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Regulatory Capital Requirements | 6 Months Ended
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Jun. 30, 2018
Regulatory Capital Requirements [Abstract] |
Regulatory Capital Requirements | NOTE 16 – Regulatory Capital Requirements We operate in a highly regulated environment and are subject to capital requirements, which may limit distributions to our company from its subsidiaries. Distributions from our broker-dealer subsidiaries are subject to net capital rules. A broker-dealer that fails to comply with the SEC’s Uniform Net Capital Rule (Rule 15c3-1) may be subject to disciplinary actions by the SEC and self-regulatory organizations, such as FINRA, including censures, fines, suspension, or expulsion. Stifel has chosen to calculate its net capital under the alternative method, which prescribes that their net capital shall not be less than the greater of $1.0 million or two percent of aggregate debit balances (primarily receivables from customers) computed in accordance with the SEC’s Customer Protection Rule (Rule 15c3-3). Our other broker-dealer subsidiaries calculate their net capital under the aggregate indebtedness method, whereby their aggregate indebtedness may not be greater than fifteen times their net capital (as defined). At June 30, 2018, Stifel had net capital of $302.1 million, which was 17.4% of aggregate debit items and $267.4 million in excess of its minimum required net capital. At June 30, 2018, all of our other broker-dealer subsidiaries’ net capital exceeded the minimum net capital required under the SEC rule. Our international subsidiary is subject to the regulatory supervision and requirements of the Financial Conduct Authority (“FCA”) in the United Kingdom. At June 30, 2018, our international subsidiary’s capital and reserves were in excess of the financial resources requirement under the rules of the FCA. Our company, as a bank holding company, and Stifel Bank are subject to various regulatory capital requirements administered by the Federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our company’s and Stifel Bank’s financial results. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, our company and Stifel Bank must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Our company’s and Stifel Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Our company and Stifel Bank are subject to Basel III. Under the Basel III rules, the quantity and quality of regulatory capital increased, a capital conservation buffer was established, selected changes were made to the calculation of risk-weighted assets, and a new ratio, common equity Tier 1 was introduced, all of which are applicable to both our company and Stifel Bank. Various aspects of Basel III will be subject to multi-year transition periods through December 31, 2018. Our company and Stifel Bank are required to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), Tier 1 capital to average assets (as defined), and under rules defined in Basel III, Common equity Tier 1 capital to risk-weighted assets. Our company and Stifel Bank each calculate these ratios in order to assess compliance with both regulatory requirements and their internal capital policies. At current capital levels, our company and Stifel Bank are each categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” our company and Stifel Bank must maintain total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the tables below (in thousands, except ratios).
Stifel Financial Corp. – Federal Reserve Capital Amounts |
June 30, 2018 |
|  | Actual |  |  | For Capital Adequacy Purposes |  |  | To Be Well Capitalized Under Prompt Corrective Action Provisions |
|  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Common equity tier 1 capital |  | $ | 1,762,240 |  |  |  | 16.4 | % |  | $ | 483,533 |  |  |  | 4.5 | % |  | $ | 698,436 |  |  |  | 6.5 | %
Tier 1 capital |  |  | 1,977,651 |  |  |  | 18.4 | % |  |  | 644,710 |  |  |  | 6.0 | % |  |  | 859,614 |  |  |  | 8.0 | %
Total capital |  |  | 2,051,426 |  |  |  | 19.1 | % |  |  | 859,614 |  |  |  | 8.0 | % |  |  | 1,074,517 |  |  |  | 10.0 | %
Tier 1 leverage |  |  | 1,977,651 |  |  |  | 9.5 | % |  |  | 831,539 |  |  |  | 4.0 | % |  |  | 1,039,424 |  |  |  | 5.0 | %
Stifel Bank – Federal Reserve Capital Amounts |
June 30, 2018 |
|  | Actual |  |  | For Capital Adequacy Purposes |  |  | To Be Well Capitalized Under Prompt Corrective Action Provisions |
|  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Common equity tier 1 capital |  | $ | 1,111,891 |  |  |  | 14.4 | % |  | $ | 346,438 |  |  |  | 4.5 | % |  | $ | 500,410 |  |  |  | 6.5 | %
Tier 1 capital |  |  | 1,111,891 |  |  |  | 14.4 | % |  |  | 461,917 |  |  |  | 6.0 | % |  |  | 615,890 |  |  |  | 8.0 | %
Total capital |  |  | 1,185,666 |  |  |  | 15.4 | % |  |  | 615,890 |  |  |  | 8.0 | % |  |  | 769,862 |  |  |  | 10.0 | %
Tier 1 leverage |  |  | 1,111,891 |  |  |  | 7.2 | % |  |  | 620,834 |  |  |  | 4.0 | % |  |  | 776,042 |  |  |  | 5.0 | %

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- Definition Tabular disclosure of computation of net capital under the SEC Regulations which may include a reconciliation (including appropriate explanations) if material differences exist between the computations made by the independent auditor based on the audited financial statements and the broker-dealer's original unaudited Part II or IIA filing, a statement that a reconciliation is not necessary if no material differences exist between the computations made by the independent auditor based on the audited financial statements and the broker-dealer's unaudited Part II or IIA filing, when different, total assets and total liabilities, as reported in the statement of financial condition, are reconciled to the total current assets and total liabilities, respectively, as reported in the statement of computation of minimum net capital. Disclosure may also include stockholder's equity, stockholders' equity not allowable for net capital, stockholders' equity qualified for net capital, subordinated borrowings allowable in computation of net capital, other deductions or allowable credits and total capital and allowable subordinated borrowings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher SEC -Name Rule 15c3-1 -Number 240 -Section 15c3-1 + Details
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