Stifel Financial : 3rd Quarter Earnings

October 30, 2019

FOR IMMEDIATE RELEASE

Media Contact: Neil Shapiro [phone]

Investor Contact: Joel Jeffrey [phone]

www.stifel.com/investor-relations

STIFEL REPORTS THIRD QUARTER 2019 FINANCIAL RESULTS

• Record net revenues of $821.6 million, increased 11.3% compared with the year-ago quarter.
• Record net revenues in Global Wealth Management.
• Net income available to common shareholders of $104.6 million, or $1.34 per diluted common share.
• Non-GAAPnet income available to common shareholders of $117.1 million, or $1.50 per diluted common share.
• Record client assets of $311.8 billion, increased 7.8% compared with the year-ago quarter.
• Non-GAAPreturn on tangible common equity of 24.2%.
• Repurchased approximately 1.0 million shares of the Company's common stock at an average price of $55.43.

ST. LOUIS, MO - Stifel Financial Corp. (NYSE: SF) today reported net income available to common shareholders of $104.6 million, or $1.34 per diluted common share on record net revenues of $821.6 million for the three months ended September 30, 2019, compared with net income available to common shareholders of $101.5 million, or $1.25 per diluted common share, on net revenues of $738.3 million for the third quarter of 2018.

For the three months ended September 30, 2019, the Company reported non-GAAP net income available to common shareholders of $117.1 million, or $1.50 per diluted common share. The Company's reported GAAP net income for the three months ended September 30, 2019 was primarily impacted by merger-related expenses. Details discussed below and in the "Non-GAAP Financial Matters" section.

Chairman's Comments

"I am pleased with our performance in the third quarter. We generated record net revenue of $822 million, a pre-tax margin greater than 20%, and return on tangible common equity of more than 24%. Our record results and the growth in the business validate of our long- term strategy to build a diversified financial services firm that can consistently generate strong performance in various market conditions. This was illustrated by our record wealth management revenue and our second strongest institutional revenues in our history despite less than optimal market conditions. As I look forward, I am optimistic about our business as the investments we've made in our firm will continue to drive revenue growth," stated Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel.

Financial Highlights (Unaudited)												Three Months Ended
																							Non-			Non-
			GAAP			GAAP	%			GAAP	%				GAAP (1)		GAAP (1)	%
($ in 000s, except per share data)	9/30/19		9/30/18			Change	6/30/19			Change	9/30/19		9/30/18			Change
Net revenues		$	821,572			$	738,342				11.3		$	800,787				2.6				$	821,572			$	738,367				11.3
Net income applicable to Stifel Financial Corp.		$	109,414			$	103,858				5.3		$	109,085				0.3			$	121,990		$	112,405		8.5
Preferred dividends			4,844				2,343				106.7			5,288				(8.4	)				4,844				2,343				106.7
Net income available to common shareholders		$	104,570			$	101,515				3.0		$	103,797				0.7			$	117,146			$	110,062			6.4
Earnings per diluted common share		$	1.40			$	1.27				10.2		$	1.38				1.4				$	1.56			$	1.38				13.0
Earnings per diluted common share available to		$	1.34																			$	1.50
common shareholders				$	1.25				7.2		$	1.31				2.3						$	1.35				11.1
Compensation ratio			59.2%			57.2%						58.3%								58.1%			56.5	%
Non-compensation ratio			22.5%			23.8	%						23.2	%								21.7%			22.9%
Pre-tax operating margin (2)			18.3%			19.0%						18.5%								20.2%			20.6	%

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For nine months ended September 30, 2019, the Company reported net income available to common shareholders of $305.2 million, or $3.87 per diluted common share on record net revenues of $2.4 billion, compared with net income available to common shareholders of $272.9 million, or $3.35 per diluted common share, on net revenues of $2.2 billion for the nine months ended September 30, 2018.

For the nine months ended September 30, 2019, the Company reported non-GAAP net income available to common shareholders of $333.0 million, or $4.22 per diluted common share.

Financial Highlights (Unaudited)									Nine Months Ended
														Non-			Non-
			GAAP			GAAP	%			GAAP (1)		GAAP (1)	%
($ in 000s, except per share data)		9/30/19				9/30/18			Change			9/30/19				9/30/18			Change
Net revenues		$	2,392,779			$	2,231,432			7.2			$	2,392,779			$	2,231,457			7.2
Net income applicable to Stifel Financial Corp.	$	317,706		$	279,906		13.5		$	345,513		$	309,683		11.6
Preferred dividends			12,476				7,031			77.4				12,476				7,031			77.4
Net income available to common shareholders	$	305,230			$	272,875			11.9		$	333,037			$	302,652			10.0
Earnings per diluted common share		$	4.03			$	3.44			17.2			$	4.38			$	3.80			15.3
Earnings per diluted common share available to common	$	3.87									$	4.22
shareholders		$	3.35		15.5			$	3.72		13.4
Compensation ratio			59.0%			59.3%						58.3%			58.7	%
Non-compensation ratio		22.8%			23.8%						22.1%			22.5%
Pre-tax operating margin (3)			18.2%			16.9%						19.6%			18.8	%

Brokerage Revenues

Brokerage revenues, defined as commissions and principal transactions, were $261.8 million, an 8.5% increase compared with the third quarter of 2018 and a 0.1% increase compared with the second quarter of 2019.

($ in 000s)						Three Months Ended
	9/30/19				9/30/18				% Change					6/30/19				% Change
Global Wealth Management			$	160,117		$	158,818				0.8				$	162,388				(1.4	)
Institutional brokerage:
Equity capital markets				41,037				43,904				(6.5	)				40,670				0.9
Fixed income capital markets				60,613				38,446				57.7					58,387				3.8
Total institutional brokerage				101,650				82,350				23.4					99,057				2.6
Total brokerage revenues		$	261,767			$	241,168			8.5				$	261,445			0.1

• Global Wealth Management brokerage revenues were $160.1 million, a 0.8% increase compared with the third quarter of 2018 and a 1.4% decrease compared with the second quarter of 2019.
• Institutional equity brokerage revenues were $41.0 million, a 6.5% decrease compared with the third quarter of 2018 and a 0.9% increase compared with the second quarter of 2019.
• Institutional fixed income brokerage revenues were $60.6 million, a 57.7% increase compared with the third quarter of 2018 and a 3.8% increase compared with the second quarter of 2019.

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Investment Banking Revenues

Investment banking revenues were $198.8 million, a 17.6% increase compared with the third quarter of 2018 and a 10.7% increase compared with the second quarter of 2019.

		9/30/19		Three Months Ended
($ in 000s)			9/30/18	% Change		6/30/19	% Change
Capital raising:	$	9,855
Global Wealth Management	$	7,722	27.6	$	10,559	(6.7)
Equity capital markets		53,006		65,000	(18.5)		59,156	(10.4)
Fixed income capital markets		31,082		20,553	51.2		26,997	15.1
Institutional Group		84,088		85,553	(1.7)		86,153	(2.4)
Total capital raising (4)		93,943		93,275	0.7		96,712	(2.9)
Advisory fees (4)		104,847		75,717	38.5		82,905	26.5
Total investment banking (4)	$	198,790	$	168,992	17.6	$	179,617	10.7

• Global Wealth Management capital raising revenues were $9.9 million, a 27.6% increase compared with the third quarter of 2018 and a 6.7% decrease compared with the second quarter of 2019.
• Institutional equity capital raising revenues were $53.0 million, an 18.5% decrease compared with the third quarter of 2018 and a 10.4% decrease compared with the second quarter of 2019.
• Institutional fixed income capital raising revenues were $31.1 million, a 51.2% increase compared with the third quarter of 2018 and a 15.1% increase compared with the second quarter of 2019.
• Advisory fee revenues were $104.8 million, a 38.5% increase compared with the third quarter of 2018 and a 26.5% increase compared with the second quarter of 2019.

Asset Management and Service Fee Revenues

Asset management and service fee revenues were $217.6 million, an 8.4% increase compared with the third quarter of 2018 and a 3.1% increase compared with the second quarter of 2019. See Asset Management and Service Fee Break-down table.

Net Interest Income

Net interest income of $134.7 million, an 11.0% increase compared with the third quarter of 2018 and a 0.3% decrease compared with the second quarter of 2019. See Net Interest Income Analysis table.

• Interest income was $178.8 million, a 5.3% increase compared with the third quarter of 2018 and a 4.9% decrease compared with the second quarter of 2019.
• Interest expense was $44.1 million, an 8.9% decrease compared with the third quarter of 2018 and a 16.5% decrease compared with the second quarter of 2019.

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Compensation and Benefits Expenses

For the quarter ended September 30, 2019, compensation and benefits expenses were $486.2 million, which included $8.8 million of merger-related and severance expenses (non-GAAP adjustments). This compares with $422.3 million in the third quarter of 2018 and $466.9 million in the second quarter of 2019. Excluding the non-GAAP adjustments, compensation and benefits as a percentage of net revenues were 58.1% in the third quarter of 2019 (non-GAAP measure).

		Three Months Ended		Nine Months Ended
($ in 000s)		9/30/19		9/30/18		9/30/19		9/30/18
GAAP compensation and benefits	$	486,160	$	422,324	$	1,411,135	$	1,322,387
As a percentage of net revenues		59.2%		57.2%		59.0%		59.3%
Non-GAAP adjustments: (5)
Merger-related and severance		(8,827)		(5,475)		(16,063)		(13,289)
Non-GAAP compensation and benefits	$	477,333	$	416,849	$	1,395,072	$	1,309,098
As a percentage of non-GAAP net revenues		58.1%		56.5%		58.3%		58.7%

Non-Compensation Operating Expenses

For the quarter ended September 30, 2019, non-compensation operating expenses were $184.7 million, which included $6.0 million of merger-related expenses (non-GAAP adjustments). This compares with $175.5 million in the third quarter of 2018 and $185.9 million in the second quarter of 2019. Excluding the non-GAAP adjustments, non-compensation operating expenses as a percentage of net revenues for the quarter ended September 30, 2019 were 21.7% (non-GAAP measure).

($ in 000s)		Three Months Ended		Nine Months Ended
	9/30/19			9/30/18			9/30/19			9/30/18
GAAP non-compensation expenses		$	184,658		$	175,488		$	545,099		$	530,614
As a percentage of net revenues		22.5%		23.8%		22.8%		23.8%
Non-GAAP adjustments: (5)
Merger-related		(6,023)		(5,277)		(13,699)		(20,192)
Litigation-related			-			(774	)		(3,507	)		(6,774)
			(6,023)		(6,051)		(17,206)		(26,966)
Non-GAAPnon-compensation expenses		$	178,635		$	169,437		$	527,893		$	503,648
As a percentage of non-GAAP net revenues		21.7%		22.9%		22.1%		22.5%

Provision for Income Taxes

The GAAP effective income tax rate for the quarter ended September 30, 2019 was 27.1%. This compares with an effective income tax rate of 26.1% for the third quarter of 2018 and 25.9% for the second quarter of 2019. The adjusted non-GAAP effective income tax rate for the quarter ended September 30, 2019 was 26.0%.

($ in 000s)		Three Months Ended		Nine Months Ended
	9/30/19				9/30/18			9/30/19				9/30/18
GAAP provision for income taxes		$	40,632			$	36,672		$	117,227			$	98,525
GAAP effective tax rate		27.1%			26.1%		27.0%			26.0%
Non-GAAP adjustments: (5)
Merger-related,litigation-related, and severance			3,994				3,166			8,949				10,980
Other			(1,720	)			(162	)		(3,487	)			(477)
			2,274				3,004			5,462				10,503
Non-GAAP provision for income taxes		$	42,906			$	39,676		$	122,689			$	109,028
Non-GAAP effective tax rate		26.0%			26.1%		26.2%			26.0%

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Conference Call Information

Stifel Financial Corp. will host its third quarter 2019 financial results conference call on Wednesday, October 30, 2019, at 8:00 a.m. Eastern time. The conference call may include forward-looking statements.

All interested parties are invited to listen to Stifel's Chairman and CEO, Ronald J. Kruszewski, by dialing [phone] and referencing conference ID #1347575. A live audio webcast of the call, as well as a presentation highlighting the Company's results, will be available through the Company's web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.

Company Information

Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel's broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated; Keefe Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Century Securities Associates, Inc., and in the United Kingdom and Europe through Stifel Nicolaus Europe Limited. The Company's broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer trust and related services. To learn more about Stifel, please visit the Company's web site at www.stifel.com.

Forward-Looking Statements

This earnings release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this earnings release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this earnings release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to successfully integrate acquired companies or the branch offices and financial advisors; a material adverse change in financial condition; the risk of borrower, depositor, and other customer attrition; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies' operations, pricing, and services; and other risk factors referred to from time to time in filings made by Stifel Financial Corp. with the Securities and Exchange Commission. Forward-looking statements speak only as to the date they are made. Stifel Financial Corp. disclaims any intent or obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

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