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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2021

OR

☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-09305

STIFEL FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Delaware |  | 43-1273600
(State or other jurisdiction of |  | (I.R.S. Employer
incorporation or organization) |  | Identification No.)

501 N. Broadway, St. Louis, Missouri 63102-2188

(Address of principal executive offices and zip code)

(314) 342-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class/ Trading Symbol |  | Name of Each Exchange on Which Registered |  | Shares or principal amount outstanding - November 1, 2021 |
Common Stock, $0.15 par value per share (SF) |  | New York Stock Exchange |  |  | 104,110,518 |
Depository Shares, each representing 1/1,000th interest in a share of 6.25% Non-Cumulative Preferred Stock, Series B (SF-PB) |  | New York Stock Exchange |  |  | 6,400 |
Depository Shares, each representing 1/1,000th interest in a share of 6.125% Non-Cumulative Preferred Stock, Series C (SF-PC) |  | New York Stock Exchange |  |  | 9,000 |
Depository Shares, each representing 1/1,000th interest in a share of 4.50% Non-Cumulative Preferred Stock, Series D (SF-PD) |  | New York Stock Exchange |  |  | 12,000 |
5.20% Senior Notes due 2047 (SFB) |  | New York Stock Exchange |  | $ | 225,000,000 |

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“the Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐

Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

1

STIFEL FINANCIAL CORP.

Form 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION |  |
Item 1. Financial Statements |  | 3
Consolidated Statements of Financial Condition as of September 30, 2021 (unaudited) and December 31, 2020 |  | 3
Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and September 30, 2020 (unaudited) |  | 5
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and September 30, 2020 (unaudited) Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2021 and September 30, 2020 (unaudited) |  | 6 7
Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and September 30, 2020 (unaudited) |  | 9
Notes to Consolidated Financial Statements (unaudited) |  | 11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 48
Item 3. Quantitative and Qualitative Disclosures About Market Risk |  | 74
Item 4. Controls and Procedures |  | 78
PART II – OTHER INFORMATION |  |
Item 1. Legal Proceedings |  | 78
Item 1A. Risk Factors |  | 78
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |  | 79
Item 6. Exhibits |  | 80
Signatures |  | 81

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

STIFEL FINANCIAL CORP.

Consolidated Statements of Financial Condition

|  | September 30, 2021 |  |  | December 31, 2020 |
($ in thousands) |  | (Unaudited) |  |  |  |  |
Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 2,054,273 |  |  | $ | 2,279,274 |
Cash segregated for regulatory purposes |  |  | 26,095 |  |  |  | 172,932 |
Receivables: |  |  |  |  |  |  |  |
Brokerage clients, net |  |  | 1,121,827 |  |  |  | 936,500 |
Brokers, dealers, and clearing organizations |  |  | 488,429 |  |  |  | 549,492 |
Securities purchased under agreements to resell |  |  | 598,535 |  |  |  | 217,930 |
Financial instruments owned, at fair value |  |  | 1,199,386 |  |  |  | 694,028 |
Available-for-sale securities, at fair value |  |  | 2,242,465 |  |  |  | 2,230,297 |
Held-to-maturity securities, at amortized cost |  |  | 5,347,821 |  |  |  | 4,117,384 |
Loans: |  |  |  |  |  |  |  |
Held for investment, net |  |  | 13,502,587 |  |  |  | 11,006,760 |
Held for sale, at lower of cost or market |  |  | 156,110 |  |  |  | 551,248 |
Investments, at fair value |  |  | 120,919 |  |  |  | 113,862 |
Fixed assets, net |  |  | 307,602 |  |  |  | 167,915 |
Operating lease right-of-use assets, net |  |  | 756,885 |  |  |  | 793,181 |
Goodwill |  |  | 1,182,313 |  |  |  | 1,181,998 |
Intangible assets, net |  |  | 127,725 |  |  |  | 140,984 |
Loans and advances to financial advisors and other employees, net |  |  | 607,552 |  |  |  | 596,993 |
Deferred tax assets, net |  |  | 179,715 |  |  |  | 136,477 |
Other assets |  |  | 800,095 |  |  |  | 716,999 |
Total assets |  | $ | 30,820,334 |  |  | $ | 26,604,254 |

See accompanying Notes to Consolidated Financial Statements.

3

STIFEL FINANCIAL CORP.

Consolidated Statements of Financial Condition (continued)

|  | September 30, 2021 |  |  | December 31, 2020 |
($ in thousands, except share and per share amounts) |  | (Unaudited) |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |
Payables: |  |  |  |  |  |  |  |
Brokerage clients |  | $ | 1,317,245 |  |  | $ | 1,063,937 |
Brokers, dealers, and clearing organizations |  |  | 245,278 |  |  |  | 177,937 |
Drafts |  |  | 85,889 |  |  |  | 117,737 |
Securities sold under agreements to repurchase |  |  | 195,451 |  |  |  | 190,955 |
Bank deposits |  |  | 20,398,874 |  |  |  | 17,396,497 |
Financial instruments sold, but not yet purchased, at fair value |  |  | 721,028 |  |  |  | 437,978 |
Accrued compensation |  |  | 728,390 |  |  |  | 638,298 |
Accounts payable and accrued expenses |  |  | 1,111,645 |  |  |  | 1,169,740 |
Federal Home Loan Bank advances |  |  | 52,000 |  |  |  | — |
Senior notes |  |  | 1,113,210 |  |  |  | 1,112,409 |
Debentures to Stifel Financial Capital Trusts |  |  | 60,000 |  |  |  | 60,000 |
Total liabilities |  |  | 26,029,010 |  |  |  | 22,365,488 |
Equity |  |  |  |  |  |  |  |
Stifel Financial Corp. shareholders' equity: |  |  |  |  |  |  |  |
Preferred stock - $1 par value; authorized 3,000,000 shares; issued 27,400 and 21,400 shares, respectively |  |  | 685,000 |  |  |  | 535,000 |
Common stock - $0.15 par value; authorized 194,000,000 shares; issued 111,661,728 and 111,661,621 shares, respectively |  |  | 16,749 |  |  |  | 16,749 |
Additional paid-in-capital |  |  | 1,864,011 |  |  |  | 1,888,982 |
Retained earnings |  |  | 2,528,727 |  |  |  | 2,078,135 |
Accumulated other comprehensive income |  |  | 21,585 |  |  |  | 27,639 |
Treasury stock, at cost, 7,398,501 and 8,512,584 shares, respectively |  |  | (324,748 | ) |  |  | (307,739 | )
Total equity |  |  | 4,791,324 |  |  |  | 4,238,766 |
Total liabilities and equity |  | $ | 30,820,334 |  |  | $ | 26,604,254 |

See accompanying Notes to Consolidated Financial Statements.

4

STIFEL FINANCIAL CORP.

Consolidated Statements of Operations

(Unaudited)

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
($ in thousands, except per share amounts) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 189,239 |  |  | $ | 172,654 |  |  | $ | 598,432 |  |  | $ | 560,780 |
Principal transactions |  |  | 118,977 |  |  |  | 140,883 |  |  |  | 436,580 |  |  |  | 445,566 |
Investment banking |  |  | 372,279 |  |  |  | 218,134 |  |  |  | 1,088,010 |  |  |  | 614,637 |
Asset management and service fees |  |  | 313,862 |  |  |  | 230,782 |  |  |  | 887,878 |  |  |  | 667,496 |
Interest |  |  | 141,844 |  |  |  | 114,411 |  |  |  | 402,975 |  |  |  | 403,956 |
Other income |  |  | 18,760 |  |  |  | 20,258 |  |  |  | 57,629 |  |  |  | 50,979 |
Total revenues |  |  | 1,154,961 |  |  |  | 897,122 |  |  |  | 3,471,504 |  |  |  | 2,743,414 |
Interest expense |  |  | 10,023 |  |  |  | 13,822 |  |  |  | 38,641 |  |  |  | 51,263 |
Net revenues |  |  | 1,144,938 |  |  |  | 883,300 |  |  |  | 3,432,863 |  |  |  | 2,692,151 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 672,385 |  |  |  | 533,638 |  |  |  | 2,062,353 |  |  |  | 1,657,991 |
Occupancy and equipment rental |  |  | 72,160 |  |  |  | 68,598 |  |  |  | 215,163 |  |  |  | 200,935 |
Communications and office supplies |  |  | 40,432 |  |  |  | 40,123 |  |  |  | 123,565 |  |  |  | 124,293 |
Commissions and floor brokerage |  |  | 14,744 |  |  |  | 13,254 |  |  |  | 44,424 |  |  |  | 43,273 |
Provision for credit losses |  |  | (660 | ) |  |  | (1,353 | ) |  |  | (15,564 | ) |  |  | 33,925 |
Other operating expenses |  |  | 89,375 |  |  |  | 70,647 |  |  |  | 254,503 |  |  |  | 215,275 |
Total non-interest expenses |  |  | 888,436 |  |  |  | 724,907 |  |  |  | 2,684,444 |  |  |  | 2,275,692 |
Income from operations before income tax expense |  |  | 256,502 |  |  |  | 158,393 |  |  |  | 748,419 |  |  |  | 416,459 |
Provision for income taxes |  |  | 64,126 |  |  |  | 37,866 |  |  |  | 184,951 |  |  |  | 101,456 |
Net income |  |  | 192,376 |  |  |  | 120,527 |  |  |  | 563,468 |  |  |  | 315,003 |
Preferred dividends |  |  | 9,689 |  |  |  | 9,897 |  |  |  | 26,267 |  |  |  | 19,584 |
Net income available to common shareholders |  | $ | 182,687 |  |  | $ | 110,630 |  |  | $ | 537,201 |  |  | $ | 295,419 |
Earnings per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.70 |  |  | $ | 1.04 |  |  | $ | 4.99 |  |  | $ | 2.78 |
Diluted |  | $ | 1.54 |  |  | $ | 0.97 |  |  | $ | 4.54 |  |  | $ | 2.60 |
Cash dividends declared per common share |  | $ | 0.15 |  |  | $ | 0.11 |  |  | $ | 0.45 |  |  | $ | 0.33 |
Weighted-average number of common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 107,379 |  |  |  | 105,941 |  |  |  | 107,655 |  |  |  | 106,221 |
Diluted |  |  | 118,475 |  |  |  | 113,775 |  |  |  | 118,355 |  |  |  | 113,568 |

See accompanying Notes to Consolidated Financial Statements.

5

STIFEL FINANCIAL CORP.

Consolidated Statements of Comprehensive Income

(Unaudited)

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
($ in thousands) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Net income |  | $ | 192,376 |  |  | $ | 120,527 |  |  | $ | 563,468 |  |  | $ | 315,003 |
Other comprehensive income/(loss), net of tax: (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Changes in unrealized gains/(losses) on available-for-sale securities (2) |  |  | 2,971 |  |  |  | 19,123 |  |  |  | (2,147 | ) |  |  | 22,467 |
Changes in unrealized losses on cash flow hedging instruments (3) |  |  | — |  |  |  | (2,968 | ) |  |  | — |  |  |  | (651 | )
Foreign currency translation adjustment |  |  | (8,652 | ) |  |  | 7,946 |  |  |  | (3,907 | ) |  |  | (2,032 | )
Total other comprehensive income/(loss), net of tax |  |  | (5,681 | ) |  |  | 24,101 |  |  |  | (6,054 | ) |  |  | 19,784 |
Comprehensive income |  | $ | 186,695 |  |  | $ | 144,628 |  |  | $ | 557,414 |  |  | $ | 334,787 |

(1) | Net of tax benefit of $1.9 million and tax expense of $7.6 million for the three months ended September 30, 2021 and 2020, respectively. Net of tax benefit of $2.0 million and tax expense of $6.4 million for the nine months ended September 30, 2021 and 2020, respectively.

(2) | There were no reclassifications to earnings for the three and nine months ended September 30, 2021. Reclassifications to earnings were immaterial for the three and nine months ended September 30, 2020.

(3) | Reclassifications to earnings were immaterial for the three and nine months ended September 30, 2021 and 2020.

See accompanying Notes to Consolidated Financial Statements.

6

STIFEL FINANCIAL CORP.

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

|  | Three Months Ended September 30, |
($ in thousands, except per share amounts) |  | 2021 |  |  | 2020 |
Preferred stock, par value $1.00 per share: |  |  |  |  |  |  |  |
Balance, beginning of period |  | $ | 535,000 |  |  | $ | 535,000 |
Issuance of preferred stock |  |  | 300,000 |  |  |  | — |
Redemption of preferred stock |  |  | (150,000 | ) |  |  | — |
Balance, end of period |  |  | 685,000 |  |  |  | 535,000 |
Common stock, par value $0.15 per share: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 16,749 |  |  |  | 16,749 |
Issuance of common stock |  |  | — |  |  |  | — |
Balance, end of period |  |  | 16,749 |  |  |  | 16,749 |
Additional paid-in-capital: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 1,846,986 |  |  |  | 1,847,608 |
Unit amortization, net of forfeitures |  |  | 29,595 |  |  |  | 28,101 |
Distributions under employee plans |  |  | (3,266 | ) |  |  | (3,403 | )
Issuance of preferred stock |  |  | (9,279 | ) |  |  | 15 |
Other |  |  | (25 | ) |  |  | 138 |
Balance, end of period |  |  | 1,864,011 |  |  |  | 1,872,459 |
Retained earnings: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 2,365,907 |  |  |  | 1,818,335 |
Net income |  |  | 192,376 |  |  |  | 120,527 |
Dividends declared: |  |  |  |  |  |  |  |
Common |  |  | (18,586 | ) |  |  | (14,042 | )
Preferred |  |  | (9,689 | ) |  |  | (9,897 | )
Distributions under employee plans |  |  | (1,169 | ) |  |  | (302 | )
Other |  |  | (112 | ) |  |  | (939 | )
Balance, end of period |  |  | 2,528,727 |  |  |  | 1,913,682 |
Accumulated other comprehensive income/(loss): |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 27,266 |  |  |  | (16,022 | )
Unrealized gains on securities, net of tax |  |  | 2,971 |  |  |  | 19,123 |
Unrealized gains on cash flow hedging activities, net of tax |  |  | — |  |  |  | (2,968 | )
Foreign currency translation adjustment, net of tax |  |  | (8,652 | ) |  |  | 7,946 |
Balance, end of period |  |  | 21,585 |  |  |  | 8,079 |
Treasury stock, at cost: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | (283,118 | ) |  |  | (317,610 | )
Distributions under employee plans |  |  | 2,086 |  |  |  | 2,328 |
Common stock repurchased |  |  | (43,716 | ) |  |  | — |
Balance, end of period |  |  | (324,748 | ) |  |  | (315,282 | )
Total Shareholders' Equity |  | $ | 4,791,324 |  |  | $ | 4,030,687 |

See accompanying Notes to Consolidated Financial Statements.

7

STIFEL FINANCIAL CORP.

Consolidated Statements of Changes in Shareholders’ Equity (continued)

(Unaudited)

|  | Nine Months Ended September 30, |
($ in thousands, except per share amounts) |  | 2021 |  |  | 2020 |
Preferred stock, par value $1.00 per share: |  |  |  |  |  |  |  |
Balance, beginning of period |  | $ | 535,000 |  |  | $ | 310,000 |
Issuance of preferred stock |  |  | 300,000 |  |  |  | 225,000 |
Redemption of preferred stock |  |  | (150,000 | ) |  |  | — |
Balance, end of period |  |  | 685,000 |  |  |  | 535,000 |
Common stock, par value $0.15 per share: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 16,749 |  |  |  | 16,749 |
Issuance of common stock |  |  | — |  |  |  | — |
Balance, end of period |  |  | 16,749 |  |  |  | 16,749 |
Additional paid-in-capital: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 1,888,982 |  |  |  | 1,903,703 |
Unit amortization, net of forfeitures |  |  | 93,840 |  |  |  | 88,717 |
Distributions under employee plans |  |  | (109,563 | ) |  |  | (113,389 | )
Issuance of preferred stock |  |  | (9,279 | ) |  |  | (7,005 | )
Dividends declared to equity-award holders |  |  | — |  |  |  | 350 |
Other |  |  | 31 |  |  |  | 83 |
Balance, end of period |  |  | 1,864,011 |  |  |  | 1,872,459 |
Retained earnings: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 2,078,135 |  |  |  | 1,715,704 |
Net income |  |  | 563,468 |  |  |  | 315,003 |
Dividends declared: |  |  |  |  |  |  |  |
Common |  |  | (55,890 | ) |  |  | (42,980 | )
Preferred |  |  | (26,267 | ) |  |  | (19,584 | )
Distributions under employee plans |  |  | (30,315 | ) |  |  | (47,813 | )
Cumulative adjustments for accounting changes |  |  | — |  |  |  | (7,772 | )
Other |  |  | (404 | ) |  |  | 1,124 |
Balance, end of period |  |  | 2,528,727 |  |  |  | 1,913,682 |
Accumulated other comprehensive income/(loss): |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 27,639 |  |  |  | (11,705 | )
Unrealized gains/(losses) on securities, net of tax |  |  | (2,147 | ) |  |  | 22,467 |
Unrealized gains on cash flow hedging activities, net of tax |  |  | — |  |  |  | (651 | )
Foreign currency translation adjustment, net of tax |  |  | (3,907 | ) |  |  | (2,032 | )
Balance, end of period |  |  | 21,585 |  |  |  | 8,079 |
Treasury stock, at cost: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | (307,739 | ) |  |  | (319,660 | )
Distributions under employee plans |  |  | 67,714 |  |  |  | 60,895 |
Common stock repurchased |  |  | (84,723 | ) |  |  | (56,517 | )
Balance, end of period |  |  | (324,748 | ) |  |  | (315,282 | )
Total Stifel Financial Corp. Shareholders' Equity |  |  | 4,791,324 |  |  |  | 4,030,687 |
Non-controlling interests: |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | — |  |  |  | 54,999 |
Deconsolidation of non-controlling interest |  |  | — |  |  |  | (54,999 | )
Balance, end of period |  |  | — |  |  |  | — |
Total Shareholders' Equity |  | $ | 4,791,324 |  |  | $ | 4,030,687 |

See accompanying Notes to Consolidated Financial Statements.

8

STIFEL FINANCIAL CORP.

Consolidated Statements of Cash Flows

(Unaudited)

|  | Nine Months Ended September 30, |
($ in thousands) |  | 2021 |  |  | 2020 |
Cash Flows From Operating Activities: |  |  |  |  |  |  |  |
Net income |  | $ | 563,468 |  |  | $ | 315,003 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 33,496 |  |  |  | 29,659 |
Amortization of loans and advances to financial advisors and other employees |  |  | 83,850 |  |  |  | 76,728 |
Amortization of premium on investment portfolio |  |  | 12,969 |  |  |  | 15,516 |
Provision for credit losses and allowance for loans and advances to financial advisors and other employees |  |  | (15,564 | ) |  |  | 35,066 |
Amortization of intangible assets |  |  | 13,216 |  |  |  | 14,489 |
Deferred income taxes |  |  | (42,492 | ) |  |  | (8,973 | )
Stock-based compensation |  |  | 85,283 |  |  |  | 80,987 |
Losses on sale of investments |  |  | 1,302 |  |  |  | 22,828 |
Other, net |  |  | 39,809 |  |  |  | (7,926 | )
Decrease/(increase) in operating assets, net of assets acquired: |  |  |  |  |  |  |  |
Receivables: |  |  |  |  |  |  |  |
Brokerage clients |  |  | (185,327 | ) |  |  | 297,127 |
Brokers, dealers, and clearing organizations |  |  | 61,063 |  |  |  | 183,105 |
Securities purchased under agreements to resell |  |  | (380,605 | ) |  |  | (51,852 | )
Financial instruments owned, including those pledged |  |  | (505,358 | ) |  |  | 153,217 |
Loans originated as held for sale |  |  | (1,594,937 | ) |  |  | (2,013,038 | )
Proceeds from mortgages held for sale |  |  | 1,954,135 |  |  |  | 2,141,691 |
Loans and advances to financial advisors and other employees |  |  | (94,958 | ) |  |  | (138,020 | )
Other assets |  |  | (76,967 | ) |  |  | 64,572 |
Increase/(decrease) in operating liabilities, net of liabilities assumed: |  |  |  |  |  |  |  |
Payables: |  |  |  |  |  |  |  |
Brokerage clients |  |  | 253,308 |  |  |  | 287,384 |
Brokers, dealers, and clearing organizations |  |  | 28,900 |  |  |  | (33,956 | )
Drafts |  |  | (31,848 | ) |  |  | (29,060 | )
Financial instruments sold, but not yet purchased |  |  | 283,050 |  |  |  | (62,918 | )
Other liabilities and accrued expenses |  |  | 84,942 |  |  |  | (37,105 | )
Net cash provided by operating activities |  | $ | 570,735 |  |  | $ | 1,334,524 |

See accompanying Notes to Consolidated Financial Statements.

9

STIFEL FINANCIAL CORP.

Consolidated Statements of Cash Flows (continued)

(Unaudited)

|  | Nine Months Ended September 30, |
($ in thousands) |  | 2021 |  |  | 2020 |
Cash Flows From Investing Activities: |  |  |  |  |  |  |  |
Proceeds from: |  |  |  |  |  |  |  |
Principal paydowns, calls, and maturities of available-for-sale securities |  | $ | 448,780 |  |  | $ | 781,922 |
Calls and principal paydowns of held-to-maturity securities |  |  | 1,307,342 |  |  |  | 155,784 |
Sale or maturity of investments |  |  | 17,581 |  |  |  | 2,252 |
Disposition of business |  |  | — |  |  |  | 37,000 |
Increase in loans held for investment, net |  |  | (2,480,035 | ) |  |  | (1,075,568 | )
Payments for: |  |  |  |  |  |  |  |
Purchase of fixed assets |  |  | (173,183 | ) |  |  | (70,532 | )
Purchase of available-for-sale securities |  |  | (807,088 | ) |  |  | (628,660 | )
Purchase of held-to-maturity securities |  |  | (2,223,971 | ) |  |  | (384,700 | )
Purchase of investments |  |  | (20,515 | ) |  |  | (21,317 | )
Acquisitions, net of cash received |  |  | (315 | ) |  |  | (280 | )
Net cash used in investing activities |  |  | (3,931,404 | ) |  |  | (1,204,099 | )
Cash Flows From Financing Activities: |  |  |  |  |  |  |  |
Proceeds from/(repayments of) Federal Home Loan Bank advances, net |  |  | 52,000 |  |  |  | (250,000 | )
Payment of contingent consideration |  |  | (16,798 | ) |  |  | (22,285 | )
Increase/(decrease) in securities sold under agreements to repurchase |  |  | 4,496 |  |  |  | (209,363 | )
Increase in bank deposits, net |  |  | 3,002,377 |  |  |  | 1,067,420 |
Increase/(decrease) in securities loaned |  |  | 38,441 |  |  |  | (520,982 | )
Tax payments related to shares withheld for stock-based compensation plans |  |  | (70,202 | ) |  |  | (70,754 | )
Proceeds from preferred stock issuance, net |  |  | 290,721 |  |  |  | 217,995 |
Proceeds from issuance of senior notes, net |  |  | — |  |  |  | 393,940 |
Redemption of preferred stock |  |  | (150,000 | ) |  |  | — |
Repurchase of common stock |  |  | (84,723 | ) |  |  | (56,517 | )
Cash dividends on preferred stock |  |  | (26,267 | ) |  |  | (18,972 | )
Cash dividends paid to common stock and equity-award holders |  |  | (47,307 | ) |  |  | (34,800 | )
Cash paid to employees upon settlement of equity awards |  |  | — |  |  |  | (27,101 | )
Net cash provided by financing activities |  |  | 2,992,738 |  |  |  | 468,581 |
Effect of exchange rate changes on cash |  |  | (3,907 | ) |  |  | (2,032 | )
Increase/(decrease) in cash, cash equivalents, and cash segregated for regulatory purposes |  |  | (371,838 | ) |  |  | 596,974 |
Cash, cash equivalents, and cash segregated for regulatory purposes at beginning of period |  |  | 2,452,206 |  |  |  | 1,273,970 |
Cash, cash equivalents, and cash segregated for regulatory purposes at end of period |  | $ | 2,080,368 |  |  | $ | 1,870,944 |
Supplemental disclosure of cash flow information: |  |  |  |  |  |  |  |
Cash paid for income taxes, net of refunds |  | $ | 227,641 |  |  | $ | 112,190 |
Cash paid for interest |  |  | 47,070 |  |  |  | 66,974 |
Noncash financing activities: |  |  |  |  |  |  |  |
Unit grants, net of forfeitures |  |  | 142,771 |  |  |  | 117,801 |

The following presents cash, cash equivalents, and cash restricted for regulatory purposes for the periods presented ($ in thousands): |
|  | September 30, 2021 |  |  | December 31, 2020 |
Cash and cash equivalents |  | $ | 2,054,273 |  |  | $ | 2,279,274 |
Cash segregated for regulatory purposes |  |  | 26,095 |  |  |  | 172,932 |
Total cash, cash equivalents, and cash segregated for regulatory purposes |  | $ | 2,080,368 |  |  | $ | 2,452,206 |

See accompanying Notes to Consolidated Financial Statements.

10

STIFEL FINANCIAL CORP.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – Nature of Operations, Basis of Presentation, and Summary of Significant Accounting Policies

Nature of Operations

Stifel Financial Corp. (the “Company”), through its wholly owned subsidiaries, is principally engaged in retail brokerage; securities trading; investment banking; investment advisory; retail, consumer, and commercial banking; and related financial services. Our major geographic area of concentration is throughout the United States, with a growing presence in the United Kingdom, Europe, and Canada. Our company’s principal customers are individual investors, corporations, municipalities, and institutions.

Basis of Presentation

The consolidated financial statements include Stifel Financial Corp. and its wholly owned subsidiaries, principally Stifel, Nicolaus & Company, Incorporated (“Stifel”), Keefe, Bruyette & Woods, Inc., Stifel Bancorp, Inc. (“Stifel Bancorp”), Stifel Nicolaus Canada Inc. (“SNC”), and Stifel Nicolaus Europe Limited (“SNEL”). Unless otherwise indicated, the terms “we,” “us,” “our,” or “our company” in this report refer to Stifel Financial Corp. and its wholly owned subsidiaries.

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles. In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise noted) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and the notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2020 on file with the SEC.

On November 11, 2020, our Board approved a 50% stock dividend, in the form of a three-for-two stock split, of our common stock paid on December 16, 2020, to shareholders of record as of December 2, 2020. All share and per share information has been retroactively adjusted to reflect the stock split.

Certain amounts from prior periods have been reclassified to conform to the current period’s presentation. The effect of these reclassifications on our company’s previously reported consolidated financial statements was not material.

Consolidation Policies

The consolidated financial statements include the accounts of Stifel Financial Corp. and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

We have investments or interests in other entities for which we must evaluate whether to consolidate by determining whether we have a controlling financial interest or are considered to be the primary beneficiary. Under our current consolidation policy, which complies with the provisions of ASC 810 as amended by ASU 2015-02, we consolidate those entities where we have the power to direct the activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the rights to receive benefits from the entity that could potentially be significant to the entity.

We determine whether we are the primary beneficiary of a variable interest entity (“VIE”) by performing an analysis of the VIE’s control structure, expected benefits and losses, and expected residual returns. This analysis includes a review of, among other factors, the VIE’s capital structure, contractual terms, which interests create or absorb benefits or losses, variability, related party relationships, and the design of the VIE. We reassess our evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances. See Note 24 for additional information on VIEs.

11

NOTE 2 – New Accounting Pronouncements

Recently Adopted Accounting Guidance

Income Taxes

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. This accounting update removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. We prospectively adopted the accounting update on January 1, 2021. The adoption did not have a material impact on our consolidated financial statements.

NOTE 3 – Receivables From and Payables to Brokers, Dealers, and Clearing Organizations

Amounts receivable from brokers, dealers, and clearing organizations at September 30, 2021 and December 31, 2020, included (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
Deposits paid for securities borrowed |  | $ | 314,154 |  |  | $ | 313,131 |
Receivables from clearing organizations |  |  | 131,469 |  |  |  | 229,070 |
Securities failed to deliver |  |  | 42,806 |  |  |  | 7,291 |
|  | $ | 488,429 |  |  | $ | 549,492 |

Amounts payable to brokers, dealers, and clearing organizations at September 30, 2021 and December 31, 2020, included (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
Deposits received from securities loaned |  | $ | 183,564 |  |  | $ | 145,124 |
Securities failed to receive |  |  | 43,603 |  |  |  | 7,273 |
Payable to clearing organizations |  |  | 18,111 |  |  |  | 25,540 |
|  | $ | 245,278 |  |  | $ | 177,937 |

Deposits paid for securities borrowed approximate the market value of the securities. Securities failed to deliver and receive represent the contract value of securities that have not been delivered or received on settlement date.

NOTE 4 – Fair Value Measurements

We measure certain financial assets and liabilities at fair value on a recurring basis, including financial instruments owned, available-for-sale securities, investments, financial instruments sold, but not yet purchased, and derivatives.

We generally utilize third-party pricing services to value Level 1 and Level 2 available-for-sale investment securities, as well as certain derivatives designated as cash flow hedges. We review the methodologies and assumptions used by the third-party pricing services and evaluate the values provided, principally by comparison with other available market quotes for similar instruments and/or analysis based on internal models using available third-party market data. We may occasionally adjust certain values provided by the third-party pricing service when we believe, as the result of our review, that the adjusted price most appropriately reflects the fair value of the particular security.

Following are descriptions of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value. The descriptions include an indication of the level of the fair value hierarchy in which the assets or liabilities are classified.

Financial Instruments Owned and Available-For-Sale Securities

When available, the fair value of financial instruments is based on quoted prices in active markets and reported in Level 1. Level 1 financial instruments include highly liquid instruments with quoted prices, such as equity securities listed in active markets, corporate fixed income securities, and U.S. government securities.

12

If quoted prices are not available for identical instruments, fair values are obtained from pricing services, broker quotes, or other model-based valuation techniques with observable inputs, such as the present value of estimated cash flows, and reported as Level 2. The nature of these financial instruments include instruments for which quoted prices are available but traded less frequently, instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 2 financial instruments include U.S. government agency securities, mortgage-backed securities, fixed income and equity securities infrequently traded, state and municipal securities, sovereign debt, and asset-backed securities, which primarily include collateralized loan obligations.

We have identified Level 3 financial instruments to include loans and certain asset-backed securities with unobservable pricing inputs. Level 3 financial instruments have little to no pricing observability as of the report date. These financial instruments do not have active two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Investments

Investments carried at fair value primarily include corporate equity securities, auction-rate securities (“ARS”), and private company investments.

Corporate equity securities are primarily valued based on quoted prices in active markets and reported in Level 1.

ARS are primarily valued based upon our expectations of issuer redemptions and using internal discounted cash flow models that utilize unobservable inputs. ARS are primarily reported as Level 3 assets. Private company investments are primarily valued based upon internally developed models. These valuations require significant management judgment due to the absence of quoted market prices, the inherent lack of liquidity, and their long-term nature. Typically, the initial costs of these investments are considered to represent fair market value, as such amounts are negotiated between willing market participants. Private company investments are primarily reported as Level 3 assets.

Investments at fair value include investments in funds, including certain money market funds that are measured at net asset value (“NAV”). The Company uses NAV to measure the fair value of its fund investments when (i) the fund investment does not have a readily determinable fair value and (ii) the NAV of the investment fund is calculated in a manner consistent with the measurement principles of investment company accounting, including measurement of the underlying investments at fair value.

The Company’s investments in funds measured at NAV include partnership interests, mutual funds, private equity funds, and money market funds. Private equity funds primarily invest in a broad range of industries worldwide in a variety of situations, including leveraged buyouts, recapitalizations, growth investments and distressed investments. The private equity funds are primarily closed-end funds in which the Company’s investments are generally not eligible for redemption. Distributions will be received from these funds as the underlying assets are liquidated or distributed.

The general and limited partnership interests in investment partnerships were primarily valued based upon NAVs received from third-party fund managers. The various partnerships are investment companies, which record their underlying investments at fair value based on fair value policies established by management of the underlying fund. Fair value policies at the underlying fund generally require the funds to utilize pricing/valuation information, including independent appraisals, from third-party sources. However, in some instances, current valuation information for illiquid securities or securities in markets that are not active may not be available from any third-party source or fund management may conclude that the valuations that are available from third-party sources are not reliable. In these instances, fund management may perform model-based analytical valuations that may be used as an input to value these investments.

13

The table below presents the fair value of our investments in, and unfunded commitments to, funds that are measured at NAV as of September 30, 2021 and December 31, 2020 (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
|  | Fair value of investments |  |  | Unfunded commitments |  |  | Fair value of investments |  |  | Unfunded commitments |
Money market funds |  | $ | 1,639 |  |  | $ | — |  |  | $ | 34,192 |  |  | $ | — |
Mutual funds |  |  | 6,885 |  |  |  | — |  |  |  | 7,152 |  |  |  | — |
Partnership interests |  |  | 12,893 |  |  |  | 12,946 |  |  |  | 3,744 |  |  |  | 2,520 |
Private equity funds |  |  | 2,286 |  |  |  | 1,203 |  |  |  | 1,489 |  |  |  | 1,203 |
Total |  | $ | 23,703 |  |  | $ | 14,149 |  |  | $ | 46,577 |  |  | $ | 3,723 |

Financial Instruments Sold, But Not Yet Purchased

Financial instruments sold, but not purchased, recorded at fair value based on quoted prices in active markets and other observable market data include highly liquid instruments with quoted prices, such as U.S. government securities, equity and fixed income securities listed in active markets, which are reported as Level 1.

If quoted prices are not available, fair values are obtained from pricing services, broker quotes, or other model-based valuation techniques with observable inputs, such as the present value of estimated cash flows, and reported as Level 2. The nature of these financial instruments include instruments for which quoted prices are available but traded less frequently, instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 2 financial instruments include agency mortgage-backed securities not actively traded, fixed income and equity securities, sovereign debt securities, and state and municipal securities.

14

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2021, are presented below (in thousands):

|  | September 30, 2021 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Financial instruments owned: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government securities |  | $ | 16,829 |  |  | $ | 16,829 |  |  | $ | — |  |  | $ | — |
U.S. government agency securities |  |  | 182,636 |  |  |  | — |  |  |  | 182,636 |  |  |  | — |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  | 303,684 |  |  |  | — |  |  |  | 303,684 |  |  |  | — |
Non-agency |  |  | 19,697 |  |  |  | — |  |  |  | 19,697 |  |  |  | — |
Asset-backed securities |  |  | 74,783 |  |  |  | — |  |  |  | 5,849 |  |  |  | 68,934 |
Corporate securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income securities |  |  | 318,288 |  |  |  | 250 |  |  |  | 318,038 |  |  |  | — |
Equity securities |  |  | 91,874 |  |  |  | 90,648 |  |  |  | 1,226 |  |  |  | — |
Sovereign debt |  |  | 9,920 |  |  |  | — |  |  |  | 9,920 |  |  |  | — |
State and municipal securities |  |  | 162,821 |  |  |  | — |  |  |  | 162,821 |  |  |  | — |
Loans |  |  | 18,854 |  |  |  | — |  |  |  | — |  |  |  | 18,854 |
Total financial instruments owned |  |  | 1,199,386 |  |  |  | 107,727 |  |  |  | 1,003,871 |  |  |  | 87,788 |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency securities |  |  | 2,268 |  |  |  | — |  |  |  | 2,268 |  |  |  | — |
State and municipal securities |  |  | 2,414 |  |  |  | — |  |  |  | 2,414 |  |  |  | — |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  | 1,016,730 |  |  |  | — |  |  |  | 1,016,730 |  |  |  | — |
Commercial |  |  | 75,701 |  |  |  | — |  |  |  | 75,701 |  |  |  | — |
Non-agency |  |  | 581 |  |  |  | — |  |  |  | 581 |  |  |  | — |
Corporate fixed income securities |  |  | 820,839 |  |  |  | — |  |  |  | 820,839 |  |  |  | — |
Asset-backed securities |  |  | 323,932 |  |  |  | — |  |  |  | 323,932 |  |  |  | — |
Total available-for-sale securities |  |  | 2,242,465 |  |  |  | — |  |  |  | 2,242,465 |  |  |  | — |
Investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate equity securities |  |  | 25,198 |  |  |  | 16,443 |  |  |  | 1,001 |  |  |  | 7,754 |
Auction rate securities |  |  | 12,912 |  |  |  | — |  |  |  | — |  |  |  | 12,912 |
Other |  |  | 60,745 |  |  |  | 10,233 |  |  |  | 14,547 |  |  |  | 35,965 |
Investments in funds and partnerships measured at NAV |  |  | 22,064 |  |  |  |  |  |  |  |  |  |  |  |  |
Total investments |  |  | 120,919 |  |  |  | 26,676 |  |  |  | 15,548 |  |  |  | 56,631 |
Cash equivalents measured at NAV |  |  | 1,639 |  |  |  |  |  |  |  |  |  |  |  |  |
|  | $ | 3,564,409 |  |  | $ | 134,403 |  |  | $ | 3,261,884 |  |  | $ | 144,419 |

|  | September 30, 2021 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments sold, but not yet purchased: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government securities |  | $ | 366,014 |  |  | $ | 366,014 |  |  | $ | — |  |  | $ | — |
U.S. government agency securities |  |  | 44,638 |  |  |  | — |  |  |  | 44,638 |  |  |  | — |
Agency mortgage-backed securities |  |  | 109,887 |  |  |  | — |  |  |  | 109,887 |  |  |  | — |
Corporate securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income securities |  |  | 161,529 |  |  |  | — |  |  |  | 161,529 |  |  |  | — |
Equity securities |  |  | 30,813 |  |  |  | 30,813 |  |  |  | — |  |  |  | — |
Other |  |  | 8,147 |  |  |  | — |  |  |  | 8,147 |  |  |  | — |
Total financial instruments sold, but not yet purchased |  | $ | 721,028 |  |  | $ | 396,827 |  |  | $ | 324,201 |  |  | $ | — |

15

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2020, are presented below (in thousands):

|  | December 31, 2020 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Financial instruments owned: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government securities |  | $ | 46,900 |  |  | $ | 46,900 |  |  | $ | — |  |  | $ | — |
U.S. government agency securities |  |  | 56,450 |  |  |  | — |  |  |  | 56,450 |  |  |  | — |
Agency mortgage-backed securities |  |  | 216,434 |  |  |  | — |  |  |  | 216,434 |  |  |  | — |
Corporate securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income securities |  |  | 194,575 |  |  |  | 4,474 |  |  |  | 190,101 |  |  |  | — |
Equity securities |  |  | 67,593 |  |  |  | 62,979 |  |  |  | 4,614 |  |  |  | — |
State and municipal securities |  |  | 96,150 |  |  |  | — |  |  |  | 96,150 |  |  |  | — |
Other (1) |  |  | 15,926 |  |  |  | — |  |  |  | 4,642 |  |  |  | 11,284 |
Total financial instruments owned |  |  | 694,028 |  |  |  | 114,353 |  |  |  | 568,391 |  |  |  | 11,284 |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency securities |  |  | 4,361 |  |  |  | — |  |  |  | 4,361 |  |  |  | — |
State and municipal securities |  |  | 2,453 |  |  |  | — |  |  |  | 2,453 |  |  |  | — |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  | 793,410 |  |  |  | — |  |  |  | 793,410 |  |  |  | — |
Commercial |  |  | 95,613 |  |  |  | — |  |  |  | 95,613 |  |  |  | — |
Non-agency |  |  | 4,569 |  |  |  | — |  |  |  | 4,569 |  |  |  | — |
Corporate fixed income securities |  |  | 631,758 |  |  |  | — |  |  |  | 631,758 |  |  |  | — |
Asset-backed securities |  |  | 698,133 |  |  |  | — |  |  |  | 698,133 |  |  |  | — |
Total available-for-sale securities |  |  | 2,230,297 |  |  |  | — |  |  |  | 2,230,297 |  |  |  | — |
Investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate equity securities |  |  | 29,496 |  |  |  | 29,496 |  |  |  | — |  |  |  | — |
Auction rate securities |  |  | 12,933 |  |  |  | — |  |  |  | — |  |  |  | 12,933 |
Other |  |  | 59,048 |  |  |  | 10,342 |  |  |  | 6,593 |  |  |  | 42,113 |
Investments in funds and partnerships measured at NAV |  |  | 12,385 |  |  |  |  |  |  |  |  |  |  |  |  |
Total investments |  |  | 113,862 |  |  |  | 39,838 |  |  |  | 6,593 |  |  |  | 55,046 |
Cash equivalents measured at NAV |  |  | 34,192 |  |  |  |  |  |  |  |  |  |  |  |  |
|  | $ | 3,072,379 |  |  | $ | 154,191 |  |  | $ | 2,805,281 |  |  | $ | 66,330 |

(1) | Includes loans, asset-backed securities, sovereign debt, and non-agency mortgage-backed securities.

|  | December 31, 2020 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments sold, but not yet purchased: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government securities |  | $ | 91,974 |  |  | $ | 91,974 |  |  | $ | — |  |  | $ | — |
Agency mortgage-backed securities |  |  | 141,227 |  |  |  | — |  |  |  | 141,227 |  |  |  | — |
Corporate securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income securities |  |  | 162,626 |  |  |  | 4,094 |  |  |  | 158,532 |  |  |  | — |
Equity securities |  |  | 30,848 |  |  |  | 30,848 |  |  |  | — |  |  |  | — |
Other (2) |  |  | 11,303 |  |  |  | — |  |  |  | 11,303 |  |  |  | — |
Total financial instruments sold, but not yet purchased |  | $ | 437,978 |  |  | $ | 126,916 |  |  | $ | 311,062 |  |  | $ | — |

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(2) | Includes sovereign debt and state and municipal securities.

The following table summarizes the changes in fair value associated with Level 3 financial instruments during the three months ended September 30, 2021 (in thousands):

|  | Three Months Ended September 30, 2021 |
|  | Financial instruments owned |  |  | Investments |
|  | Asset-backed Securities |  |  | Loans |  |  | Corporate Equity Securities |  |  | Auction Rate Securities |  |  | Other |
Balance at June 30, 2021 |  | $ | 1,815 |  |  | $ | 22,839 |  |  | $ | 8,754 |  |  | $ | 12,959 |  |  | $ | 34,666 |
Unrealized gains/(losses) |  |  | — |  |  |  | — |  |  |  | (1,000 | ) |  |  | (47 | ) |  |  | 1,299 |
Purchases |  |  | 68,028 |  |  |  | 3,365 |  |  |  | — |  |  |  | — |  |  |  | — |
Sales |  |  | — |  |  |  | (7,350 | ) |  |  | — |  |  |  | — |  |  |  | — |
Redemptions |  |  | (839 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transfers out of Level 3 |  |  | (70 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net change |  |  | 67,119 |  |  |  | (3,985 | ) |  |  | (1,000 | ) |  |  | (47 | ) |  |  | 1,299 |
Balance at September 30, 2021 |  | $ | 68,934 |  |  | $ | 18,854 |  |  | $ | 7,754 |  |  | $ | 12,912 |  |  | $ | 35,965 |

The following table summarizes the change in fair value associated with Level 3 financial instruments during the nine months ended September 30, 2021 (in thousands):

|  | Nine Months Ended September 30, 2021 |
|  | Financial instruments owned |  |  | Investments |
|  | Asset-backed Securities |  |  | Loans |  |  | Corporate Equity Securities |  |  | Auction Rate Securities |  |  | Other |
Balance at December 31, 2020 |  | $ | 9 |  |  | $ | 11,275 |  |  | $ | — |  |  | $ | 12,933 |  |  | $ | 42,113 |
Unrealized gains/(losses) |  |  | (3,000 | ) |  |  | (48 | ) |  |  | (1,000 | ) |  |  | (21 | ) |  |  | 782 |
Realized gains |  |  | 7,361 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Purchases |  |  | 68,104 |  |  |  | 14,977 |  |  |  | 3,000 |  |  |  | — |  |  |  | — |
Sales |  |  | — |  |  |  | (7,350 | ) |  |  | — |  |  |  | — |  |  |  | — |
Redemptions |  |  | (10,400 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transfers into Level 3 |  |  | — |  |  |  | — |  |  |  | 5,754 |  |  |  | — |  |  |  | — |
Transfers out of Level 3 |  |  | (70 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Category transfers |  |  | 6,930 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (6,930 | )
Net change |  |  | 68,925 |  |  |  | 7,579 |  |  |  | 7,754 |  |  |  | (21 | ) |  |  | (6,148 | )
Balance at September 30, 2021 |  | $ | 68,934 |  |  | $ | 18,854 |  |  | $ | 7,754 |  |  | $ | 12,912 |  |  | $ | 35,965 |

The results included in the tables above are only a component of the overall investment strategies of our company. The tables above do not present Level 1 or Level 2 valued assets or liabilities. The changes in unrealized gains/(losses) recorded in earnings for the three and nine months ended September 30, 2021, relating to Level 3 assets still held at September 30, 2021, were immaterial.

The fair value of certain Level 3 assets was determined using various methodologies, as appropriate, including third-party pricing vendors and broker quotes. These inputs are evaluated for reasonableness through various procedures, including due diligence reviews of third-party pricing vendors, variance analyses, consideration of current market environment, and other analytical procedures.

The fair value for our auction rate securities was determined using an income approach based on an internally developed discounted cash flow model. The discounted cash flow model utilizes two significant unobservable inputs: discount rate and workout period. Significant increases in any of these inputs in isolation would result in a significantly lower fair value. On an ongoing basis, management verifies the fair value by reviewing the appropriateness of the discounted cash flow model and its significant inputs.

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Fair Value of Financial Instruments

The following reflects the fair value of financial instruments as of September 30, 2021 and December 31, 2020, whether or not recognized in the consolidated statements of financial condition at fair value (in thousands).

|  | September 30, 2021 |  |  | December 31, 2020 |
|  | Carrying Value |  |  | Estimated Fair Value |  |  | Carrying Value |  |  | Estimated Fair Value |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 2,054,273 |  |  | $ | 2,054,273 |  |  | $ | 2,279,274 |  |  | $ | 2,279,274 |
Cash segregated for regulatory purposes |  |  | 26,095 |  |  |  | 26,095 |  |  |  | 172,932 |  |  |  | 172,932 |
Securities purchased under agreements to resell |  |  | 598,535 |  |  |  | 598,535 |  |  |  | 217,930 |  |  |  | 217,930 |
Financial instruments owned |  |  | 1,199,386 |  |  |  | 1,199,386 |  |  |  | 694,028 |  |  |  | 694,028 |
Available-for-sale securities |  |  | 2,242,465 |  |  |  | 2,242,465 |  |  |  | 2,230,297 |  |  |  | 2,230,297 |
Held-to-maturity securities |  |  | 5,347,821 |  |  |  | 5,354,129 |  |  |  | 4,117,384 |  |  |  | 4,107,960 |
Bank loans |  |  | 13,502,587 |  |  |  | 13,584,900 |  |  |  | 11,006,760 |  |  |  | 11,088,058 |
Loans held for sale |  |  | 156,110 |  |  |  | 156,110 |  |  |  | 551,248 |  |  |  | 551,248 |
Investments |  |  | 120,919 |  |  |  | 120,919 |  |  |  | 113,862 |  |  |  | 113,862 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities sold under agreements to repurchase |  | $ | 195,451 |  |  | $ | 195,451 |  |  | $ | 190,955 |  |  | $ | 190,955 |
Bank deposits |  |  | 20,398,874 |  |  |  | 20,161,189 |  |  |  | 17,396,497 |  |  |  | 17,192,722 |
Financial instruments sold, but not yet purchased |  |  | 721,028 |  |  |  | 721,028 |  |  |  | 437,978 |  |  |  | 437,978 |
Federal Home Loan Bank advances |  |  | 52,000 |  |  |  | 52,000 |  |  |  | — |  |  |  | — |
Senior notes |  |  | 1,113,210 |  |  |  | 1,243,147 |  |  |  | 1,112,409 |  |  |  | 1,265,669 |
Debentures to Stifel Financial Capital Trusts |  |  | 60,000 |  |  |  | 46,130 |  |  |  | 60,000 |  |  |  | 41,071 |

The following tables present the estimated fair values of financial instruments not measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 (in thousands):

|  | September 30, 2021 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 2,052,634 |  |  | $ | 2,052,634 |  |  | $ | — |  |  | $ | — |
Cash segregated for regulatory purposes |  |  | 26,095 |  |  |  | 26,095 |  |  |  | — |  |  |  | — |
Securities purchased under agreements to resell |  |  | 598,535 |  |  |  | 393,097 |  |  |  | 205,438 |  |  |  | — |
Held-to-maturity securities |  |  | 5,354,129 |  |  |  | — |  |  |  | 5,212,387 |  |  |  | 141,742 |
Bank loans |  |  | 13,584,900 |  |  |  | — |  |  |  | 13,584,900 |  |  |  | — |
Loans held for sale |  |  | 156,110 |  |  |  | — |  |  |  | 156,110 |  |  |  | — |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities sold under agreements to repurchase |  | $ | 195,451 |  |  | $ | — |  |  | $ | 195,451 |  |  | $ | — |
Bank deposits |  |  | 20,161,189 |  |  |  | — |  |  |  | 20,161,189 |  |  |  | — |
Federal Home Loan Bank advances |  |  | 52,000 |  |  |  | 52,000 |  |  |  | — |  |  |  | — |
Senior notes |  |  | 1,243,147 |  |  |  | 1,243,147 |  |  |  | — |  |  |  | — |
Debentures to Stifel Financial Capital Trusts |  |  | 46,130 |  |  |  | — |  |  |  | — |  |  |  | 46,130 |

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|  | December 31, 2020 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 2,245,082 |  |  | $ | 2,245,082 |  |  | $ | — |  |  | $ | — |
Cash segregated for regulatory purposes |  |  | 172,932 |  |  |  | 172,932 |  |  |  | — |  |  |  | — |
Securities purchased under agreements to resell |  |  | 217,930 |  |  |  | 164,094 |  |  |  | 53,836 |  |  |  | — |
Held-to-maturity securities |  |  | 4,107,960 |  |  |  | — |  |  |  | 3,943,944 |  |  |  | 164,016 |
Bank loans |  |  | 11,088,058 |  |  |  | — |  |  |  | 11,088,058 |  |  |  | — |
Loans held for sale |  |  | 551,248 |  |  |  | — |  |  |  | 551,248 |  |  |  | — |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities sold under agreements to repurchase |  | $ | 190,955 |  |  | $ | — |  |  | $ | 190,955 |  |  | $ | — |
Bank deposits |  |  | 17,192,722 |  |  |  | — |  |  |  | 17,192,722 |  |  |  | — |
Senior notes |  |  | 1,265,669 |  |  |  | 1,265,669 |  |  |  | — |  |  |  | — |
Debentures to Stifel Financial Capital Trusts |  |  | 41,071 |  |  |  | — |  |  |  | — |  |  |  | 41,071 |

The following, as supplemented by the discussion above, describes the valuation techniques used in estimating the fair value of our financial instruments as of September 30, 2021 and December 31, 2020.

Financial Assets

Securities Purchased Under Agreements to Resell

Securities purchased under agreements to resell are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. The carrying values at September 30, 2021 and December 31, 2020 approximate fair value due to their short-term nature.

Held-to-Maturity Securities

Securities held to maturity are recorded at amortized cost based on our company’s positive intent and ability to hold these securities to maturity. Securities held to maturity include agency mortgage-backed securities, asset-backed securities, consisting of collateralized loan obligation securities and corporate fixed income securities. The estimated fair value, included in the above table, is determined using several factors; however, primary weight is given to discounted cash flow modeling techniques that incorporated an estimated discount rate based upon recent observable debt security issuances with similar characteristics.

Bank Loans

The fair values of mortgage loans and commercial loans were estimated using a discounted cash flow method, a form of the income approach. Discount rates were determined considering rates at which similar portfolios of loans, with similar remaining maturities, would be made and considering liquidity spreads applicable to each loan portfolio based on the secondary market.

Loans Held for Sale

Loans held for sale consist of fixed-rate and adjustable-rate residential real estate mortgage loans intended for sale. Loans held for sale are stated at lower of cost or market value. Market value is determined based on prevailing market prices for loans with similar characteristics or on sale contract prices.

Financial Liabilities

Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. The carrying values at September 30, 2021 and December 31, 2020 approximate fair value due to the short-term nature.

Bank Deposits

The fair value of interest-bearing deposits, including certificates of deposits, demand deposits, savings, and checking accounts, was calculated by discounting the future cash flows using discount rates based on the replacement cost of funding of similar structures and terms.

Federal Home Loan Bank Advances

Federal Home Loan Bank advances reflect terms that approximate current market rates for similar borrowings.

19

Senior Notes

The fair value of our senior notes is estimated based upon quoted market prices.

Debentures to Stifel Financial Capital Trusts

The fair value of our trust preferred securities is based on the discounted value of contractual cash flows. We have assumed a discount rate based on similar type debt instruments.

These fair value disclosures represent our best estimates based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected losses, current economic conditions, risk characteristics of the various instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in the above methodologies and assumptions could significantly affect the estimates.

NOTE 5 – Financial Instruments Owned and Financial Instruments Sold, But Not Yet Purchased

The components of financial instruments owned and financial instruments sold, but not yet purchased, at September 30, 2021 and December 31, 2020 are as follows (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
Financial instruments owned: |  |  |  |  |  |  |  |
U.S. government securities |  | $ | 16,829 |  |  | $ | 46,900 |
U.S. government agency securities |  |  | 182,636 |  |  |  | 56,450 |
Mortgage-backed securities: |  |  |  |  |  |  |  |
Agency |  |  | 303,684 |  |  |  | 216,434 |
Non-agency |  |  | 19,697 |  |  |  | 107 |
Asset-backed securities |  |  | 74,783 |  |  |  | 3,394 |
Corporate securities: |  |  |  |  |  |  |  |
Fixed income securities |  |  | 318,288 |  |  |  | 194,575 |
Equity securities |  |  | 91,874 |  |  |  | 67,593 |
Sovereign debt |  |  | 9,920 |  |  |  | 1,150 |
State and municipal securities |  |  | 162,821 |  |  |  | 96,150 |
Loans |  |  | 18,854 |  |  |  | 11,275 |
|  | $ | 1,199,386 |  |  | $ | 694,028 |
Financial instruments sold, but not yet purchased: |  |  |  |  |  |  |  |
U.S. government securities |  | $ | 366,014 |  |  | $ | 91,974 |
U.S. government agency securities |  |  | 44,638 |  |  |  | — |
Agency mortgage-backed securities |  |  | 109,887 |  |  |  | 141,227 |
Corporate securities: |  |  |  |  |  |  |  |
Fixed income securities |  |  | 161,529 |  |  |  | 162,626 |
Equity securities |  |  | 30,813 |  |  |  | 30,848 |
Other (1) |  |  | 8,147 |  |  |  | 11,303 |
|  | $ | 721,028 |  |  | $ | 437,978 |

(1) | Includes sovereign debt and state and municipal securities.

At September 30, 2021 and December 31, 2020, financial instruments owned in the amount of $206.0 million and $194.0 million, respectively, were pledged as collateral for our repurchase agreements and short-term borrowings. Our financial instruments owned are presented on a trade-date basis in the consolidated statements of financial condition.

Financial instruments sold, but not yet purchased, represent obligations of our company to deliver the specified security at the contracted price, thereby creating a liability to purchase the security in the market at prevailing prices in future periods. We are obligated to acquire the securities sold short at prevailing market prices in future periods, which may exceed the amount reflected in the consolidated statements of financial condition.

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NOTE 6 – Available-for-Sale and Held-to-Maturity Securities

The following tables provide a summary of the amortized cost and fair values of the available-for-sale securities and held-to-maturity securities at September 30, 2021 and December 31, 2020 (in thousands):

|  | September 30, 2021 |
|  | Amortized Cost |  |  | Gross Unrealized Gains (1) |  |  | Gross Unrealized Losses (1) |  |  | Estimated Fair Value |
Available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency securities |  | $ | 2,249 |  |  | $ | 19 |  |  | $ | — |  |  | $ | 2,268 |
State and municipal securities |  |  | 2,378 |  |  |  | 36 |  |  |  | — |  |  |  | 2,414 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  | 1,011,466 |  |  |  | 11,408 |  |  |  | (6,144 | ) |  |  | 1,016,730 |
Commercial |  |  | 73,187 |  |  |  | 2,514 |  |  |  | — |  |  |  | 75,701 |
Non-agency |  |  | 581 |  |  |  | — |  |  |  | — |  |  |  | 581 |
Corporate fixed income securities |  |  | 803,835 |  |  |  | 19,677 |  |  |  | (2,673 | ) |  |  | 820,839 |
Asset-backed securities |  |  | 322,322 |  |  |  | 3,546 |  |  |  | (1,936 | ) |  |  | 323,932 |
|  | $ | 2,216,018 |  |  | $ | 37,200 |  |  | $ | (10,753 | ) |  | $ | 2,242,465 |
Held-to-maturity securities (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities |  | $ | 5,347,821 |  |  | $ | 9,315 |  |  | $ | (3,007 | ) |  | $ | 5,354,129 |

|  | December 31, 2020 |
|  | Amortized Cost |  |  | Gross Unrealized Gains (1) |  |  | Gross Unrealized Losses (1) |  |  | Estimated Fair Value |
Available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency securities |  | $ | 4,293 |  |  | $ | 68 |  |  | $ | — |  |  | $ | 4,361 |
State and municipal securities |  |  | 2,395 |  |  |  | 58 |  |  |  | — |  |  |  | 2,453 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  | 777,025 |  |  |  | 16,401 |  |  |  | (16 | ) |  |  | 793,410 |
Commercial |  |  | 91,237 |  |  |  | 4,376 |  |  |  | — |  |  |  | 95,613 |
Non-agency |  |  | 4,550 |  |  |  | 28 |  |  |  | (9 | ) |  |  | 4,569 |
Corporate fixed income securities |  |  | 604,662 |  |  |  | 27,096 |  |  |  | — |  |  |  | 631,758 |
Asset-backed securities |  |  | 700,177 |  |  |  | 3,522 |  |  |  | (5,566 | ) |  |  | 698,133 |
|  | $ | 2,184,339 |  |  | $ | 51,549 |  |  | $ | (5,591 | ) |  | $ | 2,230,297 |
Held-to-maturity securities (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities |  | $ | 4,117,384 |  |  | $ | 8,111 |  |  | $ | (17,535 | ) |  | $ | 4,107,960 |

(1) | Unrealized gains/(losses) related to available-for-sale securities are reported in accumulated other comprehensive loss.

(2) | Held-to-maturity securities are carried in the consolidated statements of financial condition at amortized cost, and the changes in the value of these securities, other than impairment charges, are not reported on the consolidated financial statements.

We are required to evaluate our available-for-sale and held-to-maturity debt securities for any expected losses with recognition of an allowance for credit losses, when applicable. At September 30, 2021, we did not have an allowance for credit losses recorded on our investment portfolio.

Accrued interest receivable for our investment portfolio at September 30, 2021 and December 31, 2020 was $28.1 million and $26.0 million, respectively, and is reported in other assets in the consolidated statements of financial condition. We do not include reserves for interest receivable in the measurement of the allowance for credit losses.

During the first quarter of 2021, we transferred $312.9 million of certain asset-backed securities from available-for-sale to held-to-maturity. Management determined that it has both the positive intent and ability to hold these securities to maturity. The reclassification of these securities was accounted for at fair value. On the date of transfer, the difference between the par value and the fair value of these securities resulted in a premium or discount that, under amortized cost accounting, will be amortized as a yield adjustment to interest income using the interest method. There were no gains or losses recognized as a result of this transfer.

During the third quarter of 2020, the Company transferred $313.0 million of certain asset-backed securities from the available-for-sale category to held-to-maturity. Management determined that it has both the positive intent and ability to hold these securities to

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maturity. The reclassification of these securities was accounted for at fair value. On the date of transfer, the difference between the par value and the fair value of these securities resulted in a premium or discount that, under amortized cost accounting, will be amortized as a yield adjustment to interest income using the interest method. There were no gains or losses recognized as a result of this transfer.

There were no sales of available-for-sale securities during the nine months ended September 30, 2021. There were no sales of available-for-sale securities during the three months ended September 30, 2020. For the nine months ended September 30, 2020, we received proceeds of $491.9 million, from the sale of available-for-sale securities, which resulted in a realized loss of $0.5 million.

The table below summarizes the amortized cost and fair values of our securities by contractual maturity at September 30, 2021 and December 31, 2020 (in thousands). Expected maturities may differ significantly from contractual maturities, as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

|  | September 30, 2021 |  |  | December 31, 2020 |
|  | Amortized Cost |  |  | Estimated Fair Value |  |  | Amortized Cost |  |  | Estimated Fair Value |
Available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Within one year |  | $ | 25,169 |  |  | $ | 25,321 |  |  | $ | 143,462 |  |  | $ | 144,362 |
After one year through three years |  |  | 223,518 |  |  |  | 230,667 |  |  |  | 134,040 |  |  |  | 137,625 |
After three years through five years |  |  | 213,452 |  |  |  | 222,208 |  |  |  | 247,907 |  |  |  | 266,139 |
After five years through ten years |  |  | 458,386 |  |  |  | 461,232 |  |  |  | 429,921 |  |  |  | 435,111 |
After ten years |  |  | 1,295,493 |  |  |  | 1,303,037 |  |  |  | 1,229,009 |  |  |  | 1,247,060 |
|  | $ | 2,216,018 |  |  | $ | 2,242,465 |  |  | $ | 2,184,339 |  |  | $ | 2,230,297 |
Held-to-maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
After three years through five years |  | $ | — |  |  | $ | — |  |  | $ | 17,460 |  |  | $ | 17,460 |
After five years through ten years |  |  | 2,267,811 |  |  |  | 2,267,120 |  |  |  | 1,932,439 |  |  |  | 1,926,425 |
After ten years |  |  | 3,080,010 |  |  |  | 3,087,009 |  |  |  | 2,167,485 |  |  |  | 2,164,075 |
|  | $ | 5,347,821 |  |  | $ | 5,354,129 |  |  | $ | 4,117,384 |  |  | $ | 4,107,960 |

The maturities of our available-for-sale (fair value) and held-to-maturity (amortized cost) securities at September 30, 2021, are as follows (in thousands):

|  | Within 1 Year |  |  | 1-5 Years |  |  | 5-10 Years |  |  | After 10 Years |  |  | Total |
Available-for-sale securities (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agency securities |  | $ | 2,064 |  |  | $ | 204 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,268 |
State and municipal securities |  |  | — |  |  |  | — |  |  |  | 2,414 |  |  |  | — |  |  |  | 2,414 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency |  |  | 56 |  |  |  | 96 |  |  |  | 63,321 |  |  |  | 953,257 |  |  |  | 1,016,730 |
Commercial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 75,701 |  |  |  | 75,701 |
Non-agency |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 581 |  |  |  | 581 |
Corporate fixed income securities |  |  | 23,201 |  |  |  | 452,575 |  |  |  | 345,063 |  |  |  | — |  |  |  | 820,839 |
Asset-backed securities |  |  | — |  |  |  | — |  |  |  | 50,434 |  |  |  | 273,498 |  |  |  | 323,932 |
|  | $ | 25,321 |  |  | $ | 452,875 |  |  | $ | 461,232 |  |  | $ | 1,303,037 |  |  | $ | 2,242,465 |
Held-to-maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities |  | $ | — |  |  | $ | — |  |  | $ | 2,267,811 |  |  | $ | 3,080,010 |  |  | $ | 5,347,821 |

(1) | Due to the immaterial amount of income recognized on tax-exempt securities, yields were not calculated on a tax-equivalent basis.

At September 30, 2021 and December 31, 2020, securities of $735.4 million and $368.4 million, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. At September 30, 2021 and December 31, 2020, securities of $1.2 billion and $1.4 billion, respectively, were pledged with the Federal Reserve discount window.

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The following table shows the gross unrealized losses and fair value of the Company’s investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at September 30, 2021 (in thousands):

|  | Less than 12 months |  |  | 12 months or more |  |  | Total |
|  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |  |  | Gross Unrealized Losses |  |  | Estimated Fair Value |
Available-for-sale securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency mortgage-backed securities |  | $ | (6,142 | ) |  | $ | 618,905 |  |  | $ | (2 | ) |  | $ | 332 |  |  | $ | (6,144 | ) |  | $ | 619,237 |
Corporate fixed income securities |  |  | (2,673 | ) |  |  | 181,665 |  |  |  | — |  |  |  | — |  |  |  | (2,673 | ) |  |  | 181,665 |
Asset-backed securities |  |  | (1,645 | ) |  |  | 116,790 |  |  |  | (291 | ) |  |  | 51,144 |  |  |  | (1,936 | ) |  |  | 167,934 |
|  | $ | (10,460 | ) |  | $ | 917,360 |  |  | $ | (293 | ) |  | $ | 51,476 |  |  | $ | (10,753 | ) |  | $ | 968,836 |

At September 30, 2021, the amortized cost of 55 securities classified as available for sale exceeded their fair value by $10.8 million, of which $0.3 million related to investment securities that had been in a loss position for 12 months or longer. The total fair value of these investments at September 30, 2021, was $968.8 million, which was 43.2% of our available-for-sale portfolio.

Credit Quality Indicators

The Company uses Moody credit ratings as the primary credit quality indicator for its held-to-maturity debt securities. Each security is evaluated at least quarterly. The indicators represent the rating for debt securities, as of the date presented, based on the most recent assessment performed. The following table shows the amortized cost of our held-to-maturity securities by credit quality indicator at September 30, 2021 (in thousands):

|  | AAA |  |  | AA |  |  | A |  |  | C |  |  | Total |
Held-to-maturity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities |  | $ | 1,104,716 |  |  | $ | 4,235,714 |  |  | $ | 5,000 |  |  | $ | 2,391 |  |  | $ | 5,347,821 |

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NOTE 7 – Bank Loans

Our loan portfolio consists primarily of the following segments:

Commercial and industrial (C&I). C&I loans primarily include commercial and industrial lending used for general corporate purposes, working capital and liquidity, and “event-driven." “Event-driven” loans support client merger, acquisition or recapitalization activities. C&I lending is structured as revolving lines of credit, letter of credit facilities, term loans and bridge loans. Risk factors considered in determining the allowance for corporate loans include the borrower’s financial strength, seniority of the loan, collateral type, leverage, volatility of collateral value, debt cushion, and covenants.

Real Estate. Real estate loans include residential real estate non-conforming loans, residential real estate conforming loans, commercial real estate, and home equity lines of credit. The allowance methodology related to real estate loans considers several factors, including, but not limited to, loan-to-value ratio, FICO score, home price index, delinquency status, credit limits, and utilization rates.

Securities-based loans. Securities-based loans allow clients to borrow money against the value of qualifying securities for any suitable purpose other than purchasing, trading, or carrying securities or refinancing margin debt. The majority of consumer loans are structured as revolving lines of credit and letter of credit facilities and are primarily offered through Stifel’s Pledged Asset ("SPA") program. The allowance methodology for securities-based lending considers the collateral type underlying the loan, including the liquidity and trading volume of the collateral, position concentration and other borrower specific factors such as personal guarantees.

Construction and land. Short-term loans used to finance the development of a real estate project.

Other. Other loans include consumer and credit card lending.

The following table presents the balance and associated percentage of each major loan category in our bank loan portfolio at September 30, 2021 and December 31, 2020 (in thousands, except percentages):

|  | September 30, 2021 |  |  | December 31, 2020 |
|  | Balance |  |  | Percent |  |  | Balance |  |  | Percent |
Commercial and industrial |  | $ | 5,033,313 |  |  |  | 36.9 | % |  | $ | 4,296,089 |  |  |  | 38.5 | %
Residential real estate |  |  | 4,952,372 |  |  |  | 36.3 |  |  |  | 3,956,670 |  |  |  | 35.4 |
Securities-based loans |  |  | 2,581,705 |  |  |  | 19.0 |  |  |  | 1,933,974 |  |  |  | 17.3 |
Construction and land |  |  | 576,362 |  |  |  | 4.2 |  |  |  | 501,681 |  |  |  | 4.5 |
Commercial real estate |  |  | 369,502 |  |  |  | 2.7 |  |  |  | 366,485 |  |  |  | 3.3 |
Home equity lines of credit |  |  | 82,230 |  |  |  | 0.6 |  |  |  | 75,507 |  |  |  | 0.7 |
Other |  |  | 35,803 |  |  |  | 0.3 |  |  |  | 40,407 |  |  |  | 0.3 |
Gross bank loans |  |  | 13,631,287 |  |  |  | 100.0 | % |  |  | 11,170,813 |  |  |  | 100.0 | %
Unamortized loan discount, net |  |  | (150 | ) |  |  |  |  |  |  | (1,822 | ) |  |  |  |
Loans in process |  |  | (32,909 | ) |  |  |  |  |  |  | (48,222 | ) |  |  |  |
Unamortized loan fees, net |  |  | (1,348 | ) |  |  |  |  |  |  | (1,980 | ) |  |  |  |
Allowance for loan losses |  |  | (94,293 | ) |  |  |  |  |  |  | (112,029 | ) |  |  |  |
Loans held for investment, net |  | $ | 13,502,587 |  |  |  |  |  |  | $ | 11,006,760 |  |  |  |  |

At September 30, 2021 and December 31, 2020, Stifel Bancorp had loans outstanding to its executive officers and directors and executive officers and directors of certain affiliated entities in the amount of $26.1 million and $23.6 million, respectively.

At September 30, 2021 and December 31, 2020, we had loans held for sale of $156.1 million and $551.2 million, respectively. For the three months ended September 30, 2021 and 2020, we recognized gains of $4.4 million and $15.0 million, respectively, from the sale of originated loans, net of fees and costs. For the nine months ended September 30, 2021 and 2020, we recognized gains of $25.8 million and $28.0 million, respectively, from the sale of originated loans, net of fees and costs.

During the three months ended June 30, 2021, we reclassified $217.1 million of primarily commercial loans and $285.6 million of deposits to held for sale. During the three months ended September 30, 2021, we sold $208.0 million in unpaid principal balance of loans and $215.1 million in deposits. Based upon the terms of the sale, we recognized a $7.4 million gain, which is reflected in other income on the consolidated statements of operations.

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At September 30, 2021 and December 31, 2020, loans, primarily consisting of residential and commercial real estate loans of $4.7 billion and $3.8 billion, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings.

Accrued interest receivable for loans and loans held for sale at September 30, 2021 and December 21, 2020 was $23.8 million and $20.8 million, respectively, and is reported in other assets on the consolidated statement of financial condition.

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2021 (in thousands).

|  | Three Months Ended September 30, 2021 |
|  | Beginning Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | Ending Balance |
Commercial and industrial |  | $ | 46,943 |  |  | $ | (256 | ) |  | $ | — |  |  | $ | — |  |  | $ | 46,687 |
Construction and land |  |  | 15,953 |  |  |  | (1,620 | ) |  |  | — |  |  |  | — |  |  |  | 14,333 |
Residential real estate |  |  | 21,267 |  |  |  | 2,637 |  |  |  | — |  |  |  | — |  |  |  | 23,904 |
Commercial real estate |  |  | 11,903 |  |  |  | (6,582 | ) |  |  | — |  |  |  | — |  |  |  | 5,321 |
Securities-based loans |  |  | 2,519 |  |  |  | 808 |  |  |  | — |  |  |  | — |  |  |  | 3,327 |
Home equity lines of credit |  |  | 426 |  |  |  | 48 |  |  |  | — |  |  |  | — |  |  |  | 474 |
Other |  |  | 185 |  |  |  | 62 |  |  |  | — |  |  |  | — |  |  |  | 247 |
|  | $ | 99,196 |  |  | $ | (4,903 | ) |  | $ | — |  |  | $ | — |  |  | $ | 94,293 |

|  | Nine Months Ended September 30, 2021 |
|  | Beginning Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | Ending Balance |
Commercial and industrial |  | $ | 67,222 |  |  | $ | (15,333 | ) |  | $ | (5,202 | ) |  | $ | — |  |  | $ | 46,687 |
Construction and land |  |  | 17,275 |  |  |  | (2,942 | ) |  |  | — |  |  |  | — |  |  |  | 14,333 |
Residential real estate |  |  | 16,300 |  |  |  | 7,604 |  |  |  | — |  |  |  | — |  |  |  | 23,904 |
Commercial real estate |  |  | 8,580 |  |  |  | (3,259 | ) |  |  | — |  |  |  | — |  |  |  | 5,321 |
Securities-based loans |  |  | 2,015 |  |  |  | 1,312 |  |  |  | — |  |  |  | — |  |  |  | 3,327 |
Home equity lines of credit |  |  | 374 |  |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | 474 |
Other |  |  | 263 |  |  |  | (16 | ) |  |  | — |  |  |  | — |  |  |  | 247 |
|  | $ | 112,029 |  |  | $ | (12,534 | ) |  | $ | (5,202 | ) |  | $ | — |  |  | $ | 94,293 |

The provision for unfunded lending commitments was an expense of $4.2 million and a credit of $3.0 million for the three and nine months ended September 30, 2021, respectively. The provision for unfunded lending commitments was a credit of $3.0 million and an expense of $0.1 million for the three and nine months ended September 30, 2020, respectively. The provision for unfunded lending commitments is included in the provision for credit losses on the consolidated statement of operations. The expected credit losses for unfunded lending commitments, including standby letters of credit and binding unfunded loan commitments, are reported on the consolidated statement of financial condition in accounts payable and accrued expenses.

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2020 (in thousands).

|  | Three Months Ended September 30, 2020 |
|  | Beginning Balance |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | Ending Balance |
Commercial and industrial |  | $ | 65,503 |  |  | $ | 10,303 |  |  | $ | (1 | ) |  | $ | 4 |  |  | $ | 75,809 |
Residential real estate |  |  | 24,043 |  |  |  | (6,360 | ) |  |  | — |  |  |  | — |  |  |  | 17,683 |
Construction and land |  |  | 13,075 |  |  |  | (2,889 | ) |  |  | — |  |  |  | — |  |  |  | 10,186 |
Commercial real estate |  |  | 10,647 |  |  |  | (2,730 | ) |  |  | — |  |  |  | — |  |  |  | 7,917 |
Securities-based loans |  |  | 1,807 |  |  |  | 95 |  |  |  | — |  |  |  | — |  |  |  | 1,902 |
Home equity lines of credit |  |  | 499 |  |  |  | (205 | ) |  |  | — |  |  |  | 87 |  |  |  | 381 |
Other |  |  | 247 |  |  |  | 9 |  |  |  | (22 | ) |  |  | 1 |  |  |  | 235 |
|  | $ | 115,821 |  |  | $ | (1,777 | ) |  | $ | (23 | ) |  | $ | 92 |  |  | $ | 114,113 |

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|  | Nine Months Ended September 30, 2020 |
|  | Beginning Balance |  |  | CECL Adoption |  |  | Provision |  |  | Charge-offs |  |  | Recoveries |  |  | Ending Balance |
Commercial and industrial |  | $ | 69,949 |  |  | $ | (19,940 | ) |  | $ | 25,949 |  |  | $ | (153 | ) |  | $ | 4 |  |  | $ | 75,809 |
Residential real estate |  |  | 14,253 |  |  |  | 3,499 |  |  |  | (69 | ) |  |  | — |  |  |  | — |  |  |  | 17,683 |
Construction and land |  |  | 4,613 |  |  |  | 2,674 |  |  |  | 2,899 |  |  |  | — |  |  |  | — |  |  |  | 10,186 |
Commercial real estate |  |  | 3,564 |  |  |  | 791 |  |  |  | 3,562 |  |  |  | — |  |  |  | — |  |  |  | 7,917 |
Securities-based loans |  |  | 2,361 |  |  |  | 1,346 |  |  |  | (1,805 | ) |  |  | — |  |  |  | — |  |  |  | 1,902 |
Home equity lines of credit |  |  | 442 |  |  |  | 39 |  |  |  | (188 | ) |  |  | — |  |  |  | 88 |  |  |  | 381 |
Other |  |  | 397 |  |  |  | (145 | ) |  |  | 21 |  |  |  | (40 | ) |  |  | 2 |  |  |  | 235 |
|  | $ | 95,579 |  |  | $ | (11,736 | ) |  | $ | 30,369 |  |  | $ | (193 | ) |  | $ | 94 |  |  | $ | 114,113 |

At September 30, 2021, we had $8.3 million of impaired loans, net of discounts, which included $0.2 million in troubled debt restructurings. The specific allowance on impaired loans at September 30, 2021 was $4.1 million. At December 31, 2020, we had $13.8 million of impaired loans, net of discounts, which included $0.2 million in troubled debt restructurings. The specific allowance on impaired loans at December 31, 2020 was $8.2 million. The gross interest income related to impaired loans, which would have been recorded, had these loans been current in accordance with their original terms, and the interest income recognized on these loans during the three and nine months ended September 30, 2021 and 2020, were insignificant to the consolidated financial statements.

In December 2020, the U.S. federal government enacted the Consolidated Appropriations Act of 2021, which provided additional COVID-19 relief to American families and business, including extending TDR relief under the CARES Act until the earlier of December 31, 2021, or 60 days following the termination of the national emergency.

The following tables present the aging of the recorded investment in past due loans at September 30, 2021 and December 31, 2020 by portfolio segment (in thousands):

|  | As of September 30, 2021 |
|  | 30 – 89 Days Past Due |  |  | 90 or More Days Past Due |  |  | Total Past Due |  |  | Current Balance |  |  | Total |
Commercial and industrial |  | $ | — |  |  | $ | 6,805 |  |  | $ | 6,805 |  |  | $ | 5,026,508 |  |  | $ | 5,033,313 |
Residential real estate |  |  | 3,894 |  |  |  | 1,333 |  |  |  | 5,227 |  |  |  | 4,947,145 |  |  |  | 4,952,372 |
Securities-based loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,581,705 |  |  |  | 2,581,705 |
Construction and land |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 576,362 |  |  |  | 576,362 |
Commercial real estate |  |  | — |  |  |  | 33 |  |  |  | 33 |  |  |  | 369,469 |  |  |  | 369,502 |
Home equity lines of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 82,230 |  |  |  | 82,230 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35,803 |  |  |  | 35,803 |
Total |  | $ | 3,894 |  |  | $ | 8,171 |  |  | $ | 12,065 |  |  | $ | 13,619,222 |  |  | $ | 13,631,287 |

|  | As of September 30, 2021* |
|  | Non-Accrual |  |  | Restructured |  |  | Nonperforming loans with no allowance |  |  | Total |
Commercial and industrial |  | $ | 6,805 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,805 |
Residential real estate |  |  | 84 |  |  |  | 156 |  |  |  | 1,249 |  |  |  | 1,489 |
Commercial real estate |  |  | 33 |  |  |  | — |  |  |  | — |  |  |  | 33 |
Total |  | $ | 6,922 |  |  | $ | 156 |  |  | $ | 1,249 |  |  | $ | 8,327 |

* | There were no loans past due 90 days and still accruing interest at September 30, 2021.

26

|  | As of December 31, 2020 |
|  | 30 – 89 Days Past Due |  |  | 90 or More Days Past Due |  |  | Total Past Due |  |  | Current Balance |  |  | Total |
Commercial and industrial |  | $ | 14 |  |  | $ | 12,237 |  |  | $ | 12,251 |  |  | $ | 4,283,838 |  |  | $ | 4,296,089 |
Residential real estate |  |  | 4,554 |  |  |  | 1,249 |  |  |  | 5,803 |  |  |  | 3,950,867 |  |  |  | 3,956,670 |
Securities-based loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,933,974 |  |  |  | 1,933,974 |
Construction and land |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 501,681 |  |  |  | 501,681 |
Commercial real estate |  |  | — |  |  |  | 144 |  |  |  | 144 |  |  |  | 366,341 |  |  |  | 366,485 |
Home equity lines of credit |  |  | 12 |  |  |  | — |  |  |  | 12 |  |  |  | 75,495 |  |  |  | 75,507 |
Other |  |  | 31 |  |  |  | — |  |  |  | 31 |  |  |  | 40,376 |  |  |  | 40,407 |
Total |  | $ | 4,611 |  |  | $ | 13,630 |  |  | $ | 18,241 |  |  | $ | 11,152,572 |  |  | $ | 11,170,813 |

|  | As of December 31, 2020* |
|  | Non-Accrual |  |  | Restructured |  |  | Nonperforming loans with no allowance |  |  | Total |
Commercial and industrial |  | $ | 12,251 |  |  | $ | — |  |  | $ | — |  |  | $ | 12,251 |
Residential real estate |  |  | — |  |  |  | 158 |  |  |  | 1,249 |  |  |  | 1,407 |
Commercial real estate |  |  | 144 |  |  |  | — |  |  |  | — |  |  |  | 144 |
Total |  | $ | 12,395 |  |  | $ | 158 |  |  | $ | 1,249 |  |  | $ | 13,802 |

* | There were no loans past due 90 days and still accruing interest at December 31, 2020.

Credit quality indicators

As of September 30, 2021, bank loans were primarily extended to non-investment grade borrowers. Substantially all of these loans align with the U.S. Federal bank regulatory agencies’ definition of Pass. Loans meet the definition of Pass when they are performing and do not demonstrate adverse characteristics that are likely to result in a credit loss. A loan is determined to be impaired when principal or interest becomes 90 days past due or when collection becomes uncertain. At the time a loan is determined to be impaired, the accrual of interest and amortization of deferred loan origination fees is discontinued (“non-accrual status”), and any accrued and unpaid interest income is reversed.

We closely monitor economic conditions and loan performance trends to manage and evaluate our exposure to credit risk. Trends in delinquency ratios are an indicator, among other considerations, of credit risk within our loan portfolio. The level of nonperforming assets represents another indicator of the potential for future credit losses. Accordingly, key metrics we track and use in evaluating the credit quality of our loan portfolio include delinquency and nonperforming asset rates, as well as charge-off rates and our internal risk ratings of the loan portfolio. In general, we are a secured lender. At September 30, 2021 and December 31, 2020, 98.9% and 98.8% of our loan portfolio was collateralized, respectively. Collateral is required in accordance with the normal credit evaluation process based upon the creditworthiness of the customer and the credit risk associated with the particular transaction. The Company uses the following definitions for risk ratings:

Pass. A credit exposure rated pass has a continued expectation of timely repayment, all obligations of the borrower are current, and the obligor complies with material terms and conditions of the lending agreement.

Special Mention. Extensions of credit that have potential weakness that deserve management’s close attention, and if left uncorrected may, at some future date, result in the deterioration of the repayment prospects or collateral position.

Substandard. Obligor has a well-defined weakness that jeopardizes the repayment of the debt and has a high probability of payment default with the distinct possibility that the Company will sustain some loss if noted deficiencies are not corrected.

Doubtful. Inherent weakness in the exposure makes the collection or repayment in full, based on existing facts, conditions and circumstances, highly improbable, and the amount of loss is uncertain.

Substandard loans are regularly reviewed for impairment. Doubtful loans are considered impaired. When a loan is impaired the impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or as a practical expedient, the observable market price of the loan or the fair value of the collateral if the loan is collateral dependent.

27

Based on the most recent analysis performed, the risk category of our loan portfolio was as follows (in thousands):

|  | As of September 30, 2021 |
|  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
Commercial and industrial |  | $ | 4,824,500 |  |  | $ | 91,090 |  |  | $ | 110,918 |  |  | $ | 6,805 |  |  | $ | 5,033,313 |
Residential real estate |  |  | 4,951,039 |  |  |  | — |  |  |  | 84 |  |  |  | 1,249 |  |  |  | 4,952,372 |
Securities-based loans |  |  | 2,581,705 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,581,705 |
Construction and land |  |  | 542,122 |  |  |  | 14,240 |  |  |  | 20,000 |  |  |  | — |  |  |  | 576,362 |
Commercial real estate |  |  | 362,738 |  |  |  | — |  |  |  | 6,731 |  |  |  | 33 |  |  |  | 369,502 |
Home equity lines of credit |  |  | 82,230 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 82,230 |
Other |  |  | 35,803 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35,803 |
Total |  | $ | 13,380,137 |  |  | $ | 105,330 |  |  | $ | 137,733 |  |  | $ | 8,087 |  |  | $ | 13,631,287 |

|  | As of December 31, 2020 |
|  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
Commercial and industrial |  | $ | 3,995,351 |  |  | $ | 105,759 |  |  | $ | 182,728 |  |  | $ | 12,251 |  |  | $ | 4,296,089 |
Residential real estate |  |  | 3,955,421 |  |  |  | — |  |  |  | — |  |  |  | 1,249 |  |  |  | 3,956,670 |
Securities-based loans |  |  | 1,933,974 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,933,974 |
Construction and land |  |  | 467,441 |  |  |  | 14,240 |  |  |  | 20,000 |  |  |  | — |  |  |  | 501,681 |
Commercial real estate |  |  | 356,008 |  |  |  | 10,333 |  |  |  | — |  |  |  | 144 |  |  |  | 366,485 |
Home equity lines of credit |  |  | 75,507 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 75,507 |
Other |  |  | 40,407 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 40,407 |
Total |  | $ | 10,824,109 |  |  | $ | 130,332 |  |  | $ | 202,728 |  |  | $ | 13,644 |  |  | $ | 11,170,813 |

28

|  | Term Loans Amortized Cost Basis by Origination Year – September 30, 2021 |  |  |  |  |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2017 |  |  | Prior |  |  | Revolving Loans Amortized Cost Basis |  |  | Total |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,303,613 |  |  | $ | 351,928 |  |  | $ | 376,203 |  |  | $ | 480,660 |  |  | $ | 245,320 |  |  | $ | 366,376 |  |  | $ | 1,700,400 |  |  | $ | 4,824,500 |
Special Mention |  |  | — |  |  |  | — |  |  |  | 30,000 |  |  |  | 32,220 |  |  |  | 28,870 |  |  |  | — |  |  |  | — |  |  |  | 91,090 |
Substandard |  |  | — |  |  |  | 512 |  |  |  | 27,255 |  |  |  | 46,085 |  |  |  | 26,382 |  |  |  | 7,731 |  |  |  | 2,953 |  |  |  | 110,918 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,805 |  |  |  | — |  |  |  | — |  |  |  | 6,805 |
|  | $ | 1,303,613 |  |  | $ | 352,440 |  |  | $ | 433,458 |  |  | $ | 558,965 |  |  | $ | 307,377 |  |  | $ | 374,107 |  |  | $ | 1,703,353 |  |  | $ | 5,033,313 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,890,145 |  |  | $ | 1,362,365 |  |  | $ | 646,445 |  |  | $ | 268,473 |  |  | $ | 222,351 |  |  | $ | 561,260 |  |  | $ | — |  |  | $ | 4,951,039 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 84 |  |  |  | — |  |  |  | 84 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 149 |  |  |  | 1,100 |  |  |  | — |  |  |  | 1,249 |
|  | $ | 1,890,145 |  |  | $ | 1,362,365 |  |  | $ | 646,445 |  |  | $ | 268,473 |  |  | $ | 222,500 |  |  | $ | 562,444 |  |  | $ | — |  |  | $ | 4,952,372 |
Securities-based loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 5,897 |  |  | $ | 39,570 |  |  | $ | 93,576 |  |  | $ | 294 |  |  | $ | 140 |  |  | $ | 11,475 |  |  | $ | 2,430,753 |  |  | $ | 2,581,705 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 5,897 |  |  | $ | 39,570 |  |  | $ | 93,576 |  |  | $ | 294 |  |  | $ | 140 |  |  | $ | 11,475 |  |  | $ | 2,430,753 |  |  | $ | 2,581,705 |
Construction and land: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 55,368 |  |  | $ | 111,262 |  |  | $ | 240,337 |  |  | $ | 65,446 |  |  | $ | 63,484 |  |  | $ | 6,225 |  |  | $ | — |  |  | $ | 542,122 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 14,240 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 14,240 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 20,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 20,000 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | 55,368 |  |  | $ | 111,262 |  |  | $ | 240,337 |  |  | $ | 99,686 |  |  | $ | 63,484 |  |  | $ | 6,225 |  |  | $ | — |  |  | $ | 576,362 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 64,963 |  |  | $ | 73,006 |  |  | $ | 148,581 |  |  | $ | 22,510 |  |  | $ | 36,438 |  |  | $ | 17,240 |  |  | $ | — |  |  | $ | 362,738 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,731 |  |  |  | — |  |  |  | 6,731 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 33 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 33 |
|  | $ | 64,963 |  |  | $ | 73,006 |  |  | $ | 148,581 |  |  | $ | 22,543 |  |  | $ | 36,438 |  |  | $ | 23,971 |  |  | $ | — |  |  | $ | 369,502 |
Home equity lines of credit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 82,230 |  |  | $ | 82,230 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 82,230 |  |  | $ | 82,230 |
Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | — |  |  | $ | 10,000 |  |  | $ | — |  |  | $ | 5,526 |  |  | $ | — |  |  | $ | 19,156 |  |  | $ | 1,121 |  |  | $ | 35,803 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | — |  |  | $ | 10,000 |  |  | $ | — |  |  | $ | 5,526 |  |  | $ | — |  |  | $ | 19,156 |  |  | $ | 1,121 |  |  | $ | 35,803 |

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NOTE 8 – Goodwill and Intangible Assets

The carrying amount of goodwill and intangible assets attributable to each of our reporting segments is presented in the following table (in thousands):

|  | December 31, 2020 |  |  | Adjustments |  |  | Write-off |  |  | September 30, 2021 |
Goodwill |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 335,009 |  |  | $ | — |  |  | $ | — |  |  | $ | 335,009 |
Institutional Group |  |  | 846,989 |  |  |  | 315 |  |  |  | — |  |  |  | 847,304 |
|  | $ | 1,181,998 |  |  | $ | 315 |  |  | $ | — |  |  | $ | 1,182,313 |

|  | December 31, 2020 |  |  | Adjustments |  |  | Amortization |  |  | September 30, 2021 |
Intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 44,671 |  |  | $ | — |  |  | $ | (4,319 | ) |  | $ | 40,352 |
Institutional Group |  |  | 96,313 |  |  |  | (43 | ) |  |  | (8,897 | ) |  |  | 87,373 |
|  | $ | 140,984 |  |  | $ | (43 | ) |  | $ | (13,216 | ) |  | $ | 127,725 |

The adjustments to goodwill and intangible assets during the nine months ended September 30, 2021 are primarily attributable to the acquisition of North Atlantic Capital Corporation in February 2021 and the impact of exchange rate changes during the period.

Amortizable intangible assets consist of acquired customer relationships, trade name, investment banking backlog, and non-compete agreements that are amortized over their contractual or determined useful lives. Intangible assets as of September 30, 2021 and December 31, 2020 were as follows (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
|  | Gross Carrying Value |  |  | Accumulated Amortization |  |  | Gross Carrying Value |  |  | Accumulated Amortization |
Customer relationships |  | $ | 202,190 |  |  | $ | 93,819 |  |  | $ | 202,342 |  |  | $ | 85,152 |
Trade names |  |  | 28,659 |  |  |  | 16,973 |  |  |  | 28,659 |  |  |  | 15,660 |
Non-compete agreements |  |  | 9,240 |  |  |  | 5,302 |  |  |  | 9,240 |  |  |  | 4,229 |
Core deposits |  |  | 8,615 |  |  |  | 5,944 |  |  |  | 8,615 |  |  |  | 4,809 |
Investment banking backlog |  |  | 4,245 |  |  |  | 3,443 |  |  |  | 4,245 |  |  |  | 2,734 |
Acquired technology |  |  | 840 |  |  |  | 583 |  |  |  | 840 |  |  |  | 373 |
|  | $ | 253,789 |  |  | $ | 126,064 |  |  | $ | 253,941 |  |  | $ | 112,957 |

Amortization expense related to intangible assets was $4.5 million and $4.7 million for the three months ended September 30, 2021 and 2020, respectively. Amortization expense related to intangible assets was $13.2 million and $14.5 million for the nine months ended September 30, 2021 and 2020, respectively. Amortization expense is included in other operating expenses in the consolidated statements of operations.

The weighted-average remaining lives of the following intangible assets at September 30, 2021, are: customer relationships, 9.8 years; trade names, 8.6 years; non-compete agreements, 5.4 years; core deposits, 2.8 years; investment banking backlog, 7.4 years; and acquired technology, 1.0 years. We have an intangible asset that is not subject to amortization and is, therefore, not included in the table below. As of September 30, 2021, we expect amortization expense in future periods to be as follows (in thousands):

Fiscal year |  |  |  |
Remainder of 2021 |  | $ | 4,395 |
2022 |  |  | 16,421 |
2023 |  |  | 14,601 |
2024 |  |  | 13,908 |
2025 |  |  | 12,067 |
Thereafter |  |  | 64,215 |
|  | $ | 125,607 |

30

NOTE 9 – Borrowings and Federal Home Loan Bank Advances

Our short-term financing is generally obtained through short-term bank line financing on an uncommitted, secured basis, securities lending arrangements, repurchase agreements, advances from the Federal Home Loan Bank, term loans, and committed bank line financing on an unsecured basis. We borrow from various banks on a demand basis with company-owned and customer securities pledged as collateral. The value of customer-owned securities used as collateral is not reflected in the consolidated statements of financial condition. We also have an unsecured, committed bank line available.

Our uncommitted secured lines of credit at September 30, 2021, totaled $880.0 million with four banks and are dependent on having appropriate collateral, as determined by the bank agreements, to secure an advance under the line. The availability of our uncommitted lines is subject to approval by the individual banks each time an advance is requested and may be denied. Our peak daily borrowing on our uncommitted secured lines was $50.0 million during the nine months ended September 30, 2021. There are no compensating balance requirements under these arrangements. Any borrowings on secured lines of credit are generally utilized to finance certain fixed income securities. At September 30, 2021, we had no outstanding balances on our uncommitted secured lines of credit.

The Federal Home Loan advances of $52.0 million as of September 30, 2021 are floating-rate advances. The weighted average interest rates on these advances during the three and nine months ended September 30, 2021 was 0.28%. The advances are secured by Stifel Bancorp’s residential mortgage loan portfolio and investment portfolio. The interest rates reset on a daily basis. Stifel Bancorp has the option to prepay these advances without penalty on the interest reset date.

On May 27, 2021, the Company and Stifel entered into an unsecured revolving credit facility agreement (the “Credit Facility”). The Credit Facility has a maturity date of May 2026 and the lenders include a number of financial institutions. This committed unsecured borrowing facility provides for maximum borrowings of up to $500.0 million, with a sublimit of $200.0 million for the Company. Stifel may borrow up to $500.0 million under the Credit Facility, depending on the amount of outstanding borrowings of the Company. The interest rates on borrowings under the Credit Facility are variable and based on LIBOR, as adjusted. There were no borrowings outstanding on the Credit Facility as of September 30, 2021.

31

NOTE 10 – Senior Notes

The following table summarizes our senior notes as of September 30, 2021 and December 31, 2020 (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
4.25% senior notes, due 2024 (1) |  | $ | 500,000 |  |  | $ | 500,000 |
4.00% senior notes, due 2030 (2) |  |  | 400,000 |  |  |  | 400,000 |
5.20% senior notes, due 2047 (3) |  |  | 225,000 |  |  |  | 225,000 |
|  |  | 1,125,000 |  |  |  | 1,125,000 |
Debt issuance costs, net |  |  | (11,790 | ) |  |  | (12,591 | )
Senior notes, net |  | $ | 1,113,210 |  |  | $ | 1,112,409 |

(1) | In July 2014, we sold in a registered underwritten public offering, $300.0 million in aggregate principal amount of 4.25% senior notes due July 2024. Interest on these senior notes is payable semi-annually in arrears. We may redeem the notes in whole or in part, at our option, at a redemption price equal to 100% of their principal amount, plus a “make-whole” premium and accrued and unpaid interest, if any, to the date of redemption. In July 2016, we issued an additional $200.0 million in aggregate principal amount of 4.25% senior notes due 2024.

(2) | In May 2020, we sold in a registered underwritten public offering, $400.0 million in aggregate principal amount of 4.00% senior notes due May 2030. Interest on these senior notes is payable semi-annually in arrears. We may redeem the notes in whole or in part, at our option, at a redemption price equal to the greater of a) 100% of their principal amount, or b) discounted present value at Treasury rate plus 50 basis points prior to February 15, 2030, and on or after February 15, 2030, at 100% of their principal amount, and accrued and unpaid interest, if any, to the date of redemption.

(3) | In October 2017, we completed the pricing of a registered underwritten public offering of $200.0 million in aggregate principal amount of 5.20% senior notes due October 2047. Interest on the senior notes is payable quarterly in arrears. On or after October 15, 2022, we may redeem some or all of the senior notes at any time at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued interest thereon to the redemption date. On October 27, 2017, we completed the sale of an additional $25.0 million aggregate principal amount of Notes pursuant to the over-allotment option.

Our senior notes mature as follows, based upon contractual terms (in thousands):

2021 |  | $ | — |
2022 |  |  | — |
2023 |  |  | — |
2024 |  |  | 500,000 |
2025 |  |  | — |
Thereafter |  |  | 625,000 |
|  | $ | 1,125,000 |

NOTE 11 – Bank Deposits

Deposits consist of interest-bearing demand deposits (primarily money market and savings accounts), non-interest bearing demand deposits, and certificates of deposit. Deposits at September 30, 2021 and December 31, 2020 were as follows (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
Demand deposits (interest-bearing) |  | $ | 19,729,032 |  |  | $ | 16,886,953 |
Demand deposits (non-interest-bearing) |  |  | 635,059 |  |  |  | 411,890 |
Certificates of deposit |  |  | 34,783 |  |  |  | 97,654 |
|  | $ | 20,398,874 |  |  | $ | 17,396,497 |

The weighted-average interest rate on deposits was 0.03% and 0.09% at September 30, 2021 and December 31, 2020, respectively.

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Scheduled maturities of certificates of deposit at September 30, 2021 and December 31, 2020 were as follows (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
Certificates of deposit, less than $100,000: |  |  |  |  |  |  |  |
Within one year |  | $ | 250 |  |  | $ | 2,719 |
One to three years |  |  | 13 |  |  |  | 409 |
Three to five years |  |  | — |  |  |  | 254 |
|  | $ | 263 |  |  | $ | 3,382 |
Certificates of deposit, $100,000 and greater: |  |  |  |  |  |  |  |
Within one year |  | $ | 24,495 |  |  | $ | 63,650 |
One to three years |  |  | 10,025 |  |  |  | 30,622 |
Three to five years |  |  | — |  |  |  | — |
|  |  | 34,520 |  |  |  | 94,272 |
|  | $ | 34,783 |  |  | $ | 97,654 |

At September 30, 2021 and December 31, 2020, the amount of deposits includes related party deposits, primarily interest-bearing and time deposits of executive officers, directors, and their affiliates of $9.9 million and $6.7 million, respectively. Brokerage customers’ deposits were $18.6 billion and $16.0 billion, respectively.

NOTE 12 – Disclosures About Offsetting Assets and Liabilities

The following table provides information about financial assets and derivative assets that are subject to offset as of September 30, 2021 and December 31, 2020 (in thousands):

|  | As of September 30, 2021 |
|  | Securities borrowing (1) |  |  | Reverse repurchase agreements (2) |  |  | Total |
Gross amounts of recognized assets |  | $ | 314,154 |  |  | $ | 598,535 |  |  | $ | 912,689 |
Gross amounts offset in the statement of financial condition |  |  | — |  |  |  | — |  |  |  | — |
Net amounts presented in the statement of financial condition |  |  | 314,154 |  |  |  | 598,535 |  |  |  | 912,689 |
Gross amounts not offset in the statement of financial condition: |  |  |  |  |  |  |  |  |  |  |  |
Amounts available for offset |  |  | (39,225 | ) |  |  | (10,655 | ) |  |  | (49,880 | )
Available collateral |  |  | (260,229 | ) |  |  | (584,240 | ) |  |  | (844,469 | )
Net amount |  | $ | 14,700 |  |  | $ | 3,640 |  |  | $ | 18,340 |
|  | As of December 31, 2020 |
|  | Securities borrowing (1) |  |  | Reverse repurchase agreements (2) |  |  | Total |
Gross amounts of recognized assets |  | $ | 313,131 |  |  | $ | 217,930 |  |  | $ | 531,061 |
Gross amounts offset in the statement of financial condition |  |  | — |  |  |  | — |  |  |  | — |
Net amounts presented in the statement of financial condition |  |  | 313,131 |  |  |  | 217,930 |  |  |  | 531,061 |
Gross amounts not offset in the statement of financial condition: |  |  |  |  |  |  |  |  |  |  |  |
Amounts available for offset |  |  | (46,183 | ) |  |  | (17,992 | ) |  |  | (64,175 | )
Available collateral |  |  | (244,578 | ) |  |  | (199,110 | ) |  |  | (443,688 | )
Net amount |  | $ | 22,370 |  |  | $ | 828 |  |  | $ | 23,198 |

(1) | Securities borrowing transactions are included in receivables from brokers, dealers, and clearing organizations on the consolidated statements of financial condition. See Note 3 in the notes to consolidated financial statements for additional information on receivables from brokers, dealers, and clearing organizations.

(2) | Collateral received includes securities received by our company from the counterparty. These securities are not included on the consolidated statements of financial condition unless there is an event of default. The fair value of securities pledged as collateral was $594.9 million and $217.3 million at September 30, 2021 and December 31, 2020, respectively.

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The following table provides information about financial liabilities and derivative liabilities that are subject to offset as of September 30, 2021 and December 31, 2020 (in thousands):

|  | As of September 30, 2021 |
|  | Securities lending (3) |  |  | Repurchase agreements (4) |  |  | Total |
Gross amounts of recognized liabilities |  | $ | (183,564 | ) |  | $ | (195,451 | ) |  | $ | (379,015 | )
Gross amounts offset in the statement of financial condition |  |  | — |  |  |  | — |  |  |  | — |
Net amounts presented in the statement of financial condition |  |  | (183,564 | ) |  |  | (195,451 | ) |  |  | (379,015 | )
Gross amounts not offset in the statement of financial condition: |  |  |  |  |  |  |  |  |  |  |  |
Amounts available for offset |  |  | 39,225 |  |  |  | 10,655 |  |  |  | 49,880 |
Collateral pledged |  |  | 144,334 |  |  |  | 184,796 |  |  |  | 329,130 |
Net amount |  | $ | (5 | ) |  | $ | — |  |  | $ | (5 | )
|  | As of December 31, 2020 |
|  | Securities lending (3) |  |  | Repurchase agreements (4) |  |  | Total |
Gross amounts of recognized liabilities |  | $ | (145,124 | ) |  | $ | (190,955 | ) |  | $ | (336,079 | )
Gross amounts offset in the statement of financial condition |  |  | — |  |  |  | — |  |  |  | — |
Net amounts presented in the statement of financial condition |  |  | (145,124 | ) |  |  | (190,955 | ) |  |  | (336,079 | )
Gross amounts not offset in the statement of financial condition: |  |  |  |  |  |  |  |  |  |  |  |
Amounts available for offset |  |  | 46,183 |  |  |  | 17,992 |  |  |  | 64,175 |
Collateral pledged |  |  | 98,925 |  |  |  | 172,963 |  |  |  | 271,888 |
Net amount |  | $ | (16 | ) |  | $ | — |  |  | $ | (16 | )

(3) | Securities lending transactions are included in payables to brokers, dealers, and clearing organizations on the consolidated statements of financial condition. See Note 3 in the notes to consolidated financial statements for additional information on payables to brokers, dealers, and clearing organizations.

(4) | Collateral pledged includes the fair value of securities pledged by our company to the counterparty. These securities are included in the consolidated statements of financial condition unless we default. Collateral pledged by our company to the counterparty includes U.S. government agency securities, U.S. government securities, and corporate fixed income securities with market values of $200.6 million and $200.2 million at September 30, 2021 and December 31, 2020, respectively.

NOTE 13 – Commitments, Guarantees, and Contingencies

Broker-Dealer Commitments and Guarantees

In the normal course of business, we enter into underwriting commitments. Settlement of transactions relating to such underwriting commitments, which were open at September 30, 2021, had no material effect on the consolidated financial statements.

As a part of our fixed income public finance operations, we enter into forward commitments to purchase agency mortgage-backed securities. In order to hedge the market interest rate risk to which we would otherwise be exposed between the date of the commitment and date of sale of the mortgage-backed securities, we enter into to be announced (“TBA”) security contracts with investors for generic mortgage-backed security at specific rates and prices to be delivered on settlement dates in the future. We may be subject to loss if the timing of, or the actual amount of, the mortgage-backed security differs significantly from the term and notional amount of the TBA security contract to which we entered. These TBA securities and related purchase commitment are accounted for at fair value. As of September 30, 2021, the fair value of the TBA securities and the estimated fair value of the purchase commitments were $109.9 million.

We also provide guarantees to securities clearinghouses and exchanges under their standard membership agreement, which requires members to guarantee the performance of other members. Under the agreement, if another member becomes unable to satisfy its obligations to the clearinghouse, other members would be required to meet shortfalls. Our liability under these agreements is not quantifiable and may exceed the cash and securities we have posted as collateral. However, the potential requirement for us to make payments under these arrangements is considered remote. Accordingly, no liability has been recognized for these arrangements.

Other Commitments

In the ordinary course of business, Stifel Bancorp has commitments to extend credit in the form of commitments to originate loans, standby letters of credit, and lines of credit. See Note 20 in the notes to consolidated financial statements for further details.

Concentration of Credit Risk

We provide investment, capital-raising, and related services to a diverse group of domestic customers, including governments, corporations, and institutional and individual investors. Our exposure to credit risk associated with the non-performance of customers

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in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile securities markets, credit markets, and regulatory changes. This exposure is measured on an individual customer basis and on a group basis for customers that share similar attributes. To reduce the potential for risk concentrations, counterparty credit limits have been implemented for certain products and are continually monitored in light of changing customer and market conditions. As of September 30, 2021, we did not have significant concentrations of credit risk with any one customer or counterparty, or any group of customers or counterparties.

NOTE 14 – Legal Proceedings

Our company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from our securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. Our company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding our business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. We are contesting allegations in these claims, and we believe that there are meritorious defenses in each of these lawsuits, arbitrations, and regulatory investigations. In view of the number and diversity of claims against our company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, we cannot state with certainty what the eventual outcome of pending litigation or other claims will be.

We have established reserves for potential losses that are probable and reasonably estimable that may result from pending and potential legal actions, investigations, and regulatory proceedings. In many cases, however, it is inherently difficult to determine whether any loss is probable or reasonably possible or to estimate the amount or range of any potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated.

In our opinion, based on currently available information, review with outside legal counsel, and consideration of amounts provided for in our consolidated financial statements with respect to these matters, including the matter described below, the ultimate resolution of these matters will not have a material adverse impact on our financial position and results of operations. However, resolution of one or more of these matters may have a material effect on the results of operations in any future period, depending upon the ultimate resolution of those matters and depending upon the level of income for such period. For matters where a reserve has not been established and for which we believe a loss is reasonably possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, based on currently available information, we believe that such losses will not have a material effect on our consolidated financial statements.

Karegnondi Water Authority

Stifel has been named as a defendant in a United States District Court, Eastern District of Michigan, Southern Division, litigation in connection with the underwriting of bonds to finance the Karegnondi Water Authority (“KWA”) pipeline, a new water pipeline intended to serve Flint, Michigan and surrounding areas. The lawsuit is filed against JP Morgan Chase, as senior manager, and Stifel and Wells Fargo, as co-managers, who underwrote the bonds for the KWA in 2014. The complaint alleges novel claims against the underwriter defendants, including conspiracy and professional negligence. We intend to defend vigorously against the allegations.

NOTE 15 – 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 September 30, 2021, Stifel had net capital of $654.9 million, which was 49.8% of aggregate debit items and $628.6 million in excess of its minimum required net capital. At September 30, 2021, all of our other broker-dealer subsidiaries’ net capital exceeded the minimum net capital required under the SEC rule.

Our international subsidiary, SNEL, is subject to the regulatory supervision and requirements of the Financial Conduct Authority (“FCA”) in the United Kingdom. At September 30, 2021, our international subsidiary’s capital and reserves were in excess of the financial resources requirement under the rules of the FCA.

Our Canadian subsidiary, SNC, is subject to the regulatory supervision and requirements of the Investment Industry Regulatory Organization of Canada (“IIROC”). At September 30, 2021, SNC’s net capital and reserves were in excess of the financial resources requirement under the rules of the IIROC.

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Our company, as a bank holding company, Stifel Bank & Trust, Stifel Bank, Stifel Trust Company, N.A., and Stifel Trust Company, Delaware, N.A. (collectively, “banking subsidiaries”) 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 it’s banking subsidiaries’ financial results. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, our company and its banking subsidiaries 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 its banking subsidiaries’ capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

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 its banking subsidiaries.

Our company and its banking subsidiaries are required to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined) 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 its banking subsidiaries 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 its banking subsidiaries are each categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” our company and its banking subsidiaries must maintain total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios.

The amounts and ratios for Stifel Financial Corp., Stifel Bank & Trust, and Stifel Bank as of September 30, 2021 are represented in the tables below (in thousands, except ratios).

|  | Actual |  |  | For Capital Adequacy Purposes |  |  | To Be Well Capitalized Under Prompt Corrective Action Provisions |
Stifel Financial Corp. |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Common equity tier 1 capital |  | $ | 2,816,734 |  |  |  | 16.6 | % |  | $ | 764,693 |  |  |  | 4.5 | % |  | $ | 1,104,557 |  |  |  | 6.5 | %
Tier 1 capital |  |  | 3,501,734 |  |  |  | 20.6 | % |  |  | 1,019,591 |  |  |  | 6.0 | % |  |  | 1,359,454 |  |  |  | 8.0 | %
Total capital |  |  | 3,643,378 |  |  |  | 21.4 | % |  |  | 1,359,454 |  |  |  | 8.0 | % |  |  | 1,699,318 |  |  |  | 10.0 | %
Tier 1 leverage |  |  | 3,501,734 |  |  |  | 12.0 | % |  |  | 1,164,911 |  |  |  | 4.0 | % |  |  | 1,456,139 |  |  |  | 5.0 | %

|  | Actual |  |  | For Capital Adequacy Purposes |  |  | To Be Well Capitalized Under Prompt Corrective Action Provisions |
Stifel Bank & Trust |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Common equity tier 1 capital |  | $ | 1,145,805 |  |  |  | 10.7 | % |  | $ | 482,722 |  |  |  | 4.5 | % |  | $ | 697,264 |  |  |  | 6.5 | %
Tier 1 capital |  |  | 1,145,805 |  |  |  | 10.7 | % |  |  | 643,629 |  |  |  | 6.0 | % |  |  | 858,172 |  |  |  | 8.0 | %
Total capital |  |  | 1,250,328 |  |  |  | 11.7 | % |  |  | 858,172 |  |  |  | 8.0 | % |  |  | 1,072,715 |  |  |  | 10.0 | %
Tier 1 leverage |  |  | 1,145,805 |  |  |  | 7.0 | % |  |  | 651,241 |  |  |  | 4.0 | % |  |  | 814,051 |  |  |  | 5.0 | %

|  | Actual |  |  | For Capital Adequacy Purposes |  |  | To Be Well Capitalized Under Prompt Corrective Action Provisions |
Stifel Bank |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Common equity tier 1 capital |  | $ | 309,150 |  |  |  | 20.9 | % |  | $ | 66,632 |  |  |  | 4.5 | % |  | $ | 96,246 |  |  |  | 6.5 | %
Tier 1 capital |  |  | 309,150 |  |  |  | 20.9 | % |  |  | 88,843 |  |  |  | 6.0 | % |  |  | 118,457 |  |  |  | 8.0 | %
Total capital |  |  | 316,431 |  |  |  | 21.4 | % |  |  | 118,457 |  |  |  | 8.0 | % |  |  | 148,071 |  |  |  | 10.0 | %
Tier 1 leverage |  |  | 309,150 |  |  |  | 7.1 | % |  |  | 174,525 |  |  |  | 4.0 | % |  |  | 218,157 |  |  |  | 5.0 | %

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NOTE 16 – Operating Leases

Our operating leases primarily relate to office space and office equipment with remaining lease terms of 1 to 15 years. At September 30, 2021 and December 31, 2020, operating lease right-of-use assets were $756.9 million and $793.2 million, respectively, and lease liabilities were $804.4 million and $839.8 million, respectively, included in accounts payable and accrued expenses in the consolidated statements of financial condition.

The table below summarizes our net lease cost for the three and nine months ended September 30, 2021 and 2020 (in thousands):

|  | Three Months Ended September 30, |
|  | 2021 |  |  | 2020 |
Operating lease cost |  | $ | 25,802 |  |  | $ | 25,251 |
Short-term lease cost |  |  | 110 |  |  |  | 590 |
Variable lease cost |  |  | 265 |  |  |  | 20 |
Sublease income |  |  | (643 | ) |  |  | (997 | )
Net lease cost |  | $ | 25,534 |  |  | $ | 24,864 |

|  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |
Operating lease cost |  | $ | 76,292 |  |  | $ | 73,172 |
Short-term lease cost |  |  | 343 |  |  |  | 2,892 |
Variable lease cost |  |  | 606 |  |  |  | 62 |
Sublease income |  |  | (1,951 | ) |  |  | (2,901 | )
Net lease cost |  | $ | 75,290 |  |  | $ | 73,225 |

Operating lease costs are included in occupancy and equipment rental in the consolidated statements of operations.

The table below summarizes other information related to our operating leases as of and for the nine months ended September 30, 2021 (in thousands):

Operating lease cash flows |  | $ | 73,589 |
Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 32,189 |
Weighted-average remaining lease term |  | 11.8 years |
Weighted-average discount rate |  |  | 4.14 | %

The weighted average discount rate represents our company’s incremental borrowing rate at the lease inception date.

The table below presents information about operating lease liabilities as of September 30, 2021, (in thousands, except percentages).

Remainder of 2021 |  | $ | 25,387 |
2022 |  |  | 100,075 |
2023 |  |  | 98,372 |
2024 |  |  | 96,377 |
2025 |  |  | 94,537 |
Thereafter |  |  | 617,407 |
Total undiscounted lease payments |  |  | 1,032,155 |
Imputed interest |  |  | (227,778 | )
Total operating lease liabilities |  | $ | 804,377 |

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NOTE 17 – Revenues from Contracts with Customers

The following table presents the Company’s total revenues broken out by revenues from contracts with customers and other sources of revenues for the three and nine months ended September 30, 2021 and 2020 (in thousands):

|  | Three Months Ended September 30, |
|  | 2021 |  |  | 2020 |
Revenues from contracts with customers: |  |  |  |  |  |  |  |
Commissions |  | $ | 189,239 |  |  | $ | 172,654 |
Investment banking |  |  | 372,279 |  |  |  | 218,134 |
Asset management and service fees |  |  | 313,862 |  |  |  | 230,782 |
Other |  |  | 5,092 |  |  |  | 15,329 |
Total revenue from contracts with customers |  |  | 880,472 |  |  |  | 636,899 |
Other sources of revenue: |  |  |  |  |  |  |  |
Interest |  |  | 141,844 |  |  |  | 114,411 |
Principal transactions |  |  | 118,977 |  |  |  | 140,883 |
Other |  |  | 13,668 |  |  |  | 4,929 |
Total revenues |  | $ | 1,154,961 |  |  | $ | 897,122 |

|  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |
Revenues from contracts with customers: |  |  |  |  |  |  |  |
Commissions |  | $ | 598,432 |  |  | $ | 560,780 |
Investment banking |  |  | 1,088,010 |  |  |  | 614,637 |
Asset management and service fees |  |  | 887,878 |  |  |  | 667,496 |
Other |  |  | 30,331 |  |  |  | 32,408 |
Total revenue from contracts with customers |  |  | 2,604,651 |  |  |  | 1,875,321 |
Other sources of revenue: |  |  |  |  |  |  |  |
Interest |  |  | 402,975 |  |  |  | 403,956 |
Principal transactions |  |  | 436,580 |  |  |  | 445,566 |
Other |  |  | 27,298 |  |  |  | 18,571 |
Total revenues |  | $ | 3,471,504 |  |  | $ | 2,743,414 |

Revenue from contracts with customers is recognized when, or as, we satisfy our performance obligations by transferring the promised services to the customers. A service is transferred to a customer when, or as, the customer obtains control of that service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring our progress in satisfying the performance obligation in a manner that depicts the transfer of the services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that we determine the customer obtains control over the promised service. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for those promised services (i.e., the “transaction price”). In determining the transaction price, we consider multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, we consider the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as market volatility or the judgment and actions of third parties.

The following provides detailed information on the recognition of our revenues from contracts with customers:

Commissions. We earn commission revenue by executing, settling, and clearing transactions for clients primarily in OTC and listed equity securities, insurance products, and options. Trade execution and clearing and custody services, when provided together, represent a single performance obligation as the services are not separately identifiable in the context of the contract. Commission revenues associated with combined trade execution and clearing and custody services, as well as trade execution services on a standalone basis, are recognized at a point in time on trade-date. Commission revenues are generally paid on settlement date and we record a receivable between trade-date and payment on settlement date.

Investment Banking. We provide our clients with a full range of capital markets and financial advisory services. Capital markets services include underwriting and placement agent services in both the equity and debt capital markets, including private equity placements, initial public offerings, follow-on offerings, underwriting and distributing public and private debt.

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Capital raising revenues are recognized at a point in time on trade-date, as the client obtains the control and benefit of the capital markets offering at that point. Costs associated with capital raising transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded, and are recorded on a gross basis within other operating expenses in the consolidated statements of operations as we are acting as a principal in the arrangement. Any expenses reimbursed by our clients are recognized as investment banking revenues.

Revenues from financial advisory services primarily consist of fees generated in connection with merger, acquisition and restructuring transactions. Advisory fees from mergers and acquisitions engagements are recognized at a point in time when the related transaction is completed, as the performance obligation is to successfully broker a specific transaction. Fees received prior to the completion of the transaction are deferred within accounts payable and accrued expenses on the consolidated statements of financial condition. Advisory fees from restructuring engagements are recognized over time using a time elapsed measure of progress as our clients simultaneously receive and consume the benefits of those services as they are provided. A significant portion of the fees we receive for our advisory services are considered variable as they are contingent upon a future event (e.g., completion of a transaction or third party emergence from bankruptcy) and are excluded from the transaction price until the uncertainty associated with the variable consideration is subsequently resolved, which is expected to occur upon achievement of the specified milestone. Payment for advisory services are generally due promptly upon completion of a specified milestone or, for retainer fees, periodically over the course of the engagement. We recognize a receivable between the date of completion of the milestone and payment by the customer. Expenses associated with investment banking advisory engagements are deferred only to the extent they are explicitly reimbursable by the client and the related revenue is recognized at the same time as the associated expense. All other investment banking advisory related expenses, including expenses incurred related to restructuring assignments, are expensed as incurred. All investment banking advisory expenses are recognized within other operating expenses on the consolidated statements of operations and any expenses reimbursed by our clients are recognized as investment banking revenues.

Asset Management Fees. We earn management and performance fees in connection with investment advisory services provided to institutional and individual clients. Investment advisory fees are charged based on the value of assets in fee-based accounts and are affected by changes in the balances of client assets due to market fluctuations and levels of net new client assets. Fees are charged either in advance based on fixed rates applied to the value of the customers’ account at the beginning of the period or periodically based on contracted rates and account performance. Contracts can be terminated at any time with no incremental payments due to our company upon termination. If the contract is terminated by the customer fees are prorated for the period and fees charged for the post termination period are refundable to the customer.

Disaggregation of Revenue

The following tables present the Company’s revenues from contracts with customers by reportable segment disaggregated by major business activity and primary geographic regions for the three and nine months ended September 30, 2021 and 2020 (in thousands):

|  | Three Months Ended September 30, 2021 (1) |
|  | Global Wealth Management |  |  | Institutional Group |  |  | Other |  |  | Total |
Major business activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 133,998 |  |  | $ | 55,241 |  |  | $ | — |  |  | $ | 189,239 |
Capital raising |  |  | 11,580 |  |  |  | 152,481 |  |  |  | — |  |  |  | 164,061 |
Advisory fees |  |  | — |  |  |  | 208,218 |  |  |  | — |  |  |  | 208,218 |
Investment banking |  |  | 11,580 |  |  |  | 360,699 |  |  |  | — |  |  |  | 372,279 |
Asset management |  |  | 313,838 |  |  |  | 24 |  |  |  | — |  |  |  | 313,862 |
Other |  |  | 5,206 |  |  |  | — |  |  |  | (114 | ) |  |  | 5,092 |
Total |  |  | 464,622 |  |  |  | 415,964 |  |  |  | (114 | ) |  |  | 880,472 |
Primary Geographic Region: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  |  | 464,622 |  |  |  | 348,087 |  |  |  | (114 | ) |  |  | 812,595 |
United Kingdom |  |  | — |  |  |  | 46,267 |  |  |  | — |  |  |  | 46,267 |
Canada |  |  | — |  |  |  | 13,088 |  |  |  | — |  |  |  | 13,088 |
Other |  |  | — |  |  |  | 8,522 |  |  |  | — |  |  |  | 8,522 |
|  | $ | 464,622 |  |  | $ | 415,964 |  |  | $ | (114 | ) |  | $ | 880,472 |

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|  | Three Months Ended September 30, 2020 (1) |
|  | Global Wealth Management |  |  | Institutional Group |  |  | Other |  |  | Total |
Major business activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 120,600 |  |  | $ | 52,054 |  |  | $ | — |  |  | $ | 172,654 |
Capital raising |  |  | 8,113 |  |  |  | 129,179 |  |  |  | — |  |  |  | 137,292 |
Advisory fees |  |  | — |  |  |  | 80,842 |  |  |  | — |  |  |  | 80,842 |
Investment banking |  |  | 8,113 |  |  |  | 210,021 |  |  |  | — |  |  |  | 218,134 |
Asset management |  |  | 230,765 |  |  |  | 17 |  |  |  | — |  |  |  | 230,782 |
Other |  |  | 14,535 |  |  |  | — |  |  |  | 794 |  |  |  | 15,329 |
Total |  |  | 374,013 |  |  |  | 262,092 |  |  |  | 794 |  |  |  | 636,899 |
Primary Geographic Region: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  |  | 374,013 |  |  |  | 209,141 |  |  |  | 794 |  |  |  | 583,948 |
United Kingdom |  |  | — |  |  |  | 30,959 |  |  |  | — |  |  |  | 30,959 |
Canada |  |  | — |  |  |  | 11,133 |  |  |  | — |  |  |  | 11,133 |
Other |  |  | — |  |  |  | 10,859 |  |  |  | — |  |  |  | 10,859 |
|  | $ | 374,013 |  |  | $ | 262,092 |  |  | $ | 794 |  |  | $ | 636,899 |

(1) Excludes revenues not derived from contracts with customers included in the Other segment.

|  | Nine Months Ended September 30, 2021 (1) |
|  | Global Wealth Management |  |  | Institutional Group |  |  | Other |  |  | Total |
Major business activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 421,156 |  |  | $ | 177,276 |  |  | $ | — |  |  | $ | 598,432 |
Capital raising |  |  | 37,027 |  |  |  | 505,618 |  |  |  | — |  |  |  | 542,645 |
Advisory fees |  |  | — |  |  |  | 545,365 |  |  |  | — |  |  |  | 545,365 |
Investment banking |  |  | 37,027 |  |  |  | 1,050,983 |  |  |  | — |  |  |  | 1,088,010 |
Asset management |  |  | 887,794 |  |  |  | 84 |  |  |  | — |  |  |  | 887,878 |
Other |  |  | 28,552 |  |  |  | — |  |  |  | 1,779 |  |  |  | 30,331 |
Total |  |  | 1,374,529 |  |  |  | 1,228,343 |  |  |  | 1,779 |  |  |  | 2,604,651 |
Primary Geographic Region: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  |  | 1,374,529 |  |  |  | 996,429 |  |  |  | 1,779 |  |  |  | 2,372,737 |
United Kingdom |  |  | — |  |  |  | 137,482 |  |  |  | — |  |  |  | 137,482 |
Canada |  |  | — |  |  |  | 64,145 |  |  |  | — |  |  |  | 64,145 |
Other |  |  | — |  |  |  | 30,287 |  |  |  | — |  |  |  | 30,287 |
|  | $ | 1,374,529 |  |  | $ | 1,228,343 |  |  | $ | 1,779 |  |  | $ | 2,604,651 |

|  | Nine Months Ended September 30, 2020 (1) |
|  | Global Wealth Management |  |  | Institutional Group |  |  | Other |  |  | Total |
Major business activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 373,653 |  |  | $ | 187,127 |  |  | $ | — |  |  | $ | 560,780 |
Capital raising |  |  | 26,443 |  |  |  | 333,442 |  |  |  | — |  |  |  | 359,885 |
Advisory fees |  |  | 19 |  |  |  | 254,733 |  |  |  | — |  |  |  | 254,752 |
Investment banking |  |  | 26,462 |  |  |  | 588,175 |  |  |  | — |  |  |  | 614,637 |
Asset management |  |  | 667,446 |  |  |  | 50 |  |  |  | — |  |  |  | 667,496 |
Other |  |  | 30,104 |  |  |  | — |  |  |  | 2,304 |  |  |  | 32,408 |
Total |  |  | 1,097,665 |  |  |  | 775,352 |  |  |  | 2,304 |  |  |  | 1,875,321 |
Primary Geographic Region: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  |  | 1,097,665 |  |  |  | 609,328 |  |  |  | 2,304 |  |  |  | 1,709,297 |
United Kingdom |  |  | — |  |  |  | 110,053 |  |  |  | — |  |  |  | 110,053 |
Canada |  |  | — |  |  |  | 27,240 |  |  |  | — |  |  |  | 27,240 |
Other |  |  | — |  |  |  | 28,731 |  |  |  | — |  |  |  | 28,731 |
|  | $ | 1,097,665 |  |  | $ | 775,352 |  |  | $ | 2,304 |  |  | $ | 1,875,321 |

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(1) Excludes revenues not derived from contracts with customers included in the Other segment.

See Note 21 for further break-out of revenues by geography.

Information on Remaining Performance Obligations and Revenue Recognized from Past Performance

We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at September 30, 2021. Investment banking advisory fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price at September 30, 2021.

Contract Balances

The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied.

We had receivables related to revenues from contracts with customers of $180.0 million and $148.6 million at September 30, 2021 and December 31, 2020, respectively. We had no significant impairments related to these receivables during the nine months ended September 30, 2021.

Our deferred revenue primarily relates to retainer fees received in investment banking advisory engagements and investment advisory fees where the performance obligation has not yet been satisfied. Deferred revenue at September 30, 2021 and December 31, 2020 was $16.8 million and $12.1 million, respectively.

NOTE 18 – Interest Income and Interest Expense

The components of interest income and interest expense are as follows (in thousands):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for investment, net |  | $ | 95,075 |  |  | $ | 76,281 |  |  | $ | 274,693 |  |  | $ | 250,565 |
Investment securities |  |  | 34,247 |  |  |  | 31,966 |  |  |  | 95,738 |  |  |  | 121,630 |
Margin balances |  |  | 6,624 |  |  |  | 5,803 |  |  |  | 19,001 |  |  |  | 22,298 |
Financial instruments owned |  |  | 3,581 |  |  |  | 2,924 |  |  |  | 9,019 |  |  |  | 10,357 |
Other |  |  | 2,317 |  |  |  | (2,563 | ) |  |  | 4,524 |  |  |  | (894 | )
|  | $ | 141,844 |  |  | $ | 114,411 |  |  | $ | 402,975 |  |  | $ | 403,956 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior notes |  | $ | 11,850 |  |  | $ | 15,411 |  |  | $ | 35,924 |  |  | $ | 39,677 |
Bank deposits |  |  | 1,111 |  |  |  | 1,478 |  |  |  | 3,608 |  |  |  | 13,324 |
Other |  |  | (2,938 | ) |  |  | (3,067 | ) |  |  | (891 | ) |  |  | (1,738 | )
|  | $ | 10,023 |  |  | $ | 13,822 |  |  | $ | 38,641 |  |  | $ | 51,263 |

NOTE 19 – Employee Incentive, Deferred Compensation, and Retirement Plans

We maintain an incentive stock plan and a wealth accumulation plan (“the Plan”) that provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards, stock units, and debentures (collectively, “deferred awards”) to our associates. We are permitted to issue new shares under all stock award plans approved by shareholders or to reissue our treasury shares. Stock awards issued under our company’s incentive stock plan are granted at market value at the date of grant. Our deferred awards generally vest ratably over a one- to ten-year vesting period.

Our stock-based compensation plans are administered by the Compensation Committee of the Board of Directors (“Compensation Committee”), which has the authority to interpret the plans, determine to whom awards may be granted under the plans, and determine the terms of each award. According to the incentive stock plan, we are authorized to grant an additional 8.2 million shares at September 30, 2021.

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Expense associated with our stock-based compensation, included in compensation and benefits expense in the consolidated statements of operations for our company’s incentive stock award plan was $46.1 million and $39.7 million for the three months ended September 30, 2021 and 2020, respectively, and $134.5 million and $116.0 million for the nine months ended September 30, 2021 and 2020, respectively.

Deferred Awards

A restricted stock unit represents the right to receive a share of the Company’s common stock at a designated time in the future without cash payment by the employee and is issued in lieu of cash incentive, principally for deferred compensation and employee retention plans. The restricted stock units vest on an annual basis over the next one to ten years and are distributable, if vested, at future specified dates. Restricted stock awards are restricted as to sale or disposition. These restrictions lapse over the next one to five years.

Our company grants Performance-based Restricted Stock Units (“PRSUs”) to certain of its executive officers. Under the terms of the grants, the number of PRSUs that will vest and convert to shares will be based on the Company's achievement of the pre-determined performance objectives during the performance period. The PRSUs will be measured over a four-year performance period and vested over a five-year period. Any resulting delivery of shares for PRSUs granted as part of compensation will occur after four years for 80% of the earned award, and in the fifth year for the remaining 20% of the earned award. The number of shares converted has the potential to range from 0% to 200% based on how the Company performs during the performance period. Compensation expense is amortized over the service period based on the fair value of the deferred award on the grant date. The Company’s pre-determined performance objectives must be met for the awards to vest. Associates forfeit unvested deferred awards upon termination of employment with a corresponding reversal of compensation expense. Certain deferred awards may continue to vest under certain circumstances as described in the Plan. At September 30, 2021, the total number of restricted stock units, PRSUs, and restricted stock awards outstanding was 19.5 million, of which 16.8 million were unvested.

At September 30, 2021, there was unrecognized compensation cost for deferred awards of approximately $588.9 million, which is expected to be recognized over a weighted-average period of 2.6 years.

Deferred Compensation Plans

The Plan is provided to certain revenue producers, officers, and key administrative associates, whereby a certain percentage of their incentive compensation is deferred as defined by the Plan into company stock units, restricted stock, and debentures. Participants may elect to defer a portion of their incentive compensation. Deferred awards generally vest over a one- to ten-year period and are distributable upon vesting or at future specified dates. Deferred compensation costs are amortized on a straight-line basis over the vesting period. Elective deferrals are 100% vested.

Additionally, the Plan allows Stifel’s financial advisors who achieve certain levels of production the option to defer a certain percentage of their gross commissions. As stipulated by the Plan, the financial advisors will defer 5% of their gross commissions. The mandatory deferral is split between company restricted stock units and debentures. They have the option to defer an additional 1% of gross commissions into company stock units.

In addition, certain revenue producers, upon joining the Company, may receive company stock units in lieu of transition cash payments. Deferred compensation related to these awards generally vests over a one- to eight-year period. Deferred compensation costs are amortized on a straight-line basis over the deferral period.

Profit Sharing Plan

Eligible U.S. associates of our company who have met certain service requirements may participate in the Stifel Financial Corp. Profit Sharing 401(k) Plan (the “401(k) Plan”). Associates are permitted within limitations imposed by tax law to make pre-tax contributions to the 401(k) Plan. We may match certain associate contributions or make additional contributions to the 401(k) Plan at our discretion. Our contributions to the 401(k) Plan were $3.8 million and $3.9 million for the three months ended September 30, 2021 and 2020, respectively and $11.4 million and $11.0 million for the nine months ended September 30, 2021 and 2020, respectively.

NOTE 20 – Off-Balance Sheet Credit Risk

In the normal course of business, we execute, settle, and finance customer and proprietary securities transactions. These activities expose our company to off-balance sheet risk in the event that customers or other parties fail to satisfy their obligations.

In accordance with industry practice, securities transactions generally settle within two business days after trade date. Should a customer or broker fail to deliver cash or securities as agreed, we may be required to purchase or sell securities at unfavorable market prices.

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We borrow and lend securities to facilitate the settlement process and finance transactions, utilizing customer margin securities held as collateral. We monitor the adequacy of collateral levels on a daily basis. We periodically borrow from banks on a collateralized basis, utilizing firm and customer margin securities in compliance with SEC rules. Should the counterparty fail to return customer securities pledged, we are subject to the risk of acquiring the securities at prevailing market prices in order to satisfy our customer obligations. We control our exposure to credit risk by continually monitoring our counterparties’ positions, and where deemed necessary, we may require a deposit of additional collateral and/or a reduction or diversification of positions. Our company sells securities it does not currently own (short sales) and is obligated to subsequently purchase such securities at prevailing market prices. We are exposed to risk of loss if securities prices increase prior to closing the transactions. We control our exposure to price risk from short sales through daily review and setting position and trading limits.

We manage our risks associated with the aforementioned transactions through position and credit limits and the continuous monitoring of collateral. Additional collateral is required from customers and other counterparties when appropriate.

We have accepted collateral in connection with resale agreements, securities borrowed transactions, and customer margin loans. Under many agreements, we are permitted to sell or repledge these securities held as collateral and use these securities to enter into securities lending arrangements or to deliver to counterparties to cover short positions. At September 30, 2021 and December 31, 2020, the fair value of securities accepted as collateral where we are permitted to sell or repledge the securities was $2.4 billion and $1.8 billion, respectively, and the fair value of the collateral that had been sold or repledged was $195.5 million and $191.0 million, respectively.

We enter into interest rate derivative contracts to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are principally used to manage differences in the amount, timing, and duration of our known or expected cash payments related to certain variable-rate affiliated deposits. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments. Our interest rate hedging strategies may not work in all market environments and, as a result, may not be effective in mitigating interest rate risk.

Derivatives’ notional contract amounts are not reflected as assets or liabilities in the consolidated statements of financial condition. Rather, the market or fair value of the derivative transactions are reported in the consolidated statements of financial condition as other assets or accounts payable and accrued expenses, as applicable. As of September 30, 2021, derivative balances were immaterial.

In the ordinary course of business, Stifel Bancorp has commitments to originate loans, standby letters of credit, and lines of credit. Commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established by the contract. These commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash commitments. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if necessary, is based on the credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate, and residential real estate.

At September 30, 2021 and December 31, 2020, Stifel Bancorp had outstanding commitments to originate loans aggregating $875.3 million and $889.0 million, respectively. The commitments extended over varying periods of time, with all commitments at September 30, 2021, scheduled to be disbursed in the following three months.

Through Stifel Bancorp, in the normal course of business, we originate residential mortgage loans and sell them to investors. We may be required to repurchase mortgage loans that have been sold to investors in the event there are breaches of certain representations and warranties contained within the sales agreements. We may be required to repurchase mortgage loans that were sold to investors in the event that there was inadequate underwriting or fraud, or in the event that the loans become delinquent shortly after they are originated. We also may be required to indemnify certain purchasers and others against losses they incur in the event of breaches of representations and warranties and in various other circumstances, and the amount of such losses could exceed the repurchase amount of the related loans. Consequently, we may be exposed to credit risk associated with sold loans.

Standby letters of credit are irrevocable conditional commitments issued by Stifel Bancorp to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under non-financial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. Should Stifel Bancorp be obligated to perform under the standby letters of credit, it may seek recourse from the customer for reimbursement of amounts paid. At September 30, 2021 and December 31, 2020, Stifel Bancorp had outstanding letters of credit totaling $25.6 million and $31.8 million, respectively. A majority of the standby letters of credit commitments at September 30, 2021, have expiration terms that are less than one year.

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Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Stifel Bancorp uses the same credit policies in granting lines of credit as it does for on-balance sheet instruments. At September 30, 2021 and December 31, 2020, Stifel Bancorp had granted unused lines of credit to commercial and consumer borrowers aggregating $3.5 billion and $2.5 billion, respectively.

We are required to evaluate our loan portfolio for any expected losses with recognition of an allowance for credit losses, when applicable. At September 30, 2021, the expected credit losses for unfunded lending commitments was $20.2 million.

NOTE 21 – Segment Reporting

We currently operate through the following three business segments: Global Wealth Management, Institutional Group, and various corporate activities combined in the Other segment.

Our Global Wealth Management segment consists of two businesses, the Private Client Group and Stifel Bancorp. The Private Client Group includes branch offices and independent contractor offices of our broker-dealer subsidiaries located throughout the United States. These branches provide securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance, as well as offering banking products to their clients through our bank subsidiaries, which provide residential, consumer, and commercial lending, as well as FDIC-insured deposit accounts to customers of our private client group and to the general public.

The Institutional Group segment includes institutional sales and trading. It provides securities brokerage, trading, and research services to institutions, with an emphasis on the sale of equity and fixed income products. This segment also includes the management of and participation in underwritings for both corporate and public finance (exclusive of sales credits generated through the private client group, which are included in the Global Wealth Management segment), merger and acquisition, and financial advisory services.

The Other segment includes interest income from stock borrow activities, unallocated interest expense, interest income and gains and losses from investments held, amortization of stock-based awards, and all unallocated overhead cost associated with the execution of orders; processing of securities transactions; custody of client securities; receipt, identification, and delivery of funds and securities; compliance with regulatory and legal requirements; internal financial accounting and controls; and general administration and acquisition charges.

Information concerning operations in these segments of business for the three and nine months ended September 30, 2021 and 2020 is as follows (in thousands):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Net revenues: (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 655,533 |  |  | $ | 526,836 |  |  | $ | 1,924,595 |  |  | $ | 1,615,574 |
Institutional Group |  |  | 492,284 |  |  |  | 363,365 |  |  |  | 1,519,176 |  |  |  | 1,093,699 |
Other |  |  | (2,879 | ) |  |  | (6,901 | ) |  |  | (10,908 | ) |  |  | (17,122 | )
|  | $ | 1,144,938 |  |  | $ | 883,300 |  |  | $ | 3,432,863 |  |  | $ | 2,692,151 |
Income/(loss) before income taxes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 232,119 |  |  | $ | 178,930 |  |  | $ | 682,655 |  |  | $ | 529,422 |
Institutional Group |  |  | 125,092 |  |  |  | 76,841 |  |  |  | 383,774 |  |  |  | 201,630 |
Other |  |  | (100,709 | ) |  |  | (97,378 | ) |  |  | (318,010 | ) |  |  | (314,593 | )
|  | $ | 256,502 |  |  | $ | 158,393 |  |  | $ | 748,419 |  |  | $ | 416,459 |

(1) | No individual client accounted for more than 10 percent of total net revenues for the three and nine months ended September 30, 2021 or 2020.

The following table presents our company’s total assets on a segment basis at September 30, 2021 and December 31, 2020 (in thousands):

|  | September 30, 2021 |  |  | December 31, 2020 |
Global Wealth Management |  | $ | 25,152,551 |  |  | $ | 21,743,202 |
Institutional Group |  |  | 5,161,215 |  |  |  | 3,733,661 |
Other |  |  | 506,568 |  |  |  | 1,127,391 |
|  | $ | 30,820,334 |  |  | $ | 26,604,254 |

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We have operations in the United States, United Kingdom, Europe, and Canada. The Company’s foreign operations are conducted through its wholly owned subsidiaries, SNEL and SNC. Substantially all long-lived assets are located in the United States.

Revenues, classified by the major geographic areas in which they are earned for the three and nine months ended September 30, 2021 and 2020, were as follows (in thousands):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
United States |  | $ | 1,067,901 |  |  | $ | 814,301 |  |  | $ | 3,142,337 |  |  | $ | 2,485,336 |
United Kingdom |  |  | 57,413 |  |  |  | 45,705 |  |  |  | 177,138 |  |  |  | 147,097 |
Canada |  |  | 9,523 |  |  |  | 10,713 |  |  |  | 76,535 |  |  |  | 24,338 |
Other |  |  | 10,101 |  |  |  | 12,581 |  |  |  | 36,853 |  |  |  | 35,380 |
|  | $ | 1,144,938 |  |  | $ | 883,300 |  |  | $ | 3,432,863 |  |  | $ | 2,692,151 |

NOTE 22 – Earnings Per Share (“EPS”)

Basic EPS is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted earnings per share include dilutive stock options and stock units under the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020 (in thousands, except per share data):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Net income |  | $ | 192,376 |  |  | $ | 120,527 |  |  | $ | 563,468 |  |  | $ | 315,003 |
Preferred dividends |  |  | 9,689 |  |  |  | 9,897 |  |  |  | 26,267 |  |  |  | 19,584 |
Net income available to common shareholders |  | $ | 182,687 |  |  | $ | 110,630 |  |  | $ | 537,201 |  |  | $ | 295,419 |
Shares for basic and diluted calculation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average shares used in basic computation |  |  | 107,379 |  |  |  | 105,941 |  |  |  | 107,655 |  |  |  | 106,221 |
Dilutive effect of stock options and units (1) |  |  | 11,096 |  |  |  | 7,835 |  |  |  | 10,700 |  |  |  | 7,347 |
Average shares used in diluted computation |  |  | 118,475 |  |  |  | 113,775 |  |  |  | 118,355 |  |  |  | 113,568 |
Earnings per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.70 |  |  | $ | 1.04 |  |  | $ | 4.99 |  |  | $ | 2.78 |
Diluted |  | $ | 1.54 |  |  | $ | 0.97 |  |  | $ | 4.54 |  |  | $ | 2.60 |

(1) | Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method.

For the three and nine months ended September 30, 2021 and 2020, the anti-dilutive effect from restricted stock units was immaterial.

Cash Dividends

During the three and nine months ended September 30, 2021, we declared and paid cash dividends of $0.15 and $0.45 per common share. During the three and nine months ended September 30, 2020, we declared and paid cash dividends of $0.11 and $0.33 per common share.

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NOTE 23 – Shareholders’ Equity

Share Repurchase Program

We have an ongoing authorization from the Board of Directors to repurchase our common stock in the open market or in negotiated transactions. At September 30, 2021, the maximum number of shares that may yet be purchased under this plan was 11.9 million. The repurchase program has no expiration date. These purchases may be made on the open market or in privately negotiated transactions, depending upon market conditions and other factors. Repurchased shares may be used to meet obligations under our company’s employee benefit plans and for general corporate purposes. During the three months ended September 30, 2021, we repurchased $44.8 million, or 0.7 million shares using existing Board authorizations at an average price of $66.74 per share to meet obligations under our company’s employee benefit plans and for general corporate purposes. During the nine months ended September 30, 2021, we repurchased $86.4 million, or 1.3 million shares using existing Board authorizations at an average price of $65.69 per share to meet obligations under our company’s employee benefit plans and for general corporate purposes. There were no share repurchases during the three months ended September 30, 2020. During the nine months ended September 30, 2020, we repurchased $56.5 million, or 1.7 million shares using existing Board authorizations at an average price of $33.08 per share to meet obligations under our company’s employee benefit plans and for general corporate purposes.

Issuance of Common Stock

During the nine months ended September 30, 2021, we issued 2.5 million shares, which were primarily reissued from treasury. Share issuances were primarily a result of the vesting and conversion transactions under our incentive stock award plans.

Issuance of Preferred Stock

On May 19, 2020, the Company issued $225.0 million of 6.125% Non-Cumulative Perpetual Preferred Stock, Series C, $1.00 par value, with a liquidation preference of $25,000 per share (equivalent to $25 liquidation preference per depositary share), which included the sale of $25.0 million of Series C Preferred, pursuant to the over-allotment option.

When, as, and if declared by the board of directors of the Company, dividends will be payable at an annual rate of 6.125%, payable quarterly, in arrears. The Company may redeem the Series C preferred stock at its option, subject to regulatory approval, on or after June 15, 2025.

On July 22, 2021, the Company completed an underwritten registered public offering of $300.0 million of 4.50% Non-Cumulative Perpetual Preferred Stock, Series D, $1.00 par value, with a liquidation preference of $25,000 per share (equivalent to $25 liquidation preference per depositary share).

When, as, and if declared by the board of directors of the Company, dividends will be payable at an annual rate of 4.50%, payable quarterly, in arrears. The Company may redeem the Series D preferred stock at its option, subject to regulatory approval, on or after August 15, 2026.

On August 20, 2021, the Company redeemed all of the outstanding 6.25% Non-Cumulative Perpetual Preferred Stock, Series A. The redemption price was $25.00 per depository share plus accrued and unpaid dividends to, but excluding, the date of redemption.

NOTE 24 – Variable Interest Entities

Our company’s involvement with VIEs is limited to entities used as investment vehicles and private equity funds, the establishment of Stifel Financial Capital Trusts, and our issuance of a convertible promissory note.

We have formed several non-consolidated investment funds with third-party investors that are typically organized as limited liability companies (“LLCs”) or limited partnerships. These partnerships and LLCs have assets of $365.7 million at September 30, 2021. For those funds where we act as the general partner, our company’s economic interest is generally limited to management fee arrangements as stipulated by the fund operating agreements. We have generally provided the third-party investors with rights to terminate the funds or to remove us as the general partner. Management fee revenue earned by our company was insignificant during the three and nine months ended September 30, 2021 and 2020. In addition, our direct investment interest in these entities is insignificant at September 30, 2021.

For the entities noted above that were determined to be VIEs, we have concluded that we are not the primary beneficiary, and therefore, we are not required to consolidate these entities.

Debenture to Stifel Financial Capital Trusts

We have completed private placements of cumulative trust preferred securities through Stifel Financial Capital Trust II, Stifel Financial Capital Trust III, and Stifel Financial Capital Trust IV (collectively, the “Trusts”). The Trusts are non-consolidated wholly owned business trust subsidiaries of our company and were established for the limited purpose of issuing trust securities to third parties and lending the proceeds to our company.

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The trust preferred securities represent an indirect interest in junior subordinated debentures purchased from our company by the Trusts, and we effectively provide for the full and unconditional guarantee of the securities issued by the Trusts. We make timely payments of interest to the Trusts as required by contractual obligations, which are sufficient to cover payments due on the securities issued by the Trusts, and believe that it is unlikely that any circumstances would occur that would make it necessary for our company to make payments related to these Trusts other than those required under the terms of the debenture agreements and the trust preferred securities agreements. The Trusts were determined to be VIEs because the holders of the equity investment at risk do not have adequate decision-making ability over the Trust’s activities. Our investment in the Trusts is not a variable interest, because equity interests are variable interests only to the extent that the investment is considered to be at risk. Because our investment was funded by the Trusts, it is not considered to be at risk.

NOTE 25 – Subsequent Events

We evaluate subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Based on the evaluation, we did not identify any recognized subsequent events that would have required adjustment to the consolidated financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and the accompanying consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q.

Certain statements in this report may be considered forward-looking. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These forward-looking statements cover, among other things, statements made about general economic and market conditions (including the impact of the COVID-19 pandemic on these conditions), the investment banking industry, objectives and results, and also may include our belief regarding the effect of various legal proceedings, management expectations, our liquidity and funding sources, counterparty credit risk, or other similar matters. In addition, statements about the potential effects of the COVID-19 pandemic on the Company’s businesses and results of operations and financial condition may constitute forward-looking statements. These statements are subject to the risk that the actual effects may differ, possibly materially from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable, and in many cases, beyond the Company’s control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on its customers, third-parties, and the Company.

Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including those factors discussed under “External Factors Impacting Our Business” in Part II, Item 1A in this Quarterly Report on Form 10-Q, as well as the factors identified under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as updated in our subsequent reports filed with the SEC. These reports are available at the Company’s web site at www.stifel.com and at the SEC web site at www.sec.gov.

Because of these and other uncertainties, the Company’s actual future results may be materially different from the results indicated by these forward-looking statements. In addition, the Company’s past results of operations do not necessarily indicate its future results. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events, unless it is obligated to do so under federal securities laws.

Unless otherwise indicated, the terms “we,” “us,” “our” or “our company” in this report refer to Stifel Financial Corp. and its wholly owned subsidiaries.

Executive Summary

We operate as a financial services and bank holding company. We have built a diversified business serving private clients, institutional investors, and investment banking clients located across the United States and in Europe. Our principal activities are: (i) private client services, including securities transaction and financial planning services; (ii) institutional equity and fixed income sales, trading and research, and municipal finance; (iii) investment banking services, including mergers and acquisitions, public offerings, and private placements; and (iv) retail and commercial banking, including personal and commercial lending programs. Our major geographic area of concentration is throughout the United States, with a growing presence in the United Kingdom and Europe. Our company’s principal customers are individual investors, corporations, municipalities, and institutions.

Our core philosophy is based upon a tradition of trust, understanding, and studied advice. We attract and retain experienced professionals by fostering a culture of entrepreneurial, long-term thinking. We provide our private, institutional and corporate clients quality, personalized service, with the theory that if we place clients’ needs first, both our clients and our company will prosper. Our unwavering client and employee focus have earned us a reputation as one of the leading brokerage and investment banking firms off Wall Street. We have grown our business both organically and through opportunistic acquisitions.

We plan to maintain our focus on revenue growth with a continued appreciation for the development of quality client relationships. Within our private client business, our efforts will be focused on recruiting experienced financial advisors with established client relationships. Within our capital markets business, our focus continues to be on providing quality client management and product diversification. In executing our growth strategy, we will continue to seek out opportunities that allow us to take advantage of the consolidation among middle-market firms, whereby allowing us to increase market share in our Global Wealth Management and Institutional Group businesses.

Our ability to attract and retain highly skilled and productive associates is critical to the success of our business. Accordingly, compensation and benefits comprise the largest component of our expenses, and our performance is dependent upon our ability to attract, develop and retain highly skilled associates who are motivated and committed to providing the highest quality of service and guidance to our clients.

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On July 22, 2021, the Company completed an underwritten registered public offering of $300.0 million of 4.50% Non-Cumulative Perpetual Preferred Stock, Series D, $1.00 par value, with a liquidation preference of $25,000 per share (equivalent to $25 liquidation preference per depositary share).

On August 20, 2021, the Company redeemed all of the outstanding 6.25% Non-Cumulative Perpetual Preferred Stock, Series A. The redemption price was $25.00 per depository share plus accrued and unpaid dividends to, but excluding, the date of redemption.

On October 31, 2021, the Company acquired Vining Sparks and its affiliates (“Vining Sparks). Established in 1981 and headquartered in Memphis, Tennessee, Vining Sparks has approximately 275 employees in 13 offices throughout the United States. Vining Sparks provides institutional fixed income brokerage, balance sheet management and underwriting services to more than 4,000 institutional clients in all 50 states, with a core focus on depository institutions, but also serving municipalities, money managers, insurance companies, trust departments and pension funds. Consideration for this acquisition consisted of cash from operations and shares of company common stock.

COVID-19 Pandemic

The global economy has recovered considerably since its decline last spring, but there is still a high degree of economic uncertainty resulting from the COVID-19 pandemic, as well as a new federal government administration. As a result, volatility of both brokerage revenues and investment banking revenues could continue, which may negatively impact our ability to sustain the current quarter revenue levels in future periods.

We are continuously monitoring circumstances around COVID-19, as well as economic and capital market conditions, and providing frequent communications to both our clients and our associates We have adopted enhanced cleaning practices across our offices, have restricted non-essential business travel, and have monitored the health and welfare of our employees and worked actively with many individuals diagnosed with COVID-19. We continue to execute our Business Continuity Plan and maintain a largely remote working environment across all functions without any significant disruptions to our business or control processes. In connection with reviewing our financial condition in light of the pandemic, we evaluated our assets, including goodwill and other intangibles, for potential impairment, and reviewed fair values of financial instruments that are carried at fair value. Based upon our review as of September 30, 2021, no impairments have been recorded and there have been no significant changes in fair value hierarchy classifications.

Results for the three and nine months ended September 30, 2021

For the three months ended September 30, 2021, net revenues increased 29.6% to $1.1 billion from $883.3 million during the comparable period in 2020. Net income available to common shareholders increased 65.1% to $182.7 million, or $1.54 per diluted common share for the three months ended September 30, 2021, compared to $110.6 million, or $0.97 per diluted common share during the comparable period in 2020.

Our revenue growth was primarily attributable to an increase in advisory fee revenues, asset management and service fees, net interest income, capital raising revenues, and commission revenues, partially offset by lower principal transaction fee revenues.

For the nine months ended September 30, 2021, net revenues increased 27.5% to a record $3.4 billion compared to $2.7 billion during the comparable period in 2020. Net income available to common shareholders increased 81.8% to $537.2 million, or $4.54 per diluted common share for the nine months ended September 30, 2021, compared to $295.4 million, or $2.60 per diluted common share during the comparable period in 2020.

Our revenue growth was primarily attributable to an increase in advisory fee revenues, capital raising revenues, asset management and service fees, commission revenues, and net interest income, partially offset by lower principal transaction fee revenues.

External Factors Impacting our Business

Performance in the financial services industry in which we operate is highly correlated to the overall strength of economic conditions and financial market activity. Overall market conditions are a product of many factors, which are beyond our control and mostly unpredictable. These factors may affect the financial decisions made by investors, including their level of participation in the financial markets. In turn, these decisions may affect our business results. With respect to financial market activity, our profitability is sensitive to a variety of factors, including the demand for investment banking services as reflected by the number and size of equity and debt financings and merger and acquisition transactions, the volatility of the equity and fixed income markets, the level and shape of various yield curves, the volume and value of trading in securities, and the value of our customers’ assets under management.

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The COVID-19 pandemic has severely impacted, and may continue to severely impact, global economic conditions, resulting in substantial volatility in the global financial markets, increased unemployment, and operational challenges such as the temporary closures of businesses, sheltering-in-place directives and increased remote work protocols. Governments and central banks around the world have reacted to the economic crisis caused by the pandemic by implementing stimulus and liquidity programs and cutting interest rates, though it is unclear whether these or future actions will be successful in countering the economic disruption. Recently, there has been widespread distribution and inoculation of the U.S. population with vaccines that have generally been proven to be both safe and effective. If the pandemic is prolonged or the actions of governments and central banks are unsuccessful, the adverse impact on the global economy will deepen, and our results of operations and financial condition in future quarters will be adversely affected.

Our overall financial results continue to be highly and directly correlated to the direction and activity levels of the United States equity and fixed income markets. At September 30, 2021, the S&P 500, NASDAQ, and Dow Jones Industrial Average, closed 14.7%, 12.1%, and 10.6% higher than their December 31, 2020 closing prices, respectively.

As a participant in the financial services industry, we are subject to complicated and extensive regulation of our business. The recent economic and political environment has led to legislative and regulatory initiatives, both enacted and proposed, that could substantially intensify the regulation of the financial services industry and may significantly impact us.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2021 Compared with Three Months Ended September 30, 2020

The following table presents consolidated financial information for the periods indicated (in thousands, except percentages):

|  | Three Months Ended September 30, |  |  | As a Percentage of Net Revenues For the Three Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 189,239 |  |  | $ | 172,654 |  |  |  | 9.6 |  |  |  | 16.5 | % |  |  | 19.5 | %
Principal transactions |  |  | 118,977 |  |  |  | 140,883 |  |  |  | (15.5 | ) |  |  | 10.4 |  |  |  | 16.0 |
Brokerage revenues |  |  | 308,216 |  |  |  | 313,537 |  |  |  | (1.7 | ) |  |  | 26.9 |  |  |  | 35.5 |
Investment banking |  |  | 372,279 |  |  |  | 218,134 |  |  |  | 70.7 |  |  |  | 32.5 |  |  |  | 24.7 |
Asset management and service fees |  |  | 313,862 |  |  |  | 230,782 |  |  |  | 36.0 |  |  |  | 27.4 |  |  |  | 26.1 |
Interest |  |  | 141,844 |  |  |  | 114,411 |  |  |  | 24.0 |  |  |  | 12.4 |  |  |  | 13.0 |
Other income |  |  | 18,760 |  |  |  | 20,258 |  |  |  | (7.4 | ) |  |  | 1.7 |  |  |  | 2.3 |
Total revenues |  |  | 1,154,961 |  |  |  | 897,122 |  |  |  | 28.7 |  |  |  | 100.9 |  |  |  | 101.6 |
Interest expense |  |  | 10,023 |  |  |  | 13,822 |  |  |  | (27.5 | ) |  |  | 0.9 |  |  |  | 1.6 |
Net revenues |  |  | 1,144,938 |  |  |  | 883,300 |  |  |  | 29.6 |  |  |  | 100.0 |  |  |  | 100.0 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 672,385 |  |  |  | 533,638 |  |  |  | 26.0 |  |  |  | 58.7 |  |  |  | 60.4 |
Occupancy and equipment rental |  |  | 72,160 |  |  |  | 68,598 |  |  |  | 5.2 |  |  |  | 6.3 |  |  |  | 7.8 |
Communication and office supplies |  |  | 40,432 |  |  |  | 40,123 |  |  |  | 0.8 |  |  |  | 3.5 |  |  |  | 4.5 |
Commissions and floor brokerage |  |  | 14,744 |  |  |  | 13,254 |  |  |  | 11.2 |  |  |  | 1.3 |  |  |  | 1.5 |
Provision for credit losses |  |  | (660 | ) |  |  | (1,353 | ) |  |  | (51.2 | ) |  |  | (0.1 | ) |  |  | (0.2 | )
Other operating expenses |  |  | 89,375 |  |  |  | 70,647 |  |  |  | 26.5 |  |  |  | 7.9 |  |  |  | 8.1 |
Total non-interest expenses |  |  | 888,436 |  |  |  | 724,907 |  |  |  | 22.6 |  |  |  | 77.6 |  |  |  | 82.1 |
Income before income taxes |  |  | 256,502 |  |  |  | 158,393 |  |  |  | 61.9 |  |  |  | 22.4 |  |  |  | 17.9 |
Provision for income taxes |  |  | 64,126 |  |  |  | 37,866 |  |  |  | 69.3 |  |  |  | 5.6 |  |  |  | 4.3 |
Net Income |  |  | 192,376 |  |  |  | 120,527 |  |  |  | 59.6 |  |  |  | 16.8 |  |  |  | 13.6 |
Preferred dividends |  |  | 9,689 |  |  |  | 9,897 |  |  |  | (2.1 | ) |  |  | 0.8 |  |  |  | 1.1 |
Net income available to common shareholders |  | $ | 182,687 |  |  | $ | 110,630 |  |  |  | 65.1 |  |  |  | 16.0 | % |  |  | 12.5 | %

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Nine months ended September 30, 2021 Compared with Nine months ended September 30, 2020

The following table presents consolidated financial information for the periods indicated (in thousands, except percentages):

|  | Nine Months Ended September 30, |  |  | As a Percentage of Net Revenues For the Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 598,432 |  |  | $ | 560,780 |  |  |  | 6.7 |  |  |  | 17.4 | % |  |  | 20.8 | %
Principal transactions |  |  | 436,580 |  |  |  | 445,566 |  |  |  | (2.0 | ) |  |  | 12.7 |  |  |  | 16.6 |
Brokerage revenues |  |  | 1,035,012 |  |  |  | 1,006,346 |  |  |  | 2.8 |  |  |  | 30.1 |  |  |  | 37.4 |
Investment banking |  |  | 1,088,010 |  |  |  | 614,637 |  |  |  | 77.0 |  |  |  | 31.7 |  |  |  | 22.8 |
Asset management and service fees |  |  | 887,878 |  |  |  | 667,496 |  |  |  | 33.0 |  |  |  | 25.9 |  |  |  | 24.8 |
Interest |  |  | 402,975 |  |  |  | 403,956 |  |  |  | (0.2 | ) |  |  | 11.7 |  |  |  | 15.0 |
Other income |  |  | 57,629 |  |  |  | 50,979 |  |  |  | 13.0 |  |  |  | 1.7 |  |  |  | 1.9 |
Total revenues |  |  | 3,471,504 |  |  |  | 2,743,414 |  |  |  | 26.5 |  |  |  | 101.1 |  |  |  | 101.9 |
Interest expense |  |  | 38,641 |  |  |  | 51,263 |  |  |  | (24.6 | ) |  |  | 1.1 |  |  |  | 1.9 |
Net revenues |  |  | 3,432,863 |  |  |  | 2,692,151 |  |  |  | 27.5 |  |  |  | 100.0 |  |  |  | 100.0 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 2,062,353 |  |  |  | 1,657,991 |  |  |  | 24.4 |  |  |  | 60.1 |  |  |  | 61.6 |
Occupancy and equipment rental |  |  | 215,163 |  |  |  | 200,935 |  |  |  | 7.1 |  |  |  | 6.3 |  |  |  | 7.5 |
Communication and office supplies |  |  | 123,565 |  |  |  | 124,293 |  |  |  | (0.6 | ) |  |  | 3.6 |  |  |  | 4.6 |
Commissions and floor brokerage |  |  | 44,424 |  |  |  | 43,273 |  |  |  | 2.7 |  |  |  | 1.3 |  |  |  | 1.6 |
Provision for credit losses |  |  | (15,564 | ) |  |  | 33,925 |  |  |  | (145.9 | ) |  |  | (0.5 | ) |  |  | 1.3 |
Other operating expenses |  |  | 254,503 |  |  |  | 215,275 |  |  |  | 18.2 |  |  |  | 7.4 |  |  |  | 7.9 |
Total non-interest expenses |  |  | 2,684,444 |  |  |  | 2,275,692 |  |  |  | 18.0 |  |  |  | 78.2 |  |  |  | 84.5 |
Income before income taxes |  |  | 748,419 |  |  |  | 416,459 |  |  |  | 79.7 |  |  |  | 21.8 |  |  |  | 15.5 |
Provision for income taxes |  |  | 184,951 |  |  |  | 101,456 |  |  |  | 82.3 |  |  |  | 5.4 |  |  |  | 3.8 |
Net Income |  |  | 563,468 |  |  |  | 315,003 |  |  |  | 78.9 |  |  |  | 16.4 |  |  |  | 11.7 |
Preferred dividends |  |  | 26,267 |  |  |  | 19,584 |  |  |  | 34.1 |  |  |  | 0.8 |  |  |  | 0.7 |
Net income available to common shareholders |  | $ | 537,201 |  |  | $ | 295,419 |  |  |  | 81.8 |  |  |  | 15.6 | % |  |  | 11.0 | %

NET REVENUES

The following table presents consolidated net revenues for the periods indicated (in thousands, except percentages):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |  |  | % Change |
Net revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 189,239 |  |  | $ | 172,654 |  |  |  | 9.6 |  |  | $ | 598,432 |  |  | $ | 560,780 |  |  |  | 6.7 |
Principal transactions |  |  | 118,977 |  |  |  | 140,883 |  |  |  | (15.5 | ) |  |  | 436,580 |  |  |  | 445,566 |  |  |  | (2.0 | )
Brokerage revenues |  |  | 308,216 |  |  |  | 313,537 |  |  |  | (1.7 | ) |  |  | 1,035,012 |  |  |  | 1,006,346 |  |  |  | 2.8 |
Capital raising |  |  | 164,061 |  |  |  | 137,292 |  |  |  | 19.5 |  |  |  | 542,645 |  |  |  | 359,885 |  |  |  | 50.8 |
Advisory fees |  |  | 208,218 |  |  |  | 80,842 |  |  |  | 157.6 |  |  |  | 545,365 |  |  |  | 254,752 |  |  |  | 114.1 |
Investment banking |  |  | 372,279 |  |  |  | 218,134 |  |  |  | 70.7 |  |  |  | 1,088,010 |  |  |  | 614,637 |  |  |  | 77.0 |
Asset management and service fees |  |  | 313,862 |  |  |  | 230,782 |  |  |  | 36.0 |  |  |  | 887,878 |  |  |  | 667,496 |  |  |  | 33.0 |
Net interest |  |  | 131,821 |  |  |  | 100,589 |  |  |  | 31.0 |  |  |  | 364,334 |  |  |  | 352,693 |  |  |  | 3.3 |
Other income |  |  | 18,760 |  |  |  | 20,258 |  |  |  | (7.4 | ) |  |  | 57,629 |  |  |  | 50,979 |  |  |  | 13.0 |
Total net revenues |  | $ | 1,144,938 |  |  | $ | 883,300 |  |  |  | 29.6 |  |  | $ | 3,432,863 |  |  | $ | 2,692,151 |  |  |  | 27.5 |

Commissions – Commission revenues are primarily generated from agency transactions in OTC and listed equity securities, insurance products and options. In addition, commission revenues also include distribution fees for promoting and distributing mutual funds.

For the three months ended September 30, 2021, commission revenues increased 9.6% to $189.2 million from $172.7 million in the comparable period in 2020. For the nine months ended September 30, 2021, commission revenues increased 6.7% to $598.4 million from $560.8 million in the comparable period in 2020. The increase is primarily attributable to higher trading volumes due to market volatility.

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Principal transactions – Principal transaction revenues are gains and losses on secondary trading, principally fixed income brokerage revenues.

For the three months ended September 30, 2021, principal transactions revenues decreased 15.5% to $119.0 million from $140.9 million in the comparable period in 2020. The decrease is primarily attributable to lower volatility as well as tighter credit spreads. For the nine months ended September 30, 2021, principal transactions revenues decreased 2.0% to $436.6 million from $445.6 million in the comparable period in 2020. The decrease is primarily attributable to lower market volumes and lower trading gains during the third quarter, partially offset by market volatility during the first quarter of 2021.

Investment banking – Investment banking revenues include: (i) capital raising revenues representing fees earned from the underwriting of debt and equity securities, and (ii) advisory fees related to corporate debt and equity offerings, municipal debt offerings, merger and acquisitions, private placements and other investment banking advisory fees.

For the three months ended September 30, 2021, investment banking revenues increased 70.7% to $372.3 million from $218.1 million in the comparable period in 2020.

Capital raising revenues increased 19.5% to $164.1 million for the three months ended September 30, 2021 from $137.3 million in the comparable period in 2020. For the three months ended September 30, 2021, equity capital raising revenues increased 23.3% to $109.9 million from $89.1 million in the comparable period in 2020. For the three months ended September 30, 2021, fixed income capital raising revenues increased 12.4% to $54.2 million from $48.2 million in the comparable period in 2020. The increase in equity capital raising revenues is primarily attributable to an increase in deals compared to the prior year.

Advisory fee revenues increased 157.6% to $208.2 million for the three months ended September 30, 2021 from $80.8 million in the comparable period in 2020. The increase is primarily attributable to higher completed advisory transactions.

For the nine months ended September 30, 2021, investment banking revenues increased 77.0% to $1.1 billion from $614.6 million in the comparable period in 2020.

Capital raising revenues increased 50.8% to $542.6 million for the nine months ended September 30, 2021 from $359.9 million in the comparable period in 2020. For the nine months ended September 30, 2021, equity capital raising revenues increased 65.0% to $379.6 million from $230.1 million in the comparable period in 2020. For the nine months ended September 30, 2021, fixed income capital raising revenues increased 25.6% to $163.0 million from $129.8 million in the comparable period in 2020. The increase is primarily attributable to an increase in our public finance business. In addition, there has been an increase in our corporate debt issuance business.

Advisory fee revenues increased 114.1% to $545.4 million for the nine months ended September 30, 2021 from $254.8 million in the comparable period in 2020. The increase is primarily attributable to higher completed advisory transactions.

Asset management and service fees – Asset management and service fee revenues are primarily generated by the investment advisory fees related to asset management services provided for individual and institutional investment portfolios, along with mutual funds. Investment advisory fees are earned on assets held in managed or non-discretionary asset-based programs. Fees from private client investment portfolios and institutional fees are typically based on asset values at the end of the prior period. Asset balances are impacted by both the performance of the market and levels of net new client assets. Rising markets have historically had a positive impact on investment advisory fee revenues as existing accounts increase in value, and individuals and institutions may commit incremental funds in rising markets.

For the three months ended September 30, 2021, asset management and service fee revenues increased 36.0% to $313.9 million from $230.8 million in the comparable period in 2020. For the nine months ended September 30, 2021, asset management and service fee revenues increased 33.0% to $887.9 million from $667.5 million in the comparable period in 2020. Please refer to “Asset management and service fees” in the Global Wealth Management segment discussion for information on the changes in asset management and service fees revenues.

Other income – Other income primarily includes investment gains and losses, rental income, and loan originations fees. For the three months ended September 30, 2021, other income decreased 7.4% to $18.8 million from $20.3 million during the comparable period in 2020. The decrease is primarily attributable to a decrease in loan origination fees, partially offset by the recognition of a gain on the sale of certain loans and transfer of deposits and improved investment gains over the comparable period in 2020. For the nine months ended September 30, 2021, other income increased 13.0% to $57.6 million from $51.0 million during the comparable period in 2020. The increase is primarily attributable to improved investment gains over the comparable period in 2020, the recognition of a gain on the sale of certain loans and transfer of deposits, and an increase in loan origination fees. Other income for the nine months ended September 30, 2020 includes a gain on the sale of Ziegler Capital Management, LLC.

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NET INTEREST INCOME

The following tables present average balance data and operating interest revenue and expense data, as well as related interest yields for the periods indicated (in thousands, except rates):

|  | Three Months Ended |
|  | September 30, 2021 |  |  | September 30, 2020 |
|  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |  |  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing cash and federal funds sold |  | $ | 1,537,923 |  |  | $ | 1,020 |  |  |  | 0.27 | % |  | $ | 1,789,831 |  |  | $ | 1,119 |  |  |  | 0.25 | %
Financial instruments owned |  |  | 1,001,160 |  |  |  | 3,581 |  |  |  | 1.43 | % |  |  | 801,349 |  |  |  | 2,924 |  |  |  | 1.46 | %
Margin balances |  |  | 1,080,975 |  |  |  | 6,624 |  |  |  | 2.45 | % |  |  | 872,466 |  |  |  | 5,803 |  |  |  | 2.66 | %
Investment portfolio |  |  | 7,242,145 |  |  |  | 34,247 |  |  |  | 1.89 | % |  |  | 6,221,840 |  |  |  | 31,966 |  |  |  | 2.06 | %
Loans |  |  | 13,490,985 |  |  |  | 95,075 |  |  |  | 2.82 | % |  |  | 10,997,589 |  |  |  | 76,281 |  |  |  | 2.77 | %
Other interest-bearing assets |  |  | 702,469 |  |  |  | 1,297 |  |  |  | 0.74 | % |  |  | 547,643 |  |  |  | (3,682 | ) |  |  | (2.69 | %)
Total interest-earning assets/interest income |  | $ | 25,055,657 |  |  | $ | 141,844 |  |  |  | 2.26 | % |  | $ | 21,230,718 |  |  | $ | 114,411 |  |  |  | 2.16 | %
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock loan |  | $ | 227,178 |  |  | $ | (5,642 | ) |  |  | (9.93 | %) |  | $ | 95,255 |  |  | $ | (5,887 | ) |  |  | (24.72 | %)
Senior notes (Stifel Financial) |  |  | 1,113,038 |  |  |  | 11,850 |  |  |  | 4.26 | % |  |  | 1,411,761 |  |  |  | 15,411 |  |  |  | 4.37 | %
Stifel Capital Trusts |  |  | 60,000 |  |  |  | 293 |  |  |  | 1.96 | % |  |  | 60,000 |  |  |  | 322 |  |  |  | 2.15 | %
Deposits |  |  | 19,545,452 |  |  |  | 1,111 |  |  |  | 0.02 | % |  |  | 16,379,234 |  |  |  | 1,478 |  |  |  | 0.04 | %
FHLB |  |  | 5,728 |  |  |  | 4 |  |  |  | 0.28 | % |  |  | 157,098 |  |  |  | 515 |  |  |  | 1.31 | %
Other interest-bearing liabilities |  |  | 1,058,845 |  |  |  | 2,407 |  |  |  | 0.91 | % |  |  | 916,400 |  |  |  | 1,983 |  |  |  | 0.87 | %
Total interest-bearing liabilities/interest expense |  | $ | 22,010,241 |  |  |  | 10,023 |  |  |  | 0.18 | % |  | $ | 19,019,748 |  |  |  | 13,822 |  |  |  | 0.29 | %
Net interest income/margin |  |  |  |  |  | $ | 131,821 |  |  |  | 2.10 | % |  |  |  |  |  | $ | 100,589 |  |  |  | 1.90 | %

|  | Nine Months Ended |
|  | September 30, 2021 |  |  | September 30, 2020 |
|  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |  |  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing cash and federal funds sold |  | $ | 1,530,293 |  |  | $ | 2,735 |  |  |  | 0.24 | % |  | $ | 1,466,579 |  |  | $ | 5,815 |  |  |  | 0.53 | %
Financial instruments owned |  |  | 929,545 |  |  |  | 9,019 |  |  |  | 1.29 | % |  |  | 879,895 |  |  |  | 10,357 |  |  |  | 1.57 | %
Margin balances |  |  | 1,033,951 |  |  |  | 19,001 |  |  |  | 2.45 | % |  |  | 1,028,579 |  |  |  | 22,298 |  |  |  | 2.89 | %
Investment portfolio |  |  | 6,816,122 |  |  |  | 95,738 |  |  |  | 1.87 | % |  |  | 6,331,871 |  |  |  | 121,630 |  |  |  | 2.56 | %
Loans |  |  | 12,860,272 |  |  |  | 274,693 |  |  |  | 2.85 | % |  |  | 10,756,496 |  |  |  | 250,565 |  |  |  | 3.11 | %
Other interest-bearing assets |  |  | 665,876 |  |  |  | 1,789 |  |  |  | 0.36 | % |  |  | 543,931 |  |  |  | (6,709 | ) |  |  | (1.64 | %)
Total interest-earning assets/interest income |  | $ | 23,836,059 |  |  | $ | 402,975 |  |  |  | 2.25 | % |  | $ | 21,007,351 |  |  | $ | 403,956 |  |  |  | 2.56 | %
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term borrowings |  | $ | 1,254 |  |  | $ | — |  |  |  | 0.00 | % |  | $ | 34,238 |  |  | $ | 281 |  |  |  | 1.09 | %
Stock loan |  |  | 224,369 |  |  |  | (9,048 | ) |  |  | (5.38 | %) |  |  | 248,262 |  |  |  | (14,489 | ) |  |  | (7.78 | %)
Senior notes (Stifel Financial) |  |  | 1,112,763 |  |  |  | 35,924 |  |  |  | 4.30 | % |  |  | 1,208,707 |  |  |  | 39,677 |  |  |  | 4.38 | %
Stifel Capital Trusts |  |  | 60,000 |  |  |  | 899 |  |  |  | 2.00 | % |  |  | 60,000 |  |  |  | 1,289 |  |  |  | 2.86 | %
Deposits |  |  | 18,611,061 |  |  |  | 3,608 |  |  |  | 0.03 | % |  |  | 16,145,386 |  |  |  | 13,324 |  |  |  | 0.11 | %
FHLB |  |  | 27,227 |  |  |  | 56 |  |  |  | 0.28 | % |  |  | 332,175 |  |  |  | 3,550 |  |  |  | 1.43 | %
Other interest-bearing liabilities |  |  | 1,046,887 |  |  |  | 7,202 |  |  |  | 0.92 | % |  |  | 984,719 |  |  |  | 7,631 |  |  |  | 1.03 | %
Total interest-bearing liabilities/interest expense |  | $ | 21,083,561 |  |  |  | 38,641 |  |  |  | 0.24 | % |  | $ | 19,013,487 |  |  |  | 51,263 |  |  |  | 0.36 | %
Net interest income/margin |  |  |  |  |  | $ | 364,334 |  |  |  | 2.04 | % |  |  |  |  |  | $ | 352,693 |  |  |  | 2.24 | %

53

Net interest income – Net interest income is the difference between interest earned on interest-earning assets and interest paid on funding sources. Net interest income is affected by changes in the volume and mix of these assets and liabilities, as well as by fluctuations in interest rates and portfolio management strategies. For the three months ended September 30, 2021, net interest income increased to $131.8 million from $100.6 million during the comparable period in 2020. For the nine months ended September 30, 2021, net interest income increased to $364.3 million from $352.7 million during the comparable period in 2020.

For the three months ended September 30, 2021, interest revenue increased 24.0% to $141.8 million from $114.4 million in the comparable period in 2020, principally as a result of an increase in interest-earning assets. The average interest-earning assets of Stifel Bancorp increased to $21.5 billion during the three months ended September 30, 2021 compared to $18.0 billion during the comparable period in 2020 at average interest rates of 2.42% and 2.41%, respectively.

For the nine months ended September 30, 2021, interest revenue decreased 0.2% to $403.0 million from $404.0 million in the comparable period in 2020, principally as a result of a decrease in interest revenue generated from interest-earning assets of Stifel Bancorp due to lower interest rates, partially offset by higher interest-earning assets. The average interest-earning assets of Stifel Bancorp increased to $20.5 billion during the nine months ended September 30, 2021 compared to $17.9 billion during the comparable period in 2020 at average interest rates of 2.42% and 2.80%, respectively.

For the three months ended September 30, 2021, interest expense decreased 27.5% to $10.0 million from $13.8 million during the comparable period in 2020. The decrease is primarily attributable to lower interest rates, partially offset by higher interest-bearing liabilities. For the nine months ended September 30, 2021, interest expense decreased 24.6% to $38.6 million from $51.3 million in the comparable period in 2020. The decrease is primarily attributable to lower interest rates partially offset by higher interest-bearing liabilities.

Decreases in short-term interest rates have had a negative impact on our results, in particular on our net interest income.

NON-INTEREST EXPENSES

The following table presents consolidated non-interest expenses for the periods indicated (in thousands, except percentages):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |  |  | % Change |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | $ | 672,385 |  |  | $ | 533,638 |  |  |  | 26.0 |  |  | $ | 2,062,353 |  |  | $ | 1,657,991 |  |  |  | 24.4 |
Occupancy and equipment rental |  |  | 72,160 |  |  |  | 68,598 |  |  |  | 5.2 |  |  |  | 215,163 |  |  |  | 200,935 |  |  |  | 7.1 |
Communications and office supplies |  |  | 40,432 |  |  |  | 40,123 |  |  |  | 0.8 |  |  |  | 123,565 |  |  |  | 124,293 |  |  |  | (0.6 | )
Commissions and floor brokerage |  |  | 14,744 |  |  |  | 13,254 |  |  |  | 11.2 |  |  |  | 44,424 |  |  |  | 43,273 |  |  |  | 2.7 |
Provision for credit losses |  |  | (660 | ) |  |  | (1,353 | ) |  |  | (51.2 | ) |  |  | (15,564 | ) |  |  | 33,925 |  |  |  | (145.9 | )
Other operating expenses |  |  | 89,375 |  |  |  | 70,647 |  |  |  | 26.5 |  |  |  | 254,503 |  |  |  | 215,275 |  |  |  | 18.2 |
Total non-interest expenses |  | $ | 888,436 |  |  | $ | 724,907 |  |  |  | 22.6 |  |  | $ | 2,684,444 |  |  | $ | 2,275,692 |  |  |  | 18.0 |

Compensation and benefits – Compensation and benefits expenses, which are the largest component of our expenses, include salaries, bonuses, transition pay, benefits, amortization of stock-based compensation, employment taxes and other employee-related costs. A significant portion of compensation expense is comprised of production-based variable compensation, including discretionary bonuses, which fluctuates in proportion to the level of business activity, increasing with higher revenues and operating profits. Other compensation costs, including base salaries, stock-based compensation amortization, and benefits, are more fixed in nature.

For the three months ended September 30, 2021, compensation and benefits expense increased 26.0% to $672.4 million from $533.6 million during the comparable period in 2020. For the nine months ended September 30, 2021, compensation and benefits expense increased 24.4% to $2.1 billion from $1.7 billion during the comparable period in 2020. The increase in compensation and benefits expenses is primarily attributable to revenue growth, as well as the change in the composition of revenues.

Compensation and benefits expense as a percentage of net revenues was 58.7% and 60.1% for the three and nine months ended September 30, 2021, respectively, compared to 60.4% and 61.6% for the three and nine months ended September 30, 2020, respectively.

Occupancy and equipment rental – For the three months ended September 30, 2021, occupancy and equipment rental expense increased 5.2% to $72.2 million from $68.6 million during the comparable period in 2020. The increase is primarily attributable to higher data processing costs associated with an increase in business activity. For the nine months ended September 30, 2021,

54

occupancy and equipment rental expense increased 7.1% to $215.2 million from $200.9 million during the comparable period in 2020. The increase is primarily attributable to higher data processing costs associated with an increase in business activity.

Communications and office supplies – Communications expense includes costs for telecommunication and data communication, primarily for obtaining third-party market data information. For the three months ended September 30, 2021, communications and office supplies expense increased 0.8% to $40.4 million from $40.1 million during the comparable period in 2020. For the nine months ended September 30, 2021, communications and office supplies expense decreased 0.6% to $123.6 million from $124.3 million during the comparable period in 2020.

Commissions and floor brokerage – For the three months ended September 30, 2021, commissions and floor brokerage expense increased 11.2% to $14.7 million from $13.3 million during the comparable period in 2020. For the nine months ended September 30, 2021, commissions and floor brokerage expense increased 2.7% to $44.4 million from $43.3 million during the comparable period in 2020. The increase is primarily attributable to higher processing expenses, partially offset by lower electronic communication network (“ECN”) trading costs.

Provision for credit losses – For the three months ended September 30, 2021, provision for credit losses decreased 51.2% to a credit of $0.7 million from a credit of $1.4 million during the comparable period in 2020. For the nine months ended September 30, 2021, provision for credit losses decreased 145.9% to a credit of $15.6 million from $33.9 million during the comparable period in 2020. The decrease is primarily attributable to the release of the allowance for credit losses driven by improvements in the outlook for macroeconomic conditions and a release related to loans that were sold at a premium in the second quarter of 2021.

Other operating expenses – Other operating expenses primarily include license and registration fees, litigation-related expenses, which consist of amounts we reserve and/or pay out related to legal and regulatory matters, travel and entertainment, promotional expenses and expenses for professional services.

For the three months ended September 30, 2021, other operating expenses increased 26.5% to $89.4 million from $70.6 million during the comparable period in 2020. The increase is primarily attributable to increases in litigation expense, travel and entertainment expenses, conference-related expenses, and professional fees. Other operating expense was also impacted by the recognition of additional earn-out expense related to a prior acquisition that has performed better than expected.

For the nine months ended September 30, 2021, other operating expenses increased 18.2% to $254.5 million from $215.3 million during the comparable period in 2020. The increase is primarily attributable to higher investment banking transaction expenses, which is attributable to an increase in investment banking revenues, increases in conference-related expenses, professional fees, and insurance expense, partially offset by lower travel and entertainment expenses, and lower provisions for litigation matters. As described above, other operating expense was also impacted by the recognition of additional earn-out expense recorded.

Provision for income taxes – For the three and nine months ended September 30, 2021, our provision for income taxes was $64.1 million and $185.0 million, representing an effective tax rate of 25.0% and 24.7%, respectively, compared to $37.9 million and $101.5 million for the comparable periods in 2020, representing an effective tax rate of 23.9% and 24.4%, respectively.

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SEGMENT ANALYSIS

Our reportable segments include Global Wealth Management, Institutional Group, and Other.

Our Global Wealth Management segment consists of two businesses, the Private Client Group and Stifel Bancorp, Inc. The Private Client Group includes branch offices and independent contractor offices of our broker-dealer subsidiaries located throughout the United States. These branches provide securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance, as well as offering banking products to their private clients through our bank subsidiaries, which provide residential, consumer, and commercial lending, as well as Federal Depository Insurance Corporation (“FDIC”)-insured deposit accounts to customers of our broker-dealer subsidiaries and to the general public.

The Institutional Group segment includes institutional sales and trading. It provides securities brokerage, trading, and research services to institutions with an emphasis on the sale of equity and fixed income products. This segment also includes the management of and participation in underwritings for both corporate and public finance (exclusive of sales credits generated through the Private Client Group, which are included in the Global Wealth Management segment), merger and acquisition, and financial advisory services.

The Other segment includes interest income from stock borrow activities, unallocated interest expense, interest income and gains and losses from investments held, amortization of stock-based awards, and all unallocated overhead cost associated with the execution of orders; processing of securities transactions; custody of client securities; receipt, identification, and delivery of funds and securities; compliance with regulatory and legal requirements; internal financial accounting and controls; and general administration and acquisition charges.

We evaluate the performance of our segments and allocate resources to them based on various factors, including prospects for growth, return on investment, and return on revenues.

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Results of Operations – Global Wealth Management

Three Months Ended September 30, 2021 Compared with Three Months Ended September 30, 2020

The following table presents consolidated financial information for the Global Wealth Management segment for the periods indicated (in thousands, except percentages):

|  | Three Months Ended September 30, |  |  | As a Percentage of Net Revenues For the Three Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 133,998 |  |  | $ | 120,600 |  |  |  | 11.1 |  |  |  | 20.4 | % |  |  | 22.9 | %
Principal transactions |  |  | 50,074 |  |  |  | 42,027 |  |  |  | 19.1 |  |  |  | 7.6 |  |  |  | 8.0 |
Brokerage revenues |  |  | 184,072 |  |  |  | 162,627 |  |  |  | 13.2 |  |  |  | 28.0 |  |  |  | 30.9 |
Asset management and service fees |  |  | 313,838 |  |  |  | 230,765 |  |  |  | 36.0 |  |  |  | 47.9 |  |  |  | 43.8 |
Investment banking |  |  | 11,580 |  |  |  | 8,113 |  |  |  | 42.7 |  |  |  | 1.8 |  |  |  | 1.5 |
Interest |  |  | 137,033 |  |  |  | 114,871 |  |  |  | 19.3 |  |  |  | 20.9 |  |  |  | 21.8 |
Other income |  |  | 15,702 |  |  |  | 17,150 |  |  |  | (8.4 | ) |  |  | 2.4 |  |  |  | 3.3 |
Total revenues |  |  | 662,225 |  |  |  | 533,526 |  |  |  | 24.1 |  |  |  | 101.0 |  |  |  | 101.3 |
Interest expense |  |  | 6,692 |  |  |  | 6,690 |  |  |  | 0.0 |  |  |  | 1.0 |  |  |  | 1.3 |
Net revenues |  |  | 655,533 |  |  |  | 526,836 |  |  |  | 24.4 |  |  |  | 100.0 |  |  |  | 100.0 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 342,792 |  |  |  | 277,903 |  |  |  | 23.3 |  |  |  | 52.3 |  |  |  | 52.7 |
Occupancy and equipment rental |  |  | 34,731 |  |  |  | 29,791 |  |  |  | 16.6 |  |  |  | 5.3 |  |  |  | 5.7 |
Communication and office supplies |  |  | 13,872 |  |  |  | 13,706 |  |  |  | 1.2 |  |  |  | 2.1 |  |  |  | 2.6 |
Commissions and floor brokerage |  |  | 6,821 |  |  |  | 5,742 |  |  |  | 18.8 |  |  |  | 1.0 |  |  |  | 1.1 |
Provision for credit losses |  |  | (660 | ) |  |  | (1,353 | ) |  |  | (51.2 | ) |  |  | (0.1 | ) |  |  | (0.3 | )
Other operating expenses |  |  | 25,858 |  |  |  | 22,117 |  |  |  | 16.9 |  |  |  | 4.0 |  |  |  | 4.2 |
Total non-interest expenses |  |  | 423,414 |  |  |  | 347,906 |  |  |  | 21.7 |  |  |  | 64.6 |  |  |  | 66.0 |
Income before income taxes |  | $ | 232,119 |  |  | $ | 178,930 |  |  |  | 29.7 |  |  |  | 35.4 | % |  |  | 34.0 | %

| September 30, |
| 2021 |  |  | 2020 |
Branch offices |  | 391 |  |  |  | 393 |
Financial advisors |  | 2,212 |  |  |  | 2,177 |
Independent contractors |  | 90 |  |  |  | 94 |
Total financial advisors |  | 2,302 |  |  |  | 2,271 |

57

Nine months ended September 30, 2021 Compared with Nine months ended September 30, 2020

The following table presents consolidated financial information for the Global Wealth Management segment for the periods indicated (in thousands, except percentages):

|  | Nine Months Ended September 30, |  |  | As a Percentage of Net Revenues For the Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 421,156 |  |  | $ | 373,653 |  |  |  | 12.7 |  |  |  | 21.9 | % |  |  | 23.1 | %
Principal transactions |  |  | 158,882 |  |  |  | 127,976 |  |  |  | 24.1 |  |  |  | 8.3 |  |  |  | 7.9 |
Brokerage revenues |  |  | 580,038 |  |  |  | 501,629 |  |  |  | 15.6 |  |  |  | 30.2 |  |  |  | 31.0 |
Asset management and service fees |  |  | 887,794 |  |  |  | 667,446 |  |  |  | 33.0 |  |  |  | 46.1 |  |  |  | 41.3 |
Investment banking |  |  | 37,027 |  |  |  | 26,462 |  |  |  | 39.9 |  |  |  | 1.9 |  |  |  | 1.6 |
Interest |  |  | 393,181 |  |  |  | 400,092 |  |  |  | (1.7 | ) |  |  | 20.4 |  |  |  | 24.8 |
Other income |  |  | 46,934 |  |  |  | 51,610 |  |  |  | (9.1 | ) |  |  | 2.5 |  |  |  | 3.2 |
Total revenues |  |  | 1,944,974 |  |  |  | 1,647,239 |  |  |  | 18.1 |  |  |  | 101.1 |  |  |  | 102.0 |
Interest expense |  |  | 20,379 |  |  |  | 31,665 |  |  |  | (35.6 | ) |  |  | 1.1 |  |  |  | 2.0 |
Net revenues |  |  | 1,924,595 |  |  |  | 1,615,574 |  |  |  | 19.1 |  |  |  | 100.0 |  |  |  | 100.0 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 1,020,880 |  |  |  | 834,564 |  |  |  | 22.3 |  |  |  | 53.0 |  |  |  | 51.7 |
Occupancy and equipment rental |  |  | 101,851 |  |  |  | 90,237 |  |  |  | 12.9 |  |  |  | 5.3 |  |  |  | 5.6 |
Communication and office supplies |  |  | 42,735 |  |  |  | 44,059 |  |  |  | (3.0 | ) |  |  | 2.2 |  |  |  | 2.7 |
Commissions and floor brokerage |  |  | 19,222 |  |  |  | 16,828 |  |  |  | 14.2 |  |  |  | 1.0 |  |  |  | 1.0 |
Provision for credit losses |  |  | (15,564 | ) |  |  | 33,925 |  |  |  | (145.9 | ) |  |  | (0.8 | ) |  |  | 2.1 |
Other operating expenses |  |  | 72,816 |  |  |  | 66,539 |  |  |  | 9.4 |  |  |  | 3.8 |  |  |  | 4.1 |
Total non-interest expenses |  |  | 1,241,940 |  |  |  | 1,086,152 |  |  |  | 14.3 |  |  |  | 64.5 |  |  |  | 67.2 |
Income before income taxes |  | $ | 682,655 |  |  | $ | 529,422 |  |  |  | 28.9 |  |  |  | 35.5 | % |  |  | 32.8 | %

NET REVENUES

For the three months ended September 30, 2021, Global Wealth Management net revenues increased 24.4% to a record $655.5 million from $526.8 million for the comparable period in 2020. The increase in net revenues over the comparable period in 2020 is primarily attributable to increases in asset management and service fee revenues, brokerage revenues, investment banking revenues, and net interest income, partially offset by a decrease in other income.

For the nine months ended September 30, 2021, Global Wealth Management net revenues increased 19.1% to a record $1.9 billion from $1.6 billion for the comparable period in 2020. The increase in net revenues over the comparable period in 2020 is primarily attributable to increases in asset management and service fee revenues, brokerage revenues, investment banking revenues, and net interest income, partially offset by a decrease in other income.

Commissions – For the three months ended September 30, 2021, commission revenues increased 11.1% to $134.0 million from $120.6 million in the comparable period in 2020. For the nine months ended September 30, 2021, commission revenues increased 12.7% to $421.2 million from $373.7 million in the comparable period in 2020. The increase is primarily attributable to an increase in mutual funds revenue and equities trading over the comparable periods in 2020.

Principal transactions – For the three months ended September 30, 2021, principal transactions revenues increased 19.1% to $50.1 million from $42.0 million in the comparable period in 2020. For the nine months ended September 30, 2021, principal transactions revenues increased 24.1% to $158.9 million from $128.0 million in the comparable period in 2020. The increase is primarily attributable to strong client engagement and market volatility.

Brokerage revenues - For the three months ended September 30, 2021, brokerage revenues increased 13.2% to $184.1 million from $162.6 million in the comparable period in 2020. For the nine months ended September 30, 2021, brokerage revenues increased 15.6% to $580.0 million from $501.6 million in the comparable period in 2020. The increase is primarily attributable to higher trading volumes over the comparable period in 2020, driven by market volatility.

Asset management and service fees – For the three months ended September 30, 2021, asset management and service fees increased 36.0% to $313.8 million from $230.8 million in the comparable period in 2020. For the nine months ended September 30, 2021, asset management and service fees increased 33.0% to $887.8 million from $667.4 million in the comparable period in 2020. The increase

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is primarily attributable to higher asset values and strong fee-based asset flows. Fee-based account revenues are primarily billed based on asset values at the end the prior quarter.

Client asset metrics as of the periods indicated (in thousands, except number of accounts and percentages):

| 9/30/21 |  |  | 9/30/20 |  |  | % Change |  |  | 6/30/21 |  |  | % Change |
Client assets | $ | 406,959,000 |  |  | $ | 325,159,000 |  |  |  | 25.2 |  |  | $ | 402,442,000 |  |  |  | 1.1 |
Fee-based client assets | $ | 150,472,000 |  |  | $ | 115,162,000 |  |  |  | 30.7 |  |  | $ | 148,838,000 |  |  |  | 1.1 |
Number of client accounts |  | 1,108,000 |  |  |  | 1,059,000 |  |  |  | 4.6 |  |  |  | 1,098,000 |  |  |  | 0.9 |
Number of fee-based client accounts |  | 288,000 |  |  |  | 252,000 |  |  |  | 14.3 |  |  |  | 282,000 |  |  |  | 2.1 |

The increase in the value of our client assets and fee-based assets was primarily attributable to the rise in the markets, as well as asset growth resulting from our recruiting efforts.

Investment banking – Investment banking, which represents sales credits for investment banking underwritings, increased 42.7% to $11.6 million for the three months ended September 30, 2021 from $8.1 million during the comparable period in 2020. For the nine months ended September 30, 2021, investment banking revenues increased 39.9% to $37.0 million from $26.5 million during the comparable period in 2020. Please refer to “Investment banking” in the Institutional Group segment discussion for information on the changes in net revenues.

Interest revenue – For the three months ended September 30, 2021, interest revenue increased 19.3% to $137.0 million from $114.9 million in the comparable period in 2020. The increase is primarily attributable to higher interest-earning assets. For the nine months ended September 30, 2021, interest revenue decreased 1.7% to $393.2 million from $400.1 million during the comparable period in 2020. The decrease is primarily driven by the impact of lower interest rates. Please refer to “Net Interest Income – Stifel Bancorp” below for a further discussion of the changes in net interest revenues.

Other income – For the three months ended September 30, 2021, other income decreased 8.4% to $15.7 million from $17.2 million in the comparable period in 2020. The decrease is primarily attributable to lower investment gains and loan origination fees, partially offset by the recognition of a gain on the sale of certain loans and transfer of deposits. For the nine months ended September 30, 2021, other income decreased 9.1% to $46.9 million from $51.6 million during the comparable period in 2020. The decrease is primarily attributable to lower investment gains over the comparable period in 2020, partially offset by the recognition of a gain on the sale of certain loans and transfer of deposits and an increase in loan origination fees. Other income for the nine months ended September 30, 2020 includes a gain on the sale of Ziegler Capital Management, LLC.

Interest expense – For the three months ended September 30, 2021, interest expense remained consistent with the comparable period in 2020 at $6.7 million. For the nine months ended September 30, 2021, interest expense decreased 35.6% to $20.4 million from $31.7 million during the comparable period in 2020. The decrease in interest expense is primarily attributable to lower interest rates over the comparable period in 2020, partially offset by higher interest-bearing liabilities.

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NET INTEREST INCOME – STIFEL BANCORP

The following tables present average balance data and operating interest revenue and expense data for Stifel Bancorp, as well as related interest yields for the periods indicated (in thousands, except rates):

|  | Three Months Ended September 30, 2021 |  |  | Three Months Ended September 30, 2020 |
|  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |  |  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing cash and federal funds sold |  | $ | 729,976 |  |  | $ | 341 |  |  |  | 0.19 | % |  | $ | 785,969 |  |  | $ | 275 |  |  |  | 0.14 | %
U.S. government agencies |  |  | 2,535 |  |  |  | 13 |  |  |  | 2.19 |  |  |  | 4,862 |  |  |  | 25 |  |  |  | 2.07 |
State and municipal securities (tax-exempt) (1) |  |  | 2,382 |  |  |  | 11 |  |  |  | 1.97 |  |  |  | 2,405 |  |  |  | 12 |  |  |  | 1.97 |
Mortgage-backed securities |  |  | 1,068,442 |  |  |  | 3,733 |  |  |  | 1.40 |  |  |  | 824,040 |  |  |  | 3,185 |  |  |  | 1.55 |
Corporate fixed income securities |  |  | 775,727 |  |  |  | 5,274 |  |  |  | 2.72 |  |  |  | 551,785 |  |  |  | 3,453 |  |  |  | 2.50 |
Asset-backed securities |  |  | 5,393,059 |  |  |  | 25,216 |  |  |  | 1.87 |  |  |  | 4,838,748 |  |  |  | 25,291 |  |  |  | 2.09 |
Federal Home Loan Bank and other capital stock |  |  | 43,512 |  |  |  | 337 |  |  |  | 3.10 |  |  |  | 42,927 |  |  |  | 306 |  |  |  | 2.86 |
Loans (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities-based loans |  |  | 2,425,009 |  |  |  | 11,747 |  |  |  | 1.94 |  |  |  | 1,787,092 |  |  |  | 9,168 |  |  |  | 2.05 |
Commercial and industrial |  |  | 4,915,891 |  |  |  | 40,865 |  |  |  | 3.33 |  |  |  | 4,036,326 |  |  |  | 30,101 |  |  |  | 2.98 |
Residential real estate |  |  | 4,743,319 |  |  |  | 30,672 |  |  |  | 2.59 |  |  |  | 3,711,243 |  |  |  | 26,103 |  |  |  | 2.81 |
Commercial real estate |  |  | 365,309 |  |  |  | 3,444 |  |  |  | 3.77 |  |  |  | 399,986 |  |  |  | 3,762 |  |  |  | 3.76 |
Home equity lines of credit |  |  | 82,239 |  |  |  | 601 |  |  |  | 2.92 |  |  |  | 66,664 |  |  |  | 475 |  |  |  | 2.85 |
Construction and land |  |  | 556,640 |  |  |  | 4,780 |  |  |  | 3.43 |  |  |  | 496,729 |  |  |  | 3,850 |  |  |  | 3.10 |
Other |  |  | 38,441 |  |  |  | 213 |  |  |  | 2.22 |  |  |  | 39,442 |  |  |  | 232 |  |  |  | 2.35 |
Loans held for sale |  |  | 364,137 |  |  |  | 2,753 |  |  |  | 3.02 |  |  |  | 460,107 |  |  |  | 2,590 |  |  |  | 2.25 |
Total interest-earning assets (3) |  | $ | 21,506,618 |  |  | $ | 130,000 |  |  |  | 2.42 | % |  | $ | 18,048,325 |  |  | $ | 108,828 |  |  |  | 2.41 | %
Cash and due from banks |  |  | 43,554 |  |  |  |  |  |  |  |  |  |  |  | 18,289 |  |  |  |  |  |  |  |  |
Other non interest-earning assets |  |  | 388,191 |  |  |  |  |  |  |  |  |  |  |  | 273,792 |  |  |  |  |  |  |  |  |
Total assets |  | $ | 21,938,363 |  |  |  |  |  |  |  |  |  |  | $ | 18,340,406 |  |  |  |  |  |  |  |  |
Liabilities and stockholder's equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market |  | $ | 18,629,616 |  |  | $ | 720 |  |  |  | 0.02 | % |  | $ | 15,636,513 |  |  | $ | 599 |  |  |  | 0.02 | %
Time deposits |  |  | 50,148 |  |  |  | 223 |  |  |  | 1.78 |  |  |  | 137,633 |  |  |  | 720 |  |  |  | 2.09 |
Demand deposits |  |  | 865,014 |  |  |  | 168 |  |  |  | 0.08 |  |  |  | 566,898 |  |  |  | 122 |  |  |  | 0.09 |
Savings |  |  | 674 |  |  |  | — |  |  |  | 0.01 |  |  |  | 38,190 |  |  |  | 37 |  |  |  | 0.39 |
Federal Home Loan Bank advances |  |  | 5,728 |  |  |  | 4 |  |  |  | 0.28 |  |  |  | 157,098 |  |  |  | 515 |  |  |  | 1.31 |
Other borrowings |  |  | 1,305 |  |  |  | 22 |  |  |  | 6.87 |  |  |  | 1,490 |  |  |  | 23 |  |  |  | 6.08 |
Total interest-bearing liabilities (3) |  |  | 19,552,485 |  |  |  | 1,137 |  |  |  | 0.02 | % |  |  | 16,537,822 |  |  |  | 2,016 |  |  |  | 0.05 | %
Non-interest-bearing liabilities |  |  | 688,052 |  |  |  |  |  |  |  |  |  |  |  | 272,328 |  |  |  |  |  |  |  |  |
Other non-interest bearing liabilities |  |  | 85,422 |  |  |  |  |  |  |  |  |  |  |  | 121,322 |  |  |  |  |  |  |  |  |
Total liabilities |  |  | 20,325,959 |  |  |  |  |  |  |  |  |  |  |  | 16,931,472 |  |  |  |  |  |  |  |  |
Stockholder's equity |  |  | 1,612,404 |  |  |  |  |  |  |  |  |  |  |  | 1,408,934 |  |  |  |  |  |  |  |  |
Total liabilities and stockholder's equity |  | $ | 21,938,363 |  |  |  |  |  |  |  |  |  |  | $ | 18,340,406 |  |  |  |  |  |  |  |  |
Net interest income/spread |  |  |  |  |  | $ | 128,863 |  |  |  | 2.40 | % |  |  |  |  |  | $ | 106,812 |  |  |  | 2.36 | %
Net interest margin |  |  |  |  |  |  |  |  |  |  | 2.40 | % |  |  |  |  |  |  |  |  |  |  | 2.37 | %

(1) | Due to immaterial amount of income recognized on tax-exempt securities, yields were not calculated on a tax equivalent basis.

(2) | Loans on non-accrual status are included in average balances.

(3) | See Net Interest Income table included in “Results of Operations” for additional information on our company’s average balances and operating interest and expenses.

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The following tables present average balance data and operating interest revenue and expense data for Stifel Bancorp, as well as related interest yields for the periods indicated (in thousands, except rates):

|  | Nine Months Ended September 30, 2021 |  |  | Nine Months Ended September 30, 2020 |
|  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |  |  | Average Balance |  |  | Interest Income/ Expense |  |  | Average Interest Rate |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing cash and federal funds sold |  | $ | 767,204 |  |  | $ | 839 |  |  |  | 0.15 | % |  | $ | 734,239 |  |  | $ | 1,804 |  |  |  | 0.33 | %
U.S. government agencies |  |  | 3,286 |  |  |  | 52 |  |  |  | 2.13 |  |  |  | 5,181 |  |  |  | 73 |  |  |  | 1.88 |
State and municipal securities (tax-exempt) (1) |  |  | 2,387 |  |  |  | 35 |  |  |  | 1.97 |  |  |  | 10,988 |  |  |  | 177 |  |  |  | 2.14 |
Mortgage-backed securities |  |  | 1,015,561 |  |  |  | 11,104 |  |  |  | 1.46 |  |  |  | 931,403 |  |  |  | 13,731 |  |  |  | 1.97 |
Corporate fixed income securities |  |  | 708,900 |  |  |  | 15,303 |  |  |  | 2.88 |  |  |  | 644,187 |  |  |  | 12,705 |  |  |  | 2.63 |
Asset-backed securities |  |  | 5,085,988 |  |  |  | 69,244 |  |  |  | 1.82 |  |  |  | 4,740,112 |  |  |  | 94,944 |  |  |  | 2.67 |
Federal Home Loan Bank and other capital stock |  |  | 42,939 |  |  |  | 921 |  |  |  | 2.86 |  |  |  | 49,718 |  |  |  | 1,192 |  |  |  | 3.20 |
Loans (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities-based loans |  |  | 2,215,361 |  |  |  | 32,234 |  |  |  | 1.94 |  |  |  | 1,879,672 |  |  |  | 35,571 |  |  |  | 2.52 |
Commercial and industrial |  |  | 4,849,536 |  |  |  | 123,660 |  |  |  | 3.40 |  |  |  | 3,897,859 |  |  |  | 99,863 |  |  |  | 3.42 |
Residential real estate |  |  | 4,347,533 |  |  |  | 86,229 |  |  |  | 2.64 |  |  |  | 3,572,673 |  |  |  | 77,001 |  |  |  | 2.87 |
Commercial real estate |  |  | 384,642 |  |  |  | 9,721 |  |  |  | 3.37 |  |  |  | 415,808 |  |  |  | 13,570 |  |  |  | 4.35 |
Home equity lines of credit |  |  | 78,260 |  |  |  | 1,662 |  |  |  | 2.83 |  |  |  | 60,207 |  |  |  | 1,471 |  |  |  | 3.26 |
Construction and land |  |  | 552,274 |  |  |  | 13,441 |  |  |  | 3.25 |  |  |  | 454,119 |  |  |  | 12,514 |  |  |  | 3.67 |
Other |  |  | 38,215 |  |  |  | 620 |  |  |  | 2.16 |  |  |  | 35,623 |  |  |  | 741 |  |  |  | 2.77 |
Loans held for sale |  |  | 394,451 |  |  |  | 7,126 |  |  |  | 2.41 |  |  |  | 440,535 |  |  |  | 9,834 |  |  |  | 2.98 |
Total interest-earning assets (3) |  | $ | 20,486,537 |  |  | $ | 372,191 |  |  |  | 2.42 | % |  | $ | 17,872,324 |  |  | $ | 375,191 |  |  |  | 2.80 | %
Cash and due from banks |  |  | 28,389 |  |  |  |  |  |  |  |  |  |  |  | 15,317 |  |  |  |  |  |  |  |  |
Other non interest-earning assets |  |  | 435,781 |  |  |  |  |  |  |  |  |  |  |  | 273,642 |  |  |  |  |  |  |  |  |
Total assets |  | $ | 20,950,707 |  |  |  |  |  |  |  |  |  |  | $ | 18,161,283 |  |  |  |  |  |  |  |  |
Liabilities and stockholder's equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market |  | $ | 17,753,629 |  |  | $ | 2,248 |  |  |  | 0.02 | % |  | $ | 15,069,691 |  |  | $ | 4,940 |  |  |  | 0.04 | %
Time deposits |  |  | 67,921 |  |  |  | 923 |  |  |  | 1.81 |  |  |  | 261,729 |  |  |  | 4,472 |  |  |  | 2.28 |
Demand deposits |  |  | 788,748 |  |  |  | 437 |  |  |  | 0.07 |  |  |  | 764,695 |  |  |  | 3,629 |  |  |  | 0.63 |
Savings |  |  | 763 |  |  |  | — |  |  |  | 0.04 |  |  |  | 49,271 |  |  |  | 283 |  |  |  | 0.76 |
Federal Home Loan Bank advances |  |  | 27,227 |  |  |  | 56 |  |  |  | 0.28 |  |  |  | 332,175 |  |  |  | 3,550 |  |  |  | 1.43 |
Other borrowings |  |  | 1,337 |  |  |  | 74 |  |  |  | 7.42 |  |  |  | 1,519 |  |  |  | 76 |  |  |  | 6.60 |
Total interest-bearing liabilities (3) |  |  | 18,639,625 |  |  |  | 3,738 |  |  |  | 0.03 | % |  |  | 16,479,080 |  |  |  | 16,950 |  |  |  | 0.14 | %
Non-interest-bearing liabilities |  |  | 585,429 |  |  |  |  |  |  |  |  |  |  |  | 246,046 |  |  |  |  |  |  |  |  |
Other non-interest bearing liabilities |  |  | 201,963 |  |  |  |  |  |  |  |  |  |  |  | 107,658 |  |  |  |  |  |  |  |  |
Total liabilities |  |  | 19,427,017 |  |  |  |  |  |  |  |  |  |  |  | 16,832,784 |  |  |  |  |  |  |  |  |
Stockholder's equity |  |  | 1,523,690 |  |  |  |  |  |  |  |  |  |  |  | 1,328,499 |  |  |  |  |  |  |  |  |
Total liabilities and stockholder's equity |  | $ | 20,950,707 |  |  |  |  |  |  |  |  |  |  | $ | 18,161,283 |  |  |  |  |  |  |  |  |
Net interest income/spread |  |  |  |  |  | $ | 368,453 |  |  |  | 2.39 | % |  |  |  |  |  | $ | 358,241 |  |  |  | 2.66 | %
Net interest margin |  |  |  |  |  |  |  |  |  |  | 2.40 | % |  |  |  |  |  |  |  |  |  |  | 2.67 | %

(1) | Due to immaterial amount of income recognized on tax-exempt securities, yields were not calculated on a tax equivalent basis.

(2) | Loans on non-accrual status are included in average balances.

(3) | See Net Interest Income table included in “Results of Operations” for additional information on our company’s average balances and operating interest and expenses.

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The following table sets forth an analysis of the effect on net interest income of volume and rate changes for the three and nine month periods ended September 30, 2021 compared to the three and nine month periods ended September 30, 2020 (in thousands):

|  | Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020 |  |  | Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020 |
|  | Increase/(decrease) due to: |  |  | Increase/(decrease) due to: |
|  | Volume |  |  | Rate |  |  | Total |  |  | Volume |  |  | Rate |  |  | Total |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest-bearing cash and federal funds sold |  | $ | (585 | ) |  | $ | 651 |  |  | $ | 66 |  |  | $ | 127 |  |  | $ | (1,092 | ) |  | $ | (965 | )
U.S. government agencies |  |  | (21 | ) |  |  | 9 |  |  |  | (12 | ) |  |  | (33 | ) |  |  | 12 |  |  |  | (21 | )
State and municipal securities (tax-exempt) (1) |  |  | — |  |  |  | (1 | ) |  |  | (1 | ) |  |  | (117 | ) |  |  | (25 | ) |  |  | (142 | )
Mortgage-backed securities |  |  | 811 |  |  |  | (263 | ) |  |  | 548 |  |  |  | 1,413 |  |  |  | (4,040 | ) |  |  | (2,627 | )
Corporate fixed income securities |  |  | 1,501 |  |  |  | 320 |  |  |  | 1,821 |  |  |  | 1,339 |  |  |  | 1,259 |  |  |  | 2,598 |
Asset-backed securities |  |  | 552 |  |  |  | (627 | ) |  |  | (75 | ) |  |  | 7,583 |  |  |  | (33,283 | ) |  |  | (25,700 | )
Federal Home Loan Bank and other capital stock |  |  | 5 |  |  |  | 26 |  |  |  | 31 |  |  |  | (152 | ) |  |  | (119 | ) |  |  | (271 | )
Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities-based loans |  |  | 3,056 |  |  |  | (477 | ) |  |  | 2,579 |  |  |  | 11,344 |  |  |  | (14,681 | ) |  |  | (3,337 | )
Commercial and industrial |  |  | 7,053 |  |  |  | 3,711 |  |  |  | 10,764 |  |  |  | 24,266 |  |  |  | (469 | ) |  |  | 23,797 |
Residential real estate |  |  | 6,435 |  |  |  | (1,866 | ) |  |  | 4,569 |  |  |  | 14,594 |  |  |  | (5,366 | ) |  |  | 9,228 |
Commercial real estate |  |  | (327 | ) |  |  | 9 |  |  |  | (318 | ) |  |  | (960 | ) |  |  | (2,889 | ) |  |  | (3,849 | )
Home equity lines of credit |  |  | 113 |  |  |  | 13 |  |  |  | 126 |  |  |  | 339 |  |  |  | (148 | ) |  |  | 191 |
Construction and land |  |  | 490 |  |  |  | 440 |  |  |  | 930 |  |  |  | 2,017 |  |  |  | (1,090 | ) |  |  | 927 |
Other |  |  | (6 | ) |  |  | (13 | ) |  |  | (19 | ) |  |  | 60 |  |  |  | (181 | ) |  |  | (121 | )
Loans held for sale |  |  | (253 | ) |  |  | 416 |  |  |  | 163 |  |  |  | (959 | ) |  |  | (1,749 | ) |  |  | (2,708 | )
|  | $ | 18,824 |  |  | $ | 2,348 |  |  | $ | 21,172 |  |  | $ | 60,861 |  |  | $ | (63,861 | ) |  | $ | (3,000 | )
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market |  | $ | 121 |  |  | $ | — |  |  | $ | 121 |  |  | $ | 5,101 |  |  | $ | (7,793 | ) |  | $ | (2,692 | )
Time deposits |  |  | (403 | ) |  |  | (94 | ) |  |  | (497 | ) |  |  | (2,781 | ) |  |  | (768 | ) |  |  | (3,549 | )
Demand deposits |  |  | 1,557 |  |  |  | (1,511 | ) |  |  | 46 |  |  |  | 118 |  |  |  | (3,310 | ) |  |  | (3,192 | )
Savings |  |  | (19 | ) |  |  | (18 | ) |  |  | (37 | ) |  |  | (144 | ) |  |  | (139 | ) |  |  | (283 | )
Federal Home Loan Bank advances |  |  | (281 | ) |  |  | (230 | ) |  |  | (511 | ) |  |  | (1,861 | ) |  |  | (1,633 | ) |  |  | (3,494 | )
Other borrowings |  |  | (6 | ) |  |  | 5 |  |  |  | (1 | ) |  |  | (1 | ) |  |  | (1 | ) |  |  | (2 | )
|  | $ | 969 |  |  | $ | (1,848 | ) |  | $ | (879 | ) |  | $ | 432 |  |  | $ | (13,644 | ) |  | $ | (13,212 | )

Increases and decreases in interest revenue and interest expense result from changes in average balances (volume) of interest-earning bank assets and liabilities, as well as changes in average interest rates. The effect of changes in volume is determined by multiplying the change in volume by the previous year's average yield/cost. Similarly, the effect of rate changes is calculated by multiplying the change in average yield/cost by the previous year's volume. Changes applicable to both volume and rate have been allocated proportionately.

Net interest income – Net interest income is the difference between interest earned on interest-earning assets and interest paid on funding sources. Net interest income is affected by changes in the volume and mix of these assets and liabilities, as well as by fluctuations in interest rates and portfolio management strategies. Decreases in short-term interest rates have had a negative impact on our results, in particular on our net interest income.

For the three months ended September 30, 2021, interest revenue of $130.0 million was generated from average interest-earning assets of $21.5 billion at an average interest rate of 2.42%. Interest revenue of $108.8 million for the comparable period in 2020 was generated from average interest-earning assets of $18.0 billion at an average interest rate of 2.41%.

For the nine months ended September 30, 2021, interest revenue of $372.2 million was generated from average interest-earning assets of $20.5 billion at an average interest rate of 2.42%. Interest revenue of $375.2 million for the comparable period in 2020 was generated from average interest-earning assets of $17.9 billion at an average interest rate of 2.80%.

Interest expense represents interest on customer money market accounts, interest on time deposits, Federal Home Loan Bank advances, and other interest expense. For the three months ended September 30, 2021, interest expense of $1.1 million was incurred

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from average interest-bearing liabilities of $19.6 billion at an average interest rate of 0.02%. Interest expense of $2.0 million for the comparable period in 2020 was incurred from average interest-bearing liabilities of $16.5 billion at an average interest rate of 0.05%.

For the nine months ended September 30, 2021, interest expense of $3.7 million was incurred from average interest-bearing liabilities of $18.6 billion at an average interest rate of 0.03%. Interest expense of $17.0 million for the comparable period in 2020 was incurred from average interest-bearing liabilities of $16.5 billion at an average interest rate of 0.14%.

Please refer to “Net Interest Income – Stifel Bancorp” above for more information regarding average balances, interest income and expense, and average interest rate yields.

NON-INTEREST EXPENSES

For the three months ended September 30, 2021, Global Wealth Management non-interest expenses increased 21.7% to $423.4 million from $347.9 million for the comparable period in 2020. For the nine months ended September 30, 2021, Global Wealth Management non-interest expenses increased 14.3% to $1.2 billion from $1.1 billion for the comparable period in 2020.

Compensation and benefits – For the three months ended September 30, 2021, compensation and benefits expense increased 23.3% to $342.8 million from $277.9 million during the comparable period in 2020. For the nine months ended September 30, 2021, compensation and benefits expense increased 22.3% to $1.0 billion from $834.6 million during the comparable period in 2020. The increase over the comparable period in 2020 is principally due to increased variable compensation as a result of strong revenue growth.

Compensation and benefits expense as a percentage of net revenues was 52.3% and 53.0% for the three and nine months ended September 30, 2021, respectively, compared to 52.7% and 51.7% for the comparable periods in 2020.

Occupancy and equipment rental – For the three months ended September 30, 2021, occupancy and equipment rental expense increased 16.6% to $34.7 million from $29.8 million during the comparable period in 2020. For the nine months ended September 30, 2021, occupancy and equipment rental expense increased 12.9% to $101.9 million from $90.2 million during the comparable period in 2020. The increase is primarily attributable to higher data processing costs associated with an increase in business activity and higher occupancy costs as a result of an increase in locations.

Communications and office supplies – For the three months ended September 30, 2021, communications and office supplies expense increased 1.2% to $13.9 million from $13.7 million during the comparable period in 2020. For the nine months ended September 30, 2021, communications and office supplies expense decreased 3.0% to $42.7 million from $44.1 million during the comparable period in 2020. The decrease is primarily attributable to lower telecommunication costs.

Commissions and floor brokerage – For the three months ended September 30, 2021, commissions and floor brokerage expense increased 18.8% to $6.8 million from $5.7 million during the comparable period in 2020. For the nine months ended September 30, 2021, commissions and floor brokerage expense increased 14.2% to $19.2 million from $16.8 million during the comparable period in 2020. The increase is primarily attributable to higher volume-related expenses, including brokerage trading costs, reflecting an increase in activity levels.

Provision for credit losses – For the three months ended September 30, 2021, provision for credit losses decreased 51.2% to a credit of $0.7 million from a credit of $1.4 million during the comparable period in 2020. For the nine months ended September 30, 2021, provision for credit losses decreased 145.9% to a credit of $15.6 million from $33.9 million during the comparable period in 2020. The decrease is primarily attributable to the release of the allowance for credit losses driven by improvements in the outlook for macroeconomic conditions and a release related to loans that are being sold at a premium in the second quarter of 2021.

Other operating expenses – For the three months ended September 30, 2021, other operating expenses increased 16.9% to $25.9 million from $22.1 million during the comparable period in 2020. The increase is primarily attributable to increases in subscriptions and professional fees, partially offset by lower settlement costs. For the nine months ended September 30, 2021, other operating expenses increased 9.4% to $72.8 million from $66.5 million during the comparable period in 2020. The increase is primarily attributable to increases in professional fees, subscriptions, and FDIC-insurance expense, partially offset by lower settlement costs.

INCOME BEFORE INCOME TAXES

For the three months ended September 30, 2021, income before income taxes increased 29.7% to $232.1 million from $178.9 million during the comparable period in 2020. For the nine months ended September 30, 2021, income before income taxes increased 28.9% to $682.7 million from $529.4 million during the comparable period in 2020.

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Profit margins (income before income taxes as a percent of net revenues) have increased to 35.4% and 35.5% for the three and nine months ended September 30, 2021, respectively, from 34.0% and 32.8% during the comparable periods in 2020.

Results of Operations – Institutional Group

Three Months Ended September 30, 2021 Compared with Three Months Ended September 30, 2020

The following table presents consolidated financial information for the Institutional Group segment for the periods indicated (in thousands, except percentages):

|  | Three Months Ended September 30, |  |  | As a Percentage of Net Revenues For the Three Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 55,241 |  |  | $ | 52,054 |  |  |  | 6.1 |  |  |  | 11.2 | % |  |  | 14.3 | %
Principal transactions |  |  | 68,904 |  |  |  | 98,856 |  |  |  | (30.3 | ) |  |  | 14.0 |  |  |  | 27.2 |
Brokerage revenues |  |  | 124,145 |  |  |  | 150,910 |  |  |  | (17.7 | ) |  |  | 25.2 |  |  |  | 41.5 |
Capital raising |  |  | 152,481 |  |  |  | 129,179 |  |  |  | 18.0 |  |  |  | 31.0 |  |  |  | 35.6 |
Advisory fees |  |  | 208,218 |  |  |  | 80,842 |  |  |  | 157.6 |  |  |  | 42.3 |  |  |  | 22.2 |
Investment banking |  |  | 360,699 |  |  |  | 210,021 |  |  |  | 71.7 |  |  |  | 73.3 |  |  |  | 57.8 |
Interest |  |  | 6,974 |  |  |  | 3,351 |  |  |  | 108.1 |  |  |  | 1.4 |  |  |  | 0.9 |
Other income |  |  | 3,107 |  |  |  | 1,765 |  |  |  | 76.0 |  |  |  | 0.6 |  |  |  | 0.5 |
Total revenues |  |  | 494,925 |  |  |  | 366,047 |  |  |  | 35.2 |  |  |  | 100.5 |  |  |  | 100.7 |
Interest expense |  |  | 2,641 |  |  |  | 2,682 |  |  |  | (1.5 | ) |  |  | 0.5 |  |  |  | 0.7 |
Net revenues |  |  | 492,284 |  |  |  | 363,365 |  |  |  | 35.5 |  |  |  | 100.0 |  |  |  | 100.0 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 283,063 |  |  |  | 210,754 |  |  |  | 34.3 |  |  |  | 57.5 |  |  |  | 58.0 |
Occupancy and equipment rental |  |  | 17,713 |  |  |  | 17,803 |  |  |  | (0.5 | ) |  |  | 3.6 |  |  |  | 4.9 |
Communication and office supplies |  |  | 21,764 |  |  |  | 21,800 |  |  |  | (0.2 | ) |  |  | 4.4 |  |  |  | 6.0 |
Commissions and floor brokerage |  |  | 7,923 |  |  |  | 7,512 |  |  |  | 5.5 |  |  |  | 1.6 |  |  |  | 2.1 |
Other operating expenses |  |  | 36,729 |  |  |  | 28,655 |  |  |  | 28.2 |  |  |  | 7.5 |  |  |  | 7.9 |
Total non-interest expenses |  |  | 367,192 |  |  |  | 286,524 |  |  |  | 28.2 |  |  |  | 74.6 |  |  |  | 78.9 |
Income before income taxes |  | $ | 125,092 |  |  | $ | 76,841 |  |  |  | 62.8 |  |  |  | 25.4 | % |  |  | 21.1 | %

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Nine months ended September 30, 2021 Compared with Nine months ended September 30, 2020

The following table presents consolidated financial information for the Institutional Group segment for the periods indicated (in thousands, except percentages):

|  | Nine Months Ended September 30, |  |  | As a Percentage of Net Revenues For the Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 177,276 |  |  | $ | 187,127 |  |  |  | (5.3 | ) |  |  | 11.7 | % |  |  | 17.1 | %
Principal transactions |  |  | 277,699 |  |  |  | 317,590 |  |  |  | (12.6 | ) |  |  | 18.3 |  |  |  | 29.0 |
Brokerage revenues |  |  | 454,975 |  |  |  | 504,717 |  |  |  | (9.9 | ) |  |  | 30.0 |  |  |  | 46.1 |
Capital raising |  |  | 505,618 |  |  |  | 333,442 |  |  |  | 51.6 |  |  |  | 33.3 |  |  |  | 30.5 |
Advisory fees |  |  | 545,365 |  |  |  | 254,733 |  |  |  | 114.1 |  |  |  | 35.9 |  |  |  | 23.3 |
Investment banking |  |  | 1,050,983 |  |  |  | 588,175 |  |  |  | 78.7 |  |  |  | 69.2 |  |  |  | 53.8 |
Interest |  |  | 14,282 |  |  |  | 11,903 |  |  |  | 20.0 |  |  |  | 0.9 |  |  |  | 1.1 |
Other income |  |  | 7,357 |  |  |  | (1,640 | ) |  |  | 548.6 |  |  |  | 0.5 |  |  |  | (0.1 | )
Total revenues |  |  | 1,527,597 |  |  |  | 1,103,155 |  |  |  | 38.5 |  |  |  | 100.6 |  |  |  | 100.9 |
Interest expense |  |  | 8,421 |  |  |  | 9,456 |  |  |  | (10.9 | ) |  |  | 0.6 |  |  |  | 0.9 |
Net revenues |  |  | 1,519,176 |  |  |  | 1,093,699 |  |  |  | 38.9 |  |  |  | 100.0 |  |  |  | 100.0 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 884,156 |  |  |  | 658,162 |  |  |  | 34.3 |  |  |  | 58.2 |  |  |  | 60.2 |
Occupancy and equipment rental |  |  | 52,369 |  |  |  | 50,501 |  |  |  | 3.7 |  |  |  | 3.4 |  |  |  | 4.6 |
Communication and office supplies |  |  | 66,935 |  |  |  | 66,105 |  |  |  | 1.3 |  |  |  | 4.4 |  |  |  | 6.0 |
Commissions and floor brokerage |  |  | 25,202 |  |  |  | 26,445 |  |  |  | (4.7 | ) |  |  | 1.7 |  |  |  | 2.4 |
Other operating expenses |  |  | 106,740 |  |  |  | 90,856 |  |  |  | 17.5 |  |  |  | 7.0 |  |  |  | 8.4 |
Total non-interest expenses |  |  | 1,135,402 |  |  |  | 892,069 |  |  |  | 27.3 |  |  |  | 74.7 |  |  |  | 81.6 |
Income before income taxes |  | $ | 383,774 |  |  | $ | 201,630 |  |  |  | 90.3 |  |  |  | 25.3 | % |  |  | 18.4 | %

NET REVENUES

For the three months ended September 30, 2021, Institutional Group net revenues increased 35.5% to $492.3 million from $363.4 million for the comparable period in 2020. For the nine months ended September 30, 2021, Institutional Group net revenues increased 38.9% to a record $1.5 billion from $1.1 billion during the comparable period in 2020. The increases in net revenues were primarily attributable to an increase in advisory fee and capital raising revenues, partially offset by a decrease in brokerage revenues. The segment’s performance continues to benefit from strong market activity, recent investments in our business, and contributions from Canada and Europe.

Commissions – For the three months ended September 30, 2021, commission revenues increased 6.1% to $55.2 million from $52.1 million in the comparable period in 2020. For the nine months ended September 30, 2021, commission revenues decreased 5.3% to $177.3 million from $187.1 million in the comparable period in 2020.

Principal transactions – For the three months ended September 30, 2021, principal transactions revenues decreased 30.3% to $68.9 million from $98.9 million in the comparable period in 2020. For the nine months ended September 30, 2021, principal transaction revenues decreased 12.6% to $277.7 million from $317.6 million in the comparable period in 2020.

Brokerage revenues – For the three months ended September 30, 2021, institutional brokerage revenues decreased 17.7% to $124.1 million from $150.9 million in the comparable period in 2020. For the nine months ended September 30, 2021, institutional brokerage revenues decreased 9.9% to $455.0 million from $504.7 million in the comparable period in 2020.

For the three months ended September 30, 2021, fixed income institutional brokerage revenues decreased 21.6% to $75.8 million from $96.7 million in the comparable period in 2020. For the nine months ended September 30, 2021, fixed income brokerage revenues decreased 16.1% to $266.1 million from $317.1 million in the comparable period in 2020. The decrease in fixed income institutional brokerage revenues is primarily attributable to lower volatility as well as tighter credit spreads.

For the three months ended September 30, 2021, equity institutional brokerage revenues decreased 10.9% to $48.3 million from $54.2 million during the comparable period in 2020. The decline in equity institutional brokerage revenues is primarily attributable to lower

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volatility and volumes. For the nine months ended September 30, 2021, equity brokerage revenues increased 0.7% to $188.9 million from $187.6 million during the comparable period in 2020.

Investment banking – For the three months ended September 30, 2021, investment banking revenues increased 71.7% to $360.7 million from $210.0 million during the comparable period in 2020. For the nine months ended September 30, 2021, investment banking revenues increased 78.7% to $1.1 billion from $588.2 million during the comparable period in 2020. The increase is primarily attributable to increases in advisory fees, as well as increases in equity and fixed income capital raising revenues.

For the three months ended September 30, 2021, capital raising revenues increased 18.0% to $152.5 million from $129.2 million in the comparable period in 2020. For the nine months ended September 30, 2021, capital raising revenues increased 51.6% to $505.6 million from $333.4 million in the comparable period in 2020.

For the three months ended September 30, 2021, equity capital raising revenues increased 19.5% to $93.8 million from $78.5 million during the comparable period in 2020. For the nine months ended September 30, 2021, equity capital raising revenues increased 70.2% to $343.6 million from $201.9 million during the comparable period in 2020. The increase is primarily attributable to an increase in deals compared to the prior year.

For the three months ended September 30, 2021, fixed income capital raising revenues increased 15.8% to $58.7 million from $50.7 million during the comparable period in 2020. For the nine months ended September 30, 2021, fixed income capital raising revenues increased 23.2% to $162.0 million from $131.5 million during the comparable period in 2020. The increase is primarily attributable to an increase in our public finance business. In addition, there has been an increase in our corporate debt issuance business.

For the three months ended September 30, 2021, advisory fee revenues increased 157.6% to $208.2 million from $80.8 million in the comparable period in 2020. For the nine months ended September 30, 2021, advisory fees increased 114.1% to $545.4 million from $254.7 million in the comparable period in 2020. The growth is primarily attributable to an increase in completed advisory transactions compared with lower volumes during the comparable period in 2020.

Interest – For the three months ended September 30, 2021, interest increased 108.1% to $7.0 million from $3.4 million in the comparable period in 2020. For the nine months ended September 30, 2021, interest increased 20.0% to $14.3 million from $11.9 million in the comparable period in 2020. The increase is primarily attributable to higher leveraged finance activity.

Other income – For the three months ended September 30, 2021, other income increased 76.0% to $3.1 million from $1.8 million in the comparable period in 2020. The increase is primarily attributable to improved investment gains over the comparable period in 2020. For the nine months ended September 30, 2021, other income increased 548.6% to $7.4 million from a loss of $1.6 million during the comparable period in 2020. The increase is primarily attributable to improved investment gains over the comparable period in 2020.

Interest expense – For the three months ended September 30, 2021, interest expense decreased 1.5% to $2.6 million from $2.7 million in the comparable period in 2020. For the nine months ended September 30, 2021, interest expense decreased 10.9% to $8.4 million from $9.5 million in the comparable period in 2020. The decrease is primarily attributable to lower interest rates and a decrease in inventory levels.

NON-INTEREST EXPENSES

For the three months ended September 30, 2021, Institutional Group non-interest expenses increased 28.2% to $367.2 million from $286.5 million for the comparable period in 2020. For the nine months ended September 30, 2021, Institutional Group non-interest expenses increased 27.3% to $1.1 billion from $892.1 million during the comparable period in 2020.

Compensation and benefits – For the three months ended September 30, 2021, compensation and benefits expense increased 34.3% to $283.1 million from $210.8 million during the comparable period in 2020. For the nine months ended September 30, 2021, compensation and benefits expense increased 34.3% to $884.2 million from $658.2 million during the comparable period in 2020. The increase is driven by higher compensable revenues.

Compensation and benefits expense as a percentage of net revenues was 57.5% and 58.2% for the three and nine months ended September 30, 2021, respectively, compared to 58.0% and 60.2% for the comparable periods in 2020.

Occupancy and equipment rental – For the three months ended September 30, 2021, occupancy and equipment rental expense decreased 0.5% to $17.7 million from $17.8 million during the comparable period in 2020. For the nine months ended September 30, 2021, occupancy and equipment rental expense increased 3.7% to $52.4 million from $50.5 million during the comparable period in 2020. The increase is attributable to higher data processing costs, partially offset by lower occupancy costs.

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Communications and office supplies – For the three months ended September 30, 2021, communications and office supplies expense decreased 0.2% to $21.8 million from $21.8 million during the comparable period in 2020. For the nine months ended September 30, 2021, communications and office supplies expense increased 1.3% to $66.9 million from $66.1 million during the comparable period in 2020.

Commissions and floor brokerage – For the three months ended September 30, 2021, commissions and floor brokerage expense increased 5.5% to $7.9 million from $7.5 million during the comparable period in 2020. For the nine months ended September 30, 2021, commissions and floor brokerage expense decreased 4.7% to $25.2 million from $26.4 million during the comparable period in 2020. The decrease is primarily attributable to lower ECN trading costs.

Other operating expenses – For the three months ended September 30, 2021, other operating expenses increased 28.2% to $36.7 million from $28.7 million during the comparable period in 2020. The increase is primarily attributable to higher travel and entertainment expenses, increased litigation-related expenses, and higher conference-related expenses, partially offset by lower investment banking transaction expenses. For the nine months ended September 30, 2021, other operating expenses increased 17.5% to $106.7 million from $90.9 million during the comparable period in 2020. The increase is primarily attributable to higher investment banking transaction expenses, conference-related expenses, and professional fees, partially offset by lower travel and entertainment expenses.

INCOME BEFORE INCOME TAXES

For the three months ended September 30, 2021, income before income taxes for the Institutional Group segment increased 62.8% to $125.1 million from $76.8 million during the comparable period in 2020. For the nine months ended September 30, 2021, income before income taxes for the Institutional Group segment increased 90.3% to $383.8 million from $201.6 million during the comparable period in 2020.

Profit margins (income before income taxes as a percentage of net revenues) have increased to 25.4% and 25.3% for the three and nine months ended September 30, 2021, respectively, from 21.1% and 18.4% during the comparable periods in 2020 as a result of strong revenue growth, partially offset by an increase in expenses.

Results of Operations – Other Segment

Three and Nine months ended September 30, 2021 Compared with Three and Nine months ended September 30, 2020

The following table presents consolidated financial information for the Other segment for the periods presented (in thousands, except percentages):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |  |  | % Change |
Net revenues |  | $ | (2,879 | ) |  | $ | (6,901 | ) |  |  | 58.3 |  |  | $ | (10,908 | ) |  | $ | (17,122 | ) |  |  | 36.3 |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 46,530 |  |  |  | 44,983 |  |  |  | 3.4 |  |  |  | 157,317 |  |  |  | 165,266 |  |  |  | (4.8 | )
Other operating expenses |  |  | 51,300 |  |  |  | 45,494 |  |  |  | 12.8 |  |  |  | 149,785 |  |  |  | 132,205 |  |  |  | 13.3 |
Total non-interest expenses |  |  | 97,830 |  |  |  | 90,477 |  |  |  | 8.1 |  |  |  | 307,102 |  |  |  | 297,471 |  |  |  | 3.2 |
Loss before income taxes |  | $ | (100,709 | ) |  | $ | (97,378 | ) |  |  | 3.4 | % |  | $ | (318,010 | ) |  | $ | (314,593 | ) |  |  | 1.1 | %

The other segment includes expenses related to the Company’s acquisition strategy and the investments made in the Company’s infrastructure and control environment.

The expenses relating to the Company’s acquisition strategy, which are included in the other segment, consists of stock-based compensation and operating costs from our various acquisitions. The following shows the expenses that are part of the other segment related to acquisitions.

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |  |  | % Change |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | $ | 5,780 |  |  | $ | 6,770 |  |  |  | (14.6 | ) |  | $ | 18,073 |  |  | $ | 22,907 |  |  |  | (21.1 | )
Other operating expenses |  |  | 11,503 |  |  |  | 6,219 |  |  |  | 85.0 |  |  |  | 30,854 |  |  |  | 19,672 |  |  |  | 56.8 |
Total non-interest expenses |  | $ | 17,283 |  |  | $ | 12,989 |  |  |  | 33.1 | % |  | $ | 48,927 |  |  | $ | 42,579 |  |  |  | 14.9 | %

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The expenses not associated with acquisition-related activities in the other segment are as follows:

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | % Change |  |  | 2021 |  |  | 2020 |  |  | % Change |
Non-interest expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  | $ | 40,750 |  |  | $ | 38,213 |  |  |  | 6.6 |  |  | $ | 139,244 |  |  | $ | 142,359 |  |  |  | (2.2 | )
Other operating expenses |  |  | 39,797 |  |  |  | 39,275 |  |  |  | 1.3 |  |  |  | 118,931 |  |  |  | 112,533 |  |  |  | 5.7 |
Total non-interest expenses |  | $ | 80,547 |  |  | $ | 77,488 |  |  |  | 3.9 | % |  | $ | 258,175 |  |  | $ | 254,892 |  |  |  | 1.3 | %

Non-interest expenses for the three months ended September 30, 2021 increased 3.9% from the comparable period in 2020. The increase consisted of a 6.6% increase in compensation and benefits and a 1.3% increase in other operating expenses. Non-interest expenses for the nine months ended September 30, 2021 increased 1.3% from the comparable period in 2020. The increase consisted of a 5.7% increase in other operating expenses, partially offset by a 2.2% decrease in compensation and benefits.

Analysis of Financial Condition

Our company’s consolidated statements of financial condition consist primarily of cash and cash equivalents, receivables, financial instruments owned, bank loans, investments, goodwill, loans and advances to financial advisors, bank deposits, and payables. As of September 30, 2021, our total assets increased 15.8% to $30.8 billion from $26.6 billion at December 31, 2020. Our broker-dealer subsidiary’s gross assets and liabilities, including financial instruments owned, stock loan/borrow, receivables and payables from/to brokers, dealers, and clearing organizations and clients, fluctuate with our business levels and overall market conditions.

As of September 30, 2021, our liabilities were comprised primarily of deposits of $20.4 billion at Stifel Bancorp, payables to customers of $1.3 billion at our broker-dealer subsidiaries, accounts payable and accrued expenses of $1.1 billion, senior notes, net of debt issuance costs, of $1.1 billion, and accrued employee compensation of $728.4 million. To meet our obligations to clients and operating needs, we had $2.1 billion in cash and cash equivalents at September 30, 2021. We also had highly liquid assets consisting of held-to-maturity securities of $5.3 billion, available-for-sale securities of $2.2 billion, financial instruments of $1.2 billion, and client brokerage receivables of $1.1 billion.

Cash Flow

Cash, cash equivalents, and restricted cash decreased $225.0 million to $2.1 billion at September 30, 2021, from $2.3 billion at December 31, 2020. Operating activities provided cash of $570.7 million. Investing activities used cash of $3.9 billion due to the growth of the loan portfolio, investment securities purchases, and fixed asset purchases, partially offset by proceeds from the sale and maturity of securities in our investment portfolio. Financing activities provided cash of $3.0 billion principally due to increases in bank deposits, proceeds from preferred stock issuance, proceeds from FHLB advances, securities loaned, and securities sold under agreements to repurchase, partially offset by the redemption of preferred stock, an increase in tax payments related to shares withheld for stock-based compensation, dividends paid on our common and preferred stock, and repurchases of our common stock.

Liquidity and Capital Resources

The Company’s senior management establishes the liquidity and capital policies of our company. The Company’s senior management reviews business performance relative to these policies, monitors the availability of alternative sources of financing, and oversees the liquidity and interest rate sensitivity of our company’s asset and liability position.

Our assets, consisting mainly of cash or assets readily convertible into cash, are our principal source of liquidity. The liquid nature of these assets provides for flexibility in managing and financing the projected operating needs of the business. These assets are financed primarily by our equity capital, corporate debt, debentures to trusts, client credit balances, short-term bank loans, proceeds from securities lending, and other payables. We currently finance our client accounts and firm trading positions through ordinary course borrowings at floating interest rates from various banks on a demand basis, securities lending, and repurchase agreements, with company-owned and client securities pledged as collateral. Changes in securities market volumes, related client borrowing demands, underwriting activity, and levels of securities inventory affect the amount of our financing requirements.

Our bank assets consist principally of available-for-sale and held-to-maturity securities, retained loans, and cash and cash equivalents. Stifel Bancorp’s current liquidity needs are generally met through deposits from brokerage clients and equity capital. We monitor the liquidity of our bank subsidiaries daily to ensure their ability to meet customer deposit withdrawals, maintain reserve requirements, and support asset growth.

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As of September 30, 2021, we had $30.8 billion in assets, $11.9 billion of which consisted of cash or assets readily convertible into cash as follows (in thousands, except average days to conversion):

| September 30, 2021 |  |  | December 31, 2020 |  |  | Average Conversion
Cash and cash equivalents | $ | 2,054,273 |  |  | $ | 2,279,274 |  |  |
Receivables from brokers, dealers, and clearing organizations |  | 488,429 |  |  |  | 549,492 |  |  | 5 days
Securities purchased under agreements to resell |  | 598,535 |  |  |  | 217,930 |  |  | 1 day
Financial instruments owned at fair value |  | 1,111,598 |  |  |  | 682,744 |  |  | 3 days
Available-for-sale securities at fair value |  | 2,242,465 |  |  |  | 2,230,297 |  |  | 2 days
Held-to-maturity securities at amortized cost |  | 5,347,821 |  |  |  | 4,117,384 |  |  | 4 days
Investments |  | 38,110 |  |  |  | 42,429 |  |  | 10 days
Total cash and assets readily convertible to cash | $ | 11,881,231 |  |  | $ | 10,119,550 |  |  |

As of September 30, 2021 and December 31, 2020, the amount of collateral by asset class is as follows (in thousands):

| September 30, 2021 |  |  | December 31, 2020 |
| Contractual |  |  | Contingent |  |  | Contractual |  |  | Contingent |
Cash and cash equivalents | $ | 190,483 |  |  | $ | — |  |  | $ | 155,081 |  |  | $ | — |
Financial instruments owned at fair value |  | 195,451 |  |  |  | 195,451 |  |  |  | 190,955 |  |  |  | 190,955 |
Investment portfolio (AFS & HTM) |  | — |  |  |  | 1,893,708 |  |  |  | — |  |  |  | 1,764,421 |
| $ | 385,934 |  |  | $ | 2,089,159 |  |  | $ | 346,036 |  |  | $ | 1,955,376 |

Capital Management

We have an ongoing authorization from the Board of Directors to repurchase our common stock in the open market or in negotiated transactions. At September 30, 2021, the maximum number of shares that may yet be purchased under this plan was 11.9 million. We utilize the share repurchase program to manage our equity capital relative to the growth of our business and help to meet obligations under our employee benefit plans.

Liquidity Risk Management

Our businesses are diverse, and our liquidity needs are determined by many factors, including market movements, collateral requirements, and client commitments, all of which can change dramatically in a difficult funding environment. During a liquidity crisis, credit-sensitive funding, including unsecured debt and some types of secured financing agreements, may be unavailable, and the terms (e.g., interest rates, collateral provisions, and tenor) or availability of other types of secured financing may change. We manage liquidity risk by diversifying our funding sources across products and among individual counterparties within those products. These liquidity risk management practices have allowed us to effectively manage the market stress from the COVID-19 pandemic. For more information on the effects of the pandemic, see Executive Summary - COVID-19 Pandemic on page 49.

As a holding company, whereby all of our operations are conducted through our subsidiaries, our cash flow and our ability to service our debt, including the notes, depend upon the earnings of our subsidiaries. Our subsidiaries are separate and distinct legal entities. Our subsidiaries have no obligation to pay any amounts due on the notes or to provide us with funds to pay our obligations, whether by dividends, distributions, loans, or other payments.

Our liquidity requirements may change in the event we need to raise more funds than anticipated to increase inventory positions, support more rapid expansion, develop new or enhanced services and products, acquire technologies, respond to acquisition opportunities, expand our recruiting efforts, or respond to other unanticipated liquidity requirements. We primarily rely on financing activities and distributions from our subsidiaries for funds to implement our business and growth strategies and repurchase our shares. Net capital rules, restrictions under our borrowing arrangements of our subsidiaries, as well as the earnings, financial condition, and cash requirements of our subsidiaries, may each limit distributions to us from our subsidiaries.

The availability of outside financing, including access to the capital markets and bank lending, depends on a variety of factors, such as market conditions, the general availability of credit, the volume of trading activities, the overall availability of credit to the financial services sector, and our credit rating. Our cost and availability of funding may be adversely affected by illiquid credit markets and wider credit spreads. As a result of any future concerns about the stability of the markets generally and the strength of counterparties specifically, lenders may from time to time curtail, or even cease to provide, funding to borrowers.

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Our liquidity management policies are designed to mitigate the potential risk that we may be unable to access adequate financing to service our financial obligations without material business impact. The principal elements of our liquidity management framework are: (a) daily monitoring of our liquidity needs at the holding company and significant subsidiary level, (b) stress testing the liquidity positions of Stifel and our bank subsidiaries, and (c) diversification of our funding sources.

Monitoring of liquidity – Senior management establishes our liquidity and capital policies. These policies include senior management’s review of short- and long-term cash flow forecasts, review of monthly capital expenditures, the monitoring of the availability of alternative sources of financing, and the daily monitoring of liquidity in our significant subsidiaries. Our decisions on the allocation of capital to our business units consider, among other factors, projected profitability and cash flow, risk, and impact on future liquidity needs. Our treasury department assists in evaluating, monitoring, and controlling the impact that our business activities have on our financial condition, liquidity, and capital structure as well as maintains our relationships with various lenders. The objectives of these policies are to support the successful execution of our business strategies while ensuring ongoing and sufficient liquidity.

Liquidity stress testing (Firm-wide) –A liquidity stress test model is maintained by the Company that measures liquidity outflows across multiple scenarios at the major operating subsidiaries and details the corresponding impact to our holding company and the overall consolidated firm. Liquidity stress tests are utilized to ensure that current exposures are consistent with the Company’s established liquidity risk tolerance and, more specifically, to identify and quantify sources of potential liquidity strain. Further, the stress tests are utilized to analyze possible impacts on the Company’s cash flows, and liquidity position. The outflows are modeled over a 30-day liquidity stress timeframe and include the impact of idiosyncratic and macro-economic stress events.

The assumptions utilized in the Company’s liquidity stress tests include, but are not limited to, the following:

| • | No government support

| • | No access to equity and unsecured debt markets within the stress horizon

| • | Higher haircuts and significantly lower availability of secured funding

| • | Additional collateral that would be required by trading counter-parties, certain exchanges, and clearing organizations related to credit rating downgrades

| • | Client cash withdrawals and inability to accept new deposits

| • | Increased demand from customers on the funding of loans and lines of credit

At September 30, 2021, the Company maintained sufficient liquidity to meet current and contingent funding obligations as modeled in its liquidity stress test model.

Liquidity stress testing (Stifel Bancorp) – Our bank subsidiaries perform three primary stress tests on their liquidity position. These stress tests are based on the following company-specific stresses: (1) the amount of deposit run-off that they could withstand over a one-month period of time based on their on-balance sheet liquidity and available credit, (2) the ability to fund operations if all available credit were to be drawn immediately, with no additional available credit, and (3) the ability to fund operations under a regulatory prompt corrective action. The goal of these stress tests is to determine their ability to fund continuing operations under significant pressures on both assets and liabilities.

Under all stress tests, our bank subsidiaries consider cash and highly liquid investments as available to meet liquidity needs. In their analysis, our bank subsidiaries consider agency mortgage-backed securities, corporate bonds, and commercial mortgage-backed securities as highly liquid. In addition to being able to be readily financed at modest haircut levels, our bank subsidiaries estimate that each of the individual securities within each of the asset classes described above could be sold into the market and converted into cash within three business days under normal market conditions, assuming that the entire portfolio of a given asset class was not simultaneously liquidated. At September 30, 2021, available cash and highly liquid investments comprised approximately 22% of Stifel Bancorp’s assets, which was well in excess of its internal target.

In addition to these stress tests, management performs a daily liquidity review. The daily analysis provides management with all major fluctuations in liquidity. The analysis also tracks the proportion of deposits that Stifel Bancorp is sweeping from its affiliated broker-dealer, Stifel. On a monthly basis, liquidity key performance indicators and compliance with liquidity policy limits are reported to the Board of Directors. Our banking subsidiaries have not violated any internal liquidity policy limits.

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Funding Sources

The Company pursues a strategy of diversification of secured and unsecured funding sources (by product and by investor) and attempts to ensure that the tenor of the Company’s liabilities equals or exceeds the expected holding period of the assets being financed. The Company funds its balance sheet through diverse sources. These sources may include the Company’s equity capital, long-term debt, repurchase agreements, securities lending, deposits, committed and uncommitted credit facilities, Federal Home Loan Bank advances, and federal funds agreements.

Cash and Cash Equivalents – We held $2.1 billion of cash and cash equivalents at September 30, 2021, compared to $2.3 billion at December 31, 2020. Cash and cash equivalents provide immediate sources of funds to meet our liquidity needs.

Securities Available-for-Sale – We held $2.2 billion in available-for-sale investment securities at September 30, 2021, compared to $2.2 billion at December 31, 2020. As of September 30, 2021, the weighted-average life of the investment securities portfolio was approximately 1.4 years. These investment securities provide increased liquidity and flexibility to support our company’s funding requirements.

We monitor the available-for-sale investment portfolio for other-than-temporary impairment based on a number of criteria, including the size of the unrealized loss position, the duration for which the security has been in a loss position, credit rating, the nature of the investments, and current market conditions. For debt securities, we also consider any intent to sell the security and the likelihood we will be required to sell the security before its anticipated recovery. We continually monitor the ratings of our security holdings and conduct regular reviews of our credit-sensitive assets.

Deposits – Deposits have become our largest funding sources. Deposits provide a stable, low-cost source of funds that we utilize to fund asset growth and to diversify funding sources. We have continued to expand our deposit-gathering efforts through our existing private client network and through expansion. These channels offer a broad set of deposit products that include demand deposits, money market deposits, and certificates of deposit (“CDs”).

As of September 30, 2021, we had $20.4 billion in deposits compared to $17.4 billion at December 31, 2020. Our core deposits are primarily comprised of money market deposit accounts, non-interest bearing deposits, and CDs.

Short-term borrowings – Our short-term financing is generally obtained through short-term bank line financing on an uncommitted, secured basis, securities lending arrangements, repurchase agreements, advances from the Federal Home Loan Bank, term loans, and committed bank line financing on an unsecured basis. We borrow from various banks on a demand basis with company-owned and customer securities pledged as collateral. The value of customer-owned securities used as collateral is not reflected in the consolidated statements of financial condition. We also have unsecured, committed bank lines available.

Our uncommitted secured lines of credit at September 30, 2021, totaled $880.0 million with four banks and are dependent on having appropriate collateral, as determined by the bank agreements, to secure an advance under the line. The availability of our uncommitted lines is subject to approval by the individual banks each time an advance is requested and may be denied. Our peak daily borrowing on our uncommitted secured lines was $50.0 million during the nine months ended September 30, 2021. There are no compensating balance requirements under these arrangements. Any borrowings on secured lines of credit are generally utilized to finance certain fixed income securities. At September 30, 2021, we had no outstanding balances on our uncommitted secured lines of credit.

The Federal Home Loan advances of $52.0 million are floating-rate advances. The weighted average interest rates during the three and nine months ended September 30, 2021 on these advances was 0.28%. The advances are secured by Stifel Bancorp’s residential mortgage loan portfolio and investment portfolio. The interest rates reset on a daily basis. Stifel Bancorp has the option to prepay these advances without penalty on the interest reset date.

Unsecured borrowings – On May 27, 2021, the Company and Stifel entered into an unsecured revolving credit facility agreement (the “Credit Facility”). The Credit Facility has a maturity date of May 2026 and the lenders include a number of financial institutions. This committed unsecured borrowing facility provides for maximum borrowings of up to $500.0 million, with a sublimit of $200.0 million for the Company. Stifel may borrow up to $500.0 million under the Credit Facility, depending on the amount of outstanding borrowings of the Company. The interest rates on borrowings under the Credit Facility are variable and based on LIBOR, as adjusted. There were no borrowings outstanding on the Credit Facility as of September 30, 2021.

We can draw upon this line as long as certain restrictive covenants are maintained. Under the Credit Facility, we are required to maintain compliance with a minimum consolidated tangible net worth covenant, as defined, and a maximum consolidated total capitalization ratio covenant, as defined. In addition, Stifel, our broker-dealer subsidiary, is required to maintain compliance with a minimum regulatory excess net capital percentage covenant, as defined, and our bank subsidiaries are required to maintain their status as well-capitalized, as defined.

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Our revolving credit facility contains customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to similar obligations, certain events of bankruptcy and insolvency, and judgment defaults. At September 30, 2021, we had no advances on the Credit Facility and were in compliance with all covenants and currently do not expect any covenant violations due to the impacts of the COVID-19 pandemic.

Federal Home Loan Bank Advances and other secured financing – Stifel Bancorp has borrowing capacity with the Federal Home Loan Bank of $4.1 billion at September 30, 2021 and $64.5 million in federal funds agreements, for the purpose of purchasing short-term funds should additional liquidity be needed. At September 30, 2021, outstanding FHLB advances were $52.0 million. Stifel Bancorp is eligible to participate in the Fed’s discount window program; however, Stifel Bancorp does not view borrowings from the Fed as a primary means of funding. The credit available in this program is subject to periodic review, may be terminated or reduced at the discretion of the Fed, and is secured by securities. Stifel Bancorp has borrowing capacity of $1.2 billion with the Fed’s discount window at September 30, 2021. Stifel Bancorp receives overnight funds from excess cash held in Stifel brokerage accounts, which are deposited into a money market account. These balances totaled $18.6 billion at September 30, 2021.

Public Offering of Senior Notes – On July 15, 2014, we sold in a registered underwritten public offering, $300.0 million in aggregate principal amount of 4.25% senior notes due July 2024 (the “2014 Notes”). Interest on the 2014 Notes is payable semi-annually in arrears. We may redeem the 2014 Notes in whole or in part, at our option, at a redemption price equal to 100% of their principal amount, plus a “make-whole” premium and accrued and unpaid interest, if any, to the date of redemption. In July 2016, we issued an additional $200.0 million in aggregate principal amount of 4.25% senior notes due 2024. In July 2014, we received a BBB- rating on the 2014 Notes. In July 2014, we received a BBB- rating on the 2014 Notes.

On October 4, 2017, we completed the pricing of a registered underwritten public offering of $200.0 million in aggregate principal amount of 5.20% senior notes due October 2047. Interest on the senior notes is payable quarterly in arrears in January, April, July, and October. On or after October 15, 2022, we may redeem some or all of the senior notes at any time at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued interest thereon to the redemption date. On October 27, 2017, we completed the sale of an additional $25.0 million aggregate principal amount of Notes pursuant to the over-allotment option. In October 2017, we received a BBB- rating on the 2017 Notes.

On May 20, 2020, we sold in a registered underwritten public offering, $400.0 million in aggregate principal amount of 4.00% senior notes due May 2030. Interest on these senior notes is payable semi-annually in arrears in May and November. We may redeem the notes in whole or in part, at our option, at a redemption price equal to the greater of a) 100% of their principal amount or b) discounted present value at Treasury rate plus 50 basis points prior to February 15, 2030, and on or after February 15, 2030, at 100% of their principal amount, and accrued and unpaid interest, if any, to the date of redemption. In May 2020, we received a BBB- rating on the notes.

Preferred Stock Offerings – In July 2016, the Company completed an underwritten registered public offering of $150.0 million 6.25% Non-Cumulative Perpetual Preferred Stock, Series A. On August 20, 2021, the Company redeemed all of the outstanding Series A Preferred Stock.

In February 2019, the Company completed an underwritten registered public offering of $150.0 million 6.25% Non-Cumulative Perpetual Preferred Stock, Series B. In March 2019, we completed a public offering of an additional $10.0 million of Series B Preferred, pursuant to the over-allotment option.

In May 2020, the Company completed an underwritten registered public offering of $225.0 million 6.125% Non-Cumulative Perpetual Preferred Stock, Series C, which included the sale of $25.0 million of Series C Preferred pursuant to an over-allotment option.

On July 22, 2021, the Company completed an underwritten registered public offering of $300.0 million of 4.50% Non-Cumulative Perpetual Preferred Stock, Series D. When, as, and if declared by the board of directors of the Company, dividends will be payable at an annual rate of 4.50%, payable quarterly, in arrears. The Company may redeem the Series D preferred stock at its option, subject to regulatory approval, on or after August 15, 2026.

Credit Rating

We believe our current rating depends upon a number of factors, including industry dynamics, operating and economic environment, operating results, operating margins, earnings trends and volatility, balance sheet composition, liquidity and liquidity management, our capital structure, our overall risk management, business diversification, and our market share and competitive position in the markets in which we operate. Deteriorations in any of these factors could impact our credit rating. A reduction in our credit rating could adversely affect our liquidity and competitive position, increase our incremental borrowing costs, limit our access to the capital markets, or trigger our obligations under certain financial agreements. As such, we may not be able to successfully obtain additional outside financing to fund our operations on favorable terms, or at all.

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We believe our existing assets, most of which are liquid in nature, together with the funds from operations, available informal short-term credit arrangements, and our ability to raise additional capital will provide sufficient resources to meet our present and anticipated financing needs.

Use of Capital Resources

We have paid $95.0 million in the form of upfront notes to financial advisors for transition pay during the nine months ended September 30, 2021. As we continue to take advantage of the opportunities created by market displacement and as competition for skilled professionals in the industry increases, we may decide to devote more significant resources to attracting and retaining qualified personnel.

We utilize transition pay, principally in the form of upfront demand notes, to aid financial advisors, who have elected to join our firm, to supplement their lost compensation while transitioning their customers’ accounts to the Stifel platform. The initial value of the notes is determined primarily by the financial advisors’ trailing production and assets under management. These notes are generally forgiven over a five- to ten-year period based on production. The future estimated amortization expense of the upfront notes, assuming current-year production levels and static growth for the remaining three months in 2021, and the years ended December 31, 2022, 2023, 2024, 2025, and thereafter are $41.6 million, $113.4 million, $101.5 million, $86.2 million, $64.6 million, and $200.3 million, respectively. These estimates could change if we continue to grow our business through expansion or experience increased production levels.

We maintain an incentive stock plan and a wealth accumulation plan that provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards, stock units, and debentures (collectively, “deferred awards”) to our associates. Historically, we have granted stock units to our associates as part of our retention program. A restricted stock unit or restricted stock award represents the right to receive a share of common stock from our company at a designated time in the future without cash payment by the employee and is issued in lieu of cash incentive, principally for deferred compensation and employee retention plans. The restricted stock units or restricted stock awards generally vest over the next one to ten years after issuance and are distributed at predetermined future payable dates once vesting occurs. At September 30, 2021, the total number of restricted stock units, PRSUs, and restricted stock awards outstanding was 19.5 million, of which 16.8 million were unvested. At September 30, 2021, there was unrecognized compensation cost for deferred awards of approximately $588.9 million, which is expected to be recognized over a weighted-average period of 2.6 years.

The future estimated compensation expense of the deferred awards, assuming current year forfeiture levels and static growth for the remaining three months in 2021, and the years ended December 31, 2022, 2023, 2024, 2025, and thereafter are $46.0 million, $168.1 million, $137.2 million, $108.7 million, $70.8 million, and $58.1 million, respectively. These estimates could change if our forfeitures change from historical levels.

On July 15, 2021, the Company purchased three commercial aircraft under lease to a domestic carrier, for a total purchase price of $145.9 million, which was funded from operating cash.

On August 20, 2021, the Company redeemed all of the outstanding 6.25% Non-Cumulative Perpetual Preferred Stock, Series A. The redemption price was $25.00 per depository share plus accrued and unpaid dividends to, but excluding, the date of redemption.

On October 31, 2021, the Company acquired Vining Sparks. Consideration for this acquisition consisted of cash from operations and shares of company common stock.

Net Capital Requirements – We operate in a highly regulated environment and are subject to capital requirements, which may limit distributions to our company from our subsidiaries. Distributions from our broker-dealer subsidiaries are subject to net capital rules. These subsidiaries have historically operated in excess of minimum net capital requirements. However, if distributions were to be limited in the future due to the failure of our subsidiaries to comply with the net capital rules or a change in the net capital rules, it could have a material and adverse effect to our company by limiting our operations that require intensive use of capital, such as underwriting or trading activities, or limit our ability to implement our business and growth strategies, pay interest on and repay the principal of our debt, and/or repurchase our common stock. Our non-broker-dealer subsidiaries, Stifel Bank & Trust, Stifel Bank, Stifel Trust Company, N.A., and Stifel Trust Company Delaware, N.A., are also subject to various regulatory capital requirements administered by the federal banking agencies. Our broker-dealer subsidiaries and our bank subsidiaries have consistently operated in excess of their capital adequacy requirements. Our Canadian subsidiary, Stifel Nicolaus Canada Inc. (“SNC”), is subject to the regulatory supervision and requirements of IIROC.

At September 30, 2021, Stifel had net capital of $654.9 million, which was 49.8% of aggregate debit items and $628.6 million in excess of its minimum required net capital. At September 30, 2021, all of our other broker-dealer subsidiaries’ net capital exceeded the minimum net capital required under the SEC rule. At September 30, 2021, SNEL’s capital and reserves were in excess of the

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financial resources requirement under the rules of the FCA. At September 30, 2021, our banking subsidiaries were considered well capitalized under the regulatory framework for prompt corrective action. At September 30, 2021, SNC’s net capital and reserves were in excess of the financial resources requirement under the rules of the IIROC. See Note 15 of the Notes to Consolidated Financial Statements for details of our regulatory capital requirements.

Critical Accounting Policies and Estimates

In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles and pursuant to the rules and regulations of the SEC, we make assumptions, judgments, and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities. We base our assumptions, judgments, and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments, and estimates. We also discuss our critical accounting policies and estimates with the Audit Committee of the Board of Directors.

We believe that the assumptions, judgments, and estimates involved in the accounting policies described below have the greatest potential impact on our consolidated financial statements. These areas are key components of our results of operations and are based on complex rules that require us to make assumptions, judgments, and estimates, so we consider these to be our critical accounting policies. Historically, our assumptions, judgments, and estimates relative to our critical accounting policies and estimates have not differed materially from actual results.

For more information, see Note 2 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2020. There have not been any material updates to our critical accounting policies and estimates as disclosed in the MD&A of the Company's Annual Report on Form 10-K.

Recent Accounting Pronouncements

See Note 2 of the Notes to Consolidated Financial Statements for information regarding the effect of new accounting pronouncements on our consolidated financial statements.

Off-Balance Sheet Arrangements

Information concerning our off-balance sheet arrangements is included in Note 20 of the Notes to Consolidated Financial Statements. Such information is hereby incorporated by reference.

Contractual Obligations

Our contractual obligations have not materially changed from those reported in our Annual Report on Form 10-K for the year ended December 31, 2020.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Risk Management

Risks are an inherent part of our business and activities. Management of these risks is critical to our soundness and profitability. Risk management at our company is a multi-faceted process that requires communication, judgment, and knowledge of financial products and markets. Our senior management group takes an active role in the risk management process and requires our business units to assist in the identification, assessment, monitoring, and control of various risks. The principal risks involved in our business activities are: market (interest rates and equity prices), credit, operational, and regulatory and legal.

We have been affected, and expect to continue to be affected, by market stress resulting from the COVID-19 pandemic that began in the first quarter of 2020. For more information on the effects of the pandemic, see Executive Summary - COVID-19 Pandemic on page 49.

We have adopted policies and procedures concerning Enterprise Risk Management. The Risk Management/Corporate Governance Committee of the Board of Directors, in exercising its oversight of management's activities, conducts periodic reviews and discussions with management regarding the guidelines and policies governing the processes by which risk assessment and risk management are handled.

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Market Risk

The potential for changes in the value of financial instruments owned by our company resulting from changes in interest rates and equity prices is referred to as “market risk.” Market risk is inherent to financial instruments, and accordingly, the scope of our market risk management procedures includes all market risk-sensitive financial instruments.

We trade tax-exempt and taxable debt obligations, including U.S. treasury bills, notes, and bonds; U.S. government agency and municipal notes and bonds; bank certificates of deposit; mortgage-backed securities; and corporate obligations. We are also an active market maker in over-the-counter equity securities. In connection with these activities, we may maintain inventories in order to ensure availability and to facilitate customer transactions.

Changes in value of our financial instruments may result from fluctuations in interest rates, credit ratings, equity prices, and the correlation among these factors, along with the level of volatility.

We manage our trading businesses by product and have established trading departments that have responsibility for each product. The trading inventories are managed with a view toward facilitating client transactions, considering the risk and profitability of each inventory position. Position limits in trading inventory accounts are established by our Enterprise Risk Management department and monitored on a daily basis within the business units. We monitor inventory levels and results of the trading departments, as well as inventory aging, pricing, concentration, securities ratings, and risk sensitivities.

We are also exposed to market risk based on our other investing activities. These investments consist of investments in private equity partnerships, start-up companies, venture capital investments, and zero coupon U.S. government securities and are included under the caption “Investments” on the consolidated statements of financial condition.

Interest Rate Risk

We are exposed to interest rate risk as a result of maintaining inventories of interest rate-sensitive financial instruments and from changes in the interest rates on our interest-earning assets (including client loans, stock borrow activities, investments, inventories, and resale agreements) and our funding sources (including client cash balances, FHLB advances, stock lending activities, bank borrowings, and repurchase agreements), which finance these assets. The collateral underlying financial instruments at the broker-dealer is repriced daily, thus requiring collateral to be delivered as necessary. Interest rates on client balances and stock borrow and lending produce a positive spread to our company, with the rates generally fluctuating in parallel.

We manage our inventory exposure to interest rate risk by setting and monitoring limits and, where feasible, hedging with offsetting positions in securities with similar interest rate risk characteristics. While a significant portion of our securities inventories have contractual maturities in excess of five years, these inventories, on average, turn over several times per year.

Value-at-Risk (“VaR”) is a statistical technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatility. It provides a common risk measure across financial instruments, markets and asset classes. We estimate VaR using a model that assumes historical changes in market conditions are representative of future changes, and trading losses on any given day could exceed the reported VaR by significant amounts in unusually volatile markets. Further, the model involves a number of assumptions and inputs. While we believe that the assumptions and inputs we use in our risk model are reasonable, different assumptions and inputs could produce materially different VaR estimates. We monitor, on a daily basis, the VaR in our trading portfolios using a ten-day horizon and a five year look-back period measured at a 99% confidence level. During the third quarter of 2021, we changed the look-back period from three to five years.

The following table sets forth the high, low, and daily average VaR for our trading portfolios during the nine months ended September 30, 2021, and the daily VaR at September 30, 2021 and December 31, 2020 (in thousands):

|  | Nine Months Ended September 30, 2021 |  |  | VAR Calculation at |
|  | High |  |  | Low |  |  | Daily Average |  |  | September 30, 2021 |  |  | December 31, 2020 |
Daily VaR |  | $ | 33,356 |  |  | $ | 3,351 |  |  | $ | 13,876 |  |  | $ | 8,154 |  |  | $ | 8,435 |

Stifel Bancorp’s interest rate risk is principally associated with changes in market interest rates related to residential, consumer, and commercial lending activities, as well as FDIC-insured deposit accounts to customers of our broker-dealer subsidiaries and to the general public.

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Our primary emphasis in interest rate risk management for Stifel Bancorp is the matching of assets and liabilities of similar cash flow and repricing time frames. This matching of assets and liabilities reduces exposure to interest rate movements and aids in stabilizing positive interest spreads. Stifel Bancorp has established limits for acceptable interest rate risk and acceptable portfolio value risk. To ensure that Stifel Bancorp is within the limits established for net interest margin, an analysis of net interest margin based on various shifts in interest rates is prepared each quarter and presented to Stifel Bancorp’s Board of Directors. Stifel Bancorp utilizes a third-party model to analyze the available data.

The following table illustrates the estimated change in net interest income at September 30, 2021, based on shifts in interest rates of up to positive 200 basis points and negative 200 basis points:

Hypothetical change in interest rates | Projected change in net interest income |
+200 |  | 39.8 | %
+100 |  | 19.7 |
0 |  | — |
-100 |  | (4.7 | )
-200 |  | (5.6 | )

The following GAP Analysis table indicates Stifel Bancorp’s interest rate sensitivity position at September 30, 2021 (in thousands):

| Repricing Opportunities |
| 0-6 Months |  |  | 7-12 Months |  |  | 1-5 Years |  |  | 5+ Years |
Interest-earning assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans | $ | 8,927,103 |  |  | $ | 603,808 |  |  | $ | 2,556,337 |  |  | $ | 1,848,627 |
Securities |  | 5,644,997 |  |  |  | 263,341 |  |  |  | 934,146 |  |  |  | 762,383 |
Interest-bearing cash |  | 458,812 |  |  |  | — |  |  |  | — |  |  |  | — |
| $ | 15,030,912 |  |  | $ | 867,149 |  |  | $ | 3,490,483 |  |  | $ | 2,611,010 |
Interest-bearing liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Transaction accounts and savings | $ | 19,761,402 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Certificates of deposit |  | 8,270 |  |  |  | 16,496 |  |  |  | 10,039 |  |  |  | — |
Borrowings |  | 52,000 |  |  |  | — |  |  |  | — |  |  |  | — |
| $ | 19,821,672 |  |  | $ | 16,496 |  |  | $ | 10,039 |  |  | $ | — |
GAP |  | (4,790,760 | ) |  |  | 850,653 |  |  |  | 3,480,444 |  |  |  | 2,611,010 |
Cumulative GAP | $ | (4,790,760 | ) |  | $ | (3,940,107 | ) |  | $ | (459,663 | ) |  | $ | 2,151,347 |

We maintain a risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings caused by interest rate volatility. Our goal is to manage sensitivity to changes in rates by hedging the maturity characteristics of Fed funds-based affiliated deposits, thereby limiting the impact on earnings. By using derivative instruments, we are exposed to credit and market risk on those derivative positions. We manage the market risk associated with interest rate contracts by establishing and monitoring limits as to the types and degree of risk that may be undertaken. Our interest rate hedging strategies may not work in all market environments and, as a result, may not be effective in mitigating interest rate risk.

Equity Price Risk

We are exposed to equity price risk as a consequence of making markets in equity securities. We attempt to reduce the risk of loss inherent in our inventory of equity securities by monitoring those security positions constantly throughout each day.

Our equity securities inventories are repriced on a regular basis, and there are no unrecorded gains or losses. Our activities as a dealer are client-driven, with the objective of meeting clients’ needs while earning a positive spread.

Credit Risk

We are engaged in various trading and brokerage activities, with the counterparties primarily being broker-dealers. In the event counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. We manage this risk by imposing and monitoring position limits for each counterparty, monitoring trading counterparties, conducting regular credit reviews of financial counterparties, reviewing security concentrations, holding and marking to market collateral on certain transactions, and conducting business through clearing organizations, which guarantee performance.

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Our client activities involve the execution, settlement, and financing of various transactions on behalf of our clients. Client activities are transacted on either a cash or margin basis. Credit exposure associated with our private client business consists primarily of customer margin accounts, which are monitored daily and are collateralized. We monitor exposure to industry sectors and individual securities and perform analyses on a regular basis in connection with our margin lending activities. We adjust our margin requirements if we believe our risk exposure is not appropriate based on market conditions.

We have accepted collateral in connection with resale agreements, securities borrowed transactions, and customer margin loans. Under many agreements, we are permitted to sell or repledge these securities held as collateral and use these securities to enter into securities lending arrangements or to deliver to counterparties to cover short positions. At September 30, 2021, the fair value of securities accepted as collateral where we are permitted to sell or repledge the securities was $2.4 billion, and the fair value of the collateral that had been sold or repledged was $195.5 million.

By using derivative instruments, we are exposed to credit and market risk on those derivative positions. Credit risk is equal to the fair value gain in a derivative, if the counterparty fails to perform. When the fair value of a derivative contract is positive, this generally indicates that the counterparty owes our company and, therefore, creates a repayment risk for our company. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, have no repayment risk. We minimize the credit (or repayment) risk in derivative instruments by entering into transactions with high-quality counterparties that are reviewed periodically by senior management.

Stifel Bancorp extends credit to individual and commercial borrowers through a variety of loan products, including residential and commercial mortgage loans, home equity loans, construction loans, and non-real-estate commercial and consumer loans. Bank loans are generally collateralized by real estate, real property, or other assets of the borrower. Stifel Bancorp’s loan policy includes criteria to adequately underwrite, document, monitor, and manage credit risk. Underwriting requires reviewing and documenting the fundamental characteristics of credit, including character, capacity to service the debt, capital, conditions, and collateral. Benchmark capital and coverage ratios are utilized, which include liquidity, debt service coverage, credit, working capital, and capital to asset ratios. Lending limits are established to include individual, collective, committee, and board authority. Monitoring credit risk is accomplished through defined loan review procedures, including frequency and scope.

We are subject to concentration risk if we hold large positions, extend large loans to, or have large commitments with a single counterparty, borrower, or group of similar counterparties or borrowers (i.e., in the same industry). Securities purchased under agreements to resell consist of securities issued by the U.S. government or its agencies. Receivables from and payables to clients and stock borrow and lending activities, both with a large number of clients and counterparties, and any potential concentration is carefully monitored. Stock borrow and lending activities are executed under master netting agreements, which gives our company right of offset in the event of counterparty default. Inventory and investment positions taken and commitments made, including underwritings, may involve exposure to individual issuers and businesses. We seek to limit this risk through careful review of counterparties and borrowers and the use of limits established by our senior management group, taking into consideration factors including the financial strength of the counterparty, the size of the position or commitment, the expected duration of the position or commitment, and other positions or commitments outstanding.

Operational Risk

Operational risk generally refers to the risk of loss resulting from our operations, including, but not limited to, improper or unauthorized execution and processing of transactions, deficiencies in our technology or financial operating systems, and inadequacies or breaches in our control processes. We operate different businesses in diverse markets and are reliant on the ability of our associates and systems to process a large number of transactions. These risks are less direct than credit and market risk, but managing them is critical, particularly in a rapidly changing environment with increasing transaction volumes. In the event of a breakdown or improper operation of systems or improper action by associates, we could suffer financial loss, regulatory sanctions, and damage to our reputation. In order to mitigate and control operational risk, we have developed policies and procedures that are designed to identify and manage operational risk at appropriate levels throughout the organization and within such departments as Accounting, Operations, Information Technology, Legal, Compliance, and Internal Audit. These control mechanisms attempt to ensure that operational policies and procedures are being followed and that our various businesses are operating within established corporate policies and limits. Business continuity plans exist for critical systems, and redundancies are built into the systems as deemed appropriate.

Regulatory and Legal Risk

Legal risk includes the risk of private client group customer claims for sales practice violations. While these claims may not be the result of any wrongdoing, we do, at a minimum, incur costs associated with investigating and defending against such claims. See further discussion on our legal reserves policy under “Critical Accounting Policies and Estimates” in Item 2, Part I and “Legal Proceedings” in Item 1, Part II of this report. In addition, we are subject to potentially sizable adverse legal judgments or arbitration awards, and fines, penalties, and other sanctions for non-compliance with applicable legal and regulatory requirements. We are

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generally subject to extensive regulation by the SEC, FINRA, and state securities regulators in the different jurisdictions in which we conduct business. As a bank holding company, we are subject to regulation by the Federal Reserve. Our bank subsidiaries are subject to regulation by the FDIC. As a result, we are subject to a risk of loss resulting from failure to comply with banking laws. Our international subsidiary, SNEL, is subject to the regulatory supervision and requirements of the FCA in the United Kingdom. Our Canadian subsidiary, SNC, is subject to the regulatory supervision and requirements of the IIROC. We have comprehensive procedures addressing issues such as regulatory capital requirements, sales and trading practices, use of and safekeeping of customer funds, the extension of credit, including margin loans, collection activities, money laundering, and record keeping. We act as an underwriter or selling group member in both equity and fixed income product offerings. Particularly when acting as lead or co-lead manager, we have potential legal exposure to claims relating to these securities offerings. To manage this exposure, a committee of senior executives review proposed underwriting commitments to assess the quality of the offering and the adequacy of due diligence investigation.

Our company, as a bank and financial holding company, is subject to regulation, including capital requirements, by the Federal Reserve. Stifel Bancorp is subject to various regulatory capital requirements administered by the FDIC and state banking authorities. 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 Bancorp's financial statements.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to, among other things, provide reasonable assurance that material information, both financial and non-financial, and other information required under the securities laws to be disclosed is accumulated and communicated to senior management, including the Chief Executive Officer and Chief Financial Officer, on a timely basis. Under the direction of the Chief Executive Officer and Chief Financial Officer, management has evaluated our disclosure controls and procedures as of September 30, 2021 and has concluded that the disclosure controls and procedures were adequate and effective as of such date.

Changes in Internal Control over Financial Reporting

There have been no changes in our company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please see our discussion set forth under Item 3. “Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2020 and Item 1. “Financial Statements” in our Form 10-Q for the quarter ended September 30, 2021.

ITEM 1A. RISK FACTORS

The discussion of our business and operations should be read together with the information contained in our other reports and periodic filings that we make with the SEC, including, without limitation, the information contained under the caption “Item 1A. Risk Factors” in our annual report on Form 10‑K for the year ended December 31, 2020. Those risk factors could materially affect our business, financial condition, and results of operations. The risks that we describe in our public filings are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be immaterial, also may materially adversely affect our business, financial condition, and results of operations.

There have been no material changes in our risk factors from those disclosed under the caption “Item 1A. Risk Factors” to our annual report on Form 10-K for the year ended December 31, 2020.

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ITEM 2. UNREGISTERED SALES OF EQU ITY SECURITIES AND USE OF PROCEEDS

There were no unregistered sales of equity securities during the quarter ended September 30, 2021. The following table sets forth information with respect to purchases made by or on behalf of Stifel Financial Corp. or any “affiliated purchaser” (as defined in Rule 10b-10(a)(3) under the Securities Exchange Act of 1934, as amended), of our common stock during the quarter ended September 30, 2021.

| Total Number of Shares Purchased |  |  | Average Price Paid per share |  |  | Total Number of Shares Purchased as Part of Publically Announced Plans |  |  | Maximum Number of Shares That May Yet be Purchased Under the Plan or Program |
July 1 - 31, 2021 |  | 105,000 |  |  | $ | 65.05 |  |  |  | 105,000 |  |  |  | 12,503,249 |
August 1 - 31, 2021 |  | 200,271 |  |  |  | 67.37 |  |  |  | 200,271 |  |  |  | 12,302,978 |
September 1 - 30, 2021 |  | 365,833 |  |  |  | 66.89 |  |  |  | 365,833 |  |  |  | 11,937,145 |
|  | 671,104 |  |  | $ | 66.74 |  |  |  | 671,104 |  |  |  |  |

We have an ongoing authorization from the Board of Directors to repurchase our common stock in the open market or in negotiated transactions. At September 30, 2021, the maximum number of shares that may yet be purchased under this plan was 11.9 million.

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ITEM 6. EXHIBITS

Exhibit No. |  | Description
3.1 |  | Certificate of Designations of the Company with respect to the Series D Preferred Stock, dated July 21, 2021, filed with the Secretary of State of the State of Delaware and effective July 21, 2021, incorporated by reference to Exhibit 8 to Stifel Financial Corp.’s Form 8-A filed on July 22, 2021.
4.1 |  | Deposit Agreement, dated July 22, 2021, among the Company, Computershare Inc. and Computershare Trust Company, N.A., jointly as Depositary, and the holders from time to time of the depositary receipts described therein, incorporated by reference to Exhibit 9 to Stifel Financial Corp.’s Form 8-A filed on July 22, 2021.
4.2 |  | Form of certificate representing the Series D Preferred Stock, incorporated by reference to Exhibit 10 to Stifel Financial Corp.’s Form 8-A filed on July 22, 2021.
4.3 |  | Form of depositary receipt representing the Depositary Shares (included as Exhibit A to the Deposit Agreement, dated July 22, 2021), incorporated by reference to Exhibit 11 to Stifel Financial Corp.’s Form 8-A filed on July 22, 2021.
11.1 |  | Statement Re: Computation of per Share Earnings (The calculation of per share earnings is included in Part I, Item 1 in the Notes to Consolidated Financial Statements (Earnings Per Share) and is omitted here in accordance with Section (b)(11) of Item 601 of Regulation S-K).
31.1 |  | Rule 13a-14(a) Certification of Chief Executive Officer.
31.2 |  | Rule 13a-14(a) Certification of Chief Financial Officer.
32.1 |  | Section 1350 Certification of Chief Executive Officer.*
32.2 |  | Section 1350 Certification of Chief Financial Officer.*
101 104 |  | The following financial information, formatted in iXBRL (Inline Extensible Business Report Language), Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Statements of Financial Condition as of September 30, 2021 and December 31, 2020; (ii) Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020; (v) Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2021 and 2020; (vi) Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020; and (vii) Notes to Consolidated Financial Statements. Cover Page Interactive Data File (embedded within the Inline XBRL document).

* | The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Stifel Financial Corp. under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SI GNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

STIFEL FINANCIAL CORP.
/s/ Ronald J. Kruszewski
Ronald J. Kruszewski Chairman of the Board and Chief Executive Officer

/s/ James M. Marischen
James M. Marischen Chief Financial Officer

Date: November 4, 2021

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