EX-99.1 2 sf-ex991_7.htm EX-99.1

Exhibit 99.1

April 30, 2019

FOR IMMEDIATE RELEASE

Media Contact: Neil Shapiro (212) 271-3447

Investor Contact: Joel Jeffrey (212) 271-3610

www.stifel.com/investor-relations

STIFEL REPORTS FIRST QUARTER 2019 FINANCIAL RESULTS

| • | Net revenues of $770.4 million, increased 2.7% compared with the year-ago quarter.

| • | Record net revenues and pre-tax operating income in Global Wealth Management.

| • | Net income available to common shareholders of $96.9 million, or $1.22 per diluted common share.

| • | Non-GAAP net income available to common shareholders of $104.5 million, or $1.32 per diluted common share.

| • | Record client assets of $300.0 billion, increased 9.2% compared with the year-ago quarter and 11.2% sequentially.

| • | Bank net interest margin of 3.17% increased 28 basis points sequentially.

| • | Non-GAAP return on tangible common equity of 22.3%.

| • | Increase in quarterly dividend by 25% to $0.15 per common share.

| • | Repurchased approximately 1.0 million shares of the Company’s common stock at an average price of $53.25.

ST. LOUIS, MO – Stifel Financial Corp. (NYSE: SF) today reported net income available to common shareholders of $96.9 million, or $1.22 per diluted common share on net revenues of $770.4 million for the three months ended March 31, 2019, compared with net income available to common shareholders of $86.4 million, or $1.06 per diluted common share, on net revenues of $750.4 million for the first quarter of 2018.

For the three months ended March 31, 2019, the Company reported non-GAAP net income available to common shareholders of $104.5 million, or $1.32 per diluted common share. The Company’s reported GAAP net income for the three months ended March 31, 2019 was primarily impacted by merger-related expenses. Details discussed below and in the “Non-GAAP Financial Matters” section.

Chairman’s Comments

“Stifel generated record first quarter results highlighting the diversity of our business model. Net revenue of $770 million increased 3% from last year’s first quarter record and we achieved non-GAAP pre-tax margins of 19% and return on tangible equity of 22%. Our Global Wealth Management segment posted record net revenues and record pre-tax income, overcoming the expected decline in asset management revenue resulting from the market sell off in the fourth quarter of 2018. Our Institutional Group generated strong advisory, public finance, and fixed income brokerage revenue that helped to minimize the impact of the government shutdown on our equities business. As we look forward, we are optimistic about our business prospects for the remainder of 2019 and beyond,” stated Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel.

1

Financial Highlights (Unaudited) |  | Three Months Ended |
($ in 000s, except per share data) |  | GAAP 3/31/19 |  |  | GAAP 3/31/18 |  |  | % Change |  |  | GAAP 12/31/18 |  |  | % Change |  |  |  | Non-GAAP (1) 3/31/19 |  |  | Non-GAAP (1) 3/31/18 |  |  | % Change |
Net revenues |  | $ | 770,420 |  |  | $ | 750,358 |  |  |  | 2.7 |  |  | $ | 793,449 |  |  |  | (2.9 | ) |  |  | $ | 770,420 |  |  | $ | 750,549 |  |  |  | 2.6 |
Net income applicable to Stifel Financial Corp. |  | $ | 99,207 |  |  | $ | 88,761 |  |  |  | 11.8 |  |  | $ | 114,062 |  |  |  | (13.0 | ) |  |  | $ | 106,864 |  |  | $ | 96,147 |  |  |  | 11.1 |
Preferred dividend |  |  | 2,344 |  |  |  | 2,344 |  |  |  | — |  |  |  | 2,344 |  |  |  | — |  |  |  |  | 2,344 |  |  |  | 2,344 |  |  |  | — |
Net income available to common shareholders |  | $ | 96,863 |  |  | $ | 86,417 |  |  |  | 12.1 |  |  | $ | 111,718 |  |  |  | (13.3 | ) |  |  | $ | 104,520 |  |  | $ | 93,803 |  |  |  | 11.4 |
Earnings per diluted common share |  | $ | 1.25 |  |  | $ | 1.09 |  |  |  | 14.7 |  |  | $ | 1.41 |  |  |  | (11.3 | ) |  |  | $ | 1.35 |  |  | $ | 1.18 |  |  |  | 14.4 |
Earnings per diluted common share available to common shareholders |  | $ | 1.22 |  |  | $ | 1.06 |  |  |  | 15.1 |  |  | $ | 1.38 |  |  |  | (11.6 | ) |  |  | $ | 1.32 |  |  | $ | 1.15 |  |  |  | 14.8 |
Compensation ratio |  |  | 59.5 | % |  |  | 61.0 | % |  |  |  |  |  |  | 56.5 | % |  |  |  |  |  |  |  | 59.0 | % |  |  | 60.5 | % |  |  |  |
Non-compensation ratio |  |  | 22.6 | % |  |  | 23.0 | % |  |  |  |  |  |  | 23.8 | % |  |  |  |  |  |  |  | 22.0 | % |  |  | 22.2 | % |  |  |  |
Pre-tax operating margin (2) |  |  | 17.9 | % |  |  | 16.0 | % |  |  |  |  |  |  | 19.7 | % |  |  |  |  |  |  |  | 19.0 | % |  |  | 17.3 | % |  |  |  |

Brokerage Revenues

Brokerage revenues, defined as commissions and principal transactions, were $259.5 million, a 1.5% decrease compared with the first quarter of 2018 and a 4.4% increase compared with the fourth quarter of 2018.

|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  | 3/31/18 |  |  | % Change |  |  | 12/31/18 |  |  | % Change |
Global Wealth Management |  | $ | 153,194 |  |  | $ | 162,734 |  |  |  | (5.9 | ) |  | $ | 157,331 |  |  |  | (2.6 | )
Institutional brokerage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity capital markets |  |  | 38,881 |  |  |  | 48,085 |  |  |  | (19.1 | ) |  |  | 48,705 |  |  |  | (20.2 | )
Fixed income capital markets |  |  | 67,406 |  |  |  | 52,738 |  |  |  | 27.8 |  |  |  | 42,463 |  |  |  | 58.7 |
Total institutional brokerage |  |  | 106,287 |  |  |  | 100,823 |  |  |  | 5.4 |  |  |  | 91,168 |  |  |  | 16.6 |
Total brokerage revenues |  | $ | 259,481 |  |  | $ | 263,557 |  |  |  | (1.5 | ) |  | $ | 248,499 |  |  |  | 4.4 |

| • | Global Wealth Management brokerage revenues were $153.2 million, a 5.9% decrease compared with the first quarter of 2018 and a 2.6% decrease compared with the fourth quarter of 2018.

| • | Institutional equity brokerage revenues were $38.9 million, a 19.1% decrease compared with the first quarter of 2018 and a 20.2% decrease compared with the fourth quarter of 2018.

| • | Institutional fixed income brokerage revenues were $67.4 million, a 27.8% increase compared with the first quarter of 2018 and a 58.7% increase compared with the fourth quarter of 2018.

Investment Banking Revenues

Investment banking revenues were $161.8 million, an 8.2% decrease compared with the first quarter of 2018 and a 19.6% decrease compared with the fourth quarter of 2018.

|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  |  |  | 3/31/18 |  |  |  |  | % Change |  |  | 12/31/18 |  |  | % Change |
Capital raising: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 8,223 |  |  |  |  | $ | 7,688 |  |  |  |  |  | 7.0 |  |  | $ | 7,915 |  |  |  | 3.9 |
Equity capital markets |  |  | 27,859 |  |  |  |  |  | 52,707 |  |  |  |  |  | (47.1 | ) |  |  | 51,839 |  |  |  | (46.3 | )
Fixed income capital markets |  |  | 20,863 |  |  |  |  |  | 18,294 |  |  |  |  |  | 14.0 |  |  |  | 30,390 |  |  |  | (31.3 | )
Institutional Group |  |  | 48,722 |  |  |  |  |  | 71,001 |  |  |  |  |  | (31.4 | ) |  |  | 82,229 |  |  |  | (40.7 | )
Total capital raising (3) |  |  | 56,945 |  |  |  |  |  | 78,689 |  |  |  |  |  | (27.6 | ) |  |  | 90,144 |  |  |  | (36.8 | )
Advisory fees (3) |  |  | 104,895 |  |  |  |  |  | 97,673 |  |  |  |  |  | 7.4 |  |  |  | 111,089 |  |  |  | (5.6 | )
Total investment banking |  | $ | 161,840 |  |  |  |  | $ | 176,362 |  |  |  |  |  | (8.2 | ) |  | $ | 201,233 |  |  |  | (19.6 | )

| • | Global Wealth Management capital raising revenues were $8.2 million, a 7.0% increase compared with the first quarter of 2018 and a 3.9% increase compared with the fourth quarter of 2018.

| • | Institutional equity capital raising revenues were $27.9 million, a 47.1% decrease compared with the first quarter of 2018 and a 46.3% decrease compared with the fourth quarter of 2018.

| • | Institutional fixed income capital raising revenues were $20.9 million, a 14.0% increase compared with the first quarter of 2018 and a 31.3% decrease compared with the fourth quarter of 2018.

2

| • | Advisory fee revenues were $104.9 million, a 7.4% increase compared with the first quarter of 2018 and a 5.6% decrease compared with the fourth quarter of 2018.

Asset Management and Service Fee Revenues

Asset management and service fee revenues were $195.3 million, a 0.3% decrease compared with the first quarter of 2018 and a 7.0% decrease compared with the fourth quarter of 2018. See Asset Management and Service Fee Break-down table.

Net Interest Income

Record net interest income of $141.7 million, a 27.3% increase compared with the first quarter of 2018 and an 11.8% increase compared with the fourth quarter of 2018. The increase is primarily due to growth of interest-earning assets and interest-bearing liabilities, as well as higher interest rates.

| • | Interest income was $191.1 million, a 38.7% increase compared with the first quarter of 2018 and a 3.5% increase compared with the fourth quarter of 2018.

| • | Interest expense was $49.4 million, an 86.9% increase compared with the first quarter of 2018 and a 14.6% decrease compared with the fourth quarter of 2018.

3

Compensation and Benefits Expenses

For the quarter ended March 31, 2019, compensation and benefits expenses were $458.1 million, which included $3.9 million of merger-related and severance expenses (non-GAAP adjustments). This compares with $457.9 million in the first quarter of 2018 and $448.4 million in the fourth quarter of 2018. Excluding the non-GAAP adjustments, compensation and benefits as a percentage of net revenues were 59.0% in the first quarter of 2019 (non-GAAP measure).

|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  | 3/31/18 |
GAAP compensation and benefits |  | $ | 458,114 |  |  | $ | 457,893 |
As a percentage of net revenues |  |  | 59.5 | % |  |  | 61.0 | %
Non-GAAP adjustments: (4) |  |  |  |  |  |  |  |
Merger-related and severance |  |  | (3,932 | ) |  |  | (3,739 | )
Non-GAAP compensation and benefits |  | $ | 454,182 |  |  | $ | 454,154 |
As a percentage of non-GAAP net revenues |  |  | 59.0 | % |  |  | 60.5 | %

Non-Compensation Operating Expenses

For the quarter ended March 31, 2019, non-compensation operating expenses were $174.5 million, which included $4.3 million of merger-related expenses (non-GAAP adjustments). This compares with $172.9 million in the first quarter of 2018 and $189.1 million in the fourth quarter of 2018. Excluding the non-GAAP adjustments, non-compensation operating expenses as a percentage of net revenues for the quarter ended March 31, 2019 were 22.0% (non-GAAP measure).

|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  | 3/31/18 |
GAAP non-compensation expenses |  | $ | 174,497 |  |  | $ | 172,911 |
As a percentage of net revenues |  |  | 22.6 | % |  |  | 23.0 | %
Non-GAAP adjustments: (4) |  |  |  |  |  |  |  |
Merger-related |  |  | (4,259 | ) |  |  | (6,023 | )
Non-GAAP non-compensation expenses |  | $ | 170,238 |  |  | $ | 166,888 |
As a percentage of non-GAAP net revenues |  |  | 22.0 | % |  |  | 22.2 | %

Provision for Income Taxes

The GAAP effective income tax rate for the quarter ended March 31, 2019 was 27.8%. This compares with an effective income tax rate of 25.8% for the first quarter of 2018 and 26.9% for the fourth quarter of 2018. The adjusted non-GAAP effective income tax rate for the quarter ended March 31, 2019 was 26.6%.

|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  | 3/31/18 |
GAAP provision for income taxes |  | $ | 38,370 |  |  | $ | 30,793 |
GAAP effective tax rate |  |  | 27.8 | % |  |  | 25.8 | %
Non-GAAP adjustments: (4) |  |  |  |  |  |  |  |
Merger-related and severance |  |  | 2,203 |  |  |  | 2,712 |
Other |  |  | (1,669 | ) |  |  | (145 | )
|  |  | 534 |  |  |  | 2,567 |
Non-GAAP provision for income taxes |  | $ | 38,904 |  |  | $ | 33,360 |
Non-GAAP effective tax rate |  |  | 26.6 | % |  |  | 25.8 | %

4

Conference Call Information

Stifel Financial Corp. will host its first quarter 2019 financial results conference call on Tuesday, April 30, 2019, 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 (877) 876-9938 and referencing conference ID #6179475. 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; and Century Securities Associates, Inc., 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 and Stifel Bank offer 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.

5

Summary Results of Operations (Unaudited) |
|  | Three Months Ended |
($ in 000s, except per share amounts) |  | 3/31/19 |  |  |  |  | 3/31/18 |  |  |  |  | % Change |  |  |  |  | 12/31/18 |  |  |  |  | % Change |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 155,449 |  |  |  |  | $ | 165,775 |  |  |  |  |  | (6.2 | ) |  |  |  | $ | 167,039 |  |  |  |  |  | (6.9 | )
Principal transactions |  |  | 104,032 |  |  |  |  |  | 97,782 |  |  |  |  |  | 6.4 |  |  |  |  |  | 81,460 |  |  |  |  |  | 27.7 |
Brokerage Revenues |  |  | 259,481 |  |  |  |  |  | 263,557 |  |  |  |  |  | (1.5 | ) |  |  |  |  | 248,499 |  |  |  |  |  | 4.4 |
Capital raising |  |  | 56,950 |  |  |  |  |  | 78,690 |  |  |  |  |  | (27.6 | ) |  |  |  |  | 90,144 |  |  |  |  |  | (36.8 | )
Advisory fees |  |  | 104,890 |  |  |  |  |  | 97,672 |  |  |  |  |  | 7.4 |  |  |  |  |  | 111,089 |  |  |  |  |  | (5.6 | )
Investment banking |  |  | 161,840 |  |  |  |  |  | 176,362 |  |  |  |  |  | (8.2 | ) |  |  |  |  | 201,233 |  |  |  |  |  | (19.6 | )
Asset management and service fees |  |  | 195,267 |  |  |  |  |  | 195,801 |  |  |  |  |  | (0.3 | ) |  |  |  |  | 210,063 |  |  |  |  |  | (7.0 | )
Other income |  |  | 12,209 |  |  |  |  |  | 3,357 |  |  |  |  |  | 263.7 |  |  |  |  |  | 6,996 |  |  |  |  |  | 74.5 |
Operating Revenues |  |  | 628,797 |  |  |  |  |  | 639,077 |  |  |  |  |  | (1.6 | ) |  |  |  |  | 666,791 |  |  |  |  |  | (5.7 | )
Interest Revenue |  |  | 191,071 |  |  |  |  |  | 137,734 |  |  |  |  |  | 38.7 |  |  |  |  |  | 184,534 |  |  |  |  |  | 3.5 |
Total Revenues |  |  | 819,868 |  |  |  |  |  | 776,811 |  |  |  |  |  | 5.5 |  |  |  |  |  | 851,325 |  |  |  |  |  | (3.7 | )
Interest Expense |  |  | 49,448 |  |  |  |  |  | 26,453 |  |  |  |  |  | 86.9 |  |  |  |  |  | 57,876 |  |  |  |  |  | (14.6 | )
Net Revenues |  |  | 770,420 |  |  |  |  |  | 750,358 |  |  |  |  |  | 2.7 |  |  |  |  |  | 793,449 |  |  |  |  |  | (2.9 | )
Non-interest Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 458,114 |  |  |  |  |  | 457,893 |  |  |  |  |  | 0.0 |  |  |  |  |  | 448,375 |  |  |  |  |  | 2.2 |
Occupancy and equipment rental |  |  | 58,862 |  |  |  |  |  | 57,595 |  |  |  |  |  | 2.2 |  |  |  |  |  | 57,158 |  |  |  |  |  | 3.0 |
Communication and office supplies |  |  | 35,697 |  |  |  |  |  | 33,499 |  |  |  |  |  | 6.6 |  |  |  |  |  | 36,786 |  |  |  |  |  | (3.0 | )
Commissions and floor brokerage |  |  | 10,956 |  |  |  |  |  | 9,365 |  |  |  |  |  | 17.0 |  |  |  |  |  | 11,169 |  |  |  |  |  | (1.9 | )
Provision for loan losses |  |  | 2,283 |  |  |  |  |  | 2,043 |  |  |  |  |  | 11.7 |  |  |  |  |  | 5,122 |  |  |  |  |  | (55.4 | )
Other operating expenses |  |  | 66,699 |  |  |  |  |  | 70,409 |  |  |  |  |  | (5.3 | ) |  |  |  |  | 78,908 |  |  |  |  |  | (15.5 | )
Total non-interest expenses |  |  | 632,611 |  |  |  |  |  | 630,804 |  |  |  |  |  | 0.3 |  |  |  |  |  | 637,518 |  |  |  |  |  | (0.8 | )
Income before income tax expense |  |  | 137,809 |  |  |  |  |  | 119,554 |  |  |  |  |  | 15.3 |  |  |  |  |  | 155,931 |  |  |  |  |  | (11.6 | )
Provision for income taxes |  |  | 38,370 |  |  |  |  |  | 30,793 |  |  |  |  |  | 24.6 |  |  |  |  |  | 41,869 |  |  |  |  |  | (8.4 | )
Net income |  |  | 99,439 |  |  |  |  |  | 88,761 |  |  |  |  |  | 12.0 |  |  |  |  |  | 114,062 |  |  |  |  |  | (12.8 | )
Net income applicable to non-controlling interests |  |  | 232 |  |  |  |  |  | — |  |  |  |  | n/m |  |  |  |  |  | — |  |  |  |  | n/m |
Net income applicable to Stifel Financial Corp. |  |  | 99,207 |  |  |  |  |  | 88,761 |  |  |  |  |  | 11.8 |  |  |  |  |  | 114,062 |  |  |  |  |  | (13.0 | )
Preferred dividends |  |  | 2,344 |  |  |  |  |  | 2,344 |  |  |  |  |  | — |  |  |  |  |  | 2,344 |  |  |  |  |  | — |
Net income available to common shareholders |  | $ | 96,863 |  |  |  |  | $ | 86,417 |  |  |  |  |  | 12.1 |  |  |  |  | $ | 111,718 |  |  |  |  |  | (13.3 | )
Earnings per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.35 |  |  |  |  | $ | 1.20 |  |  |  |  |  | 12.5 |  |  |  |  | $ | 1.56 |  |  |  |  |  | (13.5 | )
Diluted |  | $ | 1.22 |  |  |  |  | $ | 1.06 |  |  |  |  |  | 15.1 |  |  |  |  | $ | 1.38 |  |  |  |  |  | (11.6 | )
Cash dividends declared per common share |  | $ | 0.15 |  |  |  |  | $ | 0.12 |  |  |  |  |  | 25.0 |  |  |  |  | $ | 0.12 |  |  |  |  |  | 25.0 |
Weighted average number of common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 71,700 |  |  |  |  |  | 71,999 |  |  |  |  |  | (0.4 | ) |  |  |  |  | 71,666 |  |  |  |  |  | 0.0 |
Diluted |  |  | 79,210 |  |  |  |  |  | 81,789 |  |  |  |  |  | (3.2 | ) |  |  |  |  | 80,706 |  |  |  |  |  | (1.9 | )

6

Summary Segment Results (Unaudited) |
|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  | 3/31/18 |  |  |  |  | % Change |  |  | 12/31/18 |  |  | % Change |
Net revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 510,610 |  |  | $ | 485,575 |  |  |  |  |  | 5.2 |  |  | $ | 509,256 |  |  |  | 0.3 |
Institutional Group |  |  | 261,286 |  |  |  | 270,078 |  |  |  |  |  | (3.3 | ) |  |  | 286,640 |  |  |  | (8.8 | )
Other |  |  | (1,476 | ) |  |  | (5,295 | ) |  |  |  |  | 72.1 |  |  |  | (2,447 | ) |  |  | 39.7 |
Total net revenues |  | $ | 770,420 |  |  | $ | 750,358 |  |  |  |  |  | 2.7 |  |  | $ | 793,449 |  |  |  | (2.9 | )
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 316,120 |  |  | $ | 308,804 |  |  |  |  |  | 2.4 |  |  | $ | 320,296 |  |  |  | (1.3 | )
Institutional Group |  |  | 229,082 |  |  |  | 225,508 |  |  |  |  |  | 1.6 |  |  |  | 244,488 |  |  |  | (6.3 | )
Other |  |  | 87,409 |  |  |  | 96,492 |  |  |  |  |  | (9.4 | ) |  |  | 72,734 |  |  |  | 20.2 |
Total operating expenses |  | $ | 632,611 |  |  | $ | 630,804 |  |  |  |  |  | 0.3 |  |  | $ | 637,518 |  |  |  | (0.8 | )
Operating contribution: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 194,490 |  |  | $ | 176,771 |  |  |  |  |  | 10.0 |  |  | $ | 188,960 |  |  |  | 2.9 |
Institutional Group |  |  | 32,204 |  |  |  | 44,570 |  |  |  |  |  | (27.7 | ) |  |  | 42,152 |  |  |  | (23.6 | )
Other |  |  | (88,885 | ) |  |  | (101,787 | ) |  |  |  |  | (12.7 | ) |  |  | (75,181 | ) |  |  | 18.2 |
Income before income taxes |  | $ | 137,809 |  |  | $ | 119,554 |  |  |  |  |  | 15.3 |  |  | $ | 155,931 |  |  |  | (11.6 | )
As a percentage of net revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  |  | 48.5 |  |  |  | 49.8 |  |  |  |  |  |  |  |  |  | 48.5 |  |  |  |  |
Institutional Group |  |  | 61.0 |  |  |  | 59.0 |  |  |  |  |  |  |  |  |  | 62.0 |  |  |  |  |
Non-comp. operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  |  | 13.4 |  |  |  | 13.8 |  |  |  |  |  |  |  |  |  | 14.4 |  |  |  |  |
Institutional Group |  |  | 26.7 |  |  |  | 24.5 |  |  |  |  |  |  |  |  |  | 23.3 |  |  |  |  |
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  |  | 38.1 |  |  |  | 36.4 |  |  |  |  |  |  |  |  |  | 37.1 |  |  |  |  |
Institutional Group |  |  | 12.3 |  |  |  | 16.5 |  |  |  |  |  |  |  |  |  | 14.7 |  |  |  |  |
Consolidated pre-tax margin |  |  | 17.9 |  |  |  | 16.0 |  |  |  |  |  |  |  |  |  | 19.7 |  |  |  |  |

7

Financial metrics (unaudited): | As of and For the Three Months Ended |
($ in 000s, except percentages and per share amounts) | 3/31/19 |  | 3/31/18 |  | 12/31/18 |
Total assets | $ | 24,183,559 |  | $ | 21,715,342 |  | $ | 24,519,598 |
Total Stifel Financial shareholders' equity | $ | 3,376,623 |  | $ | 2,917,540 |  | $ | 3,167,593 |
Book value per common share (5) | $ | 43.18 |  | $ | 38.49 |  | $ | 42.62 |
Return on common equity (6) |  | 12.7 | % |  | 12.7 | % |  | 14.9 | %
Non-GAAP return on common equity (1) (6) |  | 13.7 | % |  | 13.7 | % |  | 16.9 | %
Return on tangible common equity (7) |  | 20.6 | % |  | 21.0 | % |  | 24.1 | %
Non-GAAP return on tangible common equity (1) (7) |  | 22.3 | % |  | 22.8 | % |  | 27.3 | %
Tier 1 common capital ratio (8) |  | 15.9 | % |  | 16.6 | % |  | 16.8 | %
Tier 1 risk based capital ratio (8) |  | 18.5 | % |  | 18.7 | % |  | 18.2 | %
Tier 1 leverage capital ratio (8) |  | 9.8 | % |  | 9.6 | % |  | 9.3 | %
Pre-tax margin on net revenues |  | 17.9 | % |  | 16.0 | % |  | 19.7 | %
Non-GAAP pre-tax margin on net revenues (1) |  | 19.0 | % |  | 17.3 | % |  | 21.9 | %
Effective tax rate |  | 27.8 | % |  | 25.8 | % |  | 26.9 | %
Non-GAAP effective tax rate (1) |  | 26.6 | % |  | 25.8 | % |  | 25.6 | %

Statistical Information (unaudited): |  | As of and For the Three Months Ended |
($ in 000s, except financial advisors and locations) |  | 3/31/19 |  |  | 3/31/18 |  |  | % Change |  |  | 12/31/18 |  |  | % Change |
Financial advisors (9) |  |  | 2,061 |  |  |  | 2,008 |  |  |  | 2.6 |  |  |  | 2,051 |  |  |  | 0.5 |
Independent contractors |  |  | 99 |  |  |  | 109 |  |  |  | (9.2 | ) |  |  | 101 |  |  |  | (2.0 | )
Total financial advisors |  |  | 2,160 |  |  |  | 2,117 |  |  |  | 2.0 |  |  |  | 2,152 |  |  |  | 0.4 |
Locations |  |  | 407 |  |  |  | 397 |  |  |  | 2.5 |  |  |  | 404 |  |  |  | 0.7 |
Total client assets |  | $ | 299,993,000 |  |  | $ | 274,651,000 |  |  |  | 9.2 |  |  | $ | 269,862,000 |  |  |  | 11.2 |
Fee-based client assets |  | $ | 99,579,000 |  |  | $ | 89,031,000 |  |  |  | 11.8 |  |  | $ | 90,174,000 |  |  |  | 10.4 |
Client money market and insured product |  | $ | 14,928,000 |  |  | $ | 16,659,000 |  |  |  | (10.4 | ) |  | $ | 16,109,000 |  |  |  | (7.3 | )
Secured client lending (10) |  | $ | 3,175,240 |  |  | $ | 3,119,473 |  |  |  | 1.8 |  |  | $ | 2,893,074 |  |  |  | 9.8 |

|  | Asset Management and Service Fee Break-down (unaudited) |
Asset Management and Service Fee Revenues: |  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  | 3/31/18 |  |  | % Change |  |  | 12/31/18 |  |  | % Change |
Private Client Group (11) |  | $ | 148,092 |  |  | $ | 146,769 |  |  |  | 0.9 |  |  | $ | 159,775 |  |  |  | (7.3 | )
Asset Management |  |  | 28,469 |  |  |  | 27,104 |  |  |  | 5.0 |  |  |  | 28,670 |  |  |  | (0.7 | )
Third-party Bank Sweep Program |  |  | 8,562 |  |  |  | 11,603 |  |  |  | (26.2 | ) |  |  | 11,062 |  |  |  | (22.6 | )
Other (12) |  |  | 10,144 |  |  |  | 10,325 |  |  |  | (1.8 | ) |  |  | 10,556 |  |  |  | (3.9 | )
Total asset management and service fee revenues |  | $ | 195,267 |  |  | $ | 195,801 |  |  |  | (0.3 | ) |  | $ | 210,063 |  |  |  | (7.0 | )
Fee-based Assets: |  | Three Months Ended |
($ in millions) |  | 3/31/19 |  |  | 3/31/18 |  |  | % Change |  |  | 12/31/18 |  |  | % Change |
Private Client Group (11) |  | $ | 73,553 |  |  | $ | 66,255 |  |  |  | 11.0 |  |  | $ | 66,097 |  |  |  | 11.3 |
Asset Management |  |  | 32,952 |  |  |  | 29,086 |  |  |  | 13.3 |  |  |  | 30,269 |  |  |  | 8.9 |
Elimination (13) |  |  | (6,926 | ) |  |  | (6,310 | ) |  |  | 9.8 |  |  |  | (6,192 | ) |  |  | 11.9 |
Total fee-based assets |  | $ | 99,579 |  |  | $ | 89,031 |  |  |  | 11.8 |  |  | $ | 90,174 |  |  |  | 10.4 |
Individual Program Banks |  | $ | 1,875 |  |  | $ | 3,676 |  |  |  | (49.0 | ) |  | $ | 2,569 |  |  |  | (27.0 | )
ROA (bps) (14) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Private Client Group (11) |  |  | 89.6 |  |  |  | 90.9 |  |  |  |  |  |  |  | 89.4 |  |  |  |  |
Asset Management |  |  | 34.6 |  |  |  | 37.3 |  |  |  |  |  |  |  | 37.9 |  |  |  |  |
Individual Program Banks |  |  | 153.3 |  |  |  | 121.7 |  |  |  |  |  |  |  | 159.3 |  |  |  |  |

8

Net Interest Income Analysis (Unaudited): |
|  | Three Months Ended |
|  | March 31, 2019 |  |  | March 31, 2018 |  |  | December 31, 2018 |
($ in millions, except percentages) |  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |  |  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |  |  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and federal funds sold |  | $ | 1,124.9 |  |  | $ | 7.8 |  |  |  | 2.78 | % |  | $ | 351.4 |  |  | $ | 1.4 |  |  |  | 1.64 | % |  | $ | 689.1 |  |  | $ | 4.3 |  |  |  | 2.52 | %
Financial instruments owned |  |  | 1,277.4 |  |  |  | 6.3 |  |  |  | 1.98 |  |  |  | 1,142.4 |  |  |  | 4.9 |  |  |  | 1.73 |  |  |  | 1,275.9 |  |  |  | 5.8 |  |  |  | 1.81 |
Margin balances |  |  | 1,258.5 |  |  |  | 13.4 |  |  |  | 4.27 |  |  |  | 1,276.6 |  |  |  | 11.0 |  |  |  | 3.43 |  |  |  | 1,245.0 |  |  |  | 13.2 |  |  |  | 4.24 |
Investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities |  |  | 4,698.9 |  |  |  | 49.0 |  |  |  | 4.17 |  |  |  | 4,431.2 |  |  |  | 36.9 |  |  |  | 3.33 |  |  |  | 4,909.1 |  |  |  | 49.2 |  |  |  | 4.01 |
Mortgage-backed securities |  |  | 1,531.4 |  |  |  | 9.0 |  |  |  | 2.35 |  |  |  | 1,746.1 |  |  |  | 9.6 |  |  |  | 2.20 |  |  |  | 1,599.4 |  |  |  | 9.0 |  |  |  | 2.18 |
Corporate fixed income securities |  |  | 954.5 |  |  |  | 7.2 |  |  |  | 3.01 |  |  |  | 1,293.6 |  |  |  | 8.1 |  |  |  | 2.51 |  |  |  | 1,143.9 |  |  |  | 8.4 |  |  |  | 2.98 |
State and municipal securities |  |  | 50.1 |  |  |  | 0.3 |  |  |  | 2.38 |  |  |  | 74.1 |  |  |  | 0.3 |  |  |  | 1.36 |  |  |  | 72.8 |  |  |  | 0.3 |  |  |  | 2.02 |
Total Investments |  |  | 7,234.9 |  |  |  | 65.5 |  |  |  | 3.62 |  |  |  | 7,545.0 |  |  |  | 54.9 |  |  |  | 2.91 |  |  |  | 7,725.2 |  |  |  | 66.9 |  |  |  | 3.47 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 3,419.8 |  |  |  | 40.8 |  |  |  | 4.78 |  |  |  | 2,478.0 |  |  |  | 26.7 |  |  |  | 4.32 |  |  |  | 3,245.7 |  |  |  | 38.9 |  |  |  | 4.79 |
Residential real estate |  |  | 2,927.9 |  |  |  | 22.5 |  |  |  | 3.07 |  |  |  | 2,636.9 |  |  |  | 18.3 |  |  |  | 2.77 |  |  |  | 2,844.8 |  |  |  | 21.1 |  |  |  | 2.96 |
Securities-based loans |  |  | 1,799.5 |  |  |  | 19.1 |  |  |  | 4.25 |  |  |  | 1,796.6 |  |  |  | 15.3 |  |  |  | 3.41 |  |  |  | 1,844.9 |  |  |  | 19.3 |  |  |  | 4.18 |
Commercial real estate |  |  | 336.5 |  |  |  | 4.7 |  |  |  | 5.60 |  |  |  | 104.5 |  |  |  | 1.0 |  |  |  | 3.78 |  |  |  | 322.1 |  |  |  | 4.8 |  |  |  | 5.94 |
Loans held for sale |  |  | 179.0 |  |  |  | 1.8 |  |  |  | 4.09 |  |  |  | 200.6 |  |  |  | 1.8 |  |  |  | 3.65 |  |  |  | 236.5 |  |  |  | 2.3 |  |  |  | 3.97 |
Other |  |  | 319.0 |  |  |  | 4.4 |  |  |  | 5.36 |  |  |  | 50.2 |  |  |  | 0.5 |  |  |  | 4.01 |  |  |  | 280.2 |  |  |  | 3.7 |  |  |  | 5.43 |
Total Loans |  |  | 8,981.7 |  |  |  | 93.3 |  |  |  | 4.15 |  |  |  | 7,266.8 |  |  |  | 63.6 |  |  |  | 3.50 |  |  |  | 8,774.2 |  |  |  | 90.1 |  |  |  | 4.11 |
Other interest-bearing assets |  |  | 736.3 |  |  |  | 4.8 |  |  |  | 2.61 |  |  |  | 768.0 |  |  |  | 1.9 |  |  |  | 0.97 |  |  |  | 836.5 |  |  |  | 4.2 |  |  |  | 2.00 |
Total interest-earning assets/interest income |  |  | 20,613.7 |  |  |  | 191.1 |  |  |  | 3.71 |  |  |  | 18,350.2 |  |  |  | 137.7 |  |  |  | 3.00 |  |  |  | 20,545.9 |  |  |  | 184.5 |  |  |  | 3.59 |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term borrowings |  |  | 68.2 |  |  |  | 0.5 |  |  |  | 3.10 |  |  |  | 160.4 |  |  |  | 0.9 |  |  |  | 2.31 |  |  |  | 58.7 |  |  |  | 0.5 |  |  |  | 3.09 |
Senior notes |  |  | 1,016.1 |  |  |  | 11.1 |  |  |  | 4.38 |  |  |  | 1,015.1 |  |  |  | 11.1 |  |  |  | 4.38 |  |  |  | 1,016.0 |  |  |  | 11.0 |  |  |  | 4.38 |
Deposits |  |  | 15,282.3 |  |  |  | 28.1 |  |  |  | 0.73 |  |  |  | 13,151.6 |  |  |  | 8.1 |  |  |  | 0.25 |  |  |  | 14,631.2 |  |  |  | 33.0 |  |  |  | 0.90 |
FHLB |  |  | 461.4 |  |  |  | 1.7 |  |  |  | 1.45 |  |  |  | 902.9 |  |  |  | 3.3 |  |  |  | 1.44 |  |  |  | 994.2 |  |  |  | 4.6 |  |  |  | 1.85 |
Other interest-bearing liabilities |  |  | 1,588.3 |  |  |  | 8.0 |  |  |  | 2.03 |  |  |  | 1,268.8 |  |  |  | 3.1 |  |  |  | 0.95 |  |  |  | 1,532.0 |  |  |  | 8.8 |  |  |  | 2.27 |
Total interest-bearing liabilities/interest expense |  | $ | 18,416.3 |  |  | $ | 49.4 |  |  |  | 1.07 | % |  | $ | 16,498.8 |  |  | $ | 26.5 |  |  |  | 0.64 | % |  | $ | 18,232.1 |  |  | $ | 57.9 |  |  |  | 1.27 | %
Net interest income/margin |  |  |  |  |  | $ | 141.7 |  |  |  | 2.75 | % |  |  |  |  |  | $ | 111.2 |  |  |  | 2.43 | % |  |  |  |  |  | $ | 126.6 |  |  |  | 2.47 | %

9

Stifel Bancorp, Inc. (15) - a component of Global Wealth Management |
Selected operating data (unaudited): | Three Months Ended |
($ in 000s, except percentages) | 3/31/19 |  |  | 3/31/18 |  |  | % Change |  |  | 12/31/18 |  |  | % Change |
Net interest income | $ | 134,564 |  |  | $ | 107,627 |  |  |  | 25.0 |  |  | $ | 121,790 |  |  |  | 10.5 |
Bank loan loss provision | $ | 2,283 |  |  | $ | 2,043 |  |  |  | 11.7 |  |  | $ | 5,122 |  |  |  | (55.4 | )
Charge-offs | $ | 56 |  |  | $ | 14 |  |  |  | 300.0 |  |  | $ | — |  |  | n/m |
Net interest margin |  | 3.17 | % |  |  | 2.89 | % |  |  | 9.7 |  |  |  | 2.89 | % |  |  | 9.7 |

Financial Metrics (unaudited): |  | As of |
($ in 000s, except percentages) |  | 3/31/19 |  |  | 3/31/18 |  |  | 12/31/18 |
Total assets |  | $ | 16,802,553 |  |  | $ | 15,154,798 |  |  | $ | 17,818,887 |
Total shareholders' equity |  |  | 1,227,087 |  |  |  | 1,081,041 |  |  |  | 1,203,243 |
Total loans, net (includes loans held for sale) |  |  | 8,850,905 |  |  |  | 7,337,749 |  |  |  | 8,723,172 |
Total deposits |  |  | 15,049,877 |  |  |  | 13,329,623 |  |  |  | 15,863,613 |
Available-for-sale securities, at fair value |  |  | 2,997,801 |  |  |  | 3,705,918 |  |  |  | 3,064,257 |
Held-to-maturity securities, at amortized cost |  |  | 4,100,357 |  |  |  | 3,842,889 |  |  |  | 4,215,533 |
Commercial and industrial |  |  | 3,314,564 |  |  |  | 2,553,671 |  |  |  | 3,304,234 |
Residential real estate |  |  | 2,928,228 |  |  |  | 2,634,069 |  |  |  | 2,875,014 |
Securities-based loans |  |  | 1,860,989 |  |  |  | 1,809,281 |  |  |  | 1,786,966 |
Commercial real estate |  |  | 361,950 |  |  |  | 101,591 |  |  |  | 318,961 |
Loans held for sale |  | $ | 144,216 |  |  | $ | 261,467 |  |  | $ | 205,557 |
Stifel Bank & Trust: |  |  |  |  |  |  |  |  |  |  |  |
Common equity tier 1 capital ratio (8) |  |  | 13.7 | % |  |  | 14.6 | % |  |  | 14.4 | %
Tier 1 capital ratio (8) |  |  | 13.8 | % |  |  | 14.6 | % |  |  | 14.6 | %
Total capital ratio (8) |  |  | 14.9 | % |  |  | 15.6 | % |  |  | 15.6 | %
Tier 1 leverage ratio (8) |  |  | 7.1 | % |  |  | 7.2 | % |  |  | 7.1 | %
Stifel Bank: |  |  |  |  |  |  |  |  |  |  |  |
Common equity tier 1 capital ratio (8) |  |  | 17.5 | % |  | n/a |  |  |  | 12.3 | %
Tier 1 capital ratio (8) |  |  | 17.5 | % |  | n/a |  |  |  | 12.3 | %
Total capital ratio (8) |  |  | 18.6 | % |  | n/a |  |  |  | 13.5 | %
Tier 1 leverage ratio (8) |  |  | 7.5 | % |  | n/a |  |  |  | 9.9 | %
Credit Metrics: |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses |  | $ | 88,172 |  |  | $ | 69,497 |  |  | $ | 85,833 |
Allowance as a percentage of retained loans |  |  | 1.00 | % |  |  | 0.97 | % |  |  | 1.00 | %
Net charge-offs as a percentage of average loans |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | %
Total nonperforming assets |  | $ | 21,276 |  |  | $ | 21,826 |  |  | $ | 24,455 |
Nonperforming assets as % of total assets |  |  | 0.13 | % |  |  | 0.14 | % |  |  | 0.14 | %

10

Global Wealth Management Summary Results of Operations (Unaudited) |
|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  |  |  | 3/31/18 |  |  |  |  | % Change |  |  |  |  | 12/31/18 |  |  | % Change |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 109,927 |  |  |  |  | $ | 119,205 |  |  |  |  |  | (7.8 | ) |  |  |  | $ | 117,006 |  |  |  | (6.1 | )
Principal transactions |  |  | 43,267 |  |  |  |  |  | 43,529 |  |  |  |  |  | (0.6 | ) |  |  |  |  | 40,325 |  |  |  | 7.3 |
Brokerage revenues |  |  | 153,194 |  |  |  |  |  | 162,734 |  |  |  |  |  | (5.9 | ) |  |  |  |  | 157,331 |  |  |  | (2.6 | )
Asset management and service fees |  |  | 195,253 |  |  |  |  |  | 195,789 |  |  |  |  |  | (0.3 | ) |  |  |  |  | 210,051 |  |  |  | (7.0 | )
Net interest |  |  | 145,295 |  |  |  |  |  | 118,455 |  |  |  |  |  | 22.7 |  |  |  |  |  | 132,402 |  |  |  | 9.7 |
Investment banking |  |  | 8,223 |  |  |  |  |  | 7,688 |  |  |  |  |  | 7.0 |  |  |  |  |  | 7,915 |  |  |  | 3.9 |
Other income |  |  | 8,645 |  |  |  |  |  | 909 |  |  |  |  |  | 851.0 |  |  |  |  |  | 1,557 |  |  |  | 455.2 |
Net revenues |  |  | 510,610 |  |  |  |  |  | 485,575 |  |  |  |  |  | 5.2 |  |  |  |  |  | 509,256 |  |  |  | 0.3 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 247,473 |  |  |  |  |  | 241,760 |  |  |  |  |  | 2.4 |  |  |  |  |  | 246,750 |  |  |  | 0.3 |
Non-compensation operating expenses |  |  | 68,647 |  |  |  |  |  | 67,044 |  |  |  |  |  | 2.4 |  |  |  |  |  | 73,546 |  |  |  | (6.7 | )
Total non-interest expenses |  |  | 316,120 |  |  |  |  |  | 308,804 |  |  |  |  |  | 2.4 |  |  |  |  |  | 320,296 |  |  |  | (1.3 | )
Income before income taxes |  | $ | 194,490 |  |  |  |  | $ | 176,771 |  |  |  |  |  | 10.0 |  |  |  |  | $ | 188,960 |  |  |  | 2.9 |
As a percentage of net revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 48.5 |  |  |  |  |  | 49.8 |  |  |  |  |  |  |  |  |  |  |  | 48.5 |  |  |  |  |
Non-compensation operating expenses |  |  | 13.4 |  |  |  |  |  | 13.8 |  |  |  |  |  |  |  |  |  |  |  | 14.4 |  |  |  |  |
Income before income taxes |  |  | 38.1 |  |  |  |  |  | 36.4 |  |  |  |  |  |  |  |  |  |  |  | 37.1 |  |  |  |  |

Institutional Group Summary Results of Operations (Unaudited) |
|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  |  |  | 3/31/18 |  |  |  |  | % Change |  |  |  |  | 12/31/18 |  |  | % Change |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 45,522 |  |  |  |  | $ | 46,570 |  |  |  |  |  | (2.3 | ) |  |  |  | $ | 50,034 |  |  |  | (9.0 | )
Principal transactions |  |  | 60,765 |  |  |  |  |  | 54,253 |  |  |  |  |  | 12.0 |  |  |  |  |  | 41,134 |  |  |  | 47.7 |
Brokerage revenues |  |  | 106,287 |  |  |  |  |  | 100,823 |  |  |  |  |  | 5.4 |  |  |  |  |  | 91,168 |  |  |  | 16.6 |
Capital raising |  |  | 48,722 |  |  |  |  |  | 71,001 |  |  |  |  |  | (31.4 | ) |  |  |  |  | 82,229 |  |  |  | (40.7 | )
Advisory fees |  |  | 104,895 |  |  |  |  |  | 97,673 |  |  |  |  |  | 7.4 |  |  |  |  |  | 111,089 |  |  |  | (5.6 | )
Investment banking |  |  | 153,617 |  |  |  |  |  | 168,674 |  |  |  |  |  | (8.9 | ) |  |  |  |  | 193,318 |  |  |  | (20.5 | )
Other (16) |  |  | 1,382 |  |  |  |  |  | 581 |  |  |  |  |  | 137.8 |  |  |  |  |  | 2,154 |  |  |  | (35.8 | )
Net revenues |  |  | 261,286 |  |  |  |  |  | 270,078 |  |  |  |  |  | (3.3 | ) |  |  |  |  | 286,640 |  |  |  | (8.8 | )
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 159,411 |  |  |  |  |  | 159,344 |  |  |  |  |  | 0.0 |  |  |  |  |  | 177,782 |  |  |  | (10.3 | )
Non-compensation operating expenses |  |  | 69,671 |  |  |  |  |  | 66,164 |  |  |  |  |  | 5.3 |  |  |  |  |  | 66,706 |  |  |  | 4.4 |
Total non-interest expenses |  |  | 229,082 |  |  |  |  |  | 225,508 |  |  |  |  |  | 1.6 |  |  |  |  |  | 244,488 |  |  |  | (6.3 | )
Income before income taxes |  | $ | 32,204 |  |  |  |  | $ | 44,570 |  |  |  |  |  | (27.7 | ) |  |  |  | $ | 42,152 |  |  |  | (23.6 | )
As a percentage of net revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 61.0 |  |  |  |  |  | 59.0 |  |  |  |  |  |  |  |  |  |  |  | 62.0 |  |  |  |  |
Non-compensation operating expenses |  |  | 26.7 |  |  |  |  |  | 24.5 |  |  |  |  |  |  |  |  |  |  |  | 23.3 |  |  |  |  |
Income before income taxes |  |  | 12.3 |  |  |  |  |  | 16.5 |  |  |  |  |  |  |  |  |  |  |  | 14.7 |  |  |  |  |

11

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 March 31, 2019 and 2018, and December 31, 2018. 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 March 31, 2019 and 2018, and December 31, 2018 to net income and earnings per diluted common share on a non-GAAP basis for the same period.

|  | Three Months Ended |
($ in 000s) |  | 3/31/19 |  |  | 3/31/18 |  |  | 12/31/18 |
GAAP net income applicable to Stifel Financial Corp. |  | $ | 99,207 |  |  | $ | 88,761 |  |  | $ | 114,062 |
Preferred dividend |  |  | 2,344 |  |  |  | 2,344 |  |  |  | 2,344 |
Net income available to common shareholders |  |  | 96,863 |  |  |  | 86,417 |  |  |  | 111,718 |
Non-GAAP adjustments: |  |  |  |  |  |  |  |  |  |  |  |
Merger-related and severance (17) |  |  | 8,191 |  |  |  | 9,953 |  |  |  | 17,714 |
Litigation-related |  |  | — |  |  |  | — |  |  |  | 18 |
Provision for income taxes (18) |  |  | (534 | ) |  |  | (2,567 | ) |  |  | (2,660 | )
Total non-GAAP adjustments |  |  | 7,657 |  |  |  | 7,386 |  |  |  | 15,072 |
Non-GAAP net income available to common shareholders |  | $ | 104,520 |  |  | $ | 93,803 |  |  | $ | 126,790 |
Weighted average diluted shares outstanding |  |  | 79,210 |  |  |  | 81,789 |  |  |  | 80,706 |
GAAP earnings per diluted common share |  | $ | 1.25 |  |  | $ | 1.09 |  |  | $ | 1.41 |
Non-GAAP adjustments |  |  | 0.10 |  |  |  | 0.09 |  |  |  | 0.19 |
Non-GAAP earnings per diluted common share |  | $ | 1.35 |  |  | $ | 1.18 |  |  | $ | 1.60 |
GAAP earnings per diluted common share available to common shareholders |  | $ | 1.22 |  |  | $ | 1.06 |  |  | $ | 1.38 |
Non-GAAP adjustments |  |  | 0.10 |  |  |  | 0.09 |  |  |  | 0.19 |
Non-GAAP earnings per diluted common share available to common shareholders |  | $ | 1.32 |  |  | $ | 1.15 |  |  | $ | 1.57 |

12

Footnotes

| (1) | Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures.”

| (2) | Non-GAAP pre-tax margin for the three months ended March 31, 2019 of 19.0% is calculated by adding non-GAAP adjustments of $8.2 million to our GAAP income before income taxes of $137.8 million and dividing it by non-GAAP net revenues for the quarter of $770.4 million. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is 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) | Book value per common share represents shareholders’ equity (excluding preferred stock and non-controlling interests) divided by period end common shares outstanding.

| (6) | 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.

| (7) | 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.

| (8) | Capital ratios are estimates at time of the Company’s earnings release.

| (9) | Reflects change in the definition of producing brokers as of January 1, 2019. Prior period amounts have been restated to conform with current period presentation.

| (10) | Includes client margin balances held by our broker-dealer subsidiaries and securities-based loans held at our bank subsidiaries.

| (11) | Includes Private Client Group and Trust Business.

| (12) | Includes fund networking fees, retirement fees, transaction/handling fees, and ACAT fees.

| (13) | Asset management assets included in Private Client Group or Trust accounts.

| (14) | Return on assets (ROA) is calculated based on prior period-end balances for Private Client Group, period-end balances for Asset Management, and average quarterly balances for Individual Program Banks.

| (15) | Includes Stifel Bank & Trust and Stifel Bank, formerly known as The Business Bank of St. Louis, which was acquired on August 31, 2018.

| (16) | Includes net interest, asset management and service fees, and other income.

| (17) | 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.

| (18) | See details of non-GAAP adjustments under “Provision for Income Taxes.”

13