Stifel Financial Corp. Reports Second Quarter 2011 Financial Results

ST. LOUIS, MO, Aug 08 (MARKET WIRE) --
Stifel Financial Corp. (NYSE: SF)

-- Net revenues of $358.9 million increased 9% from the second quarter of
2010.
-- Non-GAAP net income of $31.3 million(1), or $0.50 per diluted share,
increased 30% from the 2nd quarter of 2010.
-- GAAP net income of $3.4 million, or $0.05 per diluted share.
-- Stockholders' equity was $1.3 billion and book value per share was
$24.50 as of June 30, 2011.

Stifel Financial Corp. (NYSE: SF) today reported unaudited GAAP net
revenues of $358.9 million for the three months ended June 30, 2011. The
company reported non-GAAP net income of $31.3 million(1), or $0.50 per
diluted share, for the three months ended June 30, 2011, compared with
non-GAAP net income of $24.1 million(1), or $0.46 per diluted share(2),
on net revenues of $328.0 million for the second quarter of 2010. On a
GAAP basis, the company reported unaudited net income of $3.4 million, or
$0.05 per diluted share, for the three months ended June 30, 2011,
compared with net income of $21.1 million, or $0.40 per diluted share(2)
for the second quarter of 2010. A reconciliation of the company's GAAP
results to these non-GAAP measures is discussed below under "Non-GAAP
Financial Measures."

GAAP results for the three months ended June 30, 2011 were significantly
impacted by charges relating to ongoing civil litigation with five
southeastern Wisconsin school districts ("District Litigation") and the
related regulatory investigation. The charges relating to the District
Litigation are the result of the purchase, at a substantial discount, of
approximately $162.5 million face value notes from Depfa Bank and a
provision for estimated costs associated with the ongoing civil
litigation and related regulatory investigation. The purchase price is
confidential. In addition, the Company incurred merger-related expenses
as a result of our merger with Thomas Weisel Partners Group, Inc.
("TWPG"). Combined, these charges reduced net income by $27.9 million or
$0.45 per diluted share.

For the six months ended June 30, 2011, the company reported non-GAAP net
income of $64.2 million(1), or $1.02 per diluted share, on net revenues
of $725.6 million, compared with non-GAAP net income of $47.8 million(1),
or $0.91 per diluted share(2), on net revenues of $640.0 million during
the comparable period in 2010. On a GAAP basis, the company reported
unaudited net income of $34.8 million, or $0.55 per diluted share, for
the six months ended June 30, 2011, compared with unaudited net income of
$44.8 million, or $0.85 per diluted share(2), during the comparable
period in 2010.

"Second quarter results improved over the year-ago period, but were
impacted by a challenging market environment dominated by macroeconomic
factors, and significant non-core expenses primarily related to
additional legal reserves in connection with previously disclosed
matters. Despite these factors, our investment banking group generated
their second best revenue quarter, which was offset by pressure in our
brokerage and private client businesses due to a lack of investor
conviction coupled with lower industry-wide volumes," commented Ronald J.
Kruszewski, Chairman, President and Chief Executive Officer of Stifel
Financial. "We continue to position the firm for long-term growth and our
recent announcement of the pending acquisition of Stone & Youngberg
delivers on this strategy by adding public finance expertise and coverage
in new markets. We are excited about combining our highly complementary
businesses and delivering enhanced services to both our institutional and
wealth management clients."

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Summary Results of Operations (Unaudited)
Three Months Ended
-----------------------------------------------
(in 000s) 6/30/11 6/30/10 % Change 3/31/11 % Change
-------- -------- -------- -------- --------
Net revenues $358,857 $328,009 9.4 $366,613 (2.1)
Net income $ 3,416 $ 21,109 (83.8) $ 31,398 (89.1)
Non-GAAP net income (1) $ 31,316 $ 24,060 30.2 $ 32,926 (4.9)
Earnings per share: (2)
Basic $ 0.06 $ 0.46 (87.0) $ 0.60 (90.0)
Diluted $ 0.05 $ 0.40 (87.5) $ 0.50 (90.0)
Non-GAAP diluted (1) $ 0.50 $ 0.46 8.7 $ 0.52 (3.8)
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-------------------------------------------------------
Summary Results of Operations (Unaudited)
Six Months Ended
--------------------------
(in 000s) 6/30/11 6/30/10 % Change
-------- -------- --------
Net revenues $725,470 $640,039 13.3
Net income $ 34,814 $ 44,849 (22.4)
Non-GAAP net income (1) $ 64,242 $ 47,835 34.3
Earnings per share: (2)
Basic $ 0.66 $ 0.97 (32.0)
Diluted $ 0.55 $ 0.85 (35.3)
Non-GAAP diluted (1) $ 1.02 $ 0.91 12.1
-------------------------------------------------------

Business Segment Results

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Summary Segment Results (Unaudited)
----------------------------------------------------------------------------
Three Months Ended
------------------------------------------------
% %
(in 000s) 6/30/11 6/30/10 Change 3/31/11 Change
-------- -------- -------- -------- --------
Net revenues: (3)
Global Wealth
Management $225,645 $199,940 12.9 $238,446 (5.4)
Institutional Group 132,915 124,602 6.7 126,994 4.7
Other 403 3,467 (88.4) 1,179 (65.8)
$358,963 $328,009 9.4 $366,619 (2.1)
Operating contribution:
(3)
Global Wealth
Management $ 55,426 $ 40,441 37.1 $ 61,472 (9.8)
Institutional Group 21,951 30,769 (28.7) 21,393 2.6
Other (28,321) (30,240) (6.3) (29,714) (4.7)
$ 49,056 $ 40,970 19.7 $ 53,151 (7.7)

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------------------------------------------------------
Summary Segment Results (Unaudited)
------------------------------------------------------
Six Months Ended
----------------------------
%
(in 000s) 6/30/11 6/30/10 Change
-------- -------- --------
Net revenues: (3)
Global Wealth
Management $464,091 $399,361 16.2
Institutional Group 259,909 237,894 9.3
Other 1,582 2,784 (43.2)
$725,582 $640,039 13.4
Operating contribution:
(3)
Global Wealth
Management $116,898 $ 79,599 46.9
Institutional Group 43,344 58,225 (25.6)
Other (58,035) (57,287) 1.3
$102,207 $ 80,537 26.9

------------------------------------------------------

Global Wealth Management

For the quarter ended June 30, 2011, the Global Wealth Management ("GWM")
segment generated pre-tax operating income of $55.4 million, compared
with $40.4 million in the second quarter of 2010 and $61.5 million in the
first quarter of 2011. Net revenues for the quarter were $225.6 million,
compared with $199.9 million in the second quarter of 2010, and $238.4
million in the first quarter of 2011. The increase in net revenues over
the comparable period in 2010 is primarily attributable to: (1) higher
commissions revenues as a result of increased client assets coupled with
higher productivity; (2) growth in asset management and service fees as a
result of an increase in assets under management, positive gains in
market performance and contributions as a result of the merger with TWPG;
and (3) increased equity underwriting sales credits. The decrease in net
revenues from the record first quarter of 2011 was primarily attributable
to a decrease in commissions and principal transactions revenues as a
result of lower trading volumes.

-- The Private Client Group reported net revenues of $213.5 million, a
12% increase compared with the second quarter of 2010 and a 7%
decrease compared with the first quarter of 2011.
-- Stifel Bank reported net revenues of $12.1 million, a 36% increase
compared with the second quarter of 2010 and a 36% increase compared
with the first quarter of 2011.

Institutional Group

For the quarter ended June 30, 2011, the Institutional Group segment
generated pre-tax operating income of $22.0 million, compared with $30.8
million in the second quarter of 2010 and $21.4 million in the first
quarter of 2011. Net revenues for the quarter were $132.9 million,
compared with $124.6 million in the second quarter of 2010 and $127.0
million in the first quarter of 2011. The growth in revenue over the
comparable period in 2010 was driven by an increase in investment banking
revenues, which was primarily related to improved equity capital market
conditions and contributions as a result of the merger with TWPG. The
increase in activity was offset by a decline in fixed income and equity
institutional brokerage revenues, which was negatively impacted by the
challenging market conditions present during the first half of 2011 and
lower industry-wide volumes. The decrease in net revenues from the first
quarter of 2011 was primarily attributable to a decrease in institutional
brokerage revenues, offset by an increase in advisory fees and equity
and, to a lesser extent, fixed income capital raising revenues.

Institutional brokerage revenues were $73.2 million, a 17% decrease
compared with the second quarter of 2010 and a 19% decrease compared with
the first quarter of 2011.

-- Equity institutional brokerage revenues were $41.7 million, a 6%
decrease compared with the second quarter of 2010 and a 20% decrease
compared with the first quarter of 2011.
-- Fixed income institutional brokerage revenues were $31.5 million, a
29% decrease compared with the second quarter of 2010 and an 18%
decrease compared with the first quarter of 2011.

Investment banking revenues were $58.0 million, a 62% increase
compared with the second quarter of 2010 and a 65% increase compared with
the first quarter of 2011.

-- Equity capital raising revenues were $28.0 million, a 35% increase
compared with the second quarter of 2010 and a 22% increase compared
with the first quarter of 2011.
-- Fixed income capital raising revenues were $5.2 million, a 17%
increase compared with the second quarter of 2010 and a 70% increase
compared with the first quarter of 2011.
-- Equity advisory fee revenues were $22.9 million, a 149% increase
compared with the second quarter of 2010, and a 173% increase compared
with the first quarter of 2011.
-- Fixed income advisory fee revenues were $1.9 million, a 44% increase
compared with the second quarter of 2010 and a 184% increase compared
with the first quarter of 2011.

Consolidated Compensation and Benefits Expenses

For the quarter ended June 30, 2011, compensation and benefits expenses
was $229.9 million, which included $2.0 million of merger-related
expenses, increased 6% compared with the second quarter of 2010, and
decreased 1% compared with the first quarter of 2011. The increase in
compensation and benefits expenses from the comparable period in 2010 is
primarily due to increased revenue production and profitability. The
decrease from the first quarter of 2011 is primarily attributable to a
decrease in variable compensation as a result of lower revenues.

Excluding merger-related expenses, compensation and benefits as a
percentage of net revenues was 64%(4) compared with 65%(4) in the second
quarter of 2010 and 63%(4) in the first quarter of 2011. Transition pay,
which primarily consists of amortization of upfront notes, signing
bonuses and retention awards, as a percentage of net revenues was 5% in
the second quarter of 2011 compared with 6% in the second quarter of 2010
and 5% in the first quarter of 2011.

Consolidated Non-Compensation Operating Expenses

For the quarter ended June 30, 2011, non-compensation operating expenses
of $125.0 million, which included $41.8 million of litigation-related
charges and $1.3 million of merger-related expenses, increased 66%
compared with the second quarter of 2010 and increased 48% compared with
the first quarter of 2011. Excluding legal and merger-related expenses,
non-compensation operating expenses were $81.9 million for the second
quarter of 2011, a 12% increase compared with the second quarter of 2010
and consistent with the first quarter of 2011. The increase in
non-compensation operating expenses from the comparable period in 2010 is
primarily due to increased variable expenses associated with revenue
growth and an increase in expenses as a result of the merger with TWPG.

Excluding legal and merger-related expenses, non-compensation operating
expenses as a percentage of net revenues for the quarter ended June 30,
2011 was 23%(4) compared with 22%(4) in the second quarter of 2010 and
22%(4) in the first quarter of 2011.

Provision for Income Taxes

The effective income tax rate for the quarter ended June 30, 2011 was 12%
compared with 41% for the comparable period in 2010 and 38% for the first
quarter of 2011.

Statement of Financial Condition (Unaudited)

Total assets increased 34% to $4.5 billion as of June 30, 2011 from $3.4
billion as of June 30, 2010. The increase is primarily attributable to
growth of the company's bank subsidiary, which has grown its balance
sheet to $1.8 billion as of June 30, 2011 from $1.4 billion as of June
30, 2010. As of June 30, 2011, Stifel Bank's investment portfolio of $1.1
billion has increased 45% from June 30, 2010, with over 75% of the
investment portfolio is comprised of agency mortgage-backed securities.
The increase in total assets is also attributable to the assets acquired
in the merger with TWPG. In addition to the net assets acquired in the
merger with TWPG, the company recorded goodwill and intangible assets of
$153.1 million. The company's broker-dealer subsidiary's gross assets and
liabilities, including trading inventory, stock loan/borrow, receivables
and payables from/to brokers, dealers and clearing organizations and
clients, fluctuate with business levels and overall market conditions.

Total stockholders' equity as of June 30, 2011 increased $369.4 million,
or 40%, to $1.3 billion from $927.1 million as of June 30, 2010. The
increase is primarily attributable to the issuance of stock upon the
completion of the merger with TWPG and the cumulative impact of the
previously announced modification of the deferred compensation plan of
$73.9 million after-tax, offset by the repurchase of $71.2 million, or
2.4 million shares(5), of the company's common stock pursuant to existing
Board repurchase authorizations since June 30, 2010. Book value per share
was $24.50 at June 30, 2011.

As of June 30, 2011, the company reported total securities owned and
investments at fair value of $1.9 billion, which included securities
categorized as Level 3 of $175.7 million. The company's Level 3 assets
include auction rate securities with a fair value of $118.4 million as of
June 30, 2011.

Non-GAAP Financial Measures

The company utilized non-GAAP calculations of presented net revenues,
compensation and benefits, non-compensation operating expenses, income
before income taxes, provision for income taxes, net income, compensation
and non-compensation operating expense ratios, pre-tax margin and diluted
earnings per share as an additional measure to aid in understanding and
analyzing the company's financial results for the three and six months
ended June 30, 2011 and 2010 and the three months ended March 31, 2011.
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 periods 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. These non-GAAP amounts exclude litigation-related
expenses associated with the civil lawsuit and related regulatory
investigation in connection with the ongoing matter with five
Southeastern Wisconsin school districts and certain compensation and
non-compensation operating expenses associated with the merger of TWPG.

A limitation of utilizing these non-GAAP measures of net revenues,
compensation and benefits, non-compensation operating expenses, income
before income taxes, provision for income taxes, net income, compensation
and non-compensation operating expenses ratios, pre-tax margin and
diluted earnings per share is that the GAAP accounting effects of these
merger-related 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 of net revenues, compensation and benefits,
non-compensation operating expenses, income before income taxes,
provision for income taxes, net income, compensation and non-compensation
operating expense ratios, pre-tax margin and diluted earnings per share
and the same respective non-GAAP measures of the company's financial
performance should be considered together.

The following tables provide details with respect to reconciling net
revenues, compensation and benefits, non-compensation operating expenses,
income before income taxes, provision for income taxes, net income,
compensation and benefits and non-compensation operating expense ratios,
pre-tax margin and diluted earnings per share on a GAAP basis for the
three and six months ended June 30, 2011 and 2010 and the three months
ended March 31, 2011 to the aforementioned expenses on a non-GAAP basis
for the same periods.

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Reconciliation of GAAP to Non-GAAP Earnings (Unaudited)
(in thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2011 2011
---------------------------- ----------------------------
Non-core Non-core
GAAP (6) Non-GAAP GAAP (6) Non-GAAP
-------- -------- -------- -------- -------- --------

Net revenues $358,857 $ 106 $358,963 $725,470 $ 112 $725,582

Non-interest
expenses:
Compensation
and benefits 229,939 (1,966) 227,973 461,105 (1,722) 459,383
Non-
compensation
operating
expenses 125,043 (43,109) 81,934 209,806 (45,814) 163,992
-------- -------- -------- -------- -------- --------
Total non-
interest
expenses 354,982 (45,075) 309,907 670,911 (47,536) 623,375
-------- -------- -------- -------- -------- --------
Income before
income taxes 3,875 45,181 49,056 54,559 47,648 102,207
Provision for
income taxes 459 17,281 17,740 19,745 18,220 37,965
-------- -------- -------- -------- -------- --------
Net income $ 3,416 $ 27,900 $ 31,316 $ 34,814 $ 29,428 $ 64,242
======== ======== ======== ======== ======== ========

Earnings per
share:
Diluted $ 0.05 $ 0.50 $ 0.55 $ 1.02

As a percentage
of net
revenues:
Compensation
and benefits 64.1% 63.5% 63.6% 63.3%
Non-
compensation
operating
expenses 34.8% 22.8% 28.9% 22.6%
Income before
income taxes 1.1% 13.7% 7.5% 14.1%
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Reconciliation of GAAP to Non-GAAP Earnings (Unaudited)
(in thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2010 2010
---------------------------- ----------------------------
Non-core Non-core
GAAP (6) Non-GAAP GAAP (6) Non-GAAP
-------- -------- -------- -------- -------- --------

Net revenues $328,009 $ -- $328,009 $640,039 $ -- $640,039

Non-interest
expenses:
Compensation
and benefits 216,907 (3,119) 213,788 423,149 (3,119) 420,030
Non-
compensation
operating
expenses 75,157 (1,906) 73,251 141,380 (1,908) 139,472
-------- -------- -------- -------- -------- --------
Total non-
interest
expenses 292,064 (5,025) 287,039 564,529 (5,027) 559,502
-------- -------- -------- -------- -------- --------
Income before
income taxes 35,945 5,025 40,970 75,510 5,027 80,537
Provision for
income taxes 14,836 2,074 16,910 30,661 2,041 32,702
-------- -------- -------- -------- -------- --------
Net income $ 21,109 $ 2,951 $ 24,060 $ 44,849 $ 2,986 $ 47,835
======== ======== ======== ======== ======== ========

Earnings per
share: (7)
Diluted $ 0.40 $ 0.46 $ 0.85 $ 0.91

As a percentage
of net
revenues:
Compensation
and benefits 66.1% 65.2% 66.1% 65.6%
Non-
compensation
operating
expenses 22.9% 22.3% 22.1% 21.8%
Income before
income taxes 11.0% 12.5% 11.8% 12.6%
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Reconciliation of GAAP to Non-GAAP Earnings (Unaudited)
(in thousands, except per share amounts)
Three Months Ended March 31, 2011
-----------------------------------
GAAP Non-core (8) Non-GAAP
--------- ------------- ---------

Net revenues $ 366,613 $ 6 $ 366,619

Non-interest expenses:
Compensation and benefits 231,166 244 231,410
Non-compensation operating expenses 84,763 (2,705) 82,058
--------- ------------- ---------
Total non-interest expenses 315,929 (2,461) 313,468
--------- ------------- ---------
Income before income taxes 50,684 2,467 53,151
Provision for income taxes 19,286 939 20,225
--------- ------------- ---------
Net income $ 31,398 $ 1,528 $ 32,926
========= ============= =========

Earnings per share:
Diluted $ 0.50 $ 0.52

As a percentage of net revenues:
Compensation and benefits 63.1% 63.1%
Non-compensation operating expenses 23.1% 22.4%
Income before income taxes 13.8% 14.5%
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Conference Call Information

Stifel Financial Corp. will host its second quarter 2011 financial
results conference call on Monday, August 8, 2011, at 5:00 p.m. Eastern
time. The conference call may include forward-looking statements.

All interested parties are invited to listen to the company's Chairman,
President, and CEO, Ronald J. Kruszewski, by dialing (888) 676-3684 and
referencing conference ID #87862307. 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 holding company
headquartered in St. Louis, Missouri that conducts its banking,
securities, and financial services business through several wholly owned
subsidiaries. Stifel clients are primarily served in the U.S. through 314
offices in 44 states, and the District of Columbia through Stifel,
Nicolaus & Company, Incorporated and Thomas Weisel Partners LLC, and in
Canada through Stifel Nicolaus Canada Inc. Clients in the United Kingdom
and Europe are served through offices of Stifel Nicolaus Limited and
Stifel Nicolaus Europe Limited (formerly Thomas Weisel Partners
International Limited). Each of the 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. 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.

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Summary Results of Operations (Unaudited)
Three Months Ended
----------------------------------------------
(in thousands, except per % %
share amounts) 6/30/11 6/30/10 Change 3/31/11 Change
-------- -------- -------- -------- ---------
Revenues:
Commissions $138,315 $103,634 33.5 $155,786 (11.2)
Principal transactions 79,741 122,923 (35.1) 92,859 (14.1)
Investment banking 64,418 41,252 56.2 41,418 55.5
Asset management 56,981 44,138 29.1 57,680 (1.2)
Other income 4,556 3,757 21.3 6,256 (27.2)
-------- -------- -------- -------- ---------
Operating revenues 344,011 315,704 9.0 353,999 (2.8)
Interest revenue 21,229 14,654 44.9 18,856 12.6
-------- -------- -------- -------- ---------
Total revenues 365,240 330,358 10.6 372,855 (2.0)
Interest expense 6,383 2,349 171.7 6,242 2.3
-------- -------- -------- -------- ---------
Net revenues 358,857 328,009 9.4 366,613 (2.1)
-------- -------- -------- -------- ---------
Non-interest expenses:
Compensation and benefits 229,939 216,907 6.0 231,166 (0.5)
Occupancy and equipment
rental 29,723 26,595 11.8 29,325 1.4
Communications and office
supplies 18,515 15,925 16.3 18,845 (1.8)
Commission and floor
brokerage 6,894 5,272 30.8 6,649 3.7
Other operating expenses 69,911 27,365 155.5 29,944 133.5
-------- -------- -------- -------- ---------
Total non-interest
expenses 354,982 292,064 21.5 315,929 12.4
-------- -------- -------- -------- ---------

Income before income taxes 3,875 35,945 (89.2) 50,684 (92.4)
Provision for income
taxes 459 14,836 (96.9) 19,286 (97.6)
-------- -------- -------- -------- ---------
Net income $ 3,416 $ 21,109 (83.8) $ 31,398 (89.1)
======== ======== ======== ======== =========

Earnings per share: (9)
Basic $ 0.06 $ 0.46 (87.0) $ 0.60 (90.0)
Diluted $ 0.05 $ 0.40 (87.5) $ 0.50 (90.0)

Weighted average number of
common shares outstanding:
(9)
Basic 52,932 46,257 14.4 52,534 0.8
Diluted 63,245 52,351 20.8 63,179 0.1
--------------------------- -------- -------- --------- -------- ----------

------------------------------------------------------
Summary Results of Operations (Unaudited)
Six Months Ended
--------------------------
(in thousands, except per %
share amounts) 6/30/11 6/30/10 Change
-------- -------- --------
Revenues:
Commissions $294,101 $208,669 40.9
Principal transactions 172,600 240,343 (28.2)
Investment banking 105,836 75,473 40.2
Asset management 114,661 85,241 34.5
Other income 10,812 5,702 89.6
-------- -------- --------
Operating revenues 698,010 615,428 13.4
Interest revenue 40,085 29,301 36.8
-------- -------- --------
Total revenues 738,095 644,729 14.5
Interest expense 12,625 4,690 169.2
-------- -------- --------
Net revenues 725,470 640,039 13.3
-------- -------- --------
Non-interest expenses:
Compensation and benefits 461,105 423,149 9.0
Occupancy and equipment
rental 59,048 51,453 14.8
Communications and office
supplies 37,360 30,343 23.1
Commission and floor
brokerage 13,543 11,016 22.9
Other operating expenses 99,855 48,568 105.6
-------- -------- --------
Total non-interest
expenses 670,911 564,529 18.8
-------- -------- --------

Income before income taxes 54,559 75,510 (27.7)
Provision for income
taxes 19,745 30,661 (35.6)
-------- -------- --------
Net income $ 34,814 $ 44,849 (22.4)
======== ======== ========

Earnings per share: (9)
Basic $ 0.66 $ 0.97 (32.0)
Diluted $ 0.55 $ 0.85 (35.3)

Weighted average number of
common shares outstanding:
(9)
Basic 52,734 46,168 14.2
Diluted 63,239 52,459 20.5
----------------------------------- -------- ---------

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(in thousands, except per share, employee and location amounts)
% %
6/30/11 6/30/10 Change 3/31/11 Change
------------ ----------- ------ ------------ ------
Statistical Information:
Book value per share
(9) $ 24.50 $ 20.01 22.4 $ 24.32 0.7
Financial advisors
(10) 1,958 1,916 2.2 1,947 0.6
Full-time associates 4,938 4,587 7.7 4,916 0.4
Locations 314 301 4.3 311 1.0
Total client assets $116,174,000 $92,423,000 25.7 $115,284,000 0.8
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Global Wealth Management Summary Results of Operations (Unaudited)
Three Months Ended
---------------------------------------------
% %
(in 000s) 6/30/11 6/30/10 Change 3/31/11 Change
-------- -------- -------- -------- --------
Revenues:
Commissions $ 93,593 $ 79,521 17.7 $101,762 (8.0)
Principal transactions 51,263 58,675 (12.6) 56,163 (8.7)
Asset management and
service fees 56,817 43,777 29.8 57,530 (1.2)
Net interest 13,401 11,506 16.5 11,169 20.0
Investment banking 6,411 5,494 16.7 6,312 1.6
Other income 4,160 967 330.2 5,510 (24.5)
-------- -------- -------- -------- --------
Net revenues 225,645 199,940 12.9 238,446 (5.4)
-------- -------- -------- -------- --------
Non-interest expenses:
Compensation and benefits 132,952 123,609 7.6 142,586 (6.8)
Non-compensation operating
expenses 37,267 35,890 3.8 34,388 8.4
-------- -------- -------- -------- --------
Total non-interest
expenses 170,219 159,499 6.7 176,974 (3.8)
-------- -------- -------- -------- --------
Income before income taxes $ 55,426 $ 40,441 37.1 $ 61,472 (9.8)
======== ======== ======== ======== ========

As a percentage of net
revenues:
Compensation and benefits 58.9 61.8 59.8
Non-compensation operating
expenses 16.5 18.0 14.4
Income before income taxes 24.6 20.2 25.8
----------------------------------------------------------------------------

-------------------------------------------------------
Global Wealth Management Summary Results of Operations
(Unaudited)
Six Months Ended
--------------------------
%
(in 000s) 6/30/11 6/30/10 Change
-------- -------- --------
Revenues:
Commissions $195,355 $159,108 22.8
Principal transactions 107,426 118,546 (9.4)
Asset management and
service fees 114,347 84,671 35.0
Net interest 24,570 22,540 9.0
Investment banking 12,723 10,796 17.8
Other income 9,670 3,700 161.4
-------- -------- --------
Net revenues 464,091 399,361 16.2
-------- -------- --------
Non-interest expenses:
Compensation and benefits 275,538 248,347 10.9
Non-compensation operating
expenses 71,655 71,415 0.3
-------- -------- --------
Total non-interest
expenses 347,193 319,762 8.6
-------- -------- --------
Income before income taxes $116,898 $ 79,599 46.9
======== ======== ========

As a percentage of net
revenues:
Compensation and benefits 59.4 62.2
Non-compensation operating
expenses 15.4 17.9
Income before income taxes 25.2 19.9
-------------------------------------------------------

----------------------------------------------------------------------------
Stifel Bank & Trust (Unaudited)
(in thousands)
----------------------------------------------------------------------------
6/30/11 6/30/10 % Change 3/31/11 % Change
---------- ---------- --------- ---------- ---------
Other information:
Assets $1,807,859 $1,392,828 29.8 $1,787,531 1.1
Investment
securities 1,074,114 740,121 45.1 1,190,776 (9.8)
Retained loans,
net 476,764 366,391 30.1 396,244 20.3
Loans held for
sale, net 55,110 60,154 (8.4) 30,866 78.5
Deposits 1,641,079 1,255,292 30.7 1,625,890 0.9

Allowance as a
percentage of
loans (11) 0.68% 0.53% 0.63%
Non-performing
assets as a
percentage of
total assets 0.10% 0.16% 0.12%
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Institutional Group Summary Results of Operations (Unaudited)
Three Months Ended
---------------------------------------------
% %
(in 000s) 6/30/11 6/30/10 Change 3/31/11 Change
-------- -------- -------- -------- --------
Revenues:
Commissions $ 44,721 $ 24,113 85.5 $ 54,025 (17.2)
Principal transactions 28,477 64,249 (55.7) 36,696 (22.4)

Capital raising 33,172 25,220 31.5 26,046 27.4
Advisory fees 24,835 10,539 135.6 9,060 174.1
-------- -------- -------- -------- --------
Investment banking 58,007 35,759 62.2 35,106 65.2
Other income (12) 1,710 481 255.5 1,167 46.5
-------- -------- -------- -------- --------
Net revenues 132,915 124,602 6.7 126,994 4.7
-------- -------- -------- -------- --------
Non-interest expenses:
Compensation and benefits 82,006 72,578 13.0 77,187 6.2
Non-compensation operating
expenses 28,958 21,255 36.2 28,414 1.9
-------- -------- -------- -------- --------
Total non-interest
expenses 110,964 93,833 18.3 105,601 5.1
-------- -------- -------- -------- --------
Income before income taxes $ 21,951 $ 30,769 (28.7) $ 21,393 2.6
======== ======== ======== ======== ========

As a percentage of net
revenues:
Compensation and benefits 61.7 58.2 60.8
Non-compensation operating
expenses 21.8 17.1 22.4
Income before income taxes 16.5 24.7 16.8
----------------------------------------------------------------------------

-------------------------------------------------------
Institutional Group Summary Results of Operations
(Unaudited)
Six Months Ended
--------------------------
%
(in 000s) 6/30/11 6/30/10 Change
-------- -------- --------
Revenues:
Commissions $ 98,746 $ 49,561 99.2
Principal transactions 65,173 121,798 (46.5)

Capital raising 59,218 45,224 30.9
Advisory fees 33,895 19,453 74.2
-------- -------- --------
Investment banking 93,113 64,677 44.0
Other income (12) 2,877 1,858 54.8
-------- -------- --------
Net revenues 259,909 237,894 9.3
-------- -------- --------
Non-interest expenses:
Compensation and benefits 159,193 138,882 14.6
Non-compensation operating
expenses 57,372 40,787 40.7
-------- -------- --------
Total non-interest
expenses 216,565 179,669 20.5
-------- -------- --------
Income before income taxes $ 43,344 $ 58,225 (25.6)
======== ======== ========

As a percentage of net
revenues:
Compensation and benefits 61.2 58.4
Non-compensation operating
expenses 22.1 17.1
Income before income taxes 16.7 24.5
-------------------------------------------------------

----------------------------------------------------------------------------
Institutional Group Brokerage & Investment Banking Revenues (Unaudited)
Three Months Ended
---------------------------------------------
(in 000s) 6/30/11 6/30/10 % Change 3/31/11 % Change
-------- -------- -------- -------- --------
Institutional brokerage:
Equity $ 41,695 $ 44,100 (5.5) $ 52,398 (20.4)
Fixed income 31,503 44,262 (28.8) 38,323 (17.8)
-------- -------- -------- -------- --------
Institutional brokerage 73,198 88,362 (17.2) 90,721 (19.3)
-------- -------- -------- -------- --------

Investment banking:
Capital raising:
Equity 27,999 20,809 34.5 23,005 21.7
Fixed income 5,173 4,411 17.3 3,041 70.1
-------- -------- -------- -------- --------
Capital raising 33,172 25,220 31.5 26,046 27.4
Advisory fees:
Equity 22,924 9,215 148.8 8,387 173.3
Fixed income 1,911 1,324 44.3 673 184.0
-------- -------- -------- -------- --------
Advisory fees 24,835 10,539 135.6 9,060 174.1
-------- -------- -------- -------- --------
Investment banking $ 58,007 $ 35,759 62.2 $ 35,106 65.2
----------------------------------------------------------------- ----------

-------------------------------------------------------
Institutional Group Brokerage & Investment Banking
Revenues (Unaudited)
Six Months Ended
--------------------------
(in 000s) 6/30/11 6/30/10 % Change
-------- -------- --------
Institutional brokerage:
Equity $ 94,093 $ 82,751 13.7
Fixed income 69,826 88,608 (21.2)
-------- -------- --------
Institutional brokerage 163,919 171,359 (4.3)
-------- -------- --------

Investment banking:
Capital raising:
Equity 51,004 34,897 46.2
Fixed income 8,214 10,327 (20.5)
-------- -------- --------
Capital raising 59,218 45,224 30.9
Advisory fees:
Equity 31,311 17,700 76.9
Fixed income 2,584 1,753 47.4
-------- -------- --------
Advisory fees 33,895 19,453 74.2
-------- -------- --------
Investment banking $ 93,113 $ 64,677 44.0
-------------------------------------------------------

(1) A reconciliation of the company's GAAP results to these non-GAAP
measures is discussed below under "Non-GAAP Financial Measures."

(2) Per share information for the three and six months ended June 30,
2010 has been adjusted to reflect the April 2011 three-for-two stock
split.

(3) A reconciliation of the company's GAAP results to these non-GAAP
measures is discussed below under "Non-GAAP Financial Measures."

(4) A reconciliation of the company's GAAP results to these non-GAAP
measures is discussed below under "Non-GAAP Financial Measures."

(5) Share information has been adjusted to reflect the April 2011
three-for-two stock split.

(6) Non-core items for the three and six months ended June 30, 2011
include litigation-related expenses associated with the civil lawsuit and
related regulatory investigation in connection with the ongoing matter
with five Southeastern Wisconsin school districts and certain
merger-related expenses related to the merger with TWPG. Non-core items
for the three and six months ended June 30, 2010 include certain
merger-related expenses related to the merger with TWPG.

(7) Per share information has been adjusted to reflect the April 2011
three-for-two stock split.

(8) Non-core items for the three months ended March 31, 2011 include
certain merger-related expenses related to the merger with TWPG.

(9) Per share and share information for the three and six months ended
June 30, 2010 has been adjusted to reflect the April 2011 three-for-two
stock split.

(10) Includes 160, 167 and 160 independent contractors at June 30, 2011
and 2010 and March 31, 2011, respectively.

(11) Excluding acquired loans of $140.6 million, $174.8 million and
$146.4 million, the allowance as a percentage of gross loans totaled
0.96%, 1.0% and 1.0% as of June 30, 2011 and 2010 and March 31, 2011,
respectively.

(12) Includes net interest and other income.

Investor Relations Contact
Sarah Anderson
(415) 364-2500
investorrelations@stifel.com

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