charges; 3) litigation-related expenses associated with previously disclosed legal matters; 4) the revaluation of the Company’s deferred tax assets as a result of the enacted Tax Legislation; and 5) the favorable impact of the adoption of new accounting guidance during 2017 associated with stock-based compensation. Details discussed below and in the “Non-GAAP Financial Matters” section.
| Financial Highlights (Unaudited) | Year Ended | ||||||||||||||||||||||||
| (in 000s, except per share data) | GAAP 12/31/17 | GAAP 12/31/16 | % Change | Non-GAAP (2) 12/31/17 | Non-GAAP (2) 12/31/16 | % Change | |||||||||||||||||||
| Net revenues | $ | 2,926,432 | $ | 2,575,496 | 13.6 | $ | 2,928,416 | $ | 2,579,599 | 13.5 | |||||||||||||||
| Net income | $ | 182,871 | $ | 81,520 | 124.3 | $ | 332,758 | $ | 189,611 | 75.5 | |||||||||||||||
| Preferred dividend | 9,375 | 3,906 | 140.0 | 9,375 | 3,906 | 140.0 | |||||||||||||||||||
| Net income available to common shareholders | $ | 173,496 | $ | 77,614 | 123.5 | $ | 323,383 | $ | 185,705 | 74.1 | |||||||||||||||
| Earnings per diluted common share | $ | 2.26 | $ | 1.05 | 115.2 | $ | 4.11 | $ | 2.44 | 68.4 | |||||||||||||||
| Earnings per diluted common share available to common shareholders | $ | 2.14 | $ | 1.00 | 114.0 | $ | 3.99 | $ | 2.39 | 66.9 | |||||||||||||||
| Compensation ratio | 66.9 | % | 67.0 | % | 61.2 | % | 62.8 | % | |||||||||||||||||
| Non-compensation ratio | 23.9 | % | 27.5 | % | 21.7 | % | 24.1 | % | |||||||||||||||||
| Pre-tax operating margin (7) | 9.2 | % | 5.5 | % | 17.1 | % | 13.1 | % | |||||||||||||||||
Brokerage Revenues
Brokerage revenues for the year ended December 31, 2017 were $1.1 billion, a 10.8% decrease compared with 2016.
| Year Ended | ||||||||||||
| (in 000s) | 12/31/17 | 12/31/16 | % Change | |||||||||
| Global Wealth Management brokerage revenues | $ | 661,334 | $ | 670,635 | (1.4 | ) | ||||||
| Institutional brokerage: | ||||||||||||
| Equity capital markets | 199,526 | 232,292 | (14.1 | ) | ||||||||
| Fixed income capital markets | 214,870 | 302,491 | (29.0 | ) | ||||||||
| Total institutional brokerage | 414,396 | 534,783 | (22.5 | ) | ||||||||
| Total brokerage revenues (3) | $ | 1,075,730 | $ | 1,205,418 | (10.8 | ) | ||||||
- Global wealth management brokerage revenues were $661.3 million, a 1.4% decrease compared with 2016.
- Institutional equity brokerage revenues were $199.5 million, a 14.1% decrease compared with 2016.
- Institutional fixed income brokerage revenues were $214.9 million, a 29.0% decrease compared with 2016.
Investment Banking
Investment banking revenues were a record $726.8 million, a 41.7% increase compared with 2016.
| Year Ended | ||||||||||||
| (in 000s) | 12/31/17 | 12/31/16 | % Change | |||||||||
| Capital raising: | ||||||||||||
| Global Wealth Management | 40,466 | 42,187 | (4.1 | ) | ||||||||
| Equity capital markets | 182,728 | 103,443 | 76.6 | |||||||||
| Fixed income capital markets | 142,963 | 110,766 | 29.1 | |||||||||
| Institutional Group | 325,691 | 214,209 | 52.0 | |||||||||
| Total capital raising (3) | 366,157 | 256,396 | 42.8 | |||||||||
| Advisory fees (3) | 360,606 | 256,637 | 40.5 | |||||||||
| Total investment banking (3) | $ | 726,763 | $ | 513,033 | 41.7 | |||||||
- Global wealth management capital raising revenues were $40.5 million, a 4.1% decrease compared with 2016.
- Institutional equity capital raising revenues were $182.7 million, a 76.6% increase compared with 2016.
- Institutional fixed income capital raising revenues were $143.0 million, a 29.1% increase compared with 2016.
- Advisory fee revenues were $360.6 million, a 40.5% increase compared with 2016.
Asset Management and Service Fee Revenues
Asset management and service fee revenues were a record $702.1 million, a 20.5% increase compared with 2016.
Net Interest Income
Record net interest income of $384.4 million, a 69.0% increase compared with 2016.
- Interest income was $454.4 million, a 54.4% increase compared with 2016.
- Interest expense was $70.0 million, a 4.7% increase compared with 2016.
Fourth Quarter &Full Year 2017
Compensation and Benefits Expenses
For the quarter ended December 31, 2017, compensation and benefits expenses were $620.3 million, which included $137.5 million of tax reform, merger-related, and severance expenses (collectively, non-GAAP adjustments). This compares with $420.6 million in the fourth quarter of 2016 and $448.4 million in the third quarter of 2017. Excluding the non-GAAP adjustments, compensation and benefits as a percentage of net revenues were 60.0% in the fourth quarter of 2017 (non-GAAP measure).
For the year ended December 31, 2017, compensation and benefits expenses were $2.0 billion, which included $167.8 million of tax reform, merger-related, and severance expenses, (collectively, non-GAAP adjustments) compared to $1.7 billion in 2016. Excluding the non-GAAP adjustments, compensation and benefits as a percentage of net revenues were 61.2% in the year ended December 31, 2017 (non-GAAP measure).
| Three Months Ended 12/31/17 | Year Ended 12/31/17 | |||||||
| GAAP compensation and benefits | $ | 620,256 | $ | 1,958,929 | ||||
| As a percentage of net revenues | 77.1 | % | 66.9 | % | ||||
| Non-GAAP adjustments: (4) | ||||||||
| Tax reform | (133,319 | ) | (133,319 | ) | ||||
| Merger-related | (2,729 | ) | (23,603 | ) | ||||
| Severance | (1,432 | ) | (10,925 | ) | ||||
| (137,480 | ) | (167,847 | ) | |||||
| Non-GAAP compensation and benefits | $ | 482,776 | $ | 1,791,082 | ||||
| As a percentage of non-GAAP net revenues | 60.0 | % | 61.2 | % | ||||
Non-Compensation Operating Expenses
For the quarter ended December 31, 2017, non-compensation operating expenses were $184.6 million, which included litigation-related, merger-related, and tax reform expenses (collectively, non-GAAP adjustments) of $24.9 million. This compares with $185.9 million in the fourth quarter of 2016 and $164.6 million in the third quarter of 2017. Excluding the non-GAAP adjustments, non-compensation operating expenses as a percentage of net revenues for the quarter ended December 31, 2017 were 19.9% (non-GAAP measure).
For the year ended December 31, 2017, non-compensation operating expenses were $698.0 million, which included litigation-related, merger-related, and tax reform expenses (collectively, non-GAAP adjustments) of $61.8 million, compared with $706.9 million in 2016. Excluding the non-GAAP adjustments, non-compensation operating expenses as a percentage of net revenues for the quarter ended December 31, 2017 were 21.7% (non-GAAP measure).
| Three Months Ended 12/31/17 | Year Ended 12/31/17 | |||||||
| GAAP non-compensation expenses | $ | 184,649 | $ | 697,967 | ||||
| As a percentage of net revenues | 23.0 | % | 23.9 | % | ||||
| Non-GAAP adjustments: (4) | ||||||||
| Litigation-related | (15,961 | ) | (35,961 | ) | ||||
| Merger-related | (6,718 | ) | (23,617 | ) | ||||
| Tax reform | (2,206 | ) | (2,206 | ) | ||||
| (24,885 | ) | (61,784 | ) | |||||
| Non-GAAP non-compensation expenses | $ | 159,764 | $ | 636,183 | ||||
| As a percentage of non-GAAP net revenues | 19.9 | % | 21.7 | % | ||||
Provision for Income Taxes
The GAAP effective income tax rate for the quarter ended December 31, 2017 was (142.4%). This compares with an effective income tax rate of 51.0% for the fourth quarter of 2016 and 38.5% for the third quarter of 2017. The adjusted non-GAAP effective income tax rate for the quarter ended December 31, 2017 was 23.9%.
The GAAP effective income tax rate for the year ended December 31, 2017 was 32.2%, compared with 42.8% in 2016. The adjusted non-GAAP effective income tax rate for the year ended December 31, 2017 was 33.6%.
The provision for income taxes for the three and twelve months ended December 31, 2017 was primarily impacted by 1) actions taken by the Company in response to the Tax Legislation that was enacted in the fourth quarter of 2017 to maximize tax savings; 2) the favorable impact of the adoption of new accounting guidance during 2017 associated with stock-based compensation; and 3) the revaluation of the Company’s deferred tax assets as a result of the enacted Tax Legislation.
| Three Months Ended 12/31/17 | Year Ended 12/31/17 | |||||||
| GAAP provision for income taxes | $ | 1,168 | $ | 86,665 | ||||
| GAAP effective tax rate | (142.4 | %) | 32.2 | % | ||||
| Non-GAAP adjustments: (4) | ||||||||
| Tax reform | 53,328 | 53,328 | ||||||
| Excess tax benefits from stock-based compensation (5) | 21,144 | 38,596 | ||||||
| Litigation and merger-related and severance | 5,379 | 32,248 | ||||||
| Revaluation of deferred tax assets | (42,443 | ) | (42,443 | ) | ||||
| 37,408 | 81,729 | |||||||
| Non-GAAP provision for income taxes | $ | 38,576 | $ | 168,394 | ||||
| Non-GAAP effective tax rate | 23.9 | % | 33.6 | % | ||||
Conference Call Information
Stifel Financial Corp. will host its fourth quarter 2017 financial results conference call on Tuesday, January 30, 2018, at 8:00 a.m. Eastern time. The conference call may include forward-looking statements.
All interested parties are invited to listen to Stifel’s Chairman and CEO, Ronald J. Kruszewski, by dialing (888) 676-3684 and referencing conference ID #5299459. A live audio webcast of the call, as well as a presentation highlighting the Company’s results, will be available through the Company's web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.
Company Information
Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel’s broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated; Keefe Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; Century Securities Associates, Inc.; and Eaton Partners LLC, and in the United Kingdom and Europe through Stifel Nicolaus Europe Limited. The Company’s broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank & Trust offers a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer trust and related services. To learn more about Stifel, please visit the Company’s web site at www.stifel.com.
Forward-Looking Statements
This earnings release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this earnings release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this earnings release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to successfully integrate acquired companies or the branch offices and financial advisors; a material adverse change in financial condition; the risk of borrower, depositor, and other customer attrition; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies’ operations, pricing, and services; and other risk factors referred to from time to time in filings made by Stifel Financial Corp. with the Securities and Exchange Commission. Forward-looking statements speak only as to the date they are made. Stifel Financial Corp. disclaims any intent or obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
| Summary Results of Operations (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||||
| (in 000s, except per share amounts) | 12/31/17 | 12/31/16 | % Change | 9/30/17 | % Change | 12/31/17 | 12/31/16 | % Change | ||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||
| Commissions | $ | 168,754 | $ | 178,683 | (5.6 | ) | $ | 162,612 | 3.8 | $ | 678,904 | $ | 729,989 | (7.0 | ) | |||||||||||||||||||||||||||||||
| Principal transactions | 97,256 | 111,052 | (12.4 | ) | 87,010 | 11.8 | 396,826 | 475,428 | (16.5 | ) | ||||||||||||||||||||||||||||||||||||
| Brokerage revenues | 266,010 | 289,735 | (8.2 | ) | 249,622 | 6.6 | 1,075,730 | 1,205,417 | (10.8 | ) | ||||||||||||||||||||||||||||||||||||
| Capital raising | 109,509 | 78,204 | 40.0 | 79,922 | 37.0 | 366,147 | 256,397 | 42.8 | ||||||||||||||||||||||||||||||||||||||
| Advisory fees | 123,237 | 56,248 | 119.1 | 101,982 | 20.8 | 360,616 | 256,637 | 40.5 | ||||||||||||||||||||||||||||||||||||||
| Investment banking | 232,746 | 134,452 | 73.1 | 181,904 | 27.9 | 726,763 | 513,034 | 41.7 | ||||||||||||||||||||||||||||||||||||||
| Asset management and service fees | 186,563 | 149,484 | 24.8 | 179,848 | 3.7 | 702,064 | 582,789 | 20.5 | ||||||||||||||||||||||||||||||||||||||
| Other income | 12,016 | 12,994 | (7.5 | ) | 9,558 | 25.7 | 37,524 | 46,798 | (19.8 | ) | ||||||||||||||||||||||||||||||||||||
| Operating revenues | 697,335 | 586,665 | 18.9 | 620,932 | 12.3 | 2,542,081 | 2,348,038 | 8.3 | ||||||||||||||||||||||||||||||||||||||
| Interest revenue | 126,615 | 90,844 | 39.4 | 117,862 | 7.4 | 454,381 | 294,332 | 54.4 | ||||||||||||||||||||||||||||||||||||||
| Total revenues | 823,950 | 677,509 | 21.6 | 738,794 | 11.5 | 2,996,462 | 2,642,370 | 13.4 | ||||||||||||||||||||||||||||||||||||||
| Interest expense | 19,865 | 16,118 | 23.2 | 17,625 | 12.7 | 70,030 | 66,874 | 4.7 | ||||||||||||||||||||||||||||||||||||||
| Net revenues | 804,085 | 661,391 | 21.6 | 721,169 | 11.5 | 2,926,432 | 2,575,496 | 13.6 | ||||||||||||||||||||||||||||||||||||||
| Non-interest expenses: | ||||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 620,256 | 420,644 | 47.5 | 448,410 | 38.3 | 1,958,929 | 1,726,016 | 13.5 | ||||||||||||||||||||||||||||||||||||||
| Occupancy and equipment rental | 54,844 | 52,869 | 3.7 | 57,427 | (4.5 | ) | 222,708 | 231,324 | (3.7 | ) | ||||||||||||||||||||||||||||||||||||
| Communication and office supplies | 30,807 | 34,376 | (10.4 | ) | 34,650 | (11.1 | ) | 133,493 | 139,644 | (4.4 | ) | |||||||||||||||||||||||||||||||||||
| Commissions and floor brokerage | 10,945 | 9,662 | 13.3 | 11,232 | (2.6 | ) | 44,132 | 44,315 | (0.4 | ) | ||||||||||||||||||||||||||||||||||||
| Provision for loan losses | 5,340 | 6,016 | (11.2 | ) | 7,990 | (33.2 | ) | 25,320 | 15,659 | 61.7 | ||||||||||||||||||||||||||||||||||||
| Other operating expenses | 82,713 | 82,930 | (0.3 | ) | 53,321 | 55.1 | 272,314 | 275,956 | (1.3 | ) | ||||||||||||||||||||||||||||||||||||
| Total non-interest expenses | 804,905 | 606,497 | 32.7 | 613,030 | 31.3 | 2,656,896 | 2,432,914 | 9.2 | ||||||||||||||||||||||||||||||||||||||
| Income before income taxes | (820 | ) | 54,894 | (101.5 | ) | 108,139 | (100.8 | ) | 269,536 | 142,582 | 89.0 | |||||||||||||||||||||||||||||||||||
| Provision for income taxes | 1,168 | 28,014 | (95.8 | ) | 41,603 | (97.2 | ) | 86,665 | 61,062 | 41.9 | ||||||||||||||||||||||||||||||||||||
| Net income/(loss) | (1,988 | ) | 26,880 | (107.4 | ) | 66,536 | (103.0 | ) | 182,871 | 81,520 | 124.3 | |||||||||||||||||||||||||||||||||||
| Preferred dividends | 2,344 | 2,343 | n/m | 2,343 | n/m | 9,375 | 3,906 | 140.0 | ||||||||||||||||||||||||||||||||||||||
| Net income/(loss) available to common shareholders | $ | (4,332 | ) | $ | 24,537 | (117.7 | ) | $ | 64,193 | (106.7 | ) | $ | 173,496 | $ | 77,614 | 123.5 | ||||||||||||||||||||||||||||||
| Earnings per common share: (1) | ||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | (0.06 | ) | $ | 0.37 | (116.2 | ) | $ | 0.94 | (106.4 | ) | $ | 2.53 | $ | 1.16 | 118.1 | ||||||||||||||||||||||||||||||
| Diluted | $ | (0.06 | ) | $ | 0.31 | (119.4 | ) | $ | 0.79 | (107.6 | ) | $ | 2.14 | $ | 1.00 | 114.0 | ||||||||||||||||||||||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 68,782 | 66,636 | 3.2 | 68,522 | 0.4 | 68,562 | 66,871 | 2.5 | ||||||||||||||||||||||||||||||||||||||
| Diluted | 68,782 | 79,539 | (13.5 | ) | 80,881 | (15.0 | ) | 81,035 | 77,563 | 4.5 | ||||||||||||||||||||||||||||||||||||
| Cash dividends declared per common share | $ | 0.10 | $ | — | n/m | $ | 0.10 | n/m | $ | 0.20 | $ | — | n/m | |||||||||||||||||||||||||||||||||
| Summary Business Segment Results (Unaudited) | ||||||||||||||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||
| (in 000s) | 12/31/17 | 12/31/16 | % Change | 9/30/17 | % Change | 12/31/17 | 12/31/16 | % Change | ||||||||||||||||||||||||||
| Net revenues: | ||||||||||||||||||||||||||||||||||
| Global Wealth Management | $ | 473,938 | $ | 407,535 | 16.3 | $ | 453,558 | 4.5 | $ | 1,822,218 | $ | 1,563,410 | 16.6 | |||||||||||||||||||||
| Institutional Group | 332,401 | 253,168 | 31.3 | 264,747 | 25.6 | 1,110,768 | 1,014,164 | 9.5 | ||||||||||||||||||||||||||
| Other | (2,254 | ) | 688 | (427.6 | ) | 2,864 | (178.7 | ) | (6,554 | ) | (2,078 | ) | (215.4 | ) | ||||||||||||||||||||
| Total net revenues | $ | 804,085 | $ | 661,391 | 21.6 | $ | 721,169 | 11.5 | $ | 2,926,432 | $ | 2,575,496 | 13.6 | |||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||
| Global Wealth Management | $ | 304,077 | $ | 284,683 | 6.8 | $ | 291,802 | 4.2 | $ | 1,195,312 | $ | 1,133,092 | 5.5 | |||||||||||||||||||||
| Institutional Group | 258,901 | 205,653 | 25.9 | 213,030 | 21.5 | 892,787 | 850,021 | 5.0 | ||||||||||||||||||||||||||
| Other | 241,927 | 116,161 | 108.3 | 108,198 | 123.6 | 568,797 | 449,801 | 26.5 | ||||||||||||||||||||||||||
| Total operating expenses | $ | 804,905 | $ | 606,497 | 32.7 | $ | 613,030 | 31.3 | $ | 2,656,896 | $ | 2,432,914 | 9.2 | |||||||||||||||||||||
| Operating contribution: | ||||||||||||||||||||||||||||||||||
| Global Wealth Management | $ | 169,861 | $ | 122,852 | 38.3 | $ | 161,756 | 5.0 | $ | 626,906 | $ | 430,318 | 45.7 | |||||||||||||||||||||
| Institutional Group | 73,500 | 47,515 | 54.7 | 51,717 | 42.1 | 217,981 | 164,143 | 32.8 | ||||||||||||||||||||||||||
| Other | (244,181 | ) | (115,473 | ) | 111.5 | (105,334 | ) | 131.8 | (575,351 | ) | (451,879 | ) | 27.3 | |||||||||||||||||||||
| Income/(loss) before income taxes | $ | (820 | ) | $ | 54,894 | (101.5 | ) | $ | 108,139 | (100.8 | ) | $ | 269,536 | $ | 142,582 | 89.0 | ||||||||||||||||||
| As a percentage of net revenues: | ||||||||||||||||||||||||||||||||||
| Compensation and benefits | ||||||||||||||||||||||||||||||||||
| Global Wealth Management | 48.9 | 52.9 | 49.1 | 50.0 | 55.7 | |||||||||||||||||||||||||||||
| Institutional Group | 59.7 | 57.7 | 60.0 | 59.9 | 60.0 | |||||||||||||||||||||||||||||
| Non-compensation operating expenses | ||||||||||||||||||||||||||||||||||
| Global Wealth Management | 15.3 | 17.0 | 15.2 | 15.6 | 16.8 | |||||||||||||||||||||||||||||
| Institutional Group | 18.2 | 23.5 | 20.5 | 20.5 | 23.8 | |||||||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||||||||||
| Global Wealth Management | 35.8 | 30.1 | 35.7 | 34.4 | 27.5 | |||||||||||||||||||||||||||||
| Institutional Group | 22.1 | 18.8 | 19.5 | 19.6 | 16.2 | |||||||||||||||||||||||||||||
| Consolidated pre-tax margin | (0.1 | ) | 8.3 | 15.0 | 9.2 | 5.5 | ||||||||||||||||||||||||||||
| Stifel Financial Corp. | |||||||||
| Selected Key Metrics | |||||||||
| (Unaudited) | |||||||||
| Financial metrics: | As of and For the Three Months Ended | ||||||||
| (in 000s, except percentages and per share amounts) | 12/31/17 | 12/31/16 | 9/30/17 | ||||||
| Total assets | $ | 21,383,953 | $ | 19,129,356 | $ | 20,484,080 | |||
| Total equity | 2,861,576 | 2,738,408 | 2,932,405 | ||||||
| Book value per common share | $ | 38.26 | $ | 38.84 | $ | 40.67 | |||
| Return on common equity (8) | (0.3 | %) | 4.2 | % | 9.7 | % | |||
| Non-GAAP return on common equity (2) (8) | 17.9 | % | 8.8 | % | 10.8 | % | |||
| Return on tangible common equity (9) | (0.5 | %) | 7.2 | % | 16.1 | % | |||
| Non-GAAP return on tangible common equity (2) (9) | 29.5 | % | 15.2 | % | 17.8 | % | |||
| Tier 1 common capital ratio (10) | 16.9 | % | 18.0 | % | 18.3 | % | |||
| Tier 1 risk based capital ratio (10) | 19.0 | % | 20.3 | % | 20.5 | % | |||
| Tier 1 leverage capital ratio (10) | 9.5 | % | 10.2 | % | 10.4 | % | |||
| Pre-tax margin on net revenues | (0.1 | %) | 8.3 | % | 15.0 | % | |||
| Non-GAAP pre-tax margin on net revenues (2) | 20.1 | % | 13.5 | % | 16.8 | % | |||
| Effective tax rate | (142.4 | %) | 51.0 | % | 38.5 | % | |||
| Non-GAAP effective tax rate (2) | 23.9 | % | 36.6 | % | 38.9 | % | |||
| Statistical Information | ||||||||||||||||||||
| (in 000s) | 12/31/17 | 12/31/16 | % Change | 9/30/17 | % Change | |||||||||||||||
| Statistical Information: | ||||||||||||||||||||
| Financial advisors (11) | 2,244 | 2,280 | (1.6 | ) | 2,252 | (0.4 | ) | |||||||||||||
| Locations | 391 | 396 | (1.3 | ) | 395 | (1.0 | ) | |||||||||||||
| Total client assets | $ | 272,591,000 | $ | 236,942,000 | 15.0 | $ | 264,717,000 | 3.0 | ||||||||||||
| Fee-based client assets | $ | 87,560,000 | $ | 70,195,000 | 24.7 | $ | 82,999,000 | 5.5 | ||||||||||||
| Client money market and insured product | $ | 17,286,000 | $ | 19,253,000 | (10.2 | ) | $ | 17,420,000 | (0.8 | ) | ||||||||||
| Secured client lending (12) | $ | 3,079,737 | $ | 2,959,628 | 4.1 | $ | 3,037,158 | 1.4 | ||||||||||||
| Stifel Bank & Trust - a component of Global Wealth Management | |||||||||||||||||||||||||||||||
| Selected Key Metrics | |||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||
| Selected operating data: | Three Months Ended | Year Ended | |||||||||||||||||||||||||||||
| (in 000s, except percentages) | 12/31/17 | 12/31/16 | % Change | 9/30/17 | % Change | 12/31/17 | 12/31/16 | % Change | |||||||||||||||||||||||
| Net Interest Income | $ | 103,985 | $ | 72,931 | 42.6 | $ | 97,300 | 6.9 | $ | 376,099 | $ | 225,114 | 67.1 | ||||||||||||||||||
| Bank loan loss provision | 5,340 | 6,016 | (11.2 | ) | 7,990 | (33.2 | ) | 25,320 | 15,659 | 61.7 | |||||||||||||||||||||
| Charge-offs | 105 | — | n/m | — | n/m | 3,058 | 296 | 933.1 | |||||||||||||||||||||||
| Net Interest Margin | 2.85 | % | 2.24 | % | 27.2 | 2.80 | % | 1.8 | 2.77 | % | 2.34 | % | 18.4 | ||||||||||||||||||
| Financial Metrics: | As of | |||||||||||
| (in 000s, except percentages) | 12/31/17 | 12/31/16 | 9/30/17 | |||||||||
| Total Assets | $ | 14,995,795 | $ | 12,798,240 | $ | 14,538,750 | ||||||
| Total Equity | 1,058,488 | 943,545 | 1,019,257 | |||||||||
| Total Loans, net (includes loans held for sale) | 7,173,827 | 5,819,778 | 6,949,369 | |||||||||
| Total Deposits | 13,411,935 | 11,527,483 | 12,883,961 | |||||||||
| Available-for-sale securities, at fair value | 3,766,372 | 3,174,642 | 3,687,248 | |||||||||
| Held-to-maturity securities, at amortized cost | 3,694,377 | 3,034,380 | 3,550,962 | |||||||||
| Residential real estate | 2,593,576 | 2,161,400 | 2,517,543 | |||||||||
| Commercial and industrial | 2,437,938 | 1,710,399 | 2,380,417 | |||||||||
| Securities-based loans | 1,819,206 | 1,614,033 | 1,839,981 | |||||||||
| Commercial real estate | 116,258 | 78,711 | 78,614 | |||||||||
| Loans held for sale | 226,068 | 228,588 | 166,335 | |||||||||
| Common equity tier 1 capital ratio (10) | 14.3 | % | 16.0 | % | 14.4 | % | ||||||
| Tier 1 capital ratio (10) | 14.3 | % | 16.0 | % | 14.4 | % | ||||||
| Total capital ratio (10) | 15.3 | % | 16.8 | % | 15.3 | % | ||||||
| Tier 1 leverage ratio (10) | 7.1 | % | 7.1 | % | 7.1 | % | ||||||
| Credit Metrics: | ||||||||||||
| Allowance for loan losses | $ | 67,466 | $ | 45,163 | $ | 62,229 | ||||||
| Allowance as a percentage of retained loans | 0.96 | % | 0.81 | % | 0.92 | % | ||||||
| Net charge-offs as a percentage of average loans | 0.00 | % | 0.00 | % | 0.00 | % | ||||||
| Total nonperforming assets | 27,030 | 26,934 | 21,776 | |||||||||
| Nonperforming assets as % of total assets | 0.18 | % | 0.21 | % | 0.15 | % | ||||||
| Global Wealth Management Summary Results of Operations (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||
| (in 000s) | 12/31/17 | 12/31/16 | % Change | 9/30/17 | % Change | 12/31/17 | 12/31/16 | % Change | ||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||
| Commissions | $ | 118,292 | $ | 114,824 | 3.0 | $ | 115,410 | 2.5 | $ | 474,623 | $ | 491,214 | (3.4 | ) | ||||||||||||||||||||||||||||||
| Principal transactions | 45,129 | 45,193 | (0.1 | ) | 42,924 | 5.1 | 186,711 | 179,421 | 4.1 | |||||||||||||||||||||||||||||||||||
| Brokerage revenues | 163,421 | 160,017 | 2.1 | 158,334 | 3.2 | 661,334 | 670,635 | (1.4 | ) | |||||||||||||||||||||||||||||||||||
| Asset management and service fees | 186,373 | 149,998 | 24.3 | 179,830 | 3.6 | 701,756 | 581,862 | 20.6 | ||||||||||||||||||||||||||||||||||||
| Net interest | 112,190 | 78,748 | 42.5 | 102,831 | 9.1 | 400,414 | 248,784 | 60.9 | ||||||||||||||||||||||||||||||||||||
| Investment banking | 8,899 | 12,064 | (26.2 | ) | 9,072 | (1.9 | ) | 40,466 | 42,187 | (4.1 | ) | |||||||||||||||||||||||||||||||||
| Other income | 3,055 | 6,708 | (54.5 | ) | 3,491 | (12.5 | ) | 18,248 | 19,942 | (8.5 | ) | |||||||||||||||||||||||||||||||||
| Net revenues | 473,938 | 407,535 | 16.3 | 453,558 | 4.5 | 1,822,218 | 1,563,410 | 16.6 | ||||||||||||||||||||||||||||||||||||
| Non-interest expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 231,736 | 215,458 | 7.6 | 222,621 | 4.1 | 911,986 | 870,577 | 4.8 | ||||||||||||||||||||||||||||||||||||
| Non-compensation operating expenses | 72,341 | 69,225 | 4.5 | 69,181 | 4.6 | 283,326 | 262,515 | 7.9 | ||||||||||||||||||||||||||||||||||||
| Total non-interest expenses | 304,077 | 284,683 | 6.8 | 291,802 | 4.2 | 1,195,312 | 1,133,092 | 5.5 | ||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 169,861 | $ | 122,852 | 38.3 | $ | 161,756 | 5.0 | $ | 626,906 | $ | 430,318 | 45.7 | |||||||||||||||||||||||||||||||
| As a percentage of net revenues: | ||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 48.9 | 52.9 | 49.1 | 50.0 | 55.7 | |||||||||||||||||||||||||||||||||||||||
| Non-compensation operating expenses | 15.3 | 17.0 | 15.2 | 15.6 | 16.8 | |||||||||||||||||||||||||||||||||||||||
| Income before income taxes | 35.8 | 30.1 | 35.7 | 34.4 | 27.5 | |||||||||||||||||||||||||||||||||||||||
| Institutional Group Summary Results of Operations (Unaudited) | ||||||||||||||||||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||
| (in 000s) | 12/31/17 | 12/31/16 | % Change | 9/30/17 | % Change | 12/31/17 | 12/31/16 | % Change | ||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||
| Commissions | $ | 50,462 | $ | 63,859 | (21.0 | ) | $ | 47,202 | 6.9 | $ | 204,281 | $ | 238,775 | (14.4 | ) | |||||||||||||||||||||
| Principal transactions | 52,127 | 65,860 | (20.9 | ) | 44,086 | 18.2 | 210,115 | 296,008 | (29.0 | ) | ||||||||||||||||||||||||||
| Brokerage revenues | 102,589 | 129,719 | (20.9 | ) | 91,288 | 12.4 | 414,396 | 534,783 | (22.5 | ) | ||||||||||||||||||||||||||
| Capital raising | 100,620 | 66,949 | 50.3 | 70,850 | 42.0 | 325,691 | 214,209 | 52.0 | ||||||||||||||||||||||||||||
| Advisory fees | 123,227 | 55,439 | 122.3 | 101,982 | 20.8 | 360,606 | 256,638 | 40.5 | ||||||||||||||||||||||||||||
| Investment banking | 223,847 | 122,388 | 82.9 | 172,832 | 29.5 | 686,297 | 470,847 | 45.8 | ||||||||||||||||||||||||||||
| Other (13) | 5,965 | 1,061 | 462.2 | 627 | 851.4 | 10,075 | 8,534 | 18.1 | ||||||||||||||||||||||||||||
| Net revenues | 332,401 | 253,168 | 31.3 | 264,747 | 25.6 | 1,110,768 | 1,014,164 | 9.5 | ||||||||||||||||||||||||||||
| Non-interest expenses: | ||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 198,416 | 146,056 | 35.8 | 158,926 | 24.8 | 665,514 | 608,171 | 9.4 | ||||||||||||||||||||||||||||
| Non-compensation operating expenses | 60,485 | 59,597 | 1.5 | 54,104 | 11.8 | 227,273 | 241,850 | (6.0 | ) | |||||||||||||||||||||||||||
| Total non-interest expenses | 258,901 | 205,653 | 25.9 | 213,030 | 21.5 | 892,787 | 850,021 | 5.0 | ||||||||||||||||||||||||||||
| Income before income taxes | $ | 73,500 | $ | 47,515 | 54.7 | $ | 51,717 | 42.1 | $ | 217,981 | $ | 164,143 | 32.8 | |||||||||||||||||||||||
| As a percentage of net revenues: | ||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 59.7 | 57.7 | 60.0 | 59.9 | 60.0 | |||||||||||||||||||||||||||||||
| Non-compensation operating expenses | 18.2 | 23.5 | 20.5 | 20.5 | 23.8 | |||||||||||||||||||||||||||||||
| Income before income taxes | 22.1 | 18.8 | 19.5 | 19.6 | 16.2 | |||||||||||||||||||||||||||||||
Non-GAAP Financial Measures
The Company utilized certain non-GAAP calculations as additional measures to aid in understanding and analyzing the Company’s financial results for the three months ended December 31, 2017, September 30, 2017, and December 31, 2016 and the years ended December 31, 2017 and 2016. Specifically, the Company believes that the non-GAAP measures provide useful information by excluding certain items that may not be indicative of the Company’s core operating results and business outlook. The Company believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate a meaningful comparison of the Company’s results in the current period to those in prior and future periods. Reference to these non-GAAP measures should not be considered as a substitute for results that are presented in a manner consistent with GAAP. These non-GAAP measures are provided to enhance investors' overall understanding of the Company’s current financial performance. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. These non-GAAP measures primarily exclude expenses which management believes are, in some instances, non-recurring and not representative of on-going business.
A limitation of utilizing these non-GAAP measures is that the GAAP accounting effects of these charges do, in fact, reflect the underlying financial results of the Company’s business and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that GAAP measures and the same respective non-GAAP measures of the Company’s financial performance should be considered together.
The following table provides details with respect to reconciling net income and earnings per diluted common share on a GAAP basis for the three months ended December 31, 2017, September 30, 2017, and December 31, 2016 and the years ended December 31, 2017 and 2016 to net income and earnings per diluted common share on a non-GAAP basis for the same period.
| Three Months Ended | Year Ended | |||||||||||||||||||
| (in 000s) | 12/31/2017 | 12/31/2016 | 9/30/2017 | 12/31/2017 | 12/31/2016 | |||||||||||||||
| GAAP net income/(loss) | $ | (1,988 | ) | $ | 26,880 | $ | 66,536 | $ | 182,871 | $ | 81,520 | |||||||||
| Preferred dividend | 2,344 | 2,343 | 2,343 | 9,375 | 3,906 | |||||||||||||||
| Net income/(loss) available to common shareholders | (4,332 | ) | 24,537 | 64,193 | 173,496 | 77,614 | ||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Tax reform (14) | 135,525 | — | — | 135,525 | — | |||||||||||||||
| Merger-related (15) | 9,447 | 14,226 | 10,244 | 49,205 | 132,016 | |||||||||||||||
| Litigation-related (16) | 15,961 | 20,000 | — | 35,961 | 31,796 | |||||||||||||||
| Severance | 1,432 | — | 2,538 | 10,925 | — | |||||||||||||||
| Provision for income taxes (17) | (37,408 | ) | (4,578 | ) | (5,369 | ) | (81,729 | ) | (55,721 | ) | ||||||||||
| Total non-GAAP adjustments | 124,957 | 29,648 | 7,413 | 149,887 | 108,091 | |||||||||||||||
| Non-GAAP net income available to common shareholders | $ | 120,625 | $ | 54,185 | $ | 71,606 | $ | 323,383 | $ | 185,705 | ||||||||||
| Weighted average diluted shares outstanding | 82,267 | 79,539 | 80,881 | 81,035 | 77,563 | |||||||||||||||
| GAAP earnings per diluted common share (1) | $ | (0.03 | ) | $ | 0.34 | $ | 0.82 | $ | 2.26 | $ | 1.05 | |||||||||
| Non-GAAP adjustments | 1.52 | 0.37 | 0.09 | 1.85 | 1.39 | |||||||||||||||
| Non-GAAP earnings per diluted common share | $ | 1.49 | $ | 0.71 | $ | 0.91 | $ | 4.11 | $ | 2.44 | ||||||||||
| GAAP earnings per diluted common share available to common shareholders (1) | $ | (0.06 | ) | $ | 0.31 | $ | 0.79 | $ | 2.14 | $ | 1.00 | |||||||||
| Non-GAAP adjustments | 1.53 | 0.37 | 0.10 | 1.85 | 1.39 | |||||||||||||||
| Non-GAAP earnings per diluted common share available to common shareholders | $ | 1.47 | $ | 0.68 | $ | 0.89 | $ | 3.99 | $ | 2.39 | ||||||||||
Footnotes
(1) GAAP earnings per share for the three months ended December 31, 2017 is calculated using the basic weighted average number of common shares outstanding, not fully dilutive shares, as they are anti-dilutive in periods a loss is incurred.
(2) Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures.”
(3) Excludes revenue included in the Other segment
(4) See further discussion of non-GAAP adjustments under “Non-GAAP Financial Measures.”
(5) During the first quarter of 2017, the Company adopted new accounting guidance associated with stock-based compensation.
(6) Non-GAAP pre-tax margin for the three months ended December 31, 2017 of 20.1% is calculated by adding tax reform, merger-related and severance non-GAAP adjustments of $162.4 million to our GAAP loss before income taxes of $0.8 million and dividing it by non-GAAP net revenues for the quarter of $804.1 million. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is discussed within and under “Non-GAAP Financial Measures.”
(7) Non-GAAP pre-tax margin for the year ended December 31, 2017 of 17.1% is calculated by adding tax reform, litigation and merger-related and severance non-GAAP adjustments of $231.6 million to our GAAP income before income taxes of $269.5 million and dividing it by non-GAAP net revenues for the quarter of $2,928.4 million. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is discussed within and under “Non-GAAP Financial Measures.”
(8) Computed by dividing annualized net income by average common shareholders’ equity or, in the case of non-GAAP return on common equity, computed by dividing non-GAAP net income by average common shareholders’ equity.
(9) Computed by dividing annualized net income by average tangible shareholders' equity or, in the case of non-GAAP return on tangible common equity, computed by dividing non-GAAP net income by average tangible shareholders' equity. Tangible common shareholders' equity equals total common shareholders' equity less goodwill and identifiable intangible assets.
(10) Capital ratios are estimates at time of the Company’s earnings release.
(11) Includes 112, 123, and 116 independent contractors at December 31, 2017, December 31, 2016, and September 30, 2017, respectively.
(12) Includes client margin balances held by our broker-dealer subsidiaries and securities-based loans held at Stifel Bank.
(13) Includes net interest, asset management and service fees, and other income.
(14) Primarily related to actions taken by the Company in response to the Tax Legislation that was enacted in the fourth quarter of 2017 to maximize tax savings;
(15) Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards and promissory notes issued as retention, professional fees, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s on-going business.
(16) Primarily related to costs associated with the Company’s previously disclosed legal matters.
(17) Primarily related to 1) actions taken by the Company in response to the Tax Legislation that was enacted in the fourth quarter of 2017 to maximize tax savings; 2) the favorable impact of the adoption of new accounting guidance during 2017 associated with stock-based compensation; and 3) the revaluation of the Company’s deferred tax assets as a result of the enacted Tax Legislation.
Media Contact: Neil Shapiro (212) 895-1891
Investor Contact: Joel Jeffrey (212) 271-3610
www.stifel.com/investor-relations